1. Forms
2. FP
3. FP-10-09

What the form is

The FP 10 09, titled Windstorm or Hail Exclusion, is an endorsement to a Farm Property insurance policy. Its primary function is to remove coverage for loss or damage directly caused by windstorm or hail. This exclusion is specific and applies only to the properties (locations and buildings) explicitly listed or scheduled in the endorsement. It is used to tailor the policy when coverage for these perils is not desired or is deemed uninsurable for specific parts of the farm property.

Classes of business it applies to

This endorsement is used in conjunction with Farm Property Coverage Forms, such as the FP 00 10, which cover commercial farms owned and occupied by the insured. It would be applied to specific farm dwellings, barns, outbuildings, or other structures where the insurer or the insured has decided to exclude windstorm or hail perils. For example:

• An older, less structurally sound barn might have this exclusion applied to reduce premium or because the insurer is unwilling to cover it for wind/hail.
• A farm in a coastal area prone to hurricanes where windstorm coverage is either very expensive, provided under a separate policy (e.g., a state wind pool), or the insured opts to self-insure this specific risk for certain structures.

Special considerations

Attaching the FP 10 09 significantly alters the scope of coverage by removing protection against two common and potentially severe perils. It's crucial that the insured understands the implications of this exclusion. This endorsement might be used when:

• The underwriter deems certain structures uninsurable for wind/hail due to their condition, age, previous loss history, or location.
• The insured wishes to reduce their premium by self-insuring the risk of windstorm or hail for specific properties.
• The property is located in an area where windstorm/hail coverage is exceptionally costly or difficult to obtain through the standard market for particular structures.

The exclusion applies only to the scheduled items; other unscheduled property on the farm may still have wind/hail coverage if the main policy provides it and those items are not also scheduled on this or a similar exclusion form.

Key information for agents and underwriters

Agents: Must thoroughly explain the consequences of this exclusion to the insured, ensuring they understand the lack of coverage for windstorm and hail damage to the scheduled properties. Proper documentation of this discussion and the insured's informed consent is vital to prevent errors and omissions claims. Agents should also explore if alternative solutions or risk mitigation efforts could allow for coverage before resorting to an exclusion.

Underwriters: This form is a critical tool to manage exposure to high-risk properties or in catastrophe-prone areas. When applying this endorsement, underwriters should clearly and unambiguously identify the specific locations and buildings to which it applies in the policy schedule. The presence of this exclusion will directly impact the overall risk assessment and the premium charged for the policy. It may be a condition for providing any coverage at all for certain agricultural risks with problematic structures or exposures. Underwriters should also consider the overall insurability of the farm when key structures have this exclusion.