Just like homeowner’s insurance, farm insurance is critical to protecting what you have invested your time and money in. We speak with a farm insurance agent to learn more about what hobby farm insurance is and who needs it.
Hobby farms come in all shapes and sizes. Protecting the hard work put into growing crops, raising livestock and maintaining farmland is critical to the success of the farm.
But is hobby farm insurance a requirement? And what does a policy typically to cover?
Micky Freeman has been writing farm insurance policies for 35 years. She is an insurance agent and owner of Freeman Farm Insurance based in Hendersonville, North Carolina. Her focus is writing policies for apple and peach farms, horse farms and hobby farms.
“I enjoy helping hobby farmers find the right coverage for their small businesses,” says Freeman. “Protecting a side venture, something that you enjoy, with an insurance shield provides farmers with peace of mind. They know that at the end of the day, everything is going to be okay no matter what comes their way.”
Here, we share what hobby farm insurance is and whether or not you should consider purchasing a policy.
What is Hobby Farm Insurance?
Farm insurance protects the farmer and his or her property from potential risks.
Such risks include, but are not limited to, fire, hail, and flood damage. These insurance policies offer protection for various types of farms such as poultry farms, crop farms, dairy farms, and much more.
Because there are many options under the farm insurance umbrella, insurance companies classify farms differently in order to cover their assets properly.
Farms are classified by size, annual revenue, and acreage, for example. To be considered a hobby farm, the following must apply:
- Annual farm receipts must not exceed $10,000
- The farm operates on less than 50 acres
- There are no employees working on the farm
Put simply, hobby farm insurance is a customized farm insurance policy. Its purpose is to provide property and liability coverage to the farm, something that a standard homeowners insurance policy does not offer.
Most hobby farm insurance policies cover the following:
- Barns, outhouses, animal shelters and other structures built on the land
- Farm equipment and machinery
Every insurance policy is tailored to the individual farm’s needs. An insurance agent, such as Micky Freeman, can assist with selecting the right hobby farm insurance policy.
Who Needs Farm Insurance?
According to Freeman, anyone farming for profit, no matter how small, should consider purchasing a hobby farm insurance policy.
“Hobby farm insurance is critical if you have people visiting your farm or purchasing farm products,” explains Freeman. “Even if you are just selling a few dozen eggs here and there, insurance is there to protect you if something were to happen.”
Although insurance is not required to run a hobby farm, it is highly recommended for those seeking to make money from their efforts. Often, local farmers’ markets will require proof of insurance prior to setting up a stand as a merchant.
Depending on the goals of your hobby farm, the need for insurance will vary.
Ask yourself these questions prior to purchasing a hobby farm policy:
- Is my farm a business or simply a hobby? - If the purpose of the farm is to earn a profit in any way, then yes an insurance policy should be considered. On the flip side, if the farm’s sole purpose is to grow food for your family to eat, and is meant solely for your enjoyment, then an insurance policy might not be necessary.
- What does my homeowner's insurance already cover? - As mentioned above, most homeowner’s insurance policies do not cover farm operations and equipment. But if the farm is truly a hobby, and you do not plan to make money, sometimes the homeowner’s insurance policy will cover items such as gardens and small tools. It is less likely, however, that large farm equipment, livestock and farm-related buildings are covered. In this case, a hobby farm insurance policy is recommended.
- Am I planning to offer farm tours or other agritourism-related events? - If you answer yes to this question, farm liability coverage would be beneficial. Inviting guests or the public to tour your farm, engage with animals, and be exposed to farm-related activities, could be an opportunity for unfortunate events to happen. Falls, personal injury and animal bites are likely to take place. Having liability coverage will help to alleviate such risk
How Much Does Hobby Farm Insurance Cost?
On average, expect to pay anywhere from $50-$100 a month for hobby farm insurance.
This is dependent upon the policy itself and any liability add-ons. Other factors that can affect the cost of the policy include:
- The location
- Any previous claims
- Items being covered - buildings, livestock, etc.
Where and How Can I Get Insured?
The best place to start is by contacting an independent insurance agent that specializes in farm insurance. In the event of income, property and farm loss, hobby farm insurance can help provide the coverage needed to restore and replace.
Should you get hobby farm insurance? The answer is dependent upon your farm goals.
Connect with an insurance agent, like Micky Freeman, to learn more about the options available to you.
Have more questions about insurance for your rural land? Check out: What Insurance Do You Need For Raw Land?