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Farm Insurance 101: A Guide For Our Oklahoma Farmers To Determine The Best Coverage For Their Livelihood

In: Insider
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50251A_Farm Insurance Simplified_Blog_Title-01Farming isn't one of those straightforward professions that any average Joe can tackle. Simply put, it's hard work - like really hard work. Operating a farm is beyond intimidating and challenging, yes, but arguably one of the most necessary and rewarding jobs on the planet. In all honesty, if you farm, please stop reading for a minute and give yourself a pat on the back.  

As someone who belongs to the demanding Ag industry, you know there's more than enough on your own plate while you're working to put food on the tables of others. Why add "figuring out my farm insurance blueprint" to the growing to-do list? After all, building an insurance policy to cover a farm and all its moving parts adequately is far from simple. You're not a hobby farmer - this isn't a side gig to you. Operating your farm is your moneymaker, your way of life. Because your farm generates income, it will need far more complex coverage than a standard home insurance policy can offer. 

As a company backed by a 153-year-old Farm Mutual started in rural Missouri, you could say we now know a thing or two about farm life and how to protect it for generations. We have a dedicated Farm Underwriting Specialist, Robin, to organize the meticulous buildout of farm policies submitted by our Oklahoma agents for their CNI customers. So, take a much-needed break and let us walk you through the insurance part of your business with the help of Robin. That way, you can confidently determine the best coverage match for your unique farm - big or small.

An Intro To Farm Insurance: Basic, Broad, And Special Form Coverage

50251F_Whats Covered_Blog-01Farm insurance is designed to cover you both personally and commercially. Just as home insurance safeguards your dwelling, possessions, and personal liability, farm insurance provides all of those coverages plus protection for your machinery and livestock exposures. To understand the level of insurance coverage your specific farm needs, you'll need to familiarize yourself with the three levels of forms that underwriters use to match your farm with a compatible policy type. 

Farm insurance coverage forms are broken up into three categories: Basic, Broad, and Special. As you could venture to guess, Basic Form coverage is the most restrictive level, with Broad and Special Form coverage offering greater defense against threats to your farm. 

Basic Form Coverage: Protection Against 10 Perils 
  • Fire, lightning, wind, and hail
  • Collision
  • Damage in course of transit
  • Explosion
  • Riot and civil commotion
  • Sinkhole collapse
  • Smoke
  • Theft/Vandalism
  • Vehicles
  • Volcanic Action
Broad Form Coverage: Protection Against 15 Perils

Includes all the basic coverages above, plus the following:

  • Accidental discharge and leakage of water system
  • Accidental shooting of livestock
  • Artificially generated electrical current
  • Attacks on livestock by dogs or wild animals
  • Glass breakage in a building or structure
  • Bursting of heating or water systems
  • Collapse
  • Electrocution of livestock
  • Falling objects
  • Flood loss to livestock
  • Freezing of plumbing, heating, AC, automatic fire protection system components, and household appliances
  • Loading and unloading accidents
  • Sudden and accidental collision damage causing death of livestock
  • Sudden and accidental tearing apart of heating, AC, or water system
  • Weight of ice, snow, and sleet
Special Form Coverage

Special Form does not specifically list perils; instead, it is “all-risk” coverage unless otherwise excluded by your policy. In other words, unless the policy states a peril isn't included, it's included and should cover your potential loss. Typically, Special Form coverage is the preferred level of protection you'll want for your farm. But because it is more comprehensive coverage, many companies will require that your property has certain updates.

What Does A Typical Farm Policy Cover?

Home & Contents

  • The primary residence you and your family occupy on the farm is covered by a structured portion of your policy specifically for your dwelling and personal property filling the space.

Farm Personal Property/Structures

  • It's no secret that the equipment you use every day to perform your vital job isn’t easy (or cheap) to replace. That's why each policy in our Farm Program comes with the best protection to ensure your farm machinery and equipment are covered in the event of a loss.
  • Whether big or small, your farm likely has multiple buildings on the property. The Farm Personal Property portion of your policy includes those structures aside from just your house. Machine sheds, detached garages, grain bins, barns, hoop buildings, other outbuildings, and the equipment stored in them would also fall under this coverage.

Farm Liability

  • Farm Liability coverage protects your assets in the event a lawsuit is filed against you. Accidents can undoubtedly happen more often than not around the farm. A potential liability claim can be costly and damaging to your operation. With a healthy, totally customizable Farm Liability reserve worked into your policy's coverage guidelines, you can rest a bit easier knowing you're protected from expensive bodily injury claims or accidental property damage claims.

Livestock 

  • From dairy cows and hogs to beef cattle and sheep, your livestock are substantial investments — so they require their own specific coverage under your farm policy. Accidents, sporadic Oklahoma forecasts, and crimes are all unpredictable. That's why knowing your livestock are protected from the unexpected thanks to your farm insurance is so comforting.

