Adjuster Portion: Misc Updates not in video form

Starts on page 7

Loss Payable Clause

The Loss Payable Clause is similar to the Standard Mortgage Provision.

The Standard Mortgage Provision is used when there is a Mortgagee with an insurable interest in real property such as a building or home.

The Loss Payable Clause is used when there is a lender with an insurable interest in personal property (e.g., the lienholder on the Insured’s car). The third party with an insurable interest is listed as the Loss Payee.

The Loss Payable Clause also differs in that if the Insured is denied payment because of the Insured’s breach of one of the provisions in the policy, the Loss Payee is NOT entitled to payment.

Difference Between Waiver and Estoppel

Both waiver and estoppel have the effect of eliminating a contract requirement. For example, the insurance contract requires both the payment of premiums by the first of each month.

If the Insurer says, “You can be up to 10 days late with the payment,” that is an example of a waiver. A waiver must be intentional.

If, however, the Insurer simply doesn’t object to the late payments, it may not have the intent of waiving the first of the month payment requirement but the courts will prevent the Insurer from enforcing those requirements under the concept of Estoppel. Estoppel requires that one reasonably rely on the acts of the other (the Insurer didn’t object to the late payment) even though there may not be an intent by the Insurer to waive the first of the month payment requirement.

If you see the word “intentional” in the question, it is likely a waiver question. Otherwise, it is likely an estoppel question. Even the courts treat these concepts as being interchangeable.

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Outside the Premises – another crime coverage

pg. 8

Outside the Premises covers theft, destruction, and disappearance of money/securities that occurs outside the Insured’s premises while in the care, custody, or control of an armored vehicle company or a messenger.

Outside The Premises coverage also applies to property other than money and securities, but only for robbery (actual or attempted).

Note: Crime policies define a messenger as an employee, the Insured, or a relative of the Insured who has care, custody, and control of property outside the premises.

Third Party Administrators

pg. 8

Third-Party Administrators may be referred to as Administrators or TPA’s.

Georgia law defines an “administrator” as a business entity that collects fees and premiums, adjusts and settles claims, and provides underwriting or pre-authorization of hospitalizations or medical treatments on behalf of an insurance plan. They are commonly used by employers with self-insured health plans who want the cost savings of self-insuring but don’t want the various administrative responsibilities.

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Georgia requires administrators to obtain a license to act as an administrator from the Commissioner. Note that an administrator license does not enable an administrator to sell insurance.

Inland Marine “Floaters”

pg.8-9

Inland Marine Floater policies became known as “floaters” because they cover property that may be moved from one location to another, and the floaters will cover the property wherever it is located. The coverage “floats” with the property from one location to the next.

Extended Non-owned Coverage Endorsement

pg. 9

Provides coverage to the Insured for vehicles furnished or available for their regular use. This endorsement is used to overcome the Personal Auto Policy’s exclusions for vehicles furnished or available for the Insured’s regular use.

A person with a company furnished vehicle could add this to their personal auto policy to get liability and medical payments coverage extended to the company vehicle. Although the company’s auto policy may cover the employee driving the company furnished vehicle, this endorsement can help avoid unforeseen gaps in coverage.

Insurable Interest

pg. 9

Insurable interest is usually created by one of the following:

• Property Rights. Ownership of property.

• Contract Rights. The prime example here is a secured creditor, such as a mortgagee, who has a secured interest in property. The mortgage contract gives the mortgagee an insurable interest in property to the extent of the debt.

• Legal Liability. A person who would be legally liable if property is lost or damaged has an insurable interest in the property. For example, in bailment situations the “bailee” who has care, custody, and control of other people’s property could be legally liable if the property is lost or damaged.

Risk Retention Group

A Risk Retention Group (RRG) is a liability insurance company owned by its members, who are businesses or organizations from the same industry or facing similar risks.

1. Member-owned: RRGs are established by and for their members, meaning the policy holders are also the owners of the group.

2. Liability insurance: RRGs can only offer liability insurance, such as general liability, professional liability, malpractice liability, and product liability insurance.

3. Industry-specific: The members of an RRG must be engaged in similar or related businesses or activities in respect to liability. For example, a group of medical professionals could belong to one RRG, while a group of schools would belong to a different RRG.

4. Domiciliary regulation: RRGs are regulated by one state, the state in which they are licensed (the domicile state), but they can operate in multiple states by filing a simple registration.