Study five Flashcards
(18 cards)
What property is insured under personal lines insurance?
1) the home itself - the building
2) the contents - furnishings, clothes
3) valuables - jewelry, camaras, furs, etc
4) fine arts - paintings, glassware, rare articles or art
5) outboard motor and boats
6) vacation property
7) sports equpiment
8) mobile homes
What type of protection is offered in the comprehensive homeowners policy?
1) dwelling building
- may specify a minimum amount of insurance on the building
ex) 80% of its value without a coinsurance clause
2) detached private structure
- an amount equal to 10% of building coverage applies to detached private structures such as garages, or garden shed
3) personal property
- minimum amount of insurance will be a % of the amount of insurance on the building
- may be increased with additional premium, but it may not be decreased
4) additional living expenses
- an amount equal to 20% of the building coverage applies to additional living expenses should a loss occur and the insured be forced to relocate while repairs are being made
- an additional amount of insurance
- if insured is a tenant, the amount is based on 20% of personal contents insurance
5) liability
- specified amount of coverage applies
6) additional coverage
- any number of additional items/coverages may be added to a homeowners policy at the appropriate premiums for those items
ex) cottage, contents of cottage, jewelry, outbaord motor/boat
What does the application include?
1) name and address of applicant
2) amount of building coverage required
3) occupancy
4) structure type - detached, townhouse
5) construction
6) heating - determines potential fire hazards
7) protection
8) mortgagees
9) previous insurance, loss record, and if other insurance exists, inception and expiry date
What two distinct sections are the homeowners policy divided into?
1) property coverages
2) liability coverages
What does the property coverages section include?
1) definitions
2) coverages
- coverage A - dwelling building
- coverage B - detached private structure
- coverage C - personal property, includes special limits of insurance
- coverage D - additional living expenses
3) extensions of coverage
4) insured perils
5) exclusions - section 1
6) specified perils
7) basis of claim payment
What does coverage A include?
- this tells us exactly which items are considered to be part of the dwelling building and come within the coverage
WE DO INSURE:
1) dwelling and attached structures
2) permanently installed outdoor equipment on premises
3) outdoor swimming pool and attached equipment on premises
4) materials and supplies located on/adjacent to premises used for construction, alteration, or repair of your dwelling/private structures
Building fixtures and fittings
- you may apply 10% of the amount of insurance on your dwelling to insure these items if they are temporarily removed from premises for repair or seasonal storage
Outdoor trees, plants, and shrubs
- may apply up to 5% in amount of insurance on your dwelling to these items on premises
- do not pay more than $500 per tree, plant, shrub including debris removal
- both are optional and are not additional insurance
Perils insured against:
- fire
- lightning
- explosion
- impact by aircraft/land vehicles
- riot
- vandalism
- malicious acts
What does coverage B include?
- structures or buildings on your premises seperated fromt he dwelling by a clear space, but not insured under coverage A
What does coverage C include?
- personal property
1) informs you what is covered on the premises and explains an optional coverage that is permitted regarding personal property of others while it is on portion of premises that you occupy
2) confirms insurance on personal property while it is temporarily away from premises, anywhere in the world
- personal prop. stored in a warehouse is only insured for 30 days unless the loss/damage is caused by theft
3) confirms insurance on any student insured by this policy, who is temporarily living away from home for the purpose of attending a school, post-sec school
What is not insured:
1) motorized vehicles or their equipment
2) camper units, truck caps, trailer, or their equipment
3) aircraft or their equipment
Special limits (1-5)
- apply to certain items and if loss of or damage to such property was NOT caused by a specific peril
- if damage was caused by specified peril, the limit would not apply
- no limits if caused by specified peril
DO INSURE:
6) business items while on premises - $2000
7) securities - $2000
8) personal prop. used by student who is away at school - $2500
9) money including cash cards - $200
10) garden type tractors, equipment, accessories - $5000
11) watercraft, their furnishings, equipment, accessories - $1000
12) computer software - $2500
13) spare auto parts - $ 1000
What are the special limits of insurance applied to?
1) jewelry, watches, gems, furs, garments trimmed with fur
- UP TO $2000
2) numismatic (coin collection)
- UP TO $200
3) manuscript, stamps, and stamp collection
- UP TO $1000
4) collectible cards
- UP TO $1000
5) bicycle, its equipment, and accessories
- UP TO $500
- ## special limits only apply if loss of/damage to property was the cause of a peril that is not specified
- if claim involves an item on which special limits apply, the limit applies to that part of the loss that exceeds the deductible amount
What does coverage D include?
