Scheduled and Unscheduled Farm Personal Property

Summary: Up to this point, the farms discussion has covered the "personal" exposures of the farmer, indicating many similarities to the homeowners program of Insurance Services Office (ISO). Form FP 00 13 04 16 begins the coverage devoted to exclusively farm business property. Coverage E is "scheduled farm personal property." Coverage F is "unscheduled farm personal property."

Included in coverage E is any property scheduled on the declarations page. There are sixteen types of scheduled property, with many subclasses. When a limit of insurance is shown for coverage F on the farm property declarations, unscheduled farm personal property is insured.

For coverage to be provided under coverage E, a limit of liability must be shown on the declarations page for each class of property covered. If no limit is shown on the schedule for a described kind of property, there is no insurance under coverage E for any property of that kind.

Coverage F is the second portion of form FP 00 13 devoted exclusively to commercial coverage. When a limit of insurance is shown for coverage F on the farm property declarations, unscheduled farm personal property is insured. This coverage includes all farm personal property on the premises and some types while off the premises. Nineteen types of property are identified as Property Not Covered in this unscheduled, or blanket, category.

Section II of form FP 00 13 contains seven extensions that apply to one or both of these coverages.

Section III contains two additional coverages.

When there is scheduled farm property, additional coverage is available for spoilage of perishables. This form has been updated as of April 2016. The updates are highlighted in this article.

Topics covered:

Covered property—coverage E

Property not covered—-coverage E

Special limits of insurance under coverage E

Loss conditions—coverage E

Covered property—coverage F

Property not covered—coverage F

Special limits of liability—coverage F

Coverage F conditions

Property in the custody of a common carrier—coverages E and F

Property away from the insured location—coverage E

Replacement machinery, vehicles and equipment newly purchased —coverage E

Newly purchased additional machinery, vehicles, and equipment—coverage E

New livestock

Thirty-day additional limit on borrowed or rented farm machinery, vehicles or equipment-coverage E

Farm products in the open—coverage against certain causes of loss-coverage F

Cost to restore records

Extra expense coverage

Remainder of form

Covered Property—Coverage E

Coverage E — Scheduled Farm Personal Property

A.Coverage

We will pay for direct physical loss of or damage to Covered Property at the "insured location" described in the Declarations, or elsewhere as expressly provided below, caused by or resulting from any Covered Cause of Loss.

1.Covered Property

All of the following are Covered Property under Coverage E of this Coverage Form, provided a Limit of Insurance is shown in the Declarations for the specific type of property:

a.Grain, threshed seeds and beans, ground feed, silage, and manufactured and blended "livestock" feed in buildings or structures or in sacks, wagons or trucks.

b.Grain in stacks, shocks, swaths or piles in the open, but for this property fire and lightning, vandalism, vehicles and theft are the only Covered Causes of Loss.

c.Hay, straw and fodder:

(1)In buildings or structures; and

(2)In stacks, windrows, or bales, but for this property fire or lightning, windstorm or hail, vandalism, vehicles and theft are the only Covered Causes of Loss.

A stack means hay, straw or fodder in one area separated by a clear space of 100 feet or more from any other hay, straw or fodder in the open.

d.Farm products, materials and supplies shown in the Declarations. These include farm materials and related packing materials and containers usual to the operations of a farm, but not hay, grain or any growing crops.

e."Poultry" (excluding turkeys unless specified):

(1)In the open; or

(2)In any building designated for "poultry" in the Declarations.

But for this property, the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

f.Trays, boxes and box shook, each item or set in the proportion that its value bears to the total value of all trays, boxes and box shook covered under this Coverage Form.

g.Computers and related software used principally as aids in farm management.

But an item of software is Covered Property only up to the amount required to replace it as a prepackaged program, or in unexposed or blank form, whichever is greater.

h.Miscellaneous equipment, usual or incidental to the operation of a farm (including machinery, vehicles, tools, and supplies of all kinds), covered under a single Limit of Insurance shown for Miscellaneous Equipment in the Declarations.

