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Insurance Adjusting > 3/D - Farm Insurance > Flashcards

3/D - Farm Insurance Flashcards

1
Q

Farm

A

A property where a farmer or rancher both resides and conducts commercial business

A farmer needs:

  • Homeowners coverage for personal property
  • Commerical coverage for business assets
  • Farm Insurance, combining both in one policy

A rancher needs all of the above and:
- Additional protection for livestock

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2
Q

Types of Insurance Provided

A
  • Property insurance for dwelling and contents
  • Scheduled and unscheduled farm personal property insurance
  • Mobile agricultural machinery and livestock coverage
  • Farm liability insurance
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3
Q

Eligibility

A

Eligibility requirement: farmer must live and conduct business on the insured property.
Properties not eligible:
- Farms that manufacture or process goods
- Farms for raising race or show animals
- Some vacant farm properties

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4
Q

Farm Property Coverage Forms

A
  • Cover direct losses to physical property on the insured’s farm
  • List types of property covered
  • Use attached Causes of Loss forms to list covered perils
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5
Q

Coverage A - Dwelling

A
  • For main dwelling, attached structures, and necessary materials
  • Up to $5,000 for damaged grave markers
  • Not covered: trees, shrubs, plants, or lawns (except with endorsement)
  • Coverage extensions:
    a. Debris removal
    b. Pollution clean-up
    c. Reasonable repairs
    d. Fire department service charge
    e. Consequential loss
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6
Q

Coverage B - Other Private Detached Structures

A

Covers private structures not attached to main dwelling:

  • Detached garages or porches
  • Guesthouses
  • Patios
  • Sheds (unless used for farming purposes)
  • Outdoor antennas (up to $1,000 per occurrence)
  • Limit: 10% of Coverage A limit
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7
Q

Coverage C - Household Personal Property

A
  • Covers theft or damage of personal property
  • Includes personal property of family and guests staying on the premises
  • Has a limit of 50% of Coverage A
  • Sets special limits for some items
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8
Q

Coverage C - Items with Special Limits

A
  • $200 on cash, platinum, and gold (other than goldware)
  • $1,500 on letters of credit, manuscripts, passports, and securities
  • $1,500 on watercraft and associated engines and trailers
  • $1,500 on trailers not used for watercraft or farming
  • $2,500 on business personal property while on insured’s premises
  • $500 on business personal property NOT located on insured’s premises
  • $1,500 on electronics in or on a motor vehicle
  • $1,500 on electronics used primarily in the operation of the farm or business
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9
Q

Coverage C - Special Limits for Theft

A
  • $2,500 for furs, jewelry, precious stones, and wristwatches
  • $2,500 for pure goldware, silverware, and other items whose value is principally derived from gold or silver content
  • $3,000 for firearms
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10
Q

Coverage D - Loss of Use

A
  • Pays additional living expenses resulting from a covered peril
  • Includes Fair Rental Value if insured had tenants
  • Applies when civil emergency, such as fire or flooding, makes home uninhabitable
  • Sets a limit of 10% of Coverage A
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11
Q

Farm Commercial Coverage

A

Farm Insurance combines homeowners coverage and commercial coverage.

Farm Personal Property: Scheduled vs. Unscheduled

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12
Q

Scheduled Farm Personal Property

A
  • Insured selects items from a farm inventory
  • Policy insures only selected items, each for an assigned value
  • Separate Causes of Loss forms for each insured item
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13
Q

Unscheduled Farm Personal Property

A
  • Insures all from property
  • Provides blanket coverage for all items together
  • Single Causes of Loss form for all items covered
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14
Q

Coverage E - Scheduled Farm Personal Property

A

Covers:

  • Farm machinery
  • Grain, hay, straw or fodder stored in buildings or structures, or stored in the open in bales, stacks, or trucks
  • Livestock on or away from the premises
  • Farm packing materials and supplies
  • Farm implements
  • Specialized machinery and/or tools used in farming
  • Computers and software used in farm management
  • Portable, temporary buildings and/or structures
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15
Q

Coverage F - Unscheduled Farm Personal Property

A
  • Gives blanket coverage of all farm items
  • Settles claims at Actual Cash Value
  • Requires coinsurance for full coverage to apply
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16
Q

Coverage G - Barns, Outbuildings, and Other Farm Structures

A

Covers:

  • Barns, Silos, and Granaries
  • Pens and Fencing (except field and pasture fencing)
  • Corrals and Livestock chutes
  • Feeding structures
  • Outdoor masts, towers, and antennae
  • Farming storage structures
  • Construction or repair materials kept on or adjacent to these structures

Valuation: Actual Cash Value unless noted otherwise

17
Q

Extension and Exclusions

A

Extension:
Private light and power poles (limit: $250 per occurrence)

Exclusions:

  • Land
  • Field or pasture fencing
  • Foundations
  • Pilings or piers
  • Cost of excavations, grading, or filling
  • Structures also used as dwellings
18
Q

Inland Marine Forms

A

Two Inland Marine Forms are commonly added to Farm policies:

