Ch.5- Property insurance policies- Common characteristics Flashcards

1
Q

Personal property Insuance

A

for property having person, non business use

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2
Q

Types of personal property policies (6)

A
  1. Tenant
  2. homeowners
  3. Mobile Home
  4. Condo Insurance
  5. Secondary dwelling
  6. Seasonal dwelling
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3
Q

Commercial Property Insurance

A
  • property having business use
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4
Q

Attributes of Property policies (8)- list (NIICE DCS)

A
  1. No standard policy
  2. indentify property insured + location
  3. insures direct damage only
  4. Conditions + warranties
  5. Exclusions
  6. Deductible clause
  7. Claims payment
  8. Standard mortgage
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5
Q
  1. No standard policy
A
  • Plociy may be limited to a few perils or a variet
  • Named Peril policies : name periols insured
  • all risks policies: Perils not named, all causes of loss insured UNLESS excluded
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6
Q
  1. Identify property + insured location
A
  • Coverage resteicted to location stated in policy and
  • only for items where an amount of insurance indicated
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7
Q
  1. Insure direct damage only
A
  • property insurance insures direct damage only
    • damaged/destroyed by insured peril
    • examples:
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8
Q
  1. Conditions and Warranties
A
  • Conditions: req insured to do or not to do something
    • 2 common:
      • statutory conditions: in statute + legally binding
      • Policy conditions: developed by insurers
  • Warranties: a promise by insureds that certain facts are true + will stay that way
    • breach warranty = contract nullified
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9
Q

5.Exclusions

A

in property polcies- 2 types of exclusions:

  1. ​Property Excluded:
    • evideces of debt
    • securities
    • watercraft
    • aircraft
    • money
    • other motor vehicles
    • books of account
    • vacant property
  2. Perils excluded:
    • ​​Earthquake
    • flood
    • smoke due to agricultural smudging/insudtrial ops.
    • rust/corrosion
    • war
    • nuclear incident
    • increaed cost of repair/constructom
    • sewer backup
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10
Q
  1. Deductible clause
A
  • INC IN ALL PROPERTY POLICIES
  • Deductible: amount insured req to pay for each loss BEFORE gets any payment from insurer
    *
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11
Q

7.Claims payment

A
  • (i) Pair/set
  • (ii) Parts
  • LEAST OF 3:
    • Step 1: ACV at time of loss
    • Step 2: Interest of insured
    • step 3: Limit of insurance
  • Other basis of settlement:
    • replacement cost basis
    • Valued policies
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12
Q

(i) Pair/set

A
  • Loss/damage to 1 item of pair/set DOES NOT = loss damage to whole thing
  • other half still has value (deducted from claim amount)
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13
Q

(ii) Parts

A
  • loss to only 1 part of property that has several parts
  • (Parts clause) basis of settlement is value of lost/damaged part + cost to install
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14
Q
  1. Standard Mortgagee clause
A
  • mortgagees req their interest to be protected w/ insurance
    *
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15
Q

Personal property-> Homeowner forms

A
  • Dwelling bldg
  • detached private structures
  • personal property
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16
Q

Commercial Property Forms

A
  • Building
  • Stock
  • Equipment
17
Q

INDIRECT damage

A
  • Loss of food in a freezer when motor damaged by lightening
  • loss of rental income after major fire
  • Loss of profit from biz after tornado destroyed bldg
18
Q

What deductibles accomplish?

A
  • helps keep insurance affordable
  • higher deductible = lower premium
  • pick deductible they can afford if there is a loss
  • amount of deductible is amt insured retains/contributes to loss settlement
19
Q

Actual cash value (ACV)

A
  • Replacement cost - Depreciation
20
Q

Factors influencing Depreciation- (CORN)

A
  • Conditio n
  • Obselescence
  • Resale Value
  • Normal Life expectancy
21
Q

Replacement cost-Buildings

A

Provisions:

  • Replacement shall be effected by insureds w/ due diligence and dispatch
  • replacement shall be on the same site or an adjacent site
  • settlement will be made only when replcement has actually been effected
22
Q

Replacement cost- Property

A

Insureds req to show that:

  • prepoerty was useable for original purpose at time of loss
  • property was repaired or replaced promptly
23
Q

Meaning f replacement cost

A

replacing lost/damaged item with new one- NOT used one

24
Q

Types of property normally insured by valued policies and basis of settlement

A
  • Types of property:
    • propertyb that cant be replaced
    • i.e: original art, family jewellery, furs, antiques
  • Basis of settlement:
    • agreed on by insured and insurer
    • req valuation by qualified appraiser
25
Q

Mortgagee

A

Mortgagee: anyone w/ insurable interest in the property

banks, trusts, groip pf ppl

26
Q

Guarantees to Mortgagees (2)

A
  • Guarantee of pmt when insured breaches any policy conditions (neglect, ommssion/misrep.
  • Guaranteed Insurer will not reduce coverage to the prejudice of mortgagee NOR terminate policy w/o providing it with same notice req to insured