Property Not Covered - PowerPoint PPT Presentation

1 / 41
About This Presentation
Title:

Property Not Covered

Description:

household personal property. Farmowners. Farms ... and household personal property ... Fine Arts, Furs, Guns, Jewelry, Metals. Loss of Use of Dwellings ... – PowerPoint PPT presentation

Number of Views:44
Avg rating:3.0/5.0
Slides: 42
Provided by: aai1
Category:
Tags: covered | property

less

Transcript and Presenter's Notes

Title: Property Not Covered


1
Agricultural Output Program AgOP
Welcome to AAIS Interactive Web Seminar
Joseph Harrington, director, corporate
communications Deborah Summerlin, vice
president , insurance lines December 5,
2006 Audio - Dial 877/326-2337 Conference ID
5518405
2
Todays Seminar
  • PowerPoint presentation with comments by
    telephone
  • Use the chat function at left
  • Open phones at the end

3
Todays Program
  • What is AgOP?
  • Output background
  • Eligibility and classifications
  • Coverage overview
  • Rating concepts

4
AAIS Farm Product Innovation
  • Modular Farmowners Program
  • Choice of dwelling form
  • Choice of liability form (farm personal, farm
    commercial, CGL)
  • Income and equipment breakdown coverage forms
  • First standardized Farm Umbrella Program
  • Maintain monoline Farm Properties Program

5
AAIS Output Program Innovation
  • Manufacturers output policies MOPs
  • Developed in 1950s
  • One maintained by the TIRB, predecessor to AAIS
  • Commercial Output Program, 1993
  • Added institutional and commercial uses
  • Additional AAIS output programs
  • Commercial Output XL
  • Developers and Contractors Output (DOP)
  • Agricultural Output (AgOP)

6
Advantages of Output Programs
  • Comprehensive property and marine forms
  • Minimize potential coverage gaps
  • Integrate inland marine terms for computers,
    mobile equipment, and other types of property
  • Eliminate multiple deductibles
  • Unique rating approach
  • A single, integrated risk, rather than the sum
    of disparate exposures
  • Deficiency points determine major loss load
  • Loading for small loss history when deductible
    is less than 5,000

7
Agricultural Output Program (AgOP)
  • Provides broad property and marine coverage in
    one form
  • Includes coverage for residential property
  • Can be written on a blanket, scheduled, or
    combined basis
  • Can be packaged with CGL and other coverage parts
  • Features systematic, flexible rating procedure

8
What the AgOP Provides . . .
  • . . . to companies that write farmowners
  • Evolved product for vertically integrated
    operations
  • Product for non-farming ag risks
  • . . . to companies that write commercial property
  • A market segment tool with coverages, terms, and
    options designed for agribusinesses
  • Alternative to modifying commercial forms

9
AgOP versus Farmowners
  • AgOP
  • Processing operations that may not include the
    cultivation of crops or raising livestock
  • Special terms for dwellings and household
    personal property
  • Farmowners
  • Farms supplying commodities for manufacturing or
    processing may not be eligible
  • HO-style forms are used to insure dwelling and
    household personal property

10
AgOP Eligibility
  • Buying, selling, storing agricultural products
  • Processing or manufacturing goods from
    agricultural products
  • Sale of goods or services to agricultural or
    agribusiness customers
  • Farming operations supplying commodities for
    manufacturing or processing

11
AgOP Eligibility, cont.
  • Classifications
  • Ag Chemical Mixing and Storing
  • Cotton Ginning
  • Dehydrating Plants
  • Farm Operations
  • Feed Lots
  • Grain Elevators
  • Hatcheries (Fish or Poultry)
  • Milling - Corn, Rice, Feed, Cereal
  • Sugar Refining

12
Primary Form
  • Agribusiness Property and Income Coverage Part
  • Comprehensive mix of property, marine, and income
    coverages
  • Dec page entries control limits for
  • Additional coverages
  • Coverage extensions
  • Supplemental coverages

13
Primary Form, Property Covered
  • Open perils coverage (risks-not-excluded)
  • Building Property
  • Personal Property (including most household
    personal property)
  • Stock
  • Coverage applies on or within 1,000 feet of a
    covered location

14
Primary Form, Property Covered, cont.
  • Buildings and personal property
  • Blanket or scheduled coverage
  • Values can be combined or treated separately
  • Items may be separately scheduled and rated
  • Stock
  • Show separate limit(s)
  • Blanket or scheduled coverage
  • Items may be separately scheduled and rated

15
Primary Form, Property Covered, cont.
  • Computers and Mobile Equipment
  • Open perils coverage
  • Covered on a blanket or scheduled basis
  • Coverage not linked to a described location

16
Primary Form, Property Not Covered
  • 24 classes of property are not covered
  • Examples Animals, Growing Crops, Fences,
    Jewelry, Land, Silverware, Trees
  • Some types of property listed under Property Not
    Covered are covered under a Coverage Extension or
    a Supplemental Coverage or may be covered by
    endorsement

17
Primary Form, Internal Limits
  • Form AG 0100 includes terms that describe
  • Nine additional coverages
  • Nine coverage extensions
  • 19 supplemental coverages
  • Six other coverages
  • Dec page entries, not policy language, control .
    . .
  • . . . which coverages apply, and . . .
  • . . . the corresponding limit for each coverage.

