4 Keys Facts You Should Know About Farm Insurance

What is Farm Insurance: 4 Key Facts You Need to Know

Farmers face numerous risks and challenges in crop production, making farm insurance an essential tool to mitigate financial losses. However, understanding the ins and outs of farm insurance can be overwhelming.

Unlike homeowners insurance, farm insurance does not offer a standard policy with predetermined coverages. Each farm is unique, requiring a customized policy that adequately protects the farming operation. This means that farm owners must work closely with their insurance broker to tailor a policy that covers their specific needs, including the protection of land, farm equipment, buildings, livestock, feed, and crops.


1. Standard Homeowners Insurance vs Farming Activities

If you engage in hobby farming and do not generate income from your farm, your standard homeowner’s insurance policy may provide coverage for certain farming activities. However, it is important to note that most policies typically exclude coverage for farm equipment or farm outbuildings.

Hobby Farming for Profit Requires Separate Farm Insurance

Suppose you decide to expand your hobby farm and start selling crops at the local farmers market. In that case, your standard homeowner’s insurance policy will not be sufficient to cover your business activities. To adequately protect your farm and its operations, you will need to upgrade to a hobby farm insurance policy. These policies are specifically designed for hobby farmers who generate income from their farming activities.

To qualify for hobby farm insurance, there are certain criteria that your farm must meet, including:

  • A single farm location
  • No farm employees
  • 10 acres or less of workable land
  • Less than $8,000 in annual farm receipts
  • Less than six farm animals


2. Do you Need a Farm Owner’s Policy?

If you own a farm or farmland, you’ll need to have specialized insurance to protect your agricultural business. A comprehensive farm insurance policy typically includes coverage for your farm buildings, machinery, livestock, poultry, produce, and land liability. This ensures that you are financially protected in case of any unforeseen events or damages. From protecting your valuable dwellings to safeguarding the essential structures and equipment on your farm, having the right insurance coverage is essential.

Another consideration is if you own farmland but are choosing to rent it out. You’ll still need farm liability to protect yourself in the event of an accident on your land.

It is crucial to have a farm owner’s policy if farming is your primary occupation.

3. Factors to Consider When Customizing Your Farm Insurance

As mentioned earlier, farm insurance policies are not one size fits all. Working closely with your insurance broker to tailor a policy that meets your specific needs is crucial. Customizing your farm insurance ensures that your land, equipment, buildings, livestock, feed, and crops are adequately protected. When customizing your farm insurance policy, there are several important factors to consider. These include:

1. Farm Size and Type

The size and type of your farm will greatly influence the coverage you require. Whether you have a small hobby farm or a large-scale operation, your insurance policy should be tailored to meet your specific needs.

2. Farm Equipment and Buildings

Farm equipment and buildings are crucial assets that need to be protected. Ensure that your policy includes coverage for equipment breakdowns, damage, and theft. Additionally, consider coverage for farm buildings, including barns, silos, and storage sheds.

3. Livestock and Crops

Livestock and crops are often the primary source of income for farmers. Adequate coverage for livestock mortality, theft, and damage is essential. Similarly, crop insurance protects against losses due to weather events, pests, and diseases.

4. Liability Coverage

Liability coverage protects against potential lawsuits resulting from accidents or injuries that occur on your farm. This coverage extends to both visitors and employees. Ensure that your policy includes liability coverage that aligns with your specific needs.

5. Additional Coverage Options

Depending on your farm’s unique needs, there may be additional coverage options to consider. These could include coverage for farm vehicles, specialized equipment, or farm pollution liability.

4. How Much Does Farm Insurance Cost?

farm insurance cost blue and yellow

What will you have to pay for all of this? Now that we’ve thoroughly gone over all the coverages you may require to safeguard your farm, you’re probably curious about the cost of this level of coverage. How much will it dent your wallet?

The price of farm insurance is influenced by factors such as:

  • the location
  • size of the farm
  • additional coverage options
  • equipment and livestock amount
  • discount availability


Farm insurance can sometimes be as affordable as $2,000 per year or it can range to be over $30,000 per year. It all depends on the farm.

These four factors will have the most significant impact on the price of your farm insurance premium:

Residence: The expense of insuring your residence will be one of the major costs included in most farm insurance policies. The size of your residence, the number of floors, the type of construction, and other factors will heavily influence the rebuild value of your home which affects the amount of coverage you will need.

Farm structures: Another factor that will affect your premium is the quantity and type of additional structures on your property. It’s important to remember that you will be insuring every barn, carport, shed, and so on.

Liability coverages: The coverage you need for liability is determined by how your farm is used in various ways. The amount of coverage required will depend on the level of risk associated with the different activities on your farm.

Previous claims: Lastly, if you have previously made claims, your insurance provider will take these into account when determining your policy cost. Previous claims can significantly increase the price of your farm insurance policy; for example, you may not be able to add a claims-free discount to your insurance.


Finding the right farm insurance coverage can be a daunting task, given the unique nature of each farming operation. To simplify the process, it is advisable to work with insurance experts who understand the specific needs of farmers.

At Harvard Western Insurance, our farm insurance experts are not only knowledgeable about insurance but are also farmers themselves. They understand farmers’ challenges and risks and can tailor a policy to meet your specific requirements. Whether you are a hobby farmer or a full-time farmer, working closely with an insurance expert will help you find the right coverage for your unique needs. Invest in farm insurance today and give your farm the protection it deserves.

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