Beyond the Deductible: Protecting Your Farm from the Full Cost of a Loss
As the cost of farm machinery continues to rise, many farms are looking for ways to manage increasing insurance premiums. One common strategy is to select higher deductibles on equipment coverage. Combines, tractors, and sprayers can be valued at over $1M, so deductibles of $25,000, $50,000, or more have become increasingly common.
The conversation around deductibles is familiar: How much can the farm afford to pay out-of-pocket if a loss occurs, and how much premium can be saved by accepting a higher deductible?
While those questions are important, they only address one concern. Far too often, farmers and agents often fail to consider: What will a loss actually cost the operation beyond the deductible?
When a critical piece of equipment is damaged, the financial impact extends far beyond the repair bill. Property coverage, Business Income coverage, and Extra Expense coverage each play an important role in helping protect the farm from the full cost of a loss.
What Is Property Insurance Coverage?
Property coverage helps pay to repair or replace covered farm property that is damaged by a covered cause of loss. This includes items such as tractors, combines, sprayers, grain handling equipment, buildings, and other insured assets.
For most farmers, property coverage is the coverage they think about first. If a combine suffers major damage during harvest, property coverage helps address the cost of repairs, subject to the policy's deductible and coverage terms.
But repairing the equipment is only one part of the financial impact.
What Is Business Income Coverage?
Business Income coverage helps protect against the loss of income that can result when a covered loss disrupts normal operations.
Many farm operations depend on facilities, equipment, and infrastructure to generate revenue. A fire that damages a grain handling facility, a farm market, a dairy operation, or another income-producing part of the business can create financial losses that continue long after the physical damage occurs. Business Income coverage helps address the revenue lost while the operation recovers from a covered loss.
What Is Extra Expense Coverage?
Extra Expense coverage helps pay for additional costs sustained to keep the operation running after a covered loss. These expenses may include renting replacement equipment, hiring custom operators, outsourcing field work, or paying additional transportation and logistics costs to avoid costly delays.
Extra Expense coverage helps the farm continue operations while damaged property is being repaired or replaced.
The Hidden Cost of Equipment Downtime
Farm equipment rarely has a loss when it’s sitting still. Most often, we see equipment damaged when it’s in use during a critical window of business for the farm. The windows for planting, spraying, and harvesting are narrow, and delays can quickly affect crop quality, yields, and profitability.
With the growing size of farms across the country, we’re seeing more and more acres dependent on a singular piece of machinery, like a combine, sprayer, or tractor. When equipment is damaged during one of these critical periods, farmers are often left with three choices:
Wait for repairs to be completed.
Rent replacement equipment.
Hire a custom operator to complete the work.
None of these options are free.
According to Purdue University's 2025 Indiana Farm Custom Rates publication, the average cost to hire a custom operator to harvest corn is $36.97 per acre for the combine and operator alone. Round baling can range from $13 to $25 per bale depending on bale size, while custom spray applications can cost up to $9 per acre.
A loss that initially appeared to cost only the deductible can quickly generate thousands of dollars in additional expenses simply to keep operations on schedule.
Beyond the Deductible
As farms continue to grow and equipment becomes more expensive, evaluating insurance coverage requires more than simply choosing a deductible.
Property coverage helps repair the damaged equipment. Business Income coverage can help protect the farm's earnings when operations are interrupted by a covered loss. Extra Expense coverage can help pay the additional costs required to keep the operation moving forward while repairs are being made. Together, these coverages help address the full financial impact of a loss, not just the cost of fixing the equipment.
When discussing insurance with their agent, farmers should ask more than "What deductible can we afford?" They should also ask, "What would it cost to keep our operation running if this equipment was unavailable when we needed it most?"
Every farm is different, and the right combination of coverages depends on the operation, equipment, and financial risks involved. Reviewing these coverages with a insurance professional before a loss occurs can help ensure your operation is prepared for more than just the cost of repairing damaged equipment. At SureStead Claims, we understand the realities of agricultural losses and the importance of getting farms back up and running as quickly as possible.
About SureStead Claims
SureStead Claims specializes in claims administration and data-driven analysis for complex and high-risk industries. By combining deep claims expertise with practical risk intelligence, SureStead helps clients reduce losses, improve outcomes, and navigate claims with confidence.
About the Author
Andrew Van Gessel is a Senior Claims Manager at SureStead Claims with more than 13 years of claims experience. Having grown up in a farming family, he brings firsthand knowledge of agricultural operations and the unique risks farmers face. His experience handling complex agricultural claims gives him a practical perspective on protecting farm businesses before and after a loss.
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