Chapter 3 Conditions and definitions

Policy period

the policy only applies to losses that occur during the effective dates of the policy

Insurable interest and limit of insurance

If more than one person has an insurable interest in the property, the insurer will not be liable for more than the insured’s interest under the policy at the time of loss or for more than the applicable limit of liability

Basic form loss settlement

Property loses are settles on an actual cash value basis, subject limit of insurance, and the cost to repair or replace the damaged property

Broad and special forms loss settlement

Personal property, structures tat are not buildings, awnings, carpeting, household appliances and outdoor equipment are all covered on an ACV basis at the time of loss

Suit against the insurer

May not be brought against the insurer unless the the insured has fully complied with all policy conditions and the action is stated within 2 years of the date of the loss

Other insurance and service agreement

If other fire insurance applies to the same loss, the insurer is liable only for the proportion of the loss that the limit of insurance bears to the total of all insurance

Loss payment

Losses will be paid within 60 days of receiving proof of loss and coming to an agreement with the insured as to the amount payable

10 days advance notice

What is required if the policy s cancelled for nonpayment of premium or for any other reason if within the first 60 days of coverage

30

After 60 days if the insurer plans to nonrenew coverage, at least _____ days notice of cancellation is required

Misrepresentation of a material fact or if risks have changed

The insurer can only cancel policy midterm only if there is

Liberalization

If the insurer makes any changes that broadens coverage in the policy edition during the policy period or within 60 days before the effective date, these changes will automatically apply, without needing to be endorsed to the policy

Death

In the event of an insureds death, the legal representative of the deceased insured will be considered an insured will be considered an insured but only with respect to the property covered at the time of death

Automatic increase in insurance

A endorsement that may be added to a dwelling policy to increase the amount of insurance by an annual percentage to offset the effects of inflation

Additional premium

What does automatic increase in insurance require

True

There are no policy forms that cover theft of personal property in dwelling policies

Theft of property that is part of the building under the special form

What is the only theft coverage provided in any dwelling policy

Broad theft coverage

Can only be added by endorsement and can provide both on-premises coverage and off-premises coverage

On premises coverage

Insurers loss of property that is owned or used by the insured or a resident employee at the premises described in the policy

On premises

What type of coverage extends to property placed for safekeeping in a bank, trust, or safe deposit company, a public workhouse, or an occupied dwelling not owned, occupied, or rented by the insured

Off premises coverage

Provides protection for property that is either owned or used by the insured, or owned by a resident employee, when it is away from the described premises

No off premises coverage

Property at a newly acquired principal residence

On premises limit

Applies automatically for 0 days, including while the property is in transit to the new location

Dwellings under construction

Eligible for coverage. However, due to the unique nature of these risks, an endorsement is required to modify some of the policy provisions.

the value of the structure when completed

The limit of liability for a dwelling under construction is provisional and is based on

Special provisions

A mandatory endorsement that must be attached to all dwelling policies issued for delivery in the state to make the policy conform to the state laws regulating cancellation, refusal to renew

No

Do dwelling policies include coverage for personal liability

Yes through endorsement

Can personal liability be added to a dwelling policy

The personal liability form in dwelling policies include

Coverage L - Personal liability, Coverage M - Medical payments to other, and Additional coverages - Claims, first aid to others, damage to property of others

Coverage L

Personal Liability

Coverage M

Medical payments to others

Additional coverages

Claim expenses, first aid to others, and damage to property of others

Basic limit for personal liability coverage

$100,000

Basic per person limit for medical payments to others of liability coverage

$1,000

Personal liability

What provides coverage for bodily or property damage to third parties that is caused by the insured’s negligence or a condition of the insured’s premises