Whenever you set up a farm insurance policy, you want it to be as strong as possible. However, many small distinctions in the terms will affect how strong the policy will or won't be. It is important to understand these distinctions so you and your agent can maximize your farm's coverage. Pay attention to these four notable distinctions in farm insurance so you can specifically deal with each.
Crops and Product
Nearly all farm policies draw a distinction between crops still in the field and products already in storage. If you've placed a crop in storage, it has become a product. A typical farm insurance policy will cover it. However, you will need a separate crop insurance policy to protect your interests in anything still in the field.
Property and Fencing
In the strictest sense, fencing is property. Many insurance policies don't cover fencing unless a farmer explicitly asks and pays for it as a separate feature. From the insurer's perspective, this is because fencing is present all over farms and prone to damage from vehicles, storms, livestock, and a bunch of other things. Most farmers don't insure fencing because it's usually cheaper to just fix things as they suffer damage.
The gate is one common exception in choosing coverage. Particularly if your farm has a very nice main gate, you may want a policy to protect it.
Horses and Livestock
Most American farmers don't raise horses as livestock. Where this gets problematic from a farm insurance perspective is that horses operate in many different roles that may raise or lower their value. An insurance company doesn't want to insure a prize Arabian show horse like it's a draft animal, for example, if that means still paying out full value if something happens.
You can usually find an insurance policy for your horses, though. Discuss the issue with your agent. At most, the insurance company may send someone to assess an animal's value based on the market for similar horses. On the upside, though, insurers are usually willing to provide medical insurance and mortality coverage for horses. Especially if it's a high-end breeding animal, this can make a major difference.
Agribusiness and Family Farm
When a company offers farm insurance, it's typically offering coverage for the property as both a business and residence. Large-scale commercial businesses without residences may need to look at different policies to account for the sizes of their operations. Notably, sizable family operations are normally eligible for farm insurance as long as they have residences on one of the lots.
Contact an insurance agent to learn more about farm insurance.