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

2. Property/Casualty Insurance
Types of policies :
Fire policies
Renter’s policies
Homeowner’s 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 tenant’s property.
Examples:
Apartment
Condo
Office building

6. Renter’s Insurance Covered under Homeowner’s 4 Form
Person who rents real estate from another but has personal contents on premise carries renter’s insurance to insure:
personal contents
against liability risk
Insurable Interest law applies. A person can only insure his own property, not another’s property.

7. Renter’s Insurance Protection includes: Examples:
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 child’s skate left on steps and sues tenant for negligence

8. Homeowner’s 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. Homeowner’s (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. Homeowner’s 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. Lloyd’s of London *Supplemental*
An insurance company that covers unique property and liability risks that are difficult to insure.
Examples:
An opera singer’s vocal chords
Life insurance on insured with extremely risky occupations
Comprehensive and collision auto insurance on drivers with numerous tickets and accidents.