How this quote will help me?
Your quote is based on several common factors to give you a clear picture of the cost you can expect, though an independent agent can shop around and maybe even improve your rate!
NOTE: This quote is not final, though we did work with professional actuaries to help get you a ballpark figure to get started.
Whether you run a small hobby farm or a commercial farm, it needs to be protected. While many farmers and ranchers with smaller operations believe that homeowners coverage is enough to meet their needs, this typically isn't the case. Farms and ranches have their own designations by insurance underwriters, which often exceed the coverage included in basic home insurance policies. That's why having the proper farm and ranch insurance is critical to protect your operation.
With the right independent insurance agent in your corner, you'll get all the farm and ranch insurance expertise you need to protect your home and your livelihood. Your agent can get you matched to the policy with the ideal amount of coverage for your unique farm or ranch. But first, here's an in-depth look at farm and ranch insurance, what it covers, and more.
What Is Farm and Ranch Insurance?
Farm and ranch insurance is a blend of both homeowners insurance and business insurance designed specifically for agricultural business owners or landowners. It covers things like your personal property and liability risks, while also protecting your commercial interests. And because your business and home are so closely connected in a farming operation, it's important that you have the coverages necessary to protect each, so that an unexpected disaster doesn't cross into the other.
Common Threats Covered by Farm and Ranch Insurance
A farm insurance policy is a very flexible form of protection that can be customized to cover many things, both personal and commercial. It can cover a house, farm structures like outbuildings and barns, farm equipment, livestock, and liability related to agricultural and farming activities. For larger agribusinesses, your farm insurance coverage options may be extended to include commercial auto and commercial general liability, too.
Here are some common incidents covered by farm and ranch insurance:
- Accidents: This can include coverage for fire, smoke, loading and unloading farm items, and more.
- Natural disasters: This can include coverage for windstorms, volcanic eruptions, and sinkholes. Typically, floods and earthquakes are covered under separate policies.
- Weather events: Damage from lightning, wind, hail, tornadoes, and more can be covered. A multiple-peril crop insurance policy or a crop-hail policy can cover your fields against these disasters.
- Crimes and civil unrest: This covers theft and vandalism.
- Collision or other death while transporting: You'll want to be sure your policy has coverage for hayrides, tractor rides, or whatever moving motorized vehicle, machinery, or equipment you may be hauling visitors on.
An independent insurance agent can help ensure your farm and ranch insurance covers any potential incidents you may be concerned about.
What Does Farm and Ranch Insurance Cover?
Farm insurance is often a hybrid of personal and commercial insurance. Sometimes, it resembles homeowners insurance, while at other times, it closely resembles commercial insurance. One benefit of farm and ranch coverage is that it can be very flexible and tailored to the specific needs of each farm or ranch. Most farm and ranch insurance policies include dwelling coverage and liability coverage.
- Dwelling coverage: The farm or ranch owner's house or residence is typically covered in the same manner as it would be under a standard homeowners insurance policy. Depending on the specifics of the policy, coverage may be for replacement cost or actual cash value.
- Farm liability coverage: This provides general liability coverage in case you or your farm is responsible for third-party bodily injury or property damage. If you are sued, this coverage can pay for the third party's medical expenses and your legal defense in a lawsuit. This can also cover multiple locations if your farm uses more than one piece of land.
A farm and ranch insurance policy typically begins with these major coverage components. From there, coverage can be customized further to include more protection.
Additional Farm and Ranch Insurance Coverage Options to Consider
After the basics, you and your independent insurance agent will work together to identify your needs and find the right coverages for your farming operation. Several additional coverages to consider include the following:
- Barn and outbuilding coverage: Barns and any other outbuildings used for farming are usually not automatically included in your farm policy and likely must be listed and covered separately on your policy.
- Crop coverage: Traditional crop insurance is typically not an option on your farm insurance policy, so you may need to buy protection separately. You can, typically, add peak-season storage of your crops to your farm insurance policy.
- Livestock coverage: You can choose to insure your livestock on either a blanket or a scheduled basis. Blanket coverage means that all of your livestock are covered under one limit, while scheduling lets you pick and choose which livestock you’d like to insure.
- Farm equipment coverage: Not automatically included, you’ll need to add coverage to your policy to protect against equipment breakdowns for everything from tractors and harvesters to farm tools and drones. You can also choose whether you want to have blanket coverage or scheduled coverage.
- Multi-peril crop insurance (MPCI): This program offers coverage for inescapable crop loss and covers nearly all available crops against a decrease in crop yield or a significant loss due to natural disasters, disease, and even market disasters.
- Specialized peril coverage: Many crop insurance companies also offer coverage for specifically defined perils excluded from an MPCI or crop-hail policy, including grain fire, rainfall, citrus freeze, and more.
- Equine insurance: If you have valuable, prized, or beloved animals on your farm or ranch, such as horses, you may want to get special coverage to protect against the cost of medical treatments and even mortality.
An independent insurance agent can help ensure you build a comprehensive farm and ranch insurance policy.
Understanding the Business Side of Farm and Ranch Insurance
Many larger farms, called agribusinesses, operate similarly to other businesses and thus require similar insurance. These larger farm and ranch businesses may want to consider the following types of coverage:
- Business income coverage: This coverage can provide a continuation of income and pay ongoing expenses like employee salaries and rent during covered temporary business interruptions.
- Workers’ compensation insurance: Few states require farms or agribusinesses to have workers’ compensation, though it can help provide valuable coverage if an employee gets hurt or sick due to their job.
