Personal and Commercial Exposures

Summary: Following is a brief description of the property endorsements that may be used with the Insurance Services Office (ISO) farm property coverage forms. Descriptions refer to the current editions (unless a particular form has not changed), with any significant changes from the previous editions noted.

Alphabetical Guide to Endorsements:

Windstorm or hail percentage deductible

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 Actual Cash Value — Dwellings and Appurtenant Private Structures,FP 12 10 01 98

 This endorsement provides an actual cash value loss settlement option for dwellings or appurtenant structures designated in the schedule. This option is available to owner- or tenant-occupied dwellings. The revised 2016 form adds language stating that there is no coverage for increased costs due to ordinance or law.

 Additional Insured — Farm Property, FP 04 50 01 98

 This endorsement extends the farm property coverage to cover the interests of one or more additional insureds. The schedule of the endorsement provides space to show the names and mailing addresses of additional insureds, and the descriptions of the insured location and property to which the endorsement applies. The definition of "insured" is amended, but only with respect to the insured location described in the schedule. The endorsement provides that loss will be payable to the named insured and person(s) or organization(s) named in the schedule.

Burglary and Robbery Protective Safeguards, FP 12 12 09 03

 This endorsement provides a rate credit for certain protective systems. It also suspends theft coverage in the event the systems are not kept in working order.

Causes of Loss — Earthquake Form, FP 10 40 09 03

 This form provides coverage for earthquake and volcanic eruption. All earthquake shocks or volcanic eruptions within a 168 hour period constitute a single incident. A percentage deductible is applied separately to each building or structure, to personal property in each building or structure, and to personal property in each yard.

 The current form contains an amendment to the ordinance or law exclusion. The exclusion now applies whether there is damage to covered property or not. So, for example, if covered property sustains no damage from an earthquake, but a law mandating retrofitting is enforced for all property whether damaged or not, there is no coverage under this endorsement.

 Also added to the earthquake form is language that the exclusions of ordinance or law, governmental action, nuclear hazard, and war and military action apply whether or not the loss event results in widespread damage or affects a substantial area. Therefore, if an earthquake led to a small nuclear leak which in turn resulted in damage to covered property, the insured could not argue that the exclusion did not apply to such "limited" damage.

Collision Resulting in Death of Livestock, FP 04 56 01 98

 For a rate credit (consult the commercial lines manual) the insured may elect to cover his or her livestock for death resulting from collision only. The insurer enters, on the declarations page, "collision" in place of "basic" or "broad" as the covered cause of loss for livestock. The form covers these two types of losses: collision or overturn of a vehicle on which the livestock are being transported; or livestock running into or being struck by a vehicle on a public road.

 The endorsement has a schedule to indicate limits per animal. These limits per animal can be selected by livestock class (but not on individual animals). Horses, mules, and cattle under one year of age are valued at half of the limit per animal shown for that kind of animal designated in the schedule. No deductible applies to coverage under this form.

Contributing Insurance, FP 04 16 01 98

 This endorsement is used when two or more policies share in the farm property coverage on a pro rata basis over the entire schedule of farm property. Item (A) shows the individual insurer's percentage contribution over the entire schedule. Item (B) shows the name of the insurer providing farm liability insurance, if different. Item (C) is a schedule showing the total limits of insurance for coverages A through G and any other specified farm property damage coverage, for all contributing insurers. This endorsement should be attached to all contributing policies with appropriate individual entries for items (A) and (B) for each insurer's participation. The total of the item (A) percentages for all participating policies should exactly equal 100 percent. It is important to note that contributing insurance means insurance written by more than one company, with the same type of policy and conditions, whether in force or not at the time of a loss.

