Homeowner's Insurance With Small Farm/Boarding Operation

[flypony74]

My husband recently retired from 27 years active duty military service and we have realized our dream of buying a nice farm and truly making it our own. We are in the process of developing a small-scale specialty boarding operation (special need retirees, layups/rehabs, broodmares, young horses, etc) and sporthorse breeding program as part of this endeavor. Obviously, we have acquired extensive commercial farm liability insurance, care/custody/control, etc and notified our existing homeowner’s policyholder of everything we are doing several months ago. This was discussed extensively and I was assured that there was no issue with our small business. Yesterday, we get a letter in the mail that they are not renewing our homeowner’s policy in March because of the boarding business. This is a massive company that caters to military families, which my family has utilized for almost 50 years, so I am incredibly disappointed in their handling of this situation. My husband and I have never had a homeowner’s claim (or any other claim that I can think of).

Those of you who have home/farm-based businesses, particularly small boarding operations, who do you utilize for homeowner’s insurance? Outstanding service is a priority, and we will likely be moving all of our insurance to include multiple cars and trailers. TIA!

[Guilherme]

I have been a USAA auto insured for more than 50 years and I have been a Travelers insured for more than 20 years for the farm. USAA does not provide commercial insurance; they have at least one subsidiary that does. This is not personal; they don’t do it for anybody. Don’t be disappointed in them.

You can either use their commercial brokerage or you can look to Markel or other specialty brokers that deal in agricultural risks.

I know this rates an SUX but that’s how USAA is licensed.

G

CDR, USNR®, Ret.
Member, State Bar of Texas (Retired)
Former Regional VP for Claims

[trubandloki]

@Guilherme

I have been a USAA auto insured for more than 50 years and I have been a Travelers insured for more than 20 years for the farm. USAA does not provide commercial insurance; they have at least one subsidiary that does. This is not personal; they don’t do it for anybody. Don’t be disappointed in them.

You can either use their commercial brokerage or you can look to Markel or other specialty brokers that deal in agricultural risks.

I know this rates an SUX but that’s how USAA is licensed.

G

CDR, USNR®, Ret.
Member, State Bar of Texas (Retired)
Former Regional VP for Claims

The way I read the OP was that they had separate commercial insurance and this was about just their home owner policy, not the policies associated with the boarding facility. That is why the OP is miffed.

The insurance company did the same to me after we added an umbrella liability policy to cover our horses at home (not business, just two horses we own). Next renewal they said ‘no thanks’.

I have had very good luck with Farm Family Insurance (again, no business, just a private farm with our own two horses).

[flypony74]

I already have commercial farm coverage, care/custody/control, etc through Marshall and Sterling, and USAA is aware of this. They are dropping our personal homeowner’s policy because a small boarding business is operated on the premises, hence, my disappointment. I don’t expect them to provide a commercial policy. I will look into Traveler’s and see if they are a good fit. Thanks!

[flypony74]

@trubandloki

I have had very good luck with Farm Family Insurance (again, no business, just a private farm with our own two horses).

Thanks! I’ll take a look at Family Farm as well!

[clanter]

@flypony74

I already have commercial farm coverage, care/custody/control, etc through Marshall and Sterling, and USAA is aware of this. They are dropping our personal homeowner’s policy because a small boarding business is operated on the premises, hence, my disappointment. I don’t expect them to provide a commercial policy. I will look into Traveler’s and see if they are a good fit. Thanks!

We have personal horses at home, USAA said nothing when I told them, it was ho-hum

back in the 1990s we had our farm set up to board, Nationwide was the provider for the homeowners but our farm was a corporation that leased the property from us had commercial coverage through another company… Nationwide never said a thing other than oh you have a German Shepard protection dog…that is another $1k for the pup.

[Cynical25]

Call the agent/broker for your commercial insurance, they can likely help you find homeowners coverage. Traveler’s is a solid, ethical company, but I don’t believe you can buy direct, only through an agent.

I work for an insurance brokerage - MANY personal homeowner policies will drop you if you run a business, this is NOT exclusive to USAA. My own homeowner’s policy through SafeCo specifies I may not exceed 3 personal horses on my property, and running any business on said property would instantly void my coverage.

[ParadoxFarm]

You could consider subdividing the property to where the home is on it’s own tract. Not the easy solution, but it would work. We considered that.

