Chapter 24 - Other Property and Liability Insurance Coverages - Chris Flashcards
Some dwellings that are ineligible for coverage under the HO policy can be insured under an ___ _____ _____.
ISO (Insurance Service Office) dwelling policy.
The forms are narrower in coverage and they do not include coverage for theft or personal liability without appropriate endorsement.
What is a dwelling property 1 (basic form)?
- Provides coverages similar to the Homeowners Policy.
- Coverages A and B insure the dwelling and other stuctures
- Coverage C covers personal property
- Coverage D covers the fair rental value if part of the dwelling is rented
- Coverage E can be added to provide coverage for additional living expenses
- Only a limited number of named perils apply to both the dwelling and the personal property
- All covered property losses are paid on an actual cash value basis, with some exceptions
What is a dwelling property 2 (Broad Form)?
covers losses to the dwelling and other structures on a replacement cost basis rather than actual cash value.
the list of named perils is expanded
What is a dwelling property 3 (Special Form)?
covers the dwelling and other structures on an “open perils” basis. Direct physical loss to the dwelling and other structures are covered except those losses specifically excluded
What are the two most common endorsements to the dwelling form?
- Theft coverage
- Personal liability supplement
Under the ISO program, mobile home insurance is written by adding an endorsement to an ____ or _____ policy. The mobile home must be at least 10 feet wide and 40 ft long, and capable of being towed on its own chassis.
HO-2 or HO-3
What are the coverages A-F on a Mobile Home Insurance?
-Coverage A covers the mobile home on a replacement cost basis
-Coverage B insures other structures
-Coverage C insures unscheduled personal property
-Coverage D insures for loss-of-use
An additional coverage pays up to $500 for the cost incurred in transporting the mobile home to a safe place to avoid damage when it is endangered by a covered peril, such as a fire
-Coverages E and F provide for comprehensive personal liability insurance and medical payments to others
What is an inland marine floater?
provides broad coverage on property frequently moved from one location to another and on property used in transportation and communications.
What are five characteristics of an inland marine floater?
- Coverage can be tailored to the specific type of personal property to be insured
- Desired amounts of insurance can be selected
- Broader coverage can be obtained
- Most floaters cover insured property anywhere in the world
- Inland marine floaters are often written without a -deductible
What is the personal articles floater (PAF)?
- An inland marine floater that provides comprehensive protection on valuable personal property.
- This coverage can be written as a stand-alone contract
- The PAF insures certain classes of personal property on an “open perils” basis
- The coverage can also be added as a scheduled personal property endorsement to an HO policy.
What is a boat-owners package policy?
- Combines physical damage insurance on the boat, medical expense insurance, liability insurance, and other coverages into one policy.
- Physical damage is covered on an “open perils” basis
- The insured is covered for property damage and bodily injury liability arising out of negligent use of the boat
- The policy also includes medical expense coverage and may include uninsured boaters coverage
What are three characteristics of yacht insurance?
Yacht insurance is designed for larger boats
- Policies are not standard, but have many common features
- Hull coverage insures the yacht and its equipment for property damage on an “all risks” or “open perils” basis
- The policy includes liability coverage, medical expense coverage, and uninsured boaters coverage
What are the NINE things that a National Flood Insurance Program does?
- Flood insurance is purchased from agents or brokers who represent private insurers
- Private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowance
- The federal government is responsible for all underwriting losses
- The program is self-supporting for the average historical loss year
- In 2012, Congress acted to reform and extend the program for five years
- Federal law requires individuals to purchase flood insurance if they have federal guaranteed financing to guild, buy, refinance, or repair structures located in special hazard flood areas
- Buildings and their contents can be covered by flood insurance if the community agrees to adopt and enforce sound flood control and land use measures
- A flood hazard boundary map shows the general areas of flood losses
- Residents can purchase limited amounts of insurance at subsidized rates under the emergency portion of the program
Flood insurance coverage is available in three standard policy forms:
- The Dwelling Form is used to insure one- to four-family residential buildings and single family dwelling units in a condominium building
- The General Property Policy Form is used to insure five or more family residential buildings and non-residential buildings
- The Residential Condominium Building Association Policy Form is issued to residential condominium associations on behalf of association and unit owners
The federal flood insurance program faces several critical problems. What are these four problems?
- The NFIP has a substantial deficit, largely due to Hurricane Katrina in 2005
- Many property owners do not pay premiums that adequately reflect the risk of flooding
- NFIP is required to insure multiple loss properties
- Operational and management issues plague the program
