August 18, 2011

I have a claim on a Farmowner's policy where the insured was using a tractor to pull a piece of equipment out of a waste area. The insured is a dairy farmer, and the waste is put in an area and pumped out periodically during the year. As the tractor was pulling the piece of equipment out, it went into the waste. The waste got into the motor and damaged the motor. Under Section III of the policy, there is a peril for overturn or collision. The policy states: “Farm machinery or vehicles insured under this Section are also covered for direct loss caused by: A. overturn while in operation, but not while being transported; or B. collision with another object. I have advised the insured that I did not believe this would be a covered loss. He states that the waste is considered an object.“ Any thoughts?

Kentucky Subscriber

Indeed, if waste is not an object, then what is it? FC&S has always held that if a vehicle drives into a lake, that is a collision loss—the vehicle collided with the lake. It's going to work the same way in the farm policy—waste is an object, and while not totally solid, it is tangible; therefore, this should be covered as a collision loss.