Lesson 2 - Fire Flashcards
Four major sections in fire insurance policies
1) Declarations
2) Insuring Agreement
3) Conditions
4) Exclusions
How to get Actual Cash Value?
Building Year x Depreciation % – Replacement Cost
Basic level fire policy perils include what?
1) Fire
2) Lightning
3) Removal
Assignment/ Transfer of Rights & Duties
Transfer of legal right/interest in an insurance contract to another person
Conditions
Obligations of insured and insurance company
Standard Mortgagee Clause
No voidance act on the part of the insured will prevent a mortgagee from collecting a loss payment
Pro-Rata Liability
Company will not be liable for greater portion of loss than amount insured shall bear to the whole sum of insurance
Three conditions contained in most fire insurance policies that suspend coverage
1) Insured increases hazard intentionally
2) Coverage suspended while building vacant for period beyond 60 days
3) Coverage restricted if loss is result of explosion, unless fire ensues
Five categories of forms with fire insurance contracts
1) Floater Form
2) Automatic/Reporting Form
3) Blanket Form
4) Specific Form
5) Schedule Form
Three basic dwelling fire policies
1) Dwelling Property Basic Form (DP- 00 01)
2) Dwelling Property Broad Form (DP- 00 02)
3) Dwelling Property Special Form (DP- 00 03)
DP- 00 01 policy facts
Named peril contract, building must be used as a dwelling that contains no more than 4 families, included against fire, lightning, removal & internal explosion
4 coverage sections in DP- 00 01 policy
1) Coverage A/ Dwelling
2) Coverage B/ Other Structures
3) Coverage C/ Personal Property
4) Coverage D/ Fair Rental Value
Added as an endorsement to DP- 00 01, IF there is an owner occupant
Additional Living Expense
Coverage for additional premium against perils under DP-00 01 policy
1) Extended Coverage Perils
2) Vandalism and Malicious Mischief (V & MM)
Extended coverage provides protection against what perils
1) Windstorm & Hail
2) Aircraft Damage
3) Riot & Civil Commotion
4) Vehicle Damage
5) Explosion
6) Volcanic Eruption
7) Smoke Damage
Conditions to V & MM
Damage/loss to property is NOT covered if dwelling has been vacant for more than 30 days
DP- 00 02 policy facts
Named peril contract with 5 sections of coverage, including Coverage E/ Additional Living Expense
What does Coverage E do
Pays excess beyond normal monthly living expenses
DP- 00 03 policy facts
Open peril dwelling fire contract
DP- 04 11
Automatic increase in insurance provides automatic pro-rata increase in coverage (inflation guard endorsement)
DP- 11 43
Dwelling under construction is attached when intended occupant of dwelling is name insured
DP- 04 41
Additional Insured is a contractor that can be added to DP- 11 43
DP- 04 73
Theft Coverage Limited Form endorsement
DP- 04 72
Theft Coverage Broad Form endorsement
Theft Coverage Broad Form endorsement
Covers owner occupied dwelling
Theft Coverage Limited Form endorsement
Used for non-owner occupied properties
DP- 04-71
Law Coverage provides coverage for loss caused by a covered peril to property
DP- 02-03
Cancellation and Non-Renewal modifications
DL- 24 01
Personal Liability Supplement that provides coverage similar to coverage appearing in liability section of Homeowners forms
Commercial Package Policy (CPP) includes what coverage parts
Commercial
1) Property
2) Liability
3) Inland Marine
4) Crime
5) Boiler & Machinery
6) Farm Property
Policy that provides protection for only one coverage area
Monoline Policy
Policy that contains coverage for more than one line
Package/Multi-line Policy
Only the named insured will benefit from coverage provided in commercial property conditions
No Benefit to Bailee
Commercial Property Coverage Forms
Coverage for property used for business purposes and more than four dwelling units
CP- 00 10
Building & Personal property form that provides coverage for physical loss/damage to property resulting from covered perils
Builder’s Risk
Covers direct physical loss or damage to buildings under construction
Business Income Form
Covers actual loss of business income including net income and continuing normal expenses
Applies to personal property of the named insured in transit in or on a motor vehicle owned by the named insured
Transit extension
Specifies that in the event of a water damage loss, open peril coverage will also apply to repair
Water damage extension
Peak season endorsement
(CP–12 30) increases limit of insurance for business personal property which experience seasonal cycles in value
Value reporting form
(CP– 13 10) Used when covering property with fluctuating values or business inventory
Form to ensure against direct physical loss of scheduled perishable stock owned by the insured
Spoilage coverage
Specific form
Provides coverage for one kind of property and one definite location
Blanket form
Covers same kind of property in different locations or different types of property at a single location
Floater form
Coverage is used to cover goods in different locations
Automatic/reporting form
Used when it is difficult to provide accurate values because of fluctuations
Schedule form
Coverage often used by large risks (e.g. specific coverage)
DP 05 30
Functional replacement cost loss settlement
