Losses from hay fires have been increasing and the loss ratio for most insurers on hay coverage is 200 percent or more. Insurance companies are getting worried, says Rick Adams, associate in risk management and certified insurance counselor with Winton, Ireland, Strom and Green in Turlock, Calif.
Adams told audience members at the Western United Dairymen Convention last week that there are some issues that hay fire insurance purchasers need to be aware of.
Stack limits (dollar limits) are being written in the policies. This is even when the hay is in the barn, says Adams. And, this can limit your coverage in the event of a loss. Adams recommends checking over your insurance policy for stack limits.
A 100-foot clear space is required between stacks and barns. Losses are being adjusted downward if clear spaces are not maintained. Nothing can be stored in between stacks, no equipment or supplies, says Adams.
Insured’s are now being required to certify that they have a system for testing moisture and monitoring (probing) and recording hay temperatures. Some companies may require that moisture levels be tested with an independent lab, not just from hay brokers, notes Adams.
Some insured’s are building firewalls in their hay barns to compartmentalize hay fires.
New monitoring systems are being developed. And, there is discussion among insurance carriers whether to charge a higher rate on large bales, notes Adams.