Chapter 7: Dwelling Insurance
Terms in this set (53)
Provides protection for individuals and families against loss and their dwelling and personal property.
Difference between homeowners and dwelling.
The dwelling property provides more limited property coverage. The unendorsed dwelling policy provides property coverage only, while the homeowners policy provides a package of property and liability coverages.
3 Different Dwelling Policy Forms
1. The basic form
2. The broad form
3.The special form
DP-1 and DP 00 01
Basic Dwelling policy. Provides Coverage A-dwelling, Coverage B-other structures, Coverage C- personal property, Coverage D- fair rental value . Insured does not need to purchase each one.
Coverage A- Dwelling
Covers dwelling, structures attached to the dwelling, materials and supplies for use in the construction or repair of the dwelling or other structures at the location, and building and outdoor equipment used to service the premises.
Coverage B- Other Structures
Includes buildings on the premises that are separated from the dwelling by a clear space or connected only by a fence, utility line, or similar connection. Building may not be used for comercial, maufacturing or farming purposes.
Coverage C: Personal Property
Covers insured's personal property that is at the described location and is usual to the dwelling occupancy. Personal Property belonging to guests or servants may be covered at insureds request.
Items under personal property that are not covered
Money, securities, manuscripts, buillion, currency, accounts, deeds and evidences of debt. Bank notes, coins, gold other than goldware, letters of credit, medals, personal records, platinum, silver other than silverware, tickets and stamps, books of accounts, drawings, other paper records, electronic data processing tapes, wires, records, discs and other software media. Credit cards and fund transfer cards, animals birds, fish, aircraft, motor vehicles.
The amount of insurance that applies is divided between the described location and the new location, according to the proportion of property at each location .
Coverage D-Fair Rental Value
Available if a covered property loss to the dwelling or other structure makes the building uninhabital and teh insured cannot collect the rent he would have been able to receive if the loss had not occurred.
The basic form covers the following perils
Fire, Lightening, Internal Explosion
Extended coverage Perils
Insured may opt to be covered by these. Already printed in the DP-1 form. Riot,Smoke, Hail, Aircraft, Windstorm, Explosion, Vehicles, Civil Commotion, Volcanic Eruption.
Release of soot, smoke, vapor, or fumes from a furnace, boiler or similar equipment.
Vandalism and malicious mischief, must be purchased in conjuction with the extended coverage perils. Does not cover, damage to glass parts of the building other than glass building blocks, losses by theft, or vandalism to a building that has been vacant for more than 60 consecutive days.
Provides that upto 10% of the coverage A limit may be used to cover losses to other structures. "appurtenant structures"
Pays for the expense of removing debris resulting from a loss that is covered by the policy
Covers loss to property that occurs while the property is being removed to protect it from a covered peril. In base form property removed is covered for five days.
Pays for the reasonable costs to make necessary repairs to protect property from further damage folowing a covered loss.
Improvements, Alterations and additions
Provides coverage for insureds who are tenants for improvements or alterations to the dwelling made at the tenant's expense. Upto 10% of the coverage C limit is available for this expense.
Fire Department Service Charge
Pays upto $500 for fire department charges incurred when the fire department is called to save or protect covered property from a peril insured against. No deductible applies to this coverage.
Provides 10% of the coverage C limit for personal property while it is located anywhere in the world. Clothing that an insured takes on vacation.
Provides 20% of the Coverage A limit for loss of fair rental value, payable at 1/2 of the 20% limit for each month the described location is unfit fot its normal use.
Conditions of the dwelling policy
1. Loss settlement
2. Our option
4. Pair or set
5. Loss Payment
6. Other Insurance
7. Recovered Property
The covered property losses are valued at actual cash value but are not to exceed the amount necessary to repair or replace.
Gives the insurer the right to repair or replace damaged property with material of like kind and wuality within 30 days of receiving insured's statement of loss.
Only the amount of loss over the deductible will be paid, upto the limit of liability.
Pair or Set
Not obligated to pay value of entire set, may either repair or replace part of the set or pay the difference between the actual cash value of the property before and after the loss.
Loss will be paid within thirty days after reaching an agreement with the insured.
If loss is covered by other insurance company. The insurance will pay only its proportion of the loss.
If the insurer or insured recovers property on which the insurer has made loss payment the other party must be notified. The insured may have the property returned, in which case the loss payment will be adjusted or allow the company to have it.
Broad Form DP-2 DP 00 02
Named peril that lists the perils that dwellings, other structures, and personal property are insured against. Automatically covers all of the standard and optional perils in the basic form.
