Chpt 7 Dwelling Policy
Insured submits her sworn proof of loss form signed to the insurance company. How long does the company have to make payment? (tricky)
5 business days to pay it
What are the coverages and their names under dwelling property?
A Dwelling Coverage B Other structures C Person property D Fair Rental Value Coverage E Additional Living Expenses
So, how do we calculate coverage under DP-4 Coverage A dwelling?
Actual insurance/ Insurance required times the loss = amount paid to insurer. So, if we had rental property that replacement costs of 150000, we would need 80% in order to not get a penalty which would be 120000. However, we only get 100000 and suffer damages in 50000. How do we pay? 100000 divided into 1500000= .8 * 50000= 40,000
What are the addition endorsement under Texas law found at the Texas Dpt of Insurance?
Automatic Increase In Insurance Broad Theft Coverage Dwelling Under Construction
Under E, what two endorsement are offered?
Broad Theft endorsement for owner-occupied dwellings is for theft on and off the premises Limited Theft- endorsement provides on-premises coverage
What does coverage C cover
COntents; some reason talks about landlords select this bc some rental come with content inside.
IF we add to this list, we start looking at broad causes of loss form. What another name for this form?
DP-2
What does collapse peril coverage not cover?
Damage due to settling cracking shrinking bulging expansion
What are the two types of property policys that have long been around?
Dwelling Policy & Homeowners Policy
Whats DP mean?
Dwelling Property
What is the DP-1 cover?
Dwelling policy covers both dwelling an property contents
Valuation under coverage A and B differ depending on what?
Dwelling policy form used
What all does DP4 cover?
Dwelling, other structures, personal property, fair rental value, additional living expense, Other Coverages
What should you always check in a dwelling policy?
Exclusions
What types of peril was the standard fire policy written with?
Fire, Lightning, inherent explosions Now- other can be added with endorsements
Typically you got 5 bus. days to get money paid to insured on covered claims, whats the exception here?
If its Catastrophe claims- 15 days
Whats a special provision under Texas law provide for insureds under DP01 42? Ordinace or Law provision.
It calls for a lot. Insured will be given extra money for due repairs replacements or demolitions to be in compliance building association if they are eligible
Whats only getting replacement costs endorsement Texas law?
Jewelry losses
Dwelling under construction? (goes to the intented occupant who is the name insurred.)
Limit of liability applies at any given time is a percentage of the policy limit based on the value of the partially completed dwelling available policy limit increases as construction of the dwelling progresses
Does a dwelling policy require insured to occupy (meaning live there) the risk?
NO
Do dwelling policys cover liabiliity?
No
Does this coverage M apply to the insured or family of insureds?
No
If any machinery is damaged due to freezing, is it covered? (think under DP2)
No
Does DP2 coverage include accidental discharge where the leakage has been continous or equipment has caused the discharge?
No- thats bad maintainence
Does it apply to structures that have been unoccupied for 30 days preceding accidental discharge? DP2 coverage that is
No- the same goes for freezing pipes, unless while vacant the owner has turned off the water, drained the pipes, and made reasonable effort to maintain the heat
What did you have to have to do before being able to get a homeowners policy?
OWN and LIVE in their home
What extra coverage does the broad cause of loss form DP2 give?
Plumbing, Falling objects, Weight of Snow, ICE or Sleet, Collapse, Tearing apart Peril
Broad Theft Coverage? This endorsement applies to whom?
Property is covered whether on or off premises. Goes to theft, attempted theft, vandalism, maliscious mischieft Owner-occupied dwelling or tennat
What does the special cause of loss form cover/ DP-3 cover?
Theft, and everything that is not excluded
How does a landlord can coverage E?
They must inhabit the property (live there)
Whats special about plumbing under coverage for DP-2?
Well, it applies if there is freezing or leaking of pipes and plumbing fixtures. But NOT if the insured fails to keep heat in the building
What is coverage L and M What would an owner-occupant purchase for liability? vs What would a landlord purchase for liability?
When an owner-occupant of a dwelling policy buys personal liability insurance, the L covers it and M gets the medical bills. Together these are indistringuishable from liability coverage of a homeowners contract. Premises Liability Endorsement
What special about coverage under the Falling objects coverage of Dp-2?
Will not cover damages to the interior unless falling obejct damages the exterior first which results in damages on the inside.
Do DP2 or DP3 get a certain amount of additional coverage to offset the increased costs to repair or rebuild to local laws?
Yea- 10 percent of Coverage A
Whats the valuation of coverage C
actual cash value
Autmotatic Increase in Insurance?
allows for 4,6 , or 8 % in the amount of coverage A
What types of structures are excluded from ever getting coverage under the peril of collapse?
awnings, fences, patios, swimming pools, underground pipes, drains, septic tanks, foundations (IDK about this last one)
What three options come with the dwelling policy in terms of the peril power?
basic, broad, and special power
Who are dwelling policys sold to?
landlords
What three things to know under Texas about the Coverage L- pers. liab. clause?
1. Personal liability coverage is provided for damage Insured legally obligated to pay bodily injury of prop injury cause by covered occurence 2. Insurer will defend the insured at its own expense even if claims are grouldless or fraud
What is the value of off premises coverage C?
