The dividing line between farm insurance and homeowners' insurance seems like it would be pretty clear. Homeowners' insurance is for people who own a regular house, while farm insurance is for people on farms and ranches. Yet there's a gray area where someone in a house who isn't a farmer or rancher might actually need to buy farm insurance instead. In some cases, the gray area is so complicated that people often forget to ask about whether or not their homeowners' insurance covers what they're doing.

You May Need It Even if You Don't Consider Farming or Ranching Your Business

Even if you don't consider farming or ranching to be your business, you may need farm insurance just because of what's happening on the property. Homeowners' insurance doesn't cover a lot of business activity. If you have property associated with your business that is located at your home (and it's not a typical home business like freelance editing or selling your old possessions online), then it may be subject to exclusion through your homeowners' insurance.

Coverage Is Based on the Types of Activities and Structures

The type of coverage you get is based on the activities and structures on your property. If you own a suburban home with a bountiful garden full of fruit trees, your homeowners' insurance covers your property. If you own a suburban home with a backyard orchard that you treat like a business, where you sell the fruit at a farm stand regularly, then your homeowners' insurance might not cover everything associated with the orchard as it's a commercial enterprise. Your agent would be the one to talk to, to determine which type of insurance you need.

Another example is someone with a semi-rural home that owns a horse boarded on their property. The property might not be a ranch, and the person might not have commercial endeavors involving the horse, like giving riding or horse care lessons. But the structures like stables and runs, and the horse itself, might be enough to qualify the property for farm insurance instead.

Homeowners' Coverage May Not Be Enough Even for Temporary Situations

Imagine this: You own a nice semi-rural property that has once seen horses. You don't own any yourself and don't have any commercial activities going on, on that property, other than maybe a typical home-based business. You'd likely have homeowners' insurance. Now imagine your friend needs to board their horse somewhere for a couple of weeks but can't find a boarding center that has room, and that old stable might be a good place for the horse. Your homeowners' insurance might exclude everything to do with that horse and the stable. Technically that horse is in your possession and control for those couple of weeks, and that might mean you need to get farm insurance to cover those weeks.

If you suddenly realize that you might be doing things or have property that wouldn't be covered by regular homeowners' insurance, visit websites like to see if you really need farm insurance coverage. An agent can help you adjust and change your coverage as needed.