You have insurance, so you are completely covered, right? Maybe you are; maybe you're not. Insurance policies often have limitations or even exclude certain types of coverage. Unfortunately, policyholders sometimes do not realize these limitations until they experience a loss.

Limitations and exclusions are included because insurance policies, at their most basic level, are designed to suit the common needs of many policyholders. In order to keep rates at a reasonable level, the policy coverages must be appropriate for most policyholders and potential loss situations. Policyholders may individualize their coverage by purchasing additional policies, riders or endorsements.

Hay fever

Farmers who purchase an Indiana Farm Bureau Insurance Rural Guardian policy should be aware that only $1,000 of coverage is available if there is a loss to hay stored outdoors. The coverage is limited because, in general, the risk that the hay will be damaged as a result of a peril (such as fire, theft and vandalism) covered by the policy is greater while the hay is stored out in the open than when the hay is protected in a structure. Also, some farmers do not store a great deal of hay outdoors, and they would rather not pay for a large amount of coverage they don't really need. Farmers who regularly store more than $1,000 worth of hay outdoors may want to purchase additional coverage. If additional coverage is desired, you can purchase higher limits at a cost of 17 cents per $100 of coverage.

This limitation on coverage for hay stored outdoors is one of several limitations and exclusions in the Rural Guardian policy. Review your policy and declarations page carefully to make sure you understand what your Rural Guardian policy does and does not cover. Your Indiana Farm Bureau Insurance agent can answer questions about your policy or help you tailor it to fit your needs.

Water, water everywhere

Indiana brought in the New Year with flash floods, rising creeks, and riverbeds that were bombarded by heavy rains during the winter months. These flash floods are not uncommon in Indiana. In fact, southern and central Indiana residents experience some degree of flooding every year. During the summer of 2003, property owners sustained huge losses due to flooding from seasonal rain.

Many people believe that their standard homeowners insurance policy will cover their losses if a flood occurs. However, most private insurers, Indiana Farm Bureau Insurance included, do not provide coverage for damage caused by flooding. For flood insurance, property owners can turn to the National Flood Insurance Program, created by Congress over 30 years ago in response to rising costs of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. The NFIP is part of the Federal Emergency Management Agency, or FEMA.

Flood insurance is available to any property owner or renter located in a community participating in the NFIP. Participation means that a community adopts and enforces floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes federally backed flood insurance available to homeowners, renters and business owners in these communities. A list of Indiana communities participating in the NFIP is located at www.fema.gov/nfip. Click on "Consumers" under the "Audience" tab and then select "Community Status Book" for a list of states, which will then allow you to see a list of participating communities.

Of course, flood insurance is required for most mortgages on homes in Special Flood Hazard Areas, commonly referred to as being "in a floodplain." Even though there's a big difference between purchasing flood insurance because you are required to do so and choosing to purchase it because you wish to protect yourself financially, FEMA recommends that all eligible property owners purchase and keep flood insurance because it is the best means of recovery from flood damage. Contact your Indiana Farm Bureau Insurance agent for assistance with purchasing flood insurance through the NFIP.

You can obtain coverage for flood looses by purchasing an NFIP policy. The way to obtain coverage for other specific water-loss situations is to purchase a policy endorsement or rider. Indiana Farm Bureau Insurance offers customers the opportunity to purchase coverage for losses associated with water backup and sump overflow. Whether your home has a basement or is built on a slab, you could be at risk for loss resulting from water that backs up through sewers or drains. The endorsement provides protection in the event a sump pump fails or water backs up through sewers or drains. Your local Farm Bureau Insurance agent can discuss your specific needs and how the water backup and sump overflow endorsement may help address those needs.

Going four-wheeling?

All-terrain vehicles are popular for recreation as well as for taking care of your property, whether you own a farm or enough land to require large-scale maintenance. An Indiana Farm Bureau Insurance homeowners or dwelling policy will afford coverage for an ATV that you own and use to service your residence premises. Physical damage to the ATV (based on the applicable perils - such as left, fire and vandalism - listed in the contract) is covered under the contents section listed as "Coverage C" on your declarations page and is subject to the coverage amount limit for all of the contents of your home. Protection for liability losses exists only if the loss occurs while the ATV is in use on the residence premises. And if you take your ATV to a different location, to go hunting or four-wheeling, for example, you have no coverage for physical damage or liability losses.

If your ATV is used for farming purposes, it can be added to your Rural Guardian Policy. This coverage is for four or six-wheel ATVs used on the farm premises only. ATVs can be added to the blanket or scheduled property as farm machinery, and liability coverage and other rules apply in the same manner as other farm machinery. As with the homeowners and dwelling policies, there is no coverage for your ATV under the Rural Guardian policy if it is being used away from your insured location.

For ATVs that are used off-premises or at an uninsured location for recreational purposes, a stand-alone recreational vehicle policy is the best way to ensure appropriate coverage. If your ATV is used off-premises in addition to being used to service your property, we recommend that you purchase a stand-alone policy in addition to your homeowners or farm policy. Check with your Indiana Farm Bureau Insurance agent about purchasing a stand-alone policy to ensure the broadest coverage for physical damage and liability.

On the road again

While rental reimbursement coverage is not automatically provided with an Indiana Farm Bureau Insurance personal auto policy, it is available for a relatively low cost. By adding rental reimbursement coverage to your auto policy, you are ensuring that in the event of a covered loss, all or part of the cost of renting a vehicle while yours is being repaired will be paid for by your policy.

Until 2004, Indiana Farm Bureau Insurance auto policyholders could purchase rental reimbursement coverage of only $20 per day, which was enough to rent a small economy car. Many policyholders asked for higher levels of rental reimbursement coverage. To address those concerns, Indiana Farm Bureau Insurance now offers several options for rental reimbursement coverage. Policyholders can choose $20, $30, $40 or $50 per-day limits, which will provide more flexibility in selecting a rental reimbursement limit that enables you to rent a vehicle comparable to your own. This coverage is available only for private passenger automobiles and utility vehicles with a load capacity of 1,500 pounds (3/4 ton) or less.

Know your policy

The situations discussed above are only a few examples of the types of coverage limitations and exclusions common to various types of insurance policies. Coverage limitations and exclusions help keep premiums affordable by not charging all policyholders for coverage they do not want or need. It is important that you read your policy and speak with your local Indiana Farm Bureau Insurance agent to understand the limitations and exclusions in your policies and discuss options that are right for you.