  • Mobile Agricultural Machinery and Equipment Form
  • Livestock Floater

These are available alone or with Farm Insurance Policy

19
Q

Mobile Agricultural Machinery and Equipment Form

A
  • Covers agricultural machines and their tools and equipment
  • Allows higher limits of insurance than other forms
  • Provides scheduled or unscheduled (blanket) coverage
  • Requires coinsurance for full coverage to apply
  • Gives open-peril coverage, with Actual Cash Valuation

Property not covered:

  • Equipment for sale or on consignment
  • Machinery used in logging or forestry
20
Q

Livestock Floater

A
  • Covers horses, mules, cattle, swine, sheep, and goats
  • Provides scheduled or unscheduled coverage
  • Includes animal injured or killed while in transit
  • Provides named-peril coverage
  • Requires coinsurance from the insured
21
Q

Farm Property - Causes of Loss Forms

A
  • Every farm coverage followed by Causes of Loss form
  • Form can be Basic, Broad, or Special
  • Very similar to other policy types, but with extra livestock protections
22
Q

Basic Form - Covered Perils

A
  • Fire
  • Lightning
  • Smoke
  • Wind
  • Hail
  • Explosions
  • Riot
  • Vandalism
  • Civil Commotion
  • Theft
  • Aircraft
  • Vehicles
  • Sinkhole Collapse
  • Volcanic Activity
  • Loss of Livestock by Flood
  • Loss of Livestock by Earthquake
23
Q

Broad Form

A

Covers all Basic Form perils, plus:

  • Falling objects
  • Weight of ice, sleet or snow
  • Glass Breakage
  • Sudden and accidental tearing apart
  • Accidental discharge or leakage of water or steam
  • Sudden and accidental discharges of electricity
  • Collapse
  • Electrocution of covered livestock
  • Attack of covered livestock by wild animals (excluding sheep)
  • Drowning of covered livestock
  • Accidental shooting of covered livestock
  • Loading and unloading accidents
24
Q

Special Form Exclusions

A
  • Normal wear and tear, or purposeful neglect
  • Rust, corrosion or decay
  • Settling, cracking or shrinking of structures
  • Infestation by rodents, vermin or birds
  • Mechanical breakdown
  • Disappearance of farm property, unless proof provided the property was stolen
  • Voluntary, fraudulent parting of farm property
  • Unauthorized instructions to transport property
  • Vandalism or breakage of glass if vacant 30 days
  • Dishonest or criminal acts by the insured
  • Acts of war or nuclear hazards
25
Q

Farm Liability Coverages

A

Farmers face the same liability risks as any other business.

Farm Liability Insurance:

  • protects the farmer against liability for harm caused to others
  • includes attorney fees and court costs
  • is available in several different types
26
Q

Bodily Injury & Property Damage Liability

A
  • covers damage or injury caused by normal business operations
  • applies to damages that occur on insured premises
27
Q

Personal & Advertising Injury

A
  • pays for claims not involving property damage or bodily injury
  • includes malicious prosecution, wrongful entry or eviction, libel or slander
28
Q

Medical Payments

A
  • covers medical injuries suffered on farm property or because of farmer’s activities
  • includes medical, dental, hospital, and funeral costs
29
Q

Farm Product Liability

A

Covers injury or illness caused by eating the farmer’s products

30
Q

Farm Pollution Liability

A
  • covers pollution damage caused by farm property and operations
  • includes animal waste overflow, chemical spills
  • does not include chemical over-spray from aircraft (separate endorsement required)
31
Q

Custom Farming Liability

A
  • covers farmers doing contract work

- will not apply if a farmer makes more than $5,000 per year as a contractor

32
Q

Farm Employees Liability

A
  • is available by endorsement

- covers employee injuries not allowed under Workers’ Comp

33
Q

Agritainment

A
  • refers to farm-based entertainment
  • poses risks to farmers and farm insurers
  • excluded from farm form
  • endorsements can add this coverage back in:
    a. Agritainment-Property: adds coverage for damage to the farmer’s property caused by agritainment
    b. Agritainment-Liability: covers the farmer’s liability for injuries that occur during agritainment activities on his farm
    Example:
  • a child falls off of a hayride and breaks his leg
  • teenagers accidentally start a fire in the farmer’s barn during a harvest festival
34
Q

Loss Settlement Valuations

A
  • actual cash valuations, unless noted differently

- if replacement cost coverage, coinsurance is required

35
Q

Coinsurance Requirement Met

A

Insurer pays smallest of the following:

  1. The replacement cost of the damaged property
  2. The amount actually spent on necessary repairs or replacements
  3. The policy limit
36
Q

Coinsurance Requirement Not Met

A

Insurer pays the larger of the following:

  1. The actual cash value of the damaged property
  2. A fraction of the replacement cost: based on how much insurance the claimant had compared to how much they should have had
37
Q

RC Claim Process

A

Process for Paying Replacement Cost Claims

  1. Insurer pays actual cash value at first.
  2. Claimant has 180 days to say they will repair or replace damaged property.
  3. After completing replacement, claimant must submit another claim.
  4. Then insurer will pay for full repair or replacement cost.

Insurance Adjusting (46 decks)

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