9 - 1 COPYRIGHT © 2008 by Nelson, a division of Thomson Canada Ltd Chapter 9 – Protecting Your Property

9 - 2 Chapter 9 – Protecting Your Property Chapter 9 - Learning Goals LG 1-Discuss the importance and basic principles of property insurance, including types of exposure, indemnity, and coinsurance. LG 2-Identify the types of coverage provided by homeowner’s insurance. LG 3-Select the right homeowner’s insurance policy for your needs. LG 4-Analyze the coverage in a personal automobile policy, and choose the most cost-effective policy. LG 5-Describe the other types of property and liability insurance. LG 6-Choose a property and liability insurance agent and company, and settle claims. Learning Goals

9 - 3 Chapter 9 – Protecting Your Property Internet Links and On-Line Resources No sure where to find earthquake insurance? Go to Westernmutual.com for an instant internet quote. Westernmutual.com “Lowering Your Homeowner’s Insurance Premiums – Twelve Ways to Lower Your Homeowner’s Insurance Cost” – at Claiminformation.com. Claiminformation.com “Homeowner’s Insurance Savings Checklist” at Personalinsure.com.Homeowner’s Insurance Savings Checklist Know what to do if you have an auto accident – Insurance Bureau of Canada.Insurance Bureau of Canada Learn more about Facility Association.Facility Association “ Why Every Policyholder Needs Umbrella Insurance,” Personalinsure.com.Why Every Policyholder Needs Umbrella Insurance “Common Questions About Umbrella Insurance,” MundusInsurance.com.Common Questions About Umbrella Insurance Web Links

9 - 4 Chapter 9 – Protecting Your Property Key Chapter Terms and Definitions Property insurance Liability insurance Peril Negligence Principle of indemnity Actual cash value Right of subrogation Coinsurance Comprehensive insurance policy Comprehensive insurance policy Named peril insurance policy Broad form insurance policy Personal articles floater Replacement cost Personal automobile policy Bodily injury liability losses Property damage liability losses Property damage liability losses Collision insurance Comprehensive automobile insurance Comprehensive automobile insurance Specified perils automobile insurance Specified perils automobile insurance Uninsured motorist coverage No-fault automobile insurance Facility association insurance Personal liability umbrella policy Personal liability umbrella policy Insurance agent Insurance broker Claims adjuster Terms

9 - 5 Chapter 9 – Protecting Your Property Definitions Property Insurance Insurance coverage that protects real and personal property from catastrophic losses caused by a variety of perils, such as fire, theft, vandalism, and windstorms. Terms

9 - 6 Chapter 9 – Protecting Your Property Definitions Liability Insurance Insurance that protects against the financial consequences that may arise from the insured’s responsibility for property loss or injuries to others. Terms

9 - 7 Chapter 9 – Protecting Your Property Definitions Peril A cause of loss. The mechanism of loss. Includes: Aircraft or vehicle impact Electrical current Explosion Falling object Fire Lightning Riot Smoke Theft Terms

9 - 8 Chapter 9 – Protecting Your Property Definitions Negligence The failure to act in a reasonable manner or take necessary steps to protect others from harm. Terms

9 - 9 Chapter 9 – Protecting Your Property Definitions Principle of indemnity An insurance principle stating that an insured should not be compensated by the insurance company in an amount exceedin the insured’s economic loss. Terms

Chapter 9 – Protecting Your Property Definitions Actual cash value A value assigned to an insured property that is determined by subtracting the amount of physical depreciation from its replacement cost. Terms

Chapter 9 – Protecting Your Property Definitions Right of Subrogation The right of an insurer, who has paid an insured’s claim, to request reimbursement from the person who caused the loss or that person’s insurer. Terms

Chapter 9 – Protecting Your Property Definitions Coinsurance In property insurance, a provision that requires a policyholder to buy insurance in an amount equal to a specified percentage of the replacement value of his or her property; if not, the policyholder is required to pay for a proportional share of losses. Terms

Chapter 9 – Protecting Your Property Definitions Comprehensive insurance policy Property and liability insurance policy that covers all perils on property unless they are specifically excluded. Terms

Chapter 9 – Protecting Your Property Definitions Named peril insurance policy Property and liability insurance policy that names the perils covered individually on property. Terms

Chapter 9 – Protecting Your Property Definitions Broad form insurance policy Property and liability insurance policy that provides comprehensive coverage on buildings and named perils coverage on contents. Terms

Chapter 9 – Protecting Your Property Definitions Personal articles floater An insurance endorsement or policy that provides either blanket or scheduled coverage of expensive personal property not adequately covered in a standard property insurance policy. Terms

Chapter 9 – Protecting Your Property Definitions Replacement cost The amount necessary to repair, rebuild, or replace an asset at today’s prices. Terms

Chapter 9 – Protecting Your Property Definitions Personal automobile policy An automobile insurance policy designed to provide coverage for loss or damage arising from the ownership or use of a personally owned automobile. Terms

Chapter 9 – Protecting Your Property Definitions Bodily injury liability losses A provision in an automobile insurance policy that protects the insured against claims made for bodily injury to others; may specify coverage as a combination of per-individual and per-accident limits. Terms

Chapter 9 – Protecting Your Property Definitions Property damage liability losses A provision in an automobile insurance policy that protects the insured against claims made for damage to property; specified on a per-accident basis. Terms

Chapter 9 – Protecting Your Property Definitions Collision insurance Automobile insurance that pays for collison damage to an insured automobile, regardless of who is at fault. Terms

Chapter 9 – Protecting Your Property Definitions Comprehensive automobile insurance Coverage that protects against loss to an insured automobile caused by any peril (with a few exceptions) other than collision. Terms

Chapter 9 – Protecting Your Property Definitions Specified perils automobile insurance Coverage that protects against loss to an insured automobile caused by a specified list of perils. Terms

Chapter 9 – Protecting Your Property Definitions Uninsured motorist coverage Automobile insurance designed to meet the needs of victims of accidents who are injured by uninsured, under-insured, or hit- and-run motorists. Terms

Chapter 9 – Protecting Your Property Definitions No-fault automobile insurance A concept of automobile insurance that favours reimbursement without regard to negligence. Under pure no-fault, each insured party is compensated by his or her own company, regardless of which party caused the accident. Terms

Chapter 9 – Protecting Your Property Definitions Facility association insurance An arrangement that provides automobile insurance to drivers who have been refused regular coverage under normal procedures. Terms

Chapter 9 – Protecting Your Property Definitions Personal liability umbrella policy An insurance policy that provides excess liability coverage for both homeowner’s and automobile insurance, and additional coverage not provided by either of those policies. Terms

Chapter 9 – Protecting Your Property Definitions Insurance agent An insurance agent who represents only one insurance company and is more or less an employee of that company. Terms

Chapter 9 – Protecting Your Property Definitions Insurance broker An insurance agent who may place coverage with any company with which he or she has an agency relationship, as long as the insured meets the company’s underwriting standards. Terms

Chapter 9 – Protecting Your Property Definitions Claims adjustor An insurance specialist who works for the insurance company as an independent adjustor or for an adjustment bureau. He or she investigates claims, looking out for the interests of the company. Terms

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