Declarations
Found on the first page of the policy. It contains the name of the insurance company (the first party), and the name of the insured (the second party). It also contains the address of the property covered, policy premium, effective date/time and the polic
Insuring Agreement
States what coverage is provided.
Conditions
Apply both to the insured and insurer.
Exclusions
In back of policy: this is a list of things that are never covered. Flood, war, and earthquake are never covered.
Definition of the Insured
States who is covered on the policy.
Duties of the Insured After a Loss
On conditions page.
Obligations of the Insurance Company
Found in the insuring agreement: which losses will be covered, what property is covered, and which perils are insured against.
Mortgagee Rights
Rights granted to a mortgagee or lender. They have the right to notice of cancellation, and the right to continue paying the premium themselves. Should a fire insurance policy lapse without notice of cancellation being sent to the mortgagee, the lender ha
Proof of Loss
Complete claims form.
Notice of Claim
Give immediate written notice to the company of any loss. Immediate is defined to mean as soon as reasonably possible.
Appraisal
Appraisal applies to property claims: insured and insurer fail to agree on the ACV or replacement cost of a claim, both sides may hire their own independent appraiser and bear that cost. The two appraisers then select a disinterested umpire. Each party in
Other Insurance Provision
Also called the pro-rata liability clause. Protects the insurance company against a client who purchases more than one policy on the same property. Each policy will pay a proportionate share depending on what percentage its policy limits bear to the entir
Assignment
Ownership of the policy itself is changed. They are not effective until approved by the insurer and are seldom done.
Subrogation
When another party causes damages to your property. Your insurance company pays the claim, then takes your right of recovery and sues the negligent other party to recover money they paid out to you. They stand in their place.
Consideration clause, Offer, Acceptance, Legal purpose and capacity
Elements of a contract
Consideration clause
Exchange of values. Insured is premium paid and the answers contained in the application. Insurance company is their promise to provide coverage in return.
Offer
Mutual Agreement 1 (COAL)
Acceptance
Mutual Agreement 2 (COAL)
Legal Purpose and Capacity
Age of majority and of sound mind for contract to finalize.
Sources of Underwriting Information
Gathered from answers contained on the application, actual inspections of properties to be insured, including photographs, and consumer investigative reports, which contain personal information about the applicant's credit and character.
Privacy Protection (Gramm-Leach-Bliley Act)
Also known as the Financial Modernization Act of 1999. Protects consumers' personal financial information held by financial institutions. Customers must be provided an initial privacy notice and an annual notice.
Policy application
Main source of underwriting.
Terrorism Risk Insurance Act (TRIA)
Created to administer a system of shared public/private compensation for insured losses resulting from acts of terrorism in order to protect consumers. Commercial policies only must cover the peril of terrorism.
Liberalization
The insurer is permitted to change the terms of the contract at any time as long as the change benefits the insured and no additional premium is charged. This allows the insurer to enhance coverage at any time.
Stock Insurer
Consists of stockholders who own shares in the company. Non participating policy: dividends go to stockholders.
Mutual Insurer
No stockholders, ownership rests with the policyholders. Participating policy: dividends go to policyholders. Dividends are never guaranteed and are not taxable.
Additional/Supplementary Payments on a PAP
Up to $250 towards a bail bond, interest, and loss of earnings up to $200 a day. Does not cover cost of defense.
Arbitration
Permits an insured and insurer to decide whether or not the insured is legally entitled to recover damages from the company. Designed to prevent lawsuits from being filed by the parties involved. Each party selects their own arbitrator, and the two arbitr
Four parts of the policy
Declarations, Insuring agreement, Conditions, and Exclusions
Dwelling property policies
________ ___________ _________ do not cover breakage of glass after 60 days of vacancy.
Limits of liability
Found on the declarations page of the policy.
Cancellation provisions
Found in the conditions section of the policy.
Personal injury
_______ _____ liability does not cover bodily injury; it covers defamation, libel, and slander.
Occurrence
On an HO policy, an accident that results in bodily injury or property damage.
Limit of liability
Most an HO policy will pay.
Definitions
Where to find who is insured under the HO policy.
80%
On dwelling, fire, and HO policies- the required coinsurance percentage is...
An insured under an HO
includes residents of your household who are relatives, or any other person under age 21 who is in your care.
Four parts of a legal contract
Consideration clause, Offer, Acceptance, Legal purpose and capacity
pay for one and a half persons
In an appraisal situation, both parties:
Appraiser, Appraiser, and Umpire
Parties involved in an appraisal