Objective 08.02 Interpret the nature, theory, and different types of insurance - PowerPoint PPT Presentation

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Objective 08.02 Interpret the nature, theory, and different types of insurance

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Objective 08.02 Interpret the nature, theory, and different types of insurance PROPERTY AND CASUALTY & OTHER INSURANCES Property/Casualty Insurance Types of policies ... – PowerPoint PPT presentation

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Title: Objective 08.02 Interpret the nature, theory, and different types of insurance


1
Objective 08.02 Interpret the nature, theory, and
different types of insurance
  • PROPERTY AND CASUALTY
  • OTHER INSURANCES

2
Property/Casualty Insurance
  • Types of policies
  • Fire policies
  • Renters policies
  • Homeowners policies
  • Supplemental - marine insurance

3
Property and Casualty Insurance
  • Covers both individual and business property such
    as
  • Real Property Houses, apartments, condos, office
    buildings and other structures
  • Personal property Jewelry, furniture, clothing,
    equipment, artwork and other valuables

4
Fire Policy
  • A very basic policy covering loss resulting
    directly or proximately from an unfriendly fire.
  • Unfriendly or hostile fire is uncontrollable or
    has escaped from the place where it should be.
  • A friendly fire is a bonfire, furnace fire, fire
    in a fireplace unless it gets out of control.

5
Fire Policy
  • Owner of property rented to others protects
    investment in structure with a fire policy. Owner
    has insurable interest in the property, but not
    in tenants property.
  • Examples
  • Apartment
  • Condo
  • Office building

6
Renters Insurance
  • Covered under Homeowners 4 Form
  • Person who rents real estate from another but has
    personal contents on premise carries renters
    insurance to insure
  • personal contents
  • against liability risk
  • Insurable Interest law applies. A person can
    only insure his own property, not anothers
    property.

7
Renters Insurance
  • Protection includes
  • Personal contents of tenant in an apartment,
    condo, mobile home or house
  • Personal liability if others sue tenant for
    injuries
  • Examples
  • Lightning strikes and damages TV owned by tenant
  • Neighbor breaks leg when he steps on childs
    skate left on steps and sues tenant for negligence

8
Homeowners Policy
  • Provides coverage for
  • Home - Primary structure
  • Personal property - Contents
  • Related structures Outbuildings, if any
  • Loss of Use - Living expenses if insured can not
    live there due to covered damage
  • Premise personal liability for injuries to
    others who were on your property

9
Homeowners (HO) Policy
  • Riders may extend policy for additional coverage
    for items such as
  • Boats
  • Jewelry
  • Furs
  • Artworks
  • Antiques
  • And other special collectibles owned by a
    homeowner

10
Homeowners Insurance
  • Must own home to carry policy forms
  • HO-1 Basic - covers limited perils
  • HO-2 Broad covers extended perils
  • HO-3 Special - covers most perils with specified
    exclusions
  • HO-6 Condominium Owners coverage like an HO-3,
    but for homes with common walls
  • Peril a cause of loss

11
Co-insurance
  • Homeowners policies require the insured to carry
    a minimum of 80 of the value of the home (called
    co-insurance) to get full reimbursement for a
    claim made.
  • Most claims are partial losses leading
    policyholders to insure a home for less than
    value since risk of total loss is low.

12
Cost Factors of Property Insurance
  • Limit of coverage for property
  • Location of property fire district, city,
    county, state
  • Structural material - brick, block, frame
  • Previous claims filed
  • Company

13
FLOOD EARTHQUAKE
  • NOT COVERED UNDER HO POLICY
  • Must buy separate flood insurance coverage
  • Must buy separate earthquake coverage

14
Co-Insurance Clause Supplemental
  • In property insurance, there is a high
    probability of a partial loss claim. The
    insurance policy requires actual value of
    property be insured.
  • Co-insurance requires an insured to cover a
    minimum of 80 of the value of the property
  • If less than 80, the claim amount is reduced at
    the time of payment.
  • Example Insuring a 100,000 home for 50,000
    because the premium is cheaper and chances are
    there will ever be a total loss.

15
Marine Insurance Supplemental
  • Covers property exposed to perils of sea
    transport
  • The vessel
  • The cargo
  • Other property
  • Liability for the vessel
  • One of first types of insurance covering ancient
    traders in the Mediterranean Sea.
  • The term underwriter coined from the process of
    insuring the ships and cargo.

16
Inland Marine Supplemental
  • Covers personal property that is being transport
    over land
  • Transportation methods include
  • TRUCK
  • TRAIN
  • AIRPLANE
  • Also covers property such as jewelry, furs, fine
    arts, musical instrument etc wherever located and
    during their transport.

17
Fidelity and Surety Bonds Supplemental
  • An insurance policy against a financial loss due
    to dishonesty
  • Pays the employer money in the case of theft by
    employees
  • Guarantees the honesty of employees who
  • Handle large sums of money
  • Have access to customers money or assets
  • Example A company that cleans offices after
    hours might have a fidelity bond.

18
Lloyds of London Supplemental
  • An insurance company that covers unique property
    and liability risks that are difficult to insure.
  • Examples
  • An opera singers vocal chords
  • Life insurance on insured with extremely risky
    occupations
  • Comprehensive and collision auto insurance on
    drivers with numerous tickets and accidents.
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