Insurance - Livestock & Mortality Category Guide

Why Insure Your Dairy Cattle?

Dairy cattle represent a significant investment—often $1,500-2,500 for milk cows and $50,000+ for elite genetics. Losses from disease, accidents, weather events, or other causes can severely impact your operation. Livestock insurance provides financial protection against these unpredictable losses.

Types of Livestock Insurance

Mortality Insurance

Covers death of insured animals from covered perils including accident, disease, fire, lightning, and other specified causes. Policies may cover individual high-value animals or blanket coverage for groups.

Livestock Risk Protection (LRP)

A federally subsidized insurance program that protects against declining market prices for feeder cattle and fed cattle. While primarily used for beef, it can apply to cull dairy cattle.

Livestock Gross Margin (LGM-Dairy)

Protects against losses when the margin between milk prices and feed costs falls below insured levels. This is price insurance rather than mortality coverage.

What Mortality Insurance Covers

• Covered perils: Accident, disease, lightning, fire, flood, and other specified causes
• Exclusions: Pre-existing conditions, intentional acts, lack of proper care, and conditions existing before policy inception
• Deductibles: Many policies have per-animal or aggregate deductibles
• Waiting periods: Coverage may not begin immediately after purchase

Coverage Considerations

Valuation Methods

Policies may pay agreed value, actual cash value, or market value at time of loss. Agreed value provides certainty but may cost more.

Animals to Insure

Consider insuring:

• High-value genetics (bulls, donor cows, elite heifers)
• Newly purchased animals during transition period
• Show cattle during transport and exhibition
• Animals required for loan collateral

Do You Need Livestock Insurance?

Consider coverage if:

• You have significant capital invested in individual animals
• Loss of specific animals would significantly impact your breeding program
• Lenders require insurance on animals used as collateral
• You transport animals frequently for shows or sales
• You've experienced significant mortality losses in the past

Cost Considerations

Premiums typically run 2-5% of insured value annually for basic mortality coverage. Higher-risk situations (older animals, specialized uses, transport coverage) may cost more. Elite genetics coverage with broader terms can run 5-8% or higher. Compare policies carefully—coverage terms vary significantly between insurers.