Coverage G — Barns, Outbuildings and Other Farm Structures – Blanket Insurance, FP 04 28 09 03

 This endorsement has been retitled to reflect the revisions made in the farm forms. It permits Coverage G—Barns, Outbuildings and Other Farm Structures (FP 00 14 09 03) to be written on a blanket single limit basis, subject to 80 percent coinsurance. The insured must specify which structures, if any, are not to be covered. Loss valuation is available at either actual cash value or replacement cost. However, if the cost of repair or replacement is more than $2,500 or 5 percent of the limit of insurance, the only basis of settlement is actual cash value. If this option is used, the insured must notify the insurer within 180 days of the occurrence of the loss. The cost of repairs or replacement does not include increased costs attributable to enforcement of ordinance or law. When covering other structures with this form, the insured must report values to the company on an annual basis, using form FP 16 01.

 Added to the current form is the provision that the cost of repairs or replacement does not include any increased cost because of the enforcement of any law or ordinance regulating repair or replacement.

Coverage G – Barns, Outbuildings and Other Farm Structures Statement of Values, FP 16 01 10 06

 This endorsement complements form FP 04 28, which covers other structures on a blanket basis. The values stated in the statement of values are used to develop premium at policy inception and anniversary, and to develop a blanket average rate for mid-term changes. Insurers have the option of requiring the agent and insured to sign the form.

Debris Removal Increased Limit of Insurance, FP 04 21 01 98

 This endorsement allows for the 5 percent of the limit of insurance provided in the debris removal additional coverage of the farm property forms to be increased by the amount shown in the schedule.

Disruption of Farming Operations (Income Loss and Expenses Coverage), FP 15 01 09 03

 This endorsement provides "business income" insurance for the farmer. It covers these four items when covered property is damaged by a covered cause of loss: reduction in net profit; continuing normal expenses, including payroll; actual and necessary expenses incurred to resume normal farming operations; and actual and necessary expenses incurred to replace damaged property, to the extent that these expenses reduce the payment under this endorsement. The insured is required to resume farming "as quickly as possible."

 This endorsement also responds to loss of rental income when farm buildings are rented to others, if the rental is specified in the schedule.

 The Period of Indemnity is thirty days. The insured has the option to purchase and extended period.

Dwelling and Farm Building Replacement Cost Protection (Including Ordinance or Law Coverage), FP 04 04 09 03

 This endorsement provides both replacement cost and ordinance or law coverage on dwelling and farm buildings. The first part of the endorsement, replacement cost coverage, provides that a covered loss or damage be settled without deduction for depreciation; however, no more than the smallest of replacement cost, the amount actually and necessarily spent to repair or replace, or the applicable limit of insurance will be paid in event of a covered loss.

 The second part of the endorsement provides ordinance or law coverages. Demolition expense for undamaged parts of a covered dwelling when necessitated by enforcement of ordinance or law, and the cost to reconstruct in compliance with ordinance or law are included. The endorsement also provides coverage for increased reconstruction or repair costs not related to ordinance or law, so that, if the limit of insurance applicable to the dwelling is exceeded, that excess amount will be paid. However, no coverage is provided for any costs related to pollutants, including cleanup, testing, monitoring, treatment, detoxification or removal.

 A separate amount of insurance, to be entered in the endorsement's schedule, applies to the total of all costs relating to demolition or reconstruction, because of ordinance or law, and increased costs because of factors other than ordinance or law.

Farm Computer Coverage, FP 04 08 09 03

 This endorsement recognizes the extent to which modern farming has become computerized. It may be used with the farm dwellings, appurtenant structures and household personal property coverage form (FP 00 12 09 03) and the farm property—farm personal property coverage form (FP 00 13 09 03) to provide coverage. Coverage applies to owned electronic data processing equipment, media, and records, leased electronic data processing equipment that the insured is contractually obligated to insure, and property of others in the care, custody, or control of the insured. The special causes of loss, subject to certain exceptions and exclusions, apply.

 There are two coverage extensions. Electronic data processing equipment, media, and records are covered while temporarily away from the premises for up to ninety days subject to a maximum 25 percent of the limit of insurance. Property in transit is covered while in the coverage territory, subject to $100,000 or the applicable limit of insurance, whichever is less.

