1. Forms
2. FP
3. FP-10-15

What the Form Is

The FP 10 15 Windstorm or Hail Exclusion is an endorsement used with farm property insurance policies. Its primary function is to remove coverage for loss or damage directly caused by windstorm or hail. This means that if a windstorm or hailstorm damages insured farm property, this endorsement, if active, would prevent the policy from covering those damages. The exclusion can be applied broadly to all property covered under the farm policy or can be targeted to specific items or locations as listed in the endorsement's schedule. It's important to note that while it deletes windstorm and hail from the definition of "specified causes of loss," if a windstorm or hail event leads to another covered peril (e.g., fire, excluding ensuing rain, snow, sleet, sand, or dust), that subsequent loss might still be covered. The 04 16 edition of the form includes a clause clarifying that the exclusion does not grant coverage that would otherwise be excluded by other policy terms.

Classes of Business It Applies To

This endorsement is specifically designed for the agricultural sector and applies to various Farm Property Coverage Forms. Examples of where this form would be used include:

• Farms with dwellings, appurtenant structures, and household personal property (typically covered under forms like FP 00 12).
• Farms with extensive farm personal property, such as machinery, equipment, and livestock (often insured on forms like FP 00 13).
• Properties with barns, outbuildings, and other farm structures (covered under forms like FP 00 14).

For instance, a farmer in an area with very high windstorm premiums might choose to exclude wind and hail coverage for older, less critical outbuildings to reduce insurance costs, while maintaining broader coverage for the main dwelling or newer, more valuable structures.

Special Considerations

The FP 10 15 is a restrictive endorsement, meaning it reduces or removes coverage. Key considerations include:

• Premium Reduction: Electing to use this exclusion typically results in a premium credit or lower insurance costs for the insured, as the insurer is taking on less risk.
• High-Risk Areas: In regions prone to frequent or severe windstorms or hail (e.g., coastal areas, certain parts of the Midwest), insurers might actually require this endorsement as a condition of providing coverage, or it may be the only way to make coverage affordable.
• Scheduled vs. Blanket Application: The form allows for flexibility. The exclusion can apply to all property or only to specific buildings or types of property listed in the schedule. This requires careful attention to detail when completing the schedule to ensure the intended scope of the exclusion.
• Ensuing Loss: While direct damage from wind or hail is excluded, losses from other covered perils that might follow a windstorm (like a fire caused by downed power lines due to wind) could still be covered, subject to policy terms.

Key Information for Agents and Underwriters

Agents and underwriters should be mindful of the following:

• Risk Assessment: The decision to use this endorsement should be based on a thorough risk assessment, considering the geographic location, construction type of buildings, value of property, and the insured's risk tolerance.
• Client Counseling: Agents must clearly explain the implications of this exclusion to the insured, ensuring they understand the significant coverage gap it creates for wind and hail perils. The potential for catastrophic loss from these perils should be discussed.
• Scheduling: If the exclusion is not intended to apply to all property, precise scheduling of the excluded property and locations is critical to avoid ambiguity in the event of a claim.
• Pricing Impact: Underwriters will factor in the reduced exposure when calculating the premium. The credit offered should be commensurate with the risk being excluded.
• Alternative Solutions: Instead of a full exclusion, discuss alternatives like higher wind/hail deductibles (e.g., percentage deductibles using a form like FP 03 05) if the insured wishes to retain some level of coverage.
• Regulatory Considerations: Be aware of any state-specific rules or regulations that might impact the use of windstorm or hail exclusions.