Adds, damage to covered property caused by burglars, weight of ice, snow or sleet (excludes awnings, fences, patios, pavement, swimming pools, foundations, retaining walls), falling objects, freezing of plumbing, heating, or air conditioning, sudden and accidental tearing apart, cracking, or burning of steam, hot water heating, sudden and accidental damage from artificially generated electrical current, accidental discharge of water ir steam
2 Perils Extended under the Broad Form
Vehicle peril, and smoke peril
Covers damage to fences, driveways and walks when the vehicle is driven by someone who is not a resident of the insured's houseold. It also covers damage to other types of property when the vehicle is driven the insured, or resident of insured's home.
Includes loss caused by fireplace smoke
Special Form DP-3 DP 00 03
Provides an open peril coverage on the dwelling and other structures, insuring against all risks of direct physical loss that are not specifically excluded in the policy. Personal property is covered on a named peril basis- the same perils listed in the DP-2.
The Special Form excludes these under Coverages A & B
All property losses and perils not covered due to limitations of the general exclusions and the insuring agreement. Any loss involving collapse other than what is provided in the other coverages section. Freezing of plmbing, heating, air conditioning or automatic fire protective sprinkler system or household appliance, or overflow due to freezing, unless reasonable care was taken.
Special Form excludes Continued
Freezing, thawing or pressure or weight of water or ice on fences, pavements, patios, etc... theft to dwelling under construction, damage by wind, hail, ice to outdoor radios, antenas, vandalism, malicious mischief, theft, if vacant for more than 60 days, constant or repeated seepage or leakage, gradual and expected losses such as wear and tear, deterioration, mechanical breakdown, smog, rust, seepage of smoke, vapor, soot, fumes, acids, crackage of foundations, walls, floors, roofs, loss caused by birds vermon insects.
All three dwelling forms provide these basic coverages
D-Fair Rental Value
DP-2 and Dp-3 include this coverage
Coverage E- additional living expense. Pays for additional living expenes the insured incurs after a covered loss, including reasonable motel, dining, laundry and transportation expense. Payments are limited to a mximum of two weeks.
DP-2 and DP-3 include some other coverages not contained in DP-1
Trees shrubs and other plants, collapse, glass or safet glazing materials, ordinance or law
Trees shrubs and other plants
Pays upto 5% of the coverage A limit for damage to trees, shrubs, plants or lawns caused by a specified list of perils. No more than $500 to any one tree, shrub or plant
Pays for the collapse of the dwelling caused by a specified list of perils. Must include the building or part of the building falling down or caving in, after which the building or part of the building cannot be occupied.
Glass or Safety glazing material
Pays for breakage of glass or safety glazing material and damage to covered property caused by glass breakage.
Ordinance or law
Allows payment of upto 10% of Covereage A. A limit of liability for the increased cost repair or rebuild a dwelling or other structure to conform with applicable building and land codes.
DP-2 and DP-3 settle PP losses this way
Actual Cash Value
2 & 3 settle dwelling losses this way
Replacement cost basis with not deduction for depreciation as long as the insured carries insurance equal to 80% or more of the full replacement cost of the building at the time of loss. If not the insured will be paid the larger of the acutal cash value of the loss, or proportion of the replacement cost.
Proportional Replacement Cost
Calculated by dividing the amount of insurance the insured carries by the amount he is required to carry to qualify for replacement coverage. Then it is multiplied by the amount of the loss.
Broad Theft coverage Endorsement
Adds coverage for theft of personal property to the dwelling policy. $200 for money, coins, precious metals. $1,500 for securities/manuscripts. $1,500 for watercraft, $1,500 for trailors not used with waer equipment, $1,500 for jewelry, watches, fur, precious and semi-precious stones. $2,500 for firearms, $2,500 for silverware, goldwareor pewterware.
Coverage L- Personal Liability & Medical Payments to Others
Provides coverages for damages that the insured becomes legally obligated to pay because of an occurance to which the coverage applies that causes bodily injury or property damage. Policy Limit is $100,000
Coverage M-Medical Payments to Others
Pay all necessary medical expenses incurred within three years of an accident that causes bodily injury. On the insured's location with permission, off of the lcoation if the injury rises out of a condition. caused by animal of insured care, or due to activites of the insured $1,000 per person
Automatic Increase in Insrance
Provides an annual increase in Coverage A of 4%, 6%, 8%
Dwelling under construction
Available limit increases as the construction of the home progresses.
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