Property and Casualty Insurance Flashcards
Is a homeowner’s policy a single policy?
No it is a series of policy forms for different scenarios
How many standard homeowner’s insurance services office forms
6
Homeowner’s 2
Broad form - designed for owner occupants of 1-4 family dwelling units
Homeowners 3
Special form - designed for owner occupants of 1-4 family dwelling units
Homeowners 4
Contents broad form - tenants of residential property and owner of a building who lives in the units
Homeowners 5
Comprehensive form
Homeowners six
unit owners form - owners of condominium units
Homeowners 8
Modified coverage form - owner occupants of 1-4 family dwelling units
Homeowner’s Section I
provides property coverage, in this section policy forms differ
Homeowner’s Section II
liability section - identical in all six forms
Could vacant land have homeowner’s insurance?
Yes if its owner or rented to an insured
Can you have homeowner’s insurance on a place you are temporarily residing?
Yes even if you do not own where you are temporarily residing
Can homeowner’s extend to a cemetary?
yes to individual or family cemetery plots or burial vaults of insured
How are losses on Coverage A settled?
on a replacement-cost basis
What is the amount of insurance under coverages B, C and D
a percent of the Coverage A limit
B = 10%
C = 50%
D = 30%
What are the standard limits for B C and D coverage
B - 10% of A
C - 50% of A
D - 30% of A
Can you have endorsements that modify section I and II homeowner’s?
Yes
Home daycare coverage
Flood Ins
Earthquake Ins
Inflation guard
Personal property - antiques, fine art, instruments, other collectibles
Coverage A for the Dwelling
-property ins for the residence premises listed in the declarations page of the policy
-also applies to structures attached to dwelling like garage, decks, fences, construction supplies
Where would coverage for structures attached to the dwelling fall?
Coverage A for the Dwelling
What does Coverage A not cover
-Freezing - plumbing, ac, appliances, fences, pavement, patio, pool, docks foundations, retaining walls
-Theft
-Vandalism
-Wear and tear, marring, deterioration
Under HO-3 Policy - if unexcluded water damage occurs, water damage is covered, what is not covered
The system or appliance from which the water escaped
If a water pipe breaks and bathroom leaks under H-03 what is covered
Fixing the pipe is not covered, but tearing out part of the building to repair the pipe is covered
Coverage B for other structures
other structures on the residence that are SET APART by a clear space. Detached garage, swimming pool, garden shed
If the structure is used for business purposes is it covered under Coverage B?
No - but garage can be used to store biz property
Coverage C for personal property
-coverage for property other than the residence
-limit is greater than 10% of Coverage C limit or $1000
Coverage C personal property covered what perils
Named basis. Includes fire, windstorm vandalism, theft, falling objects, electrical current, volcanos!
How are Coverage C losses settled?
actual cash value basis - replacement cost basis can be added through an endorsement
How can you increase the limits for Coverage C?
endorsements $200 for monies, $1500 for securities, passports, stamps, $2500 for property used for biz purposes
Coverage D for loss of use
Can live elsewhere while property is repaired or rebuilt - for those named as insured in Sec I
Coverage E for personal liability
damages for which the insured is liable - Typically 100k limit per occurrence
Coverage F medical payments to others
$1000 for mdeical expenses for someone who is injured on your property
Will property insurance cover things that happen off the property?
Yes - caused by insured - caused by employee, caused by animal owned by insured
PAP
-personal auto policy
-package policy
-property and liability insurance for family members
Do motorcycles or off road vehicles fall under PAP?
