Property Insurance Illinois

Question 1

What is The Insurance Services Office?

Answer 1

Private company that writes common policy forms in property and casualty insurance.

Question 2

What is the Declarations Page?

Answer 2

First-page summary of an insurance policy: *Name of the insured party (named insured). *Overall dollar limit (limit of liability). *Deductible. *Duration of coverage (policy period).
*Premium.
*How property is valued (replacement cost vs. actual cash value).

Question 3

What are the roles of the Named Insured?

Answer 3

The named insured:
-Controls the coverage along with the insurer, is responsible for paying premiums
-Has the right to receive refunds of premiums
-Has the right to change coverage with insurer’s consent
-Has the right to cancel the insurance has the right to assign rights with insurer’s permission.

Question 4

What is the Limit of Liability?

Answer 4

The dollar limit that an insurer might need to pay after a loss.
*Might have multiple limits depending on: *Peril that caused a loss.
*Type of loss. (Example: building vs. personal property.)
*Might apply per occurrence or per policy period.

Question 5

What is the deductible?

Answer 5

The amount of an otherwise insured loss that must be paid by the consumer before the insurer will provide benefits.
*Eliminates small claims for the insurer.
*Bigger deductible = lower cost.
*Usually a flat dollar amount.
*Might apply per occurrence or per policy period.

Question 6

What are attributes of the Windstorm Deductible?

Answer 6

The windstorm deductible might be based on percentage of home’s insured value.
*More common in coastal areas.

Question 7

What is the policy period?

Answer 7

Contractual duration of coverage.
*Often for one year.
*Often starts and ends at 12:01 a.m.

Question 8

Where are the definitions typically located?

Answer 8

The definitions will be found either after declarations or at the end of the policy document.

Question 9

What is an insuring agreement?

Answer 9

An insuring agreement is the insurer’s written, basic promise to the consumer.
*Might have multiple insuring agreements in the same policy.

Question 10

What are the 3 types of Perils insured against / Cause of loss forms?

Answer 10

Basic which Insures against a handful of named perils.
Broad which Insures against an intermediate level of named perils.
Special which Insures against all perils except those specifically listed as “exclusions.”

Question 11

What are common property exclusions?

Answer 11

Common Property Exclusions are intentional damage committed by the insured, floods, earth movement, pollutants, nuclear reactions and radiation, war-related damage, & wear and tear.

Question 12

What are common casualty exclusions?

Answer 12

Common casualty exclusions are intentional acts by the insured, war, pollution, operating a vehicle, harm committed by someone who’s covered by the same policy, workers comp scenarios.

Question 13

What is Concurrent Causation?

Answer 13

Concurrent causation Occurs when two or more perils cause a loss at the same time.
*If any one of the perils is a covered peril, the loss should be covered UNLESS THE POLICY SAYS OTHERWISE.

Question 14

What are Supplementary Payments/Additional Coverages?

Answer 14

Supplementary Payments/Additional Coverages are:
-Assorted additional insurance benefits designed to reduce stress, size and scope of losses.
*Generally free benefits when loss is caused by a covered peril.
*Often no deductible and no impact on overall dollar limits.

Question 15

What do Supplementary Payments/Additional Coverages cover in Auto Insurance?

Answer 15

The cost to defend the driver in a lawsuit.
*The cost of a bail bond if a driver is arrested after an accident.
*The cost of taking time off from work to help an insurer in an accident-related court proceeding.

Question 16

What do Supplementary Payments/Additional Coverages cover in Homeowners insurance?

Answer 16

Homeowners Supplementary Payments/Additional Coverages cover
The expense of storing belongings at an offsite location after a building becomes unsecure. *The cost of temporary repairs.
*The cost of debris removal after a covered peril.
*The cost to replace damaged trees or plants. *Expenses charged by local fire departments. *Expenses from credit card theft.

Question 17

What are conditions and some examples of them?

Answer 17

Conditions are Rules for what must done after a loss.
*Alert the insurer of a loss within a reasonable time as set by the policy (notice of claim). *Provide proof of loss to the insurer within a reasonable time.
*Allow the insurer to conduct reasonable investigations and appraisals regarding the loss. *Take reasonable measures to keep an existing loss from getting worse. *Allow the insurer to take legal action against third parties who may have caused the loss.

Question 18

What are conditions and some examples of them?

Answer 18

Conditions explain that compensation might be limited by:
*Deductibles or coinsurance requirements. *Where the loss occurred. (Losses must occur within the “coverage territory.”)
*Whether the insured has violated any part of the agreement.
*Whether property is insured for its actual cash value, replacement cost or other amount.
*Other in-force insurance policies that might pay for the same loss.

Question 19

What are the terms of Proof of Loss?

Answer 19

Often must be submitted within 60 days. *Insurers cannot create unreasonable burdens when requiring proof of loss.
*Might ask for:
*An inventory of lost or damaged personal property.
*A description of damage.
*An account of when and how the loss occurred. *Proof of any additional living expenses. *Confirmation of who owns the property.
*A list of other insurance policies that might reimburse the insured for the loss.

Question 20

What’s the difference between Replacement Cost & Actual Cash Value?

Answer 20

Replacement cost is the cost of new item of “like kind and quality.” It is Often the default option for single family homes.
Actual cash value is the replacement cost minus depreciation. It is often the default option for personal belongings.

Question 21

What is Fair Market Value?

Answer 21

The amount a buyer would pay on open market.

Question 22

What are valued policies?

Answer 22

Policies that the insurer and the policyholder agree on value in advance of a loss. (Used to insure items that are difficult to replace.)

Question 23

What are the 2 types of Alternative Dispute Resolution?

Answer 23

Mediation which encourages a resolution between the insurer and the policyholder but isn’t legally binding.
Arbitration which asks a third party to settle a dispute. The umpire’s decision is legally binding.

Question 24

What are Coinsurance Clauses?

Answer 24

Coinsurance Clauses are often invoked by the insurer after a partial loss of property.
*Building must be covered up to at least a minimum percentage of its value in order for partial losses to be covered at 100%.
*Specifics depend on the policy and type of coverage.
*Sometimes known as “insurance-to-value clause.”

Question 25

What are “other insurance” clauses?

Answer 25

“Other insurance” clauses explain what happens when multiple policies apply to the same loss. *Primary policy pays first.
*Excess insurance might pay second.

Question 26

What is Pro Rata Liability?

Answer 26

Pro Rata Liability is when multiple policies split the loss.
*Often based on dollar limits of each policy and shared proportionally NOT EQUALLY.
*Example: Policy A has a dollar limit of $90k. Policy B has a dollar limit of $10k. Therefore, Policy A will pay for 90% of the loss, and Policy B will pay 10%.

Question 27

How is recovered property handled?

Answer 27

Parties must contact each other if lost or stolen property is found.
*Keep the insurance money OR keep the property.