Insuring Personal Residential Homeowners 2000 Program

Insuring Personal Residential Homeowners 2000 Program
July 1, 2011 Austin, TX

(c) The Society of CISR, Inc.
Learning Objectives They are found at the beginning of each section and will be reviewed as each section is introduced. (c) The Society of CISR, Inc.

Course Focus Multiple Homeowners Forms will be briefly discussed Our primary focus is ISO’s Homeowners 3- Special Form (HO 3) (c) The Society of CISR, Inc.

Personal Residential Concepts Learning Objectives
Policy Overview and Eligibility 1. Determine the eligibility of specific risks for an Insurance Services Office (ISO) Homeowners Policy. 2. Compare the various ISO Homeowners Policy Forms to determine the specific type of risk that each would apply to and understand the important considerations to a specific form. 3. Identify the basic limits for each of the Homeowners Section I – Property Coverage Parts. (c) The Society of CISR, Inc.

Personal Residential Concepts Learning Objectives
Policy Definitions 4. Determine who is a “you” as defined in the Homeowners Policy. 5. Describe how “bodily injury” differs from personal injury. 6. Determine if an activity qualifies as a “business”. 7. Identify who is an “insured” under the Homeowners Policy. 8. List places that are considered an “insured location” under the Homeowners Policy. (c) The Society of CISR, Inc.

Eligibility Learning Objective 1: Determine the eligibility of specific risks for an Insurance Services Office (ISO) Homeowners Policy. Residential Purposes 1 to 4 family owner-occupied Up to 2 roomers or boarders (c) The Society of CISR, Inc.

Eligibility 1 to 4 family owner-occupied co-owned Additional Insured – Residence Premises (HO 04 41) HO 4 for co-owner Owners of a Condominium (HO 06) Tenants of a Dwelling or Apartment (HO 04) (c) The Society of CISR, Inc.

Eligibility Trust Arrangements Trust Endorsement (HO 06 15) Additional Insured – Residence Premises (HO 04 41) Long Term Purchase Policy in name(s) of occupant(s) Seasonal & Secondary Homes Dwelling Under Construction Insured must occupy upon completion Theft is excluded 2011 Change – Trust Endorsement HO 06 15 (c) The Society of CISR, Inc.

Policy Overview (c) The Society of CISR, Inc.

Policy Structure (c) The Society of CISR, Inc.

Forms Available Learning Objective 2: Compare the various ISO Homeowners Policy forms to determine the specific type of risk that each would apply to and understand the important considerations to a specific form. HO-2 Broad Restrictive coverage for owner-occupied dwellings Only specifically named perils covered for both dwelling and personal property HO-3 Special Most widely used form for owner-occupied dwellings Open perils for dwelling (Everything covered unless excluded) Named perils for personal property (c) The Society of CISR, Inc.

Forms Available HO-4 Contents Broad Form Covers tenants of dwellings or apartments No dwelling coverage because not owner-occupied Named perils for personal property HO-5 Comprehensive For upscale accounts with owner-occupied dwellings Most complete coverage available with open perils for dwelling and personal property (c) The Society of CISR, Inc.

Forms Available HO-6 Unit Owner’s Form Individual condominium units Unit-owner’s coverage needs vary by community Basic limit of $5,000 to cover dwelling and structural responsibilities Named perils for dwelling and personal property $1,000 Loss Assessment Coverage included More Loss Assessment Coverage available by endorsement (advisable) Loss Assessment Coverage (HO 04 35) (c) The Society of CISR, Inc.

Forms Available HO-8 Modified Coverage Older or low value owner-occupied dwellings Very limited named perils coverage Important to note: The Liability Section is the same on all ISO Homeowners Policies (c) The Society of CISR, Inc.

Declarations Page (c) The Society of CISR, Inc.

Homeowner Coverage Parts
Coverage A – Dwelling Coverage B – Other Structures Coverage C – Personal Property Coverage D – Loss of Use Coverage E – Personal Liability Coverage F – Medical Payments to Others Section I Section II (c) The Society of CISR, Inc.

Endorsements: General Purpose
Broaden coverage Restrict coverage Clarify coverage Possibly state specific (c) The Society of CISR, Inc.

Homeowners Coverage- Basic Limits on HO 3
Learning Objective 3: Identify the basic limits for each of the Homeowners Section I – Property Coverage Parts. Section I – Property Coverages Coverage A Dwelling Value of house Insured selects Coverage B Other Structures 10% of Coverage A Coverage C Personal Property 50% of Coverage A Coverage D Loss of Use 30% of Coverage A Section II – Liability Coverages Coverage E Personal Liability $100,000 per Occurrence - Minimum Insured Selects Coverage F Medical Payments to Others $1,000 per Person - Minimum (c) The Society of CISR, Inc.

Insuring Agreement Conditional Contract Insured must: Pay the premium Comply with policy provisions Insurer must: Provide the insurance (c) The Society of CISR, Inc.

