Personal Auto Coverage
Condo Coverage
Homeowners Coverage Description
Renters Coverage Description
Commercial Property Coverage Outline
The homeowners policy provides protection against the financial consequences of personal losses. A homeowners policy is a combination of property and liability coverages. The homeowners policy is tailored to meet the needs of a homeowner. The following is a basic outline of the homeowners (HO-3) policy and the endorsements most widely used on the HO-3 policy.
The HO-3 policy provides coverages for one or two family dwellings that are owner occupied. The HO-3 policy provides coverage against risks of direct physical loss to real property, except for those causes of loss that are specifically excluded. Personal property is covered against direct physical loss caused by a specified peril. In addition to the coverages stated under Section I, several additional coverages are included. Some of the coverages included are; debris removal, fire department charges, reasonable repairs charges, property removal charges, and coverage for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money. These additional coverages are included to provide protection for the insured following a covered property loss. Each additional coverage has limitations and is subject to certain conditions.
This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is based on the value of the home and what it would cost to replace the home.
This coverage limit applies to detached structures such as a garage or storage shed. The limit of coverage is set at 10% of the dwelling. The insured can purchase a higher limit.
Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some property is excluded from coverage. The overall limit for coverage C is 50% of the dwelling limit. Coverage C can be modified in several ways with endorsements.
This coverage applies in the event of a loss under Coverage A. If the insured was to temporarily lose use of the dwelling this coverage would apply. Payment would be made for expenses incurred to live elsewhere following a loss that makes the home unsuitable for living. Another method used to determine payment for loss of use is fair rental value, which is the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are unsuitable for living.
Section II of the homeowners policy provides liability coverage for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the residence premise as well as any other premises used by the insured, as a residence, permanently or temporarily. Liability coverage is provided for the named insured and members of the named insured's household who are relatives. Personal liability has a basic limit of $100,000 per occurrence, which the insured may increase for an additional premium. In addition to the basic limit, Coverage E also provides additional coverages for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges. The additional coverages provided under Section E are subject to limitations and certain conditions.
This coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. The coverage has a basic limit of $1,000 per person. The insured may select higher limits.
When this endorsement is added to the policy, it increases the limit of coverage for A, B, C, and D. The insured selects the percentage of increase for the year and the limits are automatically increased at certain dates throughout the year.
Earthquake coverage is excluded under Section I of a homeowners policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible for each coverage under Section I.
This endorsement increases the limit under coverage B, Other Structures. The limit for unattached structures on the residence premise would be increased, and the increase would be in addition to the limit already provided.
Certain types of personal property under Coverage C have special limits of liability. Adding this endorsement increases the limit for those particular types of property.
The scheduled personal property endorsement is used to provide coverage for risk of direct loss for such items as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps and rare coins. Scheduled property can be insured for any amount the insured requires.
Property loss settlements under the homeowners policy are made on an actual cash value basis. When the replacement cost endorsement is added, the loss settlement payment would be sufficient to replace the item for the cost at the time of loss without deductions for depreciation.
The liability coverage of the personal auto policy provides protection against legal liability arising out of the ownership or operation of an automobile. The insuring agreement agrees to pay damages for bodily injury or property damage for which the insured is legally responsible because of an automobile accident.
The liability limit can be written as a single limit that applies to both bodily injury and property damage. The policy can also be written with split limits in which the limits of insurance for bodily injury and property damage are stated separately.
The insuring agreement also states that in addition to the payment of damages for which the insured is legally liable, the insurer also agrees to defend the insured for all legal defense costs. The defense cost is in addition to the policy limits.
The insuring agreement states that the insurer will pay all reasonable and necessary medical and funeral expenses incurred by an insured because of bodily injury caused by an accident. Payment can be made for expenses incurred within three years from the date of the accident. The insured is the named insured and family members, and any other person injured while occupying a covered auto. Pedestrians or cyclists are also considered the insured when struck by a vehicle. These payments are made without regard to fault.
This insuring agreement pays for bodily injury to an insured who is injured by an uninsured motorist, a hit-and-run driver, or a driver whose insurer becomes insolvent. Some states offer coverage for property damage as part of the uninsured motorist coverage. Usually when property damage is added a deductible would apply.
