Supplemental Coverages

Newly Acquired Property: Direct physical loss caused by a covered peril to additional irrigation equipment the insured acquires is covered up to $5,000 or the value of the covered property as described in the valuation section, whichever is less. The coverage is extended for up to thirty days, expiring at the policy's expiration, thirty days after the equipment is obtained, or when the insured reports the addition equipment to the insurer, whichever occurs first. Additional premium is due from the date the equipment is acquired.

Pollutant Cleanup and Removal: IM 7302 pays the expense to extract pollutants from land or water if they got to the land or water via a covered peril, during the policy period. Pollutants is a defined term on the policy. The expenses must be reported within 180 days from the date the covered peril occurs. The costs to test, evaluate, observe, or record the existence, level, or effects of pollutants is not covered. But if testing is necessary to extract pollutants from land or water, that amount is covered. The limit for this coverage is $10,000 during each twelve-month period.

Covered/Excluded Perils

The form is a special causes of loss form in that risks of direct physical loss are covered unless caused by an excluded perils. The first set of exclusions carry the anti-concurrent causation lead-in language, stating that the policy does not pay for “loss or damage caused directly or indirectly by one or more of the following excluded causes or events. Such loss or damage is excluded regardless of other causes or events that contribute to or aggravate the loss, whether such causes or events act to produce the loss before, at the same time as, or after the excluded causes or events.” In other words, if one of the excluded perils in this section and a nonexcluded peril contribute to a loss, none of the loss is covered. The perils in this section include the following:

Civil Authority: Any order of any civil authority, including seizure, destruction, confiscation, quarantine of property, is excluded. Civil authority's destruction of property to prevent the spread of fire (caused by a covered peril) is covered.

Nuclear Hazard: Losses caused by nuclear radiation, radioactive contamination, or nuclear reaction are excluded, whether caused by artificial, natural, or accidental means. Such losses are not considered fire, smoke, or explosion losses. However, if fire resulting from the nuclear hazard causes direct loss, it is covered.

War and Military Action: Losses resulting from undeclared war, civil war, warlike action, insurrection, rebellion, unlawful seizure of power, revolution are not covered.

Excluded perils not falling under the anti-concurrent causation language included the following:

Contamination or Deterioration: Includes mold, mildew, corrosion, decay, fungus, rot, rust, or any quality, fault, or weakness that causes the covered property to destroy or damage itself.

Criminal, Fraudulent, Dishonest, or Illegal Acts: Damage caused by fraudulent, criminal, illegal, or dishonest acts committed by the insured, others with an interest in the property, others to whom the insured entrusts the property, the insured's partners, officers, directors, trustees, joint venturers, members, managers, employees, or agents is excluded, whether acting alone or in collusion.

Freezing: Losses resulting from freezing, which includes pipes bursting due to freezing, are not covered.

Loss of Use: Damage resulting from delay, loss of market, or loss of use is excluded.

Mechanical Breakdown: Loss or damage caused by structural, electrical, or mechanical breakdown or malfunction is not covered unless such breakdown or malfunction results in a specified peril, in which case the damage caused by the specified peril will be covered. Specified peril is a defined term on the policy and will be discussed in the Definitions section of this article.

Missing Property: If property is missing and the only proof of it missing is unexplained or mysterious disappearance or an inventory shortage or other instances for which there is no physical proof, the loss is not covered. If the property is in the custody of a carrier, the exclusion does not apply.

Pollutants: Loss or damage caused by discharge, release, migration, seepage, escape, or dispersal of pollutants is excluded unless caused by a specified peril or if covered by the Pollutant Cleanup and Removal supplemental coverage. Resulting losses caused by specified perils are not excluded. Specified peril is a defined term on the policy and will be discussed in the Definitions section of this article.

Temperature/Humidity: Losses resulting from dryness, humidity, dampness, or changes or extremes in temperature are not covered unless they result in a specified peril; the loss or damage caused by that specified peril is not excluded. Specified peril is a defined term on the policy and will be discussed in the Definitions section of this article.

Voluntary Parting: Losses caused by voluntary parting with property due to tricks, schemes, or false pretenses are not covered.

