3 - Standard Fire Policy and Dwelling Policy Forms Flashcards
The Standard Fire Policy (SFP) is the basis for…
-all non-marine property insurance contracts in NC
The SFP was originally written as…
- a 165 line monoline “Named Perils” policy
- very basic property only coverage policy
The SFP covers 3 named perils
- Fire
- Lightning
- Removal
Lightning
- bolts of natural electricity produced by nature
- artificially generated electricity is NOT covered
Removal
- personal property located in an insured dwelling that in danger of destruction if not removed due to fire or lightning
- automatically extended for 5 days on an all-risk of perils basis
Extended Coverage Endorsement (ECE) in the SFP
- increases the perils covered
- Wind
- Hail
- Aircraft
- Riot and Civil Commotion
- Vehicles
- Explosion
- Smoke
Additional Extended Coverage Endorsements for SFP
- Vandalism and Malicious Mischief (VMM)
- Sprinkler Leakage
Exclusions from VMM
- glass breakage and damage caused by theft
- if the building has been vacant or unoccupied for 60 consecutive days
SFP Exclusions
- Accounts, bills, currency, deeds, money, evidence of debt and securities
- Acts of war, insurrection and civil war
- insured’s failure to protect property from further damage
- civil authority
- increase in hazards without notifying the insurer
- vacancy for a period of 60 consecutive days
The SFP states that coverage begins and ends at…
-12:01 am in the geographic area where the property is located
Maximum policy period for the SFP?
-7 years
The maximum an insured can receive is the specific value of the damaged/destroyed property up to the limits of liability
-Policy Limit
Cost to Repair or Replace
-company must notify the insured within 30 days after the proof of loss is submitted stating they want to repair, rebuild or replace
Pro-Rata Liability
- if there are 2 or more policies covering the same risk
- each policy will prorate payment of any claims based on the % of coverage carried n each policy
Requirements in the Event of a Loss
- notify insurance carrier
- protect the property from further damage
- allow company to inspect the property
- supply company w/ complete list of inventory within 60 days
- cooperate w/ company investigating the loss and if requested, testify under oath
In the Event of a Loss, when does a complete list of inventory indicating which goods are damaged/destroyed must be supplied?
-within 60 days of the loss
Settling a Claim
-insurer must settle the claim within 60 days after submission of the proof of loss
Suit Against the Company
-insured has up to 3 years to bring a lawsuit against the company after meeting the requirements or filing the claim
If the insured cancels the SFP policy
-premiums paid in advance will be returned on a “short rate” basis
If the insurer cancels the SFP policy
- 5 days notice must be given to the insured
- 10 days notice must be given to any mortgagee
Loss Payee (Mortgagee) Rights SFP
-the right of a mortgage holder to collect on losses up to the mortgagee’s interest in the property
DP-1
-Basic Perils Form
DP-2
-Broad Perils Form
DP-3
- Special Form
- Open Perils
- All Risk of Perils
Dwelling Policies are designed for properties that have no more than…
- 4 apartment units
- 5 roomers/boarders per apartment unit
Incidental occupancies are permitted for DPFs as long as…
- they are operated by the insured (no more than 2 persons)
- provide a service, but NOT sales
Coverage A
- Dwellings
- Direct loss coverage
Coverage B
- Other Structures/Appurtenant
- Direct loss coverage
Coverage C
- Personal Property
- Direct loss coverage
Coverage D
- Fair Rental Value
- Indirect loss coverage
Coverage E
- Additional Living Expenses
- Indirect loss coverage
- designed for an owner occupied dwelling
- pays insured for extra living expenses due to uninhabitable property due to a covered peril
Coverage A: The following items are covered unless the loss is due to wind, hail, or the weight of ice, sleet or snow…
- Outdoor Equipment
- TV aerials
- Awnings permanently attached to the dwelling
Exclusions for Coverage A
- buildings used for manufacturing
- farm buildings
- buildings rented to anyone except a tenant of the main dwelling
Coverage B: The following items are covered
- detached garage
- detached storage shed
- detached pump house
- gazebos
World-wide coverage of Coverage C for personal property taken from the premises
-10%
Coverage C: Personal property moved to a new location that is intended to be a principal residence is covered automatically for up to how many days and is subject to policy expiration.
-30 days
Coverage C: Personal Property Excluded on DPF
- accounts, bills, coins, deeds, and currency
- animals, birds or fish
- boats (except rowboats or canoes)
- credit or fund transfer cards
- motor vehicles
- paper records
- outdoor lawns, plants, shrubs, and trees (DP-1)
- aircraft
- land
Standard coverage D on DPF?
-will reimburse up to 20% of Coverage A for losses of rental income and payment for ongoing expenses
If a civil authority prohibits use of the insured property because a covered peril damaged a neighboring property, payment will be made for a maximum of…
-2 weeks w/ Coverage D and E
DP-1 standard perils covered
- fire
- lighting
- internal explosion
Extended Coverage Endorsement of DP-1
-Windstorm
-Civil Commotion
-Smoke Damage
-Hail
-Aircraft
-Vehicles
-Volcanic Eruption
-Explosion
-Riot
WCSHAVVER
DP-2 standard perils covered
- DP-1 + ECE +
- damage by burglars
- falling objects
- freezing
- weight of ice, sleet or snow
- overflow of water from plumbing, heating or ac system
- damage from artificially generated electricity
- tearing apart, cracking, burning or building or a steam or hot water heating system
DP-3 Coverage A & B vs C
- A & B covers perils on an “all risk”
- C covers the broad form perils found in the DP-2
Fire Department Service Charges with DPF
-$500
Coverage for lawns, plants and trees
-5% of Coverage A on the DP-2 and DP-3
DPF Deductible
-$250 per occurence
If premium has not been paid, the insurer can cancel the DP by letting the insured know at least….
-10 days before the date of cancellation takes place
The insurer may elect not to renew the Dwelling policy. The insurer may do so by delivering to the insured or mailing to the insured at the last known mailing address written notice at least _________ before the expiration date of this policy.
-30 days
As long as the DP has been in effect for less than _____ days and is not a renewal, the insurer may cancel by letting the insured know in writing the cancellation takes effect at least _____ days before the cancellation takes effect.
- 60 days
- 10 days
When the DP policy has been in effect for ______ or more or at any time if it is a renewal with the insured, the policy may be cancelled if there has been a material misrepresentation of fact which if known to the insurer would have caused the insurer not to issue the policy or if the risk has changed substantially since the policy was issued. The insurer must give at least _______ notice before the date cancellation takes effect.
- 60 days
- 30 days
When the DP policy is written for a period of more than ______, the insurer may cancel for any reason at anniversary by letting the insured know at least ______ before the date cancellation takes effect.
- 1 year
- 30 days
Coverage L has a minimum Personal Liability benefit of…
-$100,000
Coverage M claims must be made within ______ of the injury and minimum coverage is ______
- 3 years
- $1,000
DP-1, DP-2 and DP-3 Coverage A
-100% of insured value
DP-1 Coverage B
-10% of Coverage A within policy limits
DP-2 and DP-3 Coverage B
-10% of Coverage A outside policy limits
DP-1, DP-2 and DP-3 Coverage C
-no minimum
DP-1 Coverage D
- 20% of Coverage A
- not an additional amount
DP-2 and DP-3 Coverage D
- 20% of Coverage A
- additional amount
DP-1 Coverage E
- 20% of Coverage A
- not an additional amount
DP-2 and DP-3 Coverage E
- 20% of Coverage A
- additional amount
