Insuring Personal Residential - PowerPoint Presentation

Insuring Personal Residential
Insuring Personal Residential

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Homeowners 2000 Program July 1 2011 Austin TX Learning Objectives They are found at the beginning of each section and will be reviewed as each section is introduced c The Society of CISR Inc ID: 738059 Download Presentation

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Slide1

Insuring Personal ResidentialHomeowners 2000 Program

July 1, 2011Austin, TXSlide2

Learning ObjectivesThey are found at the beginning of each section and will be reviewed as each section is introduced.

(c) The Society of CISR, Inc.1-2Slide3

Course FocusMultiple Homeowners Forms will be briefly discussed

Our primary focus is ISO’s Homeowners 3- Special Form (HO 3)(c) The Society of CISR, Inc.

3Slide4

Personal Residential ConceptsLearning Objectives

Policy Overview and Eligibility 

1. Determine

the eligibility of specific risks for an Insurance Services Office (ISO) Homeowners Policy.

 

2. Compare

the various ISO Homeowners Policy Forms to determine the specific type of risk that each would apply to and understand the important considerations to a specific form.

 

3. Identify

the basic limits for each of the Homeowners Section I – Property Coverage Parts.

(c) The Society of CISR, Inc.

4Slide5

Personal Residential ConceptsLearning Objectives

Policy Definitions 4. Determine

who is a “you” as defined in the Homeowners Policy.

 

5. Describe

how “bodily injury” differs from personal injury.

 

6. Determine

if an activity qualifies as a “business”.

 

7. Identify

who is an “insured” under the Homeowners Policy.

 

8. List

places that are considered an “insured location” under the Homeowners Policy.

(c) The Society of CISR, Inc.

4Slide6

Eligibility

Learning Objective 1: Determine the eligibility of specific risks for an Insurance Services Office (ISO) Homeowners Policy.

Residential Purposes

1 to 4 family owner-occupied

Up to 2 roomers or boarders

(c) The Society of CISR, Inc.

5Slide7

Eligibility

1 to 4 family owner-occupied co-owned Additional Insured – Residence Premises

(HO 04 41)

HO 4 for

co-owner

Owners of a Condominium (HO 06)

Tenants of a Dwelling or Apartment (HO 04)

(c) The Society of CISR, Inc.

5Slide8

Eligibility

Trust ArrangementsResidence Held In Trust (HO 05 43)Additional Insured – Residence Premises (HO 04 41

)

Long Term Purchase

Policy in name(s) of occupant(s)

Additional Insured – Residence Premises (HO 04 41)

Seasonal & Secondary

H

omes

Dwelling Under Construction

Insured must occupy upon completion

Theft is excluded

(c) The Society of CISR, Inc.

6Slide9

Policy Overview(c) The Society of CISR, Inc.

7Slide10

Policy Structure(c) The Society of CISR, Inc.

8Slide11

Forms Available

Learning Objective 2: Compare the various ISO Homeowners Policy forms to determine the specific type of risk that each would apply to and understand the important considerations to a specific form.

HO-2 Broad

Restrictive coverage for owner-occupied dwellings

Only specifically named perils covered for both dwelling and personal property

HO-3 Special

Most widely used form for owner-occupied dwellings

Open perils for dwelling (Everything covered unless excluded)

Named perils for personal property

(c) The Society of CISR, Inc.

9Slide12

Forms AvailableHO-4 Contents Broad Form

Covers tenants of dwellings or apartmentsNo dwelling coverage because not owner-occupiedNamed perils for personal property

HO-5 Comprehensive

For upscale accounts with owner-occupied dwellings

Most complete coverage available with open perils for dwelling and personal property

(c) The Society of CISR, Inc.

9Slide13

Forms AvailableHO-6 Unit Owner’s

FormIndividual condominium units

Unit-owner’s coverage needs vary by community

Basic limit of $5000 to cover dwelling and structural responsibilities

Named perils for dwelling and personal property

$1,000 Loss Assessment Coverage included

More Loss Assessment Coverage available by endorsement (advisable) Loss Assessment Coverage (HO 04 35)

(c) The Society of CISR, Inc.

10Slide14

Forms AvailableHO-8 Modified CoverageOlder or low value owner-occupied dwellings

Very limited named perils coverageImportant to note: The Liability Section is the same on all ISO Homeowners Policies

(c) The Society of CISR, Inc.

10Slide15

Declarations Page

(c) The Society of CISR, Inc.

11Slide16

Homeowner Coverage PartsCoverage A – Dwelling

Coverage B – Other StructuresCoverage C – Personal Property

Coverage D – Loss of Use

Coverage E – Personal Liability

Coverage F – Medical Payments

to Others

(c) The Society of CISR, Inc.

Section I

Section II

12Slide17

Endorsements: General Purpose

Broaden coverageRestrict coverageClarify coverage

Possibly state specific

(c) The Society of CISR, Inc.

12Slide18

Homeowners Coverage- Basic Limits on HO 3

(c) The Society of CISR, Inc.Learning Objective 3

: Identify the basic limits for each of the Homeowners

Section

I – Property Coverage Parts.

Section I

– Property

Coverages

Coverage A

Dwelling

Value of house

Insured

selects

Coverage B

Other Structures

10% of Coverage A

Coverage C

Personal Property

50% of Coverage A

Coverage D

Loss of Use

30% of Coverage

A

Section I

I – Liability

Coverages

Coverage

E

Personal Liability

$100,000 per Occurrence -

Minimum

Insured Selects

Coverage F

Medical Payments to Others

$1,000 per Person -

Minimum

Insured Selects

13Slide19

Conditional ContractInsured must:

Pay the premiumComply with policy provisionsInsurer must:

Provide the insurance

(c) The Society of CISR, Inc.

