Limits
If your house has a limit of $100,000, how much will your insurance pay if you suffer a loss of $70,000?
$70,000
This type of property covers anything owned by you that is not attached to the property itself, such as clothes or furniture.
What is Personal Property?
This party relates to you and yours.
What is First Party?
This determines the amount paid based on the agreed valuation method.
What is Loss Settlement?
The lowest possible percentage that an insured must carry in order to be compliant with coinsurance.
What is 80%?
When a single item is insured by a single limit of coverage.
What is Specific Limit?
This property type describes the property itself and anything attached to it, such as a house or attached garage.
What is Real Property?
This party relates to the insurance company/insurer.
What is Second Party?
This determines how the insurer makes the payment within the time frame to pay claims.
What is loss payment?
This is the process and formula for determining how much the insurer will pay if an insured is carrying a limit lower than the required coinsurance amount.
What is determining 80% of the cost to rebuild; then dividing did / should times loss?
When multiple properties are insured for a single amount of insurance that applies to all.
What is Blanket Limit?
This describes any additional costs after a loss, such as hotel costs or rental car costs.
What is Loss of Use?
This party relates to them/theirs - the unknown party, the other party involved in a claim.
What is Third Party?
If the insured or insurer recovers stolen property after the payment, the other party must be notified.
What is Recovered Property?
E's house costs $500,000 to rebuild. What is the minimum amount of coverage E needs in order to be compliant with the coinsurance clause?
What is $400,000?
When multiple properties are insured on one policy with separate limits for each.
What is Scheduled Limit?
Any damage to property is paid out to this party.
What is First Party?
This is the party that a liability claim would pay out to.
What is third party?
This states that the lienholder or creditor with financial interest will get paid out before the insured in the event of a total loss.
What is Loss Payable Clause?
C has a house that will cost $100,000 to rebuild. It is insured for $70,000 and the policy has an 80% coinsurance provision. C's house suffers a $45,000 dollar loss. What will the insurance pay?
What is $39,375?
X has two houses that he wants to have insured under the same policy. One house is much more expensive than the other, so X wants a higher limit for that house. What limit would be best for X?
What is Scheduled Limit?
These are five examples of Real Property.
(POSSIBLE ANSWERS)
House, attached garage, land, cabinets, flooring, tool shed, permanently installed appliances
R gets into a car accident by rear ending someone's truck. There is $5,000 in damage to the truck and $2,000 in damage to R's car.
The damage to the truck will be paid to the _____ party, the damage to R's car will be paid to the ______ party, and these payments will come from the _______ party.
Third, First, Second
This establishes protection for the insurable interest of a mortgage company or bank; states that the bank/company is entitled to the money left on the loan in any claim.
What is Standard Mortgage Clause?
D's house is insured for $90,000 and costs $200,000 to rebuild. Assuming D has an 80% coinsurance provision, how much will D's insurance company pay if his house suffers a loss of $75,000?
What is $42,187.50?