melloInsurance

Serving our clients, Serving our community

Farm Insurance

Understanding ‘Loss of Use’ Insurance Coverage for Farm Machinery

We understand as a farmer, your machinery is vital to daily operations. So, let’s go over some key points about ‘Loss of Use’ coverage, ensuring you’re well-informed and prepared for any unexpected machinery issues.

What is ‘Loss of Use’ Coverage?

Q: What exactly does ‘loss of use’ coverage entail?

A: ‘Loss of Use’ coverage is essentially a safety net for when your machinery is out of commission due to an event covered by your policy. It’s designed to help compensate for lost income by covering costs like renting replacement equip

ment, ensuring your farming operations can continue without significant interruption.

What Does ‘Loss of Use’ Cover?

Q: Which situations are typically covered under ‘loss of use’ insurance for farm machinery?

A: This coverage typically applies when your equipment is damaged by specific events such as fire, theft, vandalism, or certain natural disasters. It helps by covering the cost of renting or leasing equipment or hiring someone to perform those tasks.

 

Q: Are there any limits or restrictions on what this coverage pays for?

A: Yes, there are usually limits on the duration and total amount the policy will cover. For example, it might cover up to a certain number of days or a maximum dollar amount per day. In the event of a total loss of the machinery, most insurers cover loss of use until an offer is made for payment. At Block’s Agencies, we offer a solution with ‘Extended Rental Expense’ through our partner, First Acre Insurance. ‘Extended Rental Expense’ provides an increased period of time for machinery rental expenses when the delay to replace lost machinery is outside of your control. It’s crucial to review your policy thoroughly to understand these specifics. Different insurers may offer different types of coverage in this scenario.

What Does ‘Loss of Use’ Not Cover?

Q: Are there any common exclusions to watch out for in ‘loss of use’ coverage?

A: Absolutely, there are common exclusions. Typically, this coverage won’t extend to issues like machinery breakdowns due to normal wear and tear, lack of maintenance, or mechanical failures unless your policy explicitly states so.

Q: Does this coverage apply to all types of farm machinery?

A: Not always. Coverage can vary depending on the type and age of your machinery and the specifics of your policy. Some policies might exclude older models or specialized equipment, so it’s important to check what your policy specifically covers.

How to Ensure Adequate Coverage

Q: How can farmers ensure they have adequate ‘loss of use’ coverage for their machinery?

A: To ensure adequate coverage, you should regularly review your insurance policies and assess the value and types of your machinery. It’s also a good idea to consult us to make sure your coverage aligns with your needs. Remember to update your policy as you acquire new equipment or as your farm’s conditions change.

In conclusion, while ‘Loss of Use’ coverage can be extremely beneficial in minimizing disruption, understanding the details of what is covered is essential. Proper management of this insurance can help protect your finances and keep your farming operations running smoothly, even when unexpected challenges arise. If you have any more questions or need further assistance, feel free to reach out!

Farm Coverages that you may have forgotten about


During the farming season, there are many things going on. When it’s spring, you are getting the harrows, drills and rest of the equipment ready to hit the fields, along with the seed and fertilizer. Then after that is in the ground you have to get the sprayer and chemical ready. Then you have a short window before the peas are yellow and you are starting the harvest.

There are so many variables to running a farm and the season is so busy and hectic that something like your insurance policy can fall through the cracks. Generally the big items are remembered: The house, Shop, Bins, Barns, Equipment, Grain, Cattle, Etc. However, we want to touch on a few items that may be forgotten.

If you have a dairy or poultry farm, a big coverage is Farm Expense & Farm Income Coverage. This coverage pays for your expenses if you have a claim that results in a devastating loss which causes your farm to be inoperable and unable to generate an income because of the claim. For example, your milking parlour burns down and you are unable to milk your cows or your cattle have been lost in the fire. You may need to transport your cows to another farm to milk your cows while you rebuild your parlour. There are many different kinds of extra expenses that can be covered under this endorsement. It is a farm version of a “business interruption” policy. You may still have mortgage payments and payroll to keep employees, but you may not be making as much income or any at all. This plan is here to protect you from such a loss.


Another forgotten coverage is Debris Removal. Many people think of the replacement cost of a shop or barn, but they forget on what it would cost to tear down, excavate and haul away damaged materials and buildings. This my be a large job if you don’t have the equipment and manpower to handle the project. Most insurance companies recommend you add a minimum of 5% of the replacement value onto the building value to include for these costs.

Equipment Breakdown (also known as Boiler & Machinery Insurance) can be purchased on your farm policy for your farm outbuildings. Equipment breakdown coverage is not Machinery breakdown coverage. This is not designed to cover your farm machinery, but rather the fixed equipment in your farm outbuildings. This would be like: Boilers, Aeration Fans, Automatic Scrapers, Milking Parlours, Automatic Ventilation Slides, Compressors, Air Conditioners, Electronic equipment, etc. This coverage would apply to any sudden and accidental electrical or mechanical failure to that equipment fixed to the buildings. This coverage is important to cover the loss of any equipment in the claim, but it also removes any loopholes typical to an insurance policy. For example, you have a sudden mechanical failure in your heat exchanger in your furnace. The furnace catches fire and the shop burns down. The shop would be normally covered on your farm policy for the value it was insured for, however, they would exclude the damage to the furnace caused by the mechanical failure. This could still end up costing $5000 or whatever it would cost to repair or replace that furnace. By having this equipment breakdown coverage, the entire claim would be paid for, and you would only have to pay one deductible.

