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7 Things You Might Not Know About Farm Insurance

By Insurance Blog
February 24, 2017

Whether farming is your occupation or just a hobby, you will probably agree that there’s nothing more peaceful than working your own land. At Grange Insurance Association, we’ve been insuring farms of all sizes across the West since 1894. Whether you are thinking about selling produce from your garden at the local farmer’s market or making your farm your full-time job, it is important to make sure that you understand the ins and outs of Farm insurance coverage. Our experts have bundled the top 7 things you may not know about Farm insurance when shopping for coverage! Stay up to date with these relevant points. 

Farm Insurance vs. Homeowners Insurance

Before we get started, it’s important to know the difference between Farm insurance and Homeowners insurance. Many treat their large garden or small farm as a hobby and have no intention of making money. If you engage in hobby farming, it’s possible that your standard homeowners insurance policy will cover some of these farming activities. Keep in mind that Homeowners insurance policies generally exclude things like farm equipment and farm outbuildings. Make sure to speak with your local insurance agent to find out precisely what coverage your Homeowners policy provides and what additional Farm insurance coverage you might need.

Farming For Profit? Make Sure You Have The Right Farm Insurance Policy

Hobby farming for a profit requires different coverage than your basic homeowners policy. If you begin selling farmed goods at a local farmers market, for example, you’ll want to consider a hobby farm policy, like Grange Insurance Association’s Country Estates Program.

There are a few guidelines that must be followed for a farm to be considered a hobby farm. Some of these guidelines include:

  • Coverage is limited to a single farm location
  • Property is less than 500 acres
  • Minimum coverage of $125,000 on the main dwelling (mobile homes are not eligible)
  • No employees 
  • Total annual farm receipts are limited to a maximum of $10,000

Not sure what’s covered? Contact your local independent agent for even more details about our Country Estates Program and its requirements.

If Farming is Your Full-Time Occupation, You Will Need a Farm Owner’s Policy

If you want to take your hobby even further and start farming as a full-time occupation, you’ll need full Farm insurance coverage. A basic farm owner’s policy generally includes:

  • Property Coverage 
  • Farm Liability Coverage
  • Farm Equipment Coverage
  • Farm Outbuilding Coverage

To better protect your livelihood, this basic coverage should be modified with endorsements based on your farm’s unique needs. Contact your local insurance agent to determine which endorsement will best fit your farm’s needs.

Farm Insurance Coverage is Not Standard

A common misconception about Farm insurance is that a policy is one big bundle of predetermined coverages. In reality, Farm insurance policies have so many different aspects that there is no standard policy. Each farming operation is unique and a policy should be custom built for the needs of the farmer.

Grange Insurance Association understands the importance of building a policy that is specific to you and your needs. From our Farm and Ranch policies, to our FarmPak Program, our trusted independent insurance agents can help you find the right policy for your farm.

Some Coverage has Limitations on Commercial Structures

Homeowner policies generally limit coverage on commercial structures, while hobby farm insurance, like our Country Estates Program, and farm owner’s policies do not. 

For example, if a building is being used in a manner that exceeds the special limits set forth in the policy conditions (usually in the form of gross annual revenue generated), the building is then considered a commercial building and may not be covered under a Homeowners policy. The same concept applies to all of the owner’s activities.

Livestock: You Will Need Special Coverage

Livestock insurance is similar to crop insurance and is partially funded by the United States Department of Agriculture. Depending on the types of animals you have on your farm, you will likely require livestock insurance coverage. A few options to consider include individual coverage, as well as blanket coverage:

Individual Coverage (Scheduled): Scheduling animals individually may be the right option if you have higher-valued animals that you want to cover up to a specific dollar amount.

Blanket Coverage (Unscheduled): With a blanket policy, all of your farm property (livestock, equipment, structures, etc.) is insured in one lump sum amount. When using blanket insurance, make sure to insure to adequate values, as being underinsured could result in a lower claim payment than you need or expect.

Keep in mind that the maximum amount payable per head is dependent upon your choice of insurance (i.e. individual or blanket), so be sure to talk to your insurance agent about which option will work best for your operation. 

Want to know more? Check out our 5 Things You May Not Know About Livestock Coverage blog for more information.

Grange Insurance Association Relies on Word of Mouth

We pride ourselves on serving farmers across the West and rely on word of mouth in the tight-knit agricultural community. One of the greatest compliments our Farm insurance policyholders can give is telling another farmer about our coverage. 

Your farm isn’t just another piece of property — it’s your life’s work. Ensure your legacy is well protected with a personalized Farm insurance policy. Founded by farmers to protect farmers, Grange Insurance Association has been serving the unique needs of agricultural families throughout California, Colorado, Idaho, Oregon, Washington, and Wyoming for over 122 years. We understand that each farm is unique and one of our local independent agents can craft a custom policy just for you using our Farm and Ranch insurance bundles. In the meantime, check out our insurance blog where we cover everything from how to create a sustainable farm business to how to insure your vineyard or orchard.

The content available via Grange.com is for informational purposes only and may not be used for any other purpose. Content provided or expressed on Grange.com, including that of third parties, may not reflect Grange Insurance Association’s (GIA) policies or conform to any agreement you may have with GIA and its subsidiary companies. Please contact a licensed insurance agent to obtain particular advice.

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