[mmeqcenter]

I have Travelers, they’ve been great. I have a combined Agri-business policy, and was told they can’t separate the home/farm policy from the commercial policy, so it may not be an option for you if you want to keep your current commercial company. I do not know if the inability to separate is specific to my policies, or just how they operate in general.

[Guilherme]

@flypony74

I already have commercial farm coverage, care/custody/control, etc through Marshall and Sterling, and USAA is aware of this. They are dropping our personal homeowner’s policy because a small boarding business is operated on the premises, hence, my disappointment. I don’t expect them to provide a commercial policy. I will look into Traveler’s and see if they are a good fit. Thanks!

As Cynical noted this is a common industry practice. You might be able to “separate” risk by using a corporate structure such as an LLP but now you have the expense of maintaining a separate entity. Clanter has posted before on how he has organized his operation. I don’t recall if he’s ever discussed his insurance structure. If he hasn’t, perhaps he might. He’s in Texas and what works there will not necessarily work in Alabama. So for the moment you’re going to be looking for new coverage for your entire operation.

If you are using a sole proprietor or partnership form I’m not sure “subdividing” the property would be effective as the ownership interest (and financial responsibility) still lies with you and/or your spouse. In any event, be careful not to build a complex ownership structure that requires time and money to maintain.

Oh, and I might was well save USAA the trouble and “drop the other shoe” for them! USAA has some strict limits on the use of personal vehicles in business. When they cut off our homeowners coverage it took them several months to do the same with the insurance on the farm truck and trailers. That put us with Progressive and Flo gets an SUX. They were REALLY picky and a PIA to deal with. I put up with them for a several years until we closed our boarding/training ops and just had some breeding stock and leased out the barn, arena, and tenant house. When we did that we were able to move back into USAA auto insurance and kept my 50 year string alive.

I feel your frustration. After USAA said “no” I was insured for a while with TN Farm Bureau. When they “discovered” we were primarily an equine operation they dropped me like the proverbial “hot potato.” Apparently they don’t think equine operations are really “agriculture.”

The Agent I’ve been using is Assured Partners. They are a regional company and I deal with the Franklin, TN office. You can call them at (615) 301-2500. They have always been very professional.

Best of luck to you as you go forward!!!

G.

[clanter]

This was back in the 1990s (you know last century so nothing may be applicable today as that was back in those days you had to actually steer a car to drive it somewhere)

Before we ever had a horse on the place we incorporated the Farm. The farm was setup a C Corp. in order to allow it to freely give scholarships The Farm had its board of directors who negotiated a lease from the land owners (us). Farm had its insurance with a commercial provider (the same agent we used for the other businesses).

Homestead was insured with Nationwide who never said anything nor questioned anything other than “oh you have German Shepherd Dog?” Yes. Well that is another $1,000 per year for That Dog. (but he was worth every penny as no one set foot on the place that he did not approve)

Otherwise there was never a question. Daughter as a employee of the Farm even ran a summer riding camp for about six years The farm had its board meetings when we were attending regional or national shows so the farm picked up most of the travel expenses

We had a very diligent CPA who knew farm/ranch tax laws and an attorney who understood corporation structure. Our insurance providers were recommended/approved by our advisers

Farm made money, paid its taxes and was dissolved when I closed my other businesses upon being hired by a national corporation as the Farm lost its primary client.

My primary business (was set up as a S Corp) owned the horses which then boarded the horses at The Farm. The S Corp was actually using the horses for advertising the business and to gain access to parties who could use its services similar to others using a country club golf course to meet clients.

When I was hired buy a manufacturer the S Corp sold the horses to us which we gave to the kids and it appeared nothing ever moved as everything appeared just as it once was… all the transactions were just the shuffling paper from one side of the table to the other.

Why did we do this? I wanted firewalls between the businesses and our personal assets. This structuring provided very clear lines that could be easily defined as this belong to that and that was to this.

The business activities had their own potential dangers as they were working on high profile projects that all had inerrant risks that I did not want to extend into my personal life.

In the military I had been a combat air traffic controller (both tower and radar control ratings) so was used to doing multiple tasks, keeping multiple items separated but on tracks to keep the aircraft safe (the field I was at had thirteen approach departure routes with a take off or landing about every ten seconds during daylight (about 3500 per day). There never was an incident at this field

[Guilherme]

@clanter

This was back in the 1990s (you know last century so nothing may be applicable today as that was back in those days you had to actually steer a car to drive it somewhere)

Before we ever had a horse on the place we incorporated the Farm. The farm was setup a C Corp. in order to allow it to freely give scholarships The Farm had its board of directors who negotiated a lease from the land owners (us). Farm had its insurance with a commercial provider (the same agent we used for the other businesses).

