Section 4 - Basics Of Property Insurance Flashcards
Open peril policy
Insures against all risks of direct physical loss except those specifically excluded in the policy.
Also sometimes called all risk, special, or comprehensive coverage
Named peril
Lists the perils or causes of loss insured against under the contract
Such as: lightning, fire, windstorm, hail, vandalism.
What are the types of property
Real Property & Personal property
Real property
Permanent structures & buildings
Personal Property
Furniture, appliances, clothing, tools & other moveable property
Actual Cash Value
Current cost of replacing an asset that is damaged or destroyed property with an identical or comparable asset minus accumulated depreciation
ACV= replacement-depreciation
The pair or set condition
A loss settlement condition that appears in many property contracts. States that if a part of a pair or set is lost or damaged, the loss will be valued as a fair proportion of the total value of the set.
Appraisal condition
Provides that either party may demand an appraisal of a loss.
Arbitration
Similar to the appraisal condition; may be used to resolve other areas of disagreement besides those regarding the value of a loss
Typically used before an insured turns to legal action
Co insurance
Requires the insured to carry a minimum amount of insurance.
The requirement is normally 80% of the replacement cost.
If the minimum is not carried, partial losses are not paid in full.
Coinsurance formula
Insurance carried divided by the insurance required x loss = claim payment-deductible.
Vacant
Entirely empty — no contents no activity.
Unoccupied
The lack of habitational presence of human beings.
Bailee
A person or organization that has temporary possession of someone else’s personal property.
No benefit to Bailee
Condition states that the Bailee is not covered under the property owners policy while the Bailee has possession of the property.
Bailee can not benefit from the property owners policy.
