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Billings – With a long winter and above average rainfall coming in to hay harvest, many farmers and ranchers in the Northern Plains are relieved to be working through their first or even their second good cutting of hay in 2018. However, with temperatures on the rise and lots of grass which could become fodder for a wildfire, it’s worth evaluating whether you should spend a little coin to protect your hay crop.


Jake Gustafson farms and ranches near Simms, Montana as well as provides farm and ranch insurance through Leavitt Great West Insurance in Choteau. He says, people need to know that hay needs to be scheduled on their insurance policy in order to be covered. “You need to make sure you have the correct tonnage and that you have the correct, agreed upon value for what it is worth.”


Limits will vary on hay insurance per policy and carrier, but Gustafson says much of the time the maximum amount covered might be around $100,000 per stack.


Other stipulations to getting hay insurance include having hay stacked a minimum of 100 feet apart. “You wouldn’t want to put two stacks 50 feet apart and have them both burn up and your max on the policy is only $100,000. The insurer will want stacks far enough apart that if one stack does go up, the other doesn’t.”


In order for hay to be insured, it would need to be stacked, chopped, baled or even cubed. It could be located in open areas or within a structure. Hay insurance typically excludes growing hay.


Additional coverage items that a rancher may want to discuss including in the policy would be loss of fencing or structure surrounding the hay, possible fire department service charges, loss of hay due to windstorm or other natural disaster, or even theft or vandalism.


Ranchers can get hay insurance as soon as the hay is stacked if it is scheduled on the policy. If they wait to get insurance until later in the season when fire risk becomes imminent, it will take one business day to bind coverage on a specialty program and then it usually takes affect at 12:01am the following day. So it seems it is worthwhile calling your agent even if you can just now smell smoke. This is not the case for flood insurance which often takes at least 30 days to get approved.


Gustafson says hay insurance is fairly reasonably priced, especially compared to fencing or livestock mortality insurance. Below is an idea of what a potential policy might look like. Rates will vary somewhat by state and carrier.


Hay Coverage & Loss Example:

Hay stack: 200 tons.

Hay Value:  $90 / ton.

Insured time: 180 days

Deductible Rate: $250/0.5{4c92fa2179cbca4bed3bb0c6c6ce267033d9d158a5f4060fb03bde3d74c11c2b} deductible


Liability: 200 tons x $90/ton = $18,000

Premium: $18,000 x $0.95 rate = $171


If Fire destroys 75 tons,

Loss: 75 tons x $90/ton = $6,750

Insurance Payment: $6,750 – $250 = $6,500


It is worthwhile to note that if your insurance policy is underwritten by Mutual of Enumclaw, you are automatically enrolled in their Wildfire Defense System. If your property is threatened, WDS may be able to provide potentially structure-saving services, including sprinklers, fire blocking gel, ground-applied retardant, and other wildfire hazard removal tactics. Gustafson notes that he has clients who have gone with a Mutual of Enumclaw policy explicitly because of this unprecedented service.


Gustafson recommends meeting with your trusted insurance agent to understand your unique risks and determine what will be practical for your operation. To speak with agents who specialize in farm and ranch, visit Mutual of Enumclaw to find an agent near you or contact Jake Gustafson directly at 406-466-5773 or jake-gustafson@leavitt.com .

 

 

 

 

Content brought to you by Mutual of Enumclaw.

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