Policy Definitions Defined words appear in quotation marks. Learning Objective 4: Determine who is a “you” as defined in the Homeowners Policy. “You” and “Yours” Named Insured in Declarations Resident spouse “We”, “Us” and “Our” Insurance company (c) The Society of CISR, Inc.

Definitions “Aircraft Liability” “Hovercraft Liability”
“Motor Vehicle Liability” “Watercraft Liability” Defined for liability exclusion Very broad definition! Sub-definitions for aircraft, hovercraft, watercraft and “motor vehicle” (c) The Society of CISR, Inc.

And Includes . . . Ownership Maintenance, occupancy, operation, use, loading or unloading Entrustment Failure to supervise or negligent supervision Vicarious liability (c) The Society of CISR, Inc.

“Bodily Injury” Learning Objective 5: Describe how “bodily injury” differs from personal injury. Bodily harm, sickness or disease Including care and loss of services Does not include personal injury Libel, slander, wrongful eviction, and other perils Personal Injury Coverage(HO 24 82) Personal Injury Coverage (Aggregate Limit of Insurance) (HO 24 10) Should add Personal Injury to every policy! 2011 Changes – Personal Injury Coverage (Aggregate Limit of Insurance) (HO 24 10) – new endorsement Both Personal Injury endorsements updated for internet exposure (c) The Society of CISR, Inc.

“Business” Learning Objective 6: Determine if an activity qualifies as a “business”. Defined as Trade, profession or occupation engaged in on a full-time, part-time or occasional basis OR All other activities engaged in for money or other compensation except . . . (c) The Society of CISR, Inc.

“Business” Activities generating under $2,000 in the 12 months BEFORE the beginning of the policy period Volunteer activities if no money was received other than expenses Home day care if there is no compensation (mutual exchange of services is okay) Home daycare to a relative (compensation okay) (c) The Society of CISR, Inc.

“Employee” Any employee or leased employee other than a “residence employee” (c) The Society of CISR, Inc.

“Insured” Learning Objective 7: Identify who is an “insured” under the Homeowners Policy. “You” Resident relatives Anyone under 21 in “your” care or resident relative’s care Full-time student if: Relative under the age of 24 or Person in your care under the age of 21; and Resident of your household before attending school 2011 Change – Policy language clarified (c) The Society of CISR, Inc.

“Insured” Non-resident student relative over 24 Additional Insured – Student Living Away From The Residence Premises (HO 05 27) Resident of the household who is not an “insured” by definition Other Members of Your Household (HO 04 58) (c) The Society of CISR, Inc.

“Insured” Limited Section II Liability Coverage: Person responsible for animals or watercraft covered by the policy Employees using a covered vehicle Others using a covered vehicle on an “insured location” (c) The Society of CISR, Inc.

“Insured Location” Learning Objective 8: List the places that are considered an “insured location” under the Homeowners Policy. Identifies locations where premises liability is extended Does not limit personal activities exposures (c) The Society of CISR, Inc.

“Insured Location” “Residence premises” Any other location shown in the declarations or acquired during the policy period for “your” residence Any premises used by “you” in connection with the “residence premises” Non-owned temporary residence (hotel room) (c) The Society of CISR, Inc.

“Insured Location” Vacant land Land owned on which a 1 to 4 family dwelling is being built for an “insured” Individual or family burial vaults or plots Any premises occasionally rented to an “insured” for non- “business” use (c) The Society of CISR, Inc.

“Motor Vehicle” Self propelled land or amphibious vehicles Riding lawn mowers Children’s motorized riding toys Motorized scooters Etc. Trailer while carried, towed by or hitched for towing (c) The Society of CISR, Inc.

Other Definitions “Occurrence” “Property Damage” “Residence Employee” “Residence Premises” (c) The Society of CISR, Inc.

Property Coverages Learning Objectives
Section I – Property Coverages 9. Describe how Coverage A – Dwelling and Coverage B – Other Structures apply to specific situations. 10. Determine how Coverage C – Personal Property provides or limits coverage for property located on and off premises. 11. List the special limits that apply to specific types of personal property under Coverage C – Personal Property. (c) The Society of CISR, Inc.

12. Recommend methods of covering specific types of personal property for which coverage is limited or excluded in the unendorsed Homeowners Policy. 13. Explain the limited property coverage found in Coverage C – Personal Property for “business” property. 14. Apply the coverage provisions of Coverage D – Loss of Use. 15. Determine if a given property loss is covered by the Section I – Additional Coverages. (c) The Society of CISR, Inc.

16. Determine if a given property loss is covered by the Perils Insured Against for Coverages A, B and/or C of the HO 3 – Special Form. 17. Apply property exclusions to specific loss situations. 18. Calculate loss payments under the Loss Settlement Provision of the Homeowners Policy. (c) The Society of CISR, Inc.

