The value of insured property at the time of loss, calculated as replacement cost minus depreciation. ACV settlements are typically lower than replacement cost settlements and may not provide enough funds to fully rebuild or replace a damaged structure.
Agritourism
Farm or ranch activities open to the public for recreational, educational, or entertainment purposes — including trail rides, lessons, clinics, and events. Standard farm policies may not cover agritourism liability; specific endorsements are often required.
All-Risk Policy
An insurance policy that covers all causes of loss except those specifically excluded. Contrast with named-peril policies that cover only listed causes. Most modern farm and ranch policies are all-risk or broad-form policies.
Agreed Value
A policy provision where the insurer and insured agree on the value of covered property at policy inception. In the event of a total loss, the agreed value is paid without depreciation. Common in equine insurance for high-value horses.
B
Bailee Liability
Liability arising from having care, custody, and control of property belonging to others. Boarding operations have bailee liability for horses owned by boarders. Standard farm liability may not cover bailee liability — a specific endorsement is often needed.
Blanket Coverage
A single coverage limit that applies to a group of items or structures, rather than scheduling each item individually. Blanket farm structure coverage applies one limit across all insured farm buildings.
Bodily Injury Liability
Coverage for legal liability arising from physical injury to another person caused by the insured's operations, animals, or property. A core component of farm liability insurance.
Builder's Risk
Insurance covering structures under construction. If you are building a new barn or arena, a builder's risk policy covers the structure during the construction period before the permanent farm policy takes effect.
C
Care, Custody and Control
A liability exclusion in most general liability policies that eliminates coverage for damage to property in the insured's care, custody, or control. Boarding operations need specific coverage for horses they are caring for that are owned by others.
Claim
A formal request to an insurance company for payment of a loss covered under a policy. Farm and ranch claims should be reported promptly — most policies require notification within a specific timeframe after a loss.
Coinsurance
A policy requirement that the insured maintain coverage equal to a specified percentage (typically 80-90%) of the property's replacement value. Failure to maintain adequate limits can result in a coinsurance penalty reducing claim payments.
Commercial General Liability (CGL)
A broad liability policy covering bodily injury, property damage, and personal injury arising from business operations. Horse properties with significant commercial activity may need a CGL policy rather than or in addition to farm liability.
Coverage Limit
The maximum amount an insurer will pay for a covered loss. Farm policies have separate limits for dwellings, farm structures, farm personal property, and liability.
D
Declarations Page
The summary page of an insurance policy listing the named insured, policy period, covered property, coverage limits, deductibles, and premium. The declarations page is the starting point for understanding what a policy covers.
Deductible
The amount the insured pays out of pocket before insurance coverage begins. Higher deductibles result in lower premiums but increase the insured's financial exposure in a loss.
Depreciation
The reduction in value of property over time due to age, wear, and obsolescence. Actual cash value settlements deduct depreciation; replacement cost settlements do not.
Dwelling Coverage
Coverage for the residential structure on a farm or ranch property. Farm and ranch policies typically cover the dwelling separately from farm structures.
E
Endorsement
A written modification to an insurance policy that adds, removes, or changes coverage. Agritourism coverage, fencing endorsements, and livestock coverage are commonly added to farm policies via endorsements.
Equine Activity Liability Statute
State laws that limit the liability of equine activity sponsors and professionals for injuries arising from the inherent risks of equine activities. Most states have some form of this protection, but it does not eliminate the need for liability insurance.
Equine Insurance
Insurance covering individual horses for mortality, major medical, surgical, loss of use, and related risks. Distinct from farm livestock coverage, which covers horses as part of a farm operation rather than as individually valued animals.
Exclusion
A provision in an insurance policy that eliminates coverage for specified causes of loss, types of property, or circumstances. Common farm policy exclusions include flood, earthquake, and intentional acts.
F
Farm and Ranch Insurance
A specialized insurance policy designed for agricultural properties that combines property coverage for structures and equipment with liability coverage for farm operations. The foundational policy for most horse properties.
