What it does
FP 04 78 makes the scheduled limit the only limit for the building described and replaces the valuation condition so that, when the insured contracts for repair or replacement, payment is based on functionally equivalent construction rather than replicating the original.
Who needs it
Farms with old barns or houses whose replacement cost far exceeds their usefulness, such as timber-frame barns.
Quoting and selling notes
Discuss with the insured whether they would rebuild the same structure; functional valuation lowers premium and avoids ACV disputes. Georgia has a state version (FP 01 63). Wording reviewed: 09 03 edition.
How it fits the farm policy
A farm program endorsement changes only the coverage forms named in its "this endorsement modifies" list. Everything else in the Farm Coverage Part keeps working as written: the FP 00 90 additional coverages, conditions and definitions, the causes of loss selected from FP 10 60, and the farm liability forms. When presenting a quote, list each farm endorsement with its schedule entries (insured location, building or item, limit, deductible) so the insured can see exactly where the base coverage was broadened or narrowed.
