Bảo hiểm - Chapter 24: Other property and liability insurance coverages

Chapter 24Other Property and Liability Insurance CoveragesAgendaISO Dwelling ProgramMobilehome InsuranceInland Marine FloatersWatercraft InsuranceGovernment Property Insurance ProgramsTitle InsurancePersonal Umbrella PolicyISO Dwelling ProgramSome dwellings that are ineligible for coverage under the HO policy can be insured under an ISO dwelling policyThe forms are narrower in coverage and there is no coverage for theft or personal liability, unless the policy is endorsedDwelling Property 1 (basic form) provides coverage similar to Coverages A-D of the Homeowners PolicyOnly a limited number of named perils apply to both the dwelling and the personal propertyAdditional perils can be added for an additional premiumCoverage D covers the fair rental value if part of the dwelling is rented Coverage E can be added to provide coverage for additional living expensesAll covered property losses are paid on an actual cash value basis, with some exceptionsISO Dwelling ProgramDwelling Property 2 (broad form) covers losses to the dwelling and other structures on a replacement cost basis The form also includes a benefit for additional living expense (Coverage E)The list of named perils is expandedDwelling Property 3 (special form) covers the dwelling and other structures on an “all-risks” basisAll direct physical losses to the dwelling and other structures are covered except those losses specifically excludedPersonal property is covered for the same named perils found in the broad formEndorsements to the dwelling form include:Theft coveragePersonal liability supplementMobilehome InsuranceUnder the ISO program, mobilehome insurance is written by adding an endorsement to an HO-2 or HO-3 policyThe mobilehome must be at least 10 feet wide and 40 feet long, and capable of being towed on its own chassisThe coverage is similar to the HO policyCoverage A covers the mobilehome on a replacement cost basisAn optional actual cash value endorsement can be added to reduce the costAn additional coverage pays up to $500 for the cost incurred in transporting the mobilehome to a safe place to avoid damage when it is endangered by a covered peril, such as a fireInland Marine FloatersAn inland marine floater is a policy that provides broad and comprehensive protection on property frequently moved from one location to anotherCoverage can be tailored to the specific type of personal property to be insured, e.g., jewelry, coins, or stampsDesired amounts of insurance can be selectedBroader and more comprehensive coverage can be obtainedAll direct physical losses are covered unless excludedMost floaters cover insured property anywhere in the worldInland marine floaters typically do not impose a deductibleInland Marine FloatersThe personal articles floater (PAF) is an inland marine floater that provides comprehensive protection on valuable personal propertyThis coverage can be written as a stand-alone contractInsures certain classes of property on an “all-risks” basisClasses of property that can be covered include jewelry, furs, cameras, fine arts, etc.The coverage can also be added as a scheduled personal property endorsement to an HO policyCoverage is essentially the same as provided by the freestanding PAFWatercraft InsuranceThe homeowners policy provides limited coverage for boatsA boatowners package policy combines physical damage insurance on the boat, medical expense insurance, liability insurance, and other coverages into one policyPhysical damage is covered on an “all-risks” basisThe insured is covered for property damage and bodily injury liability arising out of negligent use of the boatThe policy also includes medical expense coverage and an uninsured boaters coverage (may be optional)Watercraft InsuranceYacht insurance is designed for larger boatsPolicies are not standard, but have many common featuresPhysical damage to the yacht and its equipment is covered on an “all-risks” basisThe policy includes liability coverage, medical expense coverage, and uninsured boaters coverage Government Property Insurance ProgramsSome government insurance programs are necessary because certain perils are difficult to insure privatelyCoverage may not be available or may not be affordableThe National Flood Insurance Program provides insurance coverage to property owners in flood-prone areasFlood insurance is purchased from agents or brokers who represent private insurersThe private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowanceThe federal government is responsible for all underwriting lossesThe program is not currently self-supporting, due to losses from Hurricane Katrina and other hurricanes in 2005Government Property Insurance ProgramsBuildings and their contents can be covered by flood insurance if the community agrees to adopt and enforce sound flood control and land use measuresA flood hazard boundary map shows the general areas of flood lossesResidents can purchase limited amounts of insurance at subsidized rates under the emergency portion of the programA flood is defined in the Standard Flood Insurance Policy as:A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflowExhibit 24.1 Amount of Federal Flood Insurance under the Emergency and Regular ProgramsGovernment Property Insurance ProgramsFlood insurance coverage is available in three Standard Policy Forms:The Dwelling Form is used to insure one- to four-family residential buildings and single family dwelling units in a condominium buildingThe General Property Policy Form is used to insure five or more family residential buildings and non-residential buildingsThe Residential Condominium Building Association Policy Form is issued to residential condominium associations on behalf of association and unit ownersGovernment Property Insurance ProgramsThere is a 30-day waiting period for new applications and endorsements for flood coverageThis prevents property owners from waiting to purchase coverage until an imminent flood threatens their propertyThe cost of protection is relatively lowThe average flood insurance policy costs about $400 annually, and is less expensive than interest on federal disaster loansThe federal flood insurance program faces several critical problems, for example:The NFIP has a substantial deficit, largely due to Hurricane KatrinaSome have proposed adding windstorm coverage to the programThere is a low level of participation by property owners who reside in flood zonesExhibit 24.2 Summary of Property Covered under National Flood Insurance Program (NFIP)Government Property Insurance ProgramsThe Urban Property and Reinsurance Act of 1968 created FAIR plans (Fair Access to Insurance Requirements)Plans provide coverage to urban property owners who are unable to obtain coverage in the standard marketCovers property for fire and extended-coverage perils, vandalism, and malicious mischiefSeven states have beach and windstorm plans, where property is vulnerable to damage from severe windstorms and hurricanesA state with a FAIR plan creates a pool or syndicate of private insurers to provide basic property insuranceEach insurer in the pool is assessed its proportionate share of losses and expenses based on the proportion of property insurance premiums written in the stateTitle InsuranceTitle insurance protects the owner of property or the lender of money for the purchase of property against any unknown defects in the title to the property under considerationIf there is a defect in a title, the owner could lose the property to someone with a superior claimExamples of defects to the title include an invalid will, incorrect description of the property, and undisclosed liensThe policy provides protection against title defects that have occurred in the past, prior to the effective date of the policyThe insurer assumes no losses will occurThe premium is paid only once when the policy is issuedThe policy term runs indefinitely into the futureIf a loss occurs, the insured is indemnified in dollar amounts up to the policy limits (usually the purchase price of the property)Personal Umbrella PolicyThe personal umbrella policy provides protection against a catastrophic lawsuit or judgmentExcess liability insurance is provided in amounts from $1–$10 millionCertain minimum amounts of liability insurance must be carried on the underlying contractsCoverage is broad and includes protection against certain losses not covered by the underlying contractsFor example, the policy covers liability for personal injury (e.g., false arrest, slander)A self-insured retention must be satisfied for losses covered by the umbrella policy but not by any underlying contractThe umbrella policy is reasonable in costExhibit 24.3 Typical Underlying Coverage Amounts Required to Qualify for a Personal Umbrella PolicyPersonal Umbrella PolicyInsurers can use a standard Personal Umbrella Policy developed by the ISOThe policy pays for damages in excess of the retained limit for bodily injury, property damage, or personal injury for which the insured is legally liableThe retained limit is either:The total limits of the underlying insurance or any other insurance available to an insured, orThe deductible stated in the declarations if the loss is covered by the umbrella policy but not by any underlying insurance or other insuranceExclusions include liability for expected or intentional injury, certain personal injury losses, business liability, and professional services