Property insurance protects you from unforeseen events – as long as you’ve bought the right policy
If you’ve financed your home, chances are your bank mandated that you purchase property insurance. While this insurance protects you from unfortunate events such as fire, theft and accidents – such as someone injuring themselves on the premises and then filing a lawsuit against you – it doesn’t necessarily extend to incidents involving your horses.
Many small-farm owners – those with a house, a barn and a couple of their own horses on the property – simply purchase homeowner’s insurance, which, usually covers the residence only.
Check to make sure that the homeowner’s liability extends to cover the ownership of horses. In most cases, the insurance companies that write homeowner’s insurance do not extend their liability coverage to cover the ownership of horses.
If you were told that the contract does cover your horses, be sure to ask how much: Unless it’s a farm/ranch owner’s policy, chances are that the payout will be minimal.
It might cover up to $2,000 on a horse accident, which is absolutely nothing. Homeowner’s insurance is made for your home. The minute you have a horse, you have different liability requirements.
If this is the case – and you are otherwise satisfied with your homeowner’s policy – you can simply buy a separate contract for personal horse owner’s liability, designed to protect you in the event that your horse injures someone. However, this coverage only protects you if the horses under it are for your personal use.
Depending on your geographical location, you might look into insurance that protects you against floods and earthquakes. Butch notes that in areas like Texas, where grass fires are relatively common, some people opt to cover their pasture fences, although he generally advises against it.
Pricing on farm/ranch owner’s insurance is difficult to determine, because so many proper-specific factors come into play, such as how the house, barn and out-buildings are constructed, the proximity of the facility to the fire department, how far away the nearest fire hydrant is, if there is a pond on the property that the fire department can draw water from in the event of a fire, and so on. As is the case with most insurance, the higher the deductible, the less you will fork out for the premium.
Pricing for commercial facilities that offer lessons and training is determined by the frequency of classes and the number of horses in the training program. Farms that provide boarding and breeding only tend to have less expensive policies.
While few people enjoy spending money on insurance, it is surprisingly (farm/ranch owner’s insurance) not more expensive than a homeowner’s policy.