Agriculture is a multi-billion-dollar industry, with $1.053 trillion contributing to the U.S. gross domestic product in 2017. In fact, America’s farms contributed $132.8 of this amount. With so much activity in this area, there is always a need to repair and upgrade machinery. Having an active replacement strategy in place that will help offset costs, and agricultural machinery insurance in place can keep production going with no interruptions.
What is agricultural machinery insurance?
This type of insurance is designed to cover agricultural machinery from risks like flooding, breakdowns and other unforeseen circumstances that may occur through no fault of the owner. Coverage may also cover damage from foreign objects, damage that occurs during towing, cab glass coverage, machinery that must be borrowed as a result of the initial being damaged, and rented or leased equipment.
In order to maximize any agricultural machinery, a strategy must be in place. General guidelines for maintaining equipment to keep high performance levels include:
By replacing items on a rotating basis, the risk of machinery breaking down is lessened, and costs remain low.
Replace an item each year
By keeping machinery in rotation for replacement, cash flow will remain positive, while the machinery remains in top condition. This ensures pieces perform at optimal levels and the business is using the latest technology.
Replace when cash is free
By replacing when the cash flow is high, the business won’t be as affected if new machinery was needed when funds are low. Unfortunately, agriculture is a fluctuating business, so there are no exact predictors of when cash reserves will be able to withstand new major purchases.
Maintaining the components of the machinery that are used the most is key. Engines, spark plugs and batteries are specific items that cannot go without maintenance. Additionally, when the seasons are changing, ensuring the equipment has preventative maintenance procedures in place makes a difference.
There are times when unexpected events and losses occur. In the agriculture industry, the loss of one vehicle could severely cripple the livelihood of the business. That’s why having an agricultural machinery insurance policy in place is so important. Knowing you have protection to keep things going even in the event of a disaster is peace of mind.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.