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Farm Insurance

Farm Insurance

farm insurance near me

As a farmer, your life is tied to the land and your livestock. All around you is new life. The plants that grow and the animals you care for sustain the nation. You are also at the mercy of the weather and natural disasters. Too much or too little rain and your crops will fail. At the end of a long day harvesting grain, no one wants to find their combine has stopped working. It is overwhelming to think about insuring your farm when it is both your home and livelihood. A farm insurance policy can eliminate that confusion.

What is Farm Insurance?

Farm Insurance If you work in the agricultural sector, instead of ordinary business insurance, you might find that a niche product such as farm, crop, and livestock insurance is going to be best suited to what you need.

Farm, crop, and livestock insurance usually involves a package of different insurance types tailored to cover farm businesses and primary producers for a range of events.

Farm and ranch insurance is a hybrid form of coverage meant to protect you both personally and commercially. Like a standard homeowner’s policy, farm insurance will cover your home, possessions, and personal liability. Beyond that, it also includes coverage for your machinery and livestock (though not for your crops).

How does Farm Insurance work?

Farm Insurance coverageInsurance for your valuable farms or ranches works just like any other insurance. In simple ways, this is how a farm insurance policy would work: 

Research about the Insurer

Seek agencies that provide farm insurance for the components of your farm that you want to get protected. Each insurance company offers different sets of packages, so you have to be aware of what you are looking for. Get to know companies that offer farm insurance that would be suitable for you. 

When searching for an agency, have a brief list in mind of the components of your farm that you want to get protected. However, if you do not know where to start, you can contact an independent insurance agency like Advantage Insurance Solutions that can help you find out the best insurance policy to fit your needs. Insurance companies can offer lists and lists of surprising coverages that might make you realize that there are components of your farm that could easily recover if you would only insure it. 

Getting to know the insurance company

Get to know the insurance on offer. After seeking information about the different farm insurance coverages, it is possible to get a brief list of terms and quotations to help you how to decide on the best farm insurance that you should get.

Letting the insurance company get to know you

Undergo underwriting or profiling with the company and tell them what you need and want with your farm. Be open to their suggestions as well, in case you might miss out on anything. If you are sure that you have expressed all your needs to the agency, be willing to undergo some underwriting.

Underwriting is a process done by the company to make sure that you can pay for the service that they offer. After you have researched their company, this is the chance for the company to get to know you and to check your qualification for the insurance. It is important for them that you are ‘fit for their services as much as it is important for you to have a company that will take care of business. 

While the insurance company gathers information from you, they would also analyze how much you should pay them and how much they should pay you once you file for a claim. In consideration of your farm needs and your ability to pay, they also have the responsibility to complete the set of circumstances in which they can make a payment to you. In other words, these are the events that the insurance can cover.   

 

What does Farm Insurance cover?

Farm and ranch insurance also covers personal property directly related to the farming or ranch operation. This portion of the coverage can typically be broken down into three categories: farm machinery and equipment, livestock, and farm products such as seed, silage, animal feed, fertilizers and pesticides. Most farm insurance policies allow policyholders to choose broad coverages over the categories or to schedule individual items (these options work similarly to endorsements and floaters). You choose which is best for you when you speak to your agent and purchase the policy. Whether you choose to broadly cover categories or individually schedule items, we’ve broken down coverages under this portion of a farm insurance policy.

Farm Machinery and Equipment

This coverage protects the policyholder from financial loss or damage of their machinery and equipment due to covered perils. Almost everything you might guess that falls under this category is covered. Tractors, combines, cotton pickers, planters, field equipment, hay rakers and other machinery are all covered. If you use a truck for farm work, you may be able to bundle a commercial auto insurance policy and add it to your overall farm insurance package. Portable irrigation equipment and portable structures and fences are usually covered as well.

Farm and ranch machinery is expensive and some of it will need to be scheduled. Farm tractors can cost more than $200,000 but they are necessary investments for many farmers. As durable as they are, a lot can happen to them. For example, say a tornado damages a tractor. There is little the owner can do to prevent that peril so they need to protect themselves financially against the loss of such an expensive piece of equipment with farm insurance.

Example of Cost: We’ve seen most farm equipment get insured for roughly $15 per $1,000 of value – but this will depend on your deductible. For example, say you have a tractor valued at $200,000. It would cost roughly $3,000 per year to insure it against a group of named perils. If a covered peril impacts your tractor, you’d get the proceeds net of the deductible you choose.