This coverage can be added to the policy to supplement the uninsured motorist coverage. The coverage must be added to all automobiles listed on the policy, and it must be added for the same limit as the Uninsured Motorist Coverage. Underinsured motorist coverage applies when a negligent driver has liability limits at the time of an accident, but the liability limits carried may be insufficient to pay for damages that the negligent driver is responsible for. This is when the insured's underinsured motorists coverage would apply and payment for the difference could be made. The two coverages are mutually exclusive and do not overlap or duplicate each other. An insured can collect under one coverage or the other depending on the situation, but not under both.
This coverage provides protection against the upset of your auto or non-owned auto or a collision with another vehicle or object. Collision losses are paid regardless of fault.
This coverage provides protection only for certain losses. The losses are fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, and the sinking, burning, collision, or derailment of a conveyance transporting the insured vehicle.
This coverage provides protection against any loss or damage to a covered auto resulting from loss other than a collision or upset, or a loss specifically excluded. This coverage also provides for supplemental payments for transportation expenses in the event of total theft of a covered auto or a non-owned auto. The auto must be insured for comprehensive or specified cause of loss coverage. Coverage begins forty-eight hours after a theft of a covered auto. Payments end when the auto is returned to use or the insurer pays for its loss.
This coverage applies when a covered auto or non-owned auto is withdrawn from use more than twenty-four hours due to a loss, other then theft. The insuring agreement agrees to pay up to the stated amount for expenses incurred in renting a vehicle. The coverage usually carries a per day limit and a maximum amount limit.
This coverage pays for towing and labor cost each time a covered auto or non-owned auto is disabled, up to the stated amount.
This is an endorsement that adds no-fault benefits. No-Fault means that in the event of an automobile accident, each party collects from his or her own insurer regardless of fault. No-fault benefits are limited to the injured person's actual economic loss, and are paid as specified by the law of the insured's state. Payment could be made for such losses as loss of earnings resulting from bodily injury and medical and funeral expenses. Other expenses can also be considered. The PIP endorsement is only available in certain states with No-Fault Laws. The endorsement applies only to bodily injury and not to property damage. (The state of Michigan is the exception to property damage.) No-Fault Laws vary widely from state to state.
The H0-6 policy is a special form of homeowners insurance that was designed to meet the unique insurance requirements of owners of condominium units and cooperative apartments. An insured can only qualify for an H0-6 policy by being an owner occupant of a residential condominium unit or a cooperative apartment. The insured premises is defined as the unit where the insured resides, an H0-6 policy can not be used to insure a unit owned by the insured but rented or leased to others. The condominium unit is defined as the space between the walls, ceiling and floor. Sometimes unit owners are responsible for parts of the unit beyond the walls, ceiling and floor. Condominium unit owners also have an undivided interest with other unit owners in common areas of property. Common areas of property could include the land, stairways, halls, parking and storage areas, and the heating and cooling system. The unit owner's responsibilities are usually outlined in the condominium agreement and bylaws. The major loss exposures for unit owners are loss to real property, loss to personal property, and legal liability. The following is a basic outline of the H0-6 policy and the endorsements most widely used on the H0-6 policy.
This coverage applies to the insured's real property, which is the unit. Coverage is provided on a named perils basis and is separated into four categories.
The first category includes alterations, appliances, fixtures, and improvements that are part of the building and contained within the residence premises such as built-in appliances and cabinets, electrical fixtures, and similar items of this nature.
The second category relates to items of real property that pertain exclusively to the residence premises, such as exterior glass or trees and shrubs that may be located on a patio that is part of the residence premises.
The third category includes property that is the responsibility of the unit owner to insure under an agreement of a corporation or association of property owners. Insurance for this category of property provides coverage for any portion of the common areas of the building that the association agreement states is the insurance responsibility of the unit owner.
The final category of property relates to structures owned solely by the insured at the location of the residence premises but are not a part of the residence premises. This category could include a private garage that was not attached to the residence premises but located elsewhere in the condominium complex.
