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Insurance Adjusting > 5/E - Inland Marine Insurance > Flashcards

5/E - Inland Marine Insurance Flashcards

1
Q

Inland Marine Insurance - An Overview

A
  • Covers property in transport (other than ocean transport)
  • Covers property involved in transportation
  • Policies typically known as “floaters”
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2
Q

Eligible Property

A
  • Movable
  • In transit
  • Instrumentalities of transportation or communication, including:
    a. roads
    b. bridges
    c. tunnels
    d. radio towers
    e. power lines

Not Eligible

  • Actual means of transport, such as:
    a. trucks
    b. airplanes
    c. ships
    d. forklifts
    e. cranes
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3
Q

Controlled Line Floaters

A

“Controlled” lines:

  • Written on a standard provision form promulgated by a bureau and filed with the Department of Insurance for uniform use (for example, the ISO standard policy form)
  • Disclose the rates being charged
  • General property floaters: personal effects and personal property
  • Specific property floaters: cameras, fine arts, golf equipment, jewelry and furs, musical instruments, stamp and coin collections and silverware
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4
Q

Uncontrolled Line Floaters

A

“Uncontrolled” lines:

  • Insurers use their own forms, which can vary by company and by the individual risk
  • Used to meet the needs of individual clients
  • Not filed with the state department of insurance
  • Common floaters: outboard motor boat floaters, gun floaters, sporting equipment floaters and wedding present floaters

Note: Floaters are often added as scheduled property endorsements to Homeowners policies, but can be written as stand-alone Inland Marine policies

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5
Q

Inland Marine Categories

A

Four Categories of Inland Marine Insurance

  • Domestic Shipments
  • Instrumentalities of Transportation or Communication
  • Personal Property Floater Risks
  • Commercial Property Floater Risks
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6
Q

Domestic Shipments

A
  • Protect against losses occurring during shipment or transport of goods
  • Includes travel by truck, train, ship, mail or plane
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7
Q

Annual Transit

A
  • Uncontrolled form that covers loss of goods in transit
  • Applies to all of the insured’s shipments during the year
  • Choice of open-peril coverage or named- peril coverage against fire, windstorm, collision or theft
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8
Q

Trip Transit

A
  • Uncontrolled form similar to annual transit, but which only insures a single shipment
  • Coverage applies from the trip origination point to destination
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9
Q

Motor Truck Cargo

A
  • Uncontrolled form
  • Protects carrier of shipped goods while the shipment is in transit

Common Carrier Legal Liability

  • Free on Board (FOB) Shipping Point: ownership of / responsibility for cargo transfers to buyer as soon as cargo leaves shipper
  • Free or Board (FOB) Destination Point: ownership of / responsibility for cargo transfers to buyer after buyer accepts cargo when it arrives at the buyer’s destination

Tariff Liability

  • Can apply to cargo in transit, such as on a truck, ship or train
  • Refers to rates, rules, conditions, and charges for transport of goods
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10
Q

Mail Coverage

A
  • Controlled form
  • Provides open peril coverage for property sent by registered mail
  • Shipper must report property value accurately
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11
Q

Instrumentalities of Transportation & Communication

A
  • Uncontrolled form
  • Pays for direct damage or loss of revenue due to covered loss
  • Covers property directly related to transportation and communication, including:
    a. bridges
    b. tunnels
    c. roads
    d. dams
    e. piers and docks
    f. pipelines
    g. power transmission lines
    h. antennas and towers for radio and TV
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12
Q

Personal Articles Floater

A
  • Insurers may write separate forms for specific property coverage
  • Usually, coverage for several types of property is combined in a single Personal Articles Floater (PAF)
  • PAF specifies coverage and premium for each property type
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13
Q

PAF Characteristics

A
  • Open-peril coverage (they are not named-peril policies!)
  • Coverage is worldwide
  • There is no deductible
  • Valuation is determined using the least of the following (unless the insured has chosen agreed value coverage):
    a. actual cash value
    b. cost to repair or replace
    c. coverage limits
  • Subject to “pair and set” provision
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14
Q

