Acknowledging the Entire Iceberg
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Dan Kelley uses an iceberg analogy for insurance coverage, and it goes like this: “The loss you see from an event is just the tip of the iceberg, but maybe 80% to 85% is underwater. Those are the losses you don’t see. When you take out your insurance coverage, you need to make sure you’re not only thinking about the iceberg above the line but all the important stuff below the water.”
As owner and operator of Kelley Farms in Normal, Illinois, and a Nationwide board member for 15 years, Mr. Kelley shared that covering an entire farm operation starts with an annual review. “Having an insurance policy for your large farm that’s up-to-date is crucial,” says Mr. Kelley. “Because the coverage you think is adequate when you buy a tractor for $250,000 and insured for that amount, is one thing, but if that tractor is destroyed and has to be replaced, and the replacement is $325,000 because you’ve owned that piece of equipment for three or four years . . . well, those are where the major gaps are that can really hurt.”
Mr. Kelley recommends the following four steps to get started with an annual review:
1. Keep a running list of any changes to your operation. Assess everything from your family’s personal property and farm structures to operational methods and employees. From major life changes to minor equipment additions, everything counts.
2. Set up a family/decision-maker meeting before meeting with your agent. Address coverage, safety and risk management concerns they may have. This will help everyone develop a sense of ownership of safety and risk management issues and how to solve them on the farm.
3. Provide a list of questions and concerns to your agent before the annual policy renewal. Give your agent time to gather all the necessary information and prepare answers to your questions. This will make for a smooth and efficient renewal process.
4. Make sure you have an insurance agent who knows farming. No other farm insurance company trains and certifies its farm agents like Nationwide. Having a Nationwide Farm Certified Agent ensures you have the insurance coverage you need while keeping costs reasonable.
The wisdom of the iceberg analogy and Mr. Kelley’s personal experience bring home the fact that reviewing your insurance policy annually with an agent who understands the day-to-day operations of a large farm is key. “This is why Nationwide’s Farm Certification Program is so important,” says Mr. Kelley. “Because it puts agents through varying levels of training specific to farm policy needs, it truly positions the agent to understand all the risks.”
Knowing what’s above and below the waterline on your iceberg and doing an annual policy review will create the foundation for your peace of mind. “That’s where a good insurance agent can help you,” remarked Mr. Kelley. “And that’s why you need to work with Nationwide.”
