8.3 - Tenants Flashcards
Tenants policies
-designed to cover insureds who do not own the building or units they occupy as principal residences
-they provide coverage for the tenant’s personal belongings (ex. furniture and clothing) that are not covered by the landlord’s policy
-the insurance for the dwelling or the apartment is the responsibility of the landlord
Tenants policies - Underwriting Concerns:
Short Term Occupancy
-tenants can move around more easily because they do not own the dwelling
-sometimes they move without notifying their insurers
-the frequency with which tenants move can generate additional work for the insurer that is time-consuming and costly
Tenants policies - Underwriting Concerns:
Too Many Roommates
-the number of roommates living together in a dwelling or self-contained unit can be a concern
-too many roommates living together may represent greater exposure than the insurer is comfortable with because as the number of roommates increases, so does the exposure to vandalism, theft, and liability
-generally insurer limit the number of roommates to two per unit or dwelling
Types of Tenants form
-IBC Tenants forms are offered in a basic form and a comprehensive form
-a notable difference from the homeowners basic and comprehensive forms is that the tenants forms omit Coverages A ad B for a dwelling and detached private structure
-the dwelling or unit the tenant occupies is covered under the policy of the landlord
Types of Tenants form - Tenants Comprehensive Form
-Coverage C - Personal Property is essentially similar between the tenants comprehensive and homeowners comprehensive forms
-Coverage D is essentially similar in all of the tenants and homeowners forms
Types of Tenants form - Tenants Comprehensive Form: Coverage C - Personal Property
-the one difference in Coverage C between the tenants comp and HOs comp forms is that the tenants form includes coverage for improvements and betterments, and under the HOs fomr, there is no need for a clause addressed to an insured who does not own the dwelling
Types of Tenants form - Tenants Comprehensive Form: Coverage C - Personal Property - Improvements and Betterments
-under the tenants comp form, if the insured is not the owner of the dwelling, the insurer extends coverage under Coverage C to dwelling improvements and betterments made by the insured or acquired at the insured’s expense (including those purchased from the previous tenant) but only in the portion of the dwelling that the insured occupies as a private residence
-improvements and betterments are covered for the same perils as the other property under Coverage C and included in the amount of insurance that applies to Coverage C
Types of Tenants form - Tenants Comprehensive Form: Coverage D - Additional Living Expenses
-coverage D in the tenants comprehensive form is identical to Coverage D in the HOS comp form, except that, for lack of a Coverage A, the amount of insurance for Coverage D in the tenants form is set as a percentage of Coverage C
Types of Tenants form - Tenants Comprehensive Form: Extensions of Coverage
-extensions of coverage under the tenants comp form are mostly the same as the extensions under the HOs comp form, tear out and damage to dwelling are two notable exceptions
- tear out: in the HOs comp form, the tear out extension applies to any walls, ceilings, or other parts of insured buildings or structures that must be torn apart before insured water damage can be repaired
-in the tenants comp form, the tear out extension instead applies to any insured tenant improvements or betterments that must be removed or torn apart before insured water damage can be repaired
-the difference from the HOs form reflects the fact that the tenants form does not cover the building - damage to dwelling: The tenants comp form extends coverage to allow the insured to apply up to a specified dollar amount ($500 in the IBC form) of the Coverage C limit to damage
>to the part of the dwelling the insured occupies as a private residence, if that damage was directly caused by theft or attempted theft
>to the interior of the part of the dwelling the insured occupies as a private residence, if that damage was directly caused by vandalism or malicious acts; or
>to the part of the dwelling the insured occupies as a private residence, if that damage was directly caused by the impact of a vehicle being operated by the insured
-fire damage to the dwelling is not covered
-the tenants form includes this extension because, unlike the HOs form, the tenants form does not cover the building, yet the insured may be responsible for repairing damage caused in these circumstances
Types of Tenants form - Tenants Comprehensive Form: Exclusions
-like the HOs comp form, the tenants comp form is an all-risks form, under which coverage is determined by the exclusions
-the exclusions in the two forms are largely the same but with several differences that reflect the absence of building coverage under a tenants form:
>there is no exclusion in the tenants form of buildings or structures used for farming or business purposes; because there is no coverage for buildings
>the tenants form excludes lawn and outdoor trees, shrubs, and plants; the HOs form only excludes lawns
>the exclusion in the tenants form of loss due to settling, expansion, contraction, moving, bulging, buckling, or cracking omits the qualifier about resulting damage to building glass that is found in the corresponding exclusion of the HOs form
>the exclusion in the tenants form of loss caused by birds, vermin, raccoons, rodents, or insects omits the reference to building glass that is found in the corresponding exclusion of the HOs form
>in the tenants form, the exclusion of theft or attempted theft in or from a dwelling under construction does not extend to materials or supplies for use in the construction as in the corresponding exclusion of the HOs form
Types of Tenants form - Tenants Basic Form
-Coverage C - Personal Property is essentially similar between the tenants basic and homeowners basic forms; the one difference between them is that the tenants form includes coverage for improvements and betterments, and Coverage D is essentially similar in all of the tenants and homeowners forms
-the major difference between the tenants basic form and the tenants comprehensive form is the difference between named-perils and all-risks coverage
Types of Tenants form - Tenants Basic Form: Coverage C - Personal Property
-Coverage C in the tenants basic form is largely similar to Coverage C in the tenants comp form but with several differences: in both forms, personal property stored in a warehouse is insured against the peril of theft, but the basic form covers such property ONLY against theft, where the Comp form also covers loss to such property caused by any other peril - but only for 30 days
Types of Tenants form - Tenants Basic Form: Extensions of Coverage
-in the tenants basic form, the extension of coverage for damage to the dwelling does not apply to damage caused by vehicle impact as in the tenants comp form
Types of Tenants form - Tenants Basic Form: Insured Perils
-the insured perils in the tenants basic form are almost the same as those in the homeowners basic form, but the differences arise because there is no Coverage A in the tenants forms, so all mention of coverage for the building is omitted