There is a limit of $2,500 over the deductible amount for loss or damage resulting from erasure of electronic recordings; this limitation does not apply to loss or damage caused by lightning or mechanical breakdown of the electronic processing equipment.

Farm Equipment Borrowed or Rented Without a Written Contract,FP 04 23 01 98

 Formerly entitled borrowed farm equipment, the revisions made in this endorsement complement those made in the other farm property forms. This endorsement acts as an additional coverage for the farm property—farm personal property coverage, farm property—other farm provisions, and mobile agricultural machinery and equipment coverage forms. If a limit of insurance is shown in the declarations of the other forms for machinery and equipment, then up to $50,000, subject to a thirty day limitation, is available. If the owner of the borrowed or rented equipment carries insurance, coverage under this endorsement is primary.

Foreign Objects in Machinery, FP 04 20 04 16

 This form provides coverage for farm machinery damaged by foreign objects being taken into the machinery. This form may be purchased only with the special causes of loss. The coverage applies only to those items indicated in the declarations as having foreign objects coverage.

Functional Building Valuation, FP 04 78 09 03

 This endorsement is patterned on commercial property functional building valuation endorsement, CP 04 38 10 00. It provides for replacement of buildings or structures on a functional replacement cost basis. This endorsement is especially useful for buildings of unique construction, that may exhibit a large difference between replacement cost and market value.

 It provides that losses will be settled following one of these two methods: replacement with a less costly, but functionally equivalent building; or, in the case of a partial loss, restoration of the damaged portion in the same architectural style, but with less costly material.

If the insured does not repair or replace the damaged property within 180 days, the loss will be settled based on the structure's market value. Newly added with this edition is a provision making this insurance excess over non-insurance service contracts.

Functional Farm Personal Property, Machinery and Equipment Valuation, FP 04 79 01 98

 Patterned on commercial property form CP 04 39 10 90, this endorsement amends the basis on which loss to the covered property is adjusted. It pertains to specifically scheduled items of farm personal property, machinery, and equipment that can be replaced with similar property that performs the same function. As with form FP 04 78, if replacement is not accomplished within 180 days, the loss is settled on the basis of the smallest of the property's market value, the applicable limit of insurance, or the amount it would cost to repair or replace the property with material of like kind less allowance for depreciation.

Grain Under Government Loan, FP 04 27 01 98

 This optional endorsement provides wraparound/excess coverage for the farmer's interest in grain pledged as collateral for a government loan. The coverage is scheduled and covers losses not subject to loan forgiveness and for the value of the grain above the loan value. Since this coverage is wraparound/excess, a rate credit is applied.

Growing Grain and Soybean Coverage, FP 14 15 01 98

 The insured may purchase this endorsement to cover growing crops from loss by fire or lightning. Two types of crops are eligible: growing grain and growing or harvested soybeans. The form contains a schedule for showing the following: the location of the crop (specifically: section, township, range, quarter, and number); the kind of crop; the number of acres insured; the insured's interest in the crop, expressed as a percentage; and the limit of liability.

 The loss settlement provision of this form is actual cash value. However, the form provides its own definition of ACV. A damaged crop's ACV is "the price quoted at the time of loss at the market closest to the place of loss", less the cost of harvesting and hauling. The adjusted value of any contracts the insured may have with anyone else is not considered when determining the ACV of the crop.

Increased Special Limits on Business Property, FP 04 09 09 03

 This endorsement provides increased limits of insurance on business property. The limit on the insured location (as opposed to residence premises) may be increased to as much as $10,000; the limit of insurance for business property off the insured location is increased with this edition to 20 percent of this amount, or $1,000. The increased limits do not apply to business property in storage, or held as a sample, for sale or delivery after sale, or pertaining to a business actually conducted on the insured location. The limit shown in this endorsement is part of, and not in addition to, the applicable limit of liability.

 The current endorsement adds the provision that this increased limit does not apply to adaptable electronic equipment as described in the special limits of insurance in the farm property—farm dwellings, appurtenant structures and household personal property coverage form. This endorsement does not apply to business property in storage, or held as a sample. Additionally, it does not apply to business actually conducted on the insured location.

