Farm Home Policies: Unraveling The Auto Insurance Requirement

If you own a farm or ranch, you may be wondering if your vehicles require insurance. Farm vehicles that enter public roadways need auto insurance coverage, and there are different types of farm vehicle insurance coverage available depending on the vehicle's usage. For example, if your farm vehicle travels between your farm and home, or between your home and town, you will need specific insurance for that. Farm vehicle insurance can provide peace of mind and protect you, your farm, and your passengers in the event of an accident or damage to someone else's property. Additionally, homeowners insurance is not legally required, but it can help ease the financial burden of repairing or rebuilding your home and replacing your belongings after disasters like fires, lightning strikes, or vandalism.

Farm vehicles need insurance if they enter public roads

If you own a farm, you may be wondering if your farm vehicles need insurance. The answer is that, like other vehicles on the road, if your farm vehicle enters a public roadway, it needs to have auto insurance coverage. This includes vehicles that are primarily used for farming or ranching, such as pickup trucks, vans, farm trucks, tractors, and trailers.

There are different types of farm vehicle insurance coverage available, and it's important to make sure you have adequate coverage to protect yourself, your farm, and your passengers. The type of coverage you need will depend on how your vehicle is used, including whether you use it to travel between your farm and your home, or between your home and town.

• Bodily Injury Liability: This coverage can protect you and your operation in the event of an accident involving your farm or ranch vehicle.
• Property Damage Liability: This coverage will protect you if your farm or ranch vehicle causes damage to someone else's property.
• Medical or No-Fault Coverage: This type of coverage can vary by state, so be sure to check with your insurance agent to understand what is included in your policy.
• Comprehensive: Comprehensive coverage pays for damage to your insured farm vehicle due to causes other than collision, such as fire, theft, vandalism, or severe weather.
• Collision: This coverage pays for damage to your insured farm vehicle or trailer caused by an accidental collision or overturning.
• Uninsured and Underinsured: This coverage protects you and your passengers from bodily injury caused by other drivers who do not have adequate insurance.

In addition to these common types of coverage, there may be other optional coverages available, such as personal injury, uninsured/underinsured drivers, and physical damage. The cost of farm vehicle insurance will depend on various factors, including the number and type of vehicles, their usage, and your driving record.

It's important to note that even if your farm vehicles are not driven on public roads, you may still want to consider insurance to protect your assets in the event of damage or loss.

Types of farm vehicle insurance coverage

There are several types of farm vehicle insurance coverage available, depending on the type of vehicle and how it is used. Here are the key types of coverage:

Bodily Injury Liability

This coverage can protect you and your farm or ranch operation in the event of an accident involving your vehicle.

Property Damage Liability

Property damage liability coverage will protect you if your farm or ranch vehicle causes damage to someone else's property. This coverage provides peace of mind, knowing that you will be covered for any property damage liabilities.

Medical or No-Fault Coverage

This type of coverage varies by state and is designed to cover medical expenses resulting from an accident. Contact a local insurance agent to understand the specific requirements and options in your state.

Comprehensive Coverage

Comprehensive coverage is essential for protecting your insured farm vehicle from damage caused by something other than a collision. This includes incidents like fire, theft, vandalism, or severe weather conditions such as wind, hail, and flooding. Comprehensive coverage is particularly valuable if you reside in an area prone to severe weather.

Collision Coverage

Collision coverage is crucial for addressing damage to your insured farm vehicle or trailer caused by accidental collisions or overturning. This coverage ensures that you can repair or replace your vehicle in the event of a collision.

Uninsured and Underinsured Motorist Coverage

This coverage is designed to protect you and your passengers from bodily injury caused by other drivers who do not have sufficient auto insurance or lack any insurance altogether. This coverage ensures that you and your passengers are safeguarded, regardless of the insurance status of the other driver.

Commercial Auto Policy

For larger trucks and vehicles used for commercial hauling or revenue-generating activities, a commercial auto policy is necessary. This type of policy is typically required for heavy and extra-heavy trucks titled to a commercial farm entity. In some cases, a separate commercial auto policy, known as Trucking Insurance, may be needed if the vehicle is used to haul goods for third parties.

Personal Auto Policy

Mid-to-small-sized pickup trucks used on farms can often be insured through a personal auto policy. This option is usually one of the most cost-effective ways to insure such vehicles. However, it's important to be mindful of liability limit maximums, as most personal auto policies do not exceed $500,000 in liability protection.