Livestock

Most farm insurance policies offer broad coverage of livestock in the event they are killed or injured as a result of a basic peril that is covered. There also are extensions that cover a much wider array of perils that that can happen to farm animals. Some of the extended policies cover things such as the death of animals by accidental shooting or if they are struck by a train or vehicle. They also might cover attacks on livestock by dogs and wild animals, as well as flood and earthquake loss of livestock.

State Farm Insurance QuotesHorses and equine animals are unique because of the variety of purposes they serve. Whether you use one or more horses for work, breeding, show or pleasure, the animals are investments that make financial sense to purchase insurance for. Companies that offer farm and ranch insurance employ special adjusters specifically for equine animals and offer a list of purchasable options to cover them. Choosing what protection is most appropriate is a decision you make with your agent.

Typical coverage options for horses include animal mortality coverage, which covers death due to a broad number of perils and theft. Perhaps more importantly, the option also covers death due to sickness and disease – this is a unique covered peril that standard livestock portions of farm insurance policies does not. Other livestock options for horses include major medical expense, surgical expense and loss of use coverages. What purpose the horse serves the policyholder determines which of the options you need to purchase. For example, say you ride your horse to herd other animals. That horse is probably a vital part of your livelihood so you need to protect that asset with insurance in the event of perils, accidents and disease. A horse you have purely to ride for pleasure might not require extensive coverage.

Example of Cost: The cost of equine or horse options depend on many factors including the type and age of the horse, where it resides and what tasks it performs. Generally, mortality coverage costs 2.5% to 5% of the value of the horse. So if you have a horse worth $10,000 and a rate of 5%, the mortality coverage alone might cost the policyholder $500 per year. As we mentioned earlier, there are adjusters who specialize in evaluating equine options, as there are a multitude of variables to account for when determining insurance.

Farm products

Feed, grain, seed and similar items considered farm products are covered by farm insurance. Remember these products are only covered while stored. Feed or grain (or other crops) growing on the property and seed that has been planted are not covered – those would typically require a commercial insurance policy if the sale proceeds exceed your policy’s incidental income limit.

Farm liability coverage

Similar to a standard home insurance policy, farm and ranch insurance also provides liability protection. Liability coverage is not an option and part of every farm insurance policy because of the risks at hand. It covers bodily injury, medical expenses and property damage if necessary. Perhaps just as important, it covers attorney’s fees associated with covered incidents as well.

Even under the most strenuous precautions, accidents can occur. Farmers with years of experience operating machinery can misstep and hurt themselves. Something could startle an animal and cause it to injure a senior handler. Or for example, say an animal manages to escape, wander into a roadway and cause an accident. Even though that incident didn’t occur on your property, you as the animal’s owner would be liable.

 

What does Farm Insurance not cover?

farm state insurance quotesBe careful when it comes to insuring your farm: there are a few items that you think might be automatically included, but are actually not covered by your policy. For example, there are a couple of nuances around fencing and fires that homeowners should keep in mind regarding their coverage.

Fencing Not Automatically Included in Farm Insurance

Fencing is rarely covered by standard farm insurance policies. This might seem counterintuitive in terms of needs (many farms have a lot of fencing) but that’s exactly why standard farm policies don’t cover it. Some farms might not have any fencing while others might have miles of fencing. There are many different types of fencing too, which could impact the cost to insure it. For example, a quarter of a mile of woven wire fence costs roughly $2,600 while a barbed wire fence costs $1,900.

For all of the above reasons, the decision to cover fencing is one insurance companies let the policyholder make in the form of a policy extension. To have a farm or ranch insurance policy broadly cover fencing would mean factoring in a risk many policyholders aren’t subject to – even though it would be reflected in the form of a more expensive premium.

Many people choose not to insure their fencing. The only thing that might destroy a significant portion or all of a fence is a tornado. However, electric gates can cost $15,000 or more. If you have electric gates, you should definitely consider the gates importance and whether you need to insure it.

Note on Covered Perils in Farm Insurance Policies

Farm machinery and equipment is only protected by perils explicitly listed in your policy. Equipment that is not well maintained will not be covered and technical malfunctions are not covered. Like many things, farm equipment is getting increasing technically advanced and unless you purchase a specific extension, it might not be covered.

