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New York Real Estate for Salespersons, 5 th e

New York Real Estate for Salespersons, 5 th e. By Marcia Darvin Spada Cengage Learning. Chapter 14. Property Insurance. Chapter 14 Key Terms. Actual cash value Deductible Liability insurance Package policy Property insurance. Replacement cost Umbrella policy.

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New York Real Estate for Salespersons, 5 th e

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  1. New York Real Estate for Salespersons, 5the By Marcia Darvin Spada Cengage Learning Chapter 14 Property Insurance

  2. Chapter 14 Property Insurance Chapter 14 Property Insurance

  3. Chapter 14 Key Terms Actual cash value Deductible Liability insurance Package policy Property insurance Replacement cost Umbrella policy Chapter 14 Property Insurance

  4. The Purpose of Property Insurance • Protects home or income/business against damage or loss in case of fire, theft or vandalism • Two types of property insurance • Section I covers property • Section II covers liability Chapter 14 Property Insurance

  5. Choices in Purchasing Property Insurance • Independent Agents- may represent one or more licensed insurance companies • Insurance Brokers- represent the property owner, not the insurance company Chapter 14 Property Insurance

  6. Types of Policies • Monoline- one type of coverage, such as liability insurance • Package- includes several different types of coverage, such as property insurance and liability insurance • Liability- coverage to protect against claims alleging that one’s negligence resulted in injury or property damage Chapter 14 Property Insurance

  7. Prevents financial loss from Fire, winds, hail, tornado, vandalism. Theft of personal property Someone injured on property from negligence Damage by insured to someone elsess property due to negligence Property Insurance Coverage Chapter 14 Property Insurance

  8. Standard Homeowner’s Policies • Homeowners-1 (HO-1) insures home and contents • Homeowners-2 (HO-2) insures home and contents from additional perils • Homeowners-3 (HO-3) covers home for most risk of physical loss • Homeowners-5 (HO-5) same as HO-3, plus personal possessions covered for most losses Chapter 14 Property Insurance

  9. Standard Homeowner’s Policies • Homeowners-8 (HO-8) provides actual cash value coverage in place of replacement cost coverage for a building • Tenants or Coop Owners (HO-4) reimburse tenants for increases in living expenses if home becomes inhabitable • Condo Unit Owners (HO-6) insure against damage to contents of apartment plus liability Chapter 14 Property Insurance

  10. Actual Cash Value or Replacement Cost • Actual Cash Value The insured is reimbursed for the replacement cost minus the physical depreciation of the lost or damaged property • Replacement Cost The insured is covered and reimbursed for the actual cost of replacing the damaged property Chapter 14 Property Insurance

  11. Basic Amounts of Coverage Chapter 14 Property Insurance

  12. Problems in Obtaining Insurance • New York Property Insurance Underwriting Association • Offers fire insurance if you cannot purchase from individual company • Rates are higher Chapter 14 Property Insurance

  13. Problems in Obtaining Insurance • National Flood Insurance Policy • Administered by FEMA • Can purchase insurance if residing in special flood hazard areas • Coastal Residence Assistance • NYS Dept. of Financial Services helps consumers find coverage Chapter 14 Property Insurance

  14. Cancellation and Nonrenewals of a Policy • Nonpayment of a premium • Conviction of a crime • Discovery of fraud or material misrepresentation • Discover of willful or reckless acts of omissions • Physical changes in the property insured • The policy’s continuation violates insurance law Chapter 14 Property Insurance

  15. Other Types of Property Insurance • Commercial Policies • Commercial General Liability: covers four forms of injury • A Business Owner’s Policy: bundles property and liability insurance under one premium • Umbrella Policies • An excess liability policy that provides additional coverage above that offered by primary policies Chapter 14 Property Insurance

  16. Professional Liability Insurance • Professional liability Insurance • Covers individuals and business from claims by third parties • Errors and omissions insurance • Professional liability insurance covers claims of negligence against a professional business Chapter 14 Property Insurance

  17. Explaining the purpose and costs of property insurance Explaining when to obtain property insurance when there is a cash sale Explaining the lender’s interest in property insurance Explaining why the lender may escrow the property insurance Real Estate Agent’s Role Chapter 14 Property Insurance

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