Common Exclusions

A
  • War
  • Nuclear hazards
  • Wear and tear
  • Insects and vermin
  • Spoilage
  • Gradual deterioration
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15
Q

Jewelry, Furs, Cameras

A

Jewelry

  • Eligible items include:
    a. items of personal adornment containing precious metals or jewels
    b. pens
    c. flasks
    d. smoking equipment
    e. trophies
  • Each item must be individually scheduled
  • Newly acquired property automatically covered for 30 days at 25% of coverage limit, up to $10.000

Furs

  • Includes both genuine and imitation fur
  • Each item must be individually scheduled
  • Newly acquired property automatically covered for 30 days

Cameras

  • Eligible items include:
    a. photography equipment
    b. binoculars
    c. telescopes
  • Each item must be individually scheduled, but blanket coverage available for accessories
  • Newly acquired property automatically covered for 30 days
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16
Q

Medical Instruments, Silverware, Golf Equipment

A

Musical Instruments

  • Each item must be individually scheduled, but blanket coverage available for accessories
  • Newly acquired property automatically covered for 30 days

Silverware

  • Eligible items inclulde
    a. silver
    b. silver-plate items
    c. gold
    d. gold-plate items
  • Items may get blanket or scheduled coverage

Golfer’s Equipment

  • Eligible items include:
    a. clubs
    b. equipment
    c. clothing
  • Blanket coverage
17
Q

Fine Arts Coverage

A
  • Eligible items include private collections of:
    a. paintings
    b. etchings
    c. pictures
    d. tapestries
    e. stained glass
    f. rugs
    g. statues
    h. marbles
    i. bronzes
    j. antiques
    k. rare books manuscripts
    l. porcelains or rare glass
  • Individual items must be scheduled, but blanket coverage available for small items or collections
  • Agreed value coverage
  • Newly acquired property automatically covered for 90 days at 25% of total limit of scheduled items
  • No coverage for property on exhibit away from insured premises

Pair and Set provision under Fine Arts coverage:

  • Insurer pays full scheduled amount for pair or set
  • Insured must surrender any remaining pieces of set to insurer
18
Q

Stamps & Coin Collection

A
  • Eligible items include:
    a. postage stamps
    b. rare and current coins
    c. paper money
    d. banknotes
  • Can provide blanket or scheduled coverage
  • Special limits:
    a. $1,000 for any unscheduled coin collection
    b. $250 for any individual item
  • Additional exclusions apply to stamps or coins that are:
    a. faded
    b. defective
    c. damp
    d. depreciated
    e. over-handled
    f. lacking part of a set
    g. in the custody of a transport company (except registered mail)
    h. not part of a collection
19
Q

Commercial Inland Marine Policies

A

Include:

  • Domestic Shipments
  • Instrumentalities of Transportation and Communication
  • Commercial Property Floater Risks

Written in similar commercial property format

Two types of conditions

  • General
  • Loss
20
Q

Conditions

A

General Conditions

  • Concealment, Misrepresentation, and Fraud
  • Legal Action Against the Insurer
  • No Benefit to Bailee
  • Policy Period

Loss Conditions

  • Abandonment
  • Appraisal
  • Duties of the Insured
  • Insurance Under 2 or More Coverages
  • Property of Others
  • Recovery or Salvage
  • Rights of Recovery
  • Reinstatement of Limit
21
Q

Commercial Property Floater Risks

A
  • Can be written on controlled or uncontrolled forms
  • Includes
    a. Bailee forms
    b. Equipment Floaters
    c. Business Floaters
    d. Dealer Policies
22
Q

Bailees

A

Individual who holds someone else’s property for a specific purpose and then returns it to the owner

Bailee coverage:

  • Reimburses a bailee’s customer for damage to the customer’s property while in the bailee’s control
  • Property coverage for Confusion of Goods (a loss makes it impossible to identify damaged property)
23
Q

