Farm Insurance News

If you are like most farmers you have essentially everything you and your family own tied up directly or indirectly in your farm business. I am not talking about whether or not you own it or the farm owns it or even if the farm corporation or partnership owns it. What I am saying is that you probably have very little cash that is not going to be needed to run the farm and all your other assets are being used by the farm to generate income.

It is not unusual, according to what farm insurance agents tell me, for a farmer to have 90% of everything they have tied up in the farm’s operation. So what will happen to your family, your partners (maybe family members), and even the farm itself if you leave? Naturally when I use the expression “leave” I actually mean when, not if, you die. Whether or not everything you, and perhaps your parents before you, created will come apart or not will be the result of the plans you are making today. That I can guarantee!

There are actually only three options available to you when creating your farm’s plans for the future. Naturally each situation is unique and farm insurance agents have stacks of examples how a combination of these three options can be custom molded to wrap around your farm and your family’s goals and objectives.

One option is to simply sell the place, liquidate the assets the land and equipment by selling everything individually. You have been to dozens of farm sales so you know what I mean. Another option, the preferred option for most farmers of my experience is to pass the farm business to the next generation, a son or daughter - along with their spouse and non-farm heirs, so the farm can continue on as it has for generations. The final option is to sell the entire operation as a going concern. An example of this would be a fair-market sale to a neighbor’s son or to the farmer down the road.

Selling the farm one asset at a time, the auction method, will only return you a few cents on the dollar for all the assets, except maybe the prime farmland or the development-ready land you own. Think about it, when you go to a farm auction do you go there to see just how much money you can pay for something? Of course not, and neither will your neighbors when they come to your family’s sale.

Passing down the farm is everyone’s dream - having the business carried on by a son or daughter with mom and dad on the front porch watching over them - or maybe on a cruise checking the web cam dad set up in the barn so he can still check on the milking from half way around the world. The problem with this scenario is that managing the farm is different from doing what you’ve been told and farmers often seem reluctant to train their successors to manage the operation and lead the employees as if they were the boss.

Can your offspring run the place? Will your banker and trade creditors trust their judgement if you are not there to back up their decisions? I have heard from farm insurance agents who work with farms in transition where the kids (40-50 years old) were never allowed to make serious binding decisions until dad unexpectedly died. Good intentions notwithstanding, this is business and if you want it to succeed after you’re gone you have to begin laying the groundwork today.

What about your key employees, will they stick around and work for your successor or will they take off right after the funeral? How do you know? Can they work for your kids? For that matter can your kids work together? What if there is only one successor on the farm and all the rest have no interest in running the business - just in getting their “fair share” of the inheritance?

Can you see any problems here? Is it possible that the heirs will want their inheritance at the same time the government wants its taxes, and the hospital wants its money and the banker wants to clear the current notes before loaning money for next spring’s planting or feeder stock?

Do you think anyone not getting their “fair share” in cash and right away will be bitter and make it hard on your kids and your spouse? Asking farm insurance agents to tell you about the actual behavior of otherwise really nice people can be an eye opener. Will there be enough cash flow to pay off the non-farm heirs, the bank, etc. and pay your successors and key employees to run the place and still have income security for the rest of your dependent family?

If it turns out that either there isn’t anyone in the family who can run the place, or the kids can’t work together, or there is not enough cash to pay them off and still continue to farm, then maybe you’d be better off just sell the place. The only question is who will set the price and the terms and whether or not your family will receive the greatest value for your years of hard work.

There is one way to make sure in advance that your interests are protected. That is with a Buy & Sell Agreement. Personally, if I were in your shoes I would talk with someone I trust about this right away.

Farm insurance agents have arm loads of sample agreements and access to the most creative minds around - who will consider your situation, what’s important to you and help you and your family create a process that will insure that the terms of the agreement will be kept and that the farm and your family’s security will be protected.

Successful farmers see their hard work pay off over the years, naturally making the farm their most important and valuable asset, as well as one that offers other benefits. The total family’s financial security and steady income as well as your ability to be your own person - not having to answer to anybody else, and it provides you an identity and recognition in your community.

Doesn’t it make sense to protect those decades of hard work from the alphabet effect, the result of spending too many years fighting the day to day battles and not enough time considering the long term implications of your success? Let’s face it, when you don’t plan for the long term future, you lose control of your farm’s destiny in the event of death, disability, or old age.

