ISO Farm Program Scheduled Personal Property-Form 04 61

FP 04 61–ISO FARM PROGRAM SCHEDULED PERSONAL PROPERTY

(April 2020)

This endorsement provides a means to modify FP 00 12–Farm Property–Farm Dwellings, Appurtenant Structures, and Household Personal Property Coverage Form. Nine categories of covered property listed on the schedule receive special treatment. This coverage enhancement recognizes the unique aspects of each property class listed.

Changes in the 04 16 edition of this form are highlighted in bold.

The nine categories are:

·         Jewelry

·         Furs

·         Cameras

·         Musical Instruments

·         Silverware, silverplated ware, goldware, goldplated ware and pewterware

·         Golfers Equipment

·         Fine Arts

·         Postage Stamps

·         Rare and Current Coins

Each category being modified must have a total limit of insurance entered in the space provided. This represents the total value of all insured items in that category or class of property. In addition, the form requires individual schedules and lists of covered property that are part of the specific limit of liability that applies for each category. Silverware, Golfers Equipment, Postage Stamps and Rare and Current Coins are not subject to the scheduling requirement.

COVERAGE

The form uses the term “Special Limits” to apply to whatever items are listed in the schedule for which a limit is entered. There is no statement that these Special Limits are sub-limits so it would imply that the limits are in addition to the Coverage C limits.

Because the coverage being provided is specific coverage, all items covered under this endorsement will not be covered under Coverage C. This means the values should be deducted from the Coverage C limit of insurance to prevent paying double for items for which only single coverage is provided.

COVERAGE EXTENSIONS (04 16 change)

This section applies to Jewelry, Furs, Cameras, and Musical Instruments and to Fine Arts. For Cameras and Musical Instruments, newly acquired items are covered for up to 30 days and for a maximum of 25% of their respective limits of insurance or $10,000, whichever is less. Newly acquired Fine Arts are covered for up to 90 days and for a maximum of 25% of the limits of insurance or the actual cash value of the item, whichever is less.

CAUSES OF LOSS AND EXCLUSIONS (04 16 change)

FP 10 60– Farm Property–Causes of Loss is revised with respect to only the scheduled categories. The causes of loss and exclusions that apply to the rest of the household personal property do not apply to these categories. That form is completely replaced by the following:

Covered Causes of Loss is direct physical loss or damage except as it is excluded or limited throughout the policy.

The following exclusions apply to all categories of property and apply if a loss is caused directly or indirectly by and where the cause of loss occurs in a sequence of events:

·         Inherent vice, wear and tear and gradual deterioration.

Example: Jessie not only took over his grandpa’s farm, he also inherited his grandpa’s watch collection. A year after he had the items covered under a FP 04 61 endorsement that he added to his farm property policy, he noticed that a dozen watches’ leather bands were cracked and broken. He submitted a claim and it was denied….he was told there’s no coverage for natural damage to old leather.

 

·     Vermin and insects.

·     War and related warlike actions – changed to match the FP 10 60 war exclusion.

o   Nuclear Hazard, as detailed in the Nuclear Hazard Clause – changed to match the FP 10 60 nuclear hazard exclusion.

The following exclusions apply only to fine arts. Coverage does not apply to loss or damage caused by or resulting from:

·     Any damage that occurs during a repair, restoration or retouching process

·     Any loss that occurs at an exhibition at a fairground or exposition, unless the premises is specifically listed and covered under the policy

·     Breakage of fragile items, unless caused by fire, lightning, explosion, aircraft, collision, windstorm, earthquake, flood, vandalism, theft or derailment or overturn of a mode of transportation. However, this exclusion does not apply to any schedule item with a double asterisk beside it.

The following exclusions apply only to Postage Stamps and Rare and Current Coin collections:

·     Loss, damage or injuries that affect value, such as fading, creasing, denting, scratching, tearing or thinning

·     Loss or damage due to inherent defect, dampness, excessive temperatures, loss of value or color transfer

·     Loss or damage because of handling or work done on the property

·     Loss due to the disappearance of individual items, unless specifically listed and described with a specific limit. The exclusion also does not apply if the stamp is mounted and the entire page to which it is mounted is lost.

·     Loss or damage to property in the custody of public carriers for hire

·     Loss to property shipped by any non-registered mail

·     Anything that occurs to property that is not part of a collection

Golf balls are covered only when their loss or damage is due to fire or burglary and is accompanied by evidence of forcible entry.

DEDUCTIBLE

No deductibles apply to coverage provided by this form.