- Commercial auto insurance: If you’re hauling your grain or livestock, you'll need a commercial auto insurance policy. If you only use your pickup truck occasionally on the farm, your insurance company may rate it as a farm-use-only vehicle, which typically has better rates.
- Commercial umbrella insurance: This coverage can extend your liability limits to $1 million or greater to help protect you against expensive lawsuits.
Your independent insurance agent will help you cover all the business aspects of your farm or ranch within your policy.
What's Not Covered by Farm and Ranch Insurance?
Farm and ranch insurance comes with various exclusions that are important to be aware of. Typically, farm and ranch insurance won't cover any of the following:
- Natural wear and tear of your farm's equipment, buildings, or publicly used facilities
- Unworking items or equipment due to wear and tear or general public use
- Sexual misconduct
- Intentional or malicious acts against others
An independent insurance agent can help you review and understand your policy's specific coverage exclusions and add more coverage where necessary.
How Much Does Farm and Ranch Insurance Cost?
If you have an agribusiness, you may already know that the cost of insurance can be pricey. The cost of farm and ranch insurance can vary based on many different factors, including the following:
- Acreage: The amount of land you have may affect your policy's cost.
- Barns and buildings: The number of barns and other structures you have, in addition to their size and quality, may factor into your cost.
- Production: What you grow, harvest, produce, and sell may also impact premium rates.
- Farmhouse: The size, condition, and features of your home on your farm or ranch may also impact pricing.
- Equipment and machinery: Both motorized and unmotorized property, such as tractors, threshers, and other equipment, can have high replacement costs, which can impact premiums.
- Workers: The number of farmhands and workers you hire to run your farm can impact rates.
An independent insurance agent can help you find exact quotes and affordable farm and ranch insurance near you.
Common Discounts and Savings for Farm and Ranch Insurance
Fortunately for farmers, you can find farm insurance discounts and savings easily. Each insurer offers options, but some of the most common farm and ranch insurance discounts include:
- Good credit discount: Depending on the state you live in, your insurance company may run your credit as part of your application and use this information when rating your policy. People with good credit generally receive savings on their premiums.
- Multi-policy discount: Most insurance companies allow for a multi-policy discount on farm policies, which means you could save money by having both your farm and your personal auto insurance with the same insurer.
- Alarm system discount: Similar to a homeowners insurance discount, this reduces your premium if you have a central station alarm system connected to your house.
- Roof or structural discount: This discount may be more of a rating adjustment than a technical discount, but if you have a new roof, a metal roof, or a home built from a strong material such as brick, you may get lower rates.
- Farm credit discount: Potentially the largest discount, farm insurance companies have the ability to put credit on a policy, which reduces the premiums that you pay. Speak with an independent insurance agent to see if your farm qualifies for credit.
An independent insurance agent can find and apply farm and ranch insurance discounts you qualify for to help you save the most money possible on coverage.
How an Independent Insurance Agent Can Help
Independent insurance agents are small business owners just like you. They’re also industry experts who can help you through every step of your insurance application and shop multiple insurance carriers to find the right coverage at the best price. And down the road, your agent will be there to help file claims for you and update your policy as your farm or ranch evolves.
FAQs About Farm and Ranch Insurance
Does commercial farm insurance cover livestock?
Insurance for livestock is covered under your commercial farm package and can be either added as an endorsement or a separate policy. The policy can provide coverage for the value of your livestock should they need replacing following a covered incident, such as being attacked by a predator, caught in a barbed wire fence, or stolen.
Are my crops covered under my commercial farm and ranch insurance policy?
There are separate policies for your crop insurance. The one that covers multiple claims is called multiple peril crop insurance, and the other is for hail, specifically called crop-hail insurance. Multiple peril crop insurance, or MPCI, will be the policy that will provide coverage for low-yielding crop years due to drought, pests, and so on.
How does a farm and ranch policy pay for heavy machinery and equipment damage?
Coverage for your heavy machinery and equipment falls under your farm's package policy. It will typically cover the value of each piece of machinery or equipment listed on the policy and protect against fire, weather, theft, or vandalism.
How do I know if I need a farm and ranch insurance policy?
Your standard homeowners insurance or commercial insurance policy doesn’t cover farming activities or equipment. So, if you own any sort of farm equipment, acreage, or engage in any farming activities, you'll need farm and ranch insurance.
Do I need workers' comp if I have workers or farmhands?
Maybe. Every state has different laws regarding when workers' comp is required for farms and ranches, but really, this coverage is more about protecting you. Farmwork comes with a higher level of risk, so it's important to work with an independent insurance agent who can find a company that specializes in the right workers' comp for the farming sector.
What's the difference between farm insurance and crop insurance?
Crop insurance is a specific type of insurance that’s backed by the federal government. It’s essentially a subsidy that you have to buy that will ensure that you receive a certain amount of income from your crops, even if they fail due to a natural cause, such as flooding or fire. You can’t buy this as part of your farm insurance program. It’s typically a separate type of insurance, but it’s available to any farmer.
What's the difference between a farm and an agribusiness?
Agribusinesses are generally large farming operations that may resemble a manufacturing plant, complete with employees and trucks, and they conduct large-scale farming operations. The word "farm" includes these large agribusinesses, but could also mean small family-run farms or hobby farms, where farming is simply a side activity.
Does a hobby farm need insurance?
Owning a hobby farm may be more of a lifestyle than a business. But that doesn’t mean that protecting it is any less important. When you begin a hobby farm, coverage may fall under your homeowners insurance policy. However, as you grow and your goals change, you may require further protection, including liability coverage, workers' comp, and more, which can be found in a hobby farm insurance policy.