CNI Farm Policy Breakdown

At CNI, we understand farms. Considering the decades of farm underwriting and claim handling experience under our team's belt, CNI has built several policy types designed to best cover the various levels of investments hanging out on your farm. By offering customizable protection for your machinery and equipment to your home and livestock, CNI can keep your livelihood safe against common threats like Mother Nature, theft, breakdown, and much more.

Remember our knowledgeable Farm Underwriting Specialist, Robin, mentioned earlier? Well, she's here to breakdown those policies and provide valuable underwriting insight along the way, so you can get a better idea of what insurance offering would fit your farm for the long haul. 

Underwriter Insight: While each farm policy provides different levels of coverage for varying levels of farm exposures, you'll find that the only factor affecting each category of protection depends primarily on the dwelling value. If your farm home is expensive and brand new, it will likely fall under our Exclusive program. On the flip side, if your farm home is more modest in size and older, seeing few updates throughout the years, it may not be valued as high as an 'Exclusive' home. The value of your primary residence will ultimately be the driving factor as to what policy type your farm will be placed with.

Meet The Farm Policy: Farmstead Exclusive

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Policy Fast Facts
  • Offers Replacement Cost Coverage: This term refers to the amount of money it would take to replace your damaged or destroyed home with the exact same or similar home in today's market.

  • Minimum Dwelling Value: $250,000.

  • Dwelling Age: 25 years or less.

  • Insured Loss History: No losses in the past three years, with the exception of one past wind or hail claim.

  • Modular or double wide homes do not qualify for this coverage.
Underwriter Insight: Any farmhouse with solid fuel or wood heat systems as the primary source of heat would not be accepted under CNI's Underwriting Guidelines. Through the lens of an insurance underwriter, fireplaces are great for featuring mantle decorations over the holidays or providing that cozy, Instagram-worthy spot to curl up by on movie nights. But they're simply not meant to serve as a home's sole heat source during those brutal Oklahoma winters. The same goes for wood burning stoves - they should act as a supplemental source of heat - not the only source of heat. 

Meet The Farm Policy: Farmstead

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Policy Fast Facts
  • Offers Replacement Cost Coverage

  • Minimum Dwelling Value: $100,000

  • Dwelling Age: 60 years or less.

  • Modular or double wide homes do not qualify for this coverage.

Meet The Farm Policy: Farm Protector

50251D_Farm Protector_Blog-01

Policy Fast Facts
  • Offers Replacement Cost Coverage

  • Minimum Dwelling Value: $60,000

  • Dwelling Age: 70 years or less.

  • Modular and Double Wide Mobile Homes are acceptable in this program.

Meet The Farm Policy: Basic Farmowner

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Policy Fast Facts
  • Minimum Dwelling Value & Age: There is no specified home value or age for this policy-type. However, underwriting guidelines indicate the minimum cost per square foot of floor space for a qualifying dwelling in this program needs to be $40. This policy would be a great fit for an old farmhouse. 

FO-4 - Contents

50251I_FO-4 Contents_Blog-01

Policy Fast Facts

A Contents policy is the perfect coverage option for your personal property and all farm items owned at the land you farm. For example, if you rent the house on the property you farm but still want adequate insurance protection for all your owned equipment, tools, livestock, and all other personal property items, an FO-4 Contents policy would be an ideal fit for you. 

CNI Farm Policy Perks + Optional Coverages

50251G_Optional Coverages_Blog-01Who doesn't love options? When we say our Farm policies are super customizable - we aren't lying. Check out some of our most popular optional coverages for farmers like you to choose from.

Farmowners Equipment Breakdown, Service Line, & Inland Flood Coverage

As a farmer, you know breakdowns can be a pretty common occurrence during a farm workday. Equipment Breakdown Coverage automatically comes with all our farm policies by default. Farmowners Equipment Breakdown coverage protects equipment against the perils of mechanical, electrical and pressure systems breakdown, which are restricted/excluded perils in the underlying form binding coverage in your farm insurance policy. Equipment Breakdown coverage also covers the farm dwelling and its contents along with barns, stables, other structures and farm personal property.

Service Line Coverage protects the underground pipes and wiring servicing your residence on the farm. Service lines can become damaged by a number of perils such as pressure system breakdown, freezing, collapse, decay, corrosion, tree root invasion, and more. This exclusive coverage provides protection from an unexpected loss caused by any number of the service line failure examples just listed, up to the amount of $10,000 with a low $500 deductible. 

Designed specifically for residents in low-to-moderate risk areas, our Inland Flood Coverage endorsement can add affordable flood coverage to existing Home or Farmowner policies. This insurance covers the most common exposures residents face from an inland flood, including personal property, basement exposures, and appliances.