There are many little coverages that we recommend, but you may not have seen value in them when you first purchased your policy, but may now be relevant to you. A few of these are: Loss of use coverage (Farm Machinery), Volunteer Fire Fighting Coverage, Pollutant Clean-up and Removal, Tack Equipment, Vet supplies, Milk Contamination, etc. 

Please give us a call if your operation has changed, or if you would like to review the other farm coverage operations related to your farm operation.

#AIM18 is the Agricultural Trade Show to remember!

We will be attending the exciting AG IN MOTION Expo on July 17 – 19, 2018. #AIM18 is located 15 minutes NW of Saskatoon between our two neighbouring towns of Langham & Borden. We are in the Ag Pavilion building. Come say hi! We have treats, prizes and goodies that are free! Here is an interactive map showing where the events are located.

If you have trouble getting to the event, we have pinned the location here. They also now have an app and field guide to help you navigate the expo. You can click here to get started.#AIM18 is designed for the modern farmer. Ag technology and advancements in innovation. Whether its GPS or Autonomous Equipment or Advanced biology in the crops and fertilizers or insurance and risk management solutions, there are a ton of exhibitors bringing loads of valuable information and technology.
Ag in motion 2018

Start the event off right with the complimentary Dairy Producer Brunch on Tuesday July 17th from 8:30am – 10:30am and Beef Producer Brunch on July 18th from 9:00am – 10:30am. These will be located in the Ritch Bros. Event Tent. They will also have John Gormley as a Keynote Speaker on July 18th at 2:00PM. Don’t miss it. For a full list of events, visit the schedule section on the website here.  Updates on the event and continuous information on upcoming events can be found on there facebook page @AginMotion.

We would love to see you guys attend this amazing farming experience. It is 3 days of chaos, learning and fun. Please make sure you attend and take in as much as possible.

We would love to meet with you and discuss your insurance needs and how the insurance industry is changing its products for the better for the modern farmer. Our staff is rooted in the heart of the prairies and we know Agriculture. If there is anything we can help you with when it comes to your policy, coverage, claims or technology. We want to be your broker as we serve your needs first. We are licensed in Alberta and Saskatchewan, so if you farm in those provinces, give us a call, as we will design a policy to meet your every needs to make sure you are properly covered.

We hope you enjoy this event. Make sure you drink plenty of fluids as it is supposed to be a hot couple days. See you soon!

Be prepared for this years Harvest

With the warm weather comes a ripening crop. We are approaching harvest very quickly, in fact there were some combines out in the field already.

Every harvest has potential risks, and we need to make sure that those risks are either managed properly or that you have coverage in place to protect yourself in the event of a loss. First of all, with the warm weather and dry stalk, there is a potential fire trap in the combine. From the risk management side, you should have a fire extinguisher nearby at all times, and a water truck on the field, wouldn’t be a bad idea either. As for insurance, please review your equipment list with us and look over the values on that equipment, to make sure it is up to date. We would hate to have a loss and realize the equipment wasn’t listed or it was underinsured.


It  is important to make sure you have loss of use coverage on your policy for your machinery. Loss of use coverage is money you can use for a rental, if your equipment has had an insurable loss. For example: You have an ingestion claim on your combine that has resulted in damages of $25,000. The ingestion damage is covered under your insurance policy on your combine, however, you need another combine to continue with harvest while this is being repaired. If you have loss of use coverage of $10,000, you can use this coverage to rent a combine during the time your combine is being repaired.  There are different limits you can buy, we used $10,000 as an example. Please contact our office if you would like to add this coverage or more information on it.

If the conditions were right this year, you may have a bumper crop. Once that crop is in the bin ready to be transported; we need to make sure that your investment is covered. Insuring your threshed grain should be a priority to prevent losses due to theft, fire, windstorm, and upset and overturn during transportation. Your grain should be insured to a minimum 80% of replacement value to avoid co-insurance.
Today’s bins are getting larger and more complicated. With automatic bin sweeps, aeration fan systems and other technology; we need to properly insure these structures. For risk management, we would  suggest anchoring down your hopper bins to make sure they are secure, even if there is or isn’t grain in the bins. This will also result in a rate reduction for the insurance premiums on those bins. With all of  the fixed equipment in the bin, “equipment breakdown” coverage will help cover losses due to a sudden and accidental mechanical failure. And again, when insuring the bin, we should insure it for the replacement value, that way if there was damage due to fire, wind or collision from moving machinery, you are eligible for full value of the bin if replacement or repairs are needed.

The old farm saying is, the season is not over until the grains in the bin. Some might say until you have a cheque in your hand. There are a lot of variables on the way, and if we can protect your investment through that process, you will sleep better at night.