What Exactly is Included in Your Average Farm Insurance Policy?
by Arina Smith Insurance 16 July 2020
Farm insurance can cover everything from large working farms to small hobby farms, such as those who start raising alpacas, goats, or horses on a large property. New farmers, however, may not realize that standard homeowners and property insurance policies don’t cover the risks that come with a farm, and may start considering farm insurance. But not everyone knows what should and will be covered, which could lead to some issues later on. So, what exactly is included in your average farm insurance policy?
All of Your Buildings
A farm insurance policy will include your barns, workshops, livestock sheds, and other outbuildings. Furthermore, you can arrange for a farm insurance policy to cover your primary residence as part of a package deal.
This is commonly done because most farmers manage the farm out of an office in their home. However, you may have to pay for additional coverage if you want the insurance policy to pay for storm damage to the roof or vandalism to the property. Don’t forget to include any additional residences on the property like farmworker housing or the guest house your seasonal caretaker lives in.
Your Agricultural Equipment
Farm insurance policies cover farm equipment and tools. They generally cover the cost to repair or replace equipment damaged by a fire, explosion, or lightning. This is part of basic farm insurance coverage. It will also usually cover the costs associated with machinery breakdown. For example, you may be able to get reimbursement for lost days of work caused by machinery breakdowns. This type of coverage is an additional rider, and the premiums are tied to the price of the equipment. You’ll also be required to show that the equipment has been properly maintained just as you’re required to perform basic maintenance to maintain your auto insurance.
Your Agricultural Products
Your homeowner’s insurance policy will probably pay to replace your personal property if your home burns down. This includes buying new furniture and clothing. However, it won’t pay to replace the hay destroyed when the barn burned down, but farm insurance will.
Note that farm insurance only covers stored feed, not feed actively growing in the fields. This means you may need crop insurance in addition to farm insurance. Farm insurance generally covers the cost of replacing farm supplies like stored seeds and bags of soil, though that coverage stops once the products are opened and used.
Only farm insurance will pay for the lost livestock killed in a fire or other natural disaster. Special insurance is required to protect against losses due to health problems with the animals.
All Associated Liability
If you have farmworkers or caretakers staying on the property, you are typically liable for any personal injuries they sustain while staying on the property. This is why farm policies generally include some liability coverage. You may also want to take out an additional general liability policy that will protect you against expensive lawsuits.
Unfortunately, it is possible an insurer will not honor your claim or drag their feet. If this is your situation, plenty of lawyers offer free case evaluations. This helps you to understand your options, ranging from changing the insurance policy under which the claim is filed to suing the insurer to force them to pay the claim.
Farm insurance is a blend of home and commercial insurance, customizable to your unique situation. You need the right types and levels of coverage to protect you both personally and financially from mishaps.