Farm Personal Property
Movable farm-related items covered under a farm policy — tools, equipment, tack, supplies, and sometimes livestock. Distinct from household personal property.
Farm Structures
Agricultural buildings covered under a farm policy — barns, arenas, run-in sheds, hay storage, equipment buildings, and other outbuildings used in farm operations.
Flood
The temporary inundation of normally dry land by overflow of water. Excluded from virtually all standard farm and ranch policies; requires separate NFIP or private flood insurance.
H
Hurricane Deductible
A separate, typically higher deductible that applies specifically to losses caused by named hurricanes. Common in coastal states. Often expressed as a percentage of insured value rather than a flat dollar amount.
I
Inherent Risk
Risks that are an integral part of an activity that cannot be eliminated through reasonable precautions. Equine activity liability statutes typically limit liability for injuries arising from inherent risks of working with horses.
Insurable Interest
A financial stake in the insured property such that the insured would suffer a financial loss if the property were damaged or destroyed. Required for insurance coverage to be valid.
L
Liability Coverage
Insurance protection against legal claims by third parties for bodily injury or property damage caused by the insured's operations, animals, or property.
Loss of Use
In equine insurance, coverage that pays when a horse is permanently unable to perform its intended use due to injury or illness. In property insurance, coverage for additional living or operating expenses while insured property is being repaired.
M
Medical Payments Coverage
Coverage that pays medical expenses for persons injured on the insured's property or in farm operations, regardless of fault. Typically a small limit ($1,000-$10,000) designed to handle minor injuries without litigation.
Mortality Insurance
Equine insurance covering the death of a specific horse from any cause — illness, injury, or accident — for an agreed value. Distinct from farm livestock coverage which covers horses only for specified perils.
N
Named Peril
A policy that covers only specific causes of loss listed in the policy. Contrasts with all-risk or open-peril policies that cover all causes except those excluded.
NFIP
National Flood Insurance Program — the federal program administered by FEMA that provides flood insurance for structures in participating communities. The primary source of flood coverage for horse property structures in flood zones.
P
Personal Liability
Liability coverage for the named insured as an individual, as opposed to business or commercial liability. Farm liability policies typically include personal liability coverage for the farm operator.
Premium
The amount paid by the insured to the insurer for coverage, typically on an annual basis.
Property Damage Liability
Coverage for legal liability arising from damage to property belonging to others caused by the insured's operations or animals.
Public Adjuster
An independent claims professional who represents the policyholder — not the insurance company — in negotiating and settling insurance claims. Typically works on contingency as a percentage of the settlement.
R
Replacement Cost
The cost to replace damaged or destroyed property with new property of similar kind and quality at current prices, without deduction for depreciation. Provides more complete recovery than actual cash value coverage.
Riders
See Endorsement. Additional coverage provisions attached to a base policy.
S
Scheduled Coverage
Coverage for individually listed and valued items, as opposed to blanket coverage. High-value equipment, specific structures, and valuable personal property should be scheduled to ensure adequate coverage.
Special Flood Hazard Area (SFHA)
FEMA-designated zones with significant flood risk — commonly called the 100-year floodplain. Properties in SFHAs with federally backed mortgages are required to carry flood insurance.
Subrogation
The right of an insurer who has paid a claim to pursue recovery from the party responsible for causing the loss. If a third party causes damage to your barn, your insurer may sue that party after paying your claim.
U
Umbrella Policy
An excess liability policy that provides additional coverage above the limits of underlying policies. A farm umbrella can add $1-5 million in liability coverage above farm policy limits at relatively low cost.
Underinsurance
A condition where coverage limits are insufficient to fully replace or repair insured property in the event of a total loss. Common on horse properties where structure values have increased but policy limits have not been updated.
W
Waiver of Subrogation
A policy endorsement preventing the insurer from pursuing recovery against a third party after paying a claim. Sometimes required by boarding agreements or facility rental contracts.
Wind and Hail Deductible
A separate deductible applying specifically to losses caused by wind or hail. Common in tornado-prone and coastal states. May be expressed as a flat dollar amount or a percentage of insured value.