Wear and Tear: Damage caused by marring, scratching, or wear and tear are excluded unless they result in a specified peril; damage caused by that specified peril is not excluded. Specified peril is a defined term on the policy and will be discussed in the Definitions section of this article.

Duties in the Event of Loss

The named insured's duties in event of a covered loss are common to most insurance policies. The insured must give prompt notice to the insurer or its agent; take reasonable steps to protect the property from further loss; provide a proof of loss; submit, if requested, to an examination under oath; produce appropriate records; and hold the damaged property for inspection by the insurer. Any payments, offer of any rewards, or assumption of any obligation is done at the insured's own expense unless done to protect the property from further damage. The insured is to cooperate with the insurer and is not to abandon the property to the insurer without the insurer's written consent.

Valuation

The valuation provisions detail how the insurer will settle a covered loss. Covered property is valued at actual cash value. Articles that are part of a pair or set are valued based on a reasonable proportion of the value of the entire pair or set, and the loss of part of a pair or set will not be considered a total loss of the pair or set. The value of a lost or damaged part of an item that consists of several parts is based on the value of only the damaged part.

Loss Settlement

Provisions applicable to loss settlement are common to many property coverage forms. No more than the named insured's insurable interest in any property will be paid in event of a covered loss. Only the part of the loss in excess of the deductible will be paid. The insurer pays the lesser of the amount determined in the valuation provisions; the cost to repair, replace, or rebuild with materials of like kind and quality to the extent practicable; or the applicable limit of insurance.

If the schedule indicates that coinsurance applies, then it is determined by first multiplying the indicated percent by the value of the covered property at the time of loss, then dividing the limit for the covered property by the result. The resulting figure is then used to multiply the total amount of loss, after the deductible is taken. That amount or the applicable limit, whichever is less, is the amount that will be paid. If more than one limit is indicated on the schedule, that process is repeated. If only one coverage limit is indicated in the schedule, the procedure applies to the total of all covered property.

Although it is possible that more than one coverage of the policy could apply to a loss, in no event will more than the total amount of the loss be paid.

If the insured has other insurance covering the same property on the same terms as this, then the insurer prorates settlement with the other insurer. If another policy covers the same property as this policy but under different terms, then this policy becomes excess to the other policy whether the insured can collect on it.

In event of a covered loss, the insurer can elect to pay the value of the lost or damaged property; pay the cost to repair or replace; rebuild, repair, or replace with other property of equivalent kind and quality to the extent practicable; or take all or part of the property at an agreed or appraised value.

The insurer must notify the insured within thirty days after receipt of the proof of loss as to the settlement. Losses are settled with the insured unless there is a loss payee on the policy or the property belongs to another party.

Other Conditions

The other conditions applicable to the irrigation equipment coverage form are common to most insurance forms. If the insured and insurer do not agree as to the amount of loss, either may make a written demand for appraisal.

The insurance does not accrue to the benefit of anyone having custody of the insured's property. Any coverage condition that does not conform to an applicable law is amended to conform. If the named insured is an individual, then upon his death the person having temporary custody of the insured property until a legal representative is appointed, or the legal representative, is given “insured” status.

Coverage is void as to the named insured and any other insured if the named insured or any other insured commits fraud or material misrepresentation with regard to the insurance. Any suit against the insurer must be brought within two years of the loss, or the shortest period permitted by law.

Only a covered loss occurring during the policy period and within the coverage territory (the United States, its territories and possessions, Puerto Rico, and Canada ) is covered. If, following a claim's being settled, either the named insured or the insurer recovers lost or damaged property, that party must notify the other. The coverage limits are not reduced because of payment of a claim. The insurer has subrogation rights against others who might be responsible for a loss.

Definitions

Many of the coverage form's definitions are common to other insurance forms—such as “you” and “your”—and will not be discussed here. A few require mention here:

Equipment schedule: a schedule attached to the policy describing each piece of irrigation equipment that is covered.

Irrigation equipment: mobile machinery and equipment the insured uses to irrigate crops, including pumps and attached pipes.

Specified perils: the specified perils are aircraft, civil commotion, explosion, falling objects, fire, hail, leakage from fire extinguishing equipment, lightning, riot, sinkhole collapse, smoke, sonic boom, vandalism, vehicles, volcanic action, water damage, windstorm, and the weight of ice, sleet, or snow.