Farm insurance is a type of insurance that protects owners and their property from various risks, such as fire, theft, or hail damage.
These policies are designed to provide protection for all types of agricultural operations, including dairy farms, crop farms, poultry farms, and more.
There are many good reasons to consider investing in agricultural insurance. For one, farmers are always at risk of unexpected and unexpected disasters.
From a flood to a fire, a farmer’s crop is often their livelihood, and it can be disastrous when a whole season’s worth of work is lost.
It is important for all farmers to protect the farm from these risks. You have to know what an insurance policy is – and exactly what an agricultural insurance policy is.
- 1 What is a Farm Insurance Policy?
- 2 Do you need agricultural insurance? Ask these questions
- 3 Farm Insurance Coverage Facts
- 4 How much does farm insurance cost?
What is a Farm Insurance Policy?
Farm insurance (sometimes known as agricultural and farm insurance) is an insurance plan intended to protect your farm personally and professionally.
This is similar to homeowner’s insurance. This will cover you, your property, your home and personal liability (for example, if a person travels and falls on your property while visiting your farm).
You can also add additional coverage for your livestock and machinery. It does not cover crops because the USDA usually insures them.
Farm insurance is highly customized. You will start with the most basic level of coverage before adding additional options depending on your needs.
Most outflows come under the insurance of homeowners other than agricultural insurance policies. Some trees, shrubs and other plants are covered.
However, it is important to note that homeowners insurance does not cover anything grown for commercial use, nor does it cover areas of your lawn or property that are a certain distance from the home.
Farm insurance covers any type of property that is directly related to the farm. It can generally be divided into three categories:
- Agricultural products (silage, animal feed, pesticides, fertilizers, seeds)
- Farm Machinery & Equipment
Your insurance policy will cover the following:
- Animals killed by accidental shooting or auto accidents
- Livestock attacks by poachers
- Damage from livestock and floods and damage to livestock
- Damage to farm machinery, tractors, portable irrigation equipment, combine, hay racks, field equipment, etc.
- Livestock deaths due to sickness and disease (sometimes)
- Major medical expenditure for livestock (sometimes)
- Damage to agricultural products such as seeds and grains (only when stored – which have not been planted)
- Accidents related to your property and your machinery and livestock in a roadway
Do you need agricultural insurance? Ask these questions
1. Is your farm a business or a hobby?
One of the easiest ways to determine if you really need agricultural insurance is to look at your reasons for farming.
If you are farming to raise your family or as a hobby, then you do not need agricultural insurance.
However, if you are farming for profit – any benefit – you may need some coverage. This requires a different level of coverage than your standard homeowner’s policy provides. Even if you are selling a few dozen eggs or some produce at a local farmers market, a hobby farming policy is a smart choice.
The term hobby farm is closely regulated by both insurance companies and tax agencies. Agricultural insurance is not needed, to be a hobby farm, you will need:
- Annual agricultural receipts are limited to less than $ 10,000
- Less than 500 acres
- No employees
- single location
One of the best reasons for employees to obtain agricultural insurance. So there are many high-value structures and livestock animals on your property.
2. Do you have homeowners insurance?
If you own your home and have homeowner’s coverage, take a look at your policy. Occasionally, some agricultural activities are covered.
This is especially true if you consider your small farm or large garden as a hobby. This also applies if you do not plan to make any money. It is less likely that your homeowner’s insurance will cover agricultural equipment (things like expensive, big ticket items such as tractors and composters). The same goes for rebuilding the farm (like barn and chicken coops).
What your policy will be will vary, so check with your individual insurer to be sure.
3. Is this your full-time job?
Is farming your full-time job?
Chances are it is paying enough of your bills so that you can consider it your full-time gig, you will need more than the original homeowner’s insurance.
A farm owner policy will cover everything else you need to protect, such as liability coverage and property coverage.
Again, this is something that will be evaluated and revised based on the specific needs of your farm. Chatting only with an insurance agent who understands your situation will help you to complete this job properly.
Farm Insurance Coverage Facts
When it comes to shopping for farm insurance, some facts should be kept in mind.
1. Not Standardized
Many people believe that an agricultural insurance policy is a large bundle of predetermined coverage.
While often this happens when shopping for other types of insurance, such as health insurance, auto insurance, or even homeowner’s insurance, this is certainly not the case with agricultural insurance.
This is because each farm is so unique. This is in the context of what type of coverage is required and which animals, buildings and equipment need to be covered. Every agricultural insurance policy is built around the needs of the farm – everything is customized to meet your needs.
2. Limitations on Commercial Buildings
This is another area in which it is worth figuring out what your homeowner’s insurance costs are.
Most homeownership policies limit the amount of coverage you get for commercial buildings. Most agricultural insurance policies, even hobby farming policies.
In most cases, you will need to think about what the building is being used for.
Often, if the building is being used in a way that exceeds the special limits outlined in policy terms – it can be considered commercial. Therefore, it will require additional protection in your insurance policy. It is often based on the form of gross annual revenue generated.
3. Livestock is not included
Another disadvantage is that while purchasing agricultural insurance, people assume that their animals have covered themselves.
Livestock insurance is similar to crop insurance and may be partially funded by the USDA. However, this depends on the type of animals you have, so you may need additional coverage.
You can purchase individual coverage, schedule animals individually, or you can purchase blanket coverage (or undefined coverage).
Blanket coverage is ideal if you have animals that are almost all of equal value. Personal coverage is smart if you have some high-value animals (such as those used for breeding or shows).
When it comes to livestock, it is also important to keep in mind that insurers will consider what your livestock is being used for.
For example, if you have a horse that is kept strictly as a pet, you might not be able to insure it. However, if you use that horse to ride and raise other animals, you can argue that it is an important part of your livelihood – and you can insure it.
4. Other things that are not covered
There are some other things that are not included in agricultural insurance.
For example, fences are rarely covered. Some insurance companies offer policy additions for fencing, but these incur significant charges for your premium.
In addition, agricultural machinery and equipment will not be maintained, nor will technical malfunctions occur.
5. Know Your Fire Insurance Limits
It is also important to research what your farm insurance can be in the context of a fire. You must be certain that your house and other buildings will be covered if there is a fire. Although farms are generally insured, some things can activate an exclusion.
For example, if the structure of your farm is not accessible by road (sometimes even by gravel or paved road) then many insurance companies will not cover them. Some people need to have a source of water on the property – and a pond does not always close that box.
How much does farm insurance cost?
The cost of agricultural insurance varies depending on your location, claims history, operations, buildings, and more.
On average, you can expect to pay around $ 40- $ 100 per month for your coverage. In my opinion, it is worth it, even if only for the peace of mind that is being properly insured!
Agricultural insurance can be confusing. If you are a farmer, homeowner or any type of cattle owner, then it is important to understand what agricultural insurance is. You should also consider how much coverage you need.
Farm insurance can cover liability for your equipment, livestock loss, buildings on property and any accidents that occur on the farm.
So do you need farm insurance? The short (but not so simple) answer is – maybe.
Consider the suggestions above. Then, you can decide whether agricultural insurance is an investment you want to make for your farm.
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