Not ATV - motorcycles added with endorsement
How long much the car be owned/leased to be eligible for a PAP
6 continuous months or longer
How is auto liability coverage split up
3 parts
ex 25k/150k/10k
one person bodily injury / max all bodily injury claims / property damage
Time limit on medical expense payment for car insurance
3 years
Part B auto medical payments coverage
- covers if you’re hit as pedestrian
-covers all in your car
Part C uninsured motorist coverage
-also covers if persons insurance is less than legal limits
-hit and runs where offender isn’t IDd
-whos insurer denies coverage or becomes insolvent
When would you opt out of part D coverage for damage to an auto
if your car is old and value has diminished
Part D coverage for damage to an auto
coverage for physical damage for collision and other than collision
“Other than collision” includes
falling objects, fire, theft or larceny, earthquake, windstorm, hail, water, flood, malicious mischief or vandalism, riot, bird or animal, breakage of glass
PAP Endorsements
covers other vehicles motor homes, motorcycles, ATVs, golf carts
No Fault Insurance
owner required to carry first party insurance to compensate all parties injured by that vehicle
Modified No Fault
law limits but does not eliminate the right of an injured party to recover damages from a negligent party
2 types of Modified No Fault
Dollar Threshold
Verbal Threshold
Dollar Threshold (modified no fault)
if injuries below the threshold, they can collect from first party benefits and can’t sue - if over thresh then can sue
Verbal Threshold (modified no fault) think V very bad
allows suit if fatal injury, serious injury, serious disfigurement
Add on plan (no fault)
no restrictions on right to sue negligent party, but first no-fault benefits are available. after that insurance co has subrogation against negligent party
Hard to insure drivers
find coverage in residual market/substandard market
“available” not necessarily affordable
Watercraft
-coverage under a homeowners policy
-not for larger boats/little physical damage for any boat.
-large boat available under “yacht policy”
personal umbrella liability
-protection against catastrophic legal claims/judgements
-smallest usually 1 mil -& up to 5/10mil
-have to have coverage for smaller amounts and umbrella covers when those are used up
How Umbrella works re:judgements
Auto coverage of 50k and auto accident judgement of 700k - 50k used up and umbrella covers the 650k
Commercial Property Insurance
-losses to real and personal property
-named or open perils
-endorsements to expand coverage to earthquake and flood
Commercial liability ins.
-premises liability, injury or damage on site
-operations liability injury or damage from employee or owner off sit
Product Liability policy
caused by defective product company manufactured or sold
Corp Auto liability policy
company cars or trucks - fleet policy is often used
Biz Umbrella policy
losses that exceed the underlying primary policies
Professional Liability policy
-malpractice against client
- “errors and omissions” for negligence error and omissions
Liability occurrence basis
damage that occurs during policy period, regardless of when the claim is made
Liability occurrence basis
damage that occurs while policy is in force, regardless of when the claim occurs
Directors and officers liability
for breaches of their corp duties
Workers comp and employers liability
-employer is required to carry workers comp ins
3 types of workers comp
-state workers comp
-employees injured during employment not covered under state
-when traveling for work in another state
Home cost 200k to rebuild. Insurance on home is 120k w/500 deductible. Kitchen fire causes 30k damage - how much is covered?
80% of 200k = 160k
120k/160k = 75%
75% of 30k = $22,500
22,500 - 500 = 22k paid by insurer
Can you insure raw land?
No
6 parts of auto policy
A - Liability
B - Medical Payments
C - Uninsured Motorist
D - Damage to your Auto
E - Duties after accident or loss
F - General Provisions
Umbrella coverage is used with what type of insurance?
Auto and Home - not disability or life
Basic Covered perils acronym
HARVEST WFL
What does HARVEST WFL stand for
Hail, aircraft, riot, vandalism, vehicles, volcanic eruption, explosion, smoke, theft, windstorm, fire, lightning
Broad form Acronym
HARVEST WFL + FAR
falling objects, freezing pipes, artificially generated electricity, ruptured system
How does a threshold work re:your ability to sue
If its over the threshold then you can sue
Does a properties replacement cost take into account depreciation?
No
2 methods to value property that take depreciation into account
Book value
actual cash value
In modified no fault dollar threshold, what happens if injuries are below the threshold?
If injuries are below the threshold, they collect from first party benefits and cant sue
In modified no fault dollar threshold, what happens if injuries are above the threshold?
They can sue