The basic limit of liability under coverage A is $1,000, which can be increased if necessary. If the association or cooperative insurance policy is written on a bare walls basis, then the unit owner would have to provide coverage for the entire interior of the unit. It is important for the unit owner to review the condominium or cooperative association's coverage to determine if the basic limit for Coverage A of the H0-6 policy is adequate.
This coverage limit applies to the personal property of the unit owner. The limit of insurance is selected by the unit owner. The unit owner's personal property may include such items as furniture, clothing, television and stereo equipment, books, records compact discs and tapes. It could also include any items not considered part of the building structure. Items such as carpeting, if placed over finished flooring, would be considered personal property, but carpeting placed wall to wall over a rough subfloor or concrete slab is usually considered part of the building.
This coverage is provided if a loss is caused by an insured peril to covered property or to the building containing the property, if it makes the residence premises unfit to live in. The limit of insurance is 40 percent of Coverage C limit.
This provides coverage if a claim is made or suit is brought against the insured because of bodily injury or property damage caused by a covered occurrence. Personal liability has a basic limit of $100,000 per occurrence, which can be increased for an additional premium.
This coverage will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing bodily injury to someone other than an insured. Coverage applies to accidents that occur on the insured premises, or any location, when caused by action of the insured.
The following endorsements relate specifically to the HO-6 policy.
This endorsement can be used to change Coverage A of the HO-6 to provide coverage for risk of direct loss. When this endorsement is used, all direct loss to real property, which is the unit, is covered unless specifically excluded.
This endorsement provides property and liability coverage for the unit owner while the residence premises is regularly rented or held for rental to others. Theft coverage is provided for personal property at a rented condominium, however, high value items are not covered. Coverage for medical payments are also included.
This endorsement increases the limit of liability for the loss assessment coverage provided in the policy.
This endorsement provides coverage for loss assessment made against the unit owner by a corporation or association of property owners due to the peril of earthquake.
The H0-6 provides coverage on a named-peril basis, when this endorsement is added, Coverage C is changed to provide coverage for all direct loss to personal property unless specifically excluded.
Homeowners Coverage DescriptionThe homeowners policy provides protection against the financial consequences of personal losses. A homeowners policy is a combination of property and liability coverages. The homeowners policy is tailored to meet the needs of a homeowner. The following is a basic outline of the homeowners (HO-3) policy and the endorsements most widely used on the HO-3 policy.
The HO-3 policy provides coverages for one or two family dwellings that are owner occupied. The HO-3 policy provides coverage against risks of direct physical loss to real property, except for those causes of loss that are specifically excluded. Personal property is covered against direct physical loss caused by a specified peril. In addition to the coverages stated under Section I, several additional coverages are included. Some of the coverages included are; debris removal, fire department charges, reasonable repairs charges, property removal charges, and coverage for trees, shrubs and plants. Coverage is also included for loss involving credit cards, forgery, and counterfeit money. These additional coverages are included to provide protection for the insured following a covered property loss. Each additional coverage has limitations and is subject to certain conditions.
This amount of insurance applies to the dwelling and attached structures. The limit of insurance for the dwelling is based on the value of the home and what it would cost to replace the home.
This coverage limit applies to detached structures such as a garage or storage shed. The limit of coverage is set at 10% of the dwelling. The insured can purchase a higher limit.
Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some property is excluded from coverage. The overall limit for coverage C is 50% of the dwelling limit. Coverage C can be modified in several ways with endorsements.
This coverage applies in the event of a loss under Coverage A. If the insured was to temporarily lose use of the dwelling this coverage would apply. Payment would be made for expenses incurred to live elsewhere following a loss that makes the home unsuitable for living. Another method used to determine payment for loss of use is fair rental value, which is the amount of rent that could reasonably be charged for the premises, less any expenses that do not continue while the premises are unsuitable for living.
Section II of the homeowners policy provides liability coverage for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the residence premise as well as any other premises used by the insured, as a residence, permanently or temporarily. Liability coverage is provided for the named insured and members of the named insured's household who are relatives. Personal liability has a basic limit of $100,000 per occurrence, which the insured may increase for an additional premium. In addition to the basic limit, Coverage E also provides additional coverages for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges. The additional coverages provided under Section E are subject to limitations and certain conditions.
