Great American Insurance Company launched their TimberGuard product in 2001. Until then, there had been very little or no insurance coverage available for Timber in the USA. However, with TimberGuard this has all changed. Timber stand purchases, improvements, operating loans and even personal loans can now be collateralized and protected with this new insurance product.

Fire, Wind, Ice, Snow, Lightning, Theft, Vandalism, Malicious Mischief

Fire Department Service Charges (subject to maximum of $1000)

Coverage can be written as a 10%, 15%, 25% or 50% deductible.

Most stands of plantation style (unless otherwise agreed upon) timber that are grown under a comprehensive management plan will be insurable. We do not offer coverage for trees that are less than two years old.

Policyholders are required to insure all trees in which they have an insurable interest within the State, unless we agree otherwise.

We do not cover losses which occur to small, isolated areas. Before a loss qualifies for payment under this policy, it must satisfy a Minimum Loss Area, which is the lesser of:

• 20 acres; or
• 20% of the acreage insured under the policy.

However, in no event will the minimum loss area be less than 5 acres.

Note: This minimum loss area does not need to be in one contigous block; rather it could be the sum of many smaller damaged areas. However, each damaged area must be at least one acre in order to count towards satisfying the minimum loss area requirement.

In the event of an insured loss, a professional forester will determine the damage. Using that information, he will then determine the reduction in value as a percent of the pre-loss value. The chosen deductible will then be applied to determine the amount of loss payable. Any salvage value will be deducted from the amount of the loss.

A grower has 40 acres of timber insured for a value of $1000 per acre, a total of $40,000 coverage. The insured chose a 10% deductible.

A lightning strike ignites a fire, which burns 10 acres.

Is fire an insured peril? YES
Does a 10 acre loss exceed the Minimum Loss Area? YES (20% of the 40 acres is 8 acres)

How is the loss amount calculated?

• Determine the Pre - Loss Value.
  The professional forester uses his analysis to determine that the pre-loss value was equal to the insured value of $1,000 per acre, or $10,000 for the 10 acre area.
• Determine the Post - Loss Value Including Value of Salvage.
  The professional forester determined that the post-loss value for this acreage is now $0 except that the salvage has a total value of $1,500.
• Calculate the Percentage of Value Lost
  The percentage of value lost is calculated as:
  (Pre value - Post value) / Pre Value =
  ($10,000 - $1,500) / $10,000 = 85.0% .
• Apply the Deductible To Determine the Net Percent of Loss
  85.0% - 10.0% = 75.0%
• Calculate the Indemnity Payable
  The Net Percent of Loss is applied to the amount of insurance purchased to determine the indemnity payable.
• 10 acres x $1000 per acre x 75% = Indemnity Payable

The total amount paid for this loss would be $7,500