When something bad happens there are a series of problems that seem to be automatically triggered - like dominoes that start falling each of whom knocks down the next and the next and the next. And when you are in business with your parents or your children a lack of long term planning makes the results more personally devastating and much worse than if you just lost the money involved in the collapse of your farm business.

Farm insurance agents call the domino like problems cascading one on top of the other, the alphabet effect to help you visualize how a failure to plan for the long term future will effect you and your family.

First of all, attorney’s file the papers that begin the various legal proceedings. If everything has not been spelled out in advance - the courts take over with laws that were created to establish fairness in a hypothetical situation, not your situation.

Your friendly bankers will immediately begin to restrict credit. The good credit you’ve established over the years was only in part because of your assets. It was often in large measure based on your history of doing what you promised, pay the note on time, and since you are no longer here, the bankers have no choice but to …

Naturally your creditors want to be paid, sooner rather than later. And since they don’t want to be left holding the bag, like so often happens when the ultimate payment of the bills depended on the continued operation of the farm - they may press for payment in cash and as soon as your contract with them permits.

Debtors may begin to demand payment. People like the seed, feed, and fertilizer folks you’ve dealt with for decades - may not be willing to wait until harvest for their money. Because trade credit like this is typically unsecured and casually given, it may be pulled away instantly if the vendors feel threatened in any way.

Your employees start to get nervous. Your best people, those you had counted on to be there long into the future. The ones who know how everything works may start talking to your neighbors at your funeral about a new job down the road from your place. The worthless employees, the ones you would get rid of if you could - they will be there till the bitter end, along with their own special brand of meritocracy.

Family members need cash. Farm insurance agents report that most farms are supporting three groups of people within the same family. Your brother and his wife, you aunt and uncle, you and your family - you get the picture, so when something bad happens and the income stops it stops for everybody. And if you are the one people have looked to for decades as the “founder of the feast” they and all your neighbors will say that it was your responsibility to see to in that their incomes did not stop, just because something bad happened to you or yours.

There are several more letters in this alphabet of doom - each one of which will reduce the value of your business and almost any one of which your farm could handle by itself. Together, they way the dominos fall, they will combine to drastically shrink your farm’s worth, threaten it continued existence, and give everyone a much different picture of how successful a business person you were - for decades to come.

Who will be hurt by your failure to take long term planning seriously? You family, your employees, and your business partners to name just a few. What are your alternatives, how can you protect your family and your farm against the many forces you can not control? How can your farm business survive this crisis?

Farm insurance agents and common sense will tell you the answer, it’s taking the initiative and doing the long term planning that is your responsibility to do - for your sake and the sake of everyone that is part of your connected family farm business.

Naturally successful farm insurance agents are qualified professionals. Their number one function, and you know this if your have one, is to make the unexpected occurrences in life a little easier and simpler for you, that it in a nutshell. From their professional perspective, they will help you select an insurance plan that works for you. And if they are licensed to do so that help will also include auto insurance, insurance for your home and buildings, as well as life insurance and health insurance. They reach out to their companies and fellow farm insurance agents to provide valuable information about insurance, the risks that make it necessary, and how to protect yourself, your family, and your farm from those risks and at the same time strive to get the most for your money.

Like successful professionals of all types, a well respected insurance agent is one whose relationships with their customers is built on a foundation of shared values, quality service, mutual trust, and integrity.

In the case of farm insurance agents there is an additional vital component, something that goes far beyond their understanding of policy provisions, exclusions, and restrictions. It is their understanding of what makes their customers tick, as people. What is important to them and why. They must understand the importance of the legacy represented by the farm itself and they want to be there as part of the solution - with a helping hand, in all matters, not just insurance.

Unlike traditional businesses that buy wholesale and sell retail, that rely on the ages old keystone principle that insures revenues exceed costs, farmers are often forced to buy at near retail prices and sell their products at near wholesale.

Farmers, even more than most business owners, are caught in the middle - between the prices of inputs they can not control, the commodity prices they can not control, foreign and domestic politics and strategies they can not control, and the weather - something no one can control.

Money is always in short supply. Setting priorities and understanding the potential consequences of the decisions made for deploying these limited dollars is critical. When something bad happens where will the money to handle it come from? Will it come from the farmer’s nest egg, the farm business itself, or will your farm insurance agent show up with a check - new money being paid in, money that does not have to be repaid by anyone to anyone, ever.

