Good hay isn’t cheap to buy and it isn’t cheap to harvest, so managing the risk that comes with this investment is an important piece to protecting the well-being of farm and ranch operations.
“When it comes to insuring hay, stack limits are probably the most important item to consider,” said Doug Collard, farm and ranch insurance producer with Specialty Risk Insurance.
He recommended farmers and ranchers speak to their agents and/or read up on their policies because insurance carriers often only cover a set limit of hay within a certain radius, commonly known as a stack limit. If they’re unaware of these limitations, they may run into coinsurance problems or find out the full amount isn’t covered until after there is a problem.
Collard also recommended staying updated on the proper value of hay and insuring it for what it is worth – rather than underinsuring or overinsuring it by assuming the price of hay stays flat from year to year.
For hay equipment like mowers and balers, Collard said “fire is automatically covered so ingestion coverage is the biggest thing.” A foreign object can do a lot of damage to these pieces of equipment so making sure you have coverage in such an event can have a big impact on the success of a hay season.
Austin Rice, claims associate at Specialty Risk Insurance, said he estimates 75% of hay equipment claims are due to fire with the remaining due to foreign objects and ingestion incidents.
Coverages vary between carriers on scheduled and unscheduled, also known as blanketed, equipment. Some carriers require equipment to be individually listed on the policy to have foreign objects coverage while others provide the coverage on equipment when covered under a farm personal property blanket.
“When it comes to fires or ingestion, you also want to check with your company to see if it covers the cost of a rental while your equipment is getting fixed,” Collard recommended. Rental expenses can rack up quickly when there is hay on the ground or a narrow window of favorable weather and farmers have no choice but to rent equipment to get their hay up.
Additional hay risk management tips, offered by Travelers Agribusiness Insurance, include:
- Bale hay with a moisture content of 20% or less.
- Maintain a minimum of 100 feet between haystacks, roads, property lines, etc.
- Monitor the bale temperatures for up to six weeks after baling. Core temperatures greater than 175 degrees indicate the fire is imminent.
- Be alert to steam and unusual odors, such as tobacco, burning, caramel, etc., coming from the haystack as well as areas in the stack that begin to slump as these are indications of the core temperature getting too high.
For more information on managing the risks on your farm or ranch, contact your agent or call Special Risk Insurance at 417-359-5470.