Owning a farm has always been extremely risky. The risks that farmers may face are unexpected situations such as weather conditions, theft, or disease. Therefore, instead of ordinary business insurance, farm insurance is going to be best choice for farmers. However, there are still some farmers that do not even know what farm insurance is. Moreover, some of them do not know if they need farm insurance. Thus, this article has been assisting farmers to manage the risks of conducting their business by providing the details of farm insurance as follows.
List of Contents
What Is Farm Insurance?
Farm insurance combines personal and business protection for the farmers. Many farmers and agricultural company owners choose to reside on their land, where they cultivate crops and animals. In essence, this type of insurance is a typical homeowner’s insurance with a few extras. These include coverage for the owner’s house, belongings, and personal responsibility in the event of a business-related accident. Unexpected losses may be covered by this form of coverage as well. Examples of unexpected losses are weather conditions, disease and pest pressures, fires, or other natural calamities.
What Would Farm Insurance Cover?
This is highly personalized insurance that may begin with basic coverage only to be supported with extra features. It can support the demands of the owner’s home and company. In need-based insurance, an agent was often required to visit the property to be insured to effectively assist the policy owner in obtaining the appropriate benefit. Policyholders may choose broad or specific coverages in most farm insurance plans, depending on their needs. When policyholders buy the insurance and talk with the agent, they may decide which option is best. However, there are a variety of options available when it comes to this section of a farm insurance policy. Therefore, we have outlined them all as follows.
Residence Coverage
Most unexpected damages like windstorms, vandalism, and theft are covered by this policy. It includes coverage for fire and lightning. Moreover, other buildings within a specific radius of your property are also covered by this policy. There are also a variety of plants and trees that are not cultivated for commercial purposes.
Farm Coverage
Personal property closely concerned with a farm or ranch is included. Importantly, there are four main divisions: agricultural machinery and equipment, livestock, agricultural commodity, and additional coverage.
1. Agricultural Machinery And Equipment
This category is very important to the way this firm works. It costs a lot of money not only to buy but also to maintain. It can protect the policyholder from possible financial loss due to unexpected damage to machinery and equipment. This list includes farm machines and tools like tractors, combines, cotton pickers, planters, field equipment, rakes, and so on. Moreover, it can also cover vehicles like farm trucks. However, this is an addition to the farm insurance package as a whole. Besides, it usually covers portable structures and fences, as well as equipment for watering plants that can be moved around.
2. Livestock
Farm insurance policies cover livestock in a wide range of ways if they are killed or hurt by one of the risks listed in the policy. This also includes deaths caused by being shot by accident, being hit by a car, being attacked by wild animals, and even floods and earthquakes. However, policyholders should remember that horses and other exotic animals should have their insurance. This is because most horses are not raised for their meat. Instead, they are mostly used for breeding, work, or show. Policy owners have to protect these assets because keeping them comes with a lot of risks.
As part of normal coverage, death due to a wide range of risks and theft are covered. On the other hand, the special coverage includes death from sickness or disease, major medical expenses, surgery costs, and loss of use. The extra coverage can be made to fit the role of the animal in the business. However, a horse used to herd other animals or as a show horse may need more coverage than a horse whose owner only rides it for fun.
3. Agricultural Commodity
Farm insurance only covers agricultural commodities like feed, grains, seeds, and other farm products while they are in storage. However, it does not cover crops like feeds or grains that are growing on the property, or even seeds that have already been planted. Once the crop has been planted or is growing, you should get a separate commercial insurance policy.
4. Additional Coverage
Farm Insurance also protects against liability, just like a standard home insurance policy. This covers injuries to people, medical bills, and property damage if needed. It also includes the costs of hiring a lawyer for the things listed above. Even if a farmer has been doing their job for a long time, accidents can happen and they can hurt themselves. In any situation, both the animals and the people who take care of them can get hurt. Someone could also get hurt by a stray animal on the road. Even though the damage was done outside of the farmer’s property, the firm will still have to pay for it.
What Is Not Automatically Covered by Farm Insurance?
You have to be cautious while purchasing agricultural insurance. There are a few products that you may know would be automatically covered, but there are still products likely not automatically covered.
Fence
Farm insurance does not automatically cover fence. This may appear illogical in terms of requirements. Many farms have extensive fences, but ordinary farm insurance policies do not cover them. This is because some farms may be unfenced, but others may have miles of fencing. Additionally, there are several kinds of fences, which may affect their insurance cost. For instance, a quarter-mile of woven wire fence costs around $2,600, but a barbed-wire fence costs approximately $1,600. For the reasons stated, insurance providers allow policyholders to choose to cover fences by a policy extension. To extensively cover fencing, it would be necessary to account for a risk that few policyholders face, which would be reflected in a higher premium. Nevertheless, numerous farmers choose not to cover their fences. Only a Tornado could damage a substantial piece or the whole of a fence.
Should A Farmer Get Farm Insurance?
To determine if farm insurance is essential, this article advises you to examine three variables that might affect your insurance requirements:
1. Workers
If you employ someone on your farm, you will need farm insurance to cover possible liability scenarios and workers’ compensation claims. If you have two or more workers, you should have workers’ compensation coverage.
2. Structures
If you have additional buildings on your farm, such as a barn or stable, you will most certainly require farm insurance. Most structures used for agricultural purposes need particular coverage under farm insurance. This includes buildings that have been adapted for agricultural use. For example, converting an old garage into a greenhouse would need agricultural insurance.
3. Livestock
If you have animals that provide a large amount of income, a basic house insurance policy may not offer adequate incidental income coverage. You have to consider the difference between having a few chickens in your garden and caring for cows on a dairy farm. In the latter situation, farm insurance is intended to safeguard animals.
Conclusion
In conclusion, farmers may get the greatest coverage possible by finessing it to their specific business requirements. Farmers should consider the benefits and drawbacks, as well as potential exclusions. Some farmers concern about the likely high cost of the premium they will pay. Although, the thing to consider is that it gives the possible savings and avoidance of further financial troubles. Even seasoned farmers might benefit from the assistance of good insurance. Nothing is more upsetting than seeing a crop destroyed by a tornado or flood waters after a storm. Therefore, it is always better to be safe than to be late.
FAQs
Farm insurance is designed to protect farmers and ranchers from a variety of potential losses, such as property damage, injuries to workers or third parties, and other risks associated with agricultural operations.
The cost of farm and ranch insurance varies based on the type of operation and the amount of coverage required. A policy for a hobby farm will most likely be less expensive than one for a commercial grower and packer. You can customize your coverage to meet your needs, no matter how large or little.
State Farm decides the premium for farm and ranch insurance based on a many of factors, including the policyholder’s location, size, kind of operation, coverage selections, and claims history.
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Source: Teamais.net