Claude Emery pays nearly $60,000 annually in insurance premiums for his poultry facilities in Saint‑Félix‑de‑Valois, in the Lanaudière region. The size of the amount is explained by a policy choice that notably provides replacement cost coverage for his farm. Even so, he believes this decision proved invaluable during a fire in 2024.
“It was a three‑storey poultry barn [that the insurer valued] at $1.8 million. As they say, if I hadn’t had [replacement cost coverage] and had been underinsured, I wouldn’t have gotten that. But the premium comes with it,” said the farmer, who plans to rebuild a modernized facility this fall. When it was built in 1972, the barn was worth about $200,000. The producer complied with annual premium increases and with the insurer’s requirements to replace equipment.
“The question is always what premium you’re willing to pay—and that’s different for every producer,” he notes. “As for me, I wanted to be sure I could rebuild without going into debt. There are a lot of producers who aren’t willing to accept that, who can’t afford it, or who don’t want to spend the money on it because they see it as an unnecessary expense. It really comes down to personal choice, but I’ve heard from many who are underinsured—and yet they’re satisfied with the premium they pay.”
Like him, a couple of dairy farmers who preferred to remain anonymous opted for this type of coverage to avoid post-loss debt. They had seen family members incur substantial debt after a fire because their insurance policy did not fully cover the value of their farm’s assets.
The couple’s insurance premium costs over $104,000 per year, but when the pit roof collapsed in 2018, the insurer issued them a cheque for $400,000 instead of the $250,000 that the infrastructure was originally worth.
Tips to reduce costs
Serge Gosselin, Vice-President of Gosselin Insurance Brokers, confirms that due to the appreciation of farm assets, properly insuring an agricultural building has become more expensive for producers. There are, however, ways to mitigate costs: increasing the deductible, or enhancing the policy with bundled offerings from the insurer, such as covering certain fees or expenses that will not be counted toward the insurance limit. “Look at where you actually generate your income and make sure it is properly insured,” recommends Gosselin, who has 45 years of experience in agricultural insurance. He also emphasizes the importance of reviewing insured values annually. “It has become so expensive to rebuild that you really have to keep a close eye on coverage amounts,” he says.