Standing timber has a lot of value. The closer it is to being harvest-ready, the more value it has. Just as people insure other valuable things, standing timber should be considered for that, too. This is especially true for people who grow and rely on timber for the purpose of selling it. For these individuals, Outdoor Underwriters offers standing timber insurance. But what is that? And how does it work?
Standing Timber Insurance Defined
Many people aren’t familiar with standing timber insurance. They don’t understand the ins and outs of it. Of course, it takes some effort to complete applications. However, once that’s finished, the process is rather simple.
“There are several firms in the southeastern United States that offer this insurance,” said Mississippi State University Extension Office. “Standing timber insurance requires a large amount of underwriting information to process an application for coverage. Typical documentation required includes a forest management plan with a detailed timber inventory and property description. Additional information needed may include the number of acres, descriptive information for each stand or tract, type of timber (e.g., pine sawtimber), average age of the timber, distance to the nearest fire department, distance to the coast, and land use information on adjacent property. The application process will also require an estimate of the value of your standing timber and information on any loss in the last several years.”
Mature pine and hardwood saw timber that is highly valuable and ready for harvest makes an excellent candidate for standing timber insurance. (Honeycutt Creative photos)
Those who plan to apply should consult with a professional and determine the proper steps. That said, it’s an important task to protect your property investment. Oftentimes, your timber is too valuable to remain uninsured.
“When preparing the application for standing timber insurance, you can estimate the value of standing timber,” MSU said. “However, if a damage claim is made, then a certified appraiser must determine the value of the damaged timber. The valuation process considers the market value of the damaged timber at the time of loss and the salvage value of the timber. Additionally, a deductible will be applied, which is typically set at a certain percent of total timber value per risk insured.”
Standing Timber Insurance Coverage
While every insurance policy is different, many of these cover some or all the risks outlined below. Of course, some cover even more things beyond this list.
Aircraft: While planes and helicopters don’t always fall out of the sky, sometimes they do. Insurance coverage for these threats is covered.
Explosions: Another potential issue is explosion. Whether that be from an ignitable source, or whatever, some landowners might choose to insure for this.
Fire: Perhaps one of the more likely risks to occur, fire is an important thing to plan for. It can be a tree killer, and coverage can protect against it.
Floods: Another common problem in lowland areas, flooding is something to think about. This is a routine issue to have insurance for.
Hurricanes: A big issue in the South, and along the Gulf and East Coasts, hurricanes certainly damage trees. As hurricanes become more common, insurance becomes even more relevant.
Ice Storms: Not an issue in the South, ice storms are a threat in parts of the Northeast, Midwest, Mid-South, and West.
When preparing the application for standing timber insurance, you can assess the value of the standing timber. (Honeycutt Creative photos)
Lightning: As our atmospheric environment warms up, thunderstorms become more common. With these come lightning, which can strike trees, start fires, and cause a lot of trouble.
Malicious Damage: Hopefully you’re never a target of malicious harm, but damage by those seeking to hurt you and your property is a real threat. Coverage can help provide peace of mind.
Straight-Line Winds: Another common issue with inclement weather, straight-line winds can create a serious problem for standing timber. This can level entire stands of trees.
Strikes, Revolts, and Other Civil Commotion: Another issue is civil unrest, which might include strikes or revolts. When these occur, property damage almost always follows.
Theft: While it’s difficult to steal a tree (let alone a lot of trees), it’s still possible. And it happens. Coverage can protect you from the loss, though.
Tornadoes: Finally, like other weather issues, tornadoes are causes for concern. These can turn large swaths of forest into a twisted mess of trunks and limbs.
Of course, other costs might be covered by an insurance policy, too. Such things might include potential expenses, such as firefighting costs. Therefore, put your mind at ease with a quality insurance policy for your standing timber.
Standing Timber Insurance Cost
As with most things, people want to know how much it costs. As with most insurance, it varies. But a quick consultation can help outline projected premiums.
“Mature pine and hardwood saw timber that is very valuable and ready for harvest would be an excellent candidate for standing timber insurance,” MSU said. “This kind of policy can help protect landowners, who are very dependent on this pending timber income, from a devastating financial loss. Insurance can cover specific perils such as fire, lightning, windstorm, ice, theft, and so forth.”
Oftentimes, insurance premiums vary based on risk factors. According to MSU, the greater and more risks, the higher the premiums.
“Premiums can also be greater depending upon how risky your timber is for the peril you are insuring against,” MSU said. “For example, protection against wind damage would be more expensive if your timberland were close to the coast.”
Premiums may also be higher based on the level of risk associated with your timber in relation to the specific peril being insured. (Honeycutt Creative photos)
Despite the presence or lack of risks, it’s important to consider insurance. This will provide peace of mind, and can offer protection in the event of a claim-worthy event.
“The Outdoor Underwriters Standing Timber Insurance Program not only protects your valuable crop from perils normally associated with timber losses, but it also lets you borrow against an insured asset,” said Outdoor Underwriters.
“This program allows you to take full advantage of land-buying and other opportunities,” Outdoor Underwriters continued. “Borrowing against an insured asset is almost always an easier, less costly way to finance purchases. And your insurance premium may even be tax-deductible.”
Final Thoughts
Overall, it’s all about protection. Protecting assets is an important step in property management (including timber value). Take the right steps, check the right boxes, and cover your standing timber with an insurance policy.
“So, if your timberlands are under a written timber management plan as recommended by a forest products company, a consultant forester, or a state forester, call today for an application and indication,” said Outdoor Underwriters. “We’ve made it easy and fast. All we need is a completed application, a copy of your timber management plan or the latest cruise data and location map.”
Get a quote from Outdoor Underwriters today. Then, fill out a standing timber application to begin the process. Call Outdoor Underwriters at 1-866-961-4101 for more information.