If you have property in the country where you live and grow food or raise animals, you may wonder if you need a farm insurance policy. Agricultural policies written by a farm insurance agency provide specialty coverage for farm businesses which may or may not be how your farm should be classified.

Make sure you have the right property insurance by learning how a farm insurance provider determines if your home should be classified as a farm or just a home.

What Type of Property do you Own?

A home property is considered to be a personal homestead no matter what size. A farm insurance agency classifies property as personal when it has a house or other living space and other structures such as a detached garage, shed, pool house, or others. Property with structures not including a home but with other structures may be classified as agricultural property.

If you have additional structures on your homestead like livestock barns and sheds, equipment sheds, a horse stable, and livestock fencing, a farm insurance provider may classify your personal homestead as a private farm based on how these buildings are used.

Depending on the extent of what your homeowner's policy will or will not cover, you may need a farm insurance policy to ensure your home and all other structures on your land are appropriately protected.

What Farming Activities Do You Do?

Another determining factor to determine if you need an agricultural policy is what you do on the property. If like many homeowners you grow vegetables and own or raise animals strictly for personal use, your property may still classify as a personal homestead.

In this case, you can either purchase supplemental coverage for your additional structures or buy a “hobby farm” policy from a farm insurance agency.

If you engage in any kind of growing or animal raising for profit, this is considered a business that requires farm insurance. Whether you raise vegetables in your backyard to sell at a farmers market, sell eggs from chickens that live in a chicken house on the property, or plant hundreds of acres of crops for commercial production, this all constitutes agricultural use of property.

What Other Factors Differentiate Personal vs. Business Farm?

Because there is a vast difference between small, personal farms used for small business purposes and large agricultural operations, a farm insurance provider may offer a “hobby farm” policy as well as standard agriculture business coverage.

The differences between these two enterprises include:

  •  If there are any employees.
  • What kind of, how many, and how are animals on the property used.
  • Total property size.
  • How much money the business earns in a year. 
  • Is there a home on the property already covered by a homeowners policy?

Based on the different profit-earning activities that happen on the property, the structures and equipment present, and other specifics, you may need certain riders or supplemental policies. Each farm or ranch is unique, so every policy must be written individually to provide the right coverage.

Not every property that fits the description of an agricultural business or ranch requires the same extent and types of farm insurance. The critical factor is knowing when a standard homeowners policy will not provide the right coverage.

Discuss your country property and how it is used with an experienced farm insurance agency to determine whether your homeowner’s policy is sufficient or if you need a hobby or agricultural policy. Your farm insurance provider can advise on the best way to cover your property, whether it’s a personal homestead, a hobby venture, or a true working farm!

Need Advice On Farm Insurance In College Station?

Jones & Associates Is The Farm Insurance Provider For You!

Call (979) 599-7532!