Insurance Fundamentals and Property Policies

Vocabulary overview of property insurance policy types, types of loss, perils, and specific dwelling coverage categories based on lecture notes.

DP-1

Basic Form; Named Perils

DP-2

Broad Form; Named Perils + Additional Perils

DP-3

Special Form; Open Perils on Dwelling; Named Perils on Contents

Named Peril

Covers only causes of loss specifically listed.

Open Peril

Covers all causes of loss except exclusions.

Direct Loss

Physical damage to property.

Indirect Loss

Financial loss resulting from a direct loss.

Real Property

Land, buildings, and structures attached to land.

Personal Property

Movable property owned by the insured.

Vacancy

Building has little or no contents and no occupants.

Unoccupancy

Building contains contents but no occupants.

Dwelling Policy

Property policy mainly for dwellings; liability not included unless added.

Homeowners Policy

Includes both property and liability coverage.

BOP

Businessowners Policy for eligible small businesses.

CPP

Commercial Package Policy that combines selected commercial coverages.

NFIP

National Flood Insurance Program; provides flood insurance.

Builder's Risk

Temporary coverage for buildings under construction.

Equipment Breakdown

Covers boilers, machinery, electrical equipment, A/C, etc.

Inland Marine

Covers movable/special property.

Fire

Must be hostile to be covered.

Friendly Fire

Fire contained in its intended place; generally not covered.

Hostile Fire

Fire that escapes its intended place; covered.

Basic Perils

Fire, Lightning, Internal Explosion.

Extended Coverage

Windstorm, Hail, Explosion, Riot, Aircraft, Vehicles, Smoke, Vandalism, Volcanic Eruption.

Broad Form Adds

Weight of ice/snow, collapse, hidden decay, hidden insect damage, accidental discharge, freezing, electrical damage.

HO-2

Broad Form

HO-3

Special Form

HO-4

Renters

HO-5

Comprehensive

HO-6

Condo

HO-8

Modified Coverage

Flood

Not covered by standard property policies; requires NFIP.

Business Income

Pays lost income after covered loss.

Extra Expense

Pays extra costs to continue business after covered loss.

Accounts Receivable

Covers records of customer accounts.

Valuable Papers

Covers valuable documents and records.

Electronic Data

Coverage for electronic data.

Owner Occupied Dwelling

Eligible for dwelling policy.

Tenant Occupied Dwelling

Eligible for dwelling policy.

Vacation Home

Eligible for dwelling policy.

Home Under Construction

Eligible for dwelling policy.

Mobile Home

Eligible under certain dwelling forms (basic).