Chapter 7 Parts of an Insurance contract 1 Declarations Statements that provide information about the particular property or activity to be insured Insuring Agreement Summarizes the major promises of the insurer 2 a Named Perils Coverage Where only the perils specifically named in the policy are covered b Open Perils or Special Coverage Where all losses are covered 3 Exclusions Insurance contracts contain 3 major types of exclusions a Excluded Perils Flood or intentional act b Excluded Losses A Professional Liability Loss is excluded in the c Excluded Property Pets are not covered as personal property in the homeowners policy homeowners policy 4 Conditions Are provisions in the policy that qualify or place limitations on the insurer s promise to perform If conditions are not met the insurer can refuse to pay the claim 5 Endorsement Rider A written provision that adds to deletes from or modifies the provisions in the original contract A Rider is a provision that amends or changes the original policy 6 Deductible A provision by which a specified amount is subtracted from the total payment that otherwise would be payable a Straight Deductible The insured must pay a certain number of dollars of loss before the insurer is required to make a payment b Aggregate Deductible All losses that occur during a specified time period usually a year are accumulated to satisfy the deductible amount c Calendar Year Deductible A type of aggregate deductible that is found in basic medical expense and major medical insurance contracts d Elimination Period Is a stated period of time at the beginning of a los during which no insurance benefits are paid How do endorsements riders work and why do they exist Read above for how they work Chapter 16 17 Who are the Persons Insured in an HO3 policy a Named insured and spouse b Resident relatives c Other persons under age 21 foster child exchange student d Full time student away from home under the age of 24 What Perils are Covered Named perils include fire or lightening windstorm or hail explosion riot or civil commotion aircraft vehicles smoke vandalism theft falling objects The peril must be the proximate cause of the loss meaning there must be unbroken chain of events between what cause and effect Perils are covered unless they are specifically excluded What is covered under 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 Section 1 Exclusions a Concurrent causation loss if a single loss is caused by 2 or more perils and one is covered by the policy and the other is not the entire loss is excluded b Any loss due to an ordinance law except as described in the additional coverages can usually buy more c Losses due to earth movement except sinkholes is covered in florida d Certain water losses flood water back up from sewers water that seeps below surface like a pool leak What does it mean to schedule property Insures certain personal property for a specific amount a Jewelry b Guns To schedule means to list and insure individual items with specific amounts of insurance Deductibles can be a percentage or a flat amount Understand an insureds duty after a loss a Give prompt notice to insurer b Protect the property from further damage c Prepare an inventory of damaged personal property d Exhibit damaged personal property e File a proof of loss with 60 days after the insurers request Written notice of the event must be provided to the insurer including the time place circumstances and names of any claimants or witnesses The injured person or his her representative must provide written proof of claim and authorize the insurer to obtain copies of medical records What are an insured s options if they don t agree with the claims settlement amount Chapter 18 19 What is covered under a personal auto policy Any auto shown in the declarations page A newly acquired auto A trailer owned by the named insured A temporary substitute which is a non owned vehicle or trailer used temporarily because of mechanical breakdown repair servicing loss or destruction of a covered vehicle How do the 6 parts of the auto policy work Part A Liability Coverage the most important part of the PAP it protects a covered person against a suit or claim arising out of the ownership or operation of a covered vehicle Part B Medical Payments Coverage Covers all reasonable medical and funeral expenses incurred by an insured in an accident Part C Uninsured Motorists Coverage Pays for the bodily injury caused by an uninsured motorist by a hit and run driver or by a negligent driver whose insurance company is insolvent Part D Coverage for Damage to your Auto The insurer agreed to pay for any direct and accidental loss to a covered auto or any non owned auto Part E Duties after an Accident or loss After an accident the insured is required to perform certain duties such as 1 promptly notify the insurance company or agent 2 cooperate with the insurer in the investigation 3 send the insurer copies of any legal notices received in connection with an accident 4 and take a physical exam if required Part F General Provisions The named insured can cancel at any time by returning the policy to the insurer or providing written notice If a policy has been in force for more than 60 days the insurer can cancel Who is covered under an auto policy 1 The named insured and any resident family 2 Any person using the named insureds covered auto 3 Any person or organization legally responsible for any insureds use of a covered auto on behalf of that person or organization 4 Any person or organization legally responsible for the named insureds or family members use of any auto or trailer other than a covered autos or one owned by the person or organization How does collision other than collision average work Collision is defined as the upset of your covered auto or non owned auto or its impact with another vehicle or object Other than collision loss is a loss due to the following perils a Missiles or falling objects b Hail water fire flood windstorm c Riot or civil Commotion d Malicious mischief or vandalism e Contact with a bird or animal f Theft g Glass breakage h Explosion or earthquake What is coverage to consider for a new car How does liability work if another insured driver uses your car and crashes Let s say you lend your car to your roommate Annie for the day Annie hits another
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