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When a rare derecho weather system barreled through nine states in the Plains and Midwest on August 10, 2020, tornadoes and straight-line wind gusts as high as 140 mph battered everything in its path, including thousands of crop acres, livestock, and farm buildings and facilities. Corn fields were flattened, trees gnarled in fence rows and grain bins—some which had yet to see a single kernel of grain—crushed and tossed like soda cans.
In addition to causing costly damage, generating hundreds of insurance claims and testing the resolve and resilience of farmers, ranchers and members of the agribusiness community, the derecho should serve as a reminder to have plans in place for when a natural disaster of the storm’s magnitude hits.
Digging out after severe weather
The immediate aftermath of such a storm can be overwhelming. Having a plan in place that starts with assuring the health and safety of all of those in the storm’s wake can help trim anxiety as you contact your insurance agent and take other early steps to safely begin cleanup and repair work at a time when it’s natural to feel overwhelmed.
“The first thing to think about and ensure is the safety of their families,” according to Mark Anderson, Nationwide Mutual Insurance associate vice president of commercial lines. “We’re experienced at handling these situations, so the policyholder can be confident that we’re able to take care of initial damage claims and assessments without the risk of injury or further damage. With our customers’ policies come our network of vendors to take care of things like downed trees, roofs and water damage. We don’t want anyone to try to do something that could ultimately cause serious injury or more damage.”
The importance of planning and strong relationships
Once you’ve contacted your agent to further assess damage after a severe storm, the next step is to ensure you have the documentation necessary to expedite damage claims. This part of the process is best handled independently from any specific natural disaster, with plans in place ideally well before the need for a claim arises. It requires attention to detail and is best done with a strong agent relationship, Anderson said.
“The key to being able to recover the full amount of damages is to have a very good working relationship with your agent, make sure you have annual reviews of policy coverage, review statements of values and make sure all equipment and its replacement costs are identified, updated and insured to value,” he said. “If you don’t have the appropriate policy conditions prior to the loss, things can go badly; you don’t want to leave a piece of equipment or building omitted from your statement of values. If the policyholder and agent can have a strong partnership and conduct regular feedback sessions—like annual meetings to audit the farm and take photographs of pre-loss conditions and an inventory of a property—that will help you make sure coverage levels are appropriate.”
In one case after the August derecho, Anderson said one agent was able to help his customers begin cleaning up their damaged farmsteads almost immediately because of the close relationship he had with those farmers and ranchers.
“The stronger the relationship between agent and policyholder, the greater the understanding that agent will have of his or her customers’ facilities, equipment and what he or she is insuring,” Anderson said. “When an agent knows the risk as well as the customer and can respond accordingly, it is a tremendous help in recovering from a major weather event.”
- The structure itself
- Contents, such as furniture, appliances and personal property
- Garages, gazebos and swimming pools
- Liabilities from injuries to house guests
Our AgriChoice® policy provides an automatic construction cost feature that adjusts values to current building costs in your area.
Be sure to talk to your agent about:
- Insuring your farm house for replacement cost or actual cash value.
- The cause of loss (basic, broad or special) you want to insure for.
- How much deductible you should carry. A higher deductible may lower your premium, but you would have to pay more in the event of a loss.
- The current value of your farm house.
Iowa derecho: Nationwide’s claims response
Ben Rienshe’s farm in Jesup, Iowa was part of the derecho event that went across central Iowa. Hurricane force wind destroyed a grain storage system—a critical component of his business. Watch how Nationwide responded quickly to help this farmer prepare for harvest and to rebuild.
Those same winds also destroyed a two-year-old 200,000-bushel grain bin on a Nevada, Iowa farm. Watch Max Armstrong talk with farmer Scott Henry about the storm’s destructive power and Nationwide’s responsive claims service.
Answer key questions in starting the claim process
In conducting early damage assessments, policyholders should consider their farm agents “triage” in meeting initial needs. That process involves a few simple questions the answers to which policyholders can prepare in making their first calls to their agents:
- How much damage do you have?
- Are damaged structures livable or too dangerous for occupancy?
- Are downed trees damaging other structures like fences and electrical wiring?
- How profoundly is your operation being disrupted by your storm damage?
“Answering questions like these in conducting initial triage can help prioritize claims and speed up the claim payment process,” Anderson said. “We want to identify who’s hit hardest and where the greatest danger and losses are so we can prioritize and take care of people who face the greatest disruptions as soon as possible. The derecho displaced some farmers and uprooted their businesses, with many who had to destroy crops that they’d worked so hard on. We’ve got to fulfill our promise to our policyholders and make sure we’re taking care of their claims quickly.”
Prompt action prevents mounting losses
Having the answers to questions like these is especially critical for grain producers, because a slower claim process could cause even more financial losses down the road. In the case of the derecho, promptness protected some policyholders from additional losses, driving home the importance of gathering information and working with your agent to expedite the claim process.
“Promptness is absolutely critical. We ran into issues with farmers in Iowa where there was so much damage to grain bins and a resulting shortage of grain storage. We had to act quickly to prevent any grain lying on the ground out in the open from further damage, like from additional moisture. That grain needed to be dried and into storage,” Anderson said. “Working with our vendors to provide what’s needed to prevent that additional damage helped ensure our claims associates are prepared. The bottom line is we know how important the farming community is to Nationwide and our adjusters know the importance of taking care of policyholders promptly.”
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This information was obtained from sources believed to be reliable. Nationwide Mutual Insurance Company and its employees make no guarantee of results and assume no liability in connection with any suggestions or information contained herein. Furthermore, it cannot be assumed that every acceptable safety method is included in this article or that specific circumstances may not require additional methods or alternative safety suggestions. Also, nothing contained herein is meant to represent or indicate compliance with applicable standards or requirements mandated by federal, state or local jurisdictions.