Commissioner Downing Offers Insurance Advice to AG Community

National AG Week Celebrates Montana’s Economic Backbone

Helena, Mont.-In recognition of National Agriculture Week, Commissioner of Securities and Insurance (CSI), Montana State Auditor Troy Downing offers advice to Montana’s farmers and ranchers when purchasing Farm and Livestock Insurance. 

“Our farmers and ranchers are the economic and cultural backbone of our state. One of the most difficult business decisions made in the Ag community is ensuring proper levels of coverage for livestock and crops.” Commissioner Downing said. “During National Agriculture Week, our agency is celebrating by focusing on education to help the Montana Ag community protect their farms and ranches from loss.” 

Commissioner Downing shared these tips with Montana farmers and ranchers:

Farm Insurance Coverage is Not Standard

A common misconception about farm insurance is that a policy is one big bundle of predetermined coverages. In reality, farm insurance policies have so many different aspects that there is no standard policy. Each farming operation is unique, and a policy should be custom-built for the needs of the farmer.

Some Coverage has Limitations on Commercial Structures

Homeowner policies generally limit commercial structure coverage, while hobby farming policies and farm owner’s policies do not. For example, suppose a building is being used that exceeds the special limits outlined in the policy conditions (usually in gross annual revenue generated). In that case, the building is then considered a commercial building and may not be covered under a homeowners policy. The same concept applies to all of the owner’s activities. Available coverages and coverage limits differ between “residential” structures like detached garages and garden sheds and “commercial farm” structures like barns, equipment sheds, and shop buildings. Be sure to check with your agent to make sure all your buildings are classified correctly.

You Need Special Coverage for Livestock

Some Livestock insurance is similar to crop insurance and is partially funded by the United States Department of Agriculture. Depending on the types of animals you have on your farm, you will likely require special coverage for livestock. A few options to consider include individual coverage, as well as blanket coverage.

• Individual Coverage (Scheduled): Scheduling animals individually may be the right option if you have higher-valued animals, like bulls, that you want to cover up to a specific dollar amount.
• Blanket Coverage (Unscheduled): With a blanket policy, all of your farm property (livestock, equipment, structures, etc.) is insured in one lump sum amount. When using blanket insurance, make sure to insure to adequate values. Being under-insured could result in a lower claim payment than you need or expect.

“Keep in mind that the maximum amount payable per head depends on your choice of insurance, whether individual or blanket. Be sure to talk to your insurance agent about which option will work best for your operation.” Said Commissioner Downing. “For questions, contact our agency at 406-444-2040 or visit CSIMT.gov.”