Before purchasing a livestock mortality insurance policy, it is essential to understand its benefits and risks. Learn more about the costs and perils of livestock insurance and the types of policies offered by Farm credit associations. You will also learn which animals are covered under the policy. How do you decide which plan is best for your operation?
Cost of livestock mortality insurance
It is imperative to understand the cost of livestock mortality insurance. Livestock producers often make substantial investments in genetics, and mortality insurance is one way to protect your investment. Livestock mortality insurance can be expensive, especially if you have a large herd. It also depends on your specific livestock’s age and health condition. However, a livestock mortality policy is essential for protecting your financial investment and may be a good option for your farm.
Livestock mortality insurance can help farmers cover losses incurred when an animal dies prematurely due to illness, accident, disease, or natural causes. This type of policy may also cover the costs associated with animal death between losses. The cost of this coverage is usually in the range of 0.15 cents per $100 of coverage. Therefore, this insurance can provide significant relief in the event of the death of a single animal or a whole herd.
Farmers in eight states can purchase livestock insurance policies. Farmers can buy a policy through their local Farm Bureau office. Farmers can choose the level of coverage they want to cover for their livestock, which is usually a percentage of the animals’ estimated value. Livestock mortality insurance can also be purchased by supplementing a standard farm policy. If you’re unsure about whether this type of policy is right for your needs, contact your local Farm Bureau office for more information.
Perils of livestock mortality insurance
You may be able to purchase insurance against the perils of livestock mortality, including diseases and calamities, depending on the value of your herd. Monthly premiums, annual deductibles, and copays vary. Be sure to check the exclusions of your insurance policy. For example, some policies may have a deductible if the animal dies from an illness.
A livestock insurance policy can cover losses caused by various incidents, such as fire, theft, and natural disasters. This coverage will also pay out if the price of the regional or national cash prices index falls below the level of the cover price. In addition, businesses selling livestock to slaughterhouses can also obtain livestock insurance. This coverage is very beneficial and will reduce financial losses if an animal dies due to a natural calamity.
When purchasing a policy for your livestock, it is essential to consider the risks involved in producing and selling your animals. If you cannot cover livestock losses due to disease or injury, you may be out of luck if it happens to be a member of your herd. Fortunately, livestock mortality insurance can help protect you and your business. Listed below are the most common perils covered by livestock mortality insurance.
Farm Credit associations that offer livestock mortality insurance
Farmers and ranchers in Texas find that livestock insurance is a great way to reduce risk and maximize profitability. Many Farm Credit lenders offer livestock insurance policies that allow farmers to cover the entire herd or high-value individual animals. Livestock insurance plans cover the cost of losses from earthquakes, floods, accidents, and wild animal attacks. Moreover, some policies include provisions for loss reimbursement in case of theft, electrocution, and accidental shootings.
In addition to offering risk management plans for swine, cattle, and lambs, Farm Credit associations also provide a livestock risk protection plan, which covers the difference between market prices and the floor price for your livestock. Livestock risk protection covers the price drop of swine, feeder cattle, and beef and reimburses producers if their livestock’s market value drops. Although these products are not as standard as the latter two types of insurance, they can still benefit farmers financially.
LIP policies benefit livestock producers in case of natural causes such as disease, drought, or attack by reintroduced wild animals. Livestock mortality insurance pays 75 percent of the average fair market value in the event of the death of livestock due to natural causes.