Homesteading is defined as living a life of self-sufficiency, or in other words, you use what you have available to produce what you need to get by. For someone who is living the homesteading lifestyle on their home property, the rewards are great, but there are also some special considerations involved. Specifically, your homeowner's insurance can be affected by your homesteading activities. Too many homesteaders discover this fact after something has happened and they find out the incident will not be covered because of "farm incidental" clauses in their policy. Here is a look at a few things you need to know about homeowner's insurance as a homesteader.
Regular homeowner's insurance may not cover farm equipment.
Homesteading can involve everything from plowing the ground and growing crops to raising livestock. Therefore, you are likely to pick up a few pieces of farm equipment as a homesteader. Whether it is a tractor, plow, or electric fence system, it is best to consult with your insurer as you add these items to your farm. Your basic policy may not cover equipment that you have on your property for farm purposes, and if it does, it could be a conservative amount that will be far from enough to cover its actual value if something happens.
Regular homeowner's insurance may not cover farming related incidents.
Having a farm of any size on your home property means that there are things going on here that may not otherwise happen on other properties. Therefore, your insurer does need to know that you are a homesteader. Otherwise, if something happens purely because of the farm operation going on at your home, the insurance may not cover damages. So, for example, if your cow gets loose and charges through your garage door, you may be left paying for repairs on your own.
Farming for profit with your homestead makes a huge difference with insurance.
The moment that you make a profit with something on your homestead, it is time to go over your homeowner's insurance with an agent. Many home insurance companies have specific guidelines against providing coverage for hobby farmers if they are making a profit of any kind. Once a profit is made, you go from being a hobby farmer to a business farmer, which means your homeowner's insurance should change. Therefore, even if you make a profit selling extra veggies at harvest time, it is best to redo your insurance policy.
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