Coverage A - Dwelling Learning Objective 9: Describe how Coverage A – Dwelling and Coverage B – Other Structures apply to specific situations. Dwelling on the “residence premises” shown in the Declarations Attached structures Materials & supplies used to construct, alter or repair the dwelling or other structures located on or next to the “residence premises” Excludes land (c) The Society of CISR, Inc.

Coverage B – Other Structures
Detached structures Webster’s Dictionary defines a structure as anything built (c) The Society of CISR, Inc.

Examples of Other Structures
Swimming Pool Playscape Shed Fence (c) The Society of CISR, Inc.

Excludes land Excludes other structures rented to someone other than a tenant of the dwelling for use other than a private garage Structures Rented To Others – Residence Premises (HO 04 40) (c) The Society of CISR, Inc.

Excludes other structures where “business” is conducted Excludes other structures used to store “business” property unless: Property is solely owned by an “insured” or tenant of the dwelling AND Property is not gaseous or liquid fuels Permitted Incidental Occupancies –Residence Premises (HO 04 42) (c) The Society of CISR, Inc.

Coverage B – Other Structures is limited to 10% of Coverage A – Dwelling Other Structures on the Residence Premises - Increased Limits (HO 04 48) Specific additional amount of insurance on described other structure(s) (c) The Society of CISR, Inc.

Coverage C – Personal Property
Learning Objective 10: Determine how Coverage C – Personal Property provides or limits coverage for property located on and off premises. Property owned or used by an “insured” Worldwide coverage At “your” request: Property of others on the “residence premises” Property of a guest or “residence employee” while in any residence occupied by an “insured” (c) The Society of CISR, Inc.

Limits at other residences Property usually located at another residence of an “insured” Limited to 10% of Coverage C or $1,000 whichever is greater Limitation does not apply to property at a newly acquired residence for the first 30 days (c) The Society of CISR, Inc.

Policy later excludes theft for property usually located at another residence except: When an “insured” is temporarily living there College student must have been there any time during the 60 days prior to the loss (c) The Society of CISR, Inc.

Limits at Self-Storage Facilities Property owned or used by an “insured” and located at a self-storage facility Limited to 10% of Coverage C or $1,000 whichever is greater Limitation does not apply: If property moved because residence is under renovation; or To personal property usually located at other residences Increase Amount Of Insurance For Personal Property Located In A Self-Storage Facility (HO 06 14) 2011 Change – Added restrictions for self-storage facility (c) The Society of CISR, Inc.

Special Limits of Liability – Coverage C – Personal Property
Learning Objective 11: List the special limits that apply to specific types of personal property under Coverage C – Personal Property. Limit Item All Perils $200 Money Yes $1,500 Securities, accounts, deeds, etc. Watercraft including their trailers, furnishings, equipment and motors Trailers not used with watercraft Jewelry, watches, & furs Theft Only Limitation $2,500 Firearms and related equipment Silverware, silver plated, goldware, pewterware, etc. (c) The Society of CISR, Inc.

Special Limits of Liability – Coverage C – Personal Property
Item All Perils $2,500 Property on the “residence premises” used primarily for “business” purposes Yes $1,500 Property away from the “residence premises” used primarily for “business” purposes Electrical apparatus while in or upon a motor vehicle, equipped to be powered by electrical system of vehicle and other sources $250 Antennas, disks, wires and other media used with specific electronic equipment while in the “motor vehicle” 2011 Changes – Business property off-premises, portable electronic equipment and media changed (c) The Society of CISR, Inc.

Special Treatment of Personal Property Exposures
Learning Objective 12: Recommend methods of covering specific types of personal property for which coverage is limited or excluded in the unendorsed Homeowners Policy. Coverage C Increased Special Limits of Liability (HO 04 65) Does NOT broaden perils Use to increase special limits of coverage on some types of property Watch the jewelry per item limit (c) The Society of CISR, Inc.

Scheduled Personal Property Endorsement (HO 04 61) Specific amount of insurance on scheduled items Not a valued policy (agreed value) except for fine arts Pays least of: ACV, cost of repair, cost to replace, or amount of insurance Risks of direct physical loss with exclusions Deductible does not apply (c) The Society of CISR, Inc.

Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) (HO 04 60) Same as HO EXCEPT it provides agreed value for all classes of covered property (c) The Society of CISR, Inc.

Learning Objective 13: Explain the limited property coverage found in Coverage C – Personal Property for “business” property. Permitted Incidental Occupancies (HO 04 42) Increases “business” personal property used in the described “business” to full Coverage C limit Does not broaden causes of loss (c) The Society of CISR, Inc.

