Whether you are considering selling your prize-winning zucchinis from your garden or you are a full-time farmer, it’s important to understand the several types of farm insurance coverage. Here are five things you may not know about farm insurance.
Farm Insurance Coverage is Not Standard
Unlike some other insurances, farm insurance policies are quite diverse so there is no standard. Every farm is unique, and your policy should be custom-built for your specific needs.
If You’re Farming for a Profit, You May Need a Different Type of Policy
Anyone farming for a profit, hobby or large, will require different coverage than is provided by a homeowner’s policy.
So, how do you know what constitutes a working farm versus a hobby farm? There are a few guidelines which much be met for a farm to be considered a hobby farm, including:
- Single farm location
- No employees
- Less than 500 acres
- Total annual farm receipts are $10,000 or less
- Minimum coverage of $125,000 on the main dwelling
Are You a Full-Time Farmer? You Will Need a Farm Owner’s Policy
A basic farm owner’s policy generally includes property coverage, liability coverage, and more.
From there, enhance your basic coverage with endorsements based on your farm’s unique needs. One of our agents will be able to identify which endorsements will best fit your needs.
Some Coverage has Limitations on Commercial Structures
Homeowner policies usually limit coverage on commercial structures, while hobby farming policies and farm owner’s policies do not. So, if a structure is being used in a way that surpasses the specific limits in the policy conditions (which are generally financial in nature), the building is then classified as a commercial building and is generally not covered under a homeowner’s policy.
You Need Special Coverage for Livestock
Livestock insurance is like crop insurance and is partially funded by the United States Department of Agriculture. You will need special coverage for livestock depending on the types of animals you have on your farm.
There are two coverages to consider in this case:
- Blanket Coverage: With this policy, all your farm property is insured in one lump sum amount. If you choose this insurance, make sure your appraisal numbers are accurate.
- Individual Coverage: If you have higher-valued animals you want to ensure for specific amounts, this may be the correct option for you.
Your farm is more than a piece of property. It’s your livelihood or passion. Ensure it has the protection it needs with the right kind of insurance. Talk to one of our experienced agents at James Allen Insurance to find the best insurance for your needs.