Homestead was insured with Nationwide who never said anything nor questioned anything other than “oh you have German Shepherd Dog?” Yes. Well that is another $1,000 per year for That Dog. (but he was worth every penny as no one set foot on the place that he did not approve)

Otherwise there was never a question. Daughter as a employee of the Farm even ran a summer riding camp for about six years The farm had its board meetings when we were attending regional or national shows so the farm picked up most of the travel expenses

We had a very diligent CPA who knew farm/ranch tax laws and an attorney who understood corporation structure. Our insurance providers were recommended/approved by our advisers

Farm made money, paid its taxes and was dissolved when I closed my other businesses upon being hired by a national corporation as the Farm lost its primary client.

My primary business (was set up as a S Corp) owned the horses which then boarded the horses at The Farm. The S Corp was actually using the horses for advertising the business and to gain access to parties who could use its services similar to others using a country club golf course to meet clients.

When I was hired buy a manufacturer the S Corp sold the horses to us which we gave to the kids and it appeared nothing ever moved as everything appeared just as it once was… all the transactions were just the shuffling paper from one side of the table to the other.

Why did we do this? I wanted firewalls between the businesses and our personal assets. This structuring provided very clear lines that could be easily defined as this belong to that and that was to this.

The business activities had their own potential dangers as they were working on high profile projects that all had inerrant risks that I did not want to extend into my personal life.

In the military I had been a combat air traffic controller (both tower and radar control ratings) so was used to doing multiple tasks, keeping multiple items separated but on tracks to keep the aircraft safe (the field I was at had thirteen approach departure routes with a take off or landing about every ten seconds during daylight (about 3500 per day). There never was an incident at this field

Thank you; nicely done!

G.

[findeight]

Have been told the reason insurers who do insure livestock and farms specifically run from equine operations, especially boarding, is the owners of cows, sheep and other livestock rarely visit them and manage to get hurt on the property. That from an attorney specializing in the Equine business and liability field.

[clanter]

@findeight

Have been told the reason insurers who do insure livestock and farms specifically run from equine operations, especially boarding, is the owners of cows, sheep and other livestock rarely visit them and manage to get hurt on the property. That from an attorney specializing in the Equine business and liability field.

My guess is not the animals as such (even though they could be considered an attractive nuisance) but the lack of clarity of what is personal and what belongs to the business …

[ZELLA]

Try talking to agents who handle equine mortality insurance. Most of them also have markets for equine personal and/or commercial liability, care custody & control, and farmowner’s products geared toward horse operations.

[happilyretired]

Good luck. I’m in Central Florida in a rural horsey area . Nevertheless there is only one company which will write a farm policy for my 15 acre training facility. Travellers won’t write farm policies in my county – despite the fact that we are in the middle of the state I guess they consider us too close to the coast.

[merrygoround]

WE for years had an umbrella policy with USAA. When we moved to NY, they informed us that they didn’t insure farms in NY. They have continued to cover our vehicles which are not used in the farm operation. OK ! I sneak grain in now and then. For our farm we have used Farm Family.

Both insurors have been great.

[costco_muffins]

We have Traveler too. My husband is an insurance defense attorney and was ADAMANT that we have only one coverage for our farm/home/business/cars if at all possible. Otherwise, in the event of an accident and lawsuit is is extremely common for the companies to point fingers at each other. On top of all that, we have an excess liability policy that covers our entire insured portfolio. Travelers was willing to do a 2M excess liability (umbrella) policy for not a substantial amount more, and add more to the umbrella for an additional $1000 per 1M of coverage.

We were with American Family before and they were super, but couldn’t cover the farm, business intricacies (especially as it grew), and also put an umbrella over the business.

[Guilherme]

@costco_muffins

We have Traveler too. My husband is an insurance defense attorney and was ADAMANT that we have only one coverage for our farm/home/business/cars if at all possible. Otherwise, in the event of an accident and lawsuit is is extremely common for the companies to point fingers at each other. On top of all that, we have an excess liability policy that covers our entire insured portfolio. Travelers was willing to do a 2M excess liability (umbrella) policy for not a substantial amount more, and add more to the umbrella for an additional $1000 per 1M of coverage.

We were with American Family before and they were super, but couldn’t cover the farm, business intricacies (especially as it grew), and also put an umbrella over the business.

Good points and advice.

G.