AgGeorgia Farm Credit, Agricultural Credit Association (Association) loan agreements and/or commitment letters stipulate that borrowers obtain and maintain insurance on property pledged as security for loans with the association named as mortgagee or loss payee as appropriate.

This notice is a reminder that the minimum amount of coverage required to be maintained is the lesser of your loan balance(s), the actual cash value of the property, the replacement cost of the property or the amount stipulated by your loan officer. Since the amount required could be less than the amount for which the property can be insured, you are encouraged to consider higher limits where applicable to adequately protect your equity interest in the property.

If the property securing your loan consists of improved real estate, unless otherwise advised, at a minimum, your policy must insure against the following perils: fire and lightning, wind, hail, aircraft or vehicle damage, riot or civil commotion, explosion, smoke damage, water damage (other than flood), falling objects, weight of snow, ice or sleet and vandalism. Loss or damage from flooding is also required if your loan was made after October 4, 1996, and at the time the loan was made the property was located in a government mandated Special Flood Hazard Area and flood insurance was available.

If the property securing your indebtedness consists of personal property including vehicles, machinery or equipment, in addition to the causes of loss cited in the preceding paragraph, the property must also be insured against theft, and where applicable, such as with mobile machinery and equipment, collision and upset.

If your current coverage does not conform to these requirements, please contact your insurance representative and effect the necessary changes to in sure your coverage does comply with these requirements. Please contact your local AgGeorgia Farm Credit representative if you have any questions or comments.