Insuring

Agreement

14Slide20

Policy Definitions

Defined words appear in quotation marks.Learning Objective 4:

Determine who is a “you” as defined in the Homeowners

Policy

.

“You” and “Yours”

Named Insured in Declarations

Resident spouse

“We”, “Us” and “Our”

Insurance company

(c) The Society of CISR, Inc.

14Slide21

Definitions(c) The Society of CISR, Inc.

“Aircraft Liability”

“Hovercraft Liability”

“Motor Vehicle Liability”

“Watercraft Liability”

Defined for liability exclusion

Very broad definition!

Sub-definitions for aircraft,

h

overcraft, watercraft and

“motor vehicle”

15Slide22

And Includes . . . Ownership

Maintenance, occupancy, operation, use, loading or unloading

Entrustment

Failure to supervise or negligent supervision

Vicarious liability

(c) The Society of CISR, Inc.

15Slide23

“Bodily Injury” Learning Objective 5:

Describe how “bodily injury” differs from personal injury.Bodily harm, sickness or disease Including care and loss of services

Does not include personal injury

Libel, slander, wrongful eviction, and other perils

Personal Injury (HO 24 82) endorsement

Should be on every policy!

(c) The Society of CISR, Inc.

16Slide24

“Business”Learning

Objective 6: Determine if an activity qualifies as a “business”.Defined as

Trade, profession or occupation engaged in on a full-time, part-time or occasional basis

OR

All other activities engaged in for money or other compensation except . . .

(c) The Society of CISR, Inc.

17Slide25

“Business”Activities generating under $2,000 in the 12 months BEFORE the beginning of the policy period

Volunteer activities if no money was received other than expenses

Home day care if there is no compensation (mutual exchange of services is okay)

Home daycare to a relative (compensation okay)

(c) The Society of CISR, Inc.

17Slide26

“Employee”Any employee or leased employee other than a “residence employee”

(c) The Society of CISR, Inc.

17Slide27

“Insured”

Learning Objective 7: Identify who is an “insured” under the Homeowners Policy.

“You”

Resident relatives

Anyone under 21 in “your” or resident relative’s care

Full-time student if:

Relative under the age of 24 or

Person in your care under the age of 21;

and

Resident of your household before attending school

(c) The Society of CISR, Inc.

18Slide28

“Insured”

Non-resident student relative over 24Additional Insured – Student Living Away From The Residence Premises (HO 05 27)

Resident of the household who is not an “insured” by definition

Other Members of Your Household (HO 04 58)

(c) The Society of CISR, Inc.

18Slide29

“Insured”

Limited Section II Liability Coverage:Person responsible for animals or watercraft covered by the policy

Employees using a covered vehicle

Others using a covered vehicle on an “insured location”

(c) The Society of CISR, Inc.

19Slide30

Learning Objective 8: List the places that are considered an “insured location” under the Homeowners Policy.

Identifies locations where premises liability is extendedDoes not limit personal activities exposures

(c) The Society of CISR, Inc.

“Insured Location”

19Slide31

“Insured Location”“Residence premises”

Any other location shown in the declarations or acquired during the policy period for “your” residence

Any premises used by “you” in connection with the “residence premises”

Non-owned temporary residence (hotel room)

(c) The Society of CISR, Inc.

19Slide32

“Insured Location”Vacant land

Land owned on which a 1 to 4 family dwelling is being built for an “insured”Individual or family burial vaults or plots

Any premises

occasionally

rented to an “insured” for non- “business” use

(c) The Society of CISR, Inc.

20Slide33

“Motor Vehicle”Self propelled land or amphibious vehicles

Riding lawn mowersChildren’s motorized riding toysMotorized scooters

Etc.

Trailer while carried, towed by or hitched for towing

(c) The Society of CISR, Inc.

20Slide34

Other Definitions“Occurrence”

“Property Damage” “Residence Employee”

“Residence Premises”

(c) The Society of CISR, Inc.

21

22Slide35

DeductibleShown in Declarations

Applies to Section I – Property(c) The Society of CISR, Inc.

22Slide36

Property Coverages Learning Objectives

Section I – Property Coverages 

9. Describe

how Coverage A – Dwelling and Coverage B – Other Structures apply to

specific situations

.

 

10. Determine

how Coverage C – Personal Property provides or limits coverage for property located on and off premises.

 

11. List

the special limits that apply to specific

types

of personal property under Coverage C –

Personal Property

(c) The Society of CISR, Inc.

23Slide37

Property Coverages Learning Objectives

12. Recommend methods of covering specific types of personal property for which coverage is limited or excluded in the unendorsed Homeowners Policy

.

13. Explain

the limited property coverage found in Coverage C – Personal Property for “business” property.

 

14. Apply

the coverage provisions of Coverage D – Loss of Use.

 

15. Determine

if a given property loss is covered by the Section I – Additional Coverages.

(c) The Society of CISR, Inc.

23Slide38

Property Coverages Learning Objectives

16. Determine if a given property loss is covered by the Perils Insured Against for Coverages A, B and/or C of the HO 3

– Special

Form.

 

17. Apply

property exclusions to specific loss situations.

 

18. Calculate

loss payments under the Loss Settlement Provision of the Homeowners Policy.

(c) The Society of CISR, Inc.

