How to Choose the Right Type of Farm Insurance


If you own a farm, chances are that you need farm insurance. What would you do if disaster struck? Would you be able to afford to cover the damages if everything was lost? Wouldn’t you rather have insurance that could cover it for you?

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Don’t make the mistake that many farmers make and assume that your homeowner’s insurance will cover it. You need separate insurance, especially if your farm is a business. Before you shop for farm insurance, though, you should know the type that is right for you.

The Type of Farm

First, let’s look at the type of farm you live on, as that will determine the right type of insurance.

Ask yourself the following questions:

  • Do you live on the farm?
  • Is your farm strictly for business, meaning you don’t live there?
  • Do you rent the farmland?

The answers to these questions will help you determine which type of insurance policy you need. If you live on the farm, you’ll likely be best off buying an insurance policy that covers both the farm and the house. This is NOT your homeowner’s insurance; it’s a separate policy. If you don’t live on the farm, you may just need farm and property insurance. This will cover your farmland as well as any livestock, machinery, or other valuables on the property. Finally, if you rent, you’ll need rental insurance that covers you in the face of liability.

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The Details of Your Insurance Policy

The next step is to figure out the details of the insurance policy. What type of coverage do you need?

  • Liability coverage – This coverage should be included in your farmland policy, but it’s worth double-checking. Liability coverage protects you should someone get hurt on your property (someone that is not an employee). It may also protect you should someone get hurt or sick from the crops you grow.
  • Special protections – Is your farmland located in an area that is prone to floods, tornadoes, or wind? You may need more protection for your farm. Floods in particular are often excluded from general insurance. If you suffer damage, you could be on your own covering the damages. Wind and tornado damage might be included, but you’ll have to check with your insurance agent to be sure.
  • Crop protection – This insurance protects you against crop failure. It won’t provide you with 100% of the money you lose, but many programs do give you as much as 85% of the income lost from crop failure.
  • Workmen’s compensation – If you have employees, you’ll need workmen’s comp insurance to protect you should an employee get injured on the job. This insurance covers wages you must cover while the employee recovers as well as the cost of the medical bills.

The best way to find the right farm insurance for your farmland is to talk with a few insurance agents. You’ll likely get different quotes from each agent, which will allow you to compare each product and see which one suits your needs the most. You don’t want to buy insurance you don’t need, but you also want to make sure you do have the right type of protection should disaster strike.

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