ISO FARM PROGRAM POLICIES DECLARATIONS PAGES

(April 2023)

 

ISO FARM PROPERTY DECLARATIONS PAGE

Insurance Services Office recommends FP DS 10–Advisory Farm Property Coverage Declarations, plus FP DS 11–Advisory Declarations Page B – Schedule of Farm Personal Property – Coverage E as Farm Property Declarations, which insurance companies may modify to meet their individual needs. Any error in the information on these forms could adversely affect a given claim or loss settlement. The Declarations are used with Farm Property Coverage Forms FP 00 12, FP 00 13, and FP 00 14.

Related Article: ISO Farm Program Property Coverage Forms Analysis

The declarations were revised in 04 16, and changes are highlighted in bold.

FP DS 10–ADVISORY FARM PROPERTY COVERAGE DECLARATIONS

General Information

The policy number, insurance company name and address, insured name and mailing address, and policy period must be entered in this section. The mailing address is particularly important because it is used to mail any notice of cancellation. The policy period starts and ends at 12:01 a.m. at the mailing address.

Insured Locations

The Farm Property Policy covers only property described or listed at an insured location. If the insured location is not described accurately, coverage could be denied. It is important to list, identify, and describe each covered location or premises completely. Farm property frequently needs to be described by section, township, and deed or through the use of some other details or descriptions. If a farmer expands his acreage or holdings, that expansion must be clearly identified, or coverage could be denied in the event of a claim or loss. If more than one location is insured, each one should be listed and completely described.

Coverages Provided

This is a very complicated section, and entry depends on the coverage being provided.

Column One

This is the location number based on the insured locations section.

Column Two

This column requires the coverage provided to be identified. The options are:

·         Coverage A–Dwellings

·         Coverage B–Other Private Structures Appurtenant to Dwellings

·         Coverage C–Household Personal Property

·         Coverage D–Loss of Use

·         Coverage E–Scheduled Farm Personal Property

·         Coverage F–Unscheduled Farm Personal Property

·         Coverage G–Barns, Outbuildings and Other Farm Structures Coverage

·         Extra Expense

Column Three

This includes assigned building numbers and a description of the covered building or structure.

If Coverage G is involved, additional information is required:

·         There are six types of property that can be covered under Coverage G. However, the type of property is covered only if listed on the Declarations.

·         An “H” must be displayed for any building that is heated.

·         RC must be entered if replacement cost is the desired valuation. ACV will be used if RC is not entered.

Column Four

This is only for Farm Personal Property. If Coverage E is provided, FP DS 11–Advisory Declarations Page B – Schedule of Farm Personal Property – Coverage E must be attached so that scheduled personal property can be listed.

Column Five

This includes spaces in which to enter insurance limits for items described in columns 1 through 4.

Column Six

The final column is where the applicable Basic, Broad, or Special Causes of Loss is shown.

Revised Limits of Insurance

Policy extensions of coverage can be increased by appropriate entries on the declarations. If no entry is made, the following default limits (described in the policy) apply:

 

Type of Property

Default Limit

Insured’s Household Personal Property Away from Insured Location

Greater of 10% of Coverage C or $1,000

Tenant Building Additions and Alterations

10% of Coverage C

Credit and Electronic Funds Transfer Cards

$500

Property in the Custody of a Commercial Carrier

$1,000

Farm Operations Records

$2,000

30-Day Limit For Farm Machinery

$10,000

Light or Power Poles

As described

Property Not Covered

Coverage B (Other Private Structures Appurtenant to Dwellings) and Coverage F (Unscheduled Farm Personal Property) both state, in addition to the property listed as not covered, that any items entered on the declarations as not covered are also excluded. This provides a means to exclude property that is normally covered.

 

Example: Frank had a tool shed installed on his farm years ago. While it served its purpose, it has gone unused since he built a much larger storage building that included lighting and heating. It would not be repaired or replaced if it was damaged. Frank contacts his agent, and they agree to list it on the declarations as Property Not Covered, so the insurance under Coverage B is reserved for property that deserves protection.

