In a world where practically everything and every physical asset is now insured against different kinds of risk, it makes perfect sense that agricultural insurance should be a part of the modern equation. After centuries of being entirely dependent on the environment around them (and a good dose of chance), farmers can now opt for crop and farm insurance as a safeguard against some kinds of financial loss.

So for farmers and others wanting to know more about agricultural insurance providers, rates or methods, the web offers resources for getting "trained" in the ways of agriculture insurance acquisition. Take a look at solutions for learning more about this common type of insurance policy, including:

1. University or college sites offering links to ag programs as well as informative data on farm insurers and agricultural insurance company business models.

2. More agricultural insurance info from independent sites and organizations for farm support.

3. Other details on insurance for farming from a collection of populated blogs online.

Action Steps
The best contacts and resources to help you get it done

Get state college or university resources on agricultural insurance

The sites of America's higher education institutions, especially state schools, contain a wealth of resources on agriculture insurance companies and how they do business. Readers can find links to course work around ag management and farm finance, or timely articles about what's happening with agricultural insurance and other aspects of modern farming.

I recommend: Iowa State's Center for Agricultural and Rural Development details programs related to agricultural insurance and informs farmers and others about crop insurance options. Pick up more informative resources and links to programs from schools like Penn State online.

Find other sites with agricultural insurance information

Various associations and other organizations help the farmer figure out what is in the farm's best interests for financial preservation. Look to these sites for more knowledge of how to insure crops or other farm assets.

I recommend: The Crop Insurance Research Bureau delivers resources for farmers on agricultural insurance and other risk management strategies for this financially challenging profession. Find more links to professionals helping farms to get agricultural insurance from groups like the Farm Credit Services of Mid-America.

Locate more on agricultural business insurance from blogs and info pages

Another resource is the large collection of blogs that offer details on agricultural insurance and other parts of managing a farm.

I recommend: The American Association of Crop Insurers maintains a blog for helping farmers figure out what's going on in the industry. Look for more from spinoff blogs like this one, "Insurance Types," from the BlogCatalog site. Farmers and others can also try Farm Policy: "A Summary of Farm Policy News," or other post pages like The Briefing Room, part of the Corn and Soybean Digest site.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Any kind of agricultural insurance education and training should address the specific assets of a farm, as well as a timeline and other critical factors for getting the right kind of coverage. Work with trained ag insurance providers to work out a policy that makes sense for a specific plot and operation.

Your farm is probably the single biggest asset you have and provides your livelihood and security for your family. Farm insurance can repair or replace your farm buildings, equipment, livestock and crops in the event of a disaster. Agricultural business insurance can also protect you and your family in the event of a liability lawsuit due to a consumer safety issue, a farm visitor or trespasser's injury on your land.

There are 3 primary factors in deciding which type of agriculture insurance you need, and the agricultural insurance company that can best provide it. Here’s what you need to consider:

1. The type of farm and type of agricultural business you own.

2. There are full or part-time employees.

3. The presence of farm outbuildings and equipment inventory on your property.

Action Steps
The best contacts and resources to help you get it done

Assess your current insurance situation

If you already have a homeowner's insurance policy, it will not cover any buildings except your home, unless you have a rider to that effect. It also will not cover your farm equipment, livestock or crops; and it will not provide liability protection outside a certain distance from your home. If you do have insurance for your farming operations, meet with your agent and discuss your policy, line by line, to determine that you have adequate coverage for your business.

I recommend: Fill out a standard form that agricultural insurance companies use to determine what you need from your policy. Use supplemental forms to add policy riders for specific farming activities.

Learn about government resources and crop insurance programs

Whether you grow soybeans or pigs, agriculture insurance companies offer federally subsidized insurance for farm products. A transportation issue or a random hailstorm can devastate an entire season's product, and even a dip in the market is a risk addressed by some insurance policies.

I recommend: The United States Department of Agriculture (USDA) Risk Management Agency offers tips and tools for producers to reduce their risks. Find the tools you need to determine how much protection you need for your livestock and crops, and how much it will cost.

Sort through your options and calculate premiums

The primary concern most producers have is the cost of farm insurance premiums. Any agricultural insurance company will gladly work with a producer to determine which products are appropriate and what premiums they'll carry.

I recommend: The USDA offers a tool to help you calculate your insurance premium. Farm Bureau Insurance is specifically an agriculture insurance company, with agents in most rural areas.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Agriculture insurance companies need special licensing to offer farm insurance, particularly federally funded crop and livestock insurance riders. Contact your local branch of the USDA Farm Service Agency or your state's agricultural extension service for more insurance information.

Agricultural insurance is a method through which farmers and other individuals involved in the production and sale of agriculture products can protect their crops, landscapes and investments in the event of a disturbance. Many farmers would not choose to operate their business without any type of agricultural insurance or crop insurance, as it is very beneficial. Any industry has its key concepts that people must be aware of and agricultural insurance is no different. Following are some of the most prevalent agricultural insurance key terms.

Action Steps
The best contacts and resources to help you get it done

Actuarial

Actuarial calculations and principles are those made by the actuary, or the individual responsible for assessing the probability and statistics of certain events happening. The insurance company then uses these calculations in order to come up with fair rates for premiums, rates and reserves, as well as dividend calculations.

I recommend: BNet.com discusses actuarial fairness with respect to agricultural insurance rates in detail.

Adverse selection

When individuals illustrate risks for buying and maintaining agricultural insurance, people call this adverse selection. This may also arise when individuals interested in insurance select only the agricultural insurance most likely to result in a loss.

I recommend: Read about adverse selection and moral hazard with respect to the need for specialty crop insurance at length at UNM.edu.

Basis of valuation

Basis of valuation is the calculation and the potential amount at which the insurance company has valued the insured property. Companies then use this amount to determine the insured party's total sum insured. For crop insurance policies, the crop's costs of production determine basis of valuation.

I recommend: Entrepreneur.com reviews the basis of valuation for crop insurance.

Constructive total loss

Constructive total loss occurs when something has damaged the insured party's property so much that the cost to salvage it would not be economical. A constructive total loss differs from an actual total loss in that an actual total loss means that something has completely destroyed the property, not that it simply isn't economical to salvage. For those involved in agricultural insurance, insurance companies will declare constructive total loss when a party's damage levels on their property exceed a specific and pre-determined amount.

I recommend: TheFreeLibrary.com explores different total losses—including actual total loss and constructive total loss—and situations related to them.

Indemnity

Indemnity is the total amount of money that's payable to the insured party. This can take place in the form of cash, repairs to the property or crop, or replacement or reinstatement. Insurance companies value an indemnity at no more than the total value of the insured subject matter.

I recommend: SouthWestFarmPress.com discusses 2008's crop insurance indemnity payments, which they estimated in excess of six-billion dollars.

Value

The property that a company insures has a specific value. The value will fluctuate depending on exactly what property it is that a company is insuring.

I recommend: LSUAGCenter.com discusses the value of nursery crops in detail. Meanwhile, at AGSecure.com, the plant inventory value report is explained as a part of agricultural insurance.