15.1 Farm and Agricultural Coverage
Key Takeaways
- ISO Farm program = Farm Property Form (FP 00 13) + Farm Liability Form (FL 00 20) covering dwelling and farm-business exposures together.
- Coverages D (scheduled) and E (blanket/unscheduled) handle livestock and equipment; blanket property is typically ACV unless replacement cost is endorsed.
- Growing crops and standing timber are excluded and require crop-hail or federal MPCI coverage.
- Most farm property coverages carry 80% coinsurance (Coverage C household contents often 70%).
- Farm Liability Coverages H/I/J parallel CGL bodily injury/PD, personal & advertising injury, and medical payments.
Farm and Agricultural Coverage
The ISO Farm Coverage Part blends personal and commercial exposures into one program because a farm is simultaneously a residence and a business. The core forms are the Farm Property Coverage Form (FP 00 13) and the Farm Liability Coverage Form (FL 00 20), combined into a Farm Coverage Part under either the Farm Policy or a Businessowners-style package. Exam questions hinge on which Coverage letter applies to which exposure, so memorize the structure cold.
The Five Property Coverages
The Farm Property Coverage Form organizes exposures into lettered coverages. Each is scheduled or blanketed separately, and each carries its own limit and (often) its own coinsurance percentage.
| Coverage | Insures | Typical Coinsurance |
|---|---|---|
| A Dwellings | Farm dwelling + attached structures | 80% |
| B Other Private Structures | Detached garage, fences appurtenant to dwelling | 80% |
| C Household Personal Property | Contents of the dwelling | 70% |
| D Scheduled Farm Personal Property | Specifically listed equipment, livestock | 80% |
| E Unscheduled (Blanket) Farm Personal Property | Blanket grain, supplies, machinery | 80% |
| F/G Barns, Outbuildings & Structures | Farm buildings used in operations | 80% |
Coverages D and E - Livestock and Equipment
Coverage D (Scheduled Farm Personal Property) lists each animal, tractor, or implement with a stated value - useful for high-value breeding stock. Coverage E (Unscheduled / Blanket) covers the remaining farm personal property under one limit and is settled on actual cash value (ACV) unless replacement cost is endorsed. A key trap: growing crops and standing timber are NOT covered by the Farm Property form - those need crop-hail or Multi-Peril Crop Insurance (MPCI) through the federal RMA program.
Worked Coinsurance Example
A barn (Coverage F) is insured for $120,000 but its replacement cost at the time of loss is $200,000. The form carries 80% coinsurance. The required amount to carry is 80% x $200,000 = $160,000. The insured only carried $120,000, so the coinsurance penalty factor is $120,000 / $160,000 = 0.75.
On a partial loss of $40,000 (subject to a $1,000 deductible), the payable amount is: $40,000 x 0.75 = $30,000, minus the $1,000 deductible = $29,000. The insured absorbs the rest as a penalty for being underinsured.
Farm Liability (FL 00 20)
The Farm Liability Coverage Form mirrors the CGL/homeowners hybrid:
- Coverage H - Bodily Injury & Property Damage Liability (the farming operation and the residence premises)
- Coverage I - Personal & Advertising Injury (libel, slander, wrongful eviction)
- Coverage J - Medical Payments (no-fault, paid regardless of liability)
A frequent exam trap: liability for the incidental business of the farm (selling produce at a roadside stand) is covered, but a separate commercial enterprise unrelated to farming is excluded and needs a CGL. Custom farming done for others may require an endorsement.
A farm barn with a replacement cost of $200,000 is insured for $120,000 under an 80% coinsurance clause. After a $40,000 partial loss (and a $1,000 deductible), how much will the insurer pay?
Under the ISO Farm Property Coverage Form, which exposure is NOT covered and instead requires a separate federal or crop-hail policy?
The Farm Property Coverages and How They Differ From Homeowners
A Farmowners / Farm policy is a package that blends a homeowners-style dwelling and personal-property section with commercial farm property and farm liability, because a working farm is both a residence and a business. The ISO Farm Property form (FP series) organizes coverage into five parts:
| Coverage | Insures |
|---|---|
| A – Dwellings | The farm residence(s) |
| B – Other private structures | Detached residential structures (garage, fence) |
| C – Household personal property | The family's contents |
| D – Scheduled farm personal property | Specifically listed livestock, machinery, grain, produce |
| E – Unscheduled (blanket) farm personal property | Blanket limit over remaining farm property |
Worked coinsurance example: Barn replacement cost $200,000, 80% coinsurance requires $160,000, insured carries $120,000, loss $40,000. Payment = ($120,000 / $160,000) x $40,000 = $30,000 before the deductible, because the insured fell short of the 80% requirement.
Livestock, Equipment, and Farm Liability
Coverage D schedules specific high-value items — livestock insured against named perils (fire, lightning, accidental shooting, drowning, electrocution, attack by dogs/wild animals, and loading/unloading accidents) and farm machinery — while Coverage E provides blanket protection so an insured does not have to schedule every implement. Mobile equipment used off-premises may need an inland-marine equipment floater.
Farm Liability (FL 00 20) parallels the CGL but is tailored to agricultural exposures:
| Farm liability coverage | Pays |
|---|---|
| Coverage H – Bodily Injury & Property Damage | Third-party BI/PD from farming and personal activities |
| Coverage I – Personal & Advertising Injury | Named offenses |
| Coverage J – Medical Payments | No-fault medical for non-residents injured on the farm |
Exam traps: Farm liability covers the farming operation (a customer hurt at a roadside stand, livestock that escapes and causes an accident) but excludes the farm's commercial products sold off-premises beyond incidental sales, custom farming for others beyond stated limits, and auto/aircraft. Agritourism (hayrides, petting zoos) often needs an endorsement. A farm exposure makes a dwelling ineligible for a homeowners policy, which is exactly why the Farmowners package exists — recognizing that eligibility shift is a frequent question.