Farm and Ranch Insurance Basics

October 6, 2022

Small problems can soon turn into major disasters if you own a farm or ranch. All it takes is one storm or drought and you could be facing an unproductive season. With that in mind, it’s important that any American who maintains these kinds of properties invests in farm and ranch insurance. However, like other forms of insurance, several hurdles may arise when looking for a policy. To help you make the right choice, let’s take a moment to cover the basics. 

Farm and Ranch Insurance 

Farm and ranch insurance can protect any farmland or ranch one owns. It comes in various forms, typically starting with basic property coverage with supplemental coverage like crop insurance being added as needed. There are several factors to consider when choosing farm and ranch insurance, such as: 

  • The replacement cost of repair or rebuilds versus the actual cash value at the time of loss, 
  • Whether the farm is used for commercial purposes only or is also a residence, 
  • The coverage style, ranging from coverage for dwellings only to structures, equipment, etc., 
  • The structure of your farm, including Type 1, Type 2, and Type 3 buildings on site, and 
  • Which liabilities exist on the property, and which may require extra or specific coverage. 

This is a basic overview of what your typical farm and ranch insurance would take into consideration. Other critical factors include the number of locations, the number of paid employees, the property size, the limit of annual receivables, and any unique aspects that differentiate the property from the norm. 

Why Farm and Ranch Insurance Matter 

This insurance policy matters because it can protect both living and non-living assets. Many farm and ranch owners live on site, so having a policy covering their households and livelihoods is especially beneficial. It also supports their ability to meet long-term business goals no matter what happens in the future. 

By having security over all your major assets and functions, you can work confidently knowing that you have suitable protection against risks. Some compare a comprehensive farm and ranch insurance policy to having an extra family member help you with crops, animals, property bills and rent, and getting your products to market. 

It also pays to know what is and isn’t covered by farm and ranch insurance. For example, it typically covers things like machinery, equipment, livestock, and farm products like seed, fertilizers, and pesticides. However, you’ll often find that fencing is rarely protected as part of your policy. 

You can choose to have fencing covered separately, but this generally increases a policy’s premiums. Of course, this cost depends on size and type of fence in question. You also need to make sure that you live up to your end of the bargain when it comes to maintenance. Farm equipment that fails due to poor care is unlikely to be covered, and technical malfunctions are rarely covered, either. 

It’s important to choose a policy that includes everything your property has on site. We highly recommend that you speak with a trusted insurance agent before committing to any policy. A clear idea of what you need, what is covered in your policy, and what needs added coverage can ensure you get the best long-term protection possible. 

Protect Your Production 

It’s never too late to consider farm and ranch insurance for your property. We always suggest taking out a policy regardless of when you originally acquired your land. The right coverage will allow you to rest assured that your valuable assets are safe, and it will encourage you to focus your attention on what matters most each day. If you have questions or concerns about farm and ranch insurance, then please reach out to connect with a local agent. We’ll gladly explore your options and provide a free policy quote at your convenience.