23Slide39

Coverage A - Dwelling

Learning Objective 9: Describe how Coverage A – Dwelling and Coverage B – Other Structures apply to specific situations.

Dwelling on the “residence premises” shown in the Declarations

Attached structures

Materials & supplies used to construct, alter or repair the dwelling or other structures located on or next to the “residence premises”

Excludes land

(c) The Society of CISR, Inc.

24Slide40

Coverage B – Other StructuresDetached structures

Webster’s Dictionary d

efines a structure as anything built

(c) The Society of CISR, Inc.

25Slide41

Examples of Other Structures(c) The Society of CISR, Inc.

Swimming

Pool

Playscape

Shed

Fence

25Slide42

Coverage B – Other StructuresExcludes land

Excludes other structures rented to someone other than a tenant of the dwelling for use other than a private garage

Structures Rented To Others – Residence Premises (HO 04 40)

(c) The Society of CISR, Inc.

25Slide43

Coverage B – Other Structures

Excludes other structures where “business” is conducted

Excludes other structures used to store “business” property unless:

Property is solely owned by an “insured” or tenant of the dwelling

AND

Property is not gaseous or liquid fuels

Permitted Incidental Occupancies –Residence Premises (HO 04 42)

(c) The Society of CISR, Inc.

26Slide44

Coverage B – Other Structures

Coverage B – Other Structures is limited to 10% of Coverage A – Dwelling

Other Structures on the Residence Premises - Increased Limits (HO 04 48)

Specific additional amount of insurance on described other structure(s)

(c) The Society of CISR, Inc.

26Slide45

Coverage C – Personal Property

Learning Objective 10: Determine how Coverage C – Personal Property provides or limits coverage for property located on and off premises.

Property owned or used by an “insured”

Worldwide coverage

At “your” request:

Property of others on the “residence premises”

Property of a guest or “residence employee” while in any residence occupied by an “insured”

(c) The Society of CISR, Inc.

27Slide46

Coverage C – Personal Property

Limits at other residencesProperty usually

located at another residence of an “insured”

Limited to 10% of Coverage C or $1,000 whichever is greater

Limitation does not apply to property at a newly acquired residence for the first 30 days

(c) The Society of CISR, Inc.

28Slide47

Coverage C – Personal Property

Policy later excludes theft for property usually located at another residence except:When an “insured” is temporarily living there

College student must have been there any time during the 60 days prior to the loss

(c) The Society of CISR, Inc.

28Slide48

Special Limits of Liability – Coverage C – Personal Property

(c) The Society of CISR, Inc.

Learning Objective 11

: List the special limits that apply to specific types of personal property under Coverage C – Personal Property.

Limit

Item

All Perils

$200

Money

Yes

$1,500

Securities, accounts, deeds, etc.

Yes

$1,500

Watercraft including their trailers, furnishings, equipment and motors

Yes

$1,500

Trailers not used with watercraft

Yes

$1,500

Jewelry, watches, & furs

Theft Only Limitation

$2,500

Firearms and related equipment

Theft Only Limitation

$2,500

Silverware, silver plated,

goldware

,

pewterware

, etc.

Theft Only Limitation

29Slide49

Special Limits of Liability – Coverage C – Personal Property(c) The Society of CISR, Inc.

Limit

Item

All Perils

$2,500

Property on the “residence premises” used primarily for “business” purposes

Yes

$500

Property away from the “residence premises” used primarily for “business” purposes

Yes

$1,500

Electrical apparatus while in or upon a motor vehicle, equipped to be powered by electrical system of vehicle and other sources

Yes

$1,500

Electrical apparatus used primarily for “business” while away from the “residence premises”, not in or upon a “motor vehicle” equipped to be powered by electrical system of a vehicle and other sources

Yes

29Slide50

Special Treatment of Personal Property ExposuresLearning Objective 12

: Recommend methods of covering specific types of personal property for which coverage is limited or excluded in the unendorsed Homeowners Policy.

Coverage C Increased Special Limits of Liability

(HO 04 65)

Does NOT broaden perils

Use to increase special limits of coverage on some types of property

Watch the jewelry per item limit

(c) The Society of CISR, Inc.

31Slide51

Special Treatment of Personal Property Exposures

Scheduled Personal Property Endorsement (HO 04 61)

Specific amount of insurance on scheduled items

Not a valued policy (agreed value) except for fine arts

Pays least of : ACV, cost of repair, cost to replace, or amount of insurance

Risks of direct physical loss with exclusions

Deductible does not apply

(c) The Society of CISR, Inc.

31Slide52

Special Treatment of Personal Property Exposures

Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) (HO 04 60

)

Same as HO 04 61 EXCEPT it provides agreed value for all classes of covered property

(c) The Society of CISR, Inc.

32Slide53

Special Treatment of Personal Property Exposures

Learning Objective 13: Explain the limited property coverage found in Coverage

C – Personal Property for “business” property.

Permitted Incidental Occupancies

(

HO 04 42)

Increases “business” personal property used in the described “business” to full Coverage C limit

Does not broaden causes of loss

(c) The Society of CISR, Inc.

32Slide54

Increased Limits on Business Property

Increased Limits on Business Property (HO 04 12)

Increases certain “business” property of “business” conducted off premises to specified limit while property is on the “residence premises”

Increases business property limit while off premises to 20% of specified limit

Does not broaden causes of loss

(c) The Society of CISR, Inc.

32Slide55

Coverage C – Personal Property Not Covered

Articles specifically insured (Example- Scheduled personal property)

Animals, birds, or fish

(c) The Society of CISR, Inc.

