5/E - Inland Marine Insurance Flashcards
(32 cards)
1
Q
Inland Marine Insurance - An Overview
A
- Covers property in transport (other than ocean transport)
- Covers property involved in transportation
- Policies typically known as “floaters”
2
Q
Eligible Property
A
- Movable
- In transit
- Instrumentalities of transportation or communication, including:
a. roads
b. bridges
c. tunnels
d. radio towers
e. power lines
Not Eligible
- Actual means of transport, such as:
a. trucks
b. airplanes
c. ships
d. forklifts
e. cranes
3
Q
Controlled Line Floaters
A
“Controlled” lines:
- Written on a standard provision form promulgated by a bureau and filed with the Department of Insurance for uniform use (for example, the ISO standard policy form)
- Disclose the rates being charged
- General property floaters: personal effects and personal property
- Specific property floaters: cameras, fine arts, golf equipment, jewelry and furs, musical instruments, stamp and coin collections and silverware
4
Q
Uncontrolled Line Floaters
A
“Uncontrolled” lines:
- Insurers use their own forms, which can vary by company and by the individual risk
- Used to meet the needs of individual clients
- Not filed with the state department of insurance
- Common floaters: outboard motor boat floaters, gun floaters, sporting equipment floaters and wedding present floaters
Note: Floaters are often added as scheduled property endorsements to Homeowners policies, but can be written as stand-alone Inland Marine policies
5
Q
Inland Marine Categories
A
Four Categories of Inland Marine Insurance
- Domestic Shipments
- Instrumentalities of Transportation or Communication
- Personal Property Floater Risks
- Commercial Property Floater Risks
6
Q
Domestic Shipments
A
- Protect against losses occurring during shipment or transport of goods
- Includes travel by truck, train, ship, mail or plane
7
Q
Annual Transit
A
- Uncontrolled form that covers loss of goods in transit
- Applies to all of the insured’s shipments during the year
- Choice of open-peril coverage or named- peril coverage against fire, windstorm, collision or theft
8
Q
Trip Transit
A
- Uncontrolled form similar to annual transit, but which only insures a single shipment
- Coverage applies from the trip origination point to destination
9
Q
Motor Truck Cargo
A
- Uncontrolled form
- Protects carrier of shipped goods while the shipment is in transit
Common Carrier Legal Liability
- Free on Board (FOB) Shipping Point: ownership of / responsibility for cargo transfers to buyer as soon as cargo leaves shipper
- Free or Board (FOB) Destination Point: ownership of / responsibility for cargo transfers to buyer after buyer accepts cargo when it arrives at the buyer’s destination
Tariff Liability
- Can apply to cargo in transit, such as on a truck, ship or train
- Refers to rates, rules, conditions, and charges for transport of goods
10
Q
Mail Coverage
A
- Controlled form
- Provides open peril coverage for property sent by registered mail
- Shipper must report property value accurately
11
Q
Instrumentalities of Transportation & Communication
A
- Uncontrolled form
- Pays for direct damage or loss of revenue due to covered loss
- Covers property directly related to transportation and communication, including:
a. bridges
b. tunnels
c. roads
d. dams
e. piers and docks
f. pipelines
g. power transmission lines
h. antennas and towers for radio and TV
12
Q
Personal Articles Floater
A
- Insurers may write separate forms for specific property coverage
- Usually, coverage for several types of property is combined in a single Personal Articles Floater (PAF)
- PAF specifies coverage and premium for each property type
13
Q
PAF Characteristics
A
- Open-peril coverage (they are not named-peril policies!)
- Coverage is worldwide
- There is no deductible
- Valuation is determined using the least of the following (unless the insured has chosen agreed value coverage):
a. actual cash value
b. cost to repair or replace
c. coverage limits - Subject to “pair and set” provision
14
Q
Common Exclusions
A
- War
- Nuclear hazards
- Wear and tear
- Insects and vermin
- Spoilage
- Gradual deterioration
15
Q
Jewelry, Furs, Cameras
A
Jewelry
- Eligible items include:
a. items of personal adornment containing precious metals or jewels
b. pens
c. flasks
d. smoking equipment
e. trophies - Each item must be individually scheduled
- Newly acquired property automatically covered for 30 days at 25% of coverage limit, up to $10.000
Furs
- Includes both genuine and imitation fur
- Each item must be individually scheduled
- Newly acquired property automatically covered for 30 days
Cameras
- Eligible items include:
a. photography equipment
b. binoculars
c. telescopes - Each item must be individually scheduled, but blanket coverage available for accessories
- Newly acquired property automatically covered for 30 days
16
Q
Medical Instruments, Silverware, Golf Equipment
A
Musical Instruments
- Each item must be individually scheduled, but blanket coverage available for accessories
- Newly acquired property automatically covered for 30 days
Silverware
- Eligible items inclulde
a. silver
b. silver-plate items
c. gold
d. gold-plate items - Items may get blanket or scheduled coverage
Golfer’s Equipment
- Eligible items include:
a. clubs
b. equipment
c. clothing - Blanket coverage
17
Q
Fine Arts Coverage
A
- Eligible items include private collections of:
a. paintings
b. etchings
c. pictures
d. tapestries
e. stained glass
f. rugs
g. statues
h. marbles
i. bronzes
j. antiques
k. rare books manuscripts
l. porcelains or rare glass - Individual items must be scheduled, but blanket coverage available for small items or collections
- Agreed value coverage
