Property Insurance Overview
three types of liability
1. absolute 2. strict 3. vicarious
3 causes of loss forms
1. basic 2. broad 3. special
4 classes of inland marine risk
1. domestic shipments & transportation risks 2. bridges, tunnels & other instruments of transportation and communication 3. commercial property floater risks 4. personal floater risks
proof of loss
A statement of facts about a loss for which the insured is making a claim.
extended business income
actual loss of business income incurred during the period between when the date the property is actually repaired and operations resumed, and ending on the earlier of the date the insured could reasonably restore operations
Coverage E
additional living expenses are expenses above and beyond normal living expenses during repair of insured premises
DP 00 03
all perils are covered on a replacement cost basis unless specifically excluded
Loss Determination
amount of extra expenses is based on all expenses that exceed the normal operating expenses that would have been incurred during restoration if no loss had occured
absolute liability
applies to dangerous operations like handling explosives, working at extremely heights, engaging in hazardous activities, or owning a swimming pool or dangerous animals
HO-2
broad form covers named perils with certain named exclusions
dwelling policies
can be used for owner-occupied, landlord, vacation or seasonal, and some mobile homes - designed for residences that do not qualify for homeowners coverage due to age, condition, location, use, value, or certain other factors.
HO-5
comprehensive form provides coverage for open/special perils for dwelling, other structures and personal property
HO-6
condominium until owners provides broad coverage on the personal property of condominium owners with limited dwelling coverage
HO-4
contents broad form protects only personal property with no structure coverage
Inland Marine
coverage insurers goods transported from site to site, either on land or on inland waterways
Business personal property
coverage insures business personal property located in, or within 100 feet of, the building and building improvements, including leased property the insured is required to income
DP 00 01
covers named perils and offers extended perils at an addition premium
special form
covers perils exclusions include wear & tear, trick/scheme, or device, weather conditions and setting/cracking/shrinking or expansion
personal property of others
covers personal property if at the insured premises and in the insured's care, custody and control of if located within 100 feet of the described property
DP 00 02
covers the named and extended perils listed in DP 00 01, plus some additional perils
basic form
covers; 1.fire 2. lightning 3. explosion 4. windstorm/hair 5. smoke 6. aircraft/vehicles 7. riot/civil commotion 8. vandalism 9. sprinkler leakages 10. sinkhole collapses 11. volcanic action
broad form
covers; covers; 1.fire 2. lightning 3. explosion 4. windstorm/hair 5. smoke 6. aircraft/vehicles 7. riot/civil commotion 8. vandalism 9. sprinkler leakages 10. sinkhole collapses 11. volcanic action PLUS 12. falling objects 13. weight of snow/ice/sleet 14. water damage caused by accidental discharge or leakage of water on stream
Strict Liability
damage caused by defective products, even when the manufacturer's fault or negligence ,cannot be proven
other insurance provision
defines how each policy will responsd
Buisnessowners Policy (BOP)
designed for small to medium sized businesses - includes property and liability coverages, plus coverages most often needed by small businesses
Homeowner policies
designed only for owner-occupied homes, and are package policies that include liability coverage
personal lines property policies
designed to meet the needs of individuals
coverage A
dwelling covers attached structures and outdoor personal property or equipment used on premises
Coverage D
fair rental value covers replacement of rental income if the covered property is uninhabitable due to a loss caused by an insured peril - up to 10% of the dwelling coverage applies
personal property floater
generally unscheduled and written on an open peril basis
Commercial Package Policy (CPP)
include the essential elements of business coverage - made up of the following components; -commercial property coverage -general liability coverage -crime coverage -equipment breakdown coverage -auto coverage -inland marine coverage -farm coverage
building coverage
includes building, outdoor fixtures, and furniture, items used to service the property, permanently installed machinery and equipment within 100ft of the premises
commercial floaters
inland marine policies designed to cover moveable commercial property, wherever it may be located.
business income
insures against the loss of profits and fixed expenses that must continue to be paid during restoration following a direct loss to the premises
extra expense coverage
insures consequential loss and is used for businesses that cannot afford to be closed for repairs.
personal effects floater
insures items worn or carried by insureds while traveling, but not at home
liability
legal responsibility
Coverage F
medical payments to others pays for necessary medical expenses incurred within 3 years of an accident
HO-2
mobile home coverage is similar to coverage provided by which HO form?
HO-8
modified coverage form (used mainly for older homes) provides coverage for the market value of the property
limits on loss payment
no coinsurance clause - instead the insurer will pay a % specified in the Declarations, depending on how long the restoration lasts
Coverage B
other structures cover separate structures at the same location - this limit is usually 10% of the dwelling coverage
duties of the insured
outlines the specific responsibilities of the insured in the event of a loss
alterations and new buildings
pays business income and extra expense losses due to damages to a new building, an alteration or an addition to a new building
claims expense
pays expenses and costs incurred as part of defending a suit
damage to the property of others
pays for damage caused by the insured to property of others
civil authority
pays for loss of business income due to a civil authority prohibiting access to the property
loss assessment coverage
pays for the insured's share of loss assessment charged by a corporation or association of property owners of which they are an owner or tenant
exclusions
perils that are not insured against or people that are not insured
Coverage E
personal liability provides protection against bodily injury and property damage claims against the insured
Coverage C
personal property covers 10% of the limit extends anywhere in the world.
deductible
portion of a loss that is considered the responsibility of the insured
first aid to others
provides coverage in the event the insured incurs expenses while rendering first aid for bodily injury to third parties
loss
reduction, decrease, or disappearance of value of the person or property insured in a policy, by a peril insured against.
Personal floater
refers to movable personal property, wherever it is located in the world
personal articles floater
schedules certain types of property
HO-3
special form covers the dwelling on an open peril basis and provides coverage for broad perils for personal property
Peril
specific cause of loss, such as fire, hail, earthquake, or robbery
pro rata provision
states each policy will pay the same proportion of its limits to the overall coverage
appraisal provision
states that if the insurer and the insured cannot come to an agreement as to the value of the property lost or damaged in a claim, a written demand for all appraisal may be made.
notice of claim
states that the insured is required to notify the insurer in writing if events leading to a possible claim have occured
assignment provision
states the legal right or interest in a policy may be transferred
Building and Personal Property form
used to cover buildings, business personal property, and property of others on the insured's premises
equipment breakdown coverage
used to insure most types of business risk and all industrial risks
farm property
what is not eligible under a dwelling policy
vicarious liability
when someone is responsible for the acts of another - a parent can be held accountable for a child's activities, or an employer may be liable for negligent acts of employees