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Farm insurance isn’t just for farmers with thousands of acres of corn, hundreds of head of cattle and barns filled with expensive equipment. Here are four reasons you need insurance for your hobby farm.
1. Farm assets aren’t covered under homeowner’s policies.
If a tree falls on a pasture fence or your tractor is stolen, homeowner’s insurance won’t cover the losses, explains Erin Cumings, a farmer and associate vice president of agribusiness underwriting at a major insurance company.
“Some homeowner’s policies will let you add an endorsement or a rider,” she says, “but it offers limited coverage for property or liability.”
Homeowner’s insurance may also exclude farm buildings such as barns and silos. This puts you at risk of having to cover expensive repairs out-of-pocket. Purchasing hobby farm insurance helps protect your investments.
2. Hobby farmers need liability protection.
The first thing one farmer did when one of her horses nipped a rider was call her insurance company. She needed reassurance that any damages would be covered. There was no lawsuit, but the farm policy ensured that no expenses would be paid out of pocket.
“If an animal carries an illness or nips or damages property, you’ll want liability protection,” Cumings says.
Liability protection covers anything that happens on or off the farm. It’s a must if you take livestock to the state fair, operate a traveling petting zoo, or participate in any other off-farm activities with your animals or equipment.
Cumings recommends hobby farmers purchase at least $1 million in liability coverage.
3. Farm vehicles require their own coverage.
All other farm vehicles, including UTVs and ATVs, will need their own coverage.
“Your personal auto policy typically won’t cover your farm vehicles, especially if they’re used to transport produce, livestock and other items for sale,” says Jochen Schunter, commercial auto product manager at Progressive Insurance.
“A commercial policy gives you the flexibility to protect all of your farm vehicles whether you own a pickup, dump truck, agricultural trailer or horse trailer. Having the right coverage for the vehicles you rely on can keep your farm running smoothly should an accident occur.”
4. Insurance protects against loss of income.
Whether you earn a living from the farm or make just a little additional income, stolen equipment, storm damage and sick animals could have a major impact on your bottom line.
Hobby farm insurance often covers loss of income. This ensures you can still keep the hay feeders filled and cover the vet bills when things go wrong.
“What might seem like small loss could take a significant toll on your farm business,” Cumings says. “You want coverage in place to protect against financial hardship.”
When you’re shopping for hobby farm insurance, look for an agent that understands the intricacies of a small farm. This agent can recommend the right coverage for your specific needs. Coverage is more expensive than a typical homeowner’s policy, but Wilkie believes, “You’re playing with fire if you don’t have insurance.”
This story originally appeared in the November/December 2019 issue of Hobby Farms magazine.