Property Insurance Basics Ch.3

Theft, Burglary, Robbery

Any STEALING; Theft by FORCED ENTRY; Theft by THREAT OR VIOLENCE

Unoccupancy vs. Vacany

No people present, contents are VS House empty, no contents

Bailee vs Bailor (+ No Benefit to Bailee)

Bailee: Someone who takes temporary custody of someone else’s property

Bailor: Owner of property Bailee has in care

No Benefit to Bailee: Bailee can’t benefit from Bailors insurance while property in their care

Loss; 2 Types?

Reduction of Value

Direct Loss: result of peril

Indirect Loss: Consequence of loss (income loss)

Named VS Open Perils

Perils covered if listed VS Perils covered unless excluded

Loss Valuation + 6 types?

How loss will be paid

Replacement Cost (RC): Cost to replace at todays prices

Actual Cash Value (ACV): RC - depreciation

Market Value (MV): amount willing buyer would pay

Functional Replacement (FR): cost of modern replacement

Agreed Value (AV): amount discussed @ application

Stated Value (SV): Amount INSURED says - MAX insurer will pay

Coinsurance

Insured gets RC for loss if they maintain 80%

Did Carry

_________ X Loss = Loss Payment

Should Carry (divide limit by 80%)

Specific, Blanket, Scheduled Coverage

1 property 1 coverage

Multiple properties 1 coverage

Multiple properties Multiples coverages

Hostile VS Friendly Fire

Burns outside limits

Burns in intended area (fireplace)

Inherent Vice

Quality in property causes it to spoil

Mortgage Clause

Mortgagee reimbursed their loss if covered peril, even if at fault

Proximate Clause

1st event in unbroken chain of events