What you need to know about filing property insurance claims on the farm

Grace Connatser
Wisconsin State Farmer
This file photo from Aug. 11, 2020, shows massive property damage after the Iowa derecho that hit farms with winds up to 126 mph.

No one likes to file an insurance claim, but accidents and mistakes happen. If you're confused about what property insurance does, what the claim process looks like and the best tips to remember, Property Damage Appraisers, Inc. has some insight.

Adam May, assistant vice president of training for PDA Corporation, said his company works with farmers all the time doing damage appraisals for farm equipment, specialty machinery, commercial structures (like grain bins and silos) and more. The company is found in all 50 states and performs between 250,000 and 300,000 appraisals every year.

May said the number one thing is to have documentation for everything when filing a claim, especially if it's a piece of equipment. That includes maintenance and repair records, equipment specs (year, make, model and serial number), harvest and yield reports, loss value receipts and any relevant documentation from your processors. Any crucial missing documents can prevent you from getting the full compensation value for your losses.

"We're trying to make that farmer whole again and potentially compensate them accordingly," May said. "With any sort of livestock, we know that (the value of) a calf or a heifer is going to be completely different if it's dairy or cattle. ... The more documentation and information that the farmer or rancher has is going to help us expedite the process."

Many policyholders also just don't understand the coverage included in their policy, May said, instead only relying on the insurance agent to tell them what they need to know. Make sure you yourself are reviewing your coverage annually and keeping up with how much money you put into it – don't insure any property for more than it's worth, and ensure your policy accurately reflects any depreciation. Plus, commodity prices are unstable enough that you may need to adjust coverage options regularly.

An important example of this would be buying a tractor worth $50,000 and keeping it insured for that amount while years pass by. When the time comes to recover losses from a tractor loss, the insurance company won't compensate you for that amount if the appraisal value comes back significantly under that amount. You'll only receive market rate or cash value compensation.

Adam May

"We do a lot of market research as well," May said. "(A customer could say), 'We'd like for you to evaluate all our equipment, just give us an idea of what it's worth in the market right now ... because we're looking at potentially changing our policy. So we pull up comparables with the market ... and we give them that information."

May said the best benefit for property insurance is simply the peace of mind. He said PDA works as quickly as possible to get appraisals done and returned to the insurance company so that farmers can get their losses replaced without losing too much income. Normally, the turnaround time for damage appraisals is two business days, but for heavy equipment, it's four calendar days, and for residential and commercial property, it's five calendar days.

Weather often drives spikes in business, May said, especially during the spring planting season and the fall hurricane season. He added that the company responds to major weather catastrophes, like the August 2020 derecho in Iowa, with emergency teams for quick appraisals. 

"The asset to our company is that high caliber and experience of our appraisers across the country," May said. "If there is a catastrophe ... and we see a huge spike in volume, we pull our team together and we disperse people from all over the country to go in and be able to maintain that cycle time. So just because we have a spike in volume, we don't deviate away from those standards."