33Slide56

“Motor vehicles”

Includes accessories, equipment, parts, tapes, discs, etc. While in or upon the “motor vehicle”Gives back coverage if “motor vehicle” is not required to be registered for use on public roads or property which is:

Used SOLELY to service an “insured’s” residence; or

Designed to assist the handicapped

(c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered

33Slide57

Aircraft and partsExcept model or hobby aircraft

Hovercraft and partsDefined as a self-propelled motorized ground effect vehicle and includes, but is not limited to

flarecraft

and air cushion vehicles

(c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered

34Slide58

Property of roomers and tenants unless related to an “insured”

Personal property in a rental apartmentAdditional Coverage #10 provides $2,500 coverage but no theft coverage

Personal property rented to others off the “residence premises”

“Business” data

Will cover the cost of blank media and prerecorded software

(c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered

34Slide59

Credit cards, fund transfer cards, etc.

Additional Coverage #6 gives back $500

Water or steam

(c) The Society of CISR, Inc.

Coverage C – Personal Property Not

Covered

35Slide60

Coverage D – Loss of UseLearning

Objective 14: Apply the coverage provisions of Coverage D – Loss of Use.

Additional Living Expenses

Part of “residence premises” where “you” reside that is not fit to live in due to a covered property loss

Covers the necessary increase in living expenses to maintain the normal standard of living

(c) The Society of CISR, Inc.

35Slide61

Coverage D – Loss of Use Fair Rental Value

Part of “residence premises” rented to others or held for rental that is not fit to live in due to a covered property loss

Covers the fair rental value less non-continuing expenses

(c) The Society of CISR, Inc.

36Slide62

Coverage D – Loss of UseCivil Authority

Two weeks coverage when civil authority prohibits use of “residence premises” when there is direct damage to a neighboring premises by a Peril Insured A

gainst

No coverage for loss due to cancellation of a lease

Loss of use coverage is not limited by expiration of policy

(c) The Society of CISR, Inc.

36Slide63

Section I - Additional Coverages

Learning Objective 15: Determine if a given property loss is covered by the Section I – Additional

Coverages

.

Debris Removal

Covered property damaged by a covered peril

Removal of volcanic ash if causes direct damage to covered property

Additional 5% of applicable limit available if limit exhausted

(c) The Society of CISR, Inc.

37Slide64

Section I - Additional Coverages

Debris removal for tree removalRemoval from the “residence premises” Up to $500 per tree/$1,000 per loss

Caused by:

“Your” tree felled from windstorm, hail or weight of ice, snow or sleet

A neighbor’s tree felled by a Coverage C Peril Insured Against

Tree must damage a covered structure or block a driveway or access to the residence

(c) The Society of CISR, Inc.

38Slide65

Section I - Additional Coverages

Reasonable repairsReasonable cost necessary to protect damaged property from further damageNot additional insurance

Trees, shrubs and other plants

Limited named perils

5% of Coverage A with a maximum of $500 for any one tree, plant or shrub

Additional insurance

(c) The Society of CISR, Inc.

38

39Slide66

Section I - Additional Coverages

Fire department service charge$500, no deductible

Additional insurance

Property removed

Covered property endangered by a covered peril

True

all risk

coverage for 30 days

Not additional insurance

(c) The Society of CISR, Inc.

40Slide67

Section I - Additional Coverages

Credit card, fund transfer card or access device, forgery and counterfeit money$500 coverage

Excludes resident of the household; person who was entrusted with the card; or a person if not complying with card requirements

No deductible

Additional insurance

(c) The Society of CISR, Inc.

41Slide68

Section I - Additional Coverages

Loss Assessment$1,000 limit as additional insuranceExposure exists for homes in areas governed by homeowners associations

Covers assessments due to common property damaged by a

covered peril

Deductible applies

Can increase limit to $50,000 using Loss Assessment Coverage (HO 04 35)

(Assessment due to large deductible still limited to $1,000)

(c) The Society of CISR, Inc.

42Slide69

Section I - Additional Coverages

CollapseExcluded except as provided in this Additional Coverage

Specified causes of loss only (Coverage C perils, hidden decay or insect damage, or weight of contents, people or rain)

(c) The Society of CISR, Inc.

43Slide70

Section I - Additional Coverages

Glass or safety glazing materialGlass that is part of a covered building

Damage to covered property damaged by broken glass

Excluded if dwelling is vacant for more than 60 days

Not additional insurance

(c) The Society of CISR, Inc.

44Slide71

Section I - Additional Coverages

Landlord furnishingsCoverage C Perils

Theft excluded

$2,500 in each apartment on the “residence premises”

Not additional insurance

(c) The Society of CISR, Inc.

45Slide72

Section I - Additional Coverages

Ordinance Or LawIncreased costs due to:Ordinance or law regulating construction, etc.

Demolition and reconstruction of the undamaged portion of a covered building

Remodeling, removal or replacement of the undamaged part of a covered building

10% of Coverage A

Additional insurance

Includes debris

removal

(c) The Society of CISR, Inc.

45Slide73

Section I - Additional Coverages

Ordinance or Law (Continued)Excludes loss of value due to ordinanceExcludes pollution testing or cleanup

Can increase coverage by using Ordinance or Law – Increased Amount of Coverage (HO 04 77)

Options of 25%, 50%, 75% or more

(c) The Society of CISR, Inc.