Increased Limits on Business Property
Increased Limits on Business Property (HO 04 12) Increases certain “business” property of “business” conducted off premises to specified limit while property is on the “residence premises” Increases business property limit while off premises to 60% of specified limit Does not broaden causes of loss (c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered
Articles specifically insured (Example- Scheduled personal property) Animals, birds, or fish (c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered “Motor vehicles” Includes accessories, equipment, parts, tapes, discs, etc. While in or upon the “motor vehicle”. (note exceptions) Gives back coverage if “motor vehicle” is not required to be registered for use on public roads or property which is: Used SOLELY to service a residence; or Designed to assist the handicapped 2011 Changes – Portable electronic equipment Motor vehicle exception is now if solely to service a residence rather than “your” residence (c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered Aircraft and parts Except model or hobby aircraft Hovercraft and parts Defined as a self-propelled motorized ground effect vehicle and includes, but is not limited to flarecraft and air cushion vehicles (c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered Property of roomers and tenants unless related to an “insured” Personal property in a rental apartment Additional Coverage #10 provides $2,500 coverage but no theft coverage Personal property rented to others off the “residence premises” “Business” data Will cover the cost of blank media and prerecorded software (c) The Society of CISR, Inc.

Coverage C – Personal Property Not Covered Credit cards, fund transfer cards, etc. Additional Coverage #6 gives back $500 Water or steam (c) The Society of CISR, Inc.

Coverage D – Loss of Use Learning Objective 14: Apply the coverage provisions of Coverage D – Loss of Use. Additional Living Expenses Part of “residence premises” where “you” reside that is not fit to live in due to a covered property loss Covers the necessary increase in living expenses to maintain the normal standard of living (c) The Society of CISR, Inc.

Coverage D – Loss of Use Fair Rental Value Part of “residence premises” rented to others or held for rental that is not fit to live in due to a covered property loss Covers the fair rental value less non-continuing expenses (c) The Society of CISR, Inc.

Coverage D – Loss of Use Civil Authority Two weeks coverage when civil authority prohibits use of “residence premises” when there is direct damage to a neighboring premises by a Peril Insured Against No coverage for loss due to cancellation of a lease Loss of use coverage is not limited by expiration of policy (c) The Society of CISR, Inc.

Section I - Additional Coverages
Learning Objective 15: Determine if a given property loss is covered by the Section I – Additional Coverages. Debris Removal Covered property damaged by a covered peril Removal of volcanic ash if causes direct damage to covered property Additional 5% of applicable limit available if limit exhausted (c) The Society of CISR, Inc.

Debris removal for tree removal Removal from the “residence premises” Up to $500 per tree/$1,000 per loss Caused by: “Your” tree felled from windstorm, hail or weight of ice, snow or sleet A neighbor’s tree felled by a Coverage C Peril Insured Against Tree must damage a covered structure or block a driveway or access to the residence (c) The Society of CISR, Inc.

Reasonable repairs Reasonable cost necessary to protect damaged property from further damage Not additional insurance Trees, shrubs and other plants Limited named perils 5% of Coverage A with a maximum of $500 for any one tree, plant or shrub Additional insurance (c) The Society of CISR, Inc.

Fire department service charge $500, no deductible Additional insurance Property removed Covered property endangered by a covered peril True all risk coverage for 30 days Not additional insurance (c) The Society of CISR, Inc.

Credit card, fund transfer card or access device, forgery and counterfeit money $500 coverage Excludes resident of the household; person who was entrusted with the card; or a person if not complying with card requirements No deductible Additional insurance (c) The Society of CISR, Inc.

Loss Assessment $1,000 limit as additional insurance Exposure exists for homes in areas governed by homeowners associations Covers assessments due to common property damaged by a covered peril Deductible applies Can increase limit to $50,000 using Supplemental Loss Assessment Coverage (HO 04 35) 2011 Change – Name change; now Supplemental Loss Assessment Coverage (c) The Society of CISR, Inc.

Collapse Excluded except as provided in this Additional Coverage Specified causes of loss only (Coverage C perils, hidden decay or insect damage, or weight of contents, people or rain) 2011 Change- No longer says covered for risk of. Collapse clarified with better explanation (c) The Society of CISR, Inc.

Glass or safety glazing material Glass that is part of a covered building Damage to covered property damaged by broken glass Excluded if dwelling is vacant for more than 60 days Not additional insurance (c) The Society of CISR, Inc.

Landlord furnishings Coverage C Perils Theft excluded $2,500 in each apartment on the “residence premises” Not additional insurance (c) The Society of CISR, Inc.

Ordinance Or Law Increased costs due to: Ordinance or law regulating construction, etc. Demolition and reconstruction of the undamaged portion of a covered building Remodeling, removal or replacement of the undamaged part of a covered building 10% of Coverage A Additional insurance Includes debris removal (c) The Society of CISR, Inc.

Ordinance or Law (Continued) Excludes loss of value due to ordinance Excludes pollution testing or cleanup Can increase coverage by using Ordinance or Law – Increased Amount of Coverage (HO 04 77) Options of 25%, 50%, 75% or more (c) The Society of CISR, Inc.

Grave Markers Coverage C Perils $5,000 limit Not additional insurance (c) The Society of CISR, Inc.

