As a Midwest pole barn builder, we're all too familiar with Mother Nature's unpredictable behavior. Sudden and severe weather can materialize out of thin air, posing a threat to your post-frame building:
- Dented metal roofing panels from softball-sized hail
- Broken or sagging pole barn trusses from heavy snowfall
- Reduced structural integrity from high winds or tornadoes
After spending considerable time, money, and resources on a post-frame building, we recommend safeguarding your investment before damage occurs.
To simplify this process, we discuss the top five factors to consider when insuring your pole barn. These guidelines will help you understand the insurance process and ensure you have the right coverage.
If you don't have time to read this blog article, you can download the accompanying pole barn insurance checklist to read later.
Top 5 Factors to Consider When Insuring Your Pole Barn
We collaborated closely with Lana Olson of Gutwein & Risner Insurance Agency and Kolton Blickenstaff of State Farm to compile a comprehensive list of essential factors for insuring your post-frame building.
Drawing upon their expertise in insurance and risk management, as well as our own industry knowledge, we worked together to identify the key considerations that property owners should keep in mind when selecting coverages.
By sharing our insights, we have created a valuable resource that empowers individuals to make informed decisions about their pole barn insurance, providing peace of mind in unforeseen events.
1) Insure Your Pole Barn for the Proper Amount
One of the fundamental challenges insurance agents face is conveying the importance of insuring post-frame buildings for the proper amount. Many individuals only realize the significance of their policy's details when a loss occurs.
Proactive assessment is crucial. Insurance agents must determine their clients' needs.
Do they want to build a new pole barn or repair the existing post-frame building when disaster strikes? What stored belongings need to be replaced?
PRO TIP: We suggest researching the costs of new post-frame construction or pole barn repairs and renovations. Most construction companies offer free estimates on their websites. There is no need to guesstimate or use ballpark numbers!
Some financial institutions may provide guidance on the necessary coverage if there's a loan involved.
To ensure adequate protection for valuable possessions, you can purchase additional coverage by adding an endorsement to your current policy or obtaining a separate one to extend the limits for specific items.
Moreover, insurance carriers establish minimum requirements for liability coverage depending on your homeowner's or farm and ranch policy.
Recognize that there's no one-size-fits-all solution for pole barn insurance. Again, insurance agents must tailor policies to individual needs and risk management assessments.
2) Understand Your Pole Barn Insurance Policy
Policyholders should familiarize themselves with their coverage before a loss occurs. By comprehending their policy, individuals can make informed decisions about their coverage needs and ensure they're adequately protected.
This proactive approach allows policyholders to identify potential gaps or limitations in their coverage and take the necessary steps to address them.
For example, your dwelling coverage automatically covers 10 percent of detached and other structures on the property, including:
- Fences
- Driveways
- Mailboxes
- Swing sets
- Decks
- Gazebos
- Storage sheds
- Swimming pools and guest houses
- Pole barn garages or hobby shops
If your stick-built home is valued at $250,000, your insurance carrier will cover the detached and other structures for $25,000. However, this coverage sometimes doesn't cover the full cost of replacing the post-frame building.
Most insurance agents recommend adding extra coverage for detached and other structures and stored belongings for a minimal upcharge.
Farm shops and cold storage machine sheds naturally fall under farm or ranch insurance. If you have scheduled coverage, the insurer pays up to the value of the items listed on the insurance policy's schedule.
Remember that you're responsible for choosing which farm equipment or personal property to list and providing a detailed description (e.g., make, model, year, serial number, etc.). If an item is not scheduled, it will not be covered in a loss. If the values listed on your property schedule are outdated, you may be substantially underinsured.
On the other hand, blanket coverage provides a single limit of insurance for multiple items or properties within a specified category. Instead of listing individual items, such as farm equipment or tools, a blanket policy covers all units up to a predetermined limit.
Another concept to understand when choosing coverage is coinsurance, which is a penalty enforced by the insurance carrier for underreporting or underinsuring your property. When in doubt, you can always check your declaration page for a summary of your insurance policy.
Ultimately, a thorough understanding of coverage empowers policyholders to manage risks, protect their assets, and confidently navigate the insurance claims process in the event of a loss.
