Chapter 3 Flashcards
a clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80 percent of the property’s actual replacement cost.
coinsurance clause
a standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public liability, and other common risks. 36-38
homeowners’ insurance policy
insurance that covers injuries or losses sustained within the home. 37
liability coverage
the basic costs of owning a home - mortgage Principal and Interest, real estate Taxes, and hazard Insurance. 35
PITI
the construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose of function as the original. 37
replacement cost
the basic cost of owning a home - mortgage 35
principal- P
Interest- I
Taxes- T
Insurance- I
fire and lightning, glass breakage, windstorm and hail, explosion, riot and civil commotion, damage by aircraft, damage from vehicles, damage from smoke, vandalism and malicious mischief, theft, and loss of property removed from the premises when it is endangered by fire or other perils.
basic form property coverage insurance
falling objects, damage due to the weight of ice, snow, or sleet, collapse of all or part of the building, bursting, cracking, burning, or bulging of a steam or water heating system or of appliances used to heat water, accidental discharge, leakage or overflow of water or stream from within a plumbing, heating, or air conditioning systems and domestic appliances, and damage to electrical appliances, devices, fixtures, and wiring from short circuits or other accidentally generated currents.
broad form insurance policy coverage
a database of consumer claims history that enables insurance companies to access prior claims information. Database contains up to five years of personal property claims history.
Comprehensive Loss Underwriting Exchange (CLUE)
Act of 1968 enacted by Congress to help owners of property in flood-prone areas by subsidizing flood insurance and by taking land use and land control measures to improve future management for floodplain areas.
The Federal Emergency Management Agency (FEMA)
“a general and temporary condition of partial or complete inundation of two or more acres of normally dry land or two or more properties from an overflow of inland or tidal waves, an unusual and rapid accumulation or runoff of surface waters, mudflows or mudslides on the surface of normally dry land, or the collapse of land along the shore of a body of water (uner certain conditions).”
FEMA definition of flood
