A cool, wet summer followed by an early snow in Alberta has left several farmers scrambling to get their crops harvested. Many are calling it a “disastrous” year, according to the Canadian Press. It’s the first time in decades that some farmers may have to leave hundreds of thousands of dollars of crops underneath the snow, and this week’s crop report stated that even with the slightly warmer temperatures it’s still more than likely that harvesting is done for the year. With only 89% of crops harvested as compared to 95% at the same time in 2018, which constitutes millions of acres, it’s a major disappointment for Alberta’s farmers.
Crop insurance doesn’t actually kick in until crops are fully harvested, so that means that farmers won’t even be able to file until they dig their crops out next spring. It looks like it will be a difficult winter for some of Alberta’s rural entrepreneurs. But thankfully, crop insurance will eventually help, so there is a light at the end of the tunnel come next spring.
How Crop Insurance Works
Crop insurance can be included as a component of farm insurance to protect farmers from reductions in yields due to an insured peril. The problem is that many private crop insurance riders are extremely specific, and only protect against losses incurred due to fire and hail damage, which can leave you exposed to severe hardship, especially after a growing season like we had this year. This is why many farmers in Alberta choose government-subsidized crop insurance through Agricultural Financial Services Corporation (AFSC), which provides relatively broad coverage at rates most private companies can’t compete with.
That doesn’t mean that private crop insurance isn’t an option. It’s just something that should be looked at carefully. A good crop insurance plan 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.
Lower Premiums for This Year, But Likely Higher for Next
This spring, Alberta Agriculture and Forestry Minister Oneil Carlier announced there would be lower premiums for crop insurance in 2019. On average, crop insurance consumers saw a 9% reduction in their rates. That was great news, and came as the result of better-than-normal growing conditions for the last several years. Fewer claims were filed, which allowed for crop insurance underwriters to give policy-holders a bit of a break. But because of the very wet summer followed by a very early snowfall, it is unlikely crop insurance providers will be able to hold the line on lower premiums. It should be expected that costs will rise again in 2020, unfortunately.
What About the Rest of My Farm Insurance?
Farm insurance acts a lot like home insurance, but due to the fact that farmers are also businesspeople there are a lot of very important differences. Our certified insurance brokers have many years of specialized farm insurance experience under our belts, and we are able to find you the most comprehensive coverage at excellent rates. With our help you can rest easy at night knowing your livelihood is protected.
Generally, most farm insurance policies provide coverage for property, coverage for machinery, and coverage for livestock. An option we highly recommend is adding in loss of earnings coverage, 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, which allows for customization of your policy, but also leaves open the possibility of something being missed. Additional coverage may include farm liability (which we also highly recommend), identity theft insurance (or cyber insurance), compensation for if you have to leave your property for an extended period, and protection from inflation.
It is also advisable to include sewer back up insurance and/or water damage coverage in your farm insurance.
Farms are at very high risk for huge losses due to fire, as many are located far away from fire departments. Ensure you have a number of fire mitigation implements in place as possible, and have them checked regularly.
Don’t Forget … You May Need to Provide 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 deemed 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.
