Whether you have a small farm that feeds your family or your farm is your entire way of life, you probably have a lot of time and money invested in it. Farm insurance protects your investment through all kinds of disasters.
What is Farm Insurance?
Farm insurance is a package of insurance products. Some are designed specifically for farming. Others are more general types of coverages that you may get with other types of insurance. The goal is to make sure your buildings, equipment, crops, and animals are all protected.
Who Needs Farm Insurance?
Almost all farms of any size need farm insurance. Home insurance may provide some protection for a garden, but once you add in extra equipment, add farm buildings, and have valuable crops, you will probably exceed the limits and exclusions on your home insurance policy. If you sell what you grow, even in small amounts, you will likely need farm insurance, because you’d then be involved in a business activity that your home insurance probably doesn’t cover.
What Coverage Does Farm Insurance Include?
Farm insurance can include a number of coverages. You can select the coverages that meet your insurance needs.
Farm Property Coverage
Farm property coverage protects your barn and other buildings, tools, machinery, and other equipment. If you have loss or damage due to a fire, windstorm, burglary, or other covered cause, your property coverage will pay to repair or replace that property.
Crops and Livestock Coverage
Crops and livestock are property under the law but get treated differently for insurance purposes. For crops, your coverage is typically determined based on the amount of acreage that you use for a specific crop rather than counting up the exact number of plants. You also choose what percent of the value of the crops you want to insure. Livestock generally has a set reimbursement cost per animal rather than looking at the value of individual animals. For high-value livestock, such as horses or prize cattle, you can choose to insure specific animals for their actual value.
Farm Liability Coverage
If a customer, guest, or even trespasser comes onto your farm and gets hurt, you may be liable for their injuries. You could also be liable if the meat or produce you sell someone causes them to get sick. Liability coverage protects you against the resulting claims and also provides your legal defense.
Loss of Income Coverage
If you lose income due to a covered cause, loss of income coverage replaces your lost earnings. It can also cover extra expenses that you have to incur to maintain your income after a disaster.
If your property is primarily a farm, but you still live there, dwelling coverage may be right for you. Dwelling coverage provides the same protections for your house as home insurance but is bundled into your farm insurance.
Commercial Auto Insurance
Commercial auto insurance protects your business vehicles the same as your personal car insurance protects your personal vehicles. It may also be needed for personal vehicles so that they’re covered when you’re using them for business purposes. Any trucks or other vehicles that you drive on the road will typically need commercial auto insurance. If you have vehicles that you only use on your property, such as a tractor, they may be covered by your general liability and property coverage. Still, you’ll need to review your policy for the exact details.
When you assemble your farm insurance coverage, you will probably select multiple liability options. If you need higher limits to protect your assets, it’s generally better to add umbrella coverage rather than increasing each limit individually. Umbrella coverage will increase all of your liability limits at a price that is usually lower than raising them all individually. The main requirement of umbrella insurance is that you have a certain amount of coverage on the underlying liability policies.
If you hire employees to work on your farm, you may have a legal obligation to carry workers compensation insurance. Workers compensation covers their medical bills and lost wages if they get hurt on the job.
What is a Hobby Farm?
A hobby farm is a farming operation that’s bigger than what your home insurance will cover but not something you’re engaged in for-profit. Some insurance companies sell hobby farm policies separately from commercial farm policies to reflect the different insurance needs from a business operation. Even if your insurance company just generically calls everything farm insurance without distinguishing whether it’s a hobby farm, your exact coverages and premium will still reflect how you use your farm.
How Much Does Farm Insurance Cost?
Farm insurance costs vary based on what type of farm you have and how large it is. When you purchase coverage, you’ll need to tell the insurance company what you’re growing, how large your farm is, and how much money you make from your farm. If you make changes to the crops you grow or livestock you raise, you’ll need to update your policy at that time. For larger or more complex operations, the insurance company may want to have a representative visit your farm before issuing your policy. They may also schedule visits on an annual or other periodic bases.
Get Help From Your Insurance Agent
If you need help deciding what farm insurance coverage you need or finding the best price, talk to your independent insurance agent. Sagen & Associates Insurance is located in Brodhead & Racine, WI. Contact us now to get started.