Insuring Property and Liability Risks 2^nd Edition

Table of Contents

Chapter 1 Why Do We Have Insurance?	1
Why is There a Need for Insurance? What is Risk?	1 2
Liability Facts and Figures Premium Dollars: A Certain Loss	4 5
Insurance Takes Away the Worry	6
Charge It!	7
Marine Insurance Keeps the Goods Moving (Place Utility)	7
Insurance Line Development There Is Always a Way	8 8
Fire Insurance: One of the First Forms Invented Heavy Wildfire Losses	9 9
Policies Often Based on Traditional Practices Making the Policy Practical	11 11
Standardization Became Necessary The Standard Fire Policy	12 14
Chapter 2 Understanding the Impossible	18
Four Basic Parts in the Fire Insurance Form	18
Declarations	19
The Insuring Agreements	20
When is the Policy Effective?	21
Binders	22
Canceling the Policy Credit Scoring	23 26
What are the Principle Concepts of Insurance?	27
Indemnity	27
Insurable Interest	28
Using the Mortgage Clause	30
When Negligence or Neglect is a Factor Lender’s Responsibility	31 31
Proportional Payments	31
When More Than One Mortgage Exists	32
Chapter 3 Liability Limitations	33
Insuring for Logical Amounts	33
Actual Cash Value	34
Repair or Replace?	36
Policy Language has Specific Meanings (Doctrine of Proximate Cause)	37
Chapter 4 When Multiple Policies Exist	39
Who Pays What?	40
Companies That Are Not Able to Pay	41
“Other Insurance” Alternatives	41
Non-Concurrent Policies	42
What Happens When Claimants Refuse the Offer?	43
Chapter 5 Insurance Does Not Always Pay Everything	45
How Coinsurance Works	46
Why Would a Policyholder Want Coinsurance?	48
Small Versus Large Property Owners	50
Coinsurance History Consumer Distrust	50 51
Coinsurance Variety	52
Deductibles Why Are Deductibles Used?	53 53
Straight Deductibles     Convertible Deductibles	54 54
Cumulative and Participating Deductibles     Franchise Deductibles	54 55
Progressively Diminishing Deductibles To Recap	55 57
Loss Limitation Clauses Pro Rata Distribution clause	58 58
In Closing	58
Chapter 6 What Are We Insuring Against?	60
Perils Defining the Losses	60 60
Loss and Damage by Fire	61
Lightning Removal of Goods	63 64
Exceptions	66
Arson	67
Coverage for Fire Department Charges Debris Removal	68 68
Exceptions to Payment	69
Peril Expansion	71
Extended Coverage Endorsement	72
How the Deductible Applies	72
Windstorm and Hail	73
Beach Plans	74
Explosion	74
Riot and Civil Commotion	75
Aircraft & Vehicles Smoke The Apportionment Clause	76 76 76
Joint Loss The Optional Perils Endorsement	78 78
Vandalism & Malicious Mischief Endorsement	79
Earthquake & Volcanic Eruption Insurance	80
Automatic Sprinkler Coverage	81
Water Damage	82
Flood Insurance	83
Chapter 7 Fire Insurance Forms	86
Putting the Policy Together	86
Policy Forms	87
Residential Policy Forms - Dwelling Forms Dwelling and Contents Form	87 88
Dwelling Coverage	88
Contents Coverage	90
Dwelling and Contents Broad Form	92
Replacement Cost Coverage Dwelling Buildings Special Form	92 93
Dwelling Policy Program	93
Commercial Forms	94
Property Covered - Coverage A – Buildings	95
Coverage B – Personal Property of the Insured	95
Coverage C – Personal Property of Others	95
It Does Not Cover Everything	95
Extensions of Coverage	96
How is the Policy Arranged?	98
Is the Policyholder Adequately Insured?	99
Chapter 8 Marine Insurance	100
What is Marine Insurance? Is There a Standard Marine Policy?	100 100
Classifying Marine Policies	101
First Group: Loss or Damage to Conveyances	101
Second Group: “Port Risk Only” Policies	102
Third Group: Fleet Policies	102
Fourth Group: “Full Form” and “Total Loss Only” Policies	103
Fifth Group: Hull Policies Adapted to the Type of Vessel	104
Liability Protection	104
Class 1 - Collision	104
Class 2 - Protection and Indemnity Insurance policies	105
Class 3 - Excess Protection and Indemnity Insurance	105
Class 4 - Water Pollution	105
Chapter 9 Marine Insurance Marketing	107
Cost, Coverage, and Sales Rates: A judgment Call	107 107
Client Evaluation	108
Hull Rates	109
Cargo Rates	110
Considering Past Performance International Competition Pleasure Boats	111 111 111
Yacht Hull Coverage	112
Other Coverage for Yachts	113
First Coverage - Protection and Indemnity Insurance	114
Second Coverage - Federal Compensation Insurance	114
Third Coverage - Medical Payments Insurance	114
Reading the Yacht Policy	114
Outboard Policies	115
Chapter 10 Inland Marine Insurance	116
Goods in Transit Why is it Called “Inland Marine” Insurance?	116 116
Growth of the Inland Marine Insurance Industry	116
