Section 2 Flashcards
Insuring Agreement
What perils the property is covered for; contains cost of defense
Declarations
1st page of the policy; Name of insurance company (1st party), Name of insured (2nd party), Address of property covered, Policy Limits
Conditions
Duties that apply to the insurer and the insured; cancellation provisions
Exclusions and Limitations
List of things never covered like flood, war, earthquake,etc…
Definition of Insured:
States who is covered on the policy
On a HO, an insured includes you, any relative living with you, and any person under the age of 21 in your care and residing in your HH
Duties of an insured after a loss
A condition in which an insured must give immediate notice of claim to the insurer, protect the property from further damage, and furnish proof of ACV.
Cancellation and non-renewal provisions
If insured cnx, the refund is short rate.
If insurer cnx, the refund is pro-rata.
Non-renewal occurs at the policy anniversary date.
Supplementary Payments on a PAP
$250 for bail bonds,
Interest accrued after a judgments is entered, and up to $200 a day for loss of earnings
Proof of Loss
Completed claim forms the insured is required to send back
Notice of Claim
Insured must give immediate written notice to the company of any loss.
Immediate= as soon as reasonably possible
Arbitration
Liability section of Property Policy (HO) that permits an insurer and insured to arbitrate whether or not the insured is legally entitled to recover damages.
Each party hires an arbitrator and then both arbitrators hire a third. Decision made by two of the three is binding.
Other Insurance aka ‘Pro-Rata Liability Clause’
When a client purchases more than one policy on the same property.
Each policy will pay a proportionate share in accordance with the Principle of Indemnity
Limit over Total
Subrogation
Insurance company takes your right to recovery and sues the negligent third party to recover money paid to you. They stand in your place.
Loss Settlement provisions including consent to settle a loss
Ins co settles the claim in any way they feel is expedient (whichever way is the cheapest)
This isn’t always true of personal liability policies
Terrorism Risk Insurance Act (TRIA)
A system of shared public/private compensation for insured losses resulting from acts of terrorism in order to protect consumers