This coverage will pay the necessary medical expenses for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. The coverage has a basic limit of $1,000 per person. The insured may select higher limits.
When this endorsement is added to the policy, it increases the limit of coverage for A, B, C, and D. The insured selects the percentage of increase for the year and the limits are automatically increased at certain dates throughout the year.
Earthquake coverage is excluded under Section I of a homeowners policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible for each coverage under Section I.
This endorsement increases the limit under coverage B, Other Structures. The limit for unattached structures on the residence premise would be increased, and the increase would be in addition to the limit already provided.
Certain types of personal property under Coverage C have special limits of liability. Adding this endorsement increases the limit for those particular types of property.
The scheduled personal property endorsement is used to provide coverage for risk of direct loss for such items as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps and rare coins. Scheduled property can be insured for any amount the insured requires.
Property loss settlements under the homeowners policy are made on an actual cash value basis. When the replacement cost endorsement is added, the loss settlement payment would be sufficient to replace the item for the cost at the time of loss without deductions for depreciation.
The HO-4 renters policy is a combination of property and liability coverages. The HO-4 policy is tailored to meet the needs of a tenant. The following is a basic outline of the HO-4 Renters Policy and the endorsements most widely used on the HO-4 policy.
The HO-4 policy provides coverage for a tenant of a single family residence or a tenant of an apartment. The policy focuses on loss to personal property and loss to additions. Coverage for legal liability is also included. The HO-4 policy does not include coverage for the dwelling and other structures because a tenant does not have an insurable interest in the building. However, the HO-4 policy provides coverage for building additions and alterations made by the tenant. Personal Property is covered against direct physical loss caused by a specified peril. In addition to the coverages provided under Section I of the policy, additional coverages are included for debris removal, fire department service charges, loss assessment charges, reasonable repair charges, and property removal charges. Payment is also made for loss involving credit cards, forgery, and counterfeit money. The additional coverages are included to provide additional protection in the event of certain peril losses. All additional coverages are subject to certain limitations and conditions.
This is the primary limit of insurance coverage for the H0-4 policy. Coverage C provides worldwide coverage for personal property of the insured. Special limits apply to some types of property, and some types of property are excluded from coverage. The insured selects the limit of coverage which is determined by the value of personal property owned.
Coverage D applies if a peril insured against under Coverage C makes the residence unsuitable for living. Payment would be made for expenses incurred to live elsewhere following the loss. The limit for Coverage D is 20% of Coverage C.
Section II of the renters policy provides liability coverage for personal loss exposures. The insuring agreement under Coverage E provides liability coverage if a claim is made or suit is brought against an insured because of bodily injury or property damage. Coverage is provided for the named insured and members of the insured's household who are relatives. Personal Liability has a basic limit of $100,000 per occurrence. The insured may increase this limit for an additional premium. In addition to the basic limit, Coverage E also provides additional coverage for expenses such as defense cost, expenses incurred providing first aid to others, damage to property of others and loss assessment charges.
This coverage will pay the necessary medical expense for bodily injury of others. Coverage applies to accidents that occur on the insured premises or any location when caused by action of the insured. This coverage has a basic limit of $1,000 per person. The insured may select higher limits for an additional premium.
When this endorsement is added to the policy it increases the limit of Coverage C and D. The insured selects the percentage of increase for the year and limits are automatically increased at certain dates throughout the year.
Earthquake coverage is excluded under Section I of the policy. Adding this endorsement removes the exclusion and adds earthquake coverage which is subject to a deductible for each coverage under Section I.
The scheduled personal property endorsement is used to provide coverage for risk of direct loss for such items as jewelry, furs, cameras, musical instruments, silverware, golfer's equipment, fine arts, postage stamps and rare coins. Scheduled property can be insured for any amount the insured requires.
Certain types of personal property under Coverage C has special limits of liability. Adding this endorsement increases the special limit.
The policy provides additional coverage for building improvements or installations, made or acquired at the tenants expense. The basic limit is 10% of Coverage C limit, adding this endorsement increases the basic limit.
