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135 Cards in this Set
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- Back
- 3rd side (hint)
Indemnity |
Restoration to approximate previous financial condition no more no less |
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Violation of indemnity |
Collecting twice for one occurrence |
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Insurance |
An economic device used to protect against the risk of unforeseen and extraordinary financial loss |
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Reserve |
A pool of collective premiums at the insurer sets aside to pay claims |
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Premium |
A premium is a fee that insured pays in exchange for insurance coverage |
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Insurance policy |
A legal contract between the insurer and insured |
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Contract of adhesion |
Only one party dictates the terms while the other party simply agrees to them |
The insurer creates the contract not the insured |
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Utmost good faith |
Then sure agrees to pay in case of a loss the insured agrees to not conceal or misrepresent pertinent facts |
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Aliatory contract |
Elliotore contract means that neither party knows the future losses are when the event will occur. Other words it means being left up to chance |
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Insurances are unilateral |
Unilateral means that only one part of the party is obligated to pay in an event of an insured lost |
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Conditional contract |
The insurer only has to perform if certain conditions are met |
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D i c e |
Every insurance policy has a declaration page, insuring agreement,conditions and exclusions |
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Declaration page |
The deck page makes contract specific to the policyholder a general overview of the policy will include a details names of both parties insured and ensure policy number location of description of insured item value of ice insured item date and policy beginning and end amount and limit of coverage deductible and premium |
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Insuring agreement |
Where the insure and insured agree on what is covered in the coverage |
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Exclusion |
List of what the policy does not cover |
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Endorsements |
Auditions to the policy that can be added it modifies the coverage of the original contract it can add or subtract coverage |
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Certificate of insurance |
Includes basic details of the insurance policy and proof of coverage |
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Risk |
Risk is the potential for financial loss being exposed or open to damage of an insured item |
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Speculative risk |
It is not a covered loss it's when one person takes a chance in losing because there is no way of knowing whether the loss Will be beneficial or not |
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Pure risk |
Can be insured there's no chance of getting and no way to know whether there will be a loss or no loss |
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Hazard |
A condition that increases the likelihood or severity of a loss |
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Exposure |
Exposures the possibility of a loss |
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Peril |
The actual cause of loss or damage for example lightning fire flood or vandalism |
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Loss |
The value of an assured item is reduced by a peril. Also known as the amount paid out after a clean is settled. |
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Risk management |
Having a plan for how to deal with possible future losses |
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Actuary |
Is it professional who studies and measures risk |
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Risk avoidance |
Eliminates risk by not taking an action that involves risk |
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Risk reduction |
Taking measures to reduce the risk involved in actions also called risk mitigation |
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Risk transference |
Management of severe risk by transferring the risk to another party for example purchasing insurance |
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Risk retention |
Acknowledging the risk and preparing to handle unexpected losses that may occur |
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Comprehensive |
Damages done from out of your control example acts of nature |
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Collision |
Damages that you have done to your car for example hitting a pothole or driving into standing water |
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Parties |
First party is the name of the insured second party is insurance company the third party is the claimant or the TPC |
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Binder |
Temporary coverage for an insurance applicant until the policy is issued |
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Blanket insurance / blanket coverage |
Blankets more than one property, type of property, or coverage under a single limit |
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Specific limits |
Limits that apply to one specific type of property like jewelry |
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Representation |
A statement of fact |
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Misrepresentation |
A foster stored or deceitful statement of fact or opinion even if made unintentionally |
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Warranty |
Some of the conditions page it promises or guarantees that a certain conditions will be met |
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Concealment |
Deliberately withholding relevant information |
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Waiver |
Voluntarily surrender of Rights claims or privileges. Expressed waiver is a written or signed document. implied waiver assumes based on action. |
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Estoppel |
Legal principal that prevents an insurer from the nine coverage of the insured has reasonable come to believe that he has such coverage based on the insurance practice |
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Reformation of an insurance policy |
The correction of an insurance policy by Court to accurately Express the true nature of the agreement between the insurer and the insured |
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Hazards increased risk for the insurer |
Various types of hazards morale, moral, physical, and legal |
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Moral hazard |
results from policy holders deliberate decision and actions. (Immoral behavior) |
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Morale hazard |
Takes place with an insured acts differently because of the comfort the insurance protection provides (careless) |
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Physical hazard |
Physical conditions that increase the chance of loss |
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Legal hazard |
Increased chances of loss due to legal action example a legal system that favors those who file lawsuits for monetary gain |
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Fraud |
The act of deliberately altering or missrepresentation of the truth |
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Hard fraud |
Deliberately planning or faking a loss |
