By Lyndon Kelley and Jon LaPorte
Recent storm events are a reminder of how much damage can happen to irrigation equipment. For most irrigators, purchasing insurance is a way to avoid financial disaster.
Many high-value specialty crop contracts require equipment to be insured, and sometimes total replacement value is required. Specialty crops can run into values exceeding $1 million per 100-acre field. Companies requiring insurance hope an all-new pivot can be put up quicker if insurance is paying for it, which salvages the crops for the year and replaces the damaged equipment.
A sign in a local insurance company says, “You must own it to insure it,” which is a reminder that the owner of the equipment is the person who needs to acquire the insurance. This issue came to light when recent storm events significantly damaged irrigation equipment. In at least one field where the center pivot was destroyed, the pivot was found to have no insurance from either the lessee or the landowner. Another term for no insurance is self-insured, meaning that the total cost for the replacement would be absorbed by the irrigation owner. In the previous field example, if the irrigation equipment was owned by the lessee, they would be responsible for the purchase of insurance or paying to replace the irrigation system.
Insurance companies will require listing the components the coverage is issued against and an estimated value. Irrigators need to remember that electronic items and wells have a high likelihood of damage. Variable frequency drive control boxes, wells and their motors, which are all items that have high potential for lightning damage.
Source : msu.edu