3) Know the Difference Between Actual Cash Value (ACV) and Replacement Cost Value (RCV)
Actual Cash Value (ACV) and Replacement Cost Value (RCV) are methods used to determine reimbursement for a covered loss under your pole barn insurance policy.
Actual Cash Value Policies
ACV refers to the current market value of your post-frame building when it is damaged or destroyed.
It accounts for depreciation, meaning the value of your pole barn is adjusted to reflect its age, wear and tear, and routine maintenance. The average depreciation rate for older post-frame buildings is 1% per year.
When you file a claim, the insurance carrier calculates the ACV by subtracting the depreciation from the original pole barn cost.
Replacement Cost Value Policies
RCV is the cost of repairing or replacing your damaged pole barn with similar building materials and craftsmanship without deducting for depreciation.
In other words, the payout for a covered loss is based on the cost to repair or replace the damaged post-frame building at its current market value.
Some insurance carriers prefer RCV because of its comprehensive coverage. RCV calculations are based on pole barn size, usage, custom building features, and utilities.
Additionally, RCV policies may incorporate building material breakdowns and inflationary costs for thorough protection.
Editor’s Note: The depicted scenario illustrates ACV versus RCV payouts. Multiple factors significantly impact this final number, including replacement pole barn costs, the location of the post-frame building, insurance deductibles, and asset depreciation.
4) File a Pole Barn Insurance Claim
When a loss occurs, the first order of business is documenting the pole barn damage. Pull out your cell phone and take photos of your post-frame building. Be sure to note the incident date, time, and other details (if possible).
It may sound tedious, but this helpful information keeps your pole barn insurance claim moving forward. The last thing you want is annoying delays and headaches that could've been prevented.
Now, you can contact your insurance agent and text/email the documented proof. Meanwhile, they'll ask for your policy number and explain your coverage options.
Then, your insurance carrier will assign a claims number and adjuster to your case. This person will assess the damage and calculate an estimate for your post-frame building repairs.
Your insurance agent will suggest requesting quotes from contractors. However, we recommend working with a post-frame builder. After all, no one knows pole barn construction better than someone who builds them daily.
After contacting a post-frame builder, they'll send a Repair and Renovation Specialist to inspect your pole barn damage with a fine-tooth comb. Then, the Repair and Renovation Specialist will draft a work order detailing the project scope and cost. In severe cases, you may replace the post-frame building.
Moreover, your claims adjuster will conduct their assessment. They will ask questions about pre-existing conditions, routine maintenance, or other safety measures implemented to reduce risk.
Using their best judgment, they'll write an appraisal and share it with your pole barn insurance carrier. The insurer will then determine whether the post-frame building repair is covered.
You may disagree with the claim adjuster's ruling. Consequently, the insurance payout is significantly lower than you expected. We recommend having a post-frame builder work directly with the claims adjuster. They will inform the claims adjuster of the pole barn restoration costs; a lowball amount won't blindside you.
Setting up an Electronic Funds Transfer (EFT) account can expedite the insurance claim process, ensuring faster resolution and reimbursement. Otherwise, you may have to wait several business days to receive a check in the mail.
5) Review & Update Your Pole Barn Insurance Policy Regularly
Pole barn insurance will evolve over time, making periodic policy reviews and updates necessary.
Changes in property value, pole barn renovation projects, post-frame building additions, or the purchase of new items should prompt a reassessment of coverage requirements.
Additionally, staying informed about new policy options or endorsements can help optimize coverage to match one's current needs and circumstances. Your insurance agent should meet with you once a year to review your coverage and make adjustments if needed.
Is Your Pole Barn Properly Insured?
Insuring your post-frame building requires careful consideration and proactive conversations with your insurance agent. Understanding your coverage needs, policy details, and claim procedures can also help you safeguard your investment effectively.
As a trusted post-frame builder, we aim to build your confidence in choosing the right pole barn insurance policy. If you have any questions or want a second opinion, please feel free to contact your Project Sales Consultant. They're well-equipped to provide guidance on coverage amounts and offer other valuable insights.
Do you have more questions about pole barn insurance that are not covered in this article? If you need help designing and planning, please contact FBi Buildings at 800.552.2981 or click here to email us. If you're ready to get a price, click here to request a quote, and a member of our Customer Engagement Team will help you determine the next steps of your project.