C12 Property Insurance

Front 1

How is the rate of premium calculated for fire insurance policies?

Back 1

Rates vary between properties & Insureds according to several characteristics.
-Public/Private fire protection
-Occupancy
-Construction & - Susceptibility.

Front 2

How has public fire protection changed premiums charged to Insureds?

Back 2

A fire is more likely to be extinguished before it destroys property completely, than it would in a small community.

Front 3

How does the construction of a building affect the premium charged to Insureds?

Back 3

Buildings constructed of combustible material (frame) attract higher rates than a buildings constructed mainly/completely of non combustible material (concrete block)

Front 4

Describe the 4 different ways a deductible may be applied.

Back 4

1. Separate Items - applied separately to the amount recoverable under each item.
2. Occurance Basis - subtracted from the total amount of loss/damage arising from single event.
3. Loss above threshold - no loss paid below specific amount, anything over that amount paid in full.
4. Specific amount beyond which no deductible applies.

Front 5

What is the purpose of Co-Insurance?

Back 5

Obliges the Insured to maintain a specified minimum amount of Insurance in relation to the value of the property Insured.

Front 6

Describe the Co-Insurance formula.

Back 6

amount of Insurance carried divided by the minimum amount of Insurance required times the amount of the loss = Amount recoverable by Insured.

Front 7

Why is it important for Insureds to consider the effect of inflation on property values when deciding how much insurance to buy?

Back 7

they may discover they are under insured at the time of a partial loss and incur a coinsurance penalty.

Front 8

Why do property policies often include a waiver of coinsurance for small losses?

Back 8

to nullify the coinsurance clause for losses exceeding neither 2% of the amount of insurance nor $5K.
Applies separately to each item.

Front 9

What is the difference between the Stated amount Coinsurance clause and the standard co Insurance Clause?

Back 9

The difference is that the coinsurance requirements on a Stated Amount coinsurance are specified in dollars rather then as a percentage of the ACV found in the standard co insurance clause.

Front 10

When does the Stated Amount clause usually expire, relative to the policy, why?

Back 10

The Stated amount clause expires independently of the policy, usually three months later.
This gives the Insured 3 months after renewing to confirm values for the renewal terms.

Front 11

Describe the circumstances in which an average distribution clause might replace a Coinsurance clause.

Back 11

In such operations as manufacturing or processing when goods move from one building to another and the total value remains fairly constant.

Front 12

How Does a deferred payment clause affect an insured in the case of loss of a building?

Back 12

The Insured is indemnified for only a portion of the total loss to a building at the time of loss. The remainder of the loss payment is deferred until the insured repairs or replaces the building.