Chapter 8 Flashcards
Property Insurance (17 cards)
Coverage summary or declarations
Coverage summary is for personal lines. Declarations are for commercial lines. They must contain name of insurer and insured, and any person who insurance money is payable amount of premium or the method of determining it policy limit for which the insurer is liable perils, insured, subject matter of insurance description of property, including location, inception, date, and time expiry date.
Policy wordings
Comprised of ensuring agreement, coverages and extensions of coverage exclusions, statutory conditions, additional conditions, definitions, and basis of claim settlement
Endorsements
Third section of the property policy is an amendment made to insurance policy that alters the provisions of the contract or policy. It may add coverage or give permission for something to otherwise be excluded, but may limit or exclude coverage. Any change should be signed.
Actual cash value
Insured are indemnified for the replacement cost of like kind and quality at the time of loss less depreciation. Fair market value of the item taking into account the factors that may reduce the value such as expected lifespan, physical condition, resale value, or obsolescence the principle of indemnity states that insured should be returned to the same financial position as they were before the loss occurred, but not financially advantages or disadvantage from their loss
Replacement cost value
This means replacing an item with a new item of like kind and quality without any deduction for depreciation. Is it replacing the lost for something new in its place. This is standard and homeowner and tenant package policies. Sometimes it is available for the building only sometimes the contents can be included, this is usually subject two specified conditions such as – replacement must be made promptly
– Replacement must be made on the same site
– Payment is limited the cost of repair or replacement whichever is the least with new materials of like kind in quality or for like occupancy
– Settlement will be made when the work is completed and will not be more than the actual cost of the work
Guaranteed replacement value
The insurer will pay the cost of repair or replacement to a dwelling building even if it exceeds the limit of insurance on the dwelling this is found on homeowner forms must have the following conditions
- must be kept at the cost of replacement determined by a valuation guide
-must not be reduced below, determine value
-If any improvements extensions or additions are being undertaken on the building, the insured must notify the insured within 90 days of such work
Loss payee
Someone other than the named insured to whom proceeds of the insurance will be paid in the event velocity damage. The name insured can ask their insured to add the last page to the policy so that they will receive notice of cancellation and so any claims checks will be issued in the name of the insured and loss payee jointly.
Mortgagee
A loss payee who has a separate agreement under the policy with an insurer. It provides enhance protection in addition to notification of policy cancellation. Even if the insured is unable to recover because of a policy breach, the mortgagee is still protected and exchange for this protection and mortgage is responsible for notifying the insurer immediately if it becomes known to the mortgagee that the property is vacant or unoccupied for more than 30 days, if there’s a transfer of interest or if there’s any increased hazard, the mortgage is responsible for payment of any additional premiums. Under the mortgage clause once an insurer indemnifies the mortgage for the amount of their interest the mortgage is right of subrogation against the insured are transferred to the insurer, subrogation is the right of the insurer after indemnifying to take over the insureds rights of recovery from the responsible party
Coinsurance
When an insured decides to ensure something for less than the actual value, they must make up the difference in coverage of insurance standard is 80%
Formula is amount of insurance carried divided by amount of insurance required times the loss amount that will be the recovery amount. The insurer will be responsible to pay.
There is also stated amount coinsurance where the amount in the case of a loss will be predetermined
Coinsurance
When an insured decides to ensure something for less than the actual value, they must make up the difference in coverage of insurance standard is 80%
Formula is amount of insurance carried divided by amount of insurance required times the loss amount that will be the recovery amount. The insurer will be responsible to pay.
There is also stated amount coinsurance where the amount in the case of a loss will be predetermined
Deductible
Used by insurers to avoid the expense of small claims if a claim is lower than the deductible amount, the insured will pay for the loss without submitting a claim this will be shown on the coverage summary or declarations page higher deductibles will result in lower premiums. They can be per occurrence, which applies to all items under the policy for each event. They can be separate items applies to each item separately. Or they can be lost paid in full if the loss is over the deductible amount so no deductible will apply here.
When two or more policies exist for the same it
The insurer covering the same property will each be responsible to pay their rateable portion of the loss as per ratio of the amount covered. If anyone policy specifically identifies the property that insure would respond first, the other policy would only be required to participate once the primary policy limit was exhausted.
Statutory conditions
1.Misrepresentation.
2. property of others.
3. change of interest – not covered unless bankruptcy change in title law or death
4. Material change in risk.
5. Termination of insurance by the insurer 15 days by registered mail. Unused insurance will be prorated by the insured notice must be insured request. Short rate cancellation applies, which is prorate premium less admin fees or minimum retained premium.
6. Requirements after loss a proof of loss form must be submitted.
7. Fraud.
8. who may give notice the insured or an agent of the insured or a person whom insurance money is payable?
9. Salvage.
10. Entry control abandonment
11. In case of disagreement.
12. When loss payable. Within 60 days after proof of loss form.
13. repair replace. Ensure may repair rebuild or replace rather than making payment intent within 30 days of the proof of loss form worked to begin with within 45 days.
14. notice. The insure to the chief agency or head office in the province. To the insured the last known address.
Additional conditions
Pair and set
Parts
Basis of settlement
Noticed to authorities
Property protection systems
Policy forms
Commercial lines begin with declaration page definitions are found at
Personal lines begin with coverage summary definitions are at the beginning
Exclusions
Personal and commercial lines commonly exclude vacancy and un occupancy for more than 30 days and flood loss
C.O.P.E.
Construction-materials fire resistance/size/age/heating
Occupancy-vacant or unoccupied/home business operations/# of families living there/ renters and if they have liability insurance/for commercial which products are being produced or stored
Protection-distance from firehall and water/hydrants, sprinkler system, fire alarms
Exposure-distance from other buildings and thier operations or forests, geographical location natural hazards
