Depending on its size, a farm or ranch can be like a puzzle with many pieces that must come together to produce a successful outcome. Losing even one piece, such as the farmhouse, equipment, or livestock, can leave a farmer in the hole.
That’s why farm and ranch insurance is indispensable. It helps safeguard your house and belongings, equipment and machinery, livestock, and other items on your farm from potentially catastrophic loss.
While farm insurance can be customized in many ways to insure several parts of your farm or ranch, this post will focus on one key piece: livestock insurance.
What Is Livestock Insurance?
Livestock insurance is the part of your farm or ranch insurance policy that protects the animals you own from accidents and other unexpected events.
That said, livestock insurance doesn’t cover your livestock against death from disease, old age, or natural causes. You can ask your farm insurance agent about livestock mortality insurance to guard against disease, old age, and natural causes.
Like the rest of your farm insurance, you can customize livestock insurance to meet your specific needs. If you have any combination of cattle, rabbits, goats, pigs, sheep, or chickens, you can buy coverage for these animals both while they’re on the farm and while they’re being transported.
While horses are considered livestock and are covered by livestock insurance, they have special needs. As such, you should consider purchasing separate equine insurance, which would give you coverage options for mortality, theft, loss of use, and major medical and surgical emergencies.
Livestock insurance is important to farmers because it can defray the cost of replacing a lost or injured animal, as well as the loss of income from products that might have come from that animal, such as milk, meat, or eggs.
What Does Livestock Insurance Cover?
Livestock insurance generally covers the following types of losses:
- Accidents while loading and unloading
- Accidental shootings
- Attacks by dogs or wild animals
- Structural collapses
- Collisions
- Natural disasters, such as earthquakes
- Theft and vandalism
- Extreme weather, such as lightning or flooding
Some of these losses are covered directly by your livestock insurance, and some are additional endorsements you can discuss with your farm insurance agent.
Does Livestock Insurance Cover Liability?
You’ll generally find that you can customize farm and ranch insurance to suit your farming needs. That also extends to livestock insurance.
Liability coverage, which protects you if one of your animals causes property damage or bodily injury to others, is often provided with your livestock insurance. If it isn’t, you can add it on separately.
Since the liability coverages for your livestock are limited, you might also want to consider an umbrella liability policy, an additional layer of coverage that can protect you financially with coverage options ranging from $1 million to $5 million. Talk to your farm and ranch insurance agent to purchase higher coverage up to $10 million.
Additional Coverage for Collisions on the Road
Farm insurance policies don’t always offer an endorsement to cover your livestock getting hit by a car or truck on a public road. That’s why it’s often possible to purchase livestock collision insurance that covers both the animal that’s hit and the damage to the vehicle involved in the accident.
Blanket and Herd Coverage vs. Individual Coverage
It’s crucial to understand your options when covering your animals, assessing their value to the farm based on how you intend to use them. More specifically, are you raising them to sell, work, or show?
These are important questions for you to answer, as they’ll determine the type and extent of the coverage you need. For example, if you’re raising show horses, they might be more valuable to you than the horses you’re raising to work the land.
As mentioned, livestock insurance covers a range of animals, including chickens, horses, hogs, alpacas, cattle, deer and more.
You might buy a policy that covers all the animals, which is known as blanket or “unscheduled” livestock coverage. Alternatively, you could cover a herd of cattle based on the number of animals it contains. Herd coverage is the most common option.
For animals that might have a high value to your farming operation, including cattle, you can buy coverage for individual animals. This is known as “scheduled” livestock coverage. It allows you to set the amount of insurance you want for animals on a one-to-one basis, ensuring that your high-value livestock are adequately covered.
Keep in mind that if you opt for scheduled coverage, you’ll need some way to identify and list each animal individually in your policy, such as a tagging system.
What to Do When You Get New Livestock
You’ll likely acquire more animals after you purchase your livestock insurance, as is the case on most farms. In many cases, your farm and ranch insurance policy will automatically extend your personal property coverage to protect the new stock.
It’s important to be aware of your coverage limits and any timeframes for reporting the new livestock to your insurance agent.
How Much Does Livestock Insurance Cost?
The cost of livestock insurance varies depending on several factors. For instance, where your farm or ranch is located, the type and number of animals being covered, and the amount of coverage you want to purchase will all make a difference.
Beyond Livestock Insurance Coverage
Additional coverage to protect your farm against the death of an animal is available in the form of a livestock mortality policy. Mortality insurance covers the cost of replacing the lost livestock and the loss of the animal’s use on the farm.
This type of policy provides coverage for any incident that results in the death of an animal unless there’s a specific exclusion, such as neglect, illegitimate drug use, unnecessary surgeries, terrorism, or a government mandate to euthanize a group of diseased animals.
The cost of such a policy will depend on the value of the animal, which is reflected by the amount you paid for it. A policy for sheep, goats, or hogs will typically range from 12% to 15% of the animal’s purchase value. Mortality insurance for cattle tends to be lower, hovering at around 6% of the cattle’s value.
Another issue beyond livestock insurance coverage is market risk. The USDA offers Livestock Risk Protection, an insurance program that protects you if the price of covered livestock drops unexpectedly.
Find the Livestock Coverage You Need
A livestock insurance policy might be the final puzzle piece needed to ensure your farm’s success. If you own livestock or are thinking about making a purchase, contact Garrett Insurance for assistance in choosing the right policy.
This information is an explanation of how coverages may apply. For specific policy coverage details please review your policy and insuring agreements. These documents will verify eligibility and determine coverage.