5 Questions You Should Ask About Farm Insurance

We rely on farmers to provide many of our daily essentials.  If any of these small farms fall on hard times, local communities can be affected.  But, when large farms fail, there can be serious repercussions.  For these reasons and more, they must have the right farm insurance coverage regardless of the size of the farm.

Did you know family-owned farms are the heart of America’s agriculture business?  If not, you aren’t alone.  The majority of people associate agriculture with large corporate farms.  But, small family-owned farms account for about 22 percent of food production in the United States today.  

About 98% of farms in the U.S. are family farms.  A small family farm typically has a gross cash income of less than $350,000.  However, large-scale family farms account for about 44% of production.

Who Needs Farm Insurance?

Farm InsuranceFarm insurance isn’t just for farmers who own thousands of acres where they grow food or raise animals.  Whether farming is a full-time occupation or just a hobby selling produce at the local farmer’s market, you need to be protected from loss. 

If your family is farming for profit, here are some questions to ask about who needs farm insurance:  

#1. Does Homeowners Insurance Cover Farming Activities?

Individuals who have a large garden or small farm as a hobby may not need farm insurance.  For instance, if they don’t intend to make a profit, some of the farming activities are covered by a standard homeowners policy.  However, the policy won’t cover farm outbuildings or equipment.  

#2. Does Farming for Profit Require Special Insurance?

A basic homeowners policy does not cover farming for profit.  For example, if you sell goods at a farmer’s market, this is considered farming for profit.  In this situation, you should consider hobby farm insurance.  The guidelines for qualifying as a hobby farm include:

  • Coverage will be limited to a single location.
  • The farm must be less than 500 acres.
  • Total income is limited to $10,000.
  • You must not have any employees.
  • A minimum coverage of $125,000 on the main dwelling is required.

If you’re unsure about the qualifications, talk to your insurance agent to get the details you need.  

#3. What If I Farm Full-Time?

You’ll need farm insurance if farming is your full-time occupation.  A standard farm insurance policy will cover property damage, liability, and more.  Also, you can add endorsements to cover your farm’s other unique needs.

#4. What If I Have Livestock?

You will need special coverage, depending on the types of livestock on your farm.  Options include:

  • Scheduled Individual Coverage – Allows you to insure high-valued animals for a specific amount.
  • Unschedule Blanket Coverage –  With this type of coverage, all of your farm animals are covered.  It also covers equipment and structures.

The maximum amount payable per head is dependent on which type of coverage you choose.  Your agent will be able to help you choose the best option.

#5. Is Farm Insurance Expensive?

The cost of farm insurance is dependent on the deductible you choose.  However, your farm equipment can be insured for about per ,000 of value.  For instance, if your tractor is worth $200,000, the annual cost of insurance for the tractor would cost about $3,000.   Livestock coverage typically costs about 2.5% to 5% of the value of your livestock.

Benefits of Farm Insurance for Family-Owned Farms

The main benefit of farm insurance is that the coverage can be customized to fit each farming operation’s specific needs.  Whether you farm as a hobby or farming is your main source of income, in either case, adequate insurance can protect you from losing everything you’ve worked for.

Farm insurance offers the following benefits:

  • Protects your machinery and equipment – Will pay to repair or replace equipment or machinery that is destroyed by a covered peril.  
  • Provides liability coverage – This coverage includes protection against bodily injury, medical costs, and legal fees if you are sued due to farm-related damages or injuries.
  • Protects livestock and farming products –  In case of fire or other covered peril, livestock, feed, seeds, or grains are covered.  However, anything planted such as crops or trees is not covered.

Remember, a farm insurance policy can be customized to fit your farm’s specific needs.  You can even choose options such as earthquake coverage, disruption of operations, peak season coverage, or temperature-sensitive endorsements.  

Contact Sandifer Insurance Agency for More Information About Farm Insurance

At Sander Insurance Agency, we hope farmers never have to use their insurance.  But, we consider it a privilege to help them protect their livelihood.  If you want to know more about farm insurance, contact us today for a free assessment and quote.  One of our agents will be happy to assist you in choosing the right coverage for your farm at an affordable rate.  

We are located near historic downtown Cheraw, SC, serving local residents and those in the surrounding areas as well.  You can reach us by phone, email, or online for all of your insurance needs.


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