Farm Insurance

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  1. Farm Property-Farm Dwellings, Appurtenant Structures & Household Personal Property Form (FP 00 12)
    • A-Dwelling--a building used primarily for family residential purposes; replacement cost value; at least 80% coinsurance provision.
    • B-Other Private Structures--residential use only.
    • C-Household Personal Property--personal use items; subject to sublimits; actual cash value basis.
    • D-Loss of Use--provides additional living expense and fair rental value; no deductible.
  2. Farm Property—Farm Personal Property Coverage Form (FP 00 13)
    • E-Scheduled Farm Personal Property--16 types of farm property with some sublimits; actual cash value basis; excludes: growing crops, trees, household personal property, any permanent fixtures attached to a building, outdoor radio or television equipment, or power and light poles.
    • F-Unscheduled Farm Personal Property--Farm personal property is defined to include equipment, supplies, and products of farming or ranching operations; 19 property exclusions; 80% coinsurance; actual cash value basis.
  3. Farm Property—Barns, Outbuildings and Other Farm Structures Coverage Form (FP 00 14)
    G-Barns, Outbuildings and Other Farm Structures--This form provides coverage for seven types of structures:barns, outbuildings (such as machine sheds or hog pens), and other farm structures; silos specifically described in the declarations; portable buildings and portable structures; all fences (other than field and pasture fences), corrals, pens, and feed racks; outdoor radio and TV equipment, antennas, and towers; improvements and betterments to the described buildings, but do not include any property that may be legally removed by an insured; building materials and supplies used in building or repairing farm buildings or structures and kept on land adjacent to the insured location. Six types of property are not covered under this endorsement form: land; water; field or pasture fences; below ground foundations of buildings or structures; pilings, piers, wharves, or docks; costs of excavations, grading, or filling.
  4. Basic Farm Causes of Loss (FP 10 60)
    • fire or lightning
    • windstorm or hail
    • explosion
    • riot or civil commotion
    • aircraft
    • vehicles
    • smoke
    • vandalism
    • theft
    • sinkhole collapse
    • volcanic action
    • collision—Coverage E and F only—causing damage to covered farm machinery, death of covered livestock, or damage to other farm personal property
    • earthquake loss to livestock
    • flood loss to livestock
  5. Broad Farm Causes of Loss
    • These broad causes of loss include all the perils found under the basic causes of loss, plus the following perils:
    • electrocution of covered livestock
    • attacks on covered livestock by dogs or wild animals
    • accidental shooting of covered livestock
    • drowning of covered livestock from external causes
    • loading/unloading accidents involving livestock
    • breakage of glass or safety glazing material
    • falling objects
    • weight of ice, snow, or sleet
    • sudden and accidental tearing apart, cracking, burning, or bulging of hot water heating, air-conditioning, or sprinkler systems
    • accidental discharge or leakage of water or steam from within a plumbing, heating, or air-conditioning system or from an appliance that contains water or steam
    • freezing of a plumbing, heating, air-conditioning, or sprinkler system or from an appliance
    • sudden and accidental damage from artificially generated electrical current
  6. Special Farm Causes of Loss
    • Open perils coverage applies when "special" is designated in the declarations. Property insurance covers a loss arising from any fortuitous cause except those that are specifically excluded. Naturally, there are numerous exclusions. These exclusions preclude coverage for the following:
    • fire that results from the use of open fire for curing or drying tobacco in the barn;
    • collapses except as provided under the additional coverage section;
    • windstorm or hail damage to (a) dairy or farm products in the open or (b) watercraft or their trailers, unless within a fully enclosed building;
    • rain, snow, ice, or sleet to personal property in the open;
    • rain, snow, sleet, sand, or dust to the interior of a building unless the elements (e.g., hail) cause an opening in the structure;
    • freezing, thawing, or pressure or weight of water or ice to specified outside structures, such as foundations, retaining walls, pavement or patios, fences, swimming pools, or docks;
    • discharge or overflow of water or steam from within a plumbing, heating, air-conditioning, or sprinkler system or from an appliance, under certain situations;
    • explosion, rupture, or bursting of certain properties, such as alcohol stills or steam boilers, under certain circumstances and with various exceptions;
    • theft, under certain coverages, from that part of the primary residence that is rented to a noninsured;
    • theft, under certain coverages, of materials and supplies used in construction until the work is completed;
    • theft, under certain coverages, for items such as watercraft and trailers away from the insured location;
    • inventory shortage;
    • disappearance of any farm personal property or portable buildings unless there is evidence that a theft occurred;
    • voluntary parting of property due to a fraudulent scheme or trick;
    • unauthorized instructions to transfer property to any person or any place;
    • theft or vandalism to any instrument designed for the transmission, recording, or receiving of sound or pictures from a vehicle, under certain circumstances;
    • vandalism or breakage of glass from a building that has been vacant more than 30 consecutive days;
    • dishonest or criminal acts committed by the named insured, any partners, employees, directors, and related individuals, or any party to whom the named insured entrusts property for any purpose;
    • transport of farm personal property, with certain exceptions;
    • collision, upset, or overturn of farm machinery or equipment, with specified restrictions and exceptions;
    • any losses arising from foreign objects being taken into any machinery;
    • artificially generated electric current under certain coverages and for certain property;
    • smoke, vapor, or gas from agricultural smudging or industrial operations;
    • wear and tear set of perils including mechanical breakdown; and
    • certain pollution-related losses.