But such miscellaneous farm equipment does not include:

(1)Threshing machines, tractors, combines, corn pickers, hay balers, harvesters, peanut diggers, potato diggers and pickers, cotton pickers, crop driers or sawmill equipment;

(2)Automobiles, trucks, motorcycles, motorized bicycles or tricycles, mopeds, dirt bikes, snowmobiles, all-terrain vehicles; mobile homes, house trailers; vehicles primarily designed and licensed for road use (other than farm wagons and farm trailers); watercraft or aircraft; or the equipment, tires or parts of any of these;

(3)Liquefied petroleum or manufactured gas or fuel, or their containers;

(4)Bulk milk tanks, bulk feed tanks or bins attached to buildings or structures; barn cleaners, pasteurizers or boilers; any permanent fixtures within or attached to a building;

(5)Brooders;

(6)Fences, windchargers, windmills or their towers;

(7)Outdoor radio or television equipment, antennas, masts and towers, including any guy wires and lead-in wiring; private power and light poles;

(8)Irrigation equipment;

(9)Portable buildings and portable structures:

(10) Household personal property or property usual to a "dwelling;" or

(11) Property more specifically covered under another Coverage or Coverage Form of this or any other policy.

i.Farm machinery, vehicles and equipment that you borrow or rent whether or not under a written contract, except while on the premises of the owner. The borrowed or rented property must be:

(1)Usual or incidental to farming operations;

(2)In your care, custody or control; and

(3)Property in which you have no interest as owner or lienholder.

But Covered Property does not include borrowed or rented property of the following types:

(1)Automobiles, trucks, motorcycles, motorized bicycles or tricycles, mopeds, dirt bikes, snowmobiles, all-terrain vehicles; mobile homes, house trailers; vehicles primarily designed and licensed for road use (other than farm wagons and farm trailers); watercraft or aircraft; or the equipment, tires or parts of any of these; or

(2)Dealers' demonstration machinery, vehicles or equipment.

j.Farm machinery, vehicles and equipment which are individually described and specifically covered in the Declarations, while on or away from the "insured location," except while in the custody of a common or contract carrier.

k."Livestock" on or away from the "insured location," but for this property the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

But we do not cover "livestock" while:

(1)In the custody of a common or contract carrier;

(2)At public stockyards, sales barns or sales yards; or

(3)At packing plants or slaughterhouses.

l.Bees, but for this property the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

m.Worms, but for this property the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

n.Fish, but for this property the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

o.Other Animals, but for this property the Basic or Broad Covered Causes of Loss are the only Covered Causes of Loss.

p.Portable buildings and portable structures that you own.

Analysis

The form lists sixteen kinds of farm personal property as potentially covered property, if a limit is shown in the declarations for that specific type of property. Each item contains a number of subgroups, definitions, and limitations:

1. Grain, etc. This category includes threshed seeds and beans, ground feed, silage, and manufactured and blended livestock feed. These items must be in buildings or structures; or, in sacks, on wagons, or trucks if they are not located in a building or structure.

2. Grain in stacks, shocks, swaths or piles in the open. The form covers these items only for the perils of fire and lightning, vandalism, vehicles, and theft.

3. Hay, straw, and fodder. The policy breaks this property into two subdivisions. The first covers property in buildings or structures.

The second provides coverage for these items in stacks, windrows, or bales. As with the grain in the open, the farm property form covers these items for only certain perils: fire and lightning, vandalism, windstorm or hail, vehicles, and theft. The policy says that a stack consists of hay, straw, or fodder in one area separated by a clear space of 100 feet or more from any other hay, straw, or fodder in the open. This spacing helps ensure that a fire in one stack or bale is less likely to spread to others, thus mitigating the chances of a large loss.

4. The fourth type of scheduled property is farm products, materials, and supplies shown in the declarations. This group includes farm materials, other than grain, hay, or growing crops. It also includes related packaging materials and containers usual to the operation of a farm.

5. Item five consists of poultry (excluding turkeys unless specified). Such property may be either in the open or in any building designated for poultry in the declarations. The current form limits coverage for poultry to the basic or broad covered causes of loss.

6. Scheduled property item number six includes trays, boxes, and box shook (pre assembly boxes). These items are subject to a 100 percent co-insurance clause, based on the total value of all such property covered under the farm property form. Note that this pro rata clause has the effect of limiting recovery on individual units whenever the total insurance carried on this property is less than 100 percent of the total value of all trays, boxes, and shook.

