Property Insurance Flashcards
An insurance premium is
the amount of money that the insured pays to the insurer for coverage.
A deductible is
if something happens, a property owner has to pay the amount of their deductible before the insurance company coughs up any money.
There are four different kinds of people property owners can buy insurance from.
Certainly, here are nicknames for each of the roles you described:
- Independent Agents: “Middlemen”
- Captive Agents: “Company Loyalists”
- Insurance Brokers: “Quote Seekers”
- Direct Writing Companies: “Direct Sellers”
The insurance portion of that escrow payment is being held for the ___________ year
upcoming
Jillian is in the process of purchasing her first home. When should she expect to make her first property insurance payment?
When purchasing a property, a full year of property insurance is paid in advance at closing. This is typically figured into closing costs.
Named peril policies cover
only the things specifically listed, aka the named perils.
All-risk policies cover everything excep
the specifically named exceptions.
perils vs hazard definition
Perils are things that can cause a loss: high winds, ice, velociraptors, etc.
Hazards are dangerous situations or actions that are more likely to cause perils. Frayed wiring, sky diving, and flamethrower fights are all hazards.
There are three kinds of hazards.
Physical hazards are conditions or situations that increase the chance of a loss, and they are the most common kind of hazard.
Moral hazards are hazards that are the result of immoral behavior, like lying or fraud.
Morale hazards are like moral hazards, but with an extra “e.” They are the result of an environment or set of circumstances that makes people more likely to engage in risky behavior.
Monoline vs. Package Policies
There are two main types of insurance policies:
- Monoline Insurance: This type of policy offers only one specific type of coverage, such as auto insurance or health insurance.
- Package Policy: A package policy is a single insurance policy that includes coverage for multiple types of risks or needs, like both property and liability insurance bundled together.
Liability insurance is
is insurance coverage that protects against claims that one’s negligence or inappropriate action resulted in a loss to another party.
Most homeowners are going to want some liability coverage. You never know when a litigious neighbor is going to slip on your sidewalk. Usually, if something happens on your property, you’re liable. Kind of makes you want to rethink that front-yard ice rink, huh? ⛸
Dwelling vs. Homeowners Insurance
Dwelling policies generally only cover the dwelling: the roof, floors, walls, and everything about the house, but nothing that is inside it. Simple, right? It does what it says on the tin. Often, dwelling insurance is the best choice for investment properties because, well, it’s not your stuff on the inside, so who cares?
Homeowners insurance is usually broader and can include coverage for structures not attached to the dwelling, personal property, liability, and more.
walls-in policy
it covers everything from the walls in of a particular unit (because that’s as much as you own as a condo owner — the rest of the building is owned collectively by you and your neighbors).
umbrella policy is
An umbrella policy is like a safety net for those who want to be thoroughly protected. It extends your insurance coverage beyond what your other policies offer. However, it only comes into play after your existing insurance policies have reached their coverage limits. In essence, it fills in the gaps or provides extra coverage when needed. You can get this type of policy for personal or business purposes, but it’s important to remember that it doesn’t activate until your other insurance policies have been exhausted. It’s that extra layer of protection you can have for a relatively low cost. ☂️
There are four types of hazard zones on the flood map:
Zone V is a high-risk coastal area. Zone V properties are required to carry flood insurance.
Zone A properties are also high-risk properties and are inside what’s called the 100-year flood plain. That means there’s a 1% chance or higher the area will flood each year. We have been seeing more than our share of 100-year floods in the last few years, and many of these maps are being rewritten. Zone A properties are required to have flood insurance.
Zones B, C, and X are properties either in the 500-year flood plain or outside of a flood plain altogether. They’re considered low-risk for flooding and aren’t required to carry flood insurance.
Zone D designations haven’t been studied for flood vulnerability. They’re not required to have flood insurance.
