Chapter 6-- additional coverages, extensions, and exclusions
dwelling
a building designed for use as a residence for no more than four families or a single family unit in a building under a condominium
loss in progress
defined by the NFIP as a loss occurring as of 12:01 am on the first day of the policy term. you cannot increase the amount of insurance coverage you have during a loss in progress.
Special High Flood Risk Zones
defined by the flood disaster act of 1973, flood insurance is mandatory in these areas
within the current policy year
A standard flood insurance policy holder whose property has been determined not to be din a special hazard area after the map revison of a letter of map amendment under part 70 of this subchapter may cancel the policy within ___
Write Your Own Program
Private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowance. FEMA reinsures 100% of these losses 1983
mobile home coverage section D
LOSS OF USE IS 20% OF COVERAGE A
witten contract
TWIA is similar to other insurance carriers in that we have a ___ that specifies the extent and restrictions of the insurance coverage they provide
100,000
The NFIP's Dwelling FOrm offers coverage for Personal property, up to ___
250,000
The NFIP's Dwelling FOrm offers coverage for building/structure property, up to ___
National Flood Insurance Program
The federal government's program to provide Flood insurance at subsidized rates. 1968
FEMA
Zones are rated by ____ based on their relative risk of flooding
homeowners and commercial property insurance
___excludes coverage for damage due to flooding
write you own (WYO) Program
a cooperative undertaking of teh insurance industry and teh Federal Emergency Management Agency begin in october 1983. operated within the context of the NFIP and involves private insurance carriers who issue and service National Flood Insurance Program policies
flood
a general and temporary condition of partial or complete inundation by water of what is normally dry land
elevated building
a non-basement building that has its lowest elevated floor raised above the ground level by foundation walls, shear walls, posts, piers, pilings, or columns
texas windstorm insurance association
a pool of all property casualty insurance companies authorized to write coverage in texas.
on an anniversary date
a standard flood insurance policyholder may cancel a policy having a term of three years on ___
Actual Cash Value (ACV)
additional items of property attached to the mobile hoe are covered on an ___ basis
personal property (contents)
always settled @ actual cash value
flooding
america's most common disaster
special Flood Hazard area
defined as a location having special flood, mudflow or erosion problems
grandfathering
an exemption based on circumstances previously existing.
basement
any area of a building which has a floor subgrade (below ground) on all sides
mobile home coverage section A, 10x40 feet
applies to the building, attached structures, utility tanks, and permanently installed items. a home must have a minimum footprint of ___ x___ to be covered
increased cost of compliance
applies when flood damages are severe.
Boat Owners Insurance; yacht policy
as an alternative endorsement to the homeowners policy, the follow stand alone policies are available
Building and foundation Electrical and plumbing Central air conditioning equip. refrigerators, cooking stoves, built in appliances Permanently installed carpeting over unfinished flooring. BECRP
building/structure coverage includes
new construction
buildings for which the "start of construction" commenced on or after teh effective date of any inition FIRM or after Dec 31, 1974 whichever is later, including any subsequent improvements.
commercial package policy
can be used for Fam/ran business. it can be custom tailored to fit the needs of most agricultural business
TWIA
collects premiums and pays valid claims.
farm liability plus farm/ranch equipment, buildings, and other property risks
commercial package policy protection can be offered for
POST FIRM CONSTRUCTION
construction or substantial improvement which started on or after Dec 31, 1974 or before the effective date of the initial FIRM Flood insurance rate map, whichever is later
PRE-FIRM CONSTRUCTION
construction or substantial improvement which started on or before Dec 31, 1974 or before the effective date of the initial FIRM Flood insurance rate map, whichever is later
the ordinance or law additional coverage
coverage for increased costs of repair or construction resulting from zoning laws or building ordinances that require upgrades after a loss
boat owners insurance
coverage is provided for physical damage (to the insured boat) only
FEMA
determines the risk of flood in various locations across the US
the ordinance or law additional coverage
does not apply to mobile home policies
if the initial purchase of flood insurance is in connection with the making, increasing, extending, or renewing of a loan if the initial purchase of flood insurance is made during the 13 month period following teh effective date of a revised flood map for a community. (one day waiting period)
exception to 30 day waiting period
Removal Coverage; $500
expanded to provide up to ___ for reasonable expenses incurred in moving the mobile home when threatened by a coverage
farm structures scheduled agricultural equipment risk of animal loss from collision
farm and ranch owner policy coverage can be extended to add
farmhouse personal contents lost of use personal liability farm liability
farm and ranch owner policy coverage typically includes
building and contents
flood insurance protects two types of insurable property
past history, hydraulic and hydrologic studies
flood risk factors
mobile home coverage section B
for other structures is similar to homeowners form
mobile home coverage section C
for personal property generally is written with a limit equal to 40% o coverage A rather than the 50% specified for homeowners coverage
dwelling, contents, debris removal, increased cost of compliance (ICC)
four sections of flood policy
personal property claim (up to 100,000)
having an icc claim does not affect a ____, which is paid seperately
A, V
high risk zones are labeled __ or on the coast __
lender
if a owner in a Special High Risk Zones does not purchase a policy for his property, his ___ is required to do so and pass the cost along.
