Chapter 4 Flashcards
How many people are involved in a property insurance contract?
Two: the insured and the insurer
Property insurance overs what type types of property?
Real property and personal property
Real property refers to what?
Real property refers to buildings and other structures, but doesn’t include the land (land is generally not insurable).
What is personal property?
Personal property is any items that aren’t real property — the contents of a house, furniture, clothing, etc. Both homeowner’s and businesses have personal property.
What does “additional coverages” cover?
- Debris removal
- Removal/preservation of property — Can be referred to as removal coverage, preservation of property coverage
- Fire department service charge — deductible does not apply to the fire department’s service charge
What are the three types of causes of loss forms?
Basic
Broad
Special — Also referred to as All Risk, Comprehensive, Open Peril, Extended Coverage
If a home is financed with a mortgage, what type of coverage will the mortgagee require of the property?
Special Coverage
F.L.R.E.W.S.S.S.V.V.V
What does this acronym stand for?
This is the Basic Causes of Loss Form acronym
Fire, Lightening, Rioting, Explosions, Wind/hail, Smoke, Sprinklers, Sinkhole, Volcanic, vehicles/aircraft, Vandalism
What does the acronym W.W.F.G.C. Stand for?
Broad form acronym, stands for:
Water damage, Weight snow/ice, Falling Objects, Glass, Collapse
Does Basic form offer glass coverage?
No Basic does not offer glass, broad offers some glass coverage, special form offers full glass coverage.
How do you know what perils are covered under the special form?
All exclusions are listed in the policy, exclusions are not covered.
What are typical exclusions under special form coverage?
War, Nuclear Catastrophe, Sewer backup, Floods/mudslides, Earth movement, Off premises power failure, Government Action, Building Ordinance, Explosion of steam boiler, Intentional acts by insured, Theft by employees, Inherent vice, Normal wear and tear, Neglect, Birds (vermin, rodents, and insects), Terrorism, mold, damage to the structures interior from (rain, snow, sand, dust), Damage caused by animals wonder or kept by the insured.
What types of perils does special form add?
Full glass coverage, theft, including robbery and burglary, mysterious disappearance, breakage, leak roof, insureds vehicle hits property, damage from an animal (bear, deer)
Does special coverage cover theft of money or employee theft?
No, includes robbery or burglary, money or employee theft may be covered by crime insurance.
What actions are required of the Insured in the event of a loss?
Notify the police if a law has been broken; give the insurer prompt notice of loss, Send the insurer proof of loss form within 60 days, take all reasonable steps to protect the proper further, give the insurer complete inventories of damaged/undamaged property, permit the insurer to inspect the property and examine books if necessary, cooperate with the insure in the investigation of the claim, if requested submit to an examination under oath.
How long does the insured have to complete a Proof of Loss form?
60 days
What type of property valuation is not used for property insurance claims?
Fair Market Value
What does replacement cost cover?
Replacement cost pays the insured the full cost (up to the limits of the policy) of buying new, similar property to replace the old or damaged property. New for old coverage
What does ACV refer to?
ACV is also known as Actual Cash Value
How is ACV calculated?
ACV = replacement cost minus physical depreciation
Most property policies pay on what basis?
Actual Cash Value (ACV)
What basis are antiques and fine art covered under?
A Valued policy — or an Agreed Value Policy or Stated Value Policy
What is the time limit if the insured wishes to file a lawsuit agains the insurer for los under a property policy?
2 years after the date loss
Can the appraisal provision be used to settle disputes regarding the perils covered?
No, it can’t be used to settle disputes.
