NATIONWIDE NEWS
Here are risks to consider when insuring your farm
The following information is provided by Nationwide ® , the No. 1 farm and ranch insurer in the U.S.* There are many types of farmland own- ers. Some inherit land and see it as a line item on a list of assets. Others may have retired from actively farming but want to stay involved as landowners partnering with renting farmers. No matter how close your ties to the active operation of a farm, one thing is true in every farmland own- ership scenario: The right farm insurance coverage is a must. The growth in absentee land ownership and scenarios in which the owner doesn’t necessarily have ties to the farm are good reminders of the importance of farmland insurance. Without the right insurance in place, you could be exposed to major fi- nancial risk. A basic homeowner’s policy doesn’t of- fer sufficient coverage for farmland own- ers. It’s best to consult a farm insurance agent or an agricultural risk management specialist to understand the risks inherent to owning specific farmland. Potential risks to consider include: • Land use beyond production agricul- ture. This includes alternate agricultural uses such as haying and grazing, and other
uses such as hunting. • Structures on the property. Some land may have barns or grain storage buildings related to agricultural production. This may also include structures such as farm houses and storage buildings. • Other assets on the land. Things such as operating farm machinery and grazing livestock can present landowners with unique risks. • Anything that attracts visitors to the land. Agritourism activities and secondary farm businesses such as produce stands can increase a landowner’s risk, especially if visitors are on the land. In meeting with your team of trusted ad- visors, answering these seven questions can help you zero in on the right insurance for protecting your farmland: 1.What is your main goal in owning farmland? Your insurance needs will dif- fer whether you’re actively farming your land or considering it an asset for yourself or as part of a larger asset succession plan. 2. How do you own your farmland? The ownership structure—sole owner- ship, co-ownership or LLC —often has a lot to do with your risk liability. A risk management specialist can flesh out these differences.
3. What’s the land’s primary purpose? Sometimes how land is used and what it produces—crops or livestock—influences your insurance policy options. Knowing what you’ll raise on your land will help clarify the right policies for you. 4. How are you involved on your land? Some owners have a more active role in operations on their farmland. Just how much you work in the farm’s day-to-day operations is a factor to consider in select- ing the right insurance policy. 5. What are farmland prices like in your area? Land’s market value is a major fac- tor to consider in having not only the right policy but the right amount of coverage. Work with a trusted partner who has deep knowledge of your local farmland market. 6. What other assets are on your farm- land? Things such as buildings, fencing and even natural features such as trees or ponds can affect the value of farmland. This translates directly to the right cover- age for you and its costs. 7. What non-farm activities may hap- pen on your land? In some cases, agri- tourism or hunting may be part of the revenue equation for your farmland. Consider any such activities and the lia- bilities they may create in making smart, informed insurance decisions.
Visit aginsightcenter.com/farmland- ownership to download our free Farmland Ownership Protection Guide and to watch our on-demand webinar, Managing Farmland Leases. *A.M. Best Market Share Report 2021. Nationwide, the Nationwide N and Eagle, and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2022 Nationwide
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