- 20% of amount of insurance on building used for the following:
1) additional living expenses - must be above normal living expenses and will be paid for the reasonable time needed to restore dwelling or to permanently relocate
2) fair rental value
- if part of the insureds dwelling was rented before a loss and is now unfit for occupancy, policy will pay for the loss of rental income for reasonable time to fix prop.
3) prohibited access
- if a civil authority prohibits access to your building
i) as result of damage to neighbouring premises by insured peril (1+2 for up to two weeks)
ii) by order for mass evacuation as a direct result of a sudden and accidental event such
- but exclude evacuation caused from flood, earthquake, war, terrorism, nuclear incident, contamination by radioactive material
What is included in the extensions of coverage section of the policy?
1) debris removal
- additional 5% from coverage limit
2) property removed
- 30 days or policy term, to protect from loss
3) moving to another home
- while in transit prop. is covered for 30 days
4) fire department charges
- in respect to a loss
- up to $1000
5) change of temperature
- by physical damage to dwelling by insured peril
6) freezer food
- accidental power loss or breakdown
- up to $2000
7) lock replacement
- keys stolen/lost and reported
- up to $500
8) tear out
- if repairing water damage
9) arson & burglary conviction reward
- helps fight fraud
- $1000 limit
10) inflation protection
- after loss or at renewal
11) debit/credit card forgery and counterfeit money
- used without authorization of insured
- up to $200
What does the exclusions - section 1 include?
1) losses generally not insurable
- war, nuclear, flood
2) invisible terms
i) accidental
ii) extraneous - loss must not be due to the nature of the property itself
- self destroying quality
ex) rust, rot, corrosion
3) losses under the control of the insured
ex) marring/scratching losses
4) wear and tear losses
- not considered to be pure risk
5) excluded because of particular coverages
i) rate of premium due to unusual hazards that would affect only a small number of risks
ii) other specific types of policies designed to cover excluded items
ex) auto
What are the specified perils?
1) fire
2) lightning
3) explosion
4) smoke - due to sudden, unusual, and faulty operation of a heating or cooking device
5) falling object - exterior of building
6) impact by aircraft/land vehicle
7) riot
8) vandalism/malicious acts - damage caused by theft/ attempted theft excluded
9) water damage
10) windstorm/hail
11) transportation - while in transit, not property in vacation home/trailer
What does the basis of claim payment section include?
1) conditions relating to the repair/replacement of dwelling building or detached private structure
i) repair/replace on same location
ii) repair/replace with a building of same occupancy and materials of similar quality
iii) do the work within a reasonable amount of time
- no depreciation
2) guaranteed replacement cost
- insurer will pay replacement costs even if they exceed amount of insurance but subject to:
i) amount of insurance for Coverage A must be equal to 100% of replacement cost of building
ii) amount of insurance for Coverage A must not have been reduced at any time below buildings replacement cost
iii) insured must have notified the insurer within 90 days of starting work in any improvement has been made to building
3) personal property
- replacement cost
- exceptions made for electronic media and records
4) replacement cost - how it will be determined
5) ACV - how it will be determined
6) pair and set clause - insured will only get one item in the pair, if only one item is lost/damaged
7) parts clause - insured will only receive part of an item instead of whole item, if only part is lost/damaged
8) deductible
- self insuring portion
9) amounts not reduced - any loss/damage shall not reduce amount of insurance
10) insurance under more than 1 policy
- how contributions would work
11) subrogation
- expresses insurers subrogation rights
12) duties after losses
- provision for examination of insured under oath
13) statutory conditions
- emphasizes all perils set out in Section I are governed by stat. conditions
What are the special endorsements?
1) sprinkler by-law extension
- covers additional cost of installation/repair of a sprinkler system after a loss to comply with any law requiring one
2) demolition or construction extension
- covers additonal cost of demo, construction, or repair after a loss to comply with any law regulating operations
*coverage under either is available ONLY if loss is settled at replacement cost
3) sewer back-up endorsement
- water damage resulting from sewer back-up with an additonal premium
Describe a comprehensive homeowners policy.
- evolved from basic fire policy
- most widely used personal lines policy today
- an all-risks form meaning it offers insurance against all risks of direct physical loss or damage
- covers everything not exlcluded/ extent of coverage is determined by the exclusions
- must be owner-occupies to qualify
How is rating applied?
- value of building defines the premium charged
What are the stipulations that come with water damage?
water damage caused by:
- sudden, accidental escape of water from a watermain
- water or steam escaoe from plumbing, heating, sprinkler, or air conditioning unit
- from a domestic water container outside dwelling
- water entering through an opening which has been created suddenly and accidentally