Increased Special Limits on Specified Household Personal Property, FP 04 07 09 03

 This endorsement allows the special limits of insurance on certain categories of household property to be increased, such as gold, platinum and silver, and securities. Theft coverage for furs, jewelry, watches, gold- and silverware, and firearms may be increased. The special limit on adaptable electronic apparatus (such as CD players and the like), may also be increased.

Inflation Guard, FP 04 31 01 98

 This endorsement provides for an automatic increase in the limits of insurance for covered farm buildings and structures, to keep up with construction costs inflation. The amount of increase in limit each year is determined by multiplying the limit of insurance at policy inception or last previous anniversary by the percentage rate of annual increase shown on the endorsement. For a loss occurring during the policy year, the amount of coverage is increased by the same proportion of the annual percentage rate that the expired portion of the policy term bears to the full year. A schedule on the endorsement is used to show location numbers and building numbers of items that are not subject to the inflation guard provisions. The rules allow for percentage increases in two percent increments, starting with four percent.

Livestock—Additional Causes of Loss, FP 10 04 09 03

 This endorsement adds the following causes of loss to coverage provided under the livestock coverage form: accidental shooting (excluding shooting by any insured, an employee, or a resident of the farm location); drowning from external causes; electrocution; attack by wild animals or dogs (except to sheep, or if the attacking dogs or wild animals are owned by the insured, an employee, or a resident); loading or unloading accidents; and collapse.

Loss Payable Provisions, FP 12 11 09 03

 This endorsement provides for the disbursement of loss proceeds to a person or organization other than the named insured to the extent of their interest in the covered property. There are three available provisions. The first is the loss payable. This specifies how losses will be adjusted and paid when a loss payee is shown in the schedule. The second is the lenders loss payable, which protects the interest of the lender designated in the schedule, when interest in covered property is established by written contracts such as warehouse receipts. Finally, the contract of sale specifies how losses will be adjusted and paid with respect to contracts of sale of covered property. The policy's other insurance condition is amended to recognize that the seller (loss payee) may also have insurance.

Ordinance or Law Coverage, FP 04 05 10 93

 This endorsement provides ordinance or law coverage for farm buildings other than farm dwellings—these may be covered under dwelling replacement cost protection (including ordinance or law coverage) discussed above. The insured may select coverage 1, coverage 2, and/or coverage 3. Coverage 1 provides coverage for loss in value to an undamaged portion of a building following a covered loss, if the loss in value is caused by ordinance or law governing demolition of the undamaged portion of the building, or construction, repair, or zoning or land use requirements. Coverage 2 affords demolition cost coverage. Coverage 3 provides increased cost of construction arising from the enforcement or any law or ordinance governing repair or reconstruction.

 Coverage 1 is included within the limits of insurance shown in the declarations as applicable to covered building property. Separate limits of insurance for coverages 2 and 3 must be indicated on the endorsement's schedule. The insured may select separate limits for coverages 2 and 3, or may blanket the two together.

Peak Season, FP 12 29 09 03

 This endorsement provides for an increase in the limit of insurance on selected items of farm personal property. This increase is good only for selected periods of time when property values can be expected to be higher than at other times of the year, as shown in the schedule of the endorsement.

Pollutant Clean Up and Removal Additional Aggregate Limit of Insurance, FP 04 22 01 98

 This form allows the purchase of additional clean up and removal coverage beyond the $10,000 provided in the standard farm forms. The form also contains its own deductible. No coverage is available until the total of all such costs exceeds $10,000 plus the deductible amount shown in the schedule. Coverage is on the basis of scheduled locations.

Rental to Others – Theft Coverage, FP 04 80 09 03

 This endorsement deletes the theft exclusion of coverage C for personal property (1) in the principal residence when rented "occasionally" to others or (2) in that part of the principal residence rented to a roomer or boarder. Theft committed by a tenant, roomer or boarder, or employee of any of these, or theft of firearms, money, securities, silver, silverware, gold, goldware, or jewelry, watches or furs is not covered.