Equipment Floaters

A

Equipment Floater

  • Uncontrolled form
  • May be open peril or named peril
  • Covers heavy machinery and equipment

Controlled Equipment Forms

  • Physicians and Surgeons Equipment: covers instruments and furniture of doctors, surgeons, and dentists
  • Theatrical Property: covers scenery, props, and costumes
  • Commercial Articles: covers commercial photographic equipment and musical instruments
  • Contractors Equipment: covers construction machinery, like tractors, backhoes, and pavers
24
Q

Business Floaters

A

Accounts Receivable

  • Controlled
  • Open peril
  • Reimburses insured for money that cannot be collected because company records have been destroyed

Valuable Papers and Records

  • Controlled
  • Covers losses to important documents, manuscripts, or records
  • Does NOT cover money and securities
25
Q

More Business Floaters

A

Installation

  • Controlled
  • Often open peril
  • Covers items that have been sold while they are being moved or installed, before being accepted by the buyer

Electronic Data Processing (EDP)

  • Covers:
    a. hardware
    b. data
    c. media
    d. recorded information
    e. software
  • Liability coverage also available

Signs

  • Controlled
  • Covers all types of signs owned by insured and those belonging to others that are in the insured’s care
26
Q

Dealer’s Policies

A
  • Open peril
  • Covers dealers of:
    a. jewelry
    b. stamps
    c. art
    d. coins
    e. furs
    f. cameras
    g. musical instruments
    h. equipment
    Versatile coverage
    a. reporting or non-reporting
    b. property covered while on or off premises
    c. property covered while controlled by employees or in transit
    d. covers property of others in insured’s custody
27
Q

Jewelers Block Coverage Form

A

Jewelers Block

  • Bailee form
  • For jewelers with up to $250,000 in stock
  • Covers
    a. insured’s merchandise
    b. property of others in insured’s care
    c. property in transit and in showcases
28
Q

Jewelers Block Covers

A
  • Insured’s stock in trade
  • Jewelry sold, but not yet delivered
  • Similar property of others in the insured’s care
    a. if such property is in jewelry trade, it is only covered up to insured’s financial interest in the property
  • Damage to building housing merchandise when damage is caused by theft, attempted theft, and collapse
29
Q

Jewelers Block: Optional Coverages

A

Show Windows
Covers theft from a show window by cutting or smashing glass

Money
Covers theft of money form a vault or safe on insured premises

30
Q

Jewelers Block: Exclusions

A

Property Not Covered under Jewelers Block

  • On exhibition in showcases not on the premises
  • At an exhibition that is promoted by a trade association or public authority
  • Sold on a payment plan after it leaves the premises
  • Being worn by the insured or an employee (or a family member of either)
  • In the mail, in express carriers, or motor carriers

Extended Causes of Loss

  • Water damage at the insured’s premises
  • Unexplained disappearance
  • Shortage of shipped property when the package is received in good condition and the seal is unbroken
  • Failed tracking
  • Earthquake
  • Theft from a vehicle unless the property is accompanied by an attendant
  • Shortage discovered while doing inventory
  • Breakage of fragile articles
  • Criminal or dishonest acts by the insured, his employees, or someone else the property is entrusted to
31
Q

Jewelers Block: Loss Settlement

A

Determining Value

  • Value is determined at the time of loss
  • Historical or antique value have no bearing on valuation

Policy pays the least of:

  • Actual cash value
  • Cost to restore damaged property to pre-loss condition
  • Cost to replace damaged property
  • Lowest dollar value listed on the company’s books
32
Q

Jeweler’s Block: Insured’s Duties

A

Insured must:

  • Maintain safeguards in place at policy inception
  • Take yearly inventory
  • Keep records for 3 years of:
    a. purchases
    b. inventory
    c. sales
    d. property off premises
    e. property of others on premises

Insurance Adjusting (46 decks)

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