Choose the Right Insurance

Good coverage for your place in the country.


| March/April 2008



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iStockPhoto.com/Gene Krebs

You planted two acres of vegetables, and the crop is looking good. The laying hens you purchased last spring are putting out twice as many eggs as you can use. Maybe you can sell extra vegetables and eggs to cover your expenses and even turn a tidy profit. Next year, why not put your own little stand out by the highway and turn this sideline into a real working business? But what happens when a customer gets injured at your place, or your cow escapes its pasture and causes an accident on the highway? Do you have the right kind of insurance to protect yourself from the liability exposures associated with your version of the country lifestyle? If your insurance consists of a conventional homeowner’s policy, it is definitely time to talk to your agent.

 

Homeowner’s policies are as varied as the companies that write them, but many people just don’t realize that when it comes to insuring rural property, most policies exclude coverage for added risks involved with agricultural operations. Sure, they might cover you if the house burns down, hail damages your roof or a neighbor trips on your stairs and breaks a bone, but they might not be much use if a fire takes out 2,000 feet of fencing or you back into the neighbor’s truck with your tractor.

 

Specialized farm policies written for rural property owners are readily available and can be tailored to cover the exact needs of each individual applicant. Whether you raise livestock, board horses, grow fruits or vegetables, or even if you have a pumpkin patch and give hayrides, an insurance policy can be designed specifically for you – and it can cover your home and vehicles, too.

 

Categories of coverage

 

According to the “Consumer’s Guide to Farm Insurance” by the Maryland Insurance Agency, a state agency responsible for regulating insurance in the state of Maryland, there are five key areas to address when purchasing a farm policy:

 

• Property damage coverage protects your farmhouse, outbuildings and household belongings if they are damaged or destroyed by fire, lightning, hail or tornado.
• Liability coverage protects you when you unintentionally cause another person to be injured or another person’s property to be damaged or destroyed.
• Medical payments coverage pays up to a specified amount for medical expenses incurred by persons injured in an accident on your farm regardless of whether you were at fault for the injury.
• Endorsements are additional areas of coverage written specifically for the policy holder at an additional cost. Some items covered under an endorsement might include expanding basic coverage – such as changing from cash value to replacement value – or covering items excluded by your base policy – such as particular animals, outbuildings, farm equipment, etc.
• Farm-based businesses – petting zoos, pick-your-owns, corn mazes, haunted barns, pumpkin patches, farm stands or hayrides – might require a business policy instead of or in addition to your farm policy. Selling food products might also require additional specified liability coverage.

 

Comprehensive coverage

 

Several companies offer insurance coverage for all aspects of your operation without the need to specify individual endorsements. AgMax, an insurance program available through Farm Bureau Financial Services in Des Moines, Iowa, is an example of a product designed to appeal to the diverse needs of rural property owners. Although AgMax is only sold in nine Midwestern states, many companies offer similar products across the country.





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