46Slide74

Section I - Additional Coverages

Grave Markers Coverage C Perils

$5,000 limit

Not additional insurance

(c) The Society of CISR, Inc.

46Slide75

Section I- Additional Coverages

(c) The Society of CISR, Inc.

COVERAGE

LIMIT

ADDITIONAL INSURANCE

DEDUCTIBLE APPLIES

Debris Removal

Included in limit unless it exceeds limit; then 5% of covered property limit available

Only if it exceeds the limit for Covered Property

Yes

 

Reasonable Repairs

 

Included in Coverage A

No

Yes

Trees, Shrubs, Plants & Lawns

Perils

:

Fire/Lightning, Explosion, Riot, Civil Commotion, Aircraft, Vehicles, V&MM and Theft

5% of Coverage A with maximum of $500 for one tree, shrub or plant

Yes

Yes

 

Fire Department Service Charge

 

$500

Yes

No

Property Removed

(30 days)

Included in the limit that applies to property being removed

No

Yes

47Slide76

Section I- Additional Coverages

(c) The Society of CISR, Inc.

COVERAGE

LIMIT

ADDITIONAL INSURANCE

DEDUCTIBLE APPLIES

 

Credit Card, Fund Transfer Card

 

$500

Yes

No

 

Loss Assessment

 

$1,000

Yes

Yes

Collapse

Included in the limit that applies to property damaged

No

Yes

Glass or Safety Glazing Material

Included in the limit that applies to property damaged

No

Yes

 

Landlord’s Furnishings

 

$2,500

No

Yes

 

Ordinance Or Law

 

10% of Coverage A

Yes

Yes

 

Grave Markers

 

$5,000

No

Yes

47Slide77

Section I – Perils Insured Against

Learning Objective 16: Determine if a given property loss is covered by the Perils Insured Against for Coverages A, B and/or C of the HO 3 - Special Form.

Dwelling & Other Structures

Risk of direct loss with exclusions

Open perils concept

Burden of proof is on the insurance company to prove loss is excluded

(c) The Society of CISR, Inc.

48Slide78

Section I – Perils Insured Against

Dwelling & Other Structures ExclusionsCollapse except for Additional Coverages

# 8

Freezing of plumbing unless one of two precautions taken

Freezing, thawing, pressure or weight of water or ice to fences, swimming pools, pavement, foundations, retaining walls, piers, or docks

(c) The Society of CISR, Inc.

48

49Slide79

Section I – Perils Insured Against

Dwelling & Other Structures Exclusions (Continued)Theft to a dwelling under construction

No coverage for theft of materials and supplies until the dwelling is both finished and occupied

No theft coverage for property in a dwelling under construction

(c) The Society of CISR, Inc.

49Slide80

Section I – Perils Insured AgainstDwelling & Other Structures Exclusions

Vandalism and malicious mischief

No coverage for vandalism and any ensuing loss if the dwelling has been vacant for more than 60 days immediately prior to loss

(c) The Society of CISR, Inc.

50Slide81

Section I – Perils Insured AgainstDwelling & Other Structures Exclusions

Mold, fungus, or wet rot

Covered if hidden in walls or ceilings, beneath floors, above ceilings and caused by accidental discharge or overflow of water or steam within identified systems

(c) The Society of CISR, Inc.

50Slide82

Section I – Perils Insured Against

Dwelling & Other Structures ExclusionsWear and tear

Mechanical breakdown

Smog, rust, dry rot

Smoke from agricultural smudging or industrial operations

Pollution unless caused by Coverage C Peril

(c) The Society of CISR, Inc.

51Slide83

Section I – Perils Insured Against

Dwelling & Other Structures ExclusionsSettling, shrinking, bulging, etc. of walls, floors or foundations

Birds, vermin, rodents or insects

Animals owned or kept by an “insured”

In most cases, ensuing loss is covered unless otherwise excluded

(c) The Society of CISR, Inc.

51

52Slide84

Additional Exclusions that apply to all of Section I – Property appear later.

For losses to dwelling or other structures . . . if the policy doesn’t exclude the cause of loss, it is covered!

(c) The Society of CISR, Inc.

Slide85

Section I – Perils Insured AgainstPersonal Property

Named perils

Broad Form perils

Burden of proof is on the “insured” to establish the cause of loss to prove the loss is covered

(c) The Society of CISR, Inc.

53Slide86

Section I – Perils Insured AgainstPersonal Property

Fire or lightningWind or hail (note exclusions)Explosion

Riot or civil commotion

Aircraft

Vehicles

Smoke (note exclusions)

Vandalism or malicious mischief

(c) The Society of CISR, Inc.

53Slide87

Section I – Perils Insured AgainstPersonal Property

Theft Includes attempted theft and loss of property from a known place when likely to have been stolen

(c) The Society of CISR, Inc.

54Slide88

Section I – Perils Insured Against

Theft ExclusionsCommitted by an “insured”

Dwelling under construction

From part rented to other than an “insured”

Theft of watercraft, trailers and campers away from the “residence premises”

Theft of property at another residence owned, rented or occupied by an “insured” unless “insured” is staying there (see exceptions)

(c) The Society of CISR, Inc.

54Slide89

Section I – Perils Insured Against

Personal PropertyFalling objects (see requirement)

Weight of ice, snow or sleet

Damage caused by accidental discharge or overflow of water or steam from an appliance, etc. (Damage to appliance or system not covered)

Sudden and accidental tearing apart, cracking, etc. Steam or hot water heating system, etc. (not from freezing)

(c) The Society of CISR, Inc.

