WILTON, N.D. (KXNET) — Insurance rates for grain elevator facilities have increased substantially in the past year, and some facilities have lost their insurance altogether because companies have deemed grain elevators a high-risk investment.
Due to the recent facility fires in Illinois, insurance companies have recently increased premiums and deductibles, as well as coverage terms for general policies covering buildings and equipment. But the Wilton Farmers Union Elevator received a complete cancellation notice from its insurance company with only a 60-day notice.
“60 days is not enough time to fix this facility to bring it up to what they want,” states President of the Elevator Company James Meyer. “It would take a year or more for us to adjust the facility to bring it into compliance where they want, and we only got a 60-day notice.”
The new compliance issue is with the wooden grain house, which insurance companies say have a high risk of catching fire.
But with a 60-day notice, the facility has to make those changes for it to be covered, or scramble to find a new insurance company. If they don’t make the changes or find another insurance company, then the gain elevator will be nonoperational.
“It impacts our ability to do business,” explained Meyer. “We can have tens of millions of dollars of grain in here — we have to have insurance. We cannot afford the exposure, and the farmers can’t afford to have this facility non-insured. Not just the equipment, but the grain that’s in here, too.”
So what does this mean to the average farmer?
The Wilton Farmers grain elevator facility serves farmers from all across the state. Wheat, Durum, sunflower; if you can grow it, the grain elevator can store it. Grain elevators are essential to farmers for the storage and protection of their commodities.
“We serve some niche markets that other facilities don’t serve,” states General Manager and CEO of the WFU Elevator Company Mark Jennings, “and if we’re not here, who fills that niche?”
Meyers says they’ve recently spent millions in upgrades to their facility, and now they will most likely have to spend more money to replace the wooden grain house. But the clock is ticking, and they’re almost out of time.
Meyer says grain facility leaders feel an independent insurance agency could be a solution for high-risk facilities like the one in Wilton. If they get enough facilities in North Dakota, Montana, and Minnesota to contribute to the insurance fund, they could ultimately insure themselves.