3Property and Casualty Insurance Covers both individual and business property such as:Real Property: Houses, apartments, condos, office buildings and other structuresPersonal property: Jewelry, furniture, clothing, equipment, artwork and other valuables
4Fire PolicyA very basic policy covering loss resulting directly or proximately from an unfriendly fire.Unfriendly or hostile fire is uncontrollable or has escaped from the place where it should be.A friendly fire is a bonfire, furnace fire, fire in a fireplace unless it gets out of control.
5Fire PolicyOwner of property rented to others protects investment in structure with a fire policy. Owner has insurable interest in the property, but not in tenant’s property.Examples:ApartmentCondoOffice building
6Renter’s Insurance Covered under Homeowner’s 4 Form Person who rents real estate from another but has personal contents on premise carries renter’s insurance to insure:personal contentsagainst liability riskInsurable Interest law applies. A person can only insure his own property, not another’s property.
7Renter’s Insurance Protection includes: Examples: Personal contents of tenant in an apartment, condo, mobile home or housePersonal liability if others sue tenant for injuriesExamples:Lightning strikes and damages TV owned by tenantNeighbor breaks leg when he steps on child’s skate left on steps and sues tenant for negligence
8Homeowner’s Policy Provides coverage for: Home - Primary structure Personal property - ContentsRelated structures – Outbuildings, if anyLoss of Use - Living expenses if insured can not live there due to covered damagePremise personal liability – for injuries to others who were on your property
9Homeowner’s (HO) Policy Riders may extend policy for additional coverage for items such as:BoatsJewelryFursArtworksAntiquesAnd other special collectibles owned by a homeowner
10Homeowner’s Insurance Must own home to carry policy forms:HO-1 Basic - covers limited perilsHO-2 Broad – covers extended perilsHO-3 Special - covers most perils with specified exclusionsHO-6 Condominium Owners – coverage like an HO-3, but for homes with common wallsPeril – a cause of loss
11Co-insuranceHomeowners policies require the insured to carry a minimum of 80% of the value of the home (called co-insurance) to get full reimbursement for a claim made.Most claims are partial losses leading policyholders to insure a home for less than value since risk of total loss is low.
12Cost Factors of Property Insurance Limit of coverage for propertyLocation of property – fire district, city, county, stateStructural material - brick, block, framePrevious claims filedCompany
13FLOOD & EARTHQUAKE NOT COVERED UNDER HO POLICY Must buy separate flood insurance coverageMust buy separate earthquake coverage
14Co-Insurance Clause * Supplemental* In property insurance, there is a high probability of a partial loss claim. The insurance policy requires actual value of property be insured.Co-insurance requires an insured to cover a minimum of 80% of the value of the propertyIf less than 80%, the claim amount is reduced at the time of payment.Example: Insuring a $100,000 home for $50,000 because the premium is cheaper and chances are there will ever be a total loss.
15Marine Insurance *Supplemental* Covers property exposed to perils of sea transport:The vesselThe cargoOther propertyLiability for the vesselOne of first types of insurance covering ancient traders in the Mediterranean Sea.The term “underwriter” coined from the process of insuring the ships and cargo.
16Inland Marine *Supplemental* Covers personal property that is being transport over landTransportation methods include:TRUCKTRAINAIRPLANEAlso covers property such as jewelry, furs, fine arts, musical instrument etc wherever located and during their transport.
17Fidelity and Surety Bonds *Supplemental* An insurance policy against a financial loss due to dishonestyPays the employer money in the case of theft by employeesGuarantees the honesty of employees who:Handle large sums of moneyHave access to customers money or assetsExample: A company that cleans offices after hours might have a fidelity bond.
18Lloyd’s of London *Supplemental* An insurance company that covers unique property and liability risks that are difficult to insure.Examples:An opera singer’s vocal chordsLife insurance on insured with extremely risky occupationsComprehensive and collision auto insurance on drivers with numerous tickets and accidents.