  7. Farm Property—Other Farm Provisions Form—Additional Coverages, Conditions, Definitions (FP 00 90)
    This common provisions form eliminates the need to repeat some fundamental provisions in every coverage form. The FP 00 90 form contains 6 additional coverages, 11 loss conditions, 6 general conditions, 13 definitions, a "limits of insurance" section, and a deductible section.
  8. FP 00 90 Additional Coverages
    • There are six additional coverages under this form:
    • Debris removal is granted if a covered peril causes the loss. The most payable is 25 percent of the amount paid for the direct physical loss to the covered property, including the applicable deductible. Certain restrictions apply as well.
    • Reasonable repair costs to protect covered property from further damage are covered. These costs are included within the limit of the property being repaired.
    • Damage to property removed for safekeeping is covered for any cause up to 30 days after its removal from a building endangered by a covered peril. These costs are included within the limit of the property being removed.
    • Fire department service charges the insured assumes through a contract with a fire department are covered. This coverage, however, does not apply if the property is located within the limits of the city providing the fire protection. These costs are in addition to the insurance limit of the affected property. No deductible applies to this coverage.
    • Collapse is covered, subject to various definitions and restrictions, provided the broad or special covered causes of loss forms are indicated in the declarations.
    • Pollutant cleanup and removal is covered if the event is caused by a covered peril. The maximum payable for each location listed as an insured location is $10,000.
  9. FP 00 90 Loss Conditions
    • The insured cannot abandon any property to the insurer.
    • The appraisal process stipulates that if the insured and insurer disagree on the amount of the loss, either may make a written demand for an appraisal.
    • There are eight duties the insured must comply with if there is a loss. Examples include notifying the police if a law is broken and taking reasonable steps to protect property from further harm.
    • If two or more of the policy's coverages apply to the same loss, the insurer will not pay more than the actual loss amount.
    • No party can bring any legal action against the insurer unless there has been complete compliance with the terms of the policy, and the legal action occurs within 2 years after the loss date.
    • The insurer may choose among four options to pay for a covered loss, including (a) pay the value of the lost or damaged property, (b) pay the cost to repair or replace the damaged property, (c) take all or any part of the property at an agreed or appraised amount, or (d) repair, rebuild, or replace the property with related property of like kind and quality. Several restrictions apply to this condition.
    • For pair and set losses, the insurer may either (a) repair or replace the applicable part to restore the pair or set to its pre-loss value or (b) pay the difference in the pre-loss and post-loss value of the affected property.
    • The other insurance clause stipulates that if there is other insurance, the insurer's share is the proportion that its limits bears to the limits of insurance applicable to all insurance providing coverage on the same basis. If a service agreement applies, coverage under the farm form will be excess.
    • If the insured or insurer recovers property after the loss settlement process, that party must provide prompt notice to the other party. At the insurer's option, the property will be returned to the insured, and the insured must reimburse the insurer for the amount the insurer paid.
    • The insurer's subrogation rights are stipulated. The insured must do everything necessary to secure these rights of the insurer.
    • The unoccupancy and vacancy clause states that if a building is vacant or unoccupied for more than 120 consecutive days, the limit of insurance is reduced by 50 percent, unless the vacancy or unoccupancy period is extended or waived through an endorsement.
  10. FP 00 90 General Conditions
    • The coverage is void if the insured engages in fraud or if the insured intentionally conceals or misrepresents a material fact.
    • The "control of property" provision stipulates that any neglect or act of a person besides the named insured that is beyond the named insured's control will not negate the insurance.
    • The liberalization clause states that if the insurer adopts a broadening amendment to the policy without additional premium within 45 days prior to or during the policy period, this broadening coverage will automatically apply to the insured's policy.
    • The mortgage clause protects the rights of the mortgagee concerning (a) any losses, (b) nonpayment of premium, or (c) the insured's failure to comply with the policy provisions.
    • The standard "no benefit to bailee" provision applies.
    • The insurer only covers losses occurring during the policy period.
  11. Mobile Agricultural Machinery & Equipment Coverage Form (FP 00 30)
    provides coverage for mobile agricultural machinery equipment; open perils with exclusions; provides payment for direct physical loss or damage.
  12. Farm Livestock Coverage Form (FP 00 40)
    • The policy pays for a loss or damage to the "livestock" by a named peril.
    • Livestock is defined as cattle, sheep, swine, goats, horses, mules, and donkeys.
    • Loss is defined as the death or destruction of the livestock.
    • Coverage can be scheduled with an amount of insurance on each listed animal.
    • This form can also provide blanket coverage on livestock of a class (such as cattle, sheep, swine, goats, horses, mules, and donkeys) as indicated in the declarations. When this is done, a limit is indicated for each class per animal. This coverage is subject to an 80 percent coinsurance clause.
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Farm Insurance
2014-04-07 20:59:54
Lesson 24
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