Getting the Right Coverage: Difference Between Home and Hobby Farm Insurance
If you are a hobby farmer who is unsure about the difference between home and hobby farm insurance, you have come to the right place!
Below we will break down how your protection differs based on the type of insurance you choose. There’s also some coverages listed to review with your broker to help you make an informed decision on what works best for you and your property.
Protecting the Home
Both a home insurance policy and a hobby farm insurance policy can protect a house, including its contents, and homeowner’s liability. Insurance coverage for the home is fairly similar and you may choose the perils covered, limits, and deductibles (as offered by your insurance company) based on your needs.
Two enhancements you may not have considered for protecting your home are Homeowners Equipment Breakdown and Service Line coverages.
- Homeowners Equipment Breakdown can protect the appliances in your home when damaged by a sudden and accidental electrical, mechanical, or pressure system breakdown.
- Service Line can cover the repairs and replacements on lines that bring water, power, and data into the home.
Protecting the Farm
Home insurance policies are not designed to protect the extra buildings, livestock, machinery, and risks on a hobby farm or acreage. If you choose home insurance coverage to protect a home on a hobby farm, you will likely have gaps in your insurance policy for the farming aspect of your property.
For example, a hobby farmer may have:
- More land than an average home
- Additional or specialty tools
- Livestock like chickens, horses, and cattle
- Livestock or horse trailer
- Machinery and equipment like a tractor, manure spreader, sprayer, or irrigation system
- Business from product on the farm such as farm fresh eggs, cut flower sales, or homemade jams
- Additional liability risk from the examples listed above
If you would like insurance coverage to protect your tools, tack, machinery, livestock, farm buildings, and farm business, a hobby farm policy is designed to support you. Working with your insurance broker, you may want to choose coverage that protects your:
- Farm Contents
- Farm Livestock
- Fencing, Corrals, and Paddocks
- Harvested Farm Produce
- Mobile Farm Machinery
- Extra Expense
With Mutual Fire Insurance, hobby farmers can choose to add a Hobby Farm Enhancements package to their policy which offers a broad selection of insurance coverages designed specifically to protect hobby farm operations.
In the Event of a Claim
Purchasing a home insurance policy will not protect the hobby farm aspects of your property and, in fact, may lead to a claim denial if the loss doesn’t fall within the agreed insurance contract. Examples for situations where a home policy will likely not protect you may include:
- Tractor damaging your home or property of a neighbour
- Food poisoning from a farm fresh egg
- Injury to a family member or friend by your farm livestock
A home insurance policy would likely only cover damage to the home and property from an insured peril, like a fire or a burst water pipe, based on the conditions of the wordings.
Remember, insurance policies are written in good faith. It is better to be completely transparent regarding all parts of your home and any hobby farming activity rather than omit the details.
Hobby farm insurance will cost more than a standard home insurance policy because it protects more things and comes with more risks.
The lower annual premium of home insurance policy may be helpful for your pocketbook today, but it cannot protect the hobby farm aspect of your property. It is important to understand this fully when making your insurance coverage decisions.
Finding Insurance Coverage
By highlighting the differences between a home and hobby farm insurance policy, we hope to provide you with the facts to help make your insurance decision with a broker.
Learn more about hobby farm insurance with MFI! Hobby FarmPROTECT™ is the insurance coverage written to support both your hobby farm and home. It was designed with you, the policyholder, in mind with easy to understand wordings and clear descriptions for coverage. Speak with your MFI insurance broker to get a quote for your property.