On episode 33 of The Turkey Talk Show, we sit down with Scott Oswald from Town & Country Insurance to discuss current trends and understand why insurance rates and coverages have changed over the past couple of years. We delve deeper into the factors insurance companies consider, explore self-insurance options and coverage types, and share strategies farmers can use to make informed decisions about their insurance policies.
On episode 33 of The Turkey Talk Show, we sit down with Scott Oswald from Town & Country Insurance to discuss current trends and understand why insurance rates and coverages have changed over the past couple of years. We delve deeper into the factors insurance companies consider, explore self-insurance options and coverage types, and share strategies farmers can use to make informed decisions about their insurance policies.
We start off by discussing the big question everyone has been asking: Why have insurance rates increased dramatically in the past few years? There has been an increasing number of natural disasters across the country, including derechos in the Midwest, hurricanes in the Southeast, and wildfires in the West. Particularly for Iowa, insurance companies took a major hit during the 2020 and 2021 derechos. Those were both widespread storms that caused significant damage across the state. All of the natural disasters around the country in the past couple of years have caused an increased number of insurance claims to be in and caused everyone's rates to increase.
Another prominent reason is that Iowa farms are growing. There is a high dollar value concentrated in one location, which makes insurance companies re-evaluate their risk exposure. For example, lots of farmers with turkey or hog confinements could have five finisher barns in one location. If that one site gets wiped out, there is a major financial loss in that one spot. As a result, farmers are experiencing being dropped by insurance companies because the risk is too high is a large site is wiped out. Other questions that insurance companies often ask regarding confinement buildings include: What is the age of your barn? Are there any recent structural updates to those older buildings? What's your loss history in the past five years? What is the total insured value?
If you receive notice that your insurance company plans to drop coverage for your barns or other assets, ask if they have any alternative options available, especially if you are with an independent agency that has access to multiple companies and may be able to find a better fit. We also discuss the option of self-insuring, and the strategy of only insuring your revenue-generating buildings to keep your premium lower by reducing the number of assets covered. Finally, we wrap up the episode by discussing Actual Cash Value vs Replacement Cost Value coverages and understanding what those terms mean for your farm.
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