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Terms in this set (83)

\Any intentional injuries or damage to the property are specifically excluded from Personal auto policy (PAP).•

Any damage to the property owned or being transported by the insured is not covered in the liability coverage.•

The damage to the property rented or used by the insured or in the care of the insured is not covered PAP. However, when insured is rented in a home then the damage to the property of the home is covered in PAP.•

Bodily injuries to an employee of insured during the course of employment are excluded. However, the workers compensation law protects the insured from the loss. If daily labor is injured during work at insured's place and the worker compensation is not available then the insured is covered under PAP.•

If the insured makes use of the vehicle for hire to the general public. The liability arising out of the operation of vehicle or ownership is excluded from PAP.•

Liability arising out of operation of vehicle in the auto business is excluded. The auto business refers to repairing, servicing, selling, parking, testing and delivery. The intention of the exclusion is to cover the liability under auto repair firm's firm insurance• PAP excluded the liability coverage to any vehicle maintained or used in any other business. The intention of the exclusion is to exclude liability coverage for commercial vehicles.•

Liability arising out of using a vehicle without reasonable belief of permission of the insured is excluded in PAP liability coverage. However the exclusion does not apply to family members of the insured.•

PAP excludes the liability of insured who is covered under special nuclear energy contract.• The liability coverage excludes the vehicle that has less than four wheels or designed for use mainly off public roads. Thus, motorcycles, mopeds etc. are excluded.•

For the vehicle furnished or made available for the insured's regular use or by any family member of the insured the liability coverage is not covered.• Liability coverage does not apply to the racing vehicle.
• Concurrent Causation Losses:Concurrent causation losses means that losses which occurs due to the two perils concurrently or in any sequence. These entire losses are excluded from the claim.•

Ordinance or Law:This policy excludes the loss occurred due to ordinance or law. However, if the loss is covered under the additional coverages, higher amounts can be claimed as per the policy.•

Earth Movement:Damages caused due to the earthquake, shock waves etc are excluded from claiming the loss. However, if there is a direct loss like fire, explosion or theft etc are covered.•

Water Damage:Property damage that occurs due to the water are excluded under this policy.•

Power failure:This policy does not cover the losses which occur due to the power failure or other service failures. However, if the failure is due to the natural disaster like thunder or lightning there is coverage.•

Negligence:If the loss occurs due to the insurer's negligence, there is no coverage under the policy.•

War:Damages caused due to the war are specifically excluded.•

Nuclear Hazard:The accidental loss due to the nuclear hazard does not cover under the policy

.• Intentional Loss:If the insurer makes the property loss with an intention for the insurance it is excluded under the coverage.•

Governmental Actions:Actions taken by the government or change of law and regulations does not cover under the coverage.•

Faulty and defective planning or designs• Loss due to weather conditions are excluded.
• Section II of the homeowner's policy protects the insured from legal liability arising out of their personal acts.• The Section II of the homeowners policy covers the following two coverages:• Coverage E: Personal liability, $ 100,000 per occurrence.• Coverage F: Medical payments to other, $ 1000 per person.Under section II of the homeowner's policy medical payments to others (Coverage F) is explained as follows:• Medical payments to others coverage is a mini- accident policy.• A medical payment to others is not based on legal liability or negligence.• The reasonable medical expenses of other person who is accidently injured at insured premises or by the activities of an insured, resident employee or by an animal owned by or by in the care of an insured are paid by the insurer.• The insurer pays for the necessary medical expenses ascertained within 3 years from the date of accident.• The medical expenses covered are the reasonable charges for medical and surgical procedures , X-rays, dental care, ambulances, hospital stays, professional nursing, prosthetic devices and funeral services.• Medical payments coverage does not apply to insured or to the regular residents in household, other than a residence employee.Under section II of the homeowners policy the people covered for medical payments to others (Coverage F) are as follows:• The people covered in the policy are only others i.e. outsiders who are not residents of the insured. • The coverage F does not apply to insured person or to the regular household of the insured.• The Medical payments to others (Coverage F) apply and pay to the residence employee like babysitter if injured at insured premises.• A person injured at insured location with the permission of an insured.• A person bodily injured off the insured location• Immediately adjoining.• By the activities of an insured.• By a residence employee.• By any animal owned by or in the care of an insured.
Section II homeowners policy coverages contain many exclusions. Some exclusion applies to both personal liability (Coverage E) and medical payments to others (Coverage F). Some exclusion apply separately to Coverage E and Coverage F. The following exclusions apply to both Coverage E and Coverage F :• Motor Vehicle Liability: The liability arising out by the use of cars. Trucks, mopeds, motorcycles are not covered in Section II homeowners policy.• Watercraft liability: The boats used in an organized race or speed contest, rented to others, used as a cargo for fee or used for any business purpose are excluded in Section II coverages.• Aircraft Liability: This liability is excluded from Section II coverages. Aircrafts which are designed to carry people, flight such as helicopter, airplanes, hot balloons, and glider are excluded.• Hovercraft Liability: Section II coverages exclude hovercraft liability. A Hovercraft is defined as a self-propelled motorized vehicle.• Expected or Intentional Injury: The Section II homeowner's policy coverages do not apply if the bodily injury or property damage is expected or intended by an insured.• Business Activities:• Professional services: Section II coverages exclude legal liability raised out of professionals failing to render their services. Some examples of professional services are accountants, architects, engineers, physicians etc.• Uninsured Locations: Section II coverages exclude liability arising out of the premises of insured.• War: Section II homeowner's policy excludes liability arising out of discharge of nuclear weapons even if accidentally.• Communicable Disease exclusion: Section II Coverages exclude the liability arising out of the transmission of communicable disease by insured.• Controlled substance exclusion: Section II Coverages exclude the liability arising out of use, sale, manufacture, transfer, deliver. Exclusions that apply to coverage E :• Contractual liability :• Property owned by an insured.• Property in care of an insured.• Workers compensation.• Nuclear energy.• Bodily injury to an insured. Exclusions that apply to coverage F :• Any bodily injury to a residence employee off an insured location.• Workers compensation.• Nuclear energy• Any bodily injury or property damage to the persons regularly residing on the insured location.
Suggestions for buying a homeowner's policy :
Carry adequate Insurance :

