Are you a farmer or owner of a farm? Do your farm needs farm insurance to protect your farming tools and products? You landed on this page so you want to buy farmers insurance policy and need some extra knowledge before going for it.
Now, before diving into the topic, just have a look at what is exactly a farmers insurance policy?
Farm insurance is a type of insurance which protects your farm’s equipment and production from various disasters, losses, theft etc. You can divide farm insurance into many categories.
- Crop insurance
- Ranch insurance
- Farmers auto insurance
- Farmers business insurance
- Farm tractor insurance
- Farmers homeowners insurance
- Livestock insurance
- Farmers property insurance
- And many more.
According to your needs, you can choose the type of farm insurance. Generally, 4 types of farmers insurance are popular.
#1 farmers homeowners insurance
Farmers homeowners insurance is just like a life insurance but it covers some farming activities too. If you buy this insurance you not only covered with life insurance but some of your farming activities also covered by this type of insurance.
Better then life insurance it protects you and your farm together.
#2 Livestock insurance
Farmers livestock insurance will protect your domestic animals from diseases etc. It also covers your livestock with life insurance.
#3 Farmers Auto insurance (Farm tractor insurance etc)
If you have a farm in the United States then sure you have farming auto equipment like a tractor, farm truck, ATV/UTV, Cultivator, Cultipacker etc. You can protect them just buying auto insurance. Although, for farmers, auto insurance policies provide quite beneficial offers then regular auto insurance. If you are a farmer they provide some extra protection for your farming equipment.
#4 Crop Insurance
Crop Insurance protects your crops against natural disasters like hail, floods, drought or the loss of revenue due to price fluctuation. This is the reason behind the popularity of this insurance between farmers.
The market of farming industry is volatile. The commodity-related to crops changes continually. Also, you could face natural disaster during the growth period of your Crops.
As a farmer, you should protect your crops from these type of losses nor you would face problems.
#1 Some Farming Activities already covered by Standard Homeowners Policy
Do you have a small farm or a big garden? Are you farming as a hobby without any intention to make money with your farming? If you are in this category then you are a hobbyist farmer.
Now you should know that if you have a homeowners insurance policy then possibly it would protect some part of your farming activities.
But, you have to be aware of a standard homeowners insurance policy generally do not protect your farming equipment and outbuildings related to your farm. Read precisely the terms and conditions of your insurance policy regarding your farming activities. To know in depth what type of coverage your Homeowners insurance policy provides, take help from your local insurance agent.
#2 Full-time Occupation? You Will Need a Farm Owner’s Policy
If you are a professional farmer and farming is your occupation then you will need a farm owners insurance policy.
This type of policy basically gives the coverage like property coverage, liability coverage and other types of coverage related to your farm.
Generally, this insurance policy is an extended homeowner insurance policy but it has extra coverage related to your farm needs. You can say that Farm owners policy is a modified version of standard homeowners policy which also covers your farming activities.
To protect your livelihood as a farm professional you should buy a Farm owners insurance policy. For more information on this, you can contact your local Insurance agent.
#3 Coverage is Not Standard in Farm Insurance
If you are are thinking that farm insurance is a bundle of predetermined coverages then you are thinking wrong. It is possible, you have been misguided by others that farm insurance is a bundle of coverages but it is not true.
It is fully customizable and you can design it as your needs. Insurance companies know that every farmer has a different type of farming operations so they give a facility to the farmers to customize their farm insurance on their needs.
#4 Do you have special Livestock coverage?
If you have a livestock on your farm, you should cover this property with livestock insurance coverage. United States Department of Agriculture release funds for livestock property.
Which type of Livestock insurance policy you need, is actually depends on the type of animals you have. There are two types of coverages in Livestock insurance you would go with.
Individual Livestock Coverage(Scheduled coverage)
If you have animals of higher value then go with Individual Coverage to protect the money which you invested, buying them. It is a recommended option if the value of your every animal is more than $1000. Choose this option for better coverage.
Blanket Coverage (Unscheduled)
Blacket policy is just a blanket covers all your body parts in the winter season. It covers all the properties of your farm like Livestock, equipment, structure, etc against a fixed amount.
Note: Keep in mind if you don’t ensure adequate values of your farm properties at the time of buying a Blanket policy you would face loss resulting in lower claim payment than expectation.
Make sure that the amount payable depends upon the choice of insurance you choose (Individual Coverage or Blanket Coverage). For any detailed information, you can talk to your local insurance agent also.
#5 Farming for Profit? You Need a Different Type of Policy
Do you sell your farm goods to local market? If yes, then you need a different type of policy. This type of policy is called “Hobby Farm Policy”. You should consider owning this policy if you make a profit from your farm goods.
To be considered as a hobby farm, there are few guidelines must be followed by your farm. Some of them are,
- Farm area limited to 500 acres
- Minimum coverage on the main dwelling is $125,000
- Must not have any employees
- Coverage is only limited to a single farm
- Annual farm receipts are limited to $10,000 maximum
#6 Limitations of coverage on Commercial Structures
If you purchase a homeowner policy it limits the coverage on commercial structures but hobby farming policy and farm owner policy do not. For example, if you have a building that exceeds mentioned in the policy conditions then this building is considered as a commercial building and does not cover in a homeowners policy.
This concept applied to all other owners policies.
#7 Notice of crop damage
If your crop is damaged you should inform your insurance company without losing time. If you inform your insurance company within the time you would get your claim as soon as possible.
There are several reasons for crop damage. Most of the reasons are covered by farm insurance companies. But it’s your duty to inform your insurance company within a time limit. The time limit is mentioned on your policy agreement and you should read that agreement before purchasing any farm insurance.
#8 Annual Crop Cycle Deadlines
There are a number of annual crop cycle deadlines,
- Contract change date
- Cancellation date
- Production Reporting Date
- Contract change date
- Acreage Reporting Date
- End of insurance period
- payment due date
- Termination date
You should be aware of with all the above terms. All the terms are mentioned in your policy agreement and as I told you should read carefully before purchasing your farm insurance.
#9 Private Insurance
Thier are two types of Insurances in Farm insurance, Private and federal. You can buy both. Private farm insurance is also called Peril Insurance. Though they follow the rules under the federal insurance policy, you should learn carefully before purchase.
As you know insurance policies are the savior in your dark days so I would suggest you to buy insurances for all your needs. Especially if you own a farm, it is very important to own a farm insurance against your farm goods and properties.
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