What is Farm Insurance?
Farmers have very different needs from other businesses and homeowners. And the insurance offered to them is also very different -- and can be highly customized. Here's what you need to know to make smart choices when you decide on your farm and ranch insurance
Types of farm insurance
This sort of insurance is often required by three types of policyholder:
1. Farm/ranch homeowner
You own your farm and live on it. Your coverage needs might include:
Your home (dwelling house) and its contents, with similar protections to a standard homeowners policy
Farm buildings and structures
Farm "personal" property, possibly including farm machinery, grain, livestock and farm tools
Personal and farm liability, providing protection if you're legally liable for damages caused to a third party's person or property
Medical payouts to others -- help when you're liable to pay the medical bills of someone injured on your property
As explained before, you may choose blanket coverage for each of these or opt to specify ("schedule," in insurance jargon) individual risks and the maximum payout for each.
2. Non-resident farmer or rancher
You own or rent a farm but don't live there. This can provide similar coverage to that offered to owner/occupiers (above), but without protection for the home and its contents.
3. Resident renter
You rent your farm and live on it. Again, this can provide all the protections of a resident owner's policy, except the dwelling house structure. The home's contents may still be covered.
Farm insurance property coverage
For many in farming and ranching, their livestock are their single most valuable asset. Whole flocks and herds can be protected against disasters, and it's up to the individual farmer or rancher to assess the risks and costs of livestock insurance and decide on the coverage, if any, that's appropriate.
In a very few cases -- a prize bull, say, or a famous racehorse retired to stud -- an individual animal may be worth millions. But some farmers choose animal mortality coverage for key stock that are somewhat less valuable, but whose loss would result in financial hardship. Animal mortality coverage should pay out in the event of theft, or of death due to a many perils, including sickness and disease.
Such perils are not, of course, covered by standard livestock insurance policies, which are designed to protect against exceptional risks.
The scene where a tractor is lifted high into the swirling funnel of a tornado has become a movie cliche. And, no doubt, such events are in reality statistically insignificant. However, a replacement tractor can easily cost more than $200,000, and many are totaled or seriously damaged in less visually arresting ways each year.
Add on the value of expensive equipment and machinery (sprayers, drills, plows, planters and so on) that may be attached to them at the time of an incident, and losses can be eye-watering.
As with most farming risks, those covered by tractor insurance can be listed individually on the schedule, along with the item's actual value, or may be included within blanket coverage, which may have general (and perhaps insufficiently high) caps on possible pay outs.
Scheduling tends to push up premiums (costs) in line with the added protections it delivers.
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