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Hobby Farm Secrets

Summer is almost here, and maybe you’re preparing to complete some work around your property. Homeowner or hobby farmer - which side of the fence are you on? Many who own smaller farms or ranches believe their homeowner's insurance provides all needed protection. In many instances, that is actually not the case!

First thing’s first, you need to decide if you are a bonafide "farm" or a "hobby farm.” There is a growing number of hobby and small operation farms throughout the US; from raising vegetables and selling them by the road to the garage winemaker.

Do these activities qualify as a “farm” business? It’s hard to get a clear answer. Therefore, checking your policy with an insurance agent is necessary. Additionally, if there are any additions on your property, make sure you keep your agent up to date.

Part-Time Farming and Taxes

A farm is considered “part-time” depends on profits, as well as if the operator's main source of income comes from farming or not. Part-time farmers can also claim deductions for home office expenses and farming business expenses. These deductions are smaller than expenses claimed by full-time farmers.

Hobby Farm Insurance

There are certain criteria that must be met to distinguish between farm and hobby farm insurance. For example, to be considered a hobby farm, there usually should be a single farm location, no farm employees, less than 6 farm animals, less than $8,000 in annual farm receipts, 10 acres or less of workable land, farming is not the primary occupation, agri-tourism is not accepted, etc. However, these criteria can vary and are not “fixed.”

Insurance Coverage

There are several items you will need to consider getting coverage for. A personal home insurance policy will cover your dwelling, while a hobby farm is an additional policy that covers what your homeowners' insurance policy will not. As an example, you will need liability coverage, coverage for the farm building and contents, coverage for livestock, coverage for machinery, water damage coverage extensions, and comprehensive coverage.

Thanks for reading!

Farmers Mutual Insurance

749 Wilson Road, Newberry, SC 29108


#farmersmutualsc #morethanjustfarms

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