In designating the forms and endorsements of the farm coverages, ISO uses the letters FP for farm property, including farm inland marine. Farm liability forms are all designated FL.

The general concept of the farm coverages and the rules applying to them are reviewed in these pages. Detailed examinations of the various coverages will be found in additional articles.

Topics covered:

Package or monoline policies

Property coverages

Complete policy

Covered causes of loss

Farm liability

Farm inland marine forms

Endorsements

Farm rules

Definitions

Eligibility

Farm combination coverage

Deductibles

Other rules

Package or Monoline Policies

 A single set of forms and endorsements is used for both monoline and package policies. Because farms share similarities with both residential and commercial risks, the farm forms have characteristics in common with both homeowners and commercial forms.

 Property Coverages

 Under the previous farm program, all property coverages (residential and commercial) and causes of loss were included in the same form, FP 00 10 09 94. That form has now been replaced with five separate forms. The Farm Property—Farm Dwellings, Appurtenant Structures, and Household Personal Property Coverage form (FP 00 12 04 16) consists of the following personal coverages:

 A. Dwellings

B. Other Private Structures Appurtenant to the Dwellings

C. Household Personal Property

D. Loss of Use

 Farm Property—Farm Personal Property Coverage Form (FP 00 13 04 16) covers:

 E. Scheduled Farm Personal Property

F. Unscheduled Farm Personal Property

 Barns, outbuilding and other farm structures are covered on form FP 00 14 04 16.

 The farm program provides a separate causes of loss form, FP 10 60 04 16. The insured chooses and makes an indication on the declarations page regarding which type of perils to cover, and the perils are separated from the rest of the coverages.

 The FP 00 90 04 16, Other Farm Provisions form, consists of various additional coverages, conditions, and definitions common to more than one of the forms previously listed.

 Complete Policy

 A complete policy comes with the common policy conditions (form IL 00 17 11 98) and common policy declarations—along with the farm coverage declarations. The common policy conditions are cancellation, changes, examination of books and records, inspections and surveys, premiums, and transfer of rights and duties.

 Covered Causes of Loss

 The causes of loss form, FP 10 60 04 16, contains three sets of perils—basic, broad, and special.

 The basic perils: fire, lightning, windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, smoke, vandalism, theft, sinkhole collapse, and volcanic activity. Numerous exceptions and additions to this list pertain specifically to covered farm structures and farm personal property.

 The broad perils: the basic perils plus breakage of glass or safety glazing material; falling objects; weight of ice, snow, or sleet; plumbing discharge; rupture of steam or hot water heating systems, air conditioning systems, or water heaters; freezing of plumbing or similar devices; and damage from artificially generated electricity. The broad perils of the farm form include certain livestock perils as well.

 The special perils, once called “all risks” and now expressed as covering “risks of direct physical loss,” are also subject to many modifications for the farm exposures.

 Farm Liability

 Like ISO’s current commercial program, the liability coverage is provided under a separate form and either property or liability coverage may be written independently. Also, other commercial coverages may be added to the policy. A single farm personal-commercial liability coverage form, FL 00 20 04 16, is used whether the insured is buying a package of property and liability insurance or simply a monoline farmers personal liability policy.

 A few risks are not eligible for form FL 00 20. In that case, Farm Premises Liability Coverage endorsement, FL 04 11 04 16 (basic) or FL 04 37 04 16 (broad), can be added to a Commercial General Liability (CGL) form. Personal Liability Coverage endorsement FL 04 12 04 16 may also be added.

 Farm Inland Marine Forms

 The farm inland marine coverages are Mobile Agricultural Machinery and Equipment Coverage form, FP 00 30 04 16 and Livestock Coverage form, FP 00 40 04 16 respectively.

 Endorsements

 Endorsements extend or modify the coverage offered by basic farm coverage forms.

 Farm Rules

 Division four of the ISO Commercial Lines Manual contains the rules for writing all of the ISO farm coverages. The rules relating to general items—such as policy term, computation of premium for other than annual prepaid policies, rounding procedures for rates and premiums, and cancellation—are similar to those of division five covering fire and allied lines. Other rules discussed in other sections relate specifically to farm exposures.

 Definitions

 Definitions are provided for (a) classes of construction, (b) farming and ranching, and (c) farm property.

 There are five classes of construction: frame, masonry (including masonry veneer), noncombustible, fire resistive, and mixed (masonry/frame). But some of the farm definitions differ from their counterparts in the commercial property section.

 ·     The monoline definition for “frame” includes brick veneer while the farm section allows brick veneer to be classed as masonry.

 ·     In order for fire-resistive to be applied to a building, the commercial property rules require that the walls, roof, and floors have a fire resistance rating of at least one hour. The farm rules contain no such requirement.

 ·     The farm section adds the mixed construction class. If a building is part masonry and part frame, the insurance company may rate it as masonry if the frame portion is no more than 33 1/3 percent of the entire building.

 The definition of “farming and ranching” contains three sections:

 ·The growing and marketing of field crops, fruits, mushrooms, nuts, vegetables, flowers, greenhouse or nursery stock, or sod.

·The raising or keeping of bees, fur bearing animals, livestock (except commercial feed lots), poultry, or worms.

·The conducting of aquaculture (cultivation of the natural products of the water).

 The inclusion of the marketing requirement emphasizes that only a farm operated for money can be considered a “farm.” Thus, a few acres operated by a homeowner raising food for personal consumption cannot be classified properly as a farm. In view of this, many homeowners insurers may need to examine their underwriting restrictions on farm situated personal dwellings.

 Farm property is defined in these rules in terms of the various items covered by farm property form FP 00 10—dwellings and barns, for example, and silos and household goods and various classes of farm personal property. Naturally, these definitions are quite similar to the definitions of these same terms found in the form itself.

 Eligibility

 In addition to eligibility rules for the individual coverage, the general eligibility rules for farm property, liability, and inland marine risks are also included. These coverages may be written for any owner or tenant having an insurable interest in farming or ranching operations or in mobile agricultural equipment or livestock.

 Farm Combination Coverage

 Farm combination coverage preserves the pricing benefits and minimum coverage requirements of the former farmowners-ranchowners program. To be eligible for farm combination coverage, property coverage must be written on all farm dwellings, farm personal property, and other farm structures owned by the insured. Specific items may be excluded by mutual agreement. Bodily injury and property damage liability coverage must be written to cover operations and premises exposures wherever farm property is insured.

 The following types of farms are not eligible for farm combination coverage:

·Farms not operated by the insured, unless tenant-operated under the insured’s supervision or operated under contract management.

·Vacant or unoccupied farms.

·Farms supplying the insured himself with commodities for his own manufacturing or processing operations. A dairy farmer who also processes and delivers milk to retail customers is one example.

·Farms where the primary purpose is to operate freezing or dehydrating plants or poultry factories.

·Farms with farm dwellings of more than four families.

·Farms on which farm dwellings are used for business purposes other than any permitted incidental occupancy.

 Deductibles

 The rule on deductibles provides that a standard $250 deductible applies to the farm property. Optional deductible amounts may apply to each item or coverage separately.

 Other Rules

 Other topic-specific rules are addressed in articles covering the various individual coverages.