1. Farm Insurance

2. A property where a farmer or rancher both resides and conducts commercial business
A farmer needs:
Homeowners coverage for personal property
Commercial coverage for business assets
Farm insurance, combining both in one policy
A rancher needs all of the above and
Additional protection for livestock
Introduction

3. Types of Insurance provided
Property insurance for dwelling and contents
Scheduled and unscheduled farm personal property insurance
Mobile agricultural machinery and Livestock Coverage
Farm Liability Insurance
Types of Insurance provided

4. Eligibility
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

5. Farm Property Coverage Forms
Cover direct losses to physical property on the insured’s farm
List the types of property covered
Use attached Causes of Loss forms to list covered perils
Farm Property Coverage Forms

6. Coverage A - Dwelling
For main dwelling, attached structures, and necessary materials
UP to $5000 for damaged grave markers
Not covered: trees, shrubs, plants, or lawns (except with endorsement)
Coverage extensions
Debris removal
Pollution clean-up
Reasonable repairs
Fire department service charge
Consequential loss

7. Coverage B – Other Private Detached Structures
Detached garages or porches
Guesthouses
Patios
Sheds
Outdoor antennas (up to $1000 per occurrence)
Limit: 10% of Coverage A limit

8. Coverage C – Household Personal Property
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

9. Coverage C – Items w/ Special Limits
$200 on cash, platinum, and gold
$1500 on letter of credit, manuscripts, passports, and securities
$1500 on watercraft and associated engines and trailers
$1500 on trailers not used for watercraft or farming
$2500 on business personal property while on insured’s premises
$500 on business personal property NOY located on insured’s premises
$1500 on electronics in or on a motor vehicle
$1500 on electronics used primarily in the operation of the farm or business

10. Coverage C – Special Limits for Theft
$2500 for furs, jewelry, precious stones, and wristwatches
$2500 for pure goldware, silverware, and other items whose value is principally derived from gold or silver content
$3000 for firearms
Coverage C – Special Limits for Theft

11. Coverage D – Loss of Use
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

12. Farm Commercial Coverage
Farm Insurance combines homeowners coverage and commercial coverage
Farm personal property: scheduled vs unscheduled
Farm Commercial Coverage

13. Insured selects items from a farm inventory
Scheduled Farm Personal Property
Unscheduled Farm Personal Property
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
Insures all farm Property
Provides blanket coverage for all items together
Single Causes of loss form for all items covered

14. Coverage E – Scheduled Farm Personal Property
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 or tools used in farming
Computers and software used in farm management
Portable, temporary buildings or structures

15. Unscheduled Farm Personal Property
Gives blanket coverage of all farm items
Settles claims at ACV
Requires coinsurance for full coverage to apply
Unscheduled Farm Personal Property

16. Coverage G – Barns, Outbuildings, and other farm structures covers:
Barns, silos, and granaries
Pens and 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: ACV, unless noted otherwise

17. Extension and Exclusions
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 dwelling

18. Inland Marine Forms Two forms commonly added:
Mobile Agricultural Machinery and Equipment form
Livestock floater
Available alone or with farm policy

19. Mobile Agricultural Machinery and Equipment
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 ACV
Property not covered
Equipment for sale or on consignment
Machinery used in logging or forestry

20. Livestock Floater Covers horses, mules, cattle, swine, sheep and goats
Provides schedule or unscheduled coverage
Includes animal injured or killed while in transit
Provides named-peril coverage
Requires coinsurance from the insured

21. Every farm coverage followed by Causes of Loss forms
Form can be Basic, Broad, or Special
Very similar to other policy types, but with extra livestock protections
Causes of Loss Forms

22. Farm Covered Perils (BASIC)
Fire
Civil Commotion
Lightning
Theft
Smoke
Aircraft
Wind
Vehicles
Hail
Sinkhole collapse
Explosions
Volcanic activity
Riot
Loss of livestock by flood
Vandalism
Loss of livestock by earthquake

23. Covers all Basic Form perils, plus:
Falling objects
Weight of ice, sleet, or snow
Glass breakage
Sudden & 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 (excluding sheep) by wild animals
Drowning of covered livestock
Accidental shooting of covered livestock
Loading and unloading acccidents

24. Special Form Exclusions
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 stolen
Voluntary, fraudulent parting of farm property
Unauthorized instruction to transport property
Vandalism or glass breakage, if vacant 30 days
Dishonest or criminal acts by the insured
Acts or war or nuclear hazards

25. For example, if the insured is careful, he can avoid damage from rust and corrosion or rodent infestations. He can also avoid irresponsible decisions like leaving the property vacant for over a month, which increases the risk of vandalism.

