Do You Know What Your Farm Insurance Does?
That seems like a silly question at first. Of course you know what your farm insurance does! You’ve had it for years. It protects your farm.
But how? And from what?
You may be surprised to find that lots of people, from hobby farmers with only an acre to large commercial farming operations, have no idea what their farm insurance policy does or what it covers.
They only know that they have to have it.
If you’re one of the many people I just mentioned, or if you want a refresher course on how your farm insurance policy protects you from harm, let’s go over what it is, how it helps, and what it doesn’t do.
Farm Insurance Basics
Farm insurance policies cover a LOT of things on and around your farm. These are true package policies, with different parts all put together to give you a wide range of protection from all kinds of accidents that could hurt your farm.
The different kinds of coverages fall into roughly three categories: Home and Belongings Coverage, Farm Buildings and Property, and Liability.
Each of these covers a different part of your life as a farmer, and each is important. Also, make sure to note that farm insurance policies are very adjustable, meaning each can be tailored to suit the particular needs of you and your farm.
Okay, enough chatter. Let’s get to the coverages.
Home and Contents Coverage
Most farm insurance policies will cover your personal home and your belongings, just like a Homeowners policy.
It’s not hard to see why this is the case. Farm policies were created around the idea of a traditional farm, with the land around the house being used to grow crops or raise animals.
So protecting the house itself is a natural part of an old school farm policy.
But if you’re farm isn’t located around your house, don’t worry! Plenty of modern farm policies can exclude this coverage.
This part of the policy will cover the building of your house itself, as well as attached structures. It also includes your personal property inside of the home – though some items are limited, like firearms, jewelry, and cash.
Farm Outbuildings Coverage
This coverage is one of the most important on your policy, as it protects the buildings where you store your equipment, house your livestock, and do all of the other necessary work that makes your farm what it is.
Everything from storage buildings, garages for tractors and equipment, hay barns, horse stables, chicken and hog houses, and just about anything else can be included in this section.
Each of these buildings can be covered based on their value. The type of coverage depends on the age and condition of the structure.
For example, a brand new chicken house can be covered by replacement cost (the cost of a new building), while a leaning old shed where you park your tractor may be only insured for ACV, or actual cash value (what the building is currently worth).
Some policies combine your personal home with these buildings, merging this with Home and Contents coverage.
Farm Machinery Coverage
This protects the vehicles and devices you use every day to grow, raise, or cultivate the products of your farm. Tractors, combines, trucks, trailers and other kinds of equipment can be covered by this part of your Farm Insurance policy.
Most farm machinery is covered based on its actual value, not how much it would cost to replace it with something new. So ACV, not Replacement Cost.
This coverage needs to be updated each year, as farmers go through old equipment, buy new, plant a new crop and need a different kind of harvester, etc.
As any modern farmer knows, machinery and technology on the farm are vital to having an efficient business. This coverage protects the gear that runs your farm and makes sure you can keep going if something bad happens.
Farm equipment can either be added individually, or scheduled, or they can be under a blanket policy that gives a total amount of protection for all of your items.
This is a massively important piece of protection that can be often left off of a Farm Insurance policy. Farmer’s Liability protects you from harm to anyone on your farm that isn’t you or an employee.
For example, a salesperson comes to talk about buying a new irrigation system, but trips and falls in a hidden ditch. If they sue you, Farmer’s Liability would cover it.
Whether it’s a truck driver delivering goods, a salesperson, or even a trespasser, this coverage protects you from being responsible if they are hurt on your farm.
It can protect you by paying for medical bills, legal fees, court costs and other kinds of payments from accidents on your property.
This is often the least expensive part of your Farmers Insurance policy and for some reason is still overlooked. Doublecheck yours to see if you have it.
Farm Insurance is for All Farmers
Farm Insurance is adaptable and can fit any kind of farm. No matter what you do, there is a farm insurance policy for you.
Grow soybeans and a handful of other crops? Farm insurance can help with that. Have a small hobby farm around your home and still grow some tobacco? There is a farm policy for you.
Dairy farmer? Have a small ranch where you raise show horses? Operate chicken houses in a few different locations?
Or are you getting into the next big thing – HEMP? (We will have more about hemp farming coming soon.)
Whatever your farm looks like, we can tailor a farm insurance policy to fit your needs, cover your buildings and equipment, and keep you safe from liability claims.
The larger your farm, the greater the amount of coverage you will need to protect your many buildings and pieces of expensive machinery.
But if you are a small hobby farmer, your policy may resemble a regular homeowners policy with some added farm coverage – though it would still be a farm insurance policy.
No matter what your little slice of heaven looks like, farm insurance can keep it safe.
Do You Have the Right Farm Insurance?
You have farm insurance – it’s hard to run a farm without it.
But do you have the right policy? The right coverage? Do you have gaps or pieces of coverage that are missing?
The best thing to do is have one of our excellent farm insurance agents at Alliance look it over. That way we can point out what works – and what doesn’t.
Start by downloading our FREE FARM INSURANCE CHECKLIST.
Just your name and your email address gets you a free tool to see where you stand with your farm insurance.
You have put so much into your farm. It’s probably your pride and joy. Don’t let your hard work go to waste if something bad happens.