Farm insurance is worthless, 2011 edition

Back in early 2010, we wrote a long post discussing our concerns and negative experiences dealing with farm insurance, in theory a necessity for running a food-production business in this litigious and paranoid culture. In effect, our experience-based argument was that farm insurance (and most insurance) is either a scam or a waste of money, and doesn’t actually protect a small farm because the insurance company can always find a way to back out of the supposed commitment (while keeping your money), and any real farmer doesn’t have the time or money to fight.

A few days ago, I exchanged a few emails with a farmer from southwest Missouri, who is dealing with precisely this problem and wrote to us (and others) for advice. With their permission, here is the email exchange, kept anonymous by request. It speaks for itself as regards this issue:

EMAIL 1:

I have a CSA in Southwest Missouri. This was our first year. We just received a call from our insurance company saying they are cancelling our farm insurance because we get too much exposure. Was wondering if you could share the company you use so we can have some options. I have asked several people. thanks.

MY RESPONSE:

That’s terrible to hear. We have found the insurance industry very frustrating to work with, as no insurance company really cares about or understands small/direct-market farms, and we don’t fit into any of their pigeonholes. As far as we’re concerned it’s an expensive scam that offers no meaningful protection, since it’s so easy for the company to drop you or shirk their responsibility if you try to make a claim. What kind of coverage are they dropping? Basic damage coverage, like property, or product/customer visit liability? If interested, you can read more of our thoughts/experiences with farm insurance on our blog at:

http://cherthollowfarm.blogspot.com/2010/02/liability-and-insurance-on-market-farm.html

I’m a little uncomfortable sharing our insurance details over email with an unknown person, since it is such a problematic subject, but suffice it to say we’ve not found a company we feel good about. May I reproduce your email (anonymously if you like) on our blog, and/or forward to other farmers I know in the area, to see if others have input on the question?

EMAIL 2:

After I wrote a few people trying to come up with insurance, I realized how invasive I was being. Wasn’t trying to pry.Yes, you can reproduce my email. Rather not have my name attached and I will follow your blog. We had farm and property insurance and all of a sudden we got a letter saying the company was going to stop insuring any property that could not be seen from five other properties. We can only be seen by one other farm and he has to be wanting to look our way.

So we called the broker and he said not to worry. Said he had lots of companies and he would get back to us. Soon he sent a bid for insurance more that one forth higher than we were paying before and he accepted our payment after he took what seemed like a hundred pictures and asked over two hours worth of questions.

Then they wanted us to produce books on our U pick orchard which we declined to do because we don’t separate it from the other things we do here and thought it not to be their business. Well, to make a long story short, they called and the exact quote was

” we have been on your website._______ Farm is much too visible and we are going to decline insuring you. We will insure you to the end of the month and prorate your payment.” So , here we are, today is the 7th and we have no insurance past Halloween. Of course, no insurance, no home loan.

This is not the only problem we face. We are trying to refinance the farm at a lower interest rate and no one loans to a “working farm”. Hobby farms only. So I guess for that we will go to Farm Bureau. I am not a conspiracy person , yet I do believe they are trying to get rid of small farmers in order to get a higher tax rate on the land and because he who rules the food supply rules the world.

Thanks again for replying. We will find insurance somewhere before the first and I may just take down the website for now. Didn’t know about your blog when I wrote the first time. I was just trying people from Missouri who had agricultural tourism.

Thanks.

Thoughts or recommendations for this person?

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