FP 05 23–ISO FARM PROGRAM UNIT-OWNERS COVERAGE FORM

(April 2020)

This endorsement can be attached to Farm Property and Liability Coverage parts to provide coverage for condominium unit owners.

Example: Ma and Pa Smyth decide they have had enough of farming. They buy a condo and retire to Florida. They leave the operation of Smyth Acres to their children who remain on the farm.

This endorsement was updated in 04 16 and changes are highlighted in bold.

SCHEDULE (04 16 change)

The first part of the endorsement is a listing and schedule of the insured condominium unit. A complete description of the condominium is provided here or is shown on the declarations as an insured location. An accurate description is required, which is very important. The schedule provides spaces to show limits of insurance for Coverage A (Dwelling), Coverage C (Household Personal Property), Coverage D (Loss of Use) and Loss Assessment Coverage with Limits for both Property and Liability coverages. The last item is the selection of either Basic or the Broad causes of loss. Special causes of loss coverage is not available for use with this form. Roof surfacing options are available. One provides for damage to the roof to be handled on an actual cash value and the other addresses cosmetic damage to the roof. These options apply only if selected in the schedule.

Note: The schedule on the prior editions provided space for three units. The current edition provides space for only one.

DEFINITIONS

The definition of insured location is changed in both the FP 00 90 –Farm Property – Other Farm Provisions Form – Additional Coverages, Condition, Definitions and the FL 00 20–Farm Liability Coverage. The definition of dwelling is changed in the FP 00 90 and that definition of dwelling is added to the FL 00 20. These changes apply only for coverage provided by this endorsement.

Dwelling

The unit used mainly for family residential purposes that is described in the schedule. A unit that qualifies for coverage may be either owned or occupied by the named insured. It can also be owned by a partnership, joint venture or other organization of which the named insured has an ownership interest and then occupied by a member of that entity.

Insured location

This is the location where the dwelling defined above is located.

PROPERTY SECTION

Coverage (04 16 change)

Coverage A, Coverage C and Coverage D of FP 00 12–Farm Property Coverage Form are amended by this endorsement.

Coverage A

Coverage A applies to improvements, alterations, appliances, and fixtures that make up part of the dwelling. It also covers any dwelling-related real property, property the unit owner must insure in accordance with a property owner’s agreement or any other structure owned by the named insured. This last property item must be at the insured location. Basic causes of loss or broad causes of loss are the only available options. Special causes of loss coverage is not available for use with this form.

Coverage A does not apply to land, property held for rent (except for a private garage), business property storage areas, water, and trees, plants, shrubs and lawns, except as provided for in the coverage extensions in the form.

Coverage A Conditions

Claims for loss or damage to covered property are paid based on the cost to repair or replace the damaged property but it applies only if the repair or replacement is handled on a timely basis. When the repairs or replacement are delayed or not handled at all the claim is settled based on the actual cash value of the property on the day of loss if that is less than the cost to repair or replace. The amount paid for repairing or replacing will not include any cost to comply with any building-related ordinance or law or any cost associated with responding to the enforcement of any building ordinance or law.

The Roof Surfacing Condition explains how the new options on the schedule impact a roof damaged by windstorm or hail loss:

If the Actual Cash Value option is selected, the roof damage is settled on an actual cash value basis but if the loss is due to any cause of loss other than windstorm or hail, the loss is adjusted in the same manner the rest of the building is adjusted.
If the Cosmetic Damage to roof surfacing option is selected, any damage that does not result in the roof being unable to perform its function as a roof is not covered. However, this does not apply for any loss that is not windstorm or wind.

Coverage B

Coverage B (Other Private Structures Appurtenant to Dwellings) does not apply to this coverage.

Coverage C

Coverage C applies to the same household personal property covered by Form FP 00 12–Farm Property Coverage Form. Basic causes of loss or the broad causes of loss are the only causes of loss available for use with this coverage.