substantially damaged (51% or more of the dwelling is destroyed )
in order for ICC to apply, the dwelling has to be ___
farm and ranch owner policy
intended for teh family farm/ is a coordinated package providing both personal and agricultural business insurance protection
flood
many property insurance forms cover many perils, coverage for ___ is excluded from al of them
the base flood elevation
measures the base flood elevation in feet in relation to nation benchmark data
B,C,X
moderate to low risk areas are rated __,__, and __
endorsement
monoline mobile home homeowners policies had one important distinction in that any structure attached to the mobile home had to be added by ____
federal disaster assistance
most people dont think they need flood insurance because they believe ___ will bail them out
traditional for-profit insurance companies
must assess risks differently
adverse selection
occurs when only those with a high probability of experiencing loss are interested in purchasing insurance
Commercial General Liability
often used in farm/ranch situations in which the main concern is the premise liability risk for the property owner of rural land.
flood insurance
pays for all covered losses, and unlike loans, doesnt have to be paid back
debris removal
pays for all reasonable incurred expenses and the policyholder's labor to remove debris that was caused by the flood. including debris that floats onto the insured location and debris of insured property that has floated onto other properties.
other coverage that can be added include damage caused by windstorm, flood or collapse of a building
perils covered by yacht policy
contents
personal property is covered under the flood policy. Personal property must be contained in a fully enclosed building on the residence premises or secured against floating out of partially enclosed building in order for the coverage to apply
Clothing, furniture, electronics curtains portable and window air conditioning units Portable microwaves and dishwashers carpeting that is not attached to the building Washers/dryers CPPCW
personal property/contents coverage includes
one year
policy term for NFIP
coverage is provided for teh hull, sails, spars, tackle, machinery, boats, and furniture on a yacht. overage may also be extended to cover a boat trailer.
property covered by yacht policy
Boat Owners Insurance
provides coverage for smaller boats on inlands waterways
Increased Cost of Compliance (ICC)
provides coverage up to 30,000 to do one of teh following: demolish your home or elevate you home.
ICC Coverage
provides up to 30,000 of the cost to elevate, demolish, or relocate you home.
Texas Windstorm Insurance Association
provides wind and hail coverage when insurance companies exclude it from their homeowners and property policies sold to costal residences.
actual cash value
some structure items such as carpet are always adjusted on an ___ basis
Base Flood Elevations assigments
special hazard zones have ____ which greatly effects insurance rates
the reason for the cancellation is the the policy of flood insurance has been obtained or is being obtained in substitution for the NFIP policy and the NFIP obtains a written concurrence in the cancellation from any mortgage on which the NFIP has actual notice or the policy holder is extinguishing the mortgage debt and is no longer required to maintain the coverage
standard flood insurance policy holder may cancel a policy having a term of three years on an anniversary date given..
enclosure
that portion of an elevated building below the lowest elevated floor that is either partially or fully shut-in by rigid walls
Pair and Set Clause
the ___ clause is expanded to include panels as a series or piece of panels
deductibles
the ___ will apply separately to the building and personal property claims.
replacement cost
the cost to replace that part of a building that is damaged without depreciation
condominium association
the entity made up of the unit owners responsible for the maintenance and operation of a. common areas b. other real property in which the unit owners have use rights due to membership
natural grade
the grade unaffected by construction techniques such as fill, landscaping, or beaming.
dwelling
the main structure and dwelling extensions and additions to the building are covered. the 10% other structure coverage limit automatically applies to flood policies
adverse selection
the market for flood insurance among private insurers is characterized by ___
Open Peril, replacement cost
the mobile homeowners form may be written on an ___ basis and the coverage on the building is settled on a ____ basis
loss of revenue or profits loss of access to the insured property or described location loss of use of the insured property or described location loss of interruption of business or production any additional living expenses incurred while the insured building is being repaired or is unable to be occupied for any reason the cost of complying with any ordinance or law requiring or regulating the construction, demo, remodeling, renovation or repair of property any other economic loss
the policy pays for direct physical loss by or from flood so the follow items are excluded
actual cash value
the replacement value at the time of loss, less the value of its physical depreciation
texas windstorm insurance association (TWIA)
the state's insurer of last resort for wind and hail coverage in the 14 coastal counties and part of harris county
max limit for building property coverage (250, 000 single family home)
the total amount of the building claim and ICC claim can exceed the ____
500
the typical deductible under a floor policy is
Replacement cost value or actual cash value
the value of flood damage in the dwelling form is based on their ___ or ___
30 day
there is a __ waiting period after you've applied and paid the premium before they policy is effective
single family dwelling primary residence (80% of the year) building coverage is at least 80% of the full replacement cost of the building or maximum amount available for teh property under NFIP
to be eligible for a replacement cost, three conditions must be met
FARM AND RANCH OWNERS POLICY commercial package policy commercial general liability
types of farm and ranch insurance policies
National insurance program
under the ___, individuals and businesses are able to purchase flood insurance are rates subsidized by the federal government
Federal Emergency Management Agency (Fema)
underwrites all flood coverage
commercial insurance contracts
used in situations that dont include an on0site farm or ranch owner or for larger agricultural operations
Yacht Policy
usually sold as a package policy for larger boats containing both physical damage and liability coverage in order to protect a yacht/pleasure vessel
TWIA
when risk is higher and traditional markets withdraw, ____ absorbs policies no longer written by other carriers
package policy forms
with the advent of ___ in the 1950's the mobile home policy was changed to a multiline form resembling the regular homeowners package policy form
mobile homeowners insurance
written historically on a mono-line form (coverage on the property only) similar to the dwelling policy form written on other houses