Section I- Additional Coverages
LIMIT ADDITIONAL INSURANCE DEDUCTIBLE APPLIES Debris Removal Included in limit unless it exceeds limit; then 5% of covered property limit available Only if it exceeds the limit for Covered Property Yes Reasonable Repairs Included in Coverage A No Trees, Shrubs, Plants & Lawns Perils: Fire/Lightning, Explosion, Riot, Civil Commotion, Aircraft, Vehicles, V&MM and Theft 5% of Coverage A with maximum of $500 for one tree, shrub or plant Fire Department Service Charge $500 Property Removed (30 days) Included in the limit that applies to property being removed (c) The Society of CISR, Inc.

Section I- Additional Coverages
LIMIT ADDITIONAL INSURANCE DEDUCTIBLE APPLIES Credit Card, Fund Transfer Card $500 Yes No Loss Assessment $1,000 Collapse Included in the limit that applies to property damaged Glass or Safety Glazing Material Landlord’s Furnishings $2,500 Ordinance Or Law 10% of Coverage A Grave Markers $5,000 (c) The Society of CISR, Inc.

Section I – Perils Insured Against
Learning Objective 16: Determine if a given property loss is covered by the Perils Insured Against for Coverages A, B and/or C of the HO 3 - Special Form. Dwelling & Other Structures Direct loss with exclusions Open perils concept Burden of proof is on the insurance company to prove loss is excluded 2011 Change - Direct loss rather than risk of direct loss (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Collapse except for Additional Coverages # 8 No coverage for collapse including: Abrupt falling down or caving in Loss of structural integrity Cracking, bulging, settling etc. if related to above (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Freezing of plumbing unless one of two precautions taken Freezing, thawing, pressure or weight of water or ice to fences, swimming pools, pavement, foundations, retaining walls, piers, or docks Theft to a dwelling under construction No coverage for theft of materials and supplies until the dwelling is both finished and occupied No theft coverage for property in a dwelling under construction (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Vandalism and malicious mischief No coverage for vandalism and any ensuing loss if the dwelling has been vacant for more than 60 days immediately prior to loss (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Mold, fungus, or wet rot Covered if hidden in walls or ceilings, beneath floors, above ceilings and caused by accidental discharge or overflow of water or steam within identified systems (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Wear and tear Mechanical breakdown Smog, rust, dry rot Smoke from agricultural smudging or industrial operations Pollution unless caused by Coverage C Peril (c) The Society of CISR, Inc.

Dwelling & Other Structures Exclusions Settling, shrinking, bulging, etc. of walls, floors or foundations Birds, rodents or insects Nesting or infestation or release of waste or secretions by any animal Animals owned or kept by an “insured” In most cases, ensuing loss is covered unless otherwise excluded 2011 Change- Vermin reference removed, specifically detailed damage caused by any animal now excluded (c) The Society of CISR, Inc.

Additional Exclusions that apply to all of Section I – Property appear later. For losses to dwelling or other structures if the policy doesn’t exclude the cause of loss, it is covered! (c) The Society of CISR, Inc.

Personal Property Named perils Broad Form perils Burden of proof is on the “insured” to establish the cause of loss to prove the loss is covered (c) The Society of CISR, Inc.

Personal Property Fire or lightning Wind or hail (note exclusions) Explosion Riot or civil commotion Aircraft Vehicles Smoke (note exclusions) Vandalism or malicious mischief (c) The Society of CISR, Inc.

Personal Property Theft Includes attempted theft and loss of property from a known place when likely to have been stolen (c) The Society of CISR, Inc.

Theft Exclusions Committed by an “insured” Dwelling under construction From part rented to other than an “insured” Theft of watercraft, trailers and campers away from the “residence premises” Theft of property at another residence owned, rented or occupied by an “insured” unless “insured” is staying there (see exceptions) 2011 Change – Theft exception for students now 90 days instead of 60 (c) The Society of CISR, Inc.

Personal Property Falling objects (see requirement) Weight of ice, snow or sleet Damage caused by accidental discharge or overflow of water or steam from an appliance, etc. (Damage to appliance or system not covered) Sudden and accidental tearing apart, cracking, etc. Steam or hot water heating system, etc. (not from freezing) (c) The Society of CISR, Inc.

Personal Property Freezing (Precautions must be taken) Must maintain heat; or Shut off water and drain Sudden and accidental damage from artificially generated electrical current Volcanic eruption (c) The Society of CISR, Inc.

For losses to personal property… if the policy didn’t list the peril, it is not covered! (c) The Society of CISR, Inc.

Review of Covered Perils
PERIL INSURED AGAINST COVERAGE A - DWELLING COVERAGE B - OTHER STRUCTURES COVERAGE C – PERSONAL PROPERTY Fire or Lightning Yes Windstorm or Hail Explosion Riot or Civil Commotion Aircraft Vehicles Smoke Vandalism Theft Volcanic Eruption (c) The Society of CISR, Inc.