Policyholders need to be absolutely positive their home and other buildings are covered in the event of a fire. Although farms are generally insured against fires, there are things that might activate an exclusion. For example, road accessibility to farm structures is something your agent will take note of. Some carriers require there to be paved or solid gravel roads to buildings covered by the policy. Regarding water sources, some people assume a pond on the property is adequate, but fire truck hoses need to be able to reach both the pond and covered structures if a hydrant is not available. In dry conditions, a fire truck would likely deviate from a road or gravel but if a field is covered in snow or too muddy, it might not. A lack of clear roads to you barn or stable, for example, would increase your risk of sustaining damage in a fire, which tends to result in insurers excluding fire as a covered peril on your policy.

Do you need Farm Insurance?

Whether you are doing farming as a past-time or you are making your farm your full-time occupation, you know that reaping the joys of farming gives you a sense of fulfillment. If you are still in the process of getting one or thinking about selling your greens to other consumers, it is just as timely to start thinking, “Does a farm need insurance?” You need farm insurance to protect your investment and any farm-related liabilities. The liability protection present in a farm insurance policy might be sufficient to protect your farm activities however, additional policies like product liability could give you enough coverage. 

 

How much does Farm Insurance cost?

Now that we’ve thoroughly walked through all of the coverages you might need to protect your farm, you’re probably wondering what this amount of coverage is going to cost you. How hard is this going to be on the wallet?

Farm insurance can cost as little as $2,000 per year or as much, while a policy for a large production farm could cost over $30,000 per year. 

These four factors will have the greatest impact on the cost of your farm insurance premium:

Residence

The cost to insure your residence will be one of the greatest costs on most farm insurance policies. Depending on the size of the residence, the number of stories, the type of construction, etc. will heavily influence the amount of your premium.

Farm structures

Another factor that will impact your premium is the number and type of additional farm structures on your property. Remember you will be insuring every barn, carport, shed, etc., and this will greatly affect your premium amount.

Liability coverages

Your liability needs are determined by the various ways your farm will be used. You can expect the amount of this coverage to be determined by the amount of risk involved with the various ways your farm is used. This coverage will impact the bottom line of your premium costs.

Previous claims

Finally, if you have previously filed claims, your insurance carrier will consider these claims when determining how much they will charge you for coverage. Previous claims can greatly increase the cost of your farm insurance policy.

What is the difference between Farm/ranch insurance and Homeowner’s insurance?

Both farm and ranch insurance and homeowner’s insurance are generally designed to protect property and limit an owner’s liability. However, farm and ranch insurance is generally a mixture of homeowner’s insurance and business liability insurance, and so will generally cover the buildings and equipment found on a farm as well as a farmer’s house.

To determine whether a piece of property needs farm and ranch insurance, as opposed to homeowner’s insurance, an insurance company may look at several factors. These include any buildings on the property that are not typical adjuncts to a dwelling. For instance, a separate garage may be found on any residential property, but a stable or a barn generally won’t. The insurance company may also look at the presence of livestock animals on the property, such as cows or sheep. Another indicator may be people working outdoors on the property. Note that some states require separate workers’ compensation insurance, a separate policy from farm and ranch insurance, to cover workers on the farm or ranch.

Beyond coverage of a home vs. a farm, the real difference in the two types of policies is the activity they’re intended to cover. Farm and ranch insurance is really homeowner’s insurance with an additional level of protection for business activities conducted on the property. 

How to purchase Farm Insurance?

With lots of insurance agencies offering farm insurance, finding the right one can be similar to the proverbial needle in a haystack. The list could just get too long and you can end up with too many choices. However, a farm is a wide and complex business, so it is still best to find the insurance company that offers the worthiest packages that would attend to your needs and give back everything you negotiated for. 

Almost all insurance companies have the same strategies in finding clients and in persuading them, but they differ in structuring their farm insurance policies. Since every farm business is different, the needs and situations in every farm are different too. However, one thing is certain, every farm owner wants the most dependable way to protect the business that they worked hard for.  

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Conclusion

Leaving your fate in Mother Nature’s hands can be scary. A hail storm, tornedo, or something small but deadly termite can ruin your crop. Months of hard work and your revenue is lost in one day. Put your mind at ease and get farm insurance to protect your asset. To help you handle her ups and downs, you need the assistance of a CompareAquote.com expert. Our policies not only protect your farm, they can also cover your home, equipment, and livestock

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