For farm insurance agents this means that they must be ready to work with their customers to balance the risk/benefit insurance premium equation, to help manage the frequent imbalance between what the crop brings and how much it cost to produce it. Farmers know and their farm insurance agents must be willing to understand that some risks the farmer can and should manage themselves, some risks simply do not warrant insuring at all, and others, well the entire business will be lost if they are not covered properly.

Selecting the right farm insurance agent, as a confidant and collaborator in your future success, is a serious decision - but nevertheless one that may be a lot easier to do that you might suppose. Think about it, an insurance agent is the retail end of the entire insurance continuum. And like every industry for each agent in the field there are legions of highly trained experts on the speed dials back at the home office (where the insurance is manufactured).

It is less important than you think for them to know everything. What you should be looking for is someone who is willing to invest their time in understanding you and what’s important to you. They must be willing to ask the tough questions and wait for your answers. And finally, they must be willing to ask for help from the hundreds of experts they have instant access to - in order to create the right solutions for you.

Of course they may be experts in insurance and financial products of all kinds and that can be both good and bad. Good because they already have a lot of great ideas that have worked for other people like you. Bad if all that knowledge causes them to adopt the NIH (not invented here) syndrome.

They may have important professional designations, and they may already be a known quantity in your area, your community, or your association. Or they may be a brand new agent, just getting started. I don’t think it matters really - as long as they resonate with you.

They should be knowledgeable, experienced, willing to take the time to learn about you and your farm business, assertive in advocating your interests to the insurance companies they represent, well connected with the various types of insurance potentially required by you, and organized to need deadlines and respond to your changing needs.

By selecting farm insurance agents or brokers with these characteristics, you will get the help you truly need.

The right insurance professional can be an invaluable asset and an excellent resource.

Accidents can happen any time, any where even to the best of the drivers. They can be a financial nightmare. To prevent the financial drain, it is always better to have a correct insurance cover for yourself and the vehicle. An accident by itself is a big source of worry about recovery and putting life back on track. An insurance policy at the least takes off the worry of paying hospitalization bills. State Farm Auto insurance covers a wide gamut of accident liabilities to free you off tensions.

Policy Coverage of Farmers Auto Insurance:

Farmers Auto Insurance is a large insurance company. Their auto insurance policy covers a wide variety of problems concerning vehicle such as collision, comprehensive, deductibles and so on.

• A collision coverage policy covers damage to your vehicle, caused by hitting another vehicle or any object. This is the standard policy of coverage when the vehicle is leased or during the loan repayment. The insurance reimburses the amount needed to repair or replace your damaged vehicle. If the collision is due to your fault, then property damage cover reimburses for the damage caused to someone else’s property such as car, house or fence etc.

• The comprehensive coverage usually covers fire, riots, storms, earthquakes, floods, falling objects, collision with animals and other natural calamities.

• The deductible car insurance policy requires you to pay a portion of the damages, before reimbursing the total amount. It also offers uninsured motorist coverage insurance, which protects the family members and passengers. In case of an accident with someone who does not have auto insurance or with someone who is insured, it covers both the parties for any injury. This insurance also extends to you and your family members in case you are a victim of hit and run or pedestrian accident. They pay for the medical cost, pain, suffering and lost wages.
Factors Affecting State Farm Auto Insurance Coverage
• Age: You pay more if you are less than 25 years of age. Drivers over the age of 50 with good driving record get a discount.

• Where you drive: City driving and back and forth from work driving insurance is more expensive than inter state driving.

• Driving record: You get cheaper insurance rate if you have had no accidents in last five years.

• Type of vehicle: A new expensive vehicle being paid out through bank or finance company has higher rate of insurance than a second hand or family vehicle.
State farm auto insurance cover is valid anywhere in the USA and Canada, but covers just 25 miles inside the Mexican border. It is non-traditional insurance, meaning that it does not cover properties that traditionally do not fall under typical property items or automobile insurance. These include boats, snowmobiles, personal watercraft and ATV’s, while Farmers Auto Insurance and homeowners insurance covers wide range of goods including the non-traditional ones too.

Auto insurance, home insurance or any specialty insurance cover is very important to prevent financial loss in case of any untoward mishap or accident. A little premium takes care of your worries.

Auto insurance companies are noticing a distinct trend. Customers no longer have time to stop by a local office to discuss insurance coverage, nor do they wish to spend countless minutes on the phone, reciting their information simply to find out if the offered premium will even be within reason. Today’s consumers want to shop for, sign up for, maintain, and pay for their auto insurance during their lunch break, or while the baby is napping. The Internet makes this all possible, and the number of online auto insurance customers is growing. Three of today’s auto insurance powerhouses, State Farm, Geico, and Nationwide, offer various services online to meet this ever-increasing demand.