- Newly acquired property automatically covered for 90 days at 25% of total limit of scheduled items
- No coverage for property on exhibit away from insured premises
Pair and Set provision under Fine Arts coverage:
- Insurer pays full scheduled amount for pair or set
- Insured must surrender any remaining pieces of set to insurer
18
Q
Stamps & Coin Collection
A
- Eligible items include:
a. postage stamps
b. rare and current coins
c. paper money
d. banknotes - Can provide blanket or scheduled coverage
- Special limits:
a. $1,000 for any unscheduled coin collection
b. $250 for any individual item - Additional exclusions apply to stamps or coins that are:
a. faded
b. defective
c. damp
d. depreciated
e. over-handled
f. lacking part of a set
g. in the custody of a transport company (except registered mail)
h. not part of a collection
19
Q
Commercial Inland Marine Policies
A
Include:
- Domestic Shipments
- Instrumentalities of Transportation and Communication
- Commercial Property Floater Risks
Written in similar commercial property format
Two types of conditions
- General
- Loss
20
Q
Conditions
A
General Conditions
- Concealment, Misrepresentation, and Fraud
- Legal Action Against the Insurer
- No Benefit to Bailee
- Policy Period
Loss Conditions
- Abandonment
- Appraisal
- Duties of the Insured
- Insurance Under 2 or More Coverages
- Property of Others
- Recovery or Salvage
- Rights of Recovery
- Reinstatement of Limit
21
Q
Commercial Property Floater Risks
A
- Can be written on controlled or uncontrolled forms
- Includes
a. Bailee forms
b. Equipment Floaters
c. Business Floaters
d. Dealer Policies
22
Q
Bailees
A
Individual who holds someone else’s property for a specific purpose and then returns it to the owner
Bailee coverage:
- Reimburses a bailee’s customer for damage to the customer’s property while in the bailee’s control
- Property coverage for Confusion of Goods (a loss makes it impossible to identify damaged property)
23
Q
Equipment Floaters
A
Equipment Floater
- Uncontrolled form
- May be open peril or named peril
- Covers heavy machinery and equipment
Controlled Equipment Forms
- Physicians and Surgeons Equipment: covers instruments and furniture of doctors, surgeons, and dentists
- Theatrical Property: covers scenery, props, and costumes
- Commercial Articles: covers commercial photographic equipment and musical instruments
- Contractors Equipment: covers construction machinery, like tractors, backhoes, and pavers
24
Q
Business Floaters
A
Accounts Receivable
- Controlled
- Open peril
- Reimburses insured for money that cannot be collected because company records have been destroyed
Valuable Papers and Records
- Controlled
- Covers losses to important documents, manuscripts, or records
- Does NOT cover money and securities
25
More Business Floaters
Installation
- Controlled
- Often open peril
- Covers items that have been sold while they are being moved or installed, before being accepted by the buyer
Electronic Data Processing (EDP)
- Covers:
a. hardware
b. data
c. media
d. recorded information
e. software
- Liability coverage also available
Signs
- Controlled
- Covers all types of signs owned by insured and those belonging to others that are in the insured's care
26
Dealer's Policies
- Open peril
- Covers dealers of:
a. jewelry
b. stamps
c. art
d. coins
e. furs
f. cameras
g. musical instruments
h. equipment
Versatile coverage
a. reporting or non-reporting
b. property covered while on or off premises
c. property covered while controlled by employees or in transit
d. covers property of others in insured's custody
27
Jewelers Block Coverage Form
Jewelers Block
- Bailee form
- For jewelers with up to $250,000 in stock
- Covers
a. insured's merchandise
b. property of others in insured's care
c. property in transit and in showcases
28
Jewelers Block Covers
- Insured's stock in trade
- Jewelry sold, but not yet delivered
- Similar property of others in the insured's care
a. if such property is in jewelry trade, it is only covered up to insured's financial interest in the property
- Damage to building housing merchandise when damage is caused by theft, attempted theft, and collapse
29
Jewelers Block: Optional Coverages
Show Windows
Covers theft from a show window by cutting or smashing glass
Money
Covers theft of money form a vault or safe on insured premises
30
Jewelers Block: Exclusions
Property Not Covered under Jewelers Block
- On exhibition in showcases not on the premises
- At an exhibition that is promoted by a trade association or public authority
- Sold on a payment plan after it leaves the premises
- Being worn by the insured or an employee (or a family member of either)
- In the mail, in express carriers, or motor carriers
Extended Causes of Loss
- Water damage at the insured's premises
- Unexplained disappearance
- Shortage of shipped property when the package is received in good condition and the seal is unbroken
- Failed tracking
- Earthquake
- Theft from a vehicle unless the property is accompanied by an attendant
- Shortage discovered while doing inventory
- Breakage of fragile articles
- Criminal or dishonest acts by the insured, his employees, or someone else the property is entrusted to
31
Jewelers Block: Loss Settlement
Determining Value
- Value is determined at the time of loss
- Historical or antique value have no bearing on valuation
Policy pays the least of:
- Actual cash value
- Cost to restore damaged property to pre-loss condition
- Cost to replace damaged property
- Lowest dollar value listed on the company's books
32
Jeweler's Block: Insured's Duties
Insured must:
- Maintain safeguards in place at policy inception
- Take yearly inventory
- Keep records for 3 years of:
a. purchases
b. inventory
c. sales
d. property off premises
e. property of others on premises
