Agriculture is one of the oldest industries in the United States and represents a cross-generational tradition. In order to sustain farms and ranches in the long term, farmers turn to insurance companies to protect their investments against a variety of risks that arise.
The reality of farming and ranching is that for insurance purposes, calculating a replacement cost is complex. According to the Insurance Journal, the number of farms and ranches in America has steadily decreased over the last 80 years, but many that have survived that trend have grown bigger through a process of mergers and acquisitions.
"Yet another factor complicates efforts to automate farm valuation," explains the Journal. "While the construction of residential and commercial increasingly involves common, 'cookie cutter' techniques and components, farms are often collections of unique structures. On farms, it is common to encounter old buildings that have been expanded or altered multiple times, along with specialized new production facilities."
This has made it difficult for insurance professionals to automate the process of valuing farm and ranch properties. Because they represent such a distinct economic and real estate segment while being so particular unto themselves, farms and ranches defy traditional methods of valuation and are often addressed on a customized, case-by-case basis. For example, an individual farm or ranch property can have a multitude of specific buildings or fixtures that need to be accounted for in the total replacement cost. This adds time and energy to the valuation process that many offices can't easily afford to expend.
"The remaining farms are generally distinct, with more diverse exposures than most homes and businesses," the Journal states. "Premium volume for farm insurance, a little more than $2 billion per year, is well below that for residential and commercial property, which approach $60 billion combined. Because of these factors, automation in farm lines has generally lagged behind that in personal or commercial lines."
Insurance professionals want to provide a high quality of service to their farm and ranch clients but may feel frustrated by the excess of energy and resources required to write policies and determine valuations. At e2Value, we've pioneered a streamlined and consistent method of valuing farm and ranch structures. With the flexibility to handle a wide variety of structure types and configurations, our Farm and Ranch estimator eliminates pain points typically associated with determining replacement costs for farms and ranches.
Contact us today to learn more about our Farm and Ranch estimator, which provides easy-to-use and reliable solutions for calculating replacement costs of these properties. This can allow your enterprise to expand its farm and ranch business while giving your customers the highest level of service.