Review of Covered Perils
PERIL INSURED AGAINST COVERAGE A - DWELLING COVERAGE B - OTHER STRUCTURES COVERAGE C – PERSONAL PROPERTY Weight of Ice, Sleet or Snow Yes Accidental Discharge or Overflow of Water or Steam Cracking, Burning, Bulging of Heating System or AC Hot Water Heater Sudden and Accidental Damage From Artificially-Generated Electrical Current Freezing Risks of Direct Loss, except: Those perils that are specifically excluded No (c) The Society of CISR, Inc.

Section I – Property Exclusions
Learning Objective 17: Apply property exclusions to specific loss situations. Ordinance or Law Except for 10% of Coverage A provided by Additional Coverage # 11 Ordinance or Law – Increased Amount of Coverage (HO 04 77) (c) The Society of CISR, Inc.

Earth Movement By act of nature or any other cause Give back of coverage for fire, explosion, and theft Earthquake Endorsement (HO 04 54) 2011 Change – Clarifies that is by any cause (c) The Society of CISR, Inc.

Water Damage No coverage for: Flood, surface waters, tidal water Back up of sewers or drains or overflows from sump Regardless of cause Giveback for fire, explosion and theft Flood Policy Limited Water Back Up and Sump Discharge or Overflow Coverage (HO 04 95) 2011 Change – Includes language from what was previously an exclusionary endorsment (c) The Society of CISR, Inc.

Power Failure Off Residence Premises Refrigerated Property Coverage (HO 04 98) Neglect During or after the loss War Nuclear Hazard Intentional Loss 2011 Change – Refrigerated Property Coverage now $500 coverage for amount over $100 (c) The Society of CISR, Inc.

Government Action Weather Conditions Acts or Decisions Faulty or Inadequate Planning, Design, Materials or Maintenance (c) The Society of CISR, Inc.

Section I – Conditions Insurable Interest
The insurance company will not pay more than: That “insured’s” interest at the time of the loss The applicable limit of liability (c) The Society of CISR, Inc.

Section I – Conditions Deductible
Shown in Declarations If more than one deductible could apply to loss, only largest applies Applies to Section I – Property 2011 Change – Moved from beginning of policy to Conditions, now only one deductible (largest) applies (c) The Society of CISR, Inc.

Section I – Conditions Duties After a Loss
Protect property from further damage Inventory the damaged property Notify the carrier or agent and credit card company and/or police (if applicable) Exhibit the property to an adjuster Submit a sworn statement (c) The Society of CISR, Inc.

Section I – Conditions Loss Settlement
Learning Objective 18: Calculate loss payments under the Loss Settlement Provision of the Homeowners Policy. Actual Cash Value vs. Replacement Cost Actual Cash Value for (Unendorsed HO-3): Personal property Awnings, carpeting, appliances and outdoor equipment Change the above by Personal Property Replacement Loss Settlement Endorsement (HO 04 90) Actual Cash Value Loss Settlement Windstorm or Hail Losses To Roof Surfacing Endorsement (HO 04 93) (c) The Society of CISR, Inc.

Actual Cash Value for: Structures that are not buildings Replacement Cost Loss Settlement for Certain Non-Building Structures On The Residence Premises Endorsement (HO 04 43) Grave markers including mausoleums (c) The Society of CISR, Inc.

Building Insured for at Least 80% of Replacement Cost at Loss Yes No Smallest of: Larger of: Limit of Liability ACV RC of Damage Formula Limit of Coverage X Loss RC X 80% Amount Actually Spent to Repair or Replace Cannot Exceed the Limit of Liability Insured can always select an ACV Settlement (c) The Society of CISR, Inc.

Buildings covered by Coverage A or B Settled on RC or ACV depending on compliance with the 80% requirement Insured can always choose an ACV settlement if financially beneficial Certain items not included in determining the compliance (foundations) (c) The Society of CISR, Inc.

Buildings rebuilt at new premises will not increase amount paid RC will not be paid until repairs or replacement made unless: The loss is less than 5% of the amount of insurance on the building; or The loss is less than $2,500 (c) The Society of CISR, Inc.

Loss Settlement Endorsements
Specified Additional Amounts of Insurance for Coverage A (HO 04 20) Additional 25% or 50% of Coverage A available Does NOT increase Coverages B, C & D Additional Limits of Liability for Coverages A, B, C, & D (HO 04 11) No cap Increases Coverages B, C & D in proportion to increase in Coverage A (c) The Society of CISR, Inc.

Section I – Conditions Loss to a Pair or Set May pay to repair or replace or pay difference between ACV before and after loss Other Insurance Pro rata share Mortgage Clause Mortgagee has rights under Policy No Benefit to Bailee Recovered Property “Your” option (c) The Society of CISR, Inc.

