1) AGREEMENT Between insurer (Coverage) and insured (Premium) including indirect losses.
2) DEFINITIONS Insured: 1) Legal party to contract. 3) Relatives in household.
2) Spouse (Legal/Common-Law). 4) Anyone < age of 21.
Other: Business Premises
Civil Authority Vacant
Domestic Appliance Water - Ground/Surface
Dwelling
A) BUILDING
1) Dwelling a) Building itself. c) Attached Structures (deck/patio).
b) Construction Supplies (renovation). d) Outdoor Equipment (fence/swing).
2) Extensions At insured’s option, up to 10% of dwelling insurance can apply to:
a) Fixtures / Fittings Temporarily removed for repair / storage (X Sale).
b) Detached Private Structures Others on premises (Average Distribution Clause).
c) Fair Rental Value Loss (Revenue) due to: i) Insured peril.
ii) Civil authority.
B) PERSONAL PROPERTY
1) Contents All moveable or temporary property owned by the insured.
2) Extensions At insured’s option, up to 10% of personal property insurance can apply to:
a) Uninsured Property of Others Visitors (X Roomers/Boarders).
b) Property Away From Premises Anywhere in territory (X Warehouse/Watercraft).
c) Additional Living Expense Loss (Accommodation) due to: i) Insured peril.
ii) Civil authority.
3) Special Limits Insurers option to limit maximum exposure for specific property:
a) Business Property Professional books, tools or instruments: $ 2,000
b) Garden-type Tractors Including equipment/accessories: $ 5,000
c) Watercraft Including equipment/accessories: $ 1,000
b) Computer Software On or off premises: $ 2,500
c) Spare Automobile Parts Maintaining/repairing vehicle: $ 1,000
C) EXTENSIONS OF COVERAGE
1) Debris Removal Remove debris resulting from an insured loss (Fire).
2) Property Removed Protect from further loss or damage - 30 Days.
3) Fire Dept. Charges Save dwelling/personal property from further loss or damage.
4) Tear Out Removing parts of dwelling to repair water damage.
5) Inflation Protection Automatic increase of dwelling coverage on renewal (4 %).
D) INSURED PERILS
1) Fire or Lightning
2) Explosion X Water hammer.
3) Smoke + Sudden, unusual, or faulty operation of a heating or cooking unit
X Smoke from a fireplace
4) Falling Object Building exterior.
5) Impact by Aircraft X Vehicles owned/operated by insured/employees.
or Land Vehicle X Animals.
6) Riot
7) Vandalism or X Construction. X Vacancy (> 30 days).
Malicious Acts X Theft / Attempted Theft. X Intentional Acts of Insured.
8) Water Damage + Plumbing, heating, sprinkler, A/C system, pool, appliance, watermain.
X Seepage / leakage. X System itself.
X Sewer back-up. X Under Construction or Vacant.
X Ground / surface water. X Freezing.
9) Windstorm or Hail + Opening created in dwelling.
X Fences. X Ice or Snow.
X Radio / TV antennae. X Waves or Flood.
10) Electricity + Artificial current.
E) NOTICE OF AUTHORITIES
Loss must be reported to local law enforcement, discourages criminal acts (Arson/Fraud).
F) EXCLUSIONS
1) Business / Farm Dwellings 9) Nuclear Incident
2) Property at Exhibition 10) Radioactive Contamination
3) Property Illegally Acquired/Kept 11) War
4) Evidence of Debt / Title 12) Intentional or Criminal Acts of Insured
5) Money / Bullion / Securities 13) Application of Heat
6) Outdoor Lawns / Trees / Shrubs / Plants 14) Snowslide / Earthquake / Landslide
7) Property Lawfully Confiscated 15) Pollution
8) Vacancy
G) BASIS OF CLAIM PAYMENT
1) Actual Cash Value Current replacement value less depreciation.
2) Replacement Cost Same description, kind and quality.
3) Pair and Set Value proportionate to total value of set.
4) Parts Value proportionate to total value of item.
5) Deductibles Insurer responsible only for damage in excess of.
6) Amounts Not Reduced Losses do not reduce the limit of insurance.
7) More Than 1 Policy Rateable contribution.
8) Subrogation Insurer assumes right of recovery against responsible party.
NAMED PERILS a) Listed individually in the wording (Description / Limitations / Exclusions).
b) Recovery: i) Insured proves insured property lost through insured peril.
ii) Insurer refutes these assertions or pays claim.
ALL RISKS Wordings define coverage by describing only what is not covered.
Exclusions 1) Property Describes (Money, securities, aircraft, watercraft).
2) Loss Clarifies (Delay, loss of use, occupancy).
3) Risk Defines (Misappropriation, conversion, dishonesty).
:; �%a " � b p� rif";mso-bidi-font-family:"Times New Roman"'>14) If the owner of a building worth $ 600,000 buys $ 450,000 of insurance on a policy with an 85% coinsurance clause, then suffers a loss of $ 100,000, the amount of the loss (rounded to the nearest $ 100) he would have to pay will be
a) $ 36,300
b) $ 88,200
c) $ 63,800
d) $ 11,800
15) If the owner of a building worth $ 125,000 buys $ 90,000 of insurance on a policy with an 80% coinsurance clause, then suffers a loss of $ 50,000, his recovery under the policy will be
a) $ 45,000
b) $ 50,000
c) $ 90,000
d) $ 42,500
16) If the owner of a building worth $ 300,000 buys $ 200,000 of insurance on a policy with an 80% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 8,000, his recovery under the policy (rounded to the nearest $ 100) will be
a) $ 5,300
b) $ 6,700
c) $ 7,400
d) $ 8,000
17) If the owner of a building worth $ 125,000 buys $ 100,000 of insurance on a policy with a 90% coinsurance clause and a 2% coinsurance waiver, then suffers a loss of $ 20,000, his recovery under the policy will be approximately
a) $ 20,000
b) $ 17,800
a) $ 8,800
b) $ 4,000
18) If the owner of a building worth $ 200,000 buys $ 150,000 of insurance on a policy with a 90% coinsurance clause and a 2% Waiver of Coinsurance clause and then suffers a loss of $ 8,000, his recovery under the policy (rounded to the nearest $ 100) will be
a) $ 5,000
b) $ 6,400
c) $ 6,700
d) $ 8,000
19) If the owner of a building worth $ 200,000 buys $ 150,000 of insurance on a policy with a 90% coinsurance clause and a 2% Waiver of Coinsurance clause and then suffers a loss of $ 12,000, his recovery under the policy will be approximately
a) $ 9,600
b) $ 10,000
c) $ 10,800
d) $ 12,000
20) If the owner of a building worth $ 150,000 buys $ 90,000 of insurance on a policy with an 80% coinsurance clause, then suffers a loss of $ 60,000, his recovery under the policy will be
a) $ 42,500
b) $ 45,000
c) $ 60,000
d) $ 90,000
Suggested Answer Key
1) c 11) c
2) b 12) b
3) b 13) a
4) c 14) d
5) c 15) a
6) a 16) b
7) a 17) b
8) b 18) c
9) a 19) b
10) b 20) b
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