26. Private Farm Insurance
Farm Property where a farmer or rancher both lives and conducts business Farm Insurance Insurance that combines homeowner’s and commercial coverages Private Coverage Forms: Coverage A: Dwelling Coverage B: Unattached structures Coverage C: Personal property Coverage D: Loss of Use
Private Farm Insurance

27. Commercial Farm Insurance
Scheduled Farm Personal Property
Unscheduled Farm personal property
Barns, outbuildings, and other farm structures
Inland Marine Forms
Mobile agricultural Machinery and Equipment
Livestock Floater
Causes of Loss forms
Attached to each farm coverage, either Basic, Broad, or Special Form
Commercial Farm Insurance

28. Farm Liability Coverages
Farmers face the same liability risks as any other business
Farm Liability Insurance
Protects the farmer against liability for harm caused to other
Includes attorney fees and court costs
Is available in several different types

29. Farmers, like all business owners, must face the risk of being held liable if someone is injured on their property, or because of their actions. Consider the many hazards involved with using massive plows, harvesters, and threshers, or with raising large animals such as cattle or horses.
Farm liability insurance helps protect farmers and ranchers from this financial risk. It includes coverage for attorney fees and the costs of defending the farmer and his property in court.
There are several different types of farm liability insurance, and each one is designed to protect against a specific liability that farmers face.

30. Coverage H – Bodily Injury & Property Damage Liability:
Covers damage or injury caused by normal business operations
Applies to damages that occur on insured premises
Coverage H – Bodily Injury & Property Damage Liability:

31. Coverage I – Personal & Advertising Injury
Pays for claims not involving property damage or bodily injury
Includes malicious prosecution, wrongful entry or eviction, and libel or slander
Coverage I – Personal & Advertising Injury

32. Coverage J – Medical Payments Coverage
Covers medical injuries suffered on farm property or because of farmer’s activities
Includes medical, dental, hospital, and funeral costs
Coverage J – Medical Payments Coverage

33. Farm Product Liability
Covers injury or illness caused by eating the farmer’s products
Because many farmers produce and sell food to the public, they risk being liable for illnesses or injury that people could get from eating their products. For example, if a farmer sells a truckload of tainted tomatoes, he will be liable if those tomatoes cause a salmonella outbreak.
Farm Product Liability Insurance protects farmers against this liability, covering any illness or injury caused by eating products from the insured's farm or ranch. Some wholesalers require farmers to have sufficient farm product liability insurance before agreeing to distribute their products.

34. Farm Pollution Liability
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)
Farm Pollution Liability

35. Custom Farming Liability
Covers farmers doing contract work
Will not apply if a farmer makes more than $5,000 per year as a contractor
Custom Farming Liability

36. Farm Employees Liability
Is available by endorsement
Covers employee injuries not allowed under Worker’s comp

37. Paying Farm Insurance Claims
Loss Settlement Valuations
Actual cash valuation, unless noted differently
If replacement cost coverage, coinsurance is required
As an adjuster, when you receive a farm insurance claim, you will need to pay close attention to two details: valuation and coinsurance.
Most Farm policies automatically use actual cash valuations, but this is not always the case. If replacement cost valuation is chosen instead, it will be expressly noted on the Declarations page.
When an insured has replacement cost coverage, she must meet a coinsurance requirement in order to get full indemnification. That is, the limit of insurance must equal at least 80% of the insured item's full replacement cost at the time of the loss.

38. Farm insurance - Coinsurance
Insurer pays smallest of the following:
-- the replacement cost of the damaged property
-- the amount actually spent on necessary repairs r replacements
-- the policy limit
Coinsurance requirement not met:
Insurer pays the larger of the following:
The actual cash value of the damaged property
A fraction of the replacement cost: based on how much insurance the claimant had compared to how much she should have had

39. Applying the Coinsurance Requirement:
Farmer Jones needs $100,000 coverage to have coinsurance
She buys only $50,000 (half of the required amount)
In the event of a claim, the insurer will only pay half of the replacement cost for damages.
Since she has only purchased half of the required amount, her insurer will only pay half of the replacement cost for covered damages. So, if Farmer Jones files a claim for $30,000 of covered damage, the insurer will only pay $15,000 (that is, half of the covered loss).

40. RC Claim Process Process for Paying Replacement Cost Claims:
Insurer pays actual cash value at first
Claimant has 180 days to say they will repair or replace damaged property
After completing replacement, claimant must submit another claim
Then insurer will pay for full repair or replacement cost
RC Claim Process

41. Farm Liability Coverage & Valuations
Farm Liability Insurance:
Bodily injury and property damage
Personal and advertising Injury
Medical payments
Farm Product liability
Farm pollution liability
Custom farming liability
Farm employees liability

42. Loss Settlement Valuations
Usually ACV; coinsurance required for RC valuations
Replacement cost claims process
Insurer only pays full amount only after repair are done
Loss Settlement Valuations