Homeowners insurance and farm and ranch insurance both provide coverage for your property. However, these two policies differ in the scope of what they cover, as well as the specifics of each policy. What are the main differences between farm insurance and homeowners insurance?
The Scope and Limits of Homeowners Insurance
A typical homeowners insurance policy provides coverage for your personal property. Homeowners insurance protects against specific dangers such as fire, theft, and certain types of damage. Depending on your provider, you may also have access to certain riders that protect against other dangers, such as floods.
Homeowners coverage includes your home and any personal property contained therein, as well as providing liability coverage if someone is injured on your property.
This insurance can extend to outbuildings as well (such as garden sheds), though the exact coverage is limited based on the size and purpose of these buildings.
However, homeowners insurance alone is not sufficient to cover large outbuildings or things like livestock or agricultural equipment. Even a small hobby farm will need additional coverage, which is why you need farm and ranch insurance.
What Is Covered by Farm and Ranch Insurance?
Farm and ranch insurance (sometimes just called “farm insurance”) is a specialized policy designed to cover the personal and commercial risks that come with running a farm or ranch.
Unlike a homeowners insurance policy, farm insurance offers a wider range of coverage. A farm and ranch insurance policy can cover a variety of areas.
Home and Possessions
Some farm insurance policies will include coverage for your residential property and its contents. However, it’s not uncommon for farmers to purchase both homeowners and farm insurance to cover their entire property.
Personal Liability Coverage
Farm and ranch insurance will include personal liability coverage for your agricultural property. This means that if someone is injured on your property, you are covered.
Farm insurance will cover your farm machinery and equipment, including tractors, combines, and other work vehicles. This also includes machinery used for managing livestock, such as feeders or milking equipment.
Grain and seeds are just as important as your crops themselves. A farm insurance policy can provide protection against damage or loss to these products while they are stored — though be aware that coverage ends once they are used or planted.
Livestock and Supplies
Farm insurance may cover all forms of livestock. Your policy may also extend to any supplies needed to feed or manage these animals. Depending on your policy, this can extend to veterinary bills as well as mortality insurance to reimburse you in the event an animal dies.
Equine insurance is a specialized form of coverage that covers the unique challenges of raising horses. Coverage can include medical expenses, mortality, theft, and other loss of use.
A ranch insurance policy will protect your farm structures, such as barns, silos, and other outbuildings. A farm insurance policy may also extend to fencing and corrals, as well as ancillary buildings such as equipment storage sheds.
Business Liability Protection
Most agricultural policies include some type of business liability coverage to protect your business.
Chemical drift liability, for instance, protects against the economic and ecological risks associated with the loss of pesticides. It’s estimated that $640 million is lost to drift each year. Special coverage for pollution liability protection guards against loss as well as potential damage to your neighbors’ property or crops.
Fields and Vineyards
A farm and ranch insurance policy can also protect your fields and vineyards from unexpected damage. Crop insurance can be particularly important since many farmers rely on their crops as a source of income, and this coverage can prevent catastrophic economic loss.
Homeowners Insurance vs. Farm and Ranch Insurance at a Glance
To review, the main difference between homeowners insurance and farm and ranch insurance lies in the scope and specifics of what they cover.
A homeowners insurance policy normally will cover:
- Your house and its contents
- Personal liability protection
- Outbuildings (limited to size and purpose)
Farm and ranch insurance normally will cover:
- Home and possessions (depending on policy)
- Personal liability protection
- Outbuildings and fencing
- Farm machinery and equipment
- Equine insurance
- Business liability coverage
- Fields and vineyards
Depending on your insurance provider, you may be able to create a specialized policy with coverage that emphasizes one or more of the above areas for added peace of mind. Alternatively, an umbrella insurance policy can offer added protection beyond the limits of a standard policy.
Do I Need Farm and Ranch Insurance?
Every American deserves insurance coverage that applies to their whole property. If your property includes any outbuildings, barns, or livestock, your standard homeowners insurance policy isn’t enough to cover it.
Whether you operate a commercial farm or ranch or just a personal hobby operation, you’ll need a farm and ranch insurance solution that protects you, your structures, your fields, and your animals. The right policy is all the more important for commercial farmers, who depend on their farms to provide a living for themselves and their families.
Always remember that your policy declarations, descriptions, and values provided from your insurance company are the determining documents that outline your coverage. These documents may seem confusing to you, but we are here to help. If you don’t understand your coverages and limits please reach out to us and we can help explain these important coverages to you.
Get the Coverage You Deserve
Garrett Insurance understands the unique needs of farmers and ranch operators. That’s why we’re committed to offering impeccable service and customized quotes. Contact us today for a free quote, and get the protection you deserve.