Week 2 for Property and Casualty Insurance
Week 2 for Property and Casualty Insurance INS 3203
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This 2 page Class Notes was uploaded by Whitney Smith on Wednesday February 3, 2016. The Class Notes belongs to INS 3203 at Mississippi State University taught by Priscilla King in Winter 2016. Since its upload, it has received 29 views. For similar materials see Property and Casualty Insurance in Economcs at Mississippi State University.
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Date Created: 02/03/16
Assignment 2 Property and Casualty INS 1. What, other than the building itself, does BPP Building coverage include? a. The building definition includes completed additions, fixtures, and permanently installed machinery and equipment; personal property used to maintain or service the building or structure; and additions under construction, including materials, supplies, and temporary structures on or within 100 feet of the described premises. 2. What three general categories of property (corresponding to the three coverage agreements) does the Building and Personal Property Coverage Form (BPP) cover? a. The BPP covers building, Your Business Personal Property, and Personal Property of Others. 3. In addition to business personal property owned by the named insured, what else does Your Business Personal Property include? a. Labor, materials, or services furnished by the insured on personal property of others; the insured's use interest in improvements and betterments; and leased personal property that the insured has a contractual duty to insure. 4. HighRise Company owns an apartment building. HighRise insures its property under a BPP covering only the "building" (as defined in the BPP). Indicate whether each of the following items of property is covered under HighRise Company's BPP. a. Equipment owned by HighRise and used to clean and maintain the building i. Covered b. Improvements and betterments made by a tenant i. Not covered c. Furniture owned by HighRise and located in several furnished apartments in the building i. Covered d. New plumbing fixtures owned by HighRise and kept on the premises awaiting installation in the building i. Covered 5. What items that might otherwise be considered building property does the BPP exclude? a. The BPP excludes land; water; bridges; roadways, walks, patios, etc.; retaining walls that are not part of a building; bulkheads, pilings, piers, wharves, and docks; the cost of excavations, grading, back filling, or filling; and contraband. (Various exceptions allow coverage under some circumstances for some of the types of property listed above.) 6. What general categories of personal property does the BPP exclude? a. Outdoor property of various kinds; money and securities and similar property; vehicles, watercraft, and aircraft; animals; property more specifically described in the same policy Assignment 2 Property and Casualty INS or another policy; airborne or waterborne property; and contraband. (Various exceptions allow coverage under some circumstances for some of the types of property listed above.) 7. Summarize the coverage provided by the BPP for each of the following types of personal property. a. Vehicles or selfpropelled machines. i. The BPP covers unlicensed vehicles that the insured uses mainly on the insured's own premises, such as an unlicensed truck used to move goods around a yard. the BPP also covers vehicles that the insured manufactures, processes, or warehouses; and vehicles, other than autos, that the insured holds for sale. b. Animals i. Animals owned by the insured are excluded. however, the exclusion does not apply to animals held for sale (as when the insured is a pet store) or boarded by the insured. 8. Explain how the insured can benefit from the following additional coverages that are automatically included in the BPP: a. Debris removal i. Removal of debris resulting from a covered cause of loss during the policy period b. Preservation of property i. Any direct physical loss or damage to the covered property while being moved c. Fire department service charge i. The fire department charges for services to control or extinguish a fire if assumed by contract prior to loss or required by local ordinance up to $1,000 d. Pollutant cleanup and removal i. Expenses to extract pollutants from land or water at the premises if the release, discharge, dispersal, seepage, migration, or escape of the pollutants is the result of a covered cause of loss occurring during the policy period of to $10,000 per location e. Increased cost of construction i. The additional cost to rebuild in compliance with building laws, not to exceed the lesser of 5 percent of the limit of insurance or $10,000 f. Electronic data i. $2,500 of coverage per policy year for electronic data damage 9. How is the deductible applied to a loss payment under the BPP? a. The insurer is not obligated to pay anything to the insured unless the loss exceeds the applicable deductible. The limit if insurance then applies to the adjusted amount of loss in excess of the deductible. That is, the deductible comes off the loss, not off the limit of the insurance. 10. List the four optional coverages available in the BPP. a. Agreed Value b. Inflation Guard c. Replacement Cost d. Extension of Replacement Cost to Personal Property of Others. 11. Describe how the Outdoor Property coverage extension is unlike the other coverage extensions in terms of covered causes of loss. a. Unlike the other coverage extensions, the Outdoor Property extension has its own list of covered causes of loss. It covers only loss by fire, lightning, aircraft, riot or civil commotion, or explosion.
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