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Let’s talk about insuring a hobby ranch, a hobby farm, a gentleman’s ranch. I think a lot of people have small acreages with maybe a horse, some, just; hobby animal stuff and they may not have appropriate coverage. Jerry Szeszulski from American National Insurance.
They may not. And, you know, it’s a very complicated question because you have to find out how many animals do they have. If they only have 4 or less animals you may be able to handle it with just a homeowner’s policy. But then if they have more than 4 large animals, or a bunch of small animals, or if they make money off from the hobby farm.
What if you just weight all of the animals and as long as they are less than 5000 pounds than you don’t have to deal with them.
5 tone and you’re in. Well, it doesn’t work that way. Let’s say they do some hay bailing or they sell some of their pecans of the pecan orchard or whatever it is if they have some income off of it that would be than a hobby farm. And now let’s complicate it a little more. Let’s say that they have horses and they do some training or they board horses that becomes a little bit of income, not enough to make money out of but it still becomes an income. Now we have to do a commercial general liability policy because if someone get’s hurt on their property or they have a trainer there, or the horse kicks someone, or they are transporting someone else’s horse, all of that makes them liable.
But horses can be expensive and so can the danger of someone being hurt on your property. This sounds expensive, how much do these policies cost?
Well, ok, it is interesting that you’ve asked that and every time you ask that I want to answer it this way: at the time of loss how much does it matter what the cost was?
You go back and you say: yeah, I would have paid an extra $600.00 for that kind of coverage.
Exactly! And what you need to do is you need to, first of all, make sure that you have set your hobby farm up like a business, you’re not running it trough your personal check book because that opens up your personal assets.
So if it is any kind of claim against or your property, something that happens there and you are not running it separately than…
All your personal assets are exposed, so we have to make sure there is a wall there. But to answer your question, not to avoid it, it is probably going to be a thousand dollars more than just a standard homeowner’s policy. And you are going to get some additional liability protection, you are going to get protection if your cow get’s in the street and someone hits it, you are liable for that. You are liable for the loss of life, for the loss of the use of that vehicle that hit the cow. Than you have got to think about hay. What about the hay, if hay is out in the field and there is a tornado, or a fire, or if there is vandalism, if it is rapped we cover more, if it is not rapped we cover less. Grain, there is a lot of coverages that you have to think about because you have a lot of money, if you had a few head of cattle you can have a lot of money in food that has to last trough the winter.
This sounds like you have to enroll in a 4-H program or get a degree in agriculture, I mean this is real serious stuff. My family has farms down in Texas and it is amazing how much they have to learn to run their farm effectively. What you are saying is even if you have a small place, I mean you don’t have to have a big place with a lot of acres and a lot of equipment, you might have some liability.
You know what you don’t want to do Darryl; you don’t want to get the cheapest price. I sit with farmers all the time, and ranchers, and we look at their policy and they are exposed on their liability portion and that could be deadly. So, make sure you sit down with your agent and understand your product that is protecting your needs.
Jerry Szeszulski, the Szeszulski Agency 254257. I’m Darryl Baskin, from Baskin Real Estates Specialists; we’ll see you here on The Future of Real Estate next week. Make sure you go to darrylbaskin.com for information on guests and topics we’ve had today.
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When you own and operate a farm or a ranch, you are in a unique situation that makes all types of decisions and needs quite different. When you choose the proper insurance for your farm, you will have to keep in mind that you will need coverage for all of the commercial parts of the property as well as the personal parts like your home and family. This is why farm and ranch insurance is vital. It is also why the insurance is totally different from other types of policies.
However, since the type of insurance is quite different, you will need to learn a few details before you begin looking for policies. There are a few things that you need to know, which will help you choose the very best coverage for your farm or ranch.
Instead of choosing separate policies to cover each individual need for your farm and your home, which could become quite expensive, you should consider getting this one all-inclusive type of coverage because it is designed to specifically insure all of the parts of the farm or ranch without costing you an exorbitant amount of money.
Since the type of farms and ranches can vary greatly in size and operation, the insurance is designed to be flexible so that it can be personalized to each situation. You will not have to pay for coverage that you do not need. Alternatively, you will be able to make sure that you, your family, and your farm is completely covered without gaps or issues.
There are two main types of this insurance, and which is right for you will be determined by one factor: the size of your farm or ranch. This factor will include the physical size of the land involved, the amount of crops or livestock, which are cultivated on site, the number of employees that you hire, and the amount of farming equipment that you own and use. The two types are commercial farm insurance and personal farm and ranch insurance.