55Slide90

Section I – Perils Insured Against

Personal PropertyFreezing (Precautions must be taken)

Sudden and accidental damage from artificially generated electrical current

Volcanic eruption

(c) The Society of CISR, Inc.

56Slide91

(c) The Society of CISR, Inc.

For losses to personal property…

if the policy didn’t list the peril, it is not covered!

Slide92

Review of Covered Perils(c) The Society of CISR, Inc.

PERIL INSURED AGAINST

COVERAGE A - DWELLING

COVERAGE B - OTHER STRUCTURES

COVERAGE C – PERSONAL

PROPERTY

Fire or Lightning

Yes

Yes

Windstorm or Hail

Yes

Yes

Explosion

Yes

Yes

Riot or Civil Commotion

Yes

Yes

Aircraft

Yes

Yes

Vehicles

Yes

Yes

Smoke

Yes

Yes

Vandalism

Yes

Yes

Theft

Yes

Yes

Volcanic Eruption

Yes

Yes

57Slide93

Review of Covered Perils(c) The Society of CISR, Inc.

PERIL INSURED AGAINST

COVERAGE A - DWELLING

COVERAGE B - OTHER STRUCTURES

COVERAGE C – PERSONAL

PROPERTY

Weight of Ice, Sleet or Snow

Yes

Yes

Accidental Discharge or Overflow of Water or Steam

 

Yes

 

Yes

Cracking, Burning, Bulging of

Heating System or AC Hot Water Heater

 

Yes

 

Yes

Sudden and Accidental Damage From Artificially-Generated Electrical Current

 

Yes

 

Yes

Freezing

Yes

Yes

Risks of Direct Loss,

except:

Those perils that are specifically excluded

 

Yes

 

No

57Slide94

Section I – Property Exclusions

Learning Objective 17: Apply property exclusions to specific loss situations.

Ordinance or Law

Except for 10% of Coverage A provided by Additional Coverage # 11

Ordinance or Law – Increased Amount of Coverage Endorsement (HO 04 77)

(c) The Society of CISR, Inc.

58Slide95

Section I – Property Exclusions

Earth MovementGive back of coverage for fire, explosion, and

theft

Earthquake Endorsement (HO 04 54

)

Water Damage

Flood, surface waters, tidal water

Back up of sewers or drains or overflows from sump

Giveback for fire, explosion and theft

Flood Policy

Water Back Up and Sump Discharge or Overflow Endorsement (HO 04 95)

(c) The Society of CISR, Inc.

59Slide96

Section I – Property Exclusions

Power Failure Off Residence Premises Refrigerated Property Coverage (HO 04 98)

Neglect

During or after the loss

War

Nuclear Hazard

Intentional Loss

(c) The Society of CISR, Inc.

60

61Slide97

Section I – Property Exclusions

Government Action

Weather Conditions

Acts or Decisions

Faulty or Inadequate Planning, Design, Materials or Maintenance

(c) The Society of CISR, Inc.

62Slide98

Section I - ConditionsThe insurance company will not pay more than:

That “insured’s” interest at the time of the lossThe applicable limit of liability

(c) The Society of CISR, Inc.

63Slide99

Section I – ConditionsDuties After a Loss

Protect property from further damageInventory the damaged property

N

otify the carrier or agent and credit card company and/or police

(if applicable)

E

xhibit the property to an adjuster

S

ubmit a sworn statement

(c) The Society of CISR, Inc.

64Slide100

Section I – Conditions Loss Settlement

Learning Objective 18: Calculate loss payments under the Loss Settlement Provision of the Homeowners Policy.

Actual Cash Value vs. Replacement Cost

Actual Cash Value for (Unendorsed HO-3):

Personal property

Awnings, carpeting, appliances and outdoor equipment

Change the above by Personal Property Replacement Loss Settlement Endorsement (HO 04 90)

Actual Cash Value Loss Settlement Windstorm or Hail Losses To Roof Surfacing Endorsement

(

HO 04 93

)

(c) The Society of CISR, Inc.

65Slide101

Section I – Conditions Loss Settlement

Actual Cash Value for:Structures that are not buildings

Replacement Cost Loss Settlement for Certain Non-Building Structures On

T

he Residence Premises Endorsement (HO 04 43)

Grave markers including mausoleums

(c) The Society of CISR, Inc.

65Slide102

Section I – Conditions Loss Settlement(c) The Society of CISR, Inc.

Building Insured for at Least

80% of Replacement Cost at Loss

Yes

No

Smallest of:

Larger

of:

Limit

of Liability

ACV

RC of Damage

Formula

Limit of Coverage

X Loss

RC X 80%

Amount

Actually Spent to Repair or Replace

Cannot Exceed the Limit of Liability

Insured can always

select an ACV Settlement

66Slide103

Section I – ConditionsLoss Settlement

Buildings covered by Coverage A or BSettled on RC or ACV

d

epending on compliance with the 80% requirement

Insured can always choose an ACV settlement if financially beneficial

Certain items not included in determining the compliance (foundations)

(c) The Society of CISR, Inc.

66Slide104

Section I – Conditions Loss Settlement

Buildings rebuilt at new premises will not increase amount paidRC will not be paid until repairs or replacement made unless:

The loss is less than 5% of the amount of insurance on the building; or

The loss is less than $2,500

(c) The Society of CISR, Inc.