18
Primary Form, Additional Coverages
  • Additional Coverages
  • Consequential Loss to Stock
  • Debris Removal
  • Emergency Removal
  • Emergency Removal Expense
  • Fire Department Service Charges
  • Glass Repair or Replacement
  • Inventory and Appraisal Expense
  • Pollutant Clean Up and Removal
  • Recharge of Fire Protection Equipment

19
Primary Form, Coverage Extensions
  • Coverage Extensions
  • Fraud or Deceit
  • Newly Acquired Computers
  • Newly Acquired, Constructed Buildings
  • Newly Acquired Mobile Equipment
  • Personal Effects
  • Personal Property, Acquired Locations
  • Property Away From Covered Location
  • Stock -- Acquired Locations
  • Trees, Shrubs, Plants, and Lawns

20
Primary Form, Supplemental Coverages
  • Supplemental Coverages
  • Accounts Receivable
  • Brands or Labels Expense
  • Carrier Liability
  • Fine Arts, Furs, Guns, Jewelry, Metals
  • Loss of Use of Dwellings
  • Ordinance or Law -- Increased Costs
  • Overseas Transit or Location
  • Property in Transit
  • Property on Exhibition

21
Primary Form, Supplemental Coverages, cont.
  • Property Sold Under Installment Sales Plan
  • Sales Representatives Samples
  • Sewer Backup, Water Below the Surface
  • Spoilage
  • Surface Water Run-Off
  • Tank Leakage
  • Utility Service Interruption
  • Valuable Papers, Research Cost
  • Watercraft
  • Wrongful Delivery of Liquid Property

22
Primary Form, Other Coverages
  • Coverages that do not increase applicable limits
  • Collapse
  • Computer Disturbance
  • Tearing Out and Replacing
  • Theft Damage -- Non-owned Property
  • Electrical Breakdown -- May be limited to 1,000
  • Ordinance or Law -- Undamaged Parts of Building

23
Primary Form, Perils Covered, Perils Excluded
  • Open perils coverage
  • Named perils coverage in endorsements that cover
    hay, livestock, and poultry
  • Perils excluded
  • Ordinance or Law
  • Earth Movement or Volcanic Action
  • Civil Authority
  • Nuclear Hazard
  • Utility Failure
  • War
  • Water
  • TerrorismIndicates special exceptions apply

24
Primary Form, Perils Excluded, cont.
  • Marine-style treatment for certain property
  • Exceptions to these exclusions . . .
  • Earth Movement/Volcanic Action
  • Utility Failure
  • Water
  • . . . for these types of property
  • Computers
  • Mobile equipment
  • Various supplemental coverages, including
  • Accts. Receivable
  • Fine Arts, Furs, Guns, etc.
  • Property in Transit
  • Spoilage
  • Valuable Papers

25
Primary Form, Perils Excluded, cont.
  • Additional exclusions and restrictions include
  • Animals
  • Collapse
  • Computer Virus or Hacking
  • Contamination or Deterioration
  • Criminal Acts
  • Temperature/Humidity
  • Voluntary Parting
  • Wear and Tear
  • Additional standard restrictions for specific
    exposures

26
Primary Form, Income Coverage
  • Additional premium charge
  • Four income options
  • Earnings, Rents, and Extra Expense
  • Rents and Extra Expense
  • Earnings and Extra Expense
  • Extra Expense Only

27
Primary Form, Income Coverage
  • Exclusions and limitations
  • Finished stock
  • Leases, licenses, contracts, orders
  • Mobile equipment (various requirements)
  • Radio and television antennas
  • Software - 60 days or longer . . .
  • Strikes, protests, other interference
  • Coverage extensions - part of limit
  • Interruption by Civil Authority - 30 Days
  • Period of Loss Extension - Up to 90 Days
  • Grain Storage Income
  • Seasonal Coverage

28
Primary Form, Income Coverage
  • Additional Income Coverages
  • Newly Acquired Locations, Earnings and Extra
    Expense OR
  • Newly Acquired Locations, Extra Expense Only
  • Supplemental Income Coverages
  • Public Health Shutdown
  • Dependent Locations
  • Utility Service Interruption
  • Contract Penalty
  • Property In Transit, On Exhibition, or In The
    Custody Of Sales Representatives

