Others Flashcards
Earthquake
An earthquake is defined as a trembling or shaking of the earth that is volcanic or seismic in origin, often resulting in severe damage. It is a peril excluded by most standard property forms. Coverage for the peril of earthquake may be added by endorsement to most property policies, or coverage may be written in a Difference in Conditions Policy.
Mobile Homes
The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land owned or leased by the resident of the mobilehome. The limit of liability for Coverage B (other structures) is changed to $2,000 or 10% of the Coverage A limit, whichever is greater. This does not reduce the Coverage A limit.
The additional coverage of property removed is changed to add up to $500 for reasonable expenses incurred in the removal and return of the mobilehome when it is necessary to avoid damage or endangered by a peril insured against. The additional coverage of ordinance or law is removed.
To be eligible, the mobile home must be designed for year-round living and must meet certain size requirements.
The coverage structure of the Mobile Homeowners Policy follows the structure of the Homeowners policy:
Coverage A — States the limit of liability for damage to the mobile home;
Coverage B — Other covered structures;
Coverage C — Personal property of the insured*
Coverage D — Loss of use coverage;
Coverage E — Personal Liability;
Coverage F — Medical Payments to Others.
* Note: Unlike the HO forms, the Mobile Homeowners Policy provides 40% of Coverage A. Items included in the unit (at the time of sale) are classified as Coverage A property.
The mobile homeowners policy changes the language for the Additional Coverage Property Removed. The policy will pay up to $500 if the insured moves the mobile home to a safer area to protect it from loss by a covered peril. If the insured wishes to move the mobile home in a situation in which it is not threatened by an insured peril, they must contact the insurer and obtain, for additional premium, a Transportation/Permission to Move Endorsement. This endorsement adds the perils of collision, upset, and stranding and sinking to the perils insured against in the policy. Coverage under this endorsement applies for a period of 30 days anywhere in continental United States or Canada. The mobile homeowners policy endorsement deletes the additional coverage for Ordinance or Law.
WaterCraft
Watercraft endorsement provides liability protection for bodily injury or property damage caused by the ownership or use of watercraft (excluding when used to carry persons for a fee or when rented to others).
Crop and Hail
Crop insurance is designed to meet the needs of farmers and other crop growers who desire protection against loss to their investment in planted crops resulting from damage by the elements and other perils. The original crop insurance policy provided coverage against loss by hail only, and although this is still the major peril, coverage is now written to cover loss against fire and lightning as well. Insurance on growing crops is sold by specialty crop-hail insurers. In addition, coverage against loss from most any peril (multi-peril) is available from the Federal Crop Insurance Corporation (FCIC) through a federally subsidized multi-peril crop insurance program. Private insurers which are reinsured by the Federal Crop Insurance Corporation also offer multi-peril crop insurance.
Eligibility
There are over 200 different crops that may be insured under crop insurance policies; however, the eligibility list varies geographically. Crops eligible for coverage are classified into various classifications with different provisions applying to different classes. Some of the classifications include large grain crops, such as corn, maize and soybean; small grain crops, including cereal grains such as barley, oats, wheat, etc.; cotton; tobacco; fruits and vegetables. Only the marketable portion of the crop is insured.
Term of coverage
Term of Coverage
Most crop-hail applications include a binder provision that stipulates that coverage becomes effective at 12:01 AM on the day following the signing of the application. If any acres of crops described in the schedule are damaged by an insured peril during this waiting period between the time the application is signed and 12:01 AM the next day, there is no coverage. If the crops are damaged by hail during this waiting period, the applicant must give the insurer notice of such damage within 72 hours after such damage. If the notice is given in a timely fashion, the applicant is entitled to return premium for insurance on any such acre of crop damaged. When the applicant fails to notify the insurer within 72 hours, the right to return premium is automatically forfeited.
The insurance coverage expires at 12:01 AM on a specified date determined by the crop insured and the state. The specific expiration dates are printed in the form and coincide with the particular harvest period of the crop. The expiration dates are set on the basis of typical growth and harvest patterns of individual crops, reflecting the climate of the state and county in which the crop is located. The purpose of scheduling different expiration dates for different crops is to eliminate coverage from crops that have been left out long past the time for harvest and have, therefore, been subject to loss exposure not anticipated in the rates.
Crop-hail policies allow the insured to cancel the policy prior to the inception of the insurance period and receive a refund of the paid premium for the amount of insurance canceled. Since the insurance does not become effective until a normal stand of crop is clearly visible above the ground, there is a period between inception of the contract, (12:01 AM on the day following the application) and the time that the insurance becomes effective (when a stand of crop is visible).
In the event of “known crop failure”, the policy may be returned for flat cancellation up to a date specified in the policy.
Covered Perils
The perils covered under the standard crop-hail policy are hail, fire and lightning. Coverage against fire and lightning applies before the crop is harvested and while it is still in the field or being transported to first storage. The policy does not cover losses or damage caused by wind, rain, flood or frost.
Limits of Coverage
Crop-hail insurance coverage can be purchased in any amount up to the full value of the expected crop. On early pre-season contracts, the coverage is usually for an average crop yield, but adjusted for the expectation of the individual insured. Some insured purchase coverage for potential value of the expected crop, while others may only insure for the cost of production.
Most crop-hail insurance is written on a “percentage plan”. The insurer permits the insured to place a valuation on the crop, which is then the amount of insurance purchased. In the event of a loss, the indemnity is based on the percentage of the crop damaged by hail, fire, or lightning.
Windstorm
Most standard homeowner policies will cover wind damage from minor natural events. This does not usually apply, however, to areas that are considered high risk, such as coastal regions, which are susceptible to hurricanes, and inland areas that are at risk from tornadoes. In these high-risk areas, certain windstorm coverage is removed from the homeowner policy and homeowners are either required or encouraged to purchase a separate windstorm policy.
The terms wind and windstorm have specific definitions that will make it easier to understand the coverages provided by homeowner and windstorm policies. Wind is defined as a natural and perceptible movement of air parallel to or along the ground. A windstorm is defined as a storm with high winds or violent gusts but with little or no rain. Wind and windstorm may be different causes of loss, so even though a homeowner policy covers wind damage, it may not cover damage from a windstorm.
Private insurance companies sell specialty coverage such as “wind and hail” or “windstorm” policies, but in states where there are no offerings from private insurers, state-sponsored insurance pools provide windstorm insurance for these areas. Windstorm policies are written with different classifications that are tied to “trigger” events. Examples of these trigger events include
A hurricane or tornado watch issued by the National Hurricane Center or National Weather Service;
Sustained winds of 74 or more miles per hour; and
A specific, declared geographic location.