66Slide105

Loss Settlement Endorsements

Specified Additional Amounts of Insurance for Coverage A (HO 04 20)Additional 25% or 50% of Coverage A available

Does NOT increase

Coverages

B, C & D

Additional Limits of Liability for

Coverages

A, B, C, & D (HO 04 11)

No cap

Increases

Coverages

B, C & D in proportion to increase in Coverage A

(c) The Society of CISR, Inc.

68

69Slide106

Section I – Conditions Loss to a Pair or Set

May pay to repair or replace or pay difference between ACV before and after lossOther Insurance

Pro rata share

Mortgage Clause

Mortgagee has rights under Policy

No Benefit to

Bailee

Recovered Property

“Your” option

(c) The Society of CISR, Inc.

70

71Slide107

Property Coverages Learning Objectives

Section II - Liability Coverages

 

19. In specific loss situations, apply the coverage and exclusions found in Coverage E – Personal Liability of the Homeowners Policy.

 

20.

Apply Coverage F – Medical Payments To Others in a given loss situation.

 

21. Determine if a type of “motor vehicle” is excluded, and those types that may be covered under Coverage E – Personal Liability and Coverage F – Medical Payments To Others

.

(c) The Society of CISR, Inc.

72Slide108

Section II – Liability CoveragesCoverage E – Personal Liability

Coverage F – Medical Payments to Others(c) The Society of CISR, Inc.

73

74Slide109

Coverage E – Personal Liability

Learning Objective 19: In specific loss situations, apply the coverage and exclusions found in Coverage E – Personal Liability of the Homeowners Policy.Legal liability required

“Bodily injury”

Remember Personal Injury Endorsement

“Property damage”

Prejudgment interest included in limit of liability

Defense is in addition to the limit of liability

(c) The Society of CISR, Inc.

73Slide110

Coverage F – Medical Payments to Others

Learning Objective 20: Apply Coverage F – Medical Payments To Others in a given loss situation.Necessary & reasonable expenses

Legal liability is not required

Expenses must be incurred or ascertained within 3 years

(c) The Society of CISR, Inc.

74Slide111

Coverage F – Medical Payments to Others

Does not apply to “you” or regular resident of “your” household except “residence employees”Applies to persons on an “insured location” with permission

Applies to persons off an “insured location” for certain losses

(c) The Society of CISR, Inc.

74Slide112

Section II – Exclusions

Learning Objective 21: Determine if a type of “motor vehicle” is excluded, and those types that may be covered under Coverage E – Personal Liability and Coverage F – Medical Payments To Others.

“Motor Vehicle Liability”

Ownership, maintenance, or occupancy

Operation or use

Loading or unloading

Entrustment

Failure to supervise or negligent supervision

Vicarious liability

(c) The Society of CISR, Inc.

75Slide113

Section II – Exclusions

Part I of the “Motor Vehicle Liability” Exclusion

Registered for use on public roads or property

Should have been registered

Operated in a race

Rented to others

Used to carry people or cargo for a fee

Used for any “business” purposes unless a motorized golf cart on a golf facility

(c) The Society of CISR, Inc.

75

76Slide114

Section II – ExclusionsPart 2 of the “Motor Vehicle Liability” Exclusion gives back coverage for the following “motor vehicles” as long as Part I does not apply:

Dead storage

Used

solely

to service an “insured’s” residence

Designed to assist the handicapped and is being used to assist the handicapped or is parked on an “insured location”

(c) The Society of CISR, Inc.

76Slide115

Section II – Exclusions

Also Covered if:Non-owned recreational vehicle

An owned recreational vehicle while on an “insured location”

Owned motorized golf cart

Carries up to 4 people and maximum speed 25 MPH on level ground

On a golfing facility

In a private residential community where “insured” has a residence, if allowed by property owners association

(c) The Society of CISR, Inc.

77Slide116

Recreational Vehicle Endorsements

Owned Snowmobile (HO 24 64)Personal Liability and Medical Payments To Others

Recreational Vehicle Policy

Miscellaneous Vehicle Endorsement to a Personal Auto Policy

(c) The Society of CISR, Inc.

78Slide117

Section II – Exclusions

“Watercraft Liability”Ownership, maintenance, or occupancy

Operation or

use

Loading or

unloading

Entrustment

Failure to supervise or negligent

supervision

Vicarious

liability

(c) The Society of CISR, Inc.

79Slide118

Section II – Exclusions“Watercraft Liability”

Excludes watercraftPreparing or operating in a race except sailboats and predicted log racesRented to others

Used to carry people or cargo for a fee

Used for any “business” purposes

Covers watercraft that is stored

Covers specified types of watercraft

(c) The Society of CISR, Inc.

79Slide119

“Watercraft Liability” Coverage(c) The Society of CISR, Inc.

Type of Watercraft

Owned

Rented

Borrowed

Inboard

Inboard/Outdrive

No

Yes

IF

50 HP or less

Yes,

Not Excluded

Outboard

Yes, IF 25 HP or Less Or

if Newly Acquired, No HP Restriction

Yes,

No HP Restriction

Yes,

No HP Restriction

Sailboat

Yes,

Less than

26’

Yes,

Less than

26’

Yes,

No Length Restriction

79Slide120

Watercraft Endorsement

Watercraft (HO 24 75)

Watercraft must be listed

Personal Liability and Medical Payments To Others Coverage

No physical damage

Exclusions listed

(c) The Society of CISR, Inc.

80Slide121

Section II – Exclusions

“Aircraft Liability”“Hovercraft Liability”

(c) The Society of CISR, Inc.

81Slide122

Expected or intended injury

“Business”Remember, previously defined

Excludes all activities except renting an “insured location” for specified uses

Covers part-time “business” pursuits of a minor

(c) The Society of CISR, Inc.

