Insuring Your Acreage

If you’re an acreage owner seeking to insure your property and enterprises, one thing is almost certain—you won’t think of everything by yourself. That’s what your insurance agent is for, says Lorie Bear, farm product specialist for Farm Bureau Financial Services. She says in addition to conducting their own assessment of risks on their property, acreage owners need to have an expert come out for a visit. “Most agents, especially in rural areas, are going to want to come out and take a look at the property anyway,” Bear says, “and make sure that you have the coverages that you need for the different types of things that you’re doing or where you’re located, or what types of risks are located on your property.”

A checklist offered on-line by a Nebraska insurer offers examples of the sorts of potential hazards a property owner recently relocated from town might not have considered. How far are you from the nearest fire hydrant? How many miles away is the nearest fire station? Is there brush nearby? What borders each side of the property?

That last could be crucial to determine the extent of your liability insurance; if you’re adjacent to a farm, you need to protect yourself if you do damage to your neighbor’s crops or livestock. Rural residents need to be more attentive to possible run off, overspray or drift when using chemicals on lawns, gardens or fencerows.

Bear says, “Any time there’s animal waste or a chemical, you should always be concerned about the possibility of runoff. Sometimes people don’t even think—you know, ‘I’ve got weeds on the fence line, and I’m going to spray the weeds’.” A full-time farmer would be cognizant of wind speed and direction; the misdirected spray could kill the neighbor’s crops, or drift onto pastureland and poison livestock. “They just need to think a little more carefully about everything that they do, because everything can easily affect their neighbor,” she concludes.

If you do have agricultural enterprises, your agent will be able to tell you your additional insurance needs. If you own horses or livestock, your homeowner’s policy may not cover them without an additional option or endorsement. Bear says general homeowner’s and property liability policies almost always carry an exclusion clause for business, but that doesn’t mean you need to purchase a commercial policy; she says, “You can get a home business-type endorsement through your homeowners’ insurance that will cover that.”

Similarly, a tractor that is used only to mow the residence would be covered as personal property under a standard homeowner’s policy, but if that same tractor is used to move hay or pull wagons or other implements, it may be considered farm/ranch personal property and would need special coverage. But Bear says, “There are a lot of homeowners’ programs that have a small farm-type endorsement that can be put on.” They would cover a small tractor and wagon, or a limited number of livestock if they were being maintained for show or recreational purposes.

Full-time farmers will often buy crop insurance; the acreage owner with a small enterprise may want to consider looking into crop insurance if it grows into a truck garden or U-pick operation. Generally, though, acreage enterprises are too small to make crop insurance worthwhile.

Typical homeowner’s policies only provide coverage for the premises immediately surrounding the home. Acreages will usually need to be listed on the policy to ensure there is coverage if someone is hurt on the acreage. Also, if pasture or other ground is rented from someone else, those locations need to be listed to be included in the coverage.

Bear says each state has its own regulations that define an ”acreage” or a “farm”; in Iowa, for instance, it’s by size, and by use. “You can have a small amount of land and still start farm-type operations, or things that are not covered under a normal homeowners,” she says. “Some people have a rabbitry, or raise chickens and sell the eggs, or maybe they have produce that they’re selling on a small amount of acreage. That creates different liability, a whole different risk that they need to be looking at with their insurance.”

The cost of liability coverage on an acreage can mount if customers are coming onto the property rather than receiving your products off-site.   And outdoor sports, especially hunting, offer special risk considerations. Hunters who live in urban or metro areas often offer to pay a fee for the right to hunt on rural lands. If you accept fees for hunting, Bear says that makes your hunting lands a business enterprise; make sure you have proper insurance, since this may void standard personal or farm/ranch liability coverage. She adds while it’s a good idea to have sportsmen sign a waiver, it won’t provide airtight protection against a liability claim.

It’s also important, of course, to protect yourself. Someone who moves from the city to the country and is used to pavement may be taken by surprise by gravel roads. Bear says, “They don’t think much of it when they’re out there looking at the property, but all of a sudden when they’re driving there every day, it becomes more of an issue.” Rock damage to windshields is more frequent, although fixing chips in windshields before further damage develops can lower insurance costs.

And since many rural residents live a number of miles from town or work, Emergency Roadside Assistance and Auto Rental Reimbursement are two optional coverages that should be considered. Says Bear, “If you get broken down on a gravel road and you’re four miles from home and seven miles from town, and it’s not a well-traveled road, that’s a really long walk either way. So having some of emergency breakdown coverage on your auto plan is very helpful; you can just call, and they’ll show up. Otherwise, you’re kind of on your own.”

Other potential hazards to you and to visitors should be considered; dangerous areas should be fenced off, but local ordinances need to be checked. “A lot of times there are ordinances about driveways and fences,” Bear says, “how close you can have a fence to the road, and things like that. People just don’t think about that until they put something in, and they’re told that they need to remove it.”

But above all, check with your insurer. Bear says generally the same underwriter with whom you did business in town can provide you acreage coverage, but if you’re planning to get more heavily into agricultural activities, you may want to look for an insurer that specializes in those items. “They may have a better variety of coverage,” she says, “and things that are more specific to exactly what you’re doing.”