Unit 3 Insurance

Professional Liability Insurance

Certain professions are particularly at risk of liability lawsuits Doctors - sued for not providing good care or not making the best decisions (malpractice) Lawyers - alleged violation of rights These professions invest in professional liability insurance to help protect their assets in the event of a lawsuit

Additional Property insurance

Flood Insurance - Homeowners' insurance policies issued in Virginia generally do not provide coverage for damage to structures or belongings due to floods. However, flood insurance is available through the National Flood Insurance Program (NFIP) (via fema.gov). Earthquake Insurance - Homeowners' policies issued in Virginia generally do not provide coverage for damage caused by earthquakes. Earthquake insurance that pays for property damage caused by an earthquake is available as a separate policy.

home owners insurance

Homeowners' insurance is required by financial institutions (banks and credit unions) when the owner borrows to buy the house. A mortgage is legal agreement between a home buyer and a financial institution to borrow the money to purchase a house using the title to the house as security for the loan. Because buying a homes is expensive, many homeowners borrow the money to purchase their house and pay off the loan through monthly payments. The loan is paid off through mortgage payments each month until the amount of the loan, plus interest, is paid. While the loan is being paid off, the lender retains the title to the house as collateral for the loan. Once the mortgage is paid in full, the title goes to the homeowner. If the mortgage is not paid, the lender has the title to the house and therefore can sell the house to pay off the loan.

Liability Insurance

Liability means legal responsibility!** Liability is often caused by negligence, which is the failure to take proper care or precautions. Examples: - if a neighbor fell over some gardening tools you left on the sidewalk. - ignoring a dead tree in your yard and it fell on a neighbor's car.

Additional Property insurance pt 2

Mortgage Guaranty Insurance (Private Mortgage Insurance, PMI)- Mortgage guaranty insurance protects the mortgage company when a homeowner fails to pay the mortgage payment(s). The mortgage company may require the homeowner to purchase mortgage guaranty insurance in return for lending the money that is needed to purchase a house. Title Insurance- Title insurance policies cover losses if a land title is not free and clear of defects that were not known when the title insurance was written. Title insurance protects the purchaser if there is a defect in the title, such as a lien against the property, that was not discovered at the time of sale. There are two types of title insurance—one insures the mortgage company and the other insures the homeowner. Mortgage companies usually require title insurance before they will agree to lend money for the purchase of a house. For an additional fee, the homeowner can obtain an owner's title insurance policy to also protect their investment.

umbrella policy

Professionals and individuals can further protect themselves from lawsuits by taking out an umbrella policy. Most umbrella policies cover the insured against personal injury claims and attempts to damage their reputation through slander or libel (untrue statements about your character expressed in public or in print, respectively). Personal umbrella coverage is applied after liability limits from other insurance policies are reached. Many umbrella policies cover an individual for liability up to $1 million or more. People with many valuable assets or a high public profile are more likely to be sued. As a result, umbrella policies may be appropriate for them.

Property Insurance

Property insurance helps policyholders cope with major disasters—such as fires, hurricanes, or tornadoes—as well as minor mishaps, like theft or a fallen tree. Like other forms of insurance, it can provide some peace of mind and protect people from serious financial losses. Property insurance covers assets, such as a house and the possessions inside it. Renters' insurance, one type of property insurance, covers possessions within a rental unit. Property insurance covers repair, rebuilding or replacement costs if there is an unexpected event, such as a fire, flood, tornado, or theft. Homeowners' insurance covers physical structures and possessions in the event of an unexpected or catastrophic event, including the costs of repairing or rebuilding the house and replacing the possessions inside it. It also covers a homeowner's liability for damages or injury to someone visiting the property. Renters' insurance covers only the personal possessions of a person living in a rental property.

Theft and Damage!

The apartment complex is NOT responsible for your belonging in your apartment** Most apartment complexes require renters insurance before signing a lease

Costs of Property Insurance

The cost of homeowners' insurance is affected by: Location (e.g., near fire department, probability of theft or weather event) Type of structure (e.g., materials, like brick, age—built to new codes) Value of house/coverage amount Discounts: alarms, deadbolts, fire extinguishers, not smoking

Does homeowners insurance protect anything besides my belongings?

YES IT DOES! It protects your belongings and your home structure overall! Examples Roof replacement due to hurricane or tornado Financial assistance to rebuild your home if it burns down or floods Tree falls on your house and damages the structure

Renters Insurance

Your property is currently covered under your parents homeowners insurance or renters insurance What happens when you move out??? You will need your own renters insurance policy to protect all of your personal belongings in your first apartment

Benefits of Property Insurance

named perils policy—one that covers any loss that is caused by one of the covered perils named specifically in the policy open perils policy—one that covers damage or loss from all causes except causes that are specifically excluded in the policy. **It is important that the insured read and understand what losses will or will not be covered by a property insurance policy.**