1. Property Insurance Section 35.3

2. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection What You’ll Learn How to identify what kinds of loss are covered by homeowner’s insurance and fire insurance (pp. 762 & 763)

3. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection What You’ll Learn How to calculate the amounts recoverable by homeowners under coinsurance clauses (p. 763) How to describe the coverage of marine insurance (p. 765)

4. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Why It’s Important Understanding property insurance will help you protect your property at the lowest cost.

5. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Legal Terms property insurance (p. 762) binder (p. 762) floater policy (p. 762) homeowner’s insurance (p. 762) renter’s insurance (p.762)

6. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Legal Terms fire insurance (p. 763) coinsurance (p. 763) ocean marine insurance (p. 765) inland marine insurance (p. 765)

7. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Property Insurance Homeowner’s and Renter’s Insurance Fire Insurance Section Outline

8. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Coinsurance Clauses Marine Insurance Section Outline

9. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Pre-Learning Question What is property insurance?

10. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Property Insurance Property insurance is a contract in which the insurer promises, for a stated premium, to pay you a sum of money if a particular piece of real or personal property is damaged or destroyed.

11. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Property Insurance The policy becomes effective as soon as the insurer accepts your application, or even sooner if a binder is issued. A binder gives you temporary protection until a policy is issued.

12. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Property Insurance A floater policy is one that insures property that cannot be covered by specific insurance because it is constantly changing in value or location.

13. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Property Insurance A personal property floater, for example, can cover a bicycle or laptop computer, no matter where the items are located.

14. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Pre-Learning Question What does homeowner’s and renter’s insurance cover?

15. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Homeowner’s and Renter’s Insurance Homeowner’s insurance protects against most types of losses and liabilities related to home ownership.

16. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Homeowner’s Insurance Covers firewindstormvandalismburglary injuries suffered by other persons while on the property

17. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Homeowner’s Insurance Covers With certain limitations, homeowner’s policies cover your personal property anywhere in the world.

18. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Homeowner’s and Renter’s Insurance Renter’s insurance protects you against loss of personal property, liability for a visitor’s personal injury, and liability for negligent destruction of the rented premises.

19. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Pre-Learning Question What does fire insurance cover?

20. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Fire Insurance Fire insurance covers loss resulting directly from an unfriendly or hostile fire.

21. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Fire Insurance Damages that result from trying to put out a fire, or from theft or breakage while attempting to remove insured goods to a safe location are considered directly related to the fire and are usually covered.

22. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Pre-Learning Question What is coinsurance?

23. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Coinsurance Clauses Coinsurance is a provision in an insurance policy that limits your liability for a loss if the property is not insured for its full replacement value.

24. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Coinsurance Clauses For example, if your insurance policy has an 80 percent coinsurance clause, your house must be insured for 80 percent of its replacement value to receive full reimbursement for a loss.

25. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection 35.3 Coinsurance Clauses COINSURANCE CLAUSE “The insurance company will pay that part of a loss that the insurance carrier bears to 80 percent of the replacement cost of the building.” It would cost $100,000 to replace Zelia’s house. If she insured it for $60,000, the insurance company would pay only three-fourths of any loss, computed as follows: $60,000$60,0003 80% of $100,000$80,0004 80% of $100,000$80,0004 A fire partially destroys the building, causing $40,000 worth of damage. Because of the coinsurance clause, Zelia would recover $30,000 (3/4 of the loss) from the insurance company.

26. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Pre-Learning Question What does marine insurance cover?

27. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Marine Insurance Marine insurance is one of the oldest kinds of insurance coverage, dating back to Venetian traders who sailed the Mediterranean Sea.

28. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Marine Insurance Ocean marine insurance covers ships at sea. Inland marine insurance covers goods that are moved by land carriers such as trains, trucks, and airplanes.

29. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Name the insurance being described. 1._____ insurance protects you from financial loss if real or personal property is destroyed or damaged. 2._____ insurance covers ships at sea

30. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection ANSWER 1.Property. 2.Ocean marine.

31. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Name the insurance being described. 3._____ insurance covers goods that are moved by land. 4._____ insurance protects you from losses and liabilities related to home ownership.

32. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection ANSWER 3.Inland marine. 4.Homeowner’s.

33. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned 1. 1.What types of losses are covered by homeowner’s insurance? Fire insurance? Section 35.3 Assessment

34. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned Homeowner’s insurance covers losses from fire, windstorm, vandalism, burglary, and injuries suffered by other persons while on the property. Section 35.3 Assessment Answer

35. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned With certain limitations, homeowner’s policies cover personal property owned by the insured anywhere in the world. Fire insurance covers loss resulting directly from an unfriendly or hostile fire. Section 35.3 Assessment Answer

36. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned 2. 2.What is a coinsurance clause? What does it mean if your policy has an 80 percent coinsurance clause? Section 35.3 Assessment

37. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned Coinsurance is a provision in an insurance policy that limits the insurer’s liability for a loss if the property is not insured for its full replacement value. Section 35.3 Assessment Answer

38. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned If your policy has an 80 percent coinsurance clause, your house must be insured for 80 percent of its replacement value to receive full reimbursement for a loss. Section 35.3 Assessment Answer

39. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned 3. 3.Explain marine insurance coverage. Section 35.3 Assessment

40. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Reviewing What You Learned Ocean marine insurance covers ships at sea. Inland marine insurance covers goods that are moved by land carriers such as rail, truck, and airplane. Section 35.3 Assessment Answer

41. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Critical Thinking Activity Renter’s Insurance If you decide to go away to college, you will probably rent a dorm room or an apartment. Should you buy renter’s insurance? Why or why not?

42. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Critical Thinking Activity Answer Renter’s Insurance Answers may vary but should explain the purpose of renter’s insurance.

43. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Legal Skills in Action Insurance Coverage Lois and Ed carry homeowner’s and fire insurance. One day, they put a small pizza in their toaster oven and went outside to chat with neighbors.

44. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Legal Skills in Action Insurance Coverage They forgot about the pizza, which caused a fire in the kitchen. The kitchen was destroyed and the rest of the house was damaged by smoke and ash.

45. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Legal Skills in Action Insurance Coverage With a partner, debate whether Lois and Ed’s loss will be covered by either policy.

46. Understanding Business and Personal Law Property Insurance Section 35.3 Insurance Protection Section 35.3 Assessment Legal Skills in Action Answer Insurance Coverage Debates will vary but should include that homeowner’s insurance protects against most types of losses and liabilities related to home ownership, including fire.

47. Property Insurance End of Section 35.3