Updating Farm Personal Property Values
By Sherry Taylor, Manager of Product Development and Support
We have invested a significant amount of time at WRC considering how to address dwelling and building values in light of the current inflationary and supply chain issues. However, each mutual also should consider how these issues affect farm personal property.
At a recent IAMIC meeting, Steve Asmus of All States Ag Parts discussed that not only is replacement equipment hard to come by, but also the cost to obtain pieces has skyrocketed. And, according to an Indiana Public Radio article by Brock E.W. Turner published in December 2021, “the price of used equipment is up to 30% higher.” Part of the reason for the increase is that manufacturers had trouble sourcing components to build new equipment, so that increased the demand for used equipment, thus reducing the supply.
Current market forces are not just impacting equipment. Turner’s article also notes the cost of seed and fertilizer has increased two to three times. And in December 2021, the price of corn was up 75% since March of last year.
As a result of these increasing costs and values, now is a great time to revisit scheduled and unscheduled farm personal property values and limits. Be particularly aware of how the fluctuation of equipment and commodity values impact blanket coinsurance requirements.
With the dollars at stake for farmers insured by your policies, take the time to be precise about what you are covering. If the farmer is not insuring any commodities but has them on the premises, make sure to exclude them from the blanket. Best practice would be to state something like, “Blanket excluding Hay, Grain, Seed, Fertilizer and Chemicals” on the declarations. Not only does that make clear that they are not covered, but it also eliminates these categories from being considered when calculating coinsurance on blanket farm personal property.
This topic will be covered at the All Manager Meeting in August.
As always, if you have any questions, feel free to contact the Mutual Assistance team.