1. Forms
2. FP
3. FP-04-75

What the form is

The FP 04 75 Unoccupancy and Vacancy Permit is an endorsement to a farm insurance policy. Its primary purpose is to grant permission for an insured building to be unoccupied or vacant for a period longer than what is typically allowed by the policy without facing coverage limitations. Standard farm property policies often restrict or reduce coverage (e.g., for vandalism, glass breakage, or overall limits) if a building is vacant or unoccupied for a specified number of consecutive days (commonly 60 or 120 days). This endorsement temporarily waives or modifies these restrictions for the duration of the permit period stated in the endorsement.

Classes of business it applies to

This endorsement is specifically designed for the Farm Program and applies to various types of farm buildings, such as:

• Farm dwellings
• Barns
• Outbuildings
• Other farm structures covered under the policy

Real-world examples:

• A farmhouse that will be empty for several months while the owner is away for an extended period.
• A barn or storage shed that is not currently in use due to seasonal farming operations or a transition in farm activities.
• A secondary dwelling on the farm property that is only occupied sporadically.

Special considerations

• Permit Period: The endorsement is effective only for the specific 'permit period' shown in the endorsement. Coverage reverts to standard policy conditions regarding unoccupancy or vacancy after this period expires unless renewed.
• Withdrawal: The FP 04 75 endorsement was withdrawn with its 04 16 edition, with changes in that edition being editorial. This means that for current policies, insurers will use different forms or methods to address prolonged unoccupancy or vacancy.
• Specific Perils: While the permit generally maintains broader coverage, it's crucial to review the policy and the endorsement carefully. Historically, some vacancy/unoccupancy permits might still have had limitations, for instance, not overriding all restrictions related to glass or safety glazing material.
• Policy Definitions: It's important to understand the policy's definitions of 'unoccupied' (empty of people but furnishings remain) versus 'vacant' (empty of both people and most contents), as policy conditions can differ for each.

Key information for agents and underwriters

• Agents: Agents should proactively discuss unoccupancy or vacancy plans with their farm clients. If a building will exceed the policy's standard unoccupancy/vacancy allowance, this (or a similar current) endorsement should have been considered to prevent coverage gaps. Agents needed to clearly explain the permit period and what happens upon its expiration.
• Underwriters: Underwriters assessing the risk would have considered the reason for and duration of the unoccupancy/vacancy, the condition and security of the property, and the local environment (e.g., risk of vandalism). The decision to issue the permit, and for how long, would depend on this risk assessment. The withdrawal of this specific form means underwriters now use current ISO forms or company-specific endorsements to manage these risks.
• Coverage Maintenance: The key function of this endorsement was to maintain coverage that might otherwise be reduced or suspended. For example, policies often state that if a building is vacant for more than a certain number of days, coverage for vandalism, sprinkler leakage, building glass breakage, water damage, or theft might be excluded, or the overall loss settlement might be reduced. This permit aimed to prevent such adverse consequences during the agreed-upon period.