Have you ever looked at the amount of dollars you spend on insurance premiums? I tallied our premium bills up for the year last night, $46,000! I think that’s nuts. We operate a 2,000 acre farm as our sole source of income. Forty-six thousand dollars is what we hope our profit is for the year. Is it wise to spend your projected annual salary on premiums for what might happen? Fire, hail, drought, flood, high wind, tornadoes, pestilence, falling prices, liability, vandalism, theft, collision, health failure, and death are all possibilities. Couldn’t I save that money for ten years, have over $500,000 in the bank and self insure? Possibly, but I’m glad I didn’t try it.
Years like 2006 come along and it doesn’t rain, gets hot, and the wind blows. Cutting seven-bushel-an-acre wheat, shredding failed cotton, and not cutting hay puts a dent in your income. Medical bills get rather high for countless tests, hospital stays, surgeries, chemotherapy, and radiation treatments because your young wife has breast cancer. Yes, insurance is an expense part of managing risk on the farm and you can have too much. In 2006, God, friends, and insurance saved our farm.