Unit 9: Miscellaneous Property Insurance

How is flood insurance offered?

Flood insurance is ONLY offered by the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA).

NO private flood insurance.

-Covers: walled and roofed, above ground, on a permeant site.

NFIP emergency limits

Bldg: $35,000

Contents: $10,000

Commercial bldg: $100,000

Biz Personal Property: $100,000

-Deductibles: bldg and contents- $2,000

-Property moved to protect: 45 day coverage.

NFIP regular limits

Bldg: $250,000

Contents: $100,000

Commercial bldg: $500,000

Biz Personal Property: $500,000

-Min. deductibles: Bldg and contents $1,000

-Property moved to protect: 45 day coverage.

-Increase cost of compliance: due to state ordinances- pays up to $30,000

*Definition of a flood

-Overflow of inland or tidal water

-Unusual and rapid runoff of water from any source

-Mudslide by accumulation of water on ground or underground

-Collapse of land as a result of excessive erosion due to flood

-Temporary water from a natural source that covers 2 or more acres, of what is usually dry land

EXCLUDES:

-Broken water pipe

-Sewer backup

-water from inside of house

Flood NFIP Exclusions

-Accounts, bills, currency, paper

-Lawns, trees, plants, livestock

-vehicles

-fences, retaining walls, pool

-underground structures

-newly constructed buildings over/in water

-containers: liquid storage tanks

Value of Losses (standard coinsurance) of Flood

Single-family homes, 80% coinsurance= RC (everything else=ACV)

-debris removal only covered if expenses and direct loss do not exceed the policy limits.

Application Procedures

-Agent does NOT have binding authority, done by insurance company

-initial premium paid in full before policy is effective

-30 day waiting period before policy is effective: 12:01AM on the 31st day=covered!

-Purchased in conjunction with loan= no waiting period.

-1 day waiting period when flood map is being revised.

-Request to increase flood coverage=30 day waiting period.

Write Your Own Program

Government programs that private companies use.

-Insurance company writes policy

-Charges premiums and use the same limitations as NFIP

-Any losses that exceed what is collected by the private company is paid for by the federal government.

Agent flood insurance requires how much training?

3 hours with the NFIP, and pass a quiz.

Mobile Home Coverage (endorsement to HO or DP)

A: Mobile home

B: O/S- 10% of A

C: PP/contents- 40% of A

D: Loss of use- 20% of A

NOT COVERED= detached garage b/c cannot take with me!

-Moved property to protect: 30 days

Personal Inland Marine (Floaters)

Broaders coverage for personal property through scheduled personal articles.

Exclusions:

-war

-nuclear hazard

-wear and tear

-deterioration of an item

-insect or vermin damage

Personal Articles Form

Covers:

-jewelry

-furs

-camera

-musical instruments

-silverware

-golf equipment

-fine arts

-stamps

-coins

Personal Articles Form settled by Scheduled personal Property (Agreed Standard Loss Form)

Scheduling personal property paid at the agreed value of loss

Personal Articles Form settled by Standard Loss Settlement

Standard loss settlement pays lesser of:

~ACV

~Cost to Repair

~Cot to replace (substantially identical)
~Amount of insurance specified in policy

If I acquire new personal articles, what type of coverage applies?

-Automatic coverage of additional items as long as there are items in the existing category

-Coverage applied for 30 days and lesser of $10,000 or 25%

-Coverage for art= 90 days unless insured notifies insurer and 25% of limit

-Coverage ceases after 30 or 90 days unless insured notifies insurer

Boatowners is what type of policy

Open peril, combining: property, liability, and medical payments.

-Loses paid at ACV, mileage restriction off-shore applies.

Boat owners Coverage

HULL: boat, motor, trailer, & accessories can be added (fishing rods)

*-Less than 26 ft

Yacht Coverage

HULL: boat, motor, trailer

Liability: BI & PD

Medical payments

if workers= Federal Longshore & Harbors workers comp

*-Greater than 26 ft

Personal Watercraft

wave runners, canoes, etc.

Umbrella Insurance

Excess coverage for underlying coverages of min. $1 million or more w/o deductible!

-Primary underlying coverage must pay first (unless excluded by primary underlying, then Umbrella becomes primary).

—>(ex: PI or worldwide auto liability for non-owned vehicles).

-SIR= deductible applies when umbrella acts as primary