Animal Mortality Insurance
Animal Mortality Insurance is a coverage many farmers ask about. A loss of a large number of animals in a herd or flock or valuable breeding stock can devastate a farmer operation. Many farmers ask if animal mortality insurance is similar to life insurance. In this week’s blog, we are going to discuss types of mortality coverage and what it covers.
Specified Perils Coverage
Specified perils, also known as limited coverage, policies are the most common coverage carried by farmers. It is called limited coverage because it only covers for specified perils. In insurance, a peril is an event that causes a claim. Some of the most common perils covered under this type of policy are fire, lightning, windstorm, hail, electrocution, drowning, collision, sinkholes, earthquake, accidental shootings or accidents caused while the animal is in transit. Some companies may cover or allow coverage for wild animal attacks to be added under underwriting requirements. Other policies may automatically include theft, while some require it to be added as an additional coverage for an extra premium.
This type of coverage is more comprehensive than the limited coverage discussed above. It will likely cover theft automatically and will broaden coverage to include sickness and disease. This type of coverage is often considered for high-value animals. Because it is broader coverage, it costs more and usually has more underwriting guidelines. However, it is the broadest coverage generally available for a farmer’s livestock.
Ways to Cover Animals
Individual Coverage allows you to schedule specific animals for specific dollar amounts. It can be a very flexible way to insure high-value animals. Insurance companies will also allow a wider range of valuation under this type of coverage. Your animals can be identified in the policy by whatever means you use on your farm. The policy will require you to state what coverage should be applied.
Herd coverage allows you to cover your whole herd, such as 100 head of Jersey cattle. This is one of the most common ways to secure this type of coverage on insurance policies.
Blanket Coverage is usually written on the policy with your other farm equipment and structures. This can be a convenient way for many farmers to get coverage. However, you want to make sure your values are adequate as this may cause a lack of insurance in a large natural disaster, especially if the herd size changes during peak birthing seasons.
Types of Valuation
The most common valuation for these types of policies is market value. The amount of payment will be determined at the time of loss based on what a particular market is bringing for specific livestock. However, many companies, especially under the individual coverage policies, may consider amending the policy to be more flexible. High-value animals may be insured on an appraised value for a stated amount.
It is important to make sure you understand what you are buying when purchasing animal mortality coverage. Since many companies' policies will have subtle differences, it is vital that you understand the coverage to make sure it fits your operation’s needs. Call one of our advisors today if you are interested in more information about this type of coverage.