640 Class 16 - Class 16 Insurance and Risk Management...

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Class 16 Insurance and Risk Management George D. Krempley Bus. Fin. 640 Winter Quarter 2008
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Mortgage clause—protects the mortgagee’s interest Under the mortgage clause, the mortgagee is entitled to receive a loss payment from the insurer to the extent of its interest regardless of any policy violation by the insured. Even if the insured violates a policy provision, the insurer must make a loss payment to the mortgagee. Thus, the mortgagee’s insurable interest is protected.
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Insureds under the HO-3 Policy The following persons are considered “insureds” under the policy: Named insured and spouse Resident relatives Other persons under age 21 Full-time student away from home Provided student is under age 24 and a relative of the insured Under age 21, in the care of the named insured or resident relative Section II coverage also includes: Any person legally responsible for covered animals or watercraft With respect to a motor vehicle covered by the policy (e.g., a riding mower), persons employed by the named insured
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Review of HO 3 Coverages Section I: Property Coverages Coverage A: Dwelling Coverage B: Other Structures Coverage C: Personal Property Coverage D: Loss of Use Additional Coverages Section II: Liability Coverages Coverage E: Personal Liability ($100,000 per occurrence) Coverage F: Medical Payments to Others ($1000 per person)
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Section I Coverages Coverage A covers the dwelling on the residence premises and any structure attached to the dwelling Materials intended for construction are included The coverage specifically excludes land Coverage B insures other structures on the residence premises Includes a detached garage, tool shed, etc Structures that are rented out or used for a business are excluded The amount of coverage is based on the amount of insurance on the dwelling (Coverage A)
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Section I Coverages Coverage C insures personal property owned or used by an insured Personal property is covered anywhere in the world The amount of coverage is 50% of the insurance on the dwelling, but can be increased Coverage for personal property at another residence, such as a vacation home, is limited to 10% of Coverage C or $1000, whichever is greater Certain types of personal property have maximum dollar limits on the amount paid for any loss
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Exhibit 20.2 Special Limits of Liability
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Section I Coverages An insured can use a schedule to insure certain personal property for a specific amount Coverage C also excludes certain types of property: • Articles separately defined and specifically insured • Animals, birds, and fish Motor vehicles • Aircraft and parts Hovercraft and parts • Property of roomers, boarders, and other tenants • Property in a regularly rented apartment • Property rented or held for rental to others off the residence premises • Business records Credit cards, electronic transfer devices, or other access devices (some coverage in Additional Coverages) Water or steam
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This note was uploaded on 07/17/2008 for the course BUSFIN 640 taught by Professor Krempley during the Winter '08 term at Ohio State.

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640 Class 16 - Class 16 Insurance and Risk Management...

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