With the excitement of harvest building up around Manitoba, this is a good time to make sure you are properly prepared. Your first action might be to make sure you have long playlists of country music available along with a cab filled with energy drinks and western novels for the short periods of downtime throughout the day. These are important, but there are other things that are also an important part of a successful harvest season.
One important insurance coverage for your farm to purchase is called loss of use for farm machinery. This coverage provides a limit of insurance which pays for the additional expense of renting a replacement unit for machinery damaged by an insured peril.
Loss of use coverage can be purchased to a level that you select, often in increments of $10,000 in value. Some insurers will allocate a specific percentage of that limit for your daily maximum amount available. This is important to know when you are choosing your total limit of insurance. Let’s say you purchase a $30,000 loss of use limit, and your insurer has a daily limitation of 10% per day, you will have a maximum of $3,000 per day available. You may not need the entire $30,000 in a claim, but with costs of machinery increasing, daily rental costs are also increasing.
While there is a need for this coverage throughout the spring and summer months, the time that it is most valuable is during harvest. Whether it is an auger, conveyor, tractor, grain cart, swather, combine or even a header, there are multiple pieces of machinery required to keep your operations moving during harvest. We have seen claims where the loss of use payment is larger than the repair or replacement of the piece of machinery.
Downtime during harvest can cause a significant loss of revenue unless a replacement machine is found in a short period of time. It is also the time where service technicians are busy and aren’t always available for your call. In the event of a total loss to a piece of farm machinery, it can also be frustrating to try to acquire a new piece of machinery while you should be in the field, instead of scrolling through Kijiji and participating in online auctions to find a suitable replacement.
Before harvest starts, it is a good idea to review your loss of use limit, and make sure that your total limit of insurance, along with the daily maximum amount is sufficient to keep you moving during the best season of the year.
Be sure to seek advice and purchase insurance from those who understand your business!