Ch 1 Flashcards
Alteration or addition made to a building at the expense of an insured who does not own the building and who cannot legally remove them.
Improvements and betterments.
What are the three factors to decide if something is a fixture?
Attachment
Adaptation (a net is a fixture of a tennis court)
Intent (to move items to new property)
What are the steps in determining coverage?
1) determine if direct physical moss
2) cause of loss covered?
2a) review policy definitions for clarification
3) Do any additional coverages apply to the loss?
4) do any exclusions apply?
5) have all conditions been met?
What is the order of sources in determining s definition?
1) policy definition
2) court precedence
3) dictionaries
4) common usage
What are the extended coverage perils?
WHARVES
wind, hail, aircraft, riot, vehicles, explosion, smoke
What are the broad form perils?
V&mm
Glass
Falling object
Weight ice snow sleet
Collapse
Steam/hot water heat
Accidental discharge or overflow of water/steam
Freezing of plumbing, hear, a/c, appliances
Suddenly and accidental damage from artificially generated electrical current.
“If a loss is caused by a covered peril and a noncovered peril, the loss is covered if the “dominant,” “efficient,” “prime,” or “moving cause is a covered peril.”
Efficient cause approach to concurrent causation.
The entire loss is covered as long as on of the causes is a covered cause of loss.
Liberal approach to concurrent causation.
If a covered cause of loss and an excluded cause of loss combine to produce the loss, then the loss is covered.
Conservative approach to concurrent causation.
What does a jurisdiction following the “efficient cause” to concurrent causation to with an an “all-risks policy?”
Insurer has to provide the policy excluded the dominant cause
3 purposes of the insurance interest requirement.
1) indemnify the right people the right amount
2) prevent wagering on losses
3) deter fraud
5 things someone with personal ownership can do with their property.
Change, use, sell, rent, dispose of it how choose
Different between joint owner and tenant in common.
Joint owner has interest to full value of property. When one dies, remaining tenant has full own their
Tenant in common owns varying percentage and estate gets their share. No survivorship.
Difference between corporations and proprietorships/partnerships with regard to owning and having interest in business property.
Corporation is like a person; entity can own. Partnership is a shared interest of each owner.
Tenants interest in leased property.
Insurable interest arises out of property’s use value got time remaining on lease. Have interest in any improvements or betterments for rest of lease.
Mortgagee’s interest in house.
Loan’s unpaid balance is extent of interest.
George and wife live in tenancy by entirety state. They have a mortgage and have no other debt. What is the nature and extent of insurable interest in their property?
The bank has an interest on balance owed.
Insureds each have 100% interest.
Alice and Peter have a partnership, A&P, Casino, which leases a building owned by Tump. A&P is 15 years into their 20 year lease. All slots and tables become Trumps when the lease is up. What is the nature and extent of insurable interest in their property?
Alice and Peter have interest in slots and tables for rest of lease and interest in occupancy for rest of lease.
Trump has ownership interest in full value of property plus tables and slots.
Mortgages’ rights, separate from owners.
Right to separate loss settlement even if insured can’t recover. Entitled to cancellation notice.
Phil got laid off after buying a house and stopped paying mortgage. Insurance was mortgagee billed. Before foreclosure a fire made home a total loss. Phil didn’t comply with conditions of policy. What should US bank do?
Bank pays unpaid premium and still makes claim even if insured’s claim is denied. They can receive loan balance.
Why is it important to distinguish personal property from real property?
Possibility of overlapping coverages. Covered by different sections of policy and valued differently.
