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Farm fences can be insured against fire

Despite the long-standing idea fences aren’t insurable, some insurers will add a rider to cover fires

Every year, fires damage Tom Teichroeb’s fencelines. Sometimes miles of it.

“This year it came from both directions,” he said.

Teichroeb, the president of the Manitoba Beef Producers, farms near Langruth, just west of Lake Manitoba.

He’s slowly phasing out his wood fence posts for steel ones, though he said fires also compromise electric fencing wire. Fires burn hot on the marshy ground.

Teichroeb said despite many producers employing back burning and fire guards, many will still lose fences. Teichroeb doesn’t have insurance for his fences, and said there is no way to insure them.

He said he “wouldn’t even want to venture a guess,” as to what fire losses and prevention of losses have cost him.

Fences: insurable or not?

In certain cases, destroyed fences or agricultural equipment may be covered by the provincial Disaster Financial Assistance program. However, a spokesperson for the province told the Manitoba Co-operator that this is “an assistance program of last resort that evaluates requests for assistance on a case-by-case basis, dependent on the event or disaster.”

Why it matters: Despite the availability of insurance for farm infrastructure, including fences, there seems to be a disconnect between farmers and insurers.

A DFA program may be established if damages from a natural disaster are widespread, if they represent a significant financial burden to municipalities and residents, and if damages are mostly uninsurable.

The spokesperson said fences are generally considered uninsurable.

In the absence of a declared disaster, farmers are likely to be on the hook to insure equipment, crops, buildings and farm infrastructure against fire damage.

Red River Mutual insures fencing, as does Portage Mutual Insurance and Wawanesa Insurance. The coverage is an extension added to insurance policies at the farmer’s request.

Red River Mutual’s corrals and fencing coverage also extends to $5,000 in damages, according to its farm policy wording booklet. Pasture fencing is included, said Charlene Henderson, Red River Mutual’s vice-president of underwriting.

A spokesperson for Wawanesa said pasture fencing was excluded until January of 2018, when the exclusion was removed.

Portage Mutual excludes pasture fencing, according to its policy wording booklet.

Both Teichroeb and Manitoba Bison Association president Nolan Miller said they weren’t aware that fences could be insured.

“It’s important for each individual farmer to have an open line of communication with their insurance broker, whomever that is,” said Henderson. “Each farm has specific coverage needs and it’s imperative that farmers and brokers ask questions when renewing insurance coverage annually.”

“Brokers will determine availability of coverage and coverage options if they have the right information,” said Grant Wainikka, chief executive officer of the Insurance Brokers Association of Manitoba. “Brokers should be asking the right questions of their clients as well.”

Wainikka cautioned that the level of disrepair of the fence or corral will likely be a factor on insurance claims, and upgrades to the insured fences or corrals should be documented.

Fire or vandalism will likely be treated differently than general wear and tear, said Wainikka.

“The bottom line is that farmers should consult with their local insurance broker so there is a clear understanding of coverage options and claims scenarios,” he said.

Crops, buildings and equipment

Crops, farm buildings and equipment can all be insured against fire damage.

Crop insurance from Manitoba Agricultural Services Corporation covers loss due to fire, said David Van Deynze, vice-president of innovation and product support at MASC.

Claims are generally determined on a total crop basis, said Van Deynze, not field by field.

MASC also insures pasture acres. If pastures can’t sustain a normal number of grazing days because of a fire or other insurable cause, the producer may be eligible for compensation, Van Deynze said.

MASC does not cover equipment or property.

Private insurance companies such as Red River Mutual insure farm buildings and equipment.

“Naturally, whether a specific loss is covered is dependent on the situation of the loss,” said Henderson.

However, she said Red River Mutual often sees buildings and equipment insured at values below replacement costs, which for buildings is the cost to have a hired contractor rebuild.

She advised producers to “estimate the cost to rebuild buildings and replace equipment or machinery at today’s costs.” She added that variables like the exchange rate and inflation may have changed the cost to replace since the building or equipment was initially insured.

Once a wildfire is burning nearby, producers may find it is too late to purchase insurance.

“If under imminent threat, most insurers, including Red River Mutual, will usually decline coverage because the risk is so high,” said Henderson.

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