Farmowners Policy

For farms that operate unlicensed farm trucks, the appropriate form of auto insurance is a farmowners insurance policy. These vehicles are exempt from standard vehicle registration and inspections, making this type of policy a cost-effective solution. However, it's crucial to be aware of the restrictions that govern the use of these unlicensed farm vehicles to ensure compliance with the law.

Home insurance is not required by law

Even if you don't have a mortgage, there are still several reasons to buy home insurance. For example, home insurance can protect you from unexpected losses due to physical perils, such as fire and wind damage, as well as potential liability concerns, such as dog bites or slip-and-falls. It can also provide financial protection so that you are not responsible for the entire cost of repairing or rebuilding your home after a disaster.

Home insurance is designed to help cover the cost of rebuilding your home and replacing belongings damaged by covered events. Without insurance, you would have to pay for all these costs yourself, which could result in a huge financial burden. In addition, if you live in an area prone to natural disasters, such as flooding or earthquakes, it is advisable to have home insurance to protect your investment.

While home insurance is not legally mandated, most mortgage lenders will require you to have it before extending you a home loan. This is to protect their investment in the event that your home is damaged or destroyed. If you don't have home insurance and your home is damaged, your lender may not be able to recover the money they lent you. Therefore, it is essential to consider home insurance, even if it is not legally required.

Bundling auto and home insurance can save money

If you own a car and a home, you'll likely need insurance policies for both. Instead of shopping for each policy separately, you could save time and money by bundling your home and auto insurance. An insurance bundle packages two or more types of policies together and can often cost less than buying each one individually.

Benefits of Bundling

Discounts

Some insurance bundles can qualify you for discounts on your premiums, making it an easy way to save money. With some providers, the more policies you bundle, the more you save.

Streamlined Payments and Record-Keeping

Instead of juggling multiple insurance carriers, you’ll have just one provider to deal with. That streamlines your premium payments and policy management.

Customer Retention

Insurance companies like it when you bundle more than one policy with them; it boosts their bottom line and makes it more likely that you’ll stay with the company in the long term. But you can benefit from this deeper relationship as well. In addition to qualifying for discounts, sticking with one insurance provider means you’re less likely to be dropped as a customer when you need to file claims against your policy.

Single Deductible

Say a tree falls and damages both your home and vehicle. If you bundled your car and home insurance, you may be able to pay just one deductible.

Tips for Maximizing Savings

Get Quotes from Several Insurance Companies

Every carrier has a different process for setting rates. For instance, your bundling discount could be 25% with a carrier, but if the underlying rates are higher than other insurers, you could end up saving more with a carrier that quotes a lower base premium for you—even if the carrier's bundling discount is smaller.

Take Advantage of Other Discounts

A bundling discount might just be one of several discounts that you qualify for through your insurance provider. For instance, you might be eligible for a safe driver discount, loyalty discount, or low-mileage driving discount.

Review Your Policies When Life Events Happen

Staying with the same insurer for several years can be a good way to earn loyalty discounts, but occasionally shopping your coverage with other carriers can help you learn if you are still getting a competitively-priced bundle. It can be helpful to shop for insurance after significant events in your life that tend to alter your finances, like getting married or divorced, having a baby, or moving to a new home.

Improve Your Credit Score

If your insurance provider uses your credit score to determine your rates, work on improving your credit score. While it takes some time, you can do this by paying down debt, not missing payments, and raising your credit limits.

Farm and ranch insurance coverage is available

Farm and ranch insurance generally provides coverage for your home and its contents, including detached garages and other personal use buildings. It also covers farm personal property like equipment, tools, machinery, irrigation equipment, harvested crops, and livestock. Plus, it covers farm structures, including barns, machine sheds, and outbuildings.

You can also get farm liability coverage, which includes bodily injury and medical expenses caused by your farm, as well as property damage. This can be supplemented with an umbrella policy for additional protection.

There are also optional add-ons for your farm and ranch insurance, such as farm equipment breakdown coverage, replacement cost coverage for irrigation systems, farm income protection coverage, and livestock and animal farm insurance.

If you have a vehicle that you use for farming or ranching, you will need to get separate auto insurance coverage for it if it enters a public roadway. This can include vehicles such as pickup trucks, vans, farm trucks, tractors, and trailers. There are different types of farm vehicle insurance coverage available depending on how you use your vehicle.

Frequently asked questions