INSURANCE AGENCY NETWORK Blog
There are several key differences in the coverage of a Homeowner’s Insurance Policy and a Farm Owners Insurance Policy. While both policies cover your personal property and liability exposures, the coverage of them policies themselves differ significantly.
To help you understand them better, here are some of their most significant differences:
Homeowners Property Limitations
A homeowner’s policy limits coverage for Business and Property Appurtenant Structures. Appurtenant or other structures are those that can be used for business purposes on a homeowner’s policy. This also includes farm buildings such as barns, hay storage, and track rooms whether or not they will be used for commercial purposes. This means if you have a stable for horses, even if they are for personal use, your homeowner’s policy may not cover it.
Care, Control, and Custody
In a homeowner’s policy, there is an exclusion of non-owned property in the care, control, and custody of the insured. This would apply to any non-owned horse on your property for example, even if they were only kept for a short period.
In a Farm and Ranch Package, these things may be included in the care, custody, & control coverage with limits. The starting prices are $5,000 per horse and $25,000 per occurrence. You can also ask to include other livestock that you own. Higher limits are also available, depending on your request.
Business Pursuits Exclusion
Most home-based business owners mistakenly believe that their home insurance policy will cover their business activities. Generally, home insurance policies contain a “business pursuit” exclusion. These exclusions specifically state that the plans do not include any kind of business activities at home.
If, for example, a homeowner who has a horse gives a few lessons in exchange for money or other forms of compensation, he is already engaging in business activity. These activities are excluded from the liability coverage of the homeowner's policy.
A Farm Owners Insurance, on the other hand, uses commercial general liability forms that will extend proper commercial or business liability coverage. This does not have a Business Pursuit limitation because it is intended to cover any loss from the equine business activities, by the declarations found in the written policy.
At Insurance Agency Network, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get the insurance that fits your needs. You can get more information about our products and services by calling our agency at (425) 681-0996. Get your free quote today by CLICKING HERE.