• First suggestion is to carry adequate amounts of property insurance on both home and personal property.• Consideration of adequate amount of insurance is important if property is substantially increased.• The property should be insured for at least 80 percent to avoid penalty if partial loss is occurred.• It is always good to insure the home to 100 percent.

• Add Necessary Endorsements:• It is better to add necessary endorsements to the insurance policy depending on the needs, local property conditions or high values for certain property.• There are many endorsements like Earthquake endorsement, Inflation guard endorsement, personal property replacement endorsement.

• Shop around for a Homeowners policy:• Consider price variation among insurers, policy premium can be reduced by shopping around for homeowner's policy.• The information about insurers is known through internet source.

A Higher property insurance deductible should be considered: • The premium can be reduced by purchasing higher deductible property insurance.• The standard homeowner's deductible is $ 500.• The premium can be reduced by 20 to 30 percent when the policy amount is doubled the standard deductible. Take advantage of discounts:
• Usually insurers provide discounts to attract customers.• It is better to inquire the discounts when shopping homeowner's policy, because it can reduce premium.• Insurers offer wide variations of discounts based on many factors home, fire etc.

Don't ignore the perils of flood and earthquake:
• Floods and earthquakes are specifically excluded in homeowner's policy.• However, homeowner's policy includes hurricanes, tornadoes, windstorms and fire accidents.• Flood insurance and earthquake endorsement can be added to homeowner's policy.• People residing in flood or earthquake zone should seriously insure the home and personal property to avoid financial risk when there is flood or earthquake.

improve your credit record : • It is a suggestion to maintain good credit record to the insured.• Insurers consider applicant's credit record and insurance score for the purpose of rating.• Applicants with good credit record can purchase homeowners policy with lesser amount.• A good credit record applicant can also get low interest loans, credit cards etc.

Purchasing a personal umbrella policy to be considered:
• An additional amount of $ 1 Million to 10 Million of liability insurance can be covered in personal umbrella policy even after the underlying coverage is exhausted.• It also covers liability arising out of personal injury.• The homeowner's policy does not cover personal injury without endorsement.• A personal umbrella policy provides insurance on cars, boats and recreational vehicles.i
Personal Umbrella Policy - It is the type of insurance policy that provides coverage above and below liability coverage amount in a standard insurance policy. It provides protection against a catastrophic lawsuit or judgment. It provides basic coverage in different types of liability coverage including home, boat and tenant policies. This policy provides broader coverage i.e. it covers all the claims that ae not covered under standard policy. That is is also known as excess liability insurance policy.
The basic characteristics of personal umbrella

• Excess liability insurance - The policy provides excess liability coverage over underlying insurance contracts that apply. The excess coverage is provided in three ways:
• It provides higher limits with a combined blanket single limit over other existing liability policies.
• The insurer is required to pay only the certain amount of on the underlying contracts.
• It provides automatic replacement of existing coverages which have been paid out due to losses.

• Indemnity - indemnity policy as it protect the insurer with a wide variety of losses for which the insurer is legally liable.

• Broad coverage - The policy provides broader coverage of personal liability loss exposures. It covers bodily injury, property damage liability as well as personal injury. It covers all that claims that are not covered under auto and home insurance.

• Self-insured retention - applied to the losses covered by the umbrella policy but not to any underlying contract. The self-insured retention is basically $250 but can be higher.

• Reasonable cost - The actual cost depends on several variables like number of cars, boats and motorcycles to be covered. Generally, the annual premium for $1 million policy is less than $350.
Thus, the personal umbrella policy covers liability judgments that exceeds the limits of auto and homeowners' policy and includes protection against all losses that are not covered by the underlying contracts.