29
Primary Form, Valuation
  • Triggered by dec page entries
  • Actual Cash Value, Limited Replacement Cost
  • Replacement Cost
  • Stated Amount
  • Special stock valuation terms
  • ACV
  • Market Price
  • Selling Price
  • Cash Shipping Value
  • Point of Origin - Imported Stock
  • Valued Seed, Foundation Seed
  • Other, as shown on Declarations

30
Primary Form, Remaining Provisions
  • What Must Be Done In Case of Loss
  • How Much We Pay - Dec page entries trigger . . .
  • Peak Season Increase
  • Inflation Protection
  • Coinsurance
  • Value Reporting
  • Other Income Coverage Loss Settlement Terms
  • Loss Payment
  • Other Conditions

31
AgOP Endorsements
  • Countrywide Endorsements
  • Computer Virus and Hacking Coverage
  • Crime Coverages - Discovery Basis
  • Employee Fraud and Dishonesty
  • Computer and Telecommunications Fraud
  • Counterfeit Currency, Money Orders, Travelers
    Checks
  • Forged or Altered Charge, Credit, or Debit Card
    Written Instruments
  • Forged or Altered Checks, Drafts, or Promissory
    Notes
  • Money and Securities
  • Keytrol Fraud
  • Functional Replacement Cost

32
AgOP Endorsements, cont.
  • Hay, Straw, and Fodder Coverage
  • Livestock Coverage
  • Mortgaged and Stolen Grain Coverage
  • Poultry Coverage
  • Pro Rata Limit
  • Property in Transit - Condemnation or Seizure
    Coverage
  • Optional Exclusions
  • Collapse
  • Consequential Water Loss
  • Sprinkler Leakage
  • Theft
  • Vandalism
  • Water Damage
  • Windstorm or Hail

33
AgOP Endorsements, cont.
  • Protective Devices and Services
  • Rebuilding Coverage - Excess Insurance Amendment
  • Scheduled Earthquake Coverage Earthquake
    Schedule
  • Scheduled Flood Coverage Flood Schedule
  • Theft Coverage - Amended Limit
  • Waiver of Deductible - Commodities
  • Warehouse Operators - Legal Liability Coverage
    Warehouse Operators Schedule
  • Windstorm or Hail Deductible

34
AgOP Rating Information
  • Two types of rating information
  • Basic policy premium developed by using output
    methodology Loads and Deficiency Points
  • Premiums for many higher limits and coverage
    options developed by using traditional Loss Costs
  • Company must file loss cost multiplier

35
Basic Policy Premium
  • Normal Loss Basic Charge - when deductible amount
    is less than 5,000
  • Based on losses and values over the previous
    three years each loss is capped at 5,000
  • Maximum Normal Loss Basic Charge is 1.00 Minimum
    .01 or .02, depending on deductible
  • Basic Major Loss Load - Small loading, based on
    classification of the risk
  • Deficiency Points modify Basic Major Loss Load,
    reflect unique aspects of risk

36
Deficiency Points
  • Deficiency points by risk characteristic
  • Disaster Exposure
  • Climatic Hazards
  • Special Occupancy Hazards or Production
    Conditions
  • Lack of Private Protection
  • Inadequate Public Protection
  • External Exposure (neighboring premises)
  • Construction Exposures

37
Deficiency Points, cont.
  • Combustibility or Susceptibility not usual to the
    classification
  • Coverage provided for property or perils usually
    excluded
  • Transit exposures greater than those typically
    contemplated
  • Property located in known flood areas, exposure
    to sewer back-up
  • Earth movement exposures
  • Lower deductibles on selected portions of the risk

38
Property or Stock Final Factor
  • Equals the sum of
  • Normal Loss Basic Charge (when applicable)
  • Basic Major Loss Load
  • Deficiency Point Charge
  • The PFF or the SFF Rate per 100 of
    insurance

39
Additional AgOP Rating Info
  • Rating higher limits and optional coverages
  • Reflected in the assignment of deficiency points
  • Rated as a factor of the PFF or SFF
  • Loss costs

40
AgOP Support Materials
  • AAIS educational material, including rating
    Examples
  • Excel-based rating worksheet
  • Sample dec page format
  • IRMI Risk Report, December 2001

41
Additional Information
  • AAIS Contact
  • Rick Maka
  • AAIS Director of Marketing
  • 1745 South Naperville Road
  • Wheaton, IL 60187-8132
  • rickm_at_AAISonline
  • Tel. 800/564-2247, ext. 222
  • Fax 630/681-8356
  • Web www.AAISonline.com
Write a Comment
User Comments (0)
About PowerShow.com