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