Section II – Exclusions

82Slide123

Business Endorsements

Permitted Incidental Occupancies (HO 04 42)

On premises Personal Liability and Medical Payments to Others Coverage

For necessary and incidental use of the premises

Business must be operated by the “insured”

Excludes workers compensation

(c) The Society of CISR, Inc.

83Slide124

Business Endorsements

Business Pursuits (HO 24 71)Personal Liability and Medical Payments To Others Coverage on and off premises (clerical, sales and teachers)

“Insured” may not own or financially control the business

Excludes professional other than teaching

Teachers can purchase corporal punishment

(c) The Society of CISR, Inc.

83Slide125

Business Endorsements

Structures Rented to Others (HO 04 40)

Property, Personal Liability and Medical Payments To Others Coverage for structures rented to others for use as a private residence

(c) The Society of CISR, Inc.

83Slide126

Section II – Exclusions

Professional liabilityUninsured locations (owned but no insurance purchased)

War

Transmission of a communicable disease

Sexual molestation, corporal punishment, mental abuse

Controlled substance

(c) The Society of CISR, Inc.

84

85Slide127

Coverage E – Personal Liability Exclusions

Loss Assessment$1,000 available in Section II – Additional CoveragesOwned property (can’t be liable to self)

Property in the care, custody or control of an “insured” except for damage by fire, smoke or explosion

(c) The Society of CISR, Inc.

86Slide128

Coverage E – Personal Liability Exclusions

Workers compensation (If provided or required to be provided by an “insured”)Nuclear energy liability

“Bodily injury” to an “insured”

(c) The Society of CISR, Inc.

87Slide129

Coverage F – Medical Payments to Others Exclusions

“Residence employee” off premises unless during course of employmentWorkers compensation (voluntarily or required)

Nuclear

Regular residents except a “residence employee”

(c) The Society of CISR, Inc.

88Slide130

Section II – Additional Coverages

Claims expensesIn addition to limits of liabilityFirst aid expenses

(c) The Society of CISR, Inc.

89Slide131

Section II – Additional Coverages

Damage To Property Of OthersCaused by an “insured”

Up to $1,000

Excludes intentional damage if “insured” is 13 or older

Gives back coverage for recreational vehicles not required to be licensed and not owned by an “insured”

(c) The Society of CISR, Inc.

90Slide132

Section II – Additional CoveragesLoss Assessment

No defense

$1,000 coverage

Loss Assessment Coverage Endorsement (HO 04 35) to increase limits to $50,000

(c) The Society of CISR, Inc.

91Slide133

Section II – Conditions

Duties after a lossConditional contract

Duties of an injured person

Must submit to medical exam by doctor of the insurance company’s choice

(c) The Society of CISR, Inc.

92

93Slide134

Section II – ConditionsOther insurance

Excess coverage except for excess/umbrella coveragePolicy period

Loss must occur during policy period

Cancellation and nonrenewal

Modified by state specific endorsements

(c) The Society of CISR, Inc.

93

94Slide135

Section II – ConditionsAssignment

Must have written consent of insurance companySubrogation

May waive before a loss

Must be in writing

Subrogation does not apply to Medical Payments and Damage to Property of Others

(c) The Society of CISR, Inc.

95Slide136

Learning ObjectivesDwelling Policy

List the eligibility requirements for Dwelling Policies.

Point out the differences between Homeowners Policies and Dwelling Policies.

Discuss endorsements applicable to Dwelling Policies.

(c) The Society of CISR, Inc.

1Slide137

Dwelling Policy Learning Objective

1: List the eligibility requirements for Dwelling Policies.

Eligibility

Family dwelling up to 4 units

Not more than 4 apartments per dwelling or unit

Under construction

Townhouse or row house

Mobile or trailer home (Basic Form only & on permanent foundation)

(c) The Society of CISR, Inc.

2Slide138

Dwelling Fire Occupancy

Owner, seasonal or tenant occupiedWider range of incidental occupancies

No more than 5 roomers or boarders per unit

(c) The Society of CISR, Inc.

2Slide139

Dwelling Fire Coverage Parts

Coverage A - DwellingCoverage B - Other Structures Coverage C - Personal Property

Coverage D - Fair Rental Value

Coverage E - Additional Living Expenses (Not in Basic Form)

Liability Parts by Endorsement

Coverage L - Personal Liability

Coverage M - Medical Payments to Others

(c) The Society of CISR, Inc.

3Slide140

Dwelling Fire Forms

DP-1 BasicDP-2 Broad

DP-3 Special

(c) The Society of CISR, Inc.

3Slide141

Dwelling Fire – Eligibility Comparison (c) The Society of CISR, Inc.

5Slide142

Dwelling Fire - Limitations No TheftNo Liability and Medical Payments Coverage

No Loss Assessment(c) The Society of CISR, Inc.

7Slide143

Dwelling Fire – Perils Insured Against (c) The Society of CISR, Inc.

143Slide144

Dwelling Fire - EndorsementsBroad Theft Coverage (DP 04 72)

Limited Theft Coverage (DP 04 73)Loss Assessment Property Coverage (DP 04 63)Personal Liability (DL 24 01)Business Pursuits (DL 24 05)Watercraft (DL 24 06)

Loss Assessment Liability Coverage

(DL 24 14)

Snowmobiles (DL 24 07)

(c) The Society of CISR, Inc.

7-9Slide145

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(c) The Society of CISR, Inc.

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