This endorsement provides coverage for liability arising out of an insured's ownership or use of a water bed on the residence premises.
The renter's policy has a standard deductible of $250. The insured may reduce the deductible to $100 or increase it to $500, $1,000 or $2,500.
Property Insurance is any type of insurance that indemnifies an insured party who suffers a financial loss because property has been damaged or destroyed. Property is considered to be any item that has a value. Property can be classified as real property or personal property. Real property is land and the attachments to the land, such as buildings. Personal Property is all property that is not real property. The Building and Personal Property coverage form is the form used to insure almost all types of commercial property. The insuring agreement in the Building and Personal Property coverage form promises to pay for direct physical loss or damage to covered property at the premises described in the policy when caused by or resulting from a covered cause of loss. The following is a brief outline of coverages and how they are used within the Commercial Building And Personal Property coverage form.
Coverage for the building includes the building and structures, completed additions to covered buildings, outdoor fixtures, permanently installed fixtures, machinery and equipment. The building material used to maintain and service the insured's premises is also insured. Business Personal Property owned by the insured and used in the insured's business is covered for direct loss or damage. The coverage includes furniture and fixtures, stock, and several other similar business property items when not specifically excluded from coverage. The policy is also designed to protect the insured against loss or damage to the personal property of others while in the insured's care, custody or control.
In addition to the limits stated in the Building and Personal Property coverage form, the policy has a coverage extensions section and an additional coverages section. The coverage extensions section provides limited coverage for newly acquired or constructed property, property of others, certain outdoor property, and the cost to research and reconstruct information on destroyed records. When coverage is placed on the all risk form, two additional extensions are added for property in transit and coverage for certain repair costs related to damage caused by water. The two additional extensions are covered by certain perils only. The additional coverage section provides coverage for indirect losses that result from a direct loss. The coverage applies to removal of debris, preservation of property, fire department service charges and pollutant cleanup and removal. The coverage extensions and the additional coverages have limitations and are subject to certain conditions.
The most the insurer will pay for loss or damage in any one occurrence is the limit of insurance stated in the policy declarations.
The standard deductible is $250. However, other deductible amounts are available and the deductible applies only once per loss.
The term peril is used when discussing losses. A peril is a cause of loss. Basic property insurance policies are written to cover the perils of fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicle damage, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Other property insurance policies, often referred to as the broad form policy, add coverages for water damage, weight of snow, ice or sleet, breakage of glass and coverage for falling objects. The broadest coverage is the special form, which is best known as the all risk form. All risk covers all causes of loss, except those specifically excluded from coverage. It is possible for a commercial property policy to have more than one cause of loss form.
Property can be valued in several different ways. Insurance companies commonly use two approaches to determine value, which also determines how a loss will be paid; the replacement cost method and the actual cash value method. Insurers consider replacement cost of a property item to be the cost to replace it with new property of like kind. Actual cash value is replacement cost, minus the accumulated depreciation for age and condition.
When the agreed value option is used the coinsurance requirement is removed and the insurer agrees to cover loses for it's agreed value. As an example, the insured has property insured for $100,000 and the agreed value is also $100,000, if a loss occurs, any loss up to $100,000 is covered at 100% When this option is used the insured and the insurance company agree on the value of the property before the policy is issued. This option is usually assigned to one-of-a-kind property.
Most building and business personal property polices have a coinsurance clause which requires the insured to carry insurance equal to at least a specified percentage of the actual cash value of the property. If a loss occurs, and it is determined that the amount of insurance carried is less than the amount required, a penalty could be placed on the insured.
An insured can insure a building for its full value at the beginning of the policy year, but, at the end of the year, it might not be covered for it's full value. This problem can be corrected by adding inflation guard coverage. With inflation guard, the policy limit increases gradually during the policy term so that the total increase amounts to the desired percentage increase at the end of the policy term.
This endorsement extends your cause of loss to include damage that results directly from an earthquake. Coverage is provided for replacement of buildings only. All earthquake shocks that occur within a 168 hour period (one week) are considered to be a single occurrence. A separate deductible applies and is determined by the value of the insured property.