Farm Insurance 101:What You Need to Know
Farming can be a profession or a hobby, as many homeowners like to grow crops in their backyard for their own purposes. Whichever course you decide to take, keep in mind that farm insurance can protect the value of your crops. Here are important points to know about farm insurance coverage.
Who needs farm insurance?
Homeowners who don't plan on selling their produce commercially can use their standard homeowner's insurance plan to provide coverage for some of their farming efforts. However, if you plan on selling crops for a profit, you'll need a separate farm insurance plan. While a homeowners plan might help a little, it won't cover farming equipment, which requires special coverage.
Discuss your intentions with our insurance agent to clarify what your homeowner's insurance already covers in terms of farming. If you have a barn or other remote structures used for farming, find out if you need extra coverage. Keep in mind you will need separate farming insurance even if you sell goods for a minimal profit.
Why is farm insurance important?
Farm insurance is important because agriculture depends on climate conditions, which these days aren't always predictable. A sudden storm can wipe out a field of crops, leaving commercial farmers without a chance to sell to other vendors. That's where farm insurance comes in to pay for losses.
The amount of coverage you need depends on your operation. If you have livestock on your farm, you should look into special livestock coverage, which can be partially subsidized by the United States Department of Agriculture. Consider individual coverage that is scheduled for individual animals. For horses, look into horse insurance. Blanket coverage is an unscheduled option that protects all your farm property, including livestock, equipment, and structures.
Crops can also be wiped out by disease and other environmental elements. Be aware that a farm plan is very specific, so you should ask questions to clarify what's all covered in your plan.
How to choose a farm insurance policy
Here are important criteria to know if you want to pursue a hobby farm insurance policy:
- One plan covers a single farm location.
- You cannot have any employees for a hobby farm plan.
- The property must not cover more than 500 acres.
- Total farming revenue must not exceed $10,000.
- You'll need coverage of at least $125,000 for the main dwelling.
- If your farming hobby does not meet these requirements and you run a larger commercial operation, you'll need a farm owner's policy.
The type of farm insurance you need depends on your operation's type and size and how you sell items beyond personal use. Every farmer should customize their plan. Contact us at Amity Insurance Group for more information on putting the right farm insurance plan in place.