State Farm auto insurance information can easily be found at State Farm. This attractive and relatively user friendly website allows visitors to receive an immediate rate quote, provided there are no traffic violations within the past three years on the driver’s record. Those with violations during this time frame are encouraged to provide their contact information so a local agent can reach them for more information and thus a more reasonable quote. For established policyholders, the State Farm website allows for policy management and claims reporting if so desired. There is no option available to purchase a policy online at this time. While easy to use, State Farm’s online offerings may need to soon be updated just a bit for maximum customer convenience.

Geico, on the other hand, seems to have the online auto insurance market fully covered. Geico offers online quotes, online purchasing of policies, filing of claims, management of existing policies, and even a convenient electronic payment option. Easily navigated and clearly verified as a completely secure sight, Geico customers may easily think they’ve reached online auto insurance utopia. In this case, it is literally all at your fingertips.

Nationwide also markets itself as an online provider, and they have certainly created a welcoming, open atmosphere at Nationwide. Shoppers can receive an online quote, but cannot purchase auto insurance just yet without a phone call or visit to their local office. Those already carrying a policy through Nationwide however, can manage it online fairly quickly with the report a claim or pay your bill options available. Still leaving a little to be desired, Nationwide is nonetheless well on it’s way to eventually covering all it’s customers’ needs via the world wide web.
These three are merely a slice of the online auto insurance pie to be had out there, but they provide a clear range of the services currently offered. The only thing left to do is to decide which piece of the pie you prefer.

he Beginnings

State Farm insurance began in 1922, the invention of a man named George J. Mecherle. Mecherle thought that he could come up with a better insurance company than the rest, offering better coverage and great rates. So he did. Something about Mecherle’s vision was right – more than eighty years later, State Farm Insurance is still going strong.

“In just over 80 years, State Farm Insurance Companies® has grown from a small farm mutual auto insurer to one of the world’s largest financial institutions. But despite State Farm’s growth, Mecherle’s original philosophy of insurance coverage at a fair price coupled with fair claim settlement has remained.”
State Farm web site, May 2006

State Farm, Today

With 25 operations centers in 13 zones, these days State Farm employs 79,200 people, including 16,700 plus agents. State Farm actively services 71.6 million insurance policies in the United States and Canada. Many awards have been received by State Farm for their equal opportunity employing methods, and for the number of jobs the company has created. State Farm strives to give back to the community, participating in many programs to further education and safety, including awarding grants and scholarships.

The Future of State Farm

“Our vision for the future is to be the customer’s first and best choice in the products and services we provide. We will continue to be the leader in the insurance industry and we will become a leader in the financial services arena. Our customers’ needs will determine our path. Our values will guide us.”
- State Farm web site, May 2006

What State Farm Offers

State Farm can take care of all your insurance needs. They offer most types of insurance coverage. All the usual suspects of auto, home, life, renter’s, and supplemental medical insurance are available through State Farm. Other insurance offerings include condo, long-term care, and Medicare supplement. The State Farm web site is very user-friendly and easy to use. Using the web site, consumers can obtain a quote on any type of policy named above, or find an agent, both within minutes. Answering a few quick questions will lead you to a free online quote, and a search feature makes finding an agent simple work.

You can also reach State Farm agents through online insurance quote web sites. This offers you the ability to compare rates from State Farm and from other independent agents or companies. Inquire with the site in question about the companies that will be providing a quote.

“State Farm’s mission is to help people manage the risks of everyday life, recover from the unexpected, and realize their dreams.”
- State Farm web site, May 2006

Other Services

Not only does State Farm provide you with quality insurance, but the web site is a wealth of tools and information. A helpful learning center exists online for any who would like to learn more about retirement planning, college planning, savings strategies, prevention and safety, or life stages such as having a baby, marriage, or buying a home. There’s even a “kid’s stuff” section. Consumers can learn about reasons to have car insurance and what insurance policies do for you, and what they can mean in your life.

Trust

State Farm is truly one of the oldest names in insurance, and theirs is a name you can trust. If State Farm did not provide excellent customer service and satisfaction, there’s no way there would still be going strong. Often, it’s much cheaper to buy all your insurance plans through one carrier than through several different companies. State Farm can provide for all your insurance needs, without making you spend a fortune. Isn’t it better to use a company you know you can depend on?