Life is unpredictable, and the best way to defend yourself against unforeseen losses is through an adequate protection plan for your farm and your family.
66% of Americans are underinsured, leaving them unable to fully protect their assets and financial well-being. I get it, the savings you get from having lower premiums looks great on paper, but is it worth the risk? Are you simply throwing your money away?
Let’s take a look at several drawbacks you should consider before slashing your farm insurance coverage in order to save money.
Strain on your farm’s finances
Insurance is a means of protecting against catastrophic losses that would otherwise pose an undue burden to your financial situation. Without that preparation, you may end up placing excess strain on your finances, especially in a time when rising operating costs are already eating up a significant portion of your capital. This can lead to increased debt, drained savings accounts, or even bankruptcy to remedy the situation.
Higher costs over time
I get it, lower premiums are enticing. However, a tailored farm insurance plan should have a well-defined stoploss that won’t be exceeded. The amount you contribute after an underinsured loss often exceeds the amount you had planned as your deductible, leaving you with unexpected costs. Frequently this additional financial outlay far outweighs the savings you received from the policy’s lower premiums.
Increased anxiety
Unexpected losses can potentially lead to financial ruin, causing you excessive amounts of stress if you don’t have a well-composed farm insurance plan. The anxiety experienced during the financial struggle can leave a lasting impact on your mental health, your relationships with others, and your ability to make sound decisions for your farm’s future operations.
Lost investment opportunities
Your farm is not a 10-minute trade in the stock market. To grow and advance, additional investments must be made routinely. Without an adequate protection plan in place, you may be spending more money recovering from a loss, leaving you unable to capitalize on additional investment opportunities. Your farm’s capital is better spent taking calculated risks that provide potentially greater future rewards, than saving now a tiny fraction of what you may spend later.
It’s tempting to try to save money on insurance premiums however possible. However, when viewing your protection plan holistically, the costs of being underinsured far exceed the benefits. Richey-Barrett Insurance prioritizes putting together comprehensive insurance plans to safeguard your assets and give you peace of mind. Are you currently tossing your money down the drain? Prior to your next farm insurance renewal, contact us and we’ll help you make a wise investment in your future success.
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