Section II - Liability Coverages 19. In specific loss situations, apply the coverage and exclusions found in Coverage E – Personal Liability of the Homeowners Policy. 20. Apply Coverage F – Medical Payments To Others in a given loss situation. 21. Determine if a type of “motor vehicle” is excluded, and those types that may be covered under Coverage E – Personal Liability and Coverage F – Medical Payments To Others. (c) The Society of CISR, Inc.

Section II – Liability Coverages
Coverage E – Personal Liability Coverage F – Medical Payments to Others (c) The Society of CISR, Inc.

Coverage E – Personal Liability
Learning Objective 19: In specific loss situations, apply the coverage and exclusions found in Coverage E – Personal Liability of the Homeowners Policy. Legal liability required “Bodily injury” Remember Personal Injury Endorsement “Property damage” Prejudgment interest included in limit of liability Defense is in addition to the limit of liability (c) The Society of CISR, Inc.

Coverage F – Medical Payments to Others
Learning Objective 20: Apply Coverage F – Medical Payments To Others in a given loss situation. Necessary & reasonable expenses Legal liability is not required Expenses must be incurred or ascertained within 3 years (c) The Society of CISR, Inc.

Coverage F – Medical Payments to Others
Does not apply to “you” or regular resident of “your” household except “residence employees” Applies to persons on an “insured location” with permission Applies to persons off an “insured location” for certain losses (c) The Society of CISR, Inc.

Section II – Exclusions
Learning Objective 21: Determine if a type of “motor vehicle” is excluded, and those types that may be covered under Coverage E – Personal Liability and Coverage F – Medical Payments To Others. “Motor Vehicle Liability” Ownership, maintenance, or occupancy Operation or use Loading or unloading Entrustment Failure to supervise or negligent supervision Vicarious liability (c) The Society of CISR, Inc.

Part I of the “Motor Vehicle Liability” Exclusion Registered for use on public roads or property Should have been registered Operated in a race Rented to others Used to carry people or cargo for a fee Used for any “business” purposes unless a motorized golf cart on a golf facility (c) The Society of CISR, Inc.

Part 2 of the “Motor Vehicle Liability” Exclusion gives back coverage for the following “motor vehicles” as long as Part I does not apply: Dead storage Used solely to service a residence Designed to assist the handicapped and is being used to assist the handicapped or is parked on an “insured location” 2011 Change – Solely to service a residence rather than the “insured’s” residence (c) The Society of CISR, Inc.

Also Covered if: Non-owned recreational vehicle An owned recreational vehicle While on an “insured location”; or Off an “insured location” if a toy designed for a child seven years old or younger (Power and speed restrictions apply) 2011 Changes- adds coverage for some toy “motor vehicles” (c) The Society of CISR, Inc.

Also Covered if: Owned motorized golf cart Carries up to 4 people and maximum speed 25 MPH on level ground On a golfing facility In a private residential community where “insured” has a residence, if allowed by property owners association (c) The Society of CISR, Inc.

Recreational Vehicle Endorsements
Owned Snowmobile (HO 24 64) Personal Liability and Medical Payments To Others Recreational Vehicle Policy Miscellaneous Vehicle Endorsement to a Personal Auto Policy (c) The Society of CISR, Inc.

“Watercraft Liability” Ownership, maintenance, or occupancy Operation or use Loading or unloading Entrustment Failure to supervise or negligent supervision Vicarious liability (c) The Society of CISR, Inc.

“Watercraft Liability” Excludes watercraft Preparing or operating in a race except sailboats and predicted log races Rented to others Used to carry people or cargo for a fee Used for any “business” purposes Covers watercraft that is stored Covers specified types of watercraft (c) The Society of CISR, Inc.

“Watercraft Liability” Coverage
Type of Watercraft Owned Rented Borrowed Inboard Inboard/Outdrive No Yes IF 50 HP or less Yes, Not Excluded Outboard Yes, IF 25 HP or Less Or if Newly Acquired, No HP Restriction No HP Restriction Sailboat Less than 26’ No Length Restriction (c) The Society of CISR, Inc.

Watercraft Endorsement
Watercraft (HO 24 75) Watercraft must be listed Personal Liability and Medical Payments To Others Coverage No physical damage Exclusions listed (c) The Society of CISR, Inc.

“Aircraft Liability” “Hovercraft Liability” (c) The Society of CISR, Inc.

Section II – Exclusions Expected or intended injury “Business” Remember, previously defined Excludes all activities except renting an “insured location” for specified uses Covers part-time “business” pursuits of a minor (c) The Society of CISR, Inc.

Business Endorsements
Permitted Incidental Occupancies (HO 04 42) On premises Personal Liability and Medical Payments to Others Coverage For necessary and incidental use of the premises Business must be operated by the “insured” Excludes workers compensation (c) The Society of CISR, Inc.

Business Pursuits (HO 24 71) Personal Liability and Medical Payments To Others Coverage on and off premises (clerical, sales and teachers) “Insured” may not own or financially control the business Excludes professional other than teaching Teachers can purchase corporal punishment (c) The Society of CISR, Inc.

