Protecting Your Property

1. Protecting Your Property #10

2. 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

3. Types of Exposure Property loss - economic loss due to property that is damaged, destroyed, or stolen • Inventory property • Identify potential perils

4. Types of liability protection: Homeowner’s policy Automobile policy Umbrella policy Types of Exposure Liability- damage you cause others, either through your actions or negligence.

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

6. 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

7. 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

8. Coinsurance Provision requiring policyholder to buy insurance in an amount equal to a certain percentage of replacement value of property Or, insurance company will not fully repay the loss You bear part of the loss as “co-insurer”

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

10. 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

11. Type of structure Construction materials, style, age Location of home Crime rates, weather, proximity to fire hydrant Other factors Pool, trampoline, large dog Factors Affecting Home Insurance Costs

12. 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 property, either through your actions or negligence Property Covered

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

14. Renter’s Insurance Personal furnishings and belongings are not covered although the building may be fully insured Purchase a special type of homeowners policy

15. Types of Losses Covered by Homeowner’s Policies Direct loss of property Indirect loss occurring as a result of loss of use of damaged property Additional expenses resulting from direct and indirect losses

16. 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

17. Limitations on Payments Policy limits placed on covered property and depend on amount of home coverage Replacement cost amount necessary to repair, replace, or rebuild an insured asset at today’s prices

18. Actual Cash Value - what property is worth today (its depreciated value) Replacement Cost – amount to repair, rebuild or replace at today’s price Inflation Protection Rider - automatically adjusts for inflation Internal Limits - apply to specific items such as jewelry, watercraft, or securities Limitations on Payments

19. 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

20. Homeowner Premiums Differ from company to company Depend on structure type, property location, or property hazards Discounts offered non-smokers security systems

21. Types of Automobile Insurance Coverage Part A – Liability coverage Part B – Medical Payments coverage Part C – Uninsured motorists coverage Part D – Coverage for damage to your vehicle

22. Part A: Liability Coverage Required in most states Pays injury and property damages to otherswhen you are responsible for the loss Covers costs of settling or defending claims for damages

23. Part A: Policy Limits Insurance company may limit total damages paid for any one accident Typical limits are $50,000, $100,000, $300,000 and $500,000 Some insurers split the limits of liability coverage available

24. Four Parts of a PAP

25. 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

26. Reimbursement for medical expenses resulting from an accident Covers insured, family members, and passengers in covered autos Covers injuries sustained as a pedestrian or while riding a bicycle Part B: Medical Payments

27. 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

28. Part D: Physical Damage to a Vehicle Collision • Pays the actual cash value of the damage minus deductibles • Pays no matter who is at fault • Required for financed cars to protect the investment

29. Protects against loss to insured auto caused by perils other than collision hail, fire, theft, falling objects Part D: Physical Damage to a Vehicle Comprehensive

30. Reimburses parties involved in an accident without regard to negligence Each party compensated by their own insurance company Restricts remedies and payments for pain and suffering State laws vary regarding amount of no-fault benefits and restrictions for legal actions No-Fault Automobile Insurance

31. Factors Affecting Premiums Rating territory Use of automobile Driver’s personal characteristics Type of automobile Driving record

32. Financial Responsibility Laws Require motorists to buy a minimum amount of auto liability insurance Compulsory auto insurance laws require proof of insurance when acquiring license plates Others require proof of coverage after an accident

33. Supplemental Property Insurance Coverage Earthquake & flood - not included in standard homeowner's policies Other forms of transportation - mobile homes, RVs, boats, etc. Personal liability umbrella - additional liability coverage for homeowner and auto insurance

34. 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

35. Buying Insurance and Settling Claims names, addresses, phone numbers driver's license, auto license, insurance policy numbers vehicle description for all involved get names, addresses, phone numbers of witnesses contact police and insurance agent Remember to -- After an accident be sure to get: Do not leave the scene of the accident

36. Notice to insurance company Investigation Proof of loss Claims adjustor will: 1. Evaluate claim 2. Recommend settlement of amount requested settlement of a lesser amount denial of claim Steps in Claim Settlement