7. Computers and related software used principally as aids in farm management are item seven. The form limits the value of software items to the greater of: the cost to replace them as prepackaged programs; in unexposed or blank form. An insured may use computers to track planting and harvesting of crops and various pieces of equipment may be run from a computer program,

8. This item consists of miscellaneous equipment usual or incidental to the operation of a farm. This definition includes machinery, vehicles, tools, and supplies of all kinds, but excludes the following 11 groups of property:

(1) Threshing machines, tractors, combines, corn pickers, hay balers, harvesters, peanut diggers, potato diggers and pickers, cotton pickers, crop driers, or sawmill equipment.

(2) Automobiles, trucks, motorcycles, motorized bicycles or tricycles, mopeds, dirt bikes, snowmobiles, all-terrain vehicles, mobile homes, house trailers, vehicles primarily designed and licensed for road use (except farm wagons and farm trailers), watercraft, and aircraft. Also excluded are the equipment, tires, and parts of any of these. A change has been made here in the 2016 form; the earlier form listed 4-wheel all-terrain vehicles, and 4-wheel has been removed. This narrows coverage so that if the insured had a 3-wheel all-terrain vehicle that is now excluded as well.

(3) Liquefied petroleum or manufactured gas, fuel, or their containers.

(4)  Bulk milk or feed tanks or bins attached to buildings or structures; barn cleaners, pasteurizers or boilers; or any permanent fixtures within or attached to a building.

(5) Brooders.

(6) Fences, windchargers, windmills or their towers.

(7) Outdoor radio or television equipment, antennas, masts and towers, including any guy wires and lead-in wiring; private power and light poles. This has been changed as well; now included in the listing are antennas, masts and towers, guy wires and lead-in wiring are all added to the exclusion. This leaves no room for confusion as to what outdoor radio or television equipment is excluded.

(8) Irrigation equipment.

(9) Portable buildings or structures.

(10)Household personal property or property usual to a dwelling).

(11)Property more specifically covered under another coverage form or any other policy.

Coverage for most of the property excluded under item 8 can be provided elsewhere in the farm property schedule, except for property such as motor vehicles licensed for highway use, aircraft, and watercraft, customarily insured under separate policies.

9.Borrowed or rented farm machinery, vehicles, and equipment. There is no coverage while this property is on the premises or its owner. To qualify for this coverage, such property must meet the following requirements:

1. It must be usual or incidental to farming operations;

2. It must be in the insured's care, custody or control.

3. The insured may have no ownership interest in the property.

So if the insured borrows a combine from his neighbor and while using it on his land damages the combine, there is coverage. However, if the insured damages it while returning to the neighbor and the damage occurs while on the neighbor's property, there is no coverage.

Not included as covered borrowed property is the following: automobiles, trucks, motorcycles, motorized bicycles or tricycles, mopeds, dirt bikes, snowmobiles, all-terrain vehicles, mobile homes, house trailers, and other vehicles licenses or primarily designed and licensed for road use other than farm wagons and farm trailers. Also not covered are watercraft, aircraft, or any equipment, tires or parts for any of these vehicles. Note that all these vehicles are standard road vehicles that anyone might have and are not used in farming; borrowed farm equipment is fine, but borrowed autos should be covered on a standard auto policy. The same change for all-terrain vehicles is made here as well, the 4-wheel designation is removed so now any all-terrain vehicle is excluded, regardless of number of wheels. Neither does it cover dealers' demonstration machinery, vehicles, or equipment. Borrowed property, in general, is covered only to the extent that it is not covered under this or any other policy of the insured. A written contract is not required.

10. Farm machinery, vehicles, and equipment on or away from the insured location. To be covered, these items must be specifically described in the Declarations. The form covers these items while on or away from covered locations, except while in the custody of a common or contract carrier. Space is allowed on the schedule to list year, make, and model of each item of equipment included under this item.

11 Livestock on or away from the insured location. However, the current form limits coverage for this item to only the basic or broad covered causes of loss.

However, the form does cover livestock in the custody of common or contract carrier; at public stockyards, sales barns, or sales yards; or at packing plants or slaughterhouses.

There is space on the schedule for listing class and type of animals insured as well as for providing specified amounts of insurance on individual animals.

12. Bees.

13. Worms.

14. Fish.

15. Other animals.

Again, the current form limits coverage for items twelve through fifteen to only the basic or broad covered causes of loss.

16. Portable buildings and structures owned by the insured.

Property Not Covered—Coverage E