Week 3 in Property and Casualty Insurance
Week 3 in Property and Casualty Insurance INS 3203
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This 0 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 48 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 3 List the perils covered by the Causes of Loss Basic Form and the additional perils covered by the Causes of Loss Broad Form a Basic Fire lightning explosion Windstorm or hail smoke aircraft or vehicles riot or civil commotion vandalism sprinkler leakage sinkhole collapse volcanic action b Broad Basic plus falling objects weight of snow ice or sleet and water damage Also covers collapse as an additional coverage c Both forms provide limited coverage for fungus as an additional coverage What conditions must the insured meet to be covered for water damage that results from freezing of pipes a Water damages caused by freezing of plumbing is excluded unless the named insured i 1 Does his or her best to maintain heat in the building ii 2 Shuts off the water supply and drains the equipment if heat is not maintained What limitations apply to the aircraft or vehicles peril a There must be physical contact between the aircraft or vehicle and the covered property or a building containing covered property Additionally the peril does not include damage caused by vehicles owned by the named insured or operated in the course of the named insured s business To what types of loss does the vandalism peril not apply a The vandalism peril excludes loss covered by theft other than building damage caused by the forcible entry or exit of burglars b In other words no coverage for the taking of property What losses does the fire peril cover in addition to loss of property actually burned by a fire a The fire peril also covers heat and smoke damage caused by a hostile fire as well as damage resulting from attempts to extinguish the fire Why do the causes of loss forms exclude loss resulting from the enforcement of building ordinances or laws a Building ordinances and laws can substantially increase repairs or replacement costs Insurers need to charge an additional premium if the insured wants these increased costs to be covered beyond the basic Increased Cost of Construction coverage that is automatically provided in the EFF If the insured wants to supplement the basic coverage the supplemental coverage can be added by endorsement How were property insurance policies modified in response to the concurrent causation doctrine a Certain exclusions were reworded to apply even if another cause is involved in the loss All was removed from allrisks policies Collapse was excluded unless caused by one of several named perils Why is the additional coverage for fungus referred to as limited a The additional coverage for fungus is limited because it pays no more than 15000 per annual policy period b The additional coverage is also subject to coverage restrictions not discussed in the book 9 What perils does the Earth Movement exclusion eliminate in addition to earthquake a The Earth Movement exclusion excludes any kind of earth movement other than sinkhole collapse such as earthquake landslide or mine subsidence It also excludes volcanic eruption explosion or effusion other than volcanic actions 10 To what perils does the mold exclusion not apply a The mold exclusion does not apply to mod resulting from the fire specifically if the mod results from the insured property becoming saturated by water used to extinguish a fire or lightning 11 Identify the advantages to the insured of purchasing the Causes of Loss Special Form a Certain causes of loss that are omitted or excluded under the Broad Form are not excluded and are therefore covered under the Special Form Most significantly the Special Form covers theft of covered property under a wide variety of circumstances subject to some exclusions and limitations The Basic and Broad Forms cover theft by looting at the time of a riot or civil commotion but in no other circumstances b By covering direct physical losses other than those that are specifically excluded the Special Form covers losses that the insured might not have anticipated c The Special Form shifts the burden of proof from the insured to the insurer Under a named perils form such as the Basic or Broad Form the insured must prove that the loss was caused by a covered cause 12 Identity examples of perils that the Special Form specifically excludes a Wear and tear Rust corrosion decay deterioration or hidden or latent defect Smog Settling cracking shrinking or expansion Infestations and waste products of insects birds rodents or other animals Mechanical breakdown Dampness or dryness of atmosphere changes or extremes in temperatures or marring or scratching applicable to personal property only 13 Identify examples of theftrelated acts for which coverage is excluded under the Special Form a The Special Form excludes dishonest or criminal acts including theft of the insured or of partners members officers managers directors or employee of the insured but he exclusion does not apply to acts of destruction by employees The Special Form also excludes the voluntary surrendering of property as the result of a fraudulent scheme or trickery czarb09ch
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