Blanket vs. Scheduled Coverage
BLANKET: The FPP coverage under a Blanket form covers FPP usual and incidental to the operation of a farm. Coverage is for the described farm location(s) as well as off farm locations (some mileage radius limits may apply). The blanket form allows the insured to choose (based on inventories) the coverage needed without listing each item.
The advantages and concerns of Blanket coverage center around:
No need to endorse coverages when eligible items are added or removed but you must be aware of the 80% coinsurance requirement.
Each item of FPP, by category, is covered, no list required.
Newly acquired FPP is automatically covered (watch the 80% coinsurance).
Properly used, this is good for both insured and insurer.
Improperly used, coverage not adequate, the insured and insurer will be the losers.
Prices and values do not remain constant which can result in an inadequacy of coverage.
80% coinsurance requirement, often with a provision for a claim under $1,000 and less than 2% of the total coverage eliminates the need for an inventory at claim time.
SCHEDULED: The FPP coverage under a Scheduled form also covers FPP usual and incidental to the operation of a farm. Coverage is only for the FPP specifically described and insured. Coverage can extend beyond the insured premises but there may be limits. Some forms cover borrowed equipment, generally on an excess basis, while the item is in the care, custody and control of your insured. Newly acquired mobile equipment and/or specifically described livestock are generally covered for up to 25% of the total coverage on the category of items insured, not to exceed a specified amount.
Always refer to the policy forms for full description of coverages and limitations.
The advantages and concerns of Scheduled Coverage:
Each item must be listed with an amount of insurance shown.
As equipment depreciates, the coverage applied may become excessive.
Coinsurance applies on each item or category if used, not the entire inventory.
Livestock values may change due to market fluctuations.
For grain, hay etc. seasonal averages may be used (consider using the Peak Season endorsement).
No question as to the amount of coverage on a specific item of FPP.
Perils insured against
Many Blanket and Scheduled forms insure against all perils except those excluded.
Some forms use the “named perils” coverages which include, but may not be limited to:
Fire and lightning, wind or hail, VM&M, theft, collapse, flood, vehicle, overturn, etc. The livestock forms also provide for certain optional coverages, generally electrocution, attack by dogs or wild animals, drowning, accidental shooting, etc.
Don't forget to refer to the policy terms and conditions - they spell out the coverages that apply and do not apply.