Chapter 4: Dwelling ('14) Policy Concepts Flashcards
3 Dwelling Forms
Basic DP 00 01
Broad DP 00 02
Special DP 00 03
Dwelling Eligibility
Owner/tenant occupied
Primarily residential
Incidental Business occupancies (studio, offices)
Mobile Homes
in course of construction
townhouses and rowhouses
no farms
DP-1 Basic Form
least amount of coverages and ACV; fire, lightening, explosions, WHARVVES (extended coverage)
Extended Additional Coverage (EC) Perils- WHARVVES
Windstorm
Hail
Aircraft
Riot/Civil Commotion
Vehicle Damage
Vandalism & Malicious Mischief *additional peril for additional premium
Explosion
Smoke
DP- 2 Broad Form
coverage on named peril basis at RC basis
Contains: Trees/shrubs/plants, collapse, glass, ordinance or law, weight of ice/snow, freezing
DP- 3 Special Form
most complete coverage; open perils approach; RC basis
COV A-E
A- Dwelling
B- Other Structure
C- Personal Property
D- Fair Rental Value
E- Additional Living Expense
Open perils
coverage unless excluded
DP -1 Basic: Coverage A-C (dwelling/other structure/personal property)
*named perils
Fire/lightning
Internal/explosion
Windstorm/hail
Riot/Civil commotion
Aircraft
Vehicles
Smoke
Volcanic Eruption
DP-2 Broad: Coverage A-C
*broad named perils
Fire/Lightning
Internal/explosion
Windstorm/hail
Riot/Civil commotion
Aircraft
Vehicles
Smoke
Volcanic Eruption
Vandalism
Damage by burgler
Falling objects
Weight of ice/snow
Accidental discharge of water/steam
Heating system/AC- cracking or burning
Freezing (limited)
Power Surge
DP- 3 Special: perils
Coverage A-B: open perils
Coverage C: broad named perils
Other Coverages
Other structures
Debris removal
Improvements, Alterations, Additions
World-Wide Coverage (only for COV C)
Rental Value & Additional Living Expense
Reasonable Repairs
Property Removed
Fire Dept. Service Charge
Collapse
Glass or Safety Glazing Material
Ordinance and Law
Broad and Special forms provide coverage for trees, shrubs, plants and lawns for what limited perils?
Fire
Lightning
Aircraft
Vehicles
Vandalism and Malicious Mischief
Explosion
Riot/Civil Commotion
*not including wind/heavy ice
*pays $500 limit for any one
General Exclusions
Ordinance or Law
Earth Movement
Water Damage
Off Premises Power Failure
Neglect
War Exclusions
Nuclear Hazard
Intentional Loss
Governmental Action
Concurrent Causation Exclusions in DP-3
Broad and Special forms provide coverage for building collapsing for what named perils?
perils insured against in COV C- Personal Property
Hidden decay
Hidden insect or vermin damage
Weight of contents, equipment, animals or people
Weight of rain collecting on roof
Use of defective material or methods in construction, remodeling or renovation if collapse occurs during such activity
3 Causes of Loss Excluded
Weather Conditions
Acts or Decisions
Faulty, Inadequate or Defective
Concurrent Causation- Exclusion in DP-3
Two causes of loss happen at the same time and result in a loss to covered property
Ordinance or Law- Exclusion
limited protection (10%) for costs resulting from the enforcement of building or zoning laws
Earth Movement- Exclusions
earthquake, land shock wave or tremor, landslide, mudflow, subsidence or sinkhole whether caused by an act of nature or otherwise
Water Damage- Exclusion
flood, surface water, waves, tides, tidal water, overflow of any body of water or spray from. Whether driven by wind, including storm surge
* damage from water which leaks from interior water systems is covered
Off Premise Power Failure- Exclusion
loss of power or other utility service which takes place off the Described Location
Neglect- Exclusion
failure to use all reasonable steps to save and preserve property at and after the time of loss
War Exclusion
damage from declared/undeclared war, civil war, rebellion, revolution, warlike act by military or destruction or seizure or use of property for military purposes
Nuclear Hazard- Exclusion
nuclear reaction, radiation, or radioactive contamination of any consequence
Intentional Loss- Exclusion
loss arising out of any act that is committed with the intent to cause the loss (arson)
Governmental Action- Exclusion
destruction, confiscation, or seizure of property by order of a governmental authority
Weather Conditions- Exclusion
losses in which weather conditions contribute in any way to another cause or event that is already excluded by the policy
