When it comes to real estate classifications and insurance coverage, one common question we hear from clients is: “Is a farm considered commercial property?” The answer isn’t always black and white—but we’ll break it down for you right here.
What Defines Commercial Property?
Commercial property is any real estate used to generate income or profit through business activities. This typically includes office buildings, retail spaces, warehouses, and yes—farms that operate as a business.
If a farm is actively used for growing crops, raising livestock, selling produce, or other revenue-generating agricultural activities, it falls under the commercial property umbrella.
When Is a Farm Not Considered Commercial?
Not all farms are treated equally. A hobby farm—one that’s maintained for personal enjoyment rather than profit—might not be considered commercial. These types of properties could be classified as residential or agricultural-residential depending on how they’re zoned and used.
If you’re raising chickens in your backyard for personal use, that’s probably not going to be considered a commercial venture. But if you’re selling eggs at the local farmers market every weekend? Now we’re getting into commercial territory.
Farm Insurance: A Unique Blend
Unlike standard commercial property policies, farm insurance is its own category. It typically combines aspects of both homeowners and business insurance to cover:
- Your primary residence (if you live on the farm)
- Barns, sheds, and silos
- Farm equipment and machinery
- Livestock
- Liability protection
- Crop coverage (optional or seasonal)
Farm operations are unique, and so is the insurance coverage they require.
Zoning Matters
Whether your property is zoned agricultural, residential, or commercial can also impact how it’s taxed, used, and insured. Your county or municipality determines zoning regulations, and they can affect everything from what you can build to what kind of insurance you need.
Need Help Classifying or Insuring Your Farm?
At Eugene C. Yates Insurance Agency, we specialize in tailored insurance coverage for all types of property—residential, commercial, and everything in between. If you own a farm in the Sacramento area (or plan to), give us a call. We’ll help you determine the right classification and ensure you’re fully protected with the best farm or commercial insurance policy for your needs.
Need a quote or have zoning questions?
📞 Call us today or request a free farm insurance quote online