Finding the right insurance policy for a rural property based on its use is essential.
Obviously, farms require farm insurance and ranches require ranch insurance to appropriately protect these types of property.
What many rural property owners may not realize is that their property may qualify as a farm or ranch and require a policy from a farm insurance agency, even if they do not necessarily use it for business.
To keep rural properties correctly protected, owners must understand how farm and ranch insurance agencies define farms and ranches to know whether this is the policy they need.
Do You Own A Farm or A Ranch?
A few critical details that owners of rural properties must understand before seeking farm insurance is that simply owning large acreage does not mean that they own a farm or ranch.
Farm insurance agencies specify that it is what happens on that farm or ranch that determines whether a farm or ranch insurance policy is required.
Look At the Insurance Policy Definitions
A farm or ranch is defined by ranch insurance agencies in Texas as properties that include a residency of some type, whether that is a primary home or some kind of secondary residency, and is used for some type of agricultural purpose.
While that may seem simple enough, some ranch and farm insurance agencies also stipulate that the property must be generating income to be considered a farm or ranch while others do not.
It All Depends On Each Agency's Definition
This suggests that while any income-producing agricultural venture would naturally be classified as a farm or ranch by any agency that offers ranch and farm insurance, some might not classify a personal property with a few pleasure horses or pet cows as a farm or ranch while others would not.
Along these lines, a small property with a personal flock of hens that sells a few dozen eggs a week to neighbors might or might not be defined as requiring farm insurance depending on the agency and what their policy actually covers.
Many Variable In Defining Ranch and Farm Property
The questions of who owns the property, who lives there, and what types of activities happen at the property all fall into defining the classification of a farm or ranch property and which type of insurance policy will protect it.
Since no two rural properties are the same, it is erroneous for property owners themselves to assume a conventional homeowners policy or even a farm or ranch insurance policy is required.
The bottom line is that any acreage with a residence that includes anything other than open, unused land should be carefully assessed by ranch and farm insurance agencies to define it, then offer the right damages and liability coverage.