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15.1 Farm and Agricultural Coverage

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Arkansas Property & Casualty Insurance State

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1 Standalone Coverage Map

Standalone Coverage Map

2 Introduction: Arkansas Property & Casualty Insurance Exam Overview

Arkansas Property & Casualty Exam Overview

3 National Portion: Insurance Fundamentals

1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority

4 National Portion: Property Insurance Concepts

2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses

5 National Portion: Dwelling Policies (DP)

3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage

6 National Portion: Homeowners Policies - Forms & Section I

4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners

7 National Portion: Homeowners Policies - Section II & Endorsements

5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)

8 National Portion: Personal Auto Policy - Liability & Injury

6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists

9 National Portion: Personal Auto Policy - Physical Damage & Duties

7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts

10 National Portion: Liability Insurance Concepts

8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury

11 National Portion: Commercial Property Insurance

9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP

12 National Portion: Commercial General Liability - Coverages

10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments

13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions

11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements

14 National Portion: Commercial Auto Insurance

12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements

15 National Portion: Workers Compensation

13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements

16 National Portion: Other Commercial Lines - BOP, Crime & Marine

14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)

17 National Portion: Other Commercial Lines - Specialty & Professional

15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability

18 National Portion: Other Commercial Lines - Surety, Flood & Specialty

16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines

19 National Portion: Insurance Regulation & Market Conduct

17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations

20 National Portion: Ethics & Unfair Trade Practices

18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection

21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing

1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities

22 Chapter 2: Arkansas Property Insurance

2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance

23 Chapter 3: Arkansas Casualty & Auto Insurance

3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance

24 Chapter 4: Arkansas Ethics & Professional Conduct

4.1 Ethical Practices and Consumer Protection

15.1 Farm and Agricultural Coverage

Key Takeaways Explain This Topic AI

ISO Farm Coverage Part uses FP 00 90 (property) and FP 00 40 (liability) to blend personal and farming exposures in one policy.

Farm dwellings settle at replacement cost subject to 80% coinsurance; farm personal property (livestock, machinery, grain) settles at ACV.

Livestock is covered on a named-peril basis with per-animal sublimits and excludes disease and natural death.

Farm Liability (Coverages H/I/J) merges personal premises and farming business liability; custom farming, agritourism, and auto need endorsement.

Apply depreciation (age) and coinsurance (under-insurance) as separate steps - both can reduce a single recovery.

Last updated: June 2026

Farm and Agricultural Coverage

Farm operations need a hybrid of personal and commercial insurance: the farmer lives on the insured premises, but the same property generates business income. The ISO Farm Coverage Part solves this with a modular form set built on the FP 00 90 - Farm Property Coverage Form and the FP 00 40 - Farm Liability Coverage Form , packaged through the Farmowners-Ranchowners program. A single policy can therefore blend dwelling, household, barn, livestock, machinery, and liability exposures that a Homeowners or CPP form would split or exclude.

The property side is organized into four coverages, each a separate insuring agreement you can schedule or blanket:

The Four Farm Property Coverages

  • Coverage What it insures Typical valuation
  • A - Dwellings Farm residence(s) and attached structures Replacement cost (if maintained to 80%)
  • B - Other Private Structures Detached garages, fences serving the home Replacement cost
  • C - Household Personal Property Contents of the dwelling ACV unless RC endorsed

D/E - Scheduled & Unscheduled Farm Personal Property Livestock, grain, machinery, harvested crops, supplies ACV (a fundamental farm trait)

A recurring exam trap: Coverage C (household goods) defaults to replacement cost paths only when endorsed, while farm personal property under Coverage E is settled on ACV - candidates flip these. Livestock losses are further capped by a per-animal sublimit and are covered only for named perils (death by fire, lightning, electrocution, attack by dogs/wild animals, loading/unloading accidents) - not disease or natural death.

Coinsurance and ACV Math on Farm Property

Farm dwellings carry an 80% coinsurance requirement just like a Homeowners form. If a $300,000 barn is insured for $180,000 when the carrier requires $240,000 (80% of $300,000), a $60,000 partial loss is penalized:

  • Did-carry / should-carry = $180,000 / $240,000 = 0.75
  • Recovery = 0.75 x $60,000 = $45,000 , less any deductible

Farm personal property settled at ACV applies depreciation: a 6-year-old tractor with a $50,000 replacement cost, a 12-year useful life, and 50% depreciation pays $25,000 at ACV, not $50,000. Always test whether the form is RC (dwelling) or ACV (machinery/livestock) before applying coinsurance - coinsurance corrects under-insurance; depreciation corrects for age. They are separate steps and can both apply to the same claim.

Farm Liability (FP 00 40)

The Farm Liability Coverage Form mirrors CGL structure but treats the residence and the farming business as one insured operation. It provides:

  • Coverage H - Bodily Injury & Property Damage Liability (occurrence trigger)
  • Coverage I - Personal & Advertising Injury
  • Coverage J - Medical Payments (no-fault, to invitees)

Key distinctions from the CGL: the farm form folds the farmer's personal (premises) liability and farming business liability into one limit, and it specifically covers incidental farming-related activities such as roadside stand sales. Custom farming for others above an incidental threshold, and any commercial agritourism or auto exposure, require endorsement or a separate policy - a classic gap question.

Perils, Endorsements, and Underwriting Notes

Farm property can be written on named-peril (basic/broad) or special-form ("all-risk") terms. The barn and machinery exposures push many farms to special form, but mobile equipment and livestock often remain named-peril even when buildings are special form - read each coverage's peril basis separately. Frequently added endorsements include:

  • Endorsement Purpose
  • Mechanical/electrical breakdown Adds equipment-breakdown (boiler) peril
  • Spoilage / refrigerated products Covers loss of stored milk, produce on power failure
  • Replacement cost on farm personal property Overrides the ACV default on machinery
  • Identity / agritourism liability Extends Coverage H to visitor/U-pick exposures

Underwriters weigh acreage, livestock type and headcount, presence of a roadside stand or agritourism, custom-farming receipts, and whether the operation is hobby vs. commercial. A pure hobby farm with no income may instead belong on a Homeowners form with an incidental farming endorsement - matching the form to the income source is the underwriting decision the exam probes.