Farmers were surprised and disappointed to note in the Alberta government’s Budget 2023 an impending hike of 60% for crop insurance to raise the “fund balance back to levels recommended by actuarial evaluations,” says Global News. The explanation is that the value of crops has risen, so the amount of coverage needed has also risen.
Many farmers in Alberta choose government-subsidized crop insurance through the Agricultural Financial Services Corporation (AFSC), which provides relatively broad coverage at rates most private companies couldn’t usually compete with. However, with the recent rate hike, this may not be the case anymore.
In 2022, $324-million in insurance premiums were paid by crop producers, which breaks down to about $10 to $50 per acre. With the recent hike, coverage will cost farmers from $16 to $80 an acre.
As farmers deal with rising prices for fuel, fertilizer and transportation, any additional increase makes a significant impact on the bottom line. In addition, many producers were unaware there would be a hike in premiums this year, and so are unprepared in their budgeting. Checking out what else is available may result in savings.
How private crop insurance works
Private crop insurance continues to be an option for farmers, and we at Lane’s can help you look closely at your choices to ensure you are making the right decision for you and your crop-producing business. Included as a component of farm insurance, private crop insurance protects farmers from reductions in yields due to an insured peril. Many private crop insurance riders are extremely specific, however, and may only protect against losses incurred due to incidences such as fire and hail damage.
A fulsome crop insurance policy should include:
- Crop protection due to circumstances beyond your control, which includes inclement weather (all kinds).
- Programs for all different kinds of crops, including organic, commercial, perennial, and so on.
- Coverage specifically calculated for your individual needs.
- A wildlife damage option, which may assist with protection against pests and larger animals that can harm and contaminate crops.
Farm insurance coverage explained
Although farm insurance acts a lot like home insurance, the fact that farmers are also businesspeople means there are very important differences. Lane’s certified insurance brokers have years of specialized farm insurance experience under our belts, and we are able to find you the most comprehensive coverage at excellent rates.
Farm insurance is generally comprised of:
- Coverage for your buildings, including your home and any outbuildings such as Quonsets and sheds.
- Machinery coverage for items and infrastructure such as your tractors, trailers, ATVs, combines, and irrigation equipment.
- Loss-of-use coverage for when a major machine breaks down and you are unable to work.
Livestock can be insured through regular farm insurance for incidences such as fire, explosions, and even animal attacks, depending on what form you choose. An additional offering available through the AFSC is livestock price insurance, which protects ranchers who have cattle and hogs against drops in prices over a period of time. Livestock price insurance is not currently subsidized by any Canadian government, while crop insurance is, however ranchers have been lobbying for its inclusion in order to increase affordability.
We also highly recommend adding loss-of-earnings coverage to your farm insurance policy, which provides compensation for missed earnings due to an insured event. In general, you can choose to insure your property, machinery, and livestock together under one package, or separately, allowing for customization of your policy.
Sewer back-up insurance and/or water-damage coverage is also advisable for your farm insurance coverage, and don’t forget that farms are at a very high risk for huge losses due to fire. Many of Alberta’s farms are located far away from fire departments, so ensure you have a number of fire mitigation implements in place as possible and have them checked regularly.
Workers compensation benefits
If you have paid workers helping you out on your farm who are not family members, you more than likely need to provide Workers Compensation benefits. You are also required to take the necessary steps to ensure that reasonable safety standards are in place while giving workers recourse to refuse work they feel to be unsafe.
Trust Lane’s for all of your Alberta insurance needs
The experienced and knowledgeable insurance brokers of Lane’s can help explain the ins and outs of all types of insurance coverage. We work for you — not the insurance companies. Just a sampling of the products we provide includes home insurance, car insurance, travel insurance, commercial auto insurance, commercial property insurance, commercial surety bonds, contract surety bonds, and contractors insurance. Contact us at our Calgary, Edmonton, Banff, and Alberta offices today.