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Soft fraud |
Exaggerating a claim to inflate the indemnity |
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Insurance claim |
A demand for payment in accordance with the terms of an insurance policy |
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Claimant |
Someone who has filed a claim |
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First party claim |
A claim filed by the policy holder against his or her own insurance policy |
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Third party claim |
A claim filed against an insurance policy by anyone other than the person named on the policy |
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Five steps to claim process |
Filing a claim, acknowledgment, investigation, evaluation, and adjustment |
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Valuation |
The process of estimating one item is worth |
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Actual cash value |
Evaluation method that takes into account an items depreciation |
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Replacement cost |
A method of valuation based on the cost of replacing an item at current market price regardless of depreciation |
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depreciation |
An item estimated loss of value due to wear, tear, and age |
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Annual depreciation |
Replacement cost divided by the items useful life |
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Replacement cost |
Based on the replacement cost of the time of the loss generally have higher premiums |
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Replacement cost and principle of indemnity |
The insured cannot profit from a loss at times they sure will often pay the half amount and will pay the remainder after the replacement |
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Functional replacement cost |
Pizza place an outdated or absolutely item with functional equivalent item not an identical item |
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Obsolescence |
When something is no longer used or wanted despite being in good working order usually a result of a newer improved alternative |
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Valued policy also known as a agreed value or guaranteed value |
Evaluation method that assigns a set value to each insured |
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Stated amount / stated value |
Property value stated by the insured when applying for insurance |
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Partial lost |
When an insured property is only partially damaged and repair costs fall within the policy limit |
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Total loss |
When insured property is damaged so badly that is not worth repairing |
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Actual total loss |
When property is completely destroyed and unrepairable |
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Constructive total loss |
When the concert appearing damage property is higher than the property's current value |
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Deductibles |
The amount of policy holder must pay out of pocket before the insurer will pay for losses |
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Fix deductible |
A specific set amount insurer has to pay out of pocket |
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Percentage deductible |
The insured pays a percentage of insured risk value |
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Franchise deductible |
Policy kicks in only after the loss exceeds the predetermined amount |
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Coinsurance |
Encourages the ensure to purchase an adequate amount of coverage typically at least 80% of the property's value |
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Coinsurance penalty |
Underinsured when the home is insured for less than 80% of its value If a property is underinsured and sure will only cover a percentage of partial losses |
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Liability insurance |
Obligated according to law or equity; responsible for a loss |
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Negligence |
Feel it reuse a reasonable degree of care in a particular situation including both the wrongful acts and acts of omission |
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Vicarious liability |
The transfer of negligence from one part to another example if Johns negligent acts take place at work his employer is very curious reliable for his actions |
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Full liability |
The insured party is 100% at fault for damages to a third party |
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Partial liability |
Mission party is only partially at fault or shares fault with a third party the third party has some part in his own damages |
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No liability |
I'm sure party has 0% or no liability in the damages to a third party |
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Assumption of risk |
The claim and you have potential to experience damage or injury claim it will not be eligible for reimbursement |
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Contributory negligence |
Play the part in the negligence receives no indemnification |
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Comparative negligence |
And I just turned my seat to suggest to clean it was example 75% responsible and the policyholder was 25% responsible for damages |
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Modified comparative negligence |
If plaintiff is found to be 50% or more at fault they will not receive indemnification |
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Res ipsa loquitur |
It speaks for itself |
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Strict liability |
Holds a party 100% liable for damages |
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Dangerous instrumental doctrine |
Inherently dangerous activity doctor and holds a party strictly liable for damages caused during inherently dangerous activity |
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Single limit policy insurance |
Establishes one maximum payout for liability damages caused by the policyholders limit applied for each occurrence |
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Split limit liability insurance |
Establishes three different limits on how much the policy will pay up limit One Max payout for bodily injury for each person injured limits you max payout for bodily injury from multiple person limit three max payoff for property damage |
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Aggregate limit liability insurance |
Typically found a commercial liability policies establishes to liability limits number One max payout for damages or injury per occurrence limit to max amount the policy will pay per term |
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Statutory law |
Based on written laws ( state legislature) |
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Common law |
Based on Court decisions and customs when statutory law does not provide an answer |
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Tort law |
The body of law that addresses and provides remedies for any civil wrongdoing performed on another party |
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Tort |
Any civil wrongdoing weather intentional or unintentional |
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Intentional tort |
A premeditated act that causes injury to a third party |
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Negligent tort |
Negligent act that causes unintentional injury to third party |
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Compensatory damages |
Money awarded for tangible and intangible economic loss |