Coverage D

Coverage D applies to Additional Living Expenses, Fair Rental Value and Expense Due to Emergency Prohibition Against Occupancy. It applies in the same manner as on Coverage D-Loss of Use in FP 00 12–Farm Property Coverage Form but is rewritten to match the defined terms and coverages in this coverage form.

Coverage Extensions

The same coverage extensions found in FP 00 12–Farm Property–Farm Dwellings, Appurtenant Structures and Household Personal Property Coverage Form apply to this form. However, they have been modified to meet the requirements and needs of a condominium unit owner. Building Additions and Alternations is not available.

Additional Coverages

All additional coverages provided in FP 00 12–Farm Property Coverage Form, apply, with the exception of coverage for Removal of Fallen Trees, which is deleted.

Loss Assessment

Loss Assessment is included as an Additional Coverage and is an additional amount of insurance. It pays for the “fair share” that members of an association must pay due to physical damage to common or collectively owned property. The assessment must result from direct loss or damage to this property and be from a cause of loss included in this coverage form except for earthquake and volcanic eruption. Coverage is subject to the limit shown in the schedule and only one deductible is applied, regardless of the number of units involved. Coverage does not apply to assessments or charges made against the insured or the condominium association and owners by any governmental entity.

Covered Causes of Loss

The Covered Causes of Loss described in FP 10 60–Causes of Loss–Farm Property apply. With the exception of modifications needed to make the wording appropriate for condominiums, the Basic and Broad Causes of Loss are unchanged. The Special Causes of Loss is not available for use with this form.

Related Article: Farm Property Coverage Form Analysis

Conditions (04 16 change)

All conditions in Form FP 00 90–Farm Property–Other Farm Provisions Form–Additional Coverage, Conditions, and Definitions apply, with one exception.

The Other Insurance and Service Agreement Loss Condition is modified by stating that, if there is other insurance subject to the same terms as this policy, this policy pays on a proportional basis.

If the other insurance or service agreement is written in the name of an association of property owners, this insurance pays on an excess basis not a proportional basis. However, when the association insurance does not pay due to its deductible, this insurance is primary.

LIABILITY SECTION

This section modifies the FP 00 20–Farm Liability Coverage form. There are two items in this section. The first item removes coverage while the second item adds coverage.

1. The following exclusion is added to both the Bodily Injury and Property Damage Liability and the Personal and Advertising Injury Liability coverages.

Loss Assessment - exclusion

Liability coverage does not extend to:

Loss assessments made against the named insured because of its involvement with any type of property owning groups except as described in item 2. below.
Contractual or agreement based-liability regardless of which insured entered into such arrangement. There are two exceptions.

o Contracts or agreements related to an insured location’s ownership, use, or maintenance

o Liability assumed prior to an occurrence. However, the assumed liability cannot be excluded in the policy or in this endorsement.

2. The following is added to the Liability section as an Additional Coverage

Loss Assessment - coverage

The “fair share” that members of an association must pay because they own dwellings within that association at the time when there is an assessment against all members. However, coverage applies only if the assessment is due to either of the following and is made during the policy period:

Bodily injury, property damage, personal injury, or advertising injury incident that is not excluded under the policy to which this endorsement is attached and not excluded under this endorsement.
An act of an elected, unpaid director, officer, or trustee of the association.

The maximum amount paid is referred to as the Loss Assessment Limit Of Insurance – Liability. It is the most paid for an occurrence or act regardless of the number of persons involved in the occurrence or act.

Assessments by governmental bodies that are brought against individuals or associations are NOT covered.

Example: Ma and Pa Smyth receive a demand for $1,500 from their condominium association and look to their FP 05 23 for coverage.

Scenario 1: The assessment is due to Pa having driven his pickup truck into the dumpster when he was upset with how loud the crew was playing their music. This assessment is not covered because it was not against all members of the association.

Scenario 2: The assessment is due to the association dumping waste into the nearby river. This assessment is not covered because pollution is excluded in the FL 00 20.

Scenario 3: A person is suing the association because of statements made by one of the association’s directors at an association meeting. This assessment would be covered.

Scenario 4: A person is suing the association because she slipped on the ice. This assessment is covered.