CONDITIONS

In addition to the conditions in Coverage C of FP 00 12–Farm Property–Farm Dwellings, Appurtenant Structures and Household Personal Property Coverage Form, the following additional conditions apply.

 

LOSS CONDITIONS

·     Reinstatement of limit after a loss.

The limit of insurance is not reduced when payment on a claim is made unless an entire scheduled item is lost or destroyed. In those cases, the insurance company refunds any unearned premium that applies to the item lost or destroyed.

Example: Laura’s farm is burglarized, and an emerald ring is among the items stolen. After the loss is settled, she receives amended policy declarations showing her jewelry schedule limit reduced by the $3,000 value of her lost ring. She also receives a refund of the unearned premium charge for that item.

 

 

 

·     Valuation

(1)   Fine Arts

These losses are paid based on the agreed value or limit per item. If payment is made, the item must be surrendered to the insurance company unless it is was lost or stolen if so requested.

If items are part of a pair or set, the value of the pair or set is paid and the remaining item(s) are turned over to the insurance company if they request.

If a lost or stolen item is recovered, it becomes the property of the insurance company and must be relinquished to the insurance company but only if the insurance company had paid the full scheduled amount.

The insurance company will sell the surrendered items discussed above back to the named insured at an agreed upon price.  

Note: This change could be very costly. Other forms state that the named insured must only return the amount the insurance company had paid in order to obtain the property. This provision takes that option from the named insured and puts the insurance company in charge of negotiations. This could have a very negative impact on the named insured.

Example: Margy scheduled a painting that had been in her family for 200 years for $1,000 because she thought it had only sentimental value. It was stolen along with other items and the insurance company paid $1,000 for the painting and the remainder of the loss. A year later she is shocked to see her painting on TV being valued at $250,000. She notifies the police and her insurance company who begin a recovery process. Thanks to diligent work by everyone and Margy’s excellent provenance on the item, it is returned…to the insurance company. Margy offers to return the $1,000 but the insurance company insists that Margy must pay them $250,000.

 

(2)   Postage Stamps or Rate and Current Coins Collection

If coins or stamps are not individually listed and an amount of insurance is shown, the value is the cash market value at the time of loss. However, the company will not pay more than $1,000 for an unscheduled coin collection or more than $250 for any individual article, pair, block, series sheet, cover, or frame. Property underinsured is subject to a penalty. Any loss to covered property insured on a blanket basis is paid based on the proportion of the total limit of the collection as it bears to its cash market value on the day of loss.

(3)   Other Property

All other covered property is valued at the least of the following:

o    The actual cash value, at the time of the loss, of the item(s)

o    The cost to restore the property to the condition it was in just before the loss

o    The cost to replace the property with material of similar kind and quality

o    The limit of insurance on the schedule

·     Pair, Set or Parts Other Than Fine Arts (04 16 change)

When a pair or set is lost or damaged the insurance company has the option to repair or replace the damaged item in order to return the pair or set to its pre-loss value or to pay the difference of the pre-loss and post loss actual cash value.  .

If part of a property having many different parts is damaged or destroyed, only the value of the damaged or destroyed part is paid.

GENERAL CONDITIONS (04 16 change)

Coverage applies wherever the property is located. In addition, Fine Arts being prepared for shipment must be handled by competent packers.

Note: The Prior edition restricted coverage for Fine Arts to the United States or Canada. It is now worldwide.

DEFINITIONS

These definitions are in addition to the Definitions found in Form FP 00 90–Farm Property–Other Farm Provision Form–Additional Coverage, Condition, Definitions.

·     Cameras

This is not only the camera but also projection machines, films and similar equipment.

Furs is not limited to only 100% fur items. It includes fur-trimmed garments and other garments that include both fur and other material.

·     Golfers' equipment (04 16 change)

This consists of golf clubs, other types of golf equipment and clothes that are specific to golf. It also includes non-golf clothing that is kept in the locker during a round of golf.

·     Musical instruments

This is not only the instrument but also the equipment used with the instrument such as cases and stands.

·     Postage stamps

This is all types of stamps. It also includes accompanying paraphernalia, such as proofs, philatelic property, books, and mountings. Items covered under this definition can be either owned property or simply property of others in the care, custody, or control of the insured.

·     Rare and Current Coins

This is all types of coinage and paper money, along with other numismatic property, as well as the albums and display areas used with the coin collection. Items covered under this definition can be either owned property or simply property of others in the care, custody, or control of the insured.