IMch07 - CHAPTER 7 Insurance as a Risk Management...

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CHAPTER 7 Insurance as a Risk Management Technique: Policy Provisions DECLARATIONS THE INSURING AGREEMENT Named Perils versus All-Risk Agreements Defining the Insured EXCLUSIONS Excluded Perils Perils That Are Basically Uninsurable Perils to Be Covered Elsewhere Perils Covered Under Endorsement at Extra Premium Excluded Losses Excluded Property Excluded Locations COMMON POLICY CONDITIONS Fraud Protection for Mortgagees Separate Insurance for the Mortgagee’s Interest Assignment by the Insured Loss Payable Clause Mortgagee Clause Notice of Loss Proof of Loss Appraisal Preservation of the Property Cancellation Assignment DEFINITIONS BASIS OF RECOVERY Actual Cash Value Replacement Cost CLAUSES LIMITING AMOUNTS PAYABLE Dollar Limits Deductibles Straight Deductible Aggregate and Calendar-Year Deductibles Disappearing Deductible Franchise Deductible Coinsurance Operation of the Coinsurance Clause Dangers of Coinsurance Coinsurance Credits Coinsurance Rationale Time Limitations Other Insurance Clauses Pro-Rata Clause Equal Shares 1
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Other Insurance Prohibited Excess and Primary Coverage KEY TERMS AND CONCEPTS Actual cash value (ACV) Additional insureds Aggregate deductible Aggregate dollar limits Apportionment clauses Assignee Assignment Assignor Average adjusters Binder Calendar-year deductible Coinsurance Conditions Coordination of benefits provisions Declarations Deductible Direct loss Disappearing deductible Endorsement Equal shares Excess Exclusions Fire Franchise deductible Friendly fire Hostile fire Indirect loss Insuring agreement Loss payable clause Mortgagee Mortgagee clause Named insured Named perils agreement Open-perils agreement Other insurance clauses Policyholder Primary Pro-rata clause Proximate cause Pure premium Replacement cost Specific dollar limits Straight deductible Sue-and-labor clause
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This note was uploaded on 07/04/2010 for the course FIN 319 taught by Professor Briar during the Spring '10 term at Citadel.

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IMch07 - CHAPTER 7 Insurance as a Risk Management...

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