Whether you own the property and live on-site or you live elsewhere and leave the farm in the hands of a specific employee, you will have to be the one who purchases and owns the insurance policy. Whether you own the farm or ranch in full or you are a co-owner, you will be in charge of keeping the insurance up to date and properly covered. It cannot be in the name of a manager, even if that person lives on-site.
Not all farms are eligible for this specific type of all-inclusive farm and ranch insurance. Just because you own one of these types of properties does not mean that you will be eligible for the coverage. For example, farms, which fall in the category of “u-pick” fruits and vegetables, may not be covered. In addition, another type of ranch that is not covered would be a horse boarding stable. There are a number of stipulations as to who is and who is not eligible. In order to determine your eligibility, you will need to research the exceptions.
There are seven main types of coverages within a farm and ranch policy. You may choose to include all seven types or only certain ones depending upon your needs. These seven coverages include the following: residence, private structures, farm structures, personal property, farm property, living costs, and liability coverage.
In the liability category of farm insurance, there are also a number of types. As a general rule, liability insurance is a must, and is often required by state law. The types of liability can include personal liability, commercial farm liability, and umbrella policies, which will offer an extended coverage in all areas. Liability coverage will be responsible for any expenses acquired if a person who works for you or a third party is injured as a result of something on your farm or ranch.
When you own a farm or a ranch, you fall into a specialized category of insurance needs. You cannot just assume that standard business or home insurance will cover your farm’s needs. In order to make sure you and your property are correctly covered, make sure you understand the details and types of farm and ranch insurance that are available.
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Farm & ranch insurance is available for large or small agricultural operations. There are policies available for those who live on their farm and ranch as well as for non-resident operations. Most policies are highly customizable, so that you can be sure to have coverage for the equipment and operations specific to your farm or ranch.
Farm & ranch insurance is considered to be a mainline insurance product. You will be able to find coverage from a variety of national insurance groups, as well as through large agricultural support groups, such as Farmers Co-ops. Determining who will give you the best coverage can depend on your region and your preferences in working with an agriculturally oriented or a standard provider.
It is important to note on the farm side that standard farm & ranch insurance is separate from the national crop insurance program. You will want to read your policy carefully to be sure you understand what you are getting so that you can plan appropriately.
Information Needed For Farm & Ranch Insurance Quotes
As farm & ranch insurance is a multifaceted coverage option, getting an accurate quote can require a bit of legwork by you and your insurance agent. You will be required to make inventory statements about the land as well as about the equipment that you store on the land. For ranches, you will have to submit ranch reports about livestock, and photographing animals individually may be necessary, especially for breeding or rodeo stock.
For equipment, many farm & ranch insurance policies operate on a depreciation schedule for repair and replacement coverage. Thus, you will need to have the date purchased and age for your main pieces of equipment. This does extend in most cases to installations on buildings, such as power pumps on grain elevators.
Common Farm & Ranch Insurance Policy Features
The policy facets on a farm & ranch insurance policy cover a number of different areas. You will find that the following policy features are standard:
- Building coverage. Building coverage includes coverage for any dwellings that are on the farm or ranch as well as coverage for equipment sheds or barns. Generally, this will be broken out, so that you can set different deductibles for home coverage and outbuilding coverage as needed.
- Equipment and machinery coverage. Generally done on a depreciation schedule, your equipment and machinery coverage will protect against damage, vandalism, and theft. Depending on the piece of equipment, riders may be attached offering loss of use compensation or rental coverage during repairs.
- Livestock coverage. This can be done for herds or for individual animals. Some coverage is theft and death only, while other coverage supports transport and show participation as well.
- Liability coverage. This farm & ranch insurance protects you against claims due to individuals being injured on your property.
- Medical payments to others. This coverage helps provide medical support for individuals injured on your property, whether they litigate against you or not.
Farm & Ranch Insurance Discounts Available
The most common farm & ranch insurance discounts available are through bundling programs or farm and ranch associations. Bundling may be possible with vehicle policies or with crop insurance policies to earn multi-policy discounts. Multiple farm locations might also qualify. Association discounts should be stated up front as a part of the quotation process.
Farm & Ranch Insurance Exclusions To Note
All farm & ranch insurance is not created equal, and the multifaceted nature of the coverage means that there can be plenty of fine print and loopholes. You will want to particularly watch for regional exclusions and exclusions for you and your family on the plan.
In many cases, regional perils, such as flooding, may be specifically excluded from the standard farm & ranch insurance package. You may need to buy supplemental insurance to be sure that these items are covered. It may be possible to get specialty riders on your policies for these excluded items if you talk with your underwriter.
You and your family may also be excluded from some liability and medical claims portions of the policy. Many liability areas only apply to outsiders and non-farm employees. Consider the visitor traffic on your farm as you read over these items, and be sure you have your own health and wellness coverage!