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Special damages |
Compensatory damages awarded for tangible losses with quantifiable value |
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General damage |
Compensatory damages are determined by the court and awarded for intangible emotional losses that are not quantifiable for example future losses mental English permanent injury loss of reputation pain and suffering future losses due to unemployment |
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Punitive damages |
Money awarded to punish egregious misconduct For intentional acts such as slander fraud violence oppression and recklessness not covered under liability insurance |
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Statute of limitations |
A law limiting the amount of time an injured party has to file a complaint after an occurrence |
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Discovery rule |
Statutes of limitations run from when an injury is or should have been discovered |
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Wrongful death act |
Law that defines the right of individuals who are associated with someone who has killed because of negligent act for example plaintiff May sue for damages such as loss of a companionship loss of income and pain and suffering |
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Sovereign immunity |
Lotto 6 people from suing governmental entities |
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Waiver of sovereign immunity |
Law that allows individuals to sue governmental entities for damages in certain cases |
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Automobile no fault laws |
Restriction individuals rights to sue the driver of a motorized vehicle |
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Steps of the claim process |
1.Acknowledge the claim 2.established lines of communication 3.prepared necessary paperwork 4.determine ensures liability in the claim 5.investigate the losses 6.determine the time and cost of repairs 7.apply all policy coverages and provisions 8 negotiate a settlement 9. prepare final reports |
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Proof of loss forms: |
Often due within 60 days |
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Why might an insurance send a claimant a reservation of Rights letter? |
To let the cleaning know that there is a coverage dispute |
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Evaluation step 1 |
Determine time and cost of repairs |
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Evaluation step 2 |
Apply policy coverages and provisions example of policy limits exclusions or penalties |
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Evaluation step 2 common settlement options |
1.to repair property 2. replace with like kind and quality 3.replace with new 4. pay fair value for damaged property |
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Dispute resolution |
Absolute last resort litigation should be last resort can be expensive and unpredictable this is when claims go to the court |
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Arbitration |
A legal technique used to settle disputes outside the court of law and arbitrator Is a neutral third party and a arbitrators decision is legally binding cost less to taxpayers then a court of law less formal atmosphere but allows more evidence arbitrators often have more expertise than juries. |
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Mediation |
Like arbitration uses a neutral third party mediators only advised in the negotiation a mediator's decision is not legally binding unlike arbitrators settlement is only legally binding of both parties agree to it either party may walk away (impasse) and then both parties will proceed to arbitration |
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Full release settlement |
Also called for release of all claims and settlement agreement. All damages paid at once. Most common settlement option. Insure pays immediate, single lump sum toclement. Claimant signs for release form that release isn't sure from additional claims. |
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Scheduled payment release / open-ended release |
Ensure grease to put all compensatory damages up to the point of settlement, insurers also pay for certain future incidental related to the claims, most commonly used in workers comp claims |
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Partial release stress payment and property damage/bodily injury pending |
Involves claims that have property damage and bodily injury ensure that modifies all property damages while it awaits the proper identification for bodily injuries |
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Advanced payment settlement |
Use the claimants damages are mostly bodily injury in the claimant is unable to work, it involves a series of partial payments that would be subtracted when the final settlement amount is determined, decreases chances of lawsuit. |
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No release settlement / Walk away settlement |
Ensure pays the bills submitted by the claimants signing and cashing check substitutes for the release form |
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Structured settlement |
Series of smaller payments over time, reserved for larger claims and sure often must pay portion up front |
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ISO |
Insurance services offices- national organization, produces standardized insurance forms for insurers to use, collect statistical data, provides reading information, works with State regulators on behalf of subscribing ensures. |
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AAIS |
American association of insurance services national organizations produce standardized insurance forms for insurers to use collect statistical data provide rating information work with State regulators on behalf of subscribing insurers |
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Monoline policy |
An insurance policy that covers only one risk or type of risk |
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Common fire exclusions |
Earthquakes,floods,war and acts of terrorism,nuclear hazards, governmental actions,intentional loss such as arson mutiny, or military action ordinance,or law |
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Property coverage |
Covers physical losses to the home and associated structures |
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Liability coverage |
Covers losses experienced by a third party for which of the policy holder is liable |
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Exclusions to homeowners property |
Ordinance or law, earth movement, water damage, off-premises power failure, neglect, war, nuclear hazard, intentional acts, mechanical breakdown |
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Texas HOA policies |
HOA policies are very basic homeowners policies, they provide actual cash value coverage on a name peril basis for your home and personal property |
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Texas HOA amended |
Very similar to the HOA policy provides actual cash value for home and personal possessions on a name peril basis only but it expands coverage by protecting against a broader array apparels. |
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Texas hob homeowners policy |
The hob policy is the most popular policy issued in Texas it provides a thorough range of protection and replacement cost coverage for dwellings offers open perils for coverage aidwelling and named peril coverage for coverage b personal property |
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Dwelling policy |
Single family homes, wonderful unit dwellings, dwellings know more than five occupants, mobile homes is permanently installed, incidental business risk if Ensure allows. |
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