Acts or Decisions- Exclusions
acts or decisions or the failure, by any person may have contributed to the loss
Faulty, Inadequate or Defective- Exclusion
planning, zoning, development, construction, maintenance or materials
Conditions
rights and duties required of both insured and insurance company to carry out the policy provisions
Policy Period- Condition
pay only for losses which occur during the policy period stated in dec pages
Concealment or Fraud- Condition
entire policy is void if any insured intentionally concealed or misrepresented any material fact or engaged in fraudulent conduct
Duties After loss- Condition
give prompt notice to insurance company and protect property from further damage
Loss Settlement- Condition
what basis the policy will pay claims (ACV or RC)
DP-2 and DP-3 pay ACV for what types of property
personal, awning, carpeting, household appliances, outdoor antennas and outdoor equipment, structures that are not buildings (fence)
Loss of building under COV A&B can be paid RC w/o deduction/depreciation if…
the amount of insurance on the damaged building is at least 80% of the full replacement value of the building at the time of loss
*full replacement payment cannot exceed the policy limits
*did/should
Loss to a pair/set- Condition
repair or replace, to get insured in same position prior to loss
pay difference between ACV of property before the loss and after the loss
Appraisal- Condition
resolve dispute when insured and insurance company cannot agree on the amount to be paid on a covered loss.
Other Insurance and Service Agreement- Condition
other insurance applies if property is covered by more than one policy and the insurance is similar, the DP will pay covered claims in proportion to its limits
*Pro Rata basis
*if also covered by service agreement, then coverage under this policy will be excess over amounts payable by the service agreement
Our Option- Condition
if insurance company gives insured notice within 15 days from the day it received the insured’s proof of loss, it’s company’s option to repair or replace any damaged property with like property
Loss Payment- Condition
losses will be adjusted with the named insured and payments will be made to named insured unless the policy dec pages shows another party entity name
*loss is payable within 60 days from the receipt of proof of loss and
1. an agreement was made
2. final judgement has been rendered
3. appraisal award has been filed
Mortgage Clause- Condition
if company denies a claim to insured, the denial does not apply to the mortgagee, mortgagee may make a claim by submitting signed proof of loss within 60 days
DP 02 03 (owner occupied) or no COV A&B- Cancellation
Less than 60 days in effect- for any reason
More than 60 days in effect- non payment of premium, material misrepresentation, substantial change in risk, other reason approved by the Commissioner
*insurer must give 30 days notice of cancellation
DP 02 04 (non owner occupied)- Cancellation
Less than 60 days in effect- for any reason (insurer 15 days notice)
More than 60 days in effect- non payment of premium, material misrepresentation (15 days notice)
More than 60 days in effect- substantial change in risk, loss of reinsurance, failure to comply, other reasons (60 days notice by insurer)
Nonrenewal for DP 02 03/04
03- notice 30 days prior to expiration date
04- notice 60 days prior to expiration date
Automatic Increase in Insurance (DP 04 11)- Endorsement
policy increases the limits of COV A&B automatically for inflation
Dwelling Under Construction (DP- 1143)- Endorsement
property protection for a dwelling structure while under construction
actual amount of insurance on any date is a % of the provisional amount
actual dwelling value on that date/dwelling value at the date of completion
Broad Theft Coverage (DP 04 72)- Endorsement
same coverage as Homeowners, except no coverage for theft that occurs off premises
Minimum coverage limits for COV L&M are…
L- 100,000
M- 1,000
Personal Liability Supplement provides what two coverages
COV L&M
Coverage L- Personal Liability
legal defense and pays up to the limit of liability for damages for which the insured is legally responsible
*defense costs are paid in addition to the policy’s liability limit
Coverage M- Medical Payments to Others
pays medical payments to other regardless of fault up to the medical payments limit
