Farm insurance is expected to significantly increase in 2025. A contributor to this rise in cost is climate change. The negative effects of climate change due to severe weather events have resulted in higher payouts by insurance companies — thus leading to higher farm insurance premiums. Here are some examples of how farms are being affected due to climate change.
Fluctuating Crop Yields
The growing frequency and severity of weather events like extreme heat, prolonged droughts, heavy rainfall, and flooding can negatively affect crop yields, which can lead to financial losses for farmers.
Impact on Livestock
The potential for losses in livestock due to climate change is possible. For example, heat stress on dairy cattle from warmer temperatures can result in reduced milk production. It can also affect fertility and contribute to the animal’s overall health — and in some cases, livestock mortality.
Infrastructure Damage
Extreme weather such as hurricane force winds, severe rain, and flooding can damage infrastructure like barns, silos, and irrigation systems. These damaging weather events are further adding to claim costs.
Reinsurance Costs
Insurers rely on reinsurance to cover catastrophic losses, but as these losses increase due to climate change, the cost of reinsurance also rises, which is passed on to farmers in the form of higher premiums.
What You Can Do to Manage Risks
Farmers can minimize risks due to climate change by implementing practices that can build resilience in their agricultural systems. Here are several tactics to consider:
- Select crops that are resistant to severe weather events
- Diversify and rotate crops
- Access reliable climate forecasting
- Improve soil health
- Employ efficient irrigation systems
- Integrate trees into farming systems (Agroforestry)
- Improve livestock management
- And many more
Climate change is only one of the factors contributing to higher insurance premiums. Read our previous blog article, ‘Farm Insurance and How to Manage Risks to learn more ways. (links to previous article) Farm & Country Insurance is committed to keeping our farming clients as informed as possible. Please give us a call to speak to one of our agents at 585-624-2474 or toll-free at 800-258-2494 if you have any questions. You can also use our CONTACT form and one of our farm insurance agents will be in touch soon.