10 percent of the on premises coverage
Whats the policy limit on personal liability under Texas law coverage L?
100,000
What is the limit on the Coverage M medical payments?
1000 per person
How to do we value dwelling policys?
Actual Cash value NOT replacement cash value
Texas allows for insured to purchase additiona personal liability and medical payment coverage to seperate policy as well as dwelling policy. What are these two types of coverage label as in insurance lingo?
Coverage L- Personal Liability Coverage M - Medical payments to others
What does collapse coverage to cover?
Damage due to settling cracking shrinking bulging expansion It also does not cover awnings patios swimming pools underground pipes drains septic tanks
**What is the major difference b/t homeowner policy and dwelling policy?
Eligibility for homeowners policies requires owner occupancy; eligibility for dwelling policies requires owner of tenant occupancy
what does the basic cause of loss form cover peril wise DP1? (there are 11)
Fire, Also resultant smoke, water and firman damage, fireman attempts to keep the fire from spreading, (NOT FRIENDLY FIRE- like wood thrown in fire place) BUt a friendly fire can become a hostile fire which is covered LIghting, Explosions (NOT from bioler explosions), Windstorm or Hail (NOT interior contents unless damage to the building allows hail or wind to enter), Riot or Civil Commotion, Vandalism (NOT theft but this will cover burglary damage), Volcanic Action (above ground damage), -Vehicle Aircraft, Smoke, Vehicle or Aircraft, Smoke, Sprinkler Leakage, Sinkhole Collapse-IDK
What the texas policy on liquidated damages caused by fire that result in total loss?
Insured is owed the full amount located on the declaration page
Whats the general exclusion have to say in Texas policies?
additional insured will not recover for intentional loses, just like named insured Fungi and mold is normal exclusion
How does a dwelling policy become eligible for the Texas special endorsement?
be located in area covered under the Texas Windstorm Insurance Association
What are the ways people can no upgrade their perils on a standard fire policy?
by choosing the basic cause of loss form, the broad form cause of loss, or the special (all-risk) cause of loss form
What additional coverage comes with Dp-2 &3?
debris removal following covered loss, reimbursmenet for reasonable repairs to mitigate damages, and up to 500 for fire department called to protect property
What does coverage B protect under DP-4?
detached garages, storage sheds, backyard playgrounds, swimming pools and fences.
What was the policy of choice for land lords?
dwelling policy bc you dont have to live there
Whats the purpose of Coverage D?
for indirect or consequential losses to protect landlord cash flow in the event rental unit is determined unihabitable.
What are some general exclusion in dwelling policy involving ICE COVERAGE under DP-2?
foundations, awnings fences pavement retaining walls patios swimming pools bulkheads wharves docks piers
Whats tearing apart peril?
hot water heater systems, air conditioners, sometimes accidentally tear apart
I dont know what residentual community property coverage is but when its covered in Tx what effect does it have on each spouse?
it give full force an effect as to interest of each spouse, irrespective of divorce or change of ownership (change of ownership of what though?)
Does it have any limits?
limited to 20 percent of coverage A
What does Coverage M cover?
medical expenses incurred w/in 3 years of accident that cause bodily injury IF: injured part was on insured property with insured permission or injured party is off the insureds location, if the injury arises out of condition that was sustained by: 1. sustained on the insureds location 2. caused by an animal in the insureds care 3. caused by activities of the insured
What is a DP-3 dwelling policy do?
offer extensive coverage for all risk on the building structure itself (IDK) also extends content coverage to broad form level
How does Dp-1 always settle losses?
on actual cash value
Dp-2 and Dp-3 pay how?
on replacement costs basis if the property is insured for at least 80 percent of its ACV. If it falls below 80 percent reverts to ACV
Who can broad theft coverage only apply to?
only owner occupied dwelling or tenant who are the named insured
Under Texas laws for insurance, what types of property will be paid in actual cash value as opposed to replacement costs? endorsements Texas law
personal property, fences, building structures, awnings, carpeting, household appliances, outdoor antennas, outdoor equipment
What is DP-4 coverage?
property coverage designed for tenants only!
What is the Dp-2 cover?
same as DP1 but upgrades to broad for peril
What types of property are eligible for coverage under the dwelling policy?
single family homes four family homes duplexes/triplexes dwellings under construction permanently installed mobile homes (just DP-1) incident business risks
What type of dwelling policy is not eligible for the special endorsement?
the DP-1 dwelling policy
DP-4 coverage A Dwelling?
the dwelling any permanent attachments Settlements paid on replacement costs with no depreciation added as long as the policy limit is atleast 80% of full replacement costs (IDK)
What two items do homeowners policies offer that dwelling policies do not?
theft and liability coverage
What does the dwelling policy not include?
theft and personal liability BUT they can be added wit endorsement
What losses are covered under DP2 or DP3, that are not covered under DP1?
tree, shrubs, and other plants. up to 500 but no more than also get a 5 percent of Coverage A
What all comes to support the peril coverage of collapse under the broad form cause of loss/ DP-2?
weight or rain weight of people hiddden decay hidden insect or vermin damage defective construction
