Farm and ranch insurance: How to insure your rural property in Texas

June 26, 2020

How does farm and ranch insurance protect your rural property in Texas?

A Texas farmer shaking hands in a field with a farm and ranch insurance agent.

Farmers and ranchers are the backbone of any society; they work with land and livestock to make sure we have food in our markets and on our tables! But when you've built your home and your livelihood on the land, it's essential to protect the property you rely on from the unexpected. That's where farm and ranch insurance comes in! Today, we'll outline the basics of farm and ranch insurance and show you how to insure your rural property in Texas! 

What is farm and ranch insurance?

Farm and ranch insurance, sometimes referred to as rural property insurance, refers to a wide range of policies and coverages designed to protect your belongings, business, and livelihood. In a way, it can be thought of as a combination of other types of insurance, like property and business insurance. In other words, it may provide coverage for your home and personal belongings, but also cover property used for your agricultural business. 

Rural property insurance can range from basic policies similar to homeowners insurance, all the way to policies designed to cover your farm equipment, machinery, and even livestock. 

What does farm and ranch insurance cover?

Because farms and ranches are usually a unique blend of personal and commercial property, insurance policies need to be flexible in terms of what they offer. In general, farm and ranch property insurance can be broken down into two main categories.

Rural property insurance: Covering your home on the range

First, let's take a look at the personal property aspect. This refers to any structures or property on your land that isn't used for business or commercial purposes. 

Home or dwelling. This policy works in a similar fashion to a standard homeowners insurance policy and is designed to cover your rural home, ranch house, or perhaps a barndominium. Just like home insurance, it generally covers losses due to things like fires, storms, hail, and so on.  

Other structures and outbuildings. With room to spare, it's not uncommon for rural homes to include several buildings apart from the main living structure. This might include workshops, detached garages, or even stables. However, it's important to note that this typically does not cover buildings intended for commercial use. 

Additionally, some policies offer coverage for things like plants and landscaping features near your dwelling. This might include things like trees, but could also include gardens. However, just as structures used for commercial agriculture aren't covered in this section, anything planted for the market won't be covered.

For example, if you have a small garden near your house that you use for personal consumption, this could be covered. But if you have a field of corn used in any way commercially, this would fall under a separate policy, regardless of how close it is to your house. 

Covering your farm or ranch equipment and operations

Unlike traditional homeowners insurance, some of the more unique aspects of farm and ranch insurance are the various policies that cover buildings and equipment used for commercial agricultural purposes. As you can imagine, the losses covered by these policies will vary from case to case and greatly depend on what you do with your land.

For example, the risks associated with raising cattle is going to be very different than those associated with crops. As such, you will need to work closely with your insurance agent to craft a policy that is right for you and your needs.

Generally, policies in this category can be split into four types:

Farm machinery and equipment. Coverage in this category protects the equipment and machinery you rely on to run your farm or ranch. This may include tractors, combines, shredders, plows, hay balers, cotton strippers, hay cutters, farm trailers, and more. Depending on the insurance company and specific policy, this may include vehicles (like a pickup truck) used for farm work. However, in some cases, this might fall under a separate commercial or business auto policy

Farm products. When it comes to insurance policies, there is usually a distinction drawn between crops and products. Grain, hay, seeds, and other field products may be covered, but only once they are harvested and stored. Once planted, crops usually require a separate commercial policy. 

Livestock. If you raise animals, such as cattle, many farm and ranch insurance policies provide coverage to protect you in the event that they are injured or killed. While livestock are susceptible to many of the same dangers as your equipment (such as tornadoes), they also present a unique set of risks (like being attacked by wild animals). Some insurance companies include these perils in their standard offerings, yet others may place those in separate, additional policies. 

Policies are also available for horses, or other equine animals (like a mule, for example). However, the type of coverage you'll need depends on how you use that animal. For example, if you use a horse to check fences or herd other livestock, the necessary coverage may differ than if you used your horse for show purposes or recreation. 

Regardless of what types of animals you have on your property, you'll very likely need the advice of your insurance agent to decide which coverages are right for you.

Other agricultural structures. Typically, policies that cover your house, or any personal property, will not cover structures or buildings with a commercial use. If you have a barn, stable, grain silo, or workshop that you use to produce agricultural products, you'll need to inquire about this additional type of coverage. 

Farm and ranch liability insurance

If you've ever owned or operated a farm or ranch, you know that there are a wide range of risks unique to the practice. Animals are unpredictable at times and can sometimes escape, potentially causing damage to people and property in the process. Farming also comes with its own dangers, especially when large machinery is involved.

That's why there is often a liability component to farm and ranch insurance. Similar to the liability that comes with many homeowners insurance plans, it covers things like bodily injury, medical expenses, and damage to property. Liability coverage may be part of or otherwise packaged with your farm and ranch property insurance, or may be sold as a separate policy.

The type of liability insurance you'll need for your farm or ranch depends largely on the size of your operation, the type of ranching or farming you do, and whether or not your farm or ranch is run for business purposes or personal use. 

It's important to understand that something like a personal liability or personal umbrella policy isn't likely to cover business-related activities. If you run your farm or ranch as a business, you may need something like a farm liability or farm umbrella liability policy

No matter what the scope and scale of your farm or ranch is, having the right type of liability insurance is essential. If you ever have questions or concerns about your existing liability coverage, or want to make sure that you purchase the right coverage for your farm or ranch, make sure to speak with your insurance agent. 

Wrap up

It's important to understand that there really isn't such a thing as a "standard" farm and ranch insurance policy. As we have discussed, there are a wide range of different policies and coverages simply because farms and ranches have so many different functions. 

You may simply want to insure your barndominium and a few horses for recreational use, or you may need insurance for several dozen head of cattle. You might have a single tractor for a few acres, or a couple combines for a massive crop. 

Depending on the insurance company, the coverages and policies we've discussed may come as a single bundled package, or may be available separately. 

At the end of the day, your insurance agent is going to be your greatest resource for crafting a policy that fits with your work and lifestyle. They understand what sorts of losses and perils their policies protect against, and may even conduct an on-site inspection to help determine the product that is right for you.

A Texas farmer shaking hands in a field with a farm and ranch insurance agent.

When you’re filing a claim, great customer service is essential. Since 1896, Germania Insurance has been the Insurance Texans Trust for great coverage and outstanding customer service. But don’t take our word for it! Hear what our customers have to say

For more information about our insurance products, request a free quote online, or reach out to one of our trusted agents today!

Read more: Farm mutual insurance companies (like Germania) got their start helping farmers and ranchers insure their property. Read our blog and learn all about farm mutuals!

by Geoff Ullrich

About the Author

Geoff Ullrich is a writer and Content Marketing Specialist at Germania Insurance.