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Protecting Your Property

Protecting Your Property. #10. Learning Goals. Property Insurance Basics. Property insurance Protects real and personal property from losses from various perils. Liability insurance Protects against financial consequences from insured’s responsibility to others. Types of Exposure.

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Protecting Your Property

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  1. Protecting Your Property #10

  2. Learning Goals

  3. Property Insurance Basics • Property insurance • Protects real and personal property from losses from various perils • Liability insurance • Protects against financial consequences from insured’s responsibility to others

  4. Types of Exposure • Property loss • Economic loss due to property that is damaged, destroyed or stolen • Inventory property • Identified potential perils

  5. Types of liability protection: Types of Exposure Liability-damage you cause others, either through actions or negligence

  6. Principle of Indemnity Most property and liability insurance contracts are based on this principle Insured may not be compensated by insurance company an amount exceeding economic loss

  7. Concepts Related to Indemnity • Actual cash value • Value assigned to insured property • Replacement cost less depreciation • Right of Subrogation • Insurer’s right to request reimbursement from person who caused the loss or that person’s insurer

  8. Insurance companies do not want you to profit from a loss Concepts Related to Indemnity Other insurance clause - When multiple companies insure a property, together they will not pay more than the economic loss

  9. Coinsurance

  10. Homeowner's Insurance • Homeowners • HO-1—Basic Form • HO-2—Broad Form • HO-3—Special Form • HO-8—Modified Form • Renters • HO-4—Renter’s Form • HO-6—Condominium Form

  11. Policy states conditions (perils) under which it will pay Stipulate property covered and extent of coverage Peril—a cause of loss such as fire, lightning, windstorm Homeowner's Insurance

  12. Factors Affecting Home Insurance Costs

  13. Property Covered • Section I- • Loss to property conditions under which it will be covered, extent of coverage • Perils rarely covered: flood, earthquake, acts of war • Section II- • Liability which may arise in connection to either property, either through your actions or negligence

  14. Personal Property Floater Provides blanket or scheduled coverage of expensive personal property not adequately covered by standardized homeowner’s policy

  15. Renter’s Insurance

  16. Types of Losses Covered by Homeowner’s Policies

  17. Persons and Locations Covered • Policy states who is covered • Coverage for guests and students at college may be limited. • Most homeowner’s policies offer coverage worldwide • Second home may be an exception

  18. Limitations on Payments • Replacement cost • Amount necessary to repair, replace, or rebuild an insured asset at today's prices • Policy limits • Placed on covered property and depend on amount of home coverage

  19. Limitations on Payments

  20. Calculating Replacement Cost

  21. Deductibles keep insurance costs down by eliminating frequent small loss claims that are proportionately more expensive to administer Deductibles Deductible - amount paid out of pocket on covered losses

  22. Homeowner Premiums

  23. Types of Automobile Insurance Coverage

  24. Part A: Liability Coverage

  25. Part A: Policy Limits

  26. Part A: Persons Insured • Insured Person • The named insured • Family members • Any person using covered auto • Any person or organization responsible for insured’s actions • Covered Auto • Listed on declaration page • Acquired during policy period • Any vehicle temporarily used while auto is being repaired

  27. Part B: Medical Payments

  28. Pays when other driver has no insurance or if hit-and-run Usually pays for bodily injuries, not property damage Additional coverage available to protect against underinsured motorists Must meet criteria: Another driver at fault Other motorist uninsured Damages were incurred Part C: Uninsured Motorists

  29. Part D: Physical Damage to a Vehicle Collision

  30. Part D: Physical Damage to a Vehicle Comprehensive

  31. No-Fault Automobile Insurance

  32. Factors Affecting Premiums

  33. Financial Responsibility Laws Require motorists to buy a minimum amount of auto liability insurance

  34. Supplemental Property Insurance Coverage Personal liability umbrella - additional liability coverage for homeowner and auto insurance

  35. Property and Liability Insurance Agents • Captive agent • Represents one insurance company • Independent agent • Represents multiple insurance companies • Before selecting • Review total property and liability exposures • Inventory property and identify exposures • Determine appropriate covered perils, limits, deductibles, and floater policies

  36. Buying Insurance and Settling Claims • After an accident be sure to get: • Names, addresses, phone numbers • Driver’s license, auto license, insurance policy numbers • Vehicle description for all involved • Remember to- • Get names, addresses, phone number of witnesses • Contact police and insurance agent • Do NOT leave the scene of the accident

  37. Steps in Claim Settlement • Claims adjuster will: • Evaluate claim • Recommend • Settlement of amount requested • Settlement of a lesser amount • Denial of claim • Notice to insurance company • Investigation • Proof of loss

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