Structures Rented to Others (HO 04 40) Property, Personal Liability and Medical Payments To Others Coverage for structures rented to others for use as a private residence (c) The Society of CISR, Inc.

Professional liability Uninsured locations (owned but no insurance purchased) War Transmission of a communicable disease Sexual molestation, corporal punishment, mental abuse Controlled substance 2011 Change – Controlled substance changed (c) The Society of CISR, Inc.

Coverage E – Personal Liability Exclusions
Loss Assessment $1,000 available in Section II – Additional Coverages Owned property (can’t be liable to self) Property in the care, custody or control of an “insured” except for damage by fire, smoke or explosion (c) The Society of CISR, Inc.

Coverage E – Personal Liability Exclusions
Workers compensation (If provided or required to be provided by an “insured”) Nuclear energy liability “Bodily injury” to an “insured” (c) The Society of CISR, Inc.

Coverage F – Medical Payments to Others Exclusions
“Residence employee” off premises unless during course of employment Workers compensation (voluntarily or required) Nuclear Regular residents except a “residence employee” (c) The Society of CISR, Inc.

Section II – Additional Coverages
Claims expenses In addition to limits of liability First aid expenses (c) The Society of CISR, Inc.

Damage To Property Of Others Caused by an “insured” Up to $1,000 Excludes intentional damage if “insured” is 13 or older Gives back coverage for recreational vehicles not required to be licensed and not owned by an “insured” (c) The Society of CISR, Inc.

Loss Assessment No defense $1,000 coverage Supplemental Loss Assessment Coverage (HO 04 35) to increase limits to $50,000 2011 Change- Name change Supplemental Loss Assessment (c) The Society of CISR, Inc.

Section II – Conditions
Duties after a loss Conditional contract Any “insured” paying, assuming or incurring costs other than first aid does so at own risk (c) The Society of CISR, Inc.

Duties of an injured person Must submit to medical exam by doctor of the insurance company’s choice Other insurance Excess coverage except for excess/umbrella coverage Policy period Loss must occur during policy period (c) The Society of CISR, Inc.

Cancellation and nonrenewal Modified by state specific endorsements (c) The Society of CISR, Inc.

Assignment Must have written consent of insurance company Subrogation May waive before a loss Must be in writing Subrogation does not apply to Medical Payments and Damage to Property of Others (c) The Society of CISR, Inc.

Learning Objectives Dwelling Policy List the eligibility requirements for Dwelling Policies. Point out the differences between Homeowners Policies and Dwelling Policies. Discuss endorsements applicable to Dwelling Policies. (c) The Society of CISR, Inc.

Dwelling Policy Learning Objective 1: List the eligibility requirements for Dwelling Policies. Eligibility Family dwelling up to 4 units Not more than 4 apartments per dwelling or unit Under construction Townhouse or row house Mobile or trailer home (Basic Form only & on permanent foundation) (c) The Society of CISR, Inc.

Dwelling Fire Occupancy Owner, seasonal or tenant occupied Wider range of incidental occupancies No more than 5 roomers or boarders per unit (c) The Society of CISR, Inc.

Dwelling Fire Coverage Parts Coverage A - Dwelling Coverage B - Other Structures Coverage C - Personal Property Coverage D - Fair Rental Value Coverage E - Additional Living Expenses (Not in Basic Form) Liability Parts by Endorsement Coverage L - Personal Liability Coverage M - Medical Payments to Others (c) The Society of CISR, Inc.

Dwelling Fire Forms DP-1 Basic DP-2 Broad DP-3 Special (c) The Society of CISR, Inc.

Dwelling Fire – Eligibility Comparison
(c) The Society of CISR, Inc.

Dwelling Fire - Limitations
No Theft No Liability and Medical Payments Coverage No Loss Assessment (c) The Society of CISR, Inc.

Dwelling Fire – Perils Insured Against
(c) The Society of CISR, Inc.

Dwelling Fire - Endorsements
Broad Theft Coverage (DP 04 72) Limited Theft Coverage (DP 04 73) Loss Assessment Property Coverage (DP 04 63) Personal Liability (DL 24 01) Business Pursuits (DL 24 05) Watercraft (DL 24 06) Loss Assessment Liability Coverage (DL 24 14) Snowmobiles (DL 24 07) (c) The Society of CISR, Inc.

Please Complete Your Evaluation Form
Thank you! Please Complete Your Evaluation Form (c) The Society of CISR, Inc.

Insuring Personal Residential Homeowners 2000 Program

Similar presentations

Presentation on theme: "Insuring Personal Residential Homeowners 2000 Program"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Insuring Personal Residential Homeowners 2000 Program

Similar presentations

Presentation on theme: "Insuring Personal Residential Homeowners 2000 Program"— Presentation transcript:

Similar presentations

About project

Feedback