While Farmowners Equipment Breakdown is an automatic coverage add-on in our Farm Program, Service Line and Inland Flood Coverage are elective endorsements. Be sure to ask your CNI Agent for more information about these coverages to determine if you'd like to add them to your Farm policy.  

Livestock – Additional Endorsements 

Coverage for livestock can be extended to include loss resulting from death caused by accidental shooting, drowning, attack by dogs or wild animals, and collapse of a building.

  • Suffocation of Livestock - Coverage for livestock can be extended to include loss resulting from death caused by suffocation in confinement operations. The suffocation must result from the breakdown of or the interruption of power to equipment that controls the temperature, atmosphere, or movement of air within a building that confines the covered livestock.

  • Winter Livestock Perils - CNI provides special coverage for livestock, including our Winter Livestock Perils endorsement. This endorsement covers your cattle, sheep, swine, goats, horses, mules, and donkeys if they are affected by common threats like freezing or smothering in a snow or ice storm or falling through ice at your farm's pond during the winter.

Types of Machinery

  • Described Machinery – Tractors, Rakes, mowers
  • Cotton Pickers
  • Electronic Equipment – GPS, monitors, etc.
  • Harvesting Equipment – Combine, headers, etc
  • Hay Balers
  • Irrigation Equipment          

Additional Endorsements available for the farm policies:

  • Rented or Borrowed Equipment
  • Property in Transit
  • Coverage for farm personal property in transit can be provided against all risks of direct physical loss, with certain exceptions. Coverage for such loss is limited to $5,000.

Buildings & Other Structures

  • Barns
  • Silos
  • Green Houses
Endorsements For Buildings
  • Weight of Ice, Snow, or Sleet
  • Theft of Building Materials

New Home Discount

Our Farmstead Exclusive and Farmstead policies provide a New Home Credit to newer farm homes in generous amounts ranging from 3%-20%. Cha-ching, cha-ching!

Grain, Hay, & Other Farm Supplies/Products Coverage

As you could probably guess, grain, hay, and other farm supplies and products (stored in buildings or in the open) are covered under this portion of your farm policy. Hay, straw, and fodder in one area is considered one stack if separated by a clear space of 100 feet or more from any other hay, straw, or fodder in the open. If no specific “limit” is shown on the declaration page of your policy for any one stack, the maximum coverage per stack of hay, straw, or fodder in the open is $40,000.

Policy Discounts You'll Love

  • Legacy Discount: Does farming run in your family? If so, you can save money on your CNI Farm Policy. Thank you for keeping your family farm alive and well for the next generation.

  • Education Or Public Safety Discount: Your commitment in the classroom and as a public servant - whether active or retired - doesn't go unnoticed. Save money on your CNI policy as a token of our gratitude for your dedication. This discount can be applied to any policyholder who is currently working as [or is] a retired teacher, policeman, fireman, paramedic, first responder, nurse, and/or EMT.

  • Senior: You've taken great pride in your property for decades. Make sure you get rewarded for it on your CNI Policy. This discount will be applied to any policyholder who is 62 years or older.
  • Millennial: We know that when it comes to shopping, millennials love a good discount. Save money on your CNI policy just for being the young, hip/cool property-owner you are. This discount can be applied to any policyholder who is 18-35 years old.
  • Military/Veteran: Whether you're active-duty or a Veteran, your time in the Military can help you save on your CNI policy. Thank you for your sacrifice and service.
  • Auto/Home Discount: It's all in the family - when you package your home (or farm) and auto with CNI, you'll see exclusive savings on your policy.

Are You Ready To Build Your Personalized CNI Farm Policy?50251H_CTA Farm Insurance_Blog-01

If any of our farm policies appear to be a great fit for your Oklahoma operation, reach out to one of our local agents. Just click the picture above and find an agent closest to you!


Taking Her Farm Roots To The Office: Meet Robin Chambers

Robin_164PXRobin Chambers, our Farm Underwriting Specialist who starred in this blog (striking resemblance, right?), has a ton of experience in the insurance underwriting world. She also happens to have rural Missouri roots and farming experience, making her a seasoned expert in the field of farm insurance.

Here's a little background on Robin and why you should trust your farm is in good hands when pros like her organize your coverages.

Robin started her insurance career in 2012 at an independent agency and small farm mutual insurance company in northern Missouri. Shortly after, she earned her P&C producers license and began selling personal lines insurance, on top of processing policy endorsements, payments, and renewals.

Several years later, Robin shifted careers and began working for CNI as a Marketing Underwriter, primarily training agents on company products and systems. Today, she leads our Farm Underwriting Division at CNI and works in the trenches each day to ensure our farm policy offerings meet the needs of the diverse customers we serve.

Tags: Insider

Written by Morgan Graning

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