*Standard Fire Policy SFP
This policy was the first property insurance policy that was standardized by law. This policy is never sold alone in today's property insurance market, many of the provisions found in the contract remain standard in today's property insurance policies.
*Perils & Losses covered and excluded in SFP
Perils:
- Fire - the policy did not define a fire, the courts defined a fire as combustion accompanied by a flame, glow, or incandescence. Smoke or heat without a visible light did not constitute as a fire.
- Lightning
- Removal of property to protect it
Inception/Expiration
The date of inception of the insurance policy refers to the date at which the insurance policy goes into effect. From the inception date until the date the policy expires or is cancelled, the insured is covered by the policy.
While there are some exceptio
Policy Limit
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Actual Cash Value
Actual cash value (ACV) is the amount equal to the replacement cost minus depreciation of a damaged or stolen property at the time of the loss. The actual value for which the property could be sold, which is always less than what it would cost to replace
Cost to Repair or Replace
Replacement Cost Coverage � a property insurance term that refers to one of the two primary valuation methods for establishing the value of insured property for purposes of determining the amount the insurer will pay in the event of loss.
Pro Rata Liability
Addressed the possibility of more than one policy covering the same property. In this situation, each policy would have been liable for their pro-rata share or the loss relative to all other policies in force, regardless of whether the other insurance was
Interest of the Insured
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Insurer's Options in the Loss Settlement
- ACV settlement, this is loss payment based on today's replacement cost minus depreciation
- The insurer could repair, rebuild or replace the damaged property with material of like kind and quality. If this option was chosen, the insured had to be notifi
Concealment, Misrepresentation, Fraud
Concealment and Fraud provisions protected the insurer from wilful (material) misprepresentations by the insured. The insurer could have declared the entire policy "null and void" if willful misrepresentation had been given. However, the mortgagee's insur
Pro-Rata Liability
Addressed the possiblity of more than one policy covering the same property. In this situation, each policy would have been liable for their pro-rata share of the loss relative to all the other policies in force, regardless of whether the other insurnace
*Requirements in the Event of a Loss
- Protect the property from further damage, this includes seperating damaged from undamaged property
- Give the insurer prompt notice of the loss
- Submit a signed statement of loss, proof of loss, within 60 days from the date of the company's request unl
Appraisal
An appraisal is a professional assessment of a property's value. Real estate can be appraised, but so can any other types of property. In the insurance industry, appraisals are used to calculate the cost of replacing the property or to determine the amoun
Subrogation
Required the insured to assign to the insurer the right to recover claim payments from negligent third parties.
Ex. If a fire started in an adjacent building and spread to the insured's location causing $30,000 of damage. If the insurer paid this claim to
Suit against the company
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Abandonment
Prohibited the insured from abandoning their partially damaged property to the insurance company in order to claim a total loss.
Waiver
A legal doctrine placed in writing that means the voluntary abandonment of a right or advantage.
Ex. The insured may accept an exclusion of coverage beyond the normal exlcusions. To do so waives their right to that coverage.
Basic DP-1
Basic Form - named peril
Covering:
-Fire
-Lightning
-Wind
-Hail
-Damage done by aircraft
-Riot/Civil commotion
-Damage done by vehicles unless the vehiles are owned or operated by the insured or a resident of the household
-Explosion
-Smoke
-VMM and volca
Broad DP-2
Broad Form - named peril
Covers all of DP-1 perils (including damage done by vehicles unless the vehiles are owned or operated by the insured or a resident of the household)
-Plus damage done by burglars
-Falling ice
-Weight of ice
-Sleet/snow
-Sudden and
Special DP-3
Special Form - open peril
Open peril coverage on the dwelling and other structures, however content losses are not covered on an open peril basis. Content coverage is provided on a broad form, named peril basis (same perils as DP-2 policy)
Coverage Parts (Insuring Agreements) of the Dwelling Policies
Coverage A - Dwelling
Available on all coverage forms
Coverage B - Other structions
10% of A, Available on all coverage forms
Shed, not attached to the house
Coverage C - Personal property/Contents
Limit purchased seperately
Available on all coverage form
Personal Liability & Theft Coverage
2 theft coverage options are available on dwelling policies by endorsement.
Broad Theft Coverage that is used for owner-occupied dwellings and covers both on premises and off premises theft and
Limited Theft Coverage that is used for non-owner-occupied dw
Broad Form HO-2
Provides named peril coverage insuring the following perils:
Fire & lightning
E.C. perils
VMM
Theft
Volcanic eruption
Falling objects
Weight of ice, sleet, snow
Sudden + accidental discharge/overflow of water from a plumbing, heating, or AC unit or from h
Special Form HO-3
Provides open peril coverage on the dwelling and other structures and board form, named perils on the contents (same perils as HO-2)
Contents Broad Form HO-4
Provides broad form, named perils direct loss coverage for contents only. Commonly referred to as renter's insurance or tenant homeowners as there is no structure coverage. The perils are the same as HO-2
Comprehensive Form HO-5
Provides open peril coverage on both structures and contents. The defintion of theft is also broadened in this form to include coverage for the mysterious disappearance of personal property.
Unit-Owners Form HO-6
Provides broad form, named perils coverage (same as HO-2) and is similar to HO-4 in that the primary purpose is to provide contents coverage for condo owners who major exposure is contents and not the building. HO-6 does provide $1,000 flat amount of stuc