FARM PROPERTY AND LIABILITY INSURANCE
FARM PROPERTY AND LIABILITY INSURANCE CHAPTER
17 EXAM QUESTIONS AND ANSWERS GRADED A+
A farm is often a home; how does the policy work when a family lives on the premises? ANS >> All
homeowners coverages must be included as a part of the farm policy
Farm coverage contracts consist of two forms? ANS >> Farm property coverage form and farm liability
coverage form
Together these make up a farm coverage form, which can be purchased in two different ways? ANS >>
Monoline policy
or
part of Commercial Package Policy
Includes any building used for family residential purposes, including trailers, modular living units, and
prefab bodings? (just learning defeminations for terms of a farm policy) ANS >> Dwelling
Means cattle, sheep, swine, goats, horses, mules, donkeys? ANS >> Livestock
Means fowl kepi by the insured for use of sale? ANS >> Poultry
,FARM PROPERTY AND LIABILITY INSURANCE
How are other animals covered? (meaning those not included under livestock and poultry) ANS >>
special endorsement
Means equipment supplies, and products of farming or ranching operations, including but not limited to
feed, seed, fertilizer, livestock, other animals, poultry, grain, bees, fish, worms, produce and agricultural
vehicles and equipment? ANS >> Farm personal property
Before buying coverage, we must assess and analyse the property risk? ANS >> What is insured?
Against what perils?
How are losses paid?
To answer that first question- "What property is insured?" Where do we look in farm insurance? ANS >>
To three Sub-forms:
1. Farm Dwelling, appurtenant structures, and household personal property
2. Farm (business) Personal Property
3. Farm buildings and structure
What coverages comprise the sub form Farm Dwelling, Appurtenant Structures, and Household Personal
Property? (4) ANS >> Coverage A- Dwellings
Coverage B - Other Private Structures Appurtenant to Dwellings
Coverage C- Household Personal Property
Coverage D- Loss of Use
, FARM PROPERTY AND LIABILITY INSURANCE
What does Coverage A- Dwellings mean? (Don’t forget the last part) ANS >> It protects the dwelling
where I live, as well as permanently attached property and ANY materials on site for repair of the
dwelling.
What if I have equipment on my farm that is used for maintenance of my residence? ANS >> Covered
under Coverage A
What if I have equipment in the same manner accept it located off site? ANS >> Covered under
Coverage A
Are satellite dishes covered? (trick) ANS >> Yes, but they are only covered up to 1000
What the valuation of property located under coverage A dwelling for farm coverage? ANS >>
Replacement Costs basis AS LONG AS the policy they purchased is 80% of the dwellings replacement cost
value
What if the policy covers less than 80% of dwelling? ANS >> Settlement is made on ACV
or
the ratio of actual coverage to 80%
How do we get to the ratio number of coverage in calculation if policy carries less than 80% under Farm?
ANS >> Identify the replacement value of the property.
Then, multiply 80% to it to see what that gets you. So, in the fact pattern, they will have to give
placement costs. Says 120000. Look to see what 80percent coverage would be on 120000. Its 96000.
However, the farm owner only bought 80000 of coverage. They 83 percent of 90000 but I don’t know
how they are getting that. Anyway, insurer will which ever is greater 83% of replacement costs or ACV.
What are the exclusions of Coverage A? (dwelling under farm coverage) ANS >> trees, plants, shrubs,
water, and land where the residence is located
Is there anyway to rescue these types of property from exclusion? (some type of form perhaps) ANS >>
Yes, put them on an extension coverage form.
FARM PROPERTY AND LIABILITY INSURANCE CHAPTER
17 EXAM QUESTIONS AND ANSWERS GRADED A+
A farm is often a home; how does the policy work when a family lives on the premises? ANS >> All
homeowners coverages must be included as a part of the farm policy
Farm coverage contracts consist of two forms? ANS >> Farm property coverage form and farm liability
coverage form
Together these make up a farm coverage form, which can be purchased in two different ways? ANS >>
Monoline policy
or
part of Commercial Package Policy
Includes any building used for family residential purposes, including trailers, modular living units, and
prefab bodings? (just learning defeminations for terms of a farm policy) ANS >> Dwelling
Means cattle, sheep, swine, goats, horses, mules, donkeys? ANS >> Livestock
Means fowl kepi by the insured for use of sale? ANS >> Poultry
,FARM PROPERTY AND LIABILITY INSURANCE
How are other animals covered? (meaning those not included under livestock and poultry) ANS >>
special endorsement
Means equipment supplies, and products of farming or ranching operations, including but not limited to
feed, seed, fertilizer, livestock, other animals, poultry, grain, bees, fish, worms, produce and agricultural
vehicles and equipment? ANS >> Farm personal property
Before buying coverage, we must assess and analyse the property risk? ANS >> What is insured?
Against what perils?
How are losses paid?
To answer that first question- "What property is insured?" Where do we look in farm insurance? ANS >>
To three Sub-forms:
1. Farm Dwelling, appurtenant structures, and household personal property
2. Farm (business) Personal Property
3. Farm buildings and structure
What coverages comprise the sub form Farm Dwelling, Appurtenant Structures, and Household Personal
Property? (4) ANS >> Coverage A- Dwellings
Coverage B - Other Private Structures Appurtenant to Dwellings
Coverage C- Household Personal Property
Coverage D- Loss of Use
, FARM PROPERTY AND LIABILITY INSURANCE
What does Coverage A- Dwellings mean? (Don’t forget the last part) ANS >> It protects the dwelling
where I live, as well as permanently attached property and ANY materials on site for repair of the
dwelling.
What if I have equipment on my farm that is used for maintenance of my residence? ANS >> Covered
under Coverage A
What if I have equipment in the same manner accept it located off site? ANS >> Covered under
Coverage A
Are satellite dishes covered? (trick) ANS >> Yes, but they are only covered up to 1000
What the valuation of property located under coverage A dwelling for farm coverage? ANS >>
Replacement Costs basis AS LONG AS the policy they purchased is 80% of the dwellings replacement cost
value
What if the policy covers less than 80% of dwelling? ANS >> Settlement is made on ACV
or
the ratio of actual coverage to 80%
How do we get to the ratio number of coverage in calculation if policy carries less than 80% under Farm?
ANS >> Identify the replacement value of the property.
Then, multiply 80% to it to see what that gets you. So, in the fact pattern, they will have to give
placement costs. Says 120000. Look to see what 80percent coverage would be on 120000. Its 96000.
However, the farm owner only bought 80000 of coverage. They 83 percent of 90000 but I don’t know
how they are getting that. Anyway, insurer will which ever is greater 83% of replacement costs or ACV.
What are the exclusions of Coverage A? (dwelling under farm coverage) ANS >> trees, plants, shrubs,
water, and land where the residence is located
Is there anyway to rescue these types of property from exclusion? (some type of form perhaps) ANS >>
Yes, put them on an extension coverage form.
