AFIS Farm Property and Equipment Insurance 3

Question 1

What is an 'inland marine' floater in the context of farm insurance?

Accepted Answer

A broader, more flexible property coverage designed to cover mobile or transportable equipment both on and off the farm premises

Answer

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.

Question 2

How is farm equipment typically valued under an actual cash value (ACV) settlement?

Accepted Answer

Replacement cost of a comparable new item minus physical depreciation based on age and condition

Answer

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.

Question 3

Which of the following losses would most likely be EXCLUDED under a standard farm property policy?

Accepted Answer

Gradual deterioration of a silo due to long-term moisture and age

Answer

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.

Question 4

What does 'ordinance or law' coverage provide for farm structures?

Accepted Answer

Additional funds to bring a damaged structure into compliance with current building codes when rebuilding after a covered loss

Answer

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.

Question 5

How does debris removal coverage function following a farm property loss?

Accepted 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

Answer

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.

AFIS - Agribusiness and Farm Insurance Specialist Practice Test

AFIS - Agribusiness and Farm Insurance Specialist Practice Test

AFIS Farm Property and Equipment Insurance 3