Farm Property and Equipment Insurance Flashcards
7 cards from real AFIS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Farm Property and Equipment Insurance flashcards as text
What is an 'inland marine' floater in the context of farm insurance?
Answer: A broader, more flexible property coverage designed to cover mobile or transportable equipment both on and off the farm premises
An inland marine floater provides broad coverage for mobile property like farm equipment and can follow the equipment off the insured premises, unlike standard farm property coverage which is location-based.
How is farm equipment typically valued under an actual cash value (ACV) settlement?
Answer: Replacement cost of a comparable new item minus physical depreciation based on age and condition
ACV is calculated as the cost to replace the item with new property of like kind and quality, minus accumulated depreciation reflecting the equipment's age, use, and physical condition.
Which of the following losses would most likely be EXCLUDED under a standard farm property policy?
Answer: Gradual deterioration of a silo due to long-term moisture and age
Gradual deterioration, wear and tear, and maintenance-related damage are standard exclusions in farm property policies because they represent expected costs of ownership rather than sudden accidental losses.
What does 'ordinance or law' coverage provide for farm structures?
Answer: Additional funds to bring a damaged structure into compliance with current building codes when rebuilding after a covered loss
Ordinance or law coverage pays the additional cost required to rebuild a structure to current building codes after a covered loss, costs that standard replacement cost coverage would not include.
How does debris removal coverage function following a farm property loss?
Answer: It provides additional funds to cover the cost of removing the remains of damaged property after a covered loss, subject to a sub-limit
Debris removal coverage pays reasonable costs to remove the wreckage of insured property destroyed in a covered loss, and is typically subject to a sub-limit expressed as a percentage of the loss or a fixed dollar amount.
What is the primary consideration when insuring a custom-built or one-of-a-kind piece of farm equipment?
Answer: An appraisal or agreed value endorsement is critical because standard ACV or replacement cost methods may not accurately reflect the item's true value
Custom or one-of-a-kind equipment lacks a standard market replacement cost, so an independent appraisal and agreed value endorsement ensure the policy reflects a fair and documented value at claim time.
Which endorsement would best provide coverage for a farmer's mobile irrigation equipment while it is operating on rented fields away from the insured farm premises?
Answer: Inland marine mobile equipment floater
An inland marine mobile equipment floater follows the equipment to any covered location, providing protection away from the farm premises where standard farm property coverage may not apply.