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Whether you have a little hobby farm that produces small crops for the local farmer’s market or a large operation that requires full-time attention, you know all too well the risks and frustrations that come with crop production.
Farm insurance helps mitigate the financial loss that accompanies the risks and challenges of running a farm, but not all farmers understand the ins and outs of farm insurance. Here are four interesting facts you may not know about farm insurance policies.
1. Farm Insurance is Not One Size Fits All
Unlike homeowners insurance, farm insurance doesn’t have a standard policy that includes the same set of predetermined coverages. Every farm is unique so the policy is tailored to the unique needs of the farming operation. That’s why it’s important that farm owners work closely with their insurance broker to customize a policy that adequately protects their land, farm equipment, farm buildings, livestock, feed, and crops.
2. Standard Homeowners Insurance Does Not Cover Hobby Farming Activities
If you’re not looking to make money from your farm, but consider it to be a hobby, your standard homeowner’s insurance policy does not cover farming activities. Most policies typically exclude farm equipment or farm outbuildings. If you’re relying on homeowners insurance to cover your entire hobby farming activities, talk to your insurance broker so you know exactly what is covered and what is not.
3. Hobby Farming for Profit Requires Separate Farm Insurance
If you decide to expand your hobby farm and start selling crops at the local farmers market, you will need to upgrade from using your standard homeowner’s insurance policy for coverage and add a hobby farm policy. Why? It is because standard homeowner policies often have a “business pursuit” exclusion or “professionals services” exclusion that does not cover business activities at home. To qualify for hobby farm insurance, your farm must meet certain criteria, which usually includes having:
• A single farm location
• No farm employees
• 10 acres or less of workable land
• Less than $8,000 in annual farm receipts
• Less than 6 farm animals
4. Full-Time Farming Requires a Farm Owner’s Policy
For farm owners who farm exclusively as their full-time job, a farm owner’s policy is essential. At a minimum, you’ll want to have property coverage, liability coverage, and livestock coverage. You can also add endorsements that cover things that may be unique to your farm like fencing.
Your farm is your pride and joy. Give it the protection it deserves with an insurance policy that fits your farming situation. Talk to your insurance broker today to customize the best coverage for your farming operation.