Section 1 Flashcards
What are the five rights and duties of the First Named Insured
Authorized to cancel
Receive notice of cancellation
Make changes with insurer consent
Responsible for payment of all premiums
Payee for return premiums
What is the formula for coinsurance
Amount Carried/Amount Required multiplied by the loss equals the recovery, then subtract the deductible and that equals settlement
What does the Transfer of Rights of Recovery Against Others to Us do?
Transfers rights of recovery against a third party to the insurance company that paid out the claim.
What are the four elements needed in order for there to be coverage per the Insuring Agreement?
There must be a physical direct loss or damage
The loss or damage must be to covered property
The Covered Property must be at the premises described in the Declarations
The loss or damage must be caused by or result from a Covered Cause of Loss
What are the three categories of Covered Property?
Building
Business Personal Property
Personal Poperty of Others
What are the five types of property in addition to the building listed in the declarations?
Completed Additions
Fixtures, including outdoor fixtures
Machinery and equipment that’s permanently installed
Personal property used to service the building or premises
Additions under construction or building materials, as long as not covered else where
What is considered Business Personal Property?
Furniture and Fixtures
Machinery and Equipment not permanently installed
Stock
Other owned property used in your business
Labor/materials named insured put into customer’s property
Leased property you have a contractual responsibility to insure
What is Blanket Property Coverage?
One limit that applies to more than one type of property
What are advantages to using blanket coverage?
Named insured can apply insurance where needed when more than one type of property is covered
Handles fluctuating values between locations
Reporting forms are easier
Named insured may have 100% insurance to value at each location but only has to carry 90% insurance to value
What are disadvantages to using blanket coverage?
90% or 100% coinsurance is required
Blanket may not be possible due to underwriting restrictions
SOV’s must be obtained from named insured listing each item and amount of coverage
Rates for one year only
Must have same causes of loss for all properties
Must list all ownership interests with multiple locations
What is a margin clause?
Lists the maximum amount payable to any individual item on the SOV, severely restricts the blanket concept.
What is a Value Reporting Form?
Handles fluctuations in sales throughout the year. Insured limit is the highest needed in the year, a report is done on a regular basis (usually monthly) that must be accurate and timely every time. Charged 75% of premium up front, settled up at the end of the year based on reports. First must be within 60 days of the first period, all others must be within 30 days. Reports must be accurate, 100% coinsurance is used. If report is excess of limit, the most that is paid will be the limit.
How much will an insurance company pay for debris removal?
25% of the loss (including the deductible) up to the total limit on the building. Then an additional $25k above that limit.
What are the 6 additional coverages in the Building and Personal Property Coverage Form?
Debris Removal
Preservation of Property
Fire Department Service Charge
Pollutant Clean-up and Removal
Increased Cost of Construction
Electronic Data
What are the seven coverage extensions?
Newly Acquired or Constructed Property
Personal Effects and Property of Others
Valuable Papers and Records
Property off premises
Outdoor Property
Non-Owned Detached Trailers
BPP Temporarily in Storage Units
