Let's get down to business and discuss something vital for all of us hardworking Indiana farmers — insurance. Specifically, we're going to delve into the difference between special coverage and named perils in our Indiana farmowners insurance policy. You might be familiar with the basics of these, but a refresher never hurts, especially when it's your bread and butter on the line.
Named Perils
To start, we'll dig into what 'Named Perils' coverage is. You could think of this type of coverage as preparing for a harvest. You know what you'll plant when you'll plant it, and what you'll get when it's all said and done. In insurance terms, it means your policy explicitly lists the risks or perils it covers. Common ones include fire, lightning, windstorm, or hail - things we're no strangers to here in the Hoosier state.
While this can offer peace of mind because you know exactly what's covered, it does have its downsides. If a risk isn't named, it's not covered, leaving you up a creek without a paddle if a peril outside the list strikes your farm. For instance, if your policy lists fire but not theft, and someone steals your GPS equipment, you're on your own to cover the loss.
Special Coverage
On the flip side, 'Special Coverage' is a bit like planting with crop insurance. It's there to safeguard your crop against all perils except those explicitly excluded in your policy. This could be a better option if you're worried about those 'what if' situations that aren't on the named perils list. With Special Coverage, if something happens that isn't explicitly excluded, you can breathe a sigh of relief knowing you're covered. But remember, there are still excluded perils, and these typically include things like wear and tear, earthquakes, or flood - risks that can be as unpredictable as Indiana's spring weather.
Example
A recent example of this is a client's liquid manure spread imploded. They were using it as they always do & all of a sudden they heard a large boom, the tank caved in. On a typical farm policy with named perils, this would not have been a covered loss. However, they had special coverage, and nothing in the policy excluded implosions of equipment. The insurance company paid out the claim and helped them source another spreader.
In Conclusion
To put it in simple terms, Named Perils coverage is like a grain bin—it’s good, it’s solid, but it only holds a limited number of items. Special Coverage, on the other hand, is more like a large shop—it has room for a whole lot more, but there are still a few things you just can’t store in there.
When deciding between these types of coverage, consider your farm, your risks, and your peace of mind. If your farm's nestled in a spot that rarely sees any peril beyond the named list, Named Perils coverage might be all you need. But if your farm's a bit more exposed, and you want to sleep soundly at night, Special Coverage could be the ticket.
Just like picking out the right seed for your soil, it's crucial to choose the insurance policy that's best for you. Whether that's Named Perils or Special Coverage depends on the specifics of your farm and your comfort level. So, take a moment, look over your farm and ponder it. Remember, insurance is not just about protecting our property; it's about preserving our way of life, the Hoosier way. Let's keep our legacy secure, and our farmland thriving.