Replacement Cost — Household Personal Property, FP 04 36 01 98

 This endorsement converts the basis for payment of loss under coverage C from actual cash value to replacement cost. Although it differs somewhat in wording, it provides essentially the same household goods coverage as ISO homeowners endorsement HO 04 90 10 00. Still covered for actual cash value are certain types of property such as antiques, memorabilia, articles not maintained in good or workable condition, or articles that are obsolete and stored or not used. The replacement cost provisions of this endorsement do not apply to scheduled items, as do the equivalent homeowners form's.

 Report of Values Form, FP 13 02 09 03

 This form complements the farm value reporting endorsement FP 13 01, and provides information on reporting property values, and a summary or reporting dates. A Report of the full value of the covered property must be filed within 30 days of the end of the reporting period.

Scheduled Glass, FP 04 67 01 98

 Scheduled glass may be covered for loss caused by breakage or chemicals applied to the glass. This form provides actual cash value coverage for expenses incurred in making temporary repairs, and expenses incurred in removing and replacing obstructions due to glass losses. A description of the glass—including number of plates, dimensions, any lettering or ornamentation, and position in the building—is then shown on the endorsement with the applicable limit of insurance.

Scheduled Personal Property, FP 04 61 05 11

 This endorsement covers specific items of personal property in much the same way as a personal articles floater or homeowners scheduled personal property endorsement HO 04 61 05 11. Endorsement FP 04 61 differs in language and format from these forms, but there are only a few differences in the coverage provided.

 The most substantive difference is that under endorsement FP 04 61, thirty-day automatic coverage on newly acquired property is limited to "cameras" and "musical instruments," and does not apply to jewelry or furs as the other two forms do. The ninety-day automatic coverage on fine arts is the same under all three forms.

 Also, this form defines several terms, in contrast to the homeowners endorsement and the personal articles floater, which do not have a specific definitions section. These forms include the definitions either in the schedule or text of the form. But the meaning of these terms is essentially the same in all three coverages.

Single Farm Property Per-Occurrence Deductible, FP 03 04 01 98

 New with the 01 98 forms revision, this endorsement provides for a single per-occurrence deductible for all covered losses under the farm property coverage forms, mobile agricultural machinery and equipment coverage form, and livestock coverage form, when two or all of the forms are included in the same policy.

Sound Receiving and Transmitting Equipment, FP 04 33 01 87

 This endorsement provides coverage for loss or damage to sound receiving, recording, or sound receiving and transmitting equipment. It covers accessories and antennas, while installed in or upon a motor vehicle or mobile agricultural machinery or equipment. This endorsement covers property that is excluded as property not covered in the farm property—farm dwellings, appurtenant structures and household personal property coverage form. Tapes for this equipment are shown as either included or excluded, by marking the appropriate space on the endorsement. If marked as included, $100 of coverage on tapes, wires, records, discs, or other media is also provided. No deductible applies to this coverage. This endorsement may also be used with the mobile agricultural machinery and equipment coverage form. No deductible applies to this coverage.

Special Loss Settlement on Dwellings, FP 04 35 01 98

 This endorsement revises the percentage of insurance required to recover full replacement cost under the valuation loss condition of the farm dwellings coverage form. Instead of 80 percent, the insured may choose 70 percent, 60 percent, or 50 percent, with successive increase in rate as the percentage is reduced. This endorsement is available only for farms that qualify for the farm combination coverage program. It is useful on older dwellings of elaborate construction that have a high replacement cost in relation to market value, when the owner wishes to recover cost of repair on partial losses but would replace with lower cost, less elaborate construction in the event of a substantial loss.

Spoilage Coverage—Perishable Farm Personal Property, FP 04 24 09 03

 This endorsement extends "consequential loss" coverage to perishable farm personal property, scheduled under the farm personal property coverage form at an owned insured location. The form covers direct loss to perishable farm personal property. Such property includes meat, poultry, and fish products, as well as drugs, vitamins, plasma, blood, medicine, milk and produce. These items must be maintained under "controlled temperature or humidity conditions" and be "susceptible to loss or damage" from a change in temperature or humidity.