Mortgageholders

The insured locations and building numbers are obtained from the Coverages Provided section of the declarations. The mortgageholder name and mailing address is entered with respect to any such building or location. An incorrect mailing address for a mortgageholder can result in delaying an insurer’s ability to terminate coverage properly.

 

Example: ABC Insurance Company discovered that Felix Farms used two of its barns for making meth. The insurer sent cancellation notices to both Felix and his mortgageholder. ABC used the mortgageholder address shown on the declarations, but that notice was returned as “undeliverable.” When ABC checked their records, they found they made a mistake in entering the mortgageholder address from the application. ABC then sent out a new notice, but a fire destroyed the farm before the notice period ended. While Felix had no coverage, the mortgageholder was still protected because they were able to rely on the delayed notification.

 

Deductible

The policy does not have a default deductible in any coverage part. A $250 deductible is shown on the declarations, and space is provided for exceptions or higher deductibles. This means that the property rating structure contemplates a $250 deductible. Any change in the amount of deductible results in a modified premium. The policy deductible that applies is an occurrence deductible. This means that if a loss resulting in damage under Coverages A, B, C, E, and F occurs, only the largest deductible will be applied once to the entire loss.

 

Example: Sara was concerned about the high premiums on her Farm Policy. Her insurance agent recommended higher deductibles to reduce those premiums. She decided she could handle a $1,000 deductible on the buildings but wanted only a $500 deductible on personal property. A tornado came through the property and caused damage to both buildings and personal property. Because the property was adequately insured to value, she was pleased to find that she had full coverage except for the single application of the $1,000 deductible.

 

Forms Applicable

This section alerts the insured to the various forms attached to the policy. These forms can be to the benefit or detriment of the insured, and it is important that the insured carefully review them to be certain they are understood and to make sure they should apply. The time to contest a form on the policy is when the policy is issued, not after a loss occurs.

Premium Payable

The final policy premium is shown on the declarations and should be the same as the premium quoted. If the figures do not agree, the issue should be addressed and resolved promptly since the premium is due and payable immediately.

FP DS 11–ADVISORY DECLARATIONS PAGE B–SCHEDULE OF FARM PERSONAL PROPERTY–COVERAGE E

This supplemental form must be used if FP 00 13–Farm Personal Property is attached to the policy. There are three columns on the declarations.

Column One

This is for the description of the items insured. The form includes 18 pre-printed items and has spaces for 12 additional items. Item 12, Farm Machinery, includes spaces A through J for listing specific machinery and showing the year, makes and model of each.

Column Two

This is where the Basic, Broad, or Special Causes of Loss is shown. Only the Basic and Broad Causes of Loss are available for items 3, 4, 6, 7, 13, 14, 15, 16, and 17. Item 13 has an additional coverage option available. If endorsement FP 04 56–Collision Resulting in Death of Livestock applies, the word "Collision" is entered.

Column Three

This is where the limits of insurance for the various covered items are shown. If no limit is indicated, there is no coverage, even if a cause of loss is shown. The limit is the mechanism that triggers coverage, so there is no coverage unless limits are selected and inserted in the appropriate spaces provided.

Item 12 has an option to purchase optional coverage FP 04 20– Foreign Objects in Machinery. This option is for the Special Causes of Loss coverage.

Except for items 12 and 13, off-premises coverage can be provided by attaching FP 05 20–Scheduled Farm Personal Property Away From the Insured Location.

The covered Causes of Loss for this coverage are the same as those shown on the declarations.

Note: Off-premises coverage on bees includes the beehives and accessories but only covers bees when in the hive.

The last part of this schedule is the loss payable information. The loss payees must be listed, and the name and address of each shown. This information is used in the issuance of loss payments because payment is made in the name of both the insured and the loss payee.