 The insured may select coverage for loss caused by mechanical breakdown or contamination by a refrigerant, or by public power outage. If a selling price is indicated in the schedule, then in event of covered loss or damage the value of the property will be determined at its selling price as if no loss or damage had occurred, less discounts and expenses the insured otherwise would have had.

Sump Overflow and Water Backup from Sewers or Drains (Coverages A, B, C and D Only), FP 04 02 01 98

 This endorsement was new in the 01 98 forms revision. It removes the exclusion for water "that backs up or overflows from a sewer, drain or sump" in the causes of loss form—farm property. The endorsement provides up to $5,000 coverage for direct physical loss or damage to property covered under the farm property—farm dwellings, appurtenant structures and household personal property coverage form.

Supplemental Report of Values Form, FP 13 03 10 06

 This endorsement is designed to be attached to report of values form FP 13 02, and provides additional space to report property values. Each listing must indicate whether the valuation is actual cash value, market value, replacement cost, selling price or other type of valuation.

Theft Exclusion, FP 10 14 01 98

 For a rate credit, the insured may use this endorsement to delete theft coverage for types of property shown in the schedule at specified locations. Some insurers may require this form because of increased theft risk. Even though theft is excluded, the form does provide coverage for loss from looting during a riot and damage done to a building by burglars.

Unoccupancy and Vacancy Permit, FP 04 75 01 98

 This form amends the unoccupancy and vacancy provisions of the policy in two ways. First, it allows for unoccupancy and vacancy of buildings for more than 120 days without reducing the limit of liability on the specified building to 50 percent, and, second, it removes the restriction on perils applying to the selected buildings that have been vacant for more than thirty days.

 The form indicates a time period when the permit applies, as well as a description of the building or structure in question.

Value Reporting Endorsement, FP 13 01 09 03

 This form recognizes that farms—like other businesses—have property values that may vary from time to time. If the insured chooses this form, he pays a deposit premium based on the anticipated value of his farm personal property and livestock. He then reports to the insurer the actual values at his farm, according to one of a number of options indicated on the form.

 The form contains a provision that it is excess over the sum of the amount due from "specific insurance" plus any other insurance, whether collectible or not, plus the amount of any deductibles applying to the "specific insurance." "Specific insurance" is any other insurance covering any covered property subject to this endorsement, for the same causes of loss covered by the insurance to which this endorsement attaches.

Vandalism Exclusion, FP 10 16 01 98

 A rate credit is applied when this form, which excludes the peril of vandalism, is attached. Also, due to increased vandalism risk some insurers may require the addition of this form. The insured schedules the locations where no vandalism coverage is to be provided. Note, though, that if vandalism results in any covered cause of loss, that ensuing loss or damage is covered.

Windstorm or Hail Exclusion, FP 10 15 09 03

 This endorsement allows a rate credit for the exclusion of coverage for these perils at certain properties. Also, due to increased risk of loss from wind and hail in some areas (severe summer storms in the Midwest come to mind), some insurers may require the addition of this form. The form provides a place to schedule the property. It also deletes windstorm and hail from the definition of "specified causes of loss."

 However, if the windstorm or hail results in a covered cause of loss other than rain, snow, sleet, sand or dust, that ensuing loss is covered.

Windstorm or Hail Percentage Deductible, FP 03 05 09 03

 The insured may select a 1 percent, 2 percent, or 5 percent deductible, and may schedule the locations and/or buildings to which the deductible applies. This coverage is available for new or replacement machinery, newly acquired livestock and the 30 day additional limit on borrowed or rented machinery, vehicles or equipment. Cautious use of this endorsement is advised, since its application results in much lower payments for many claims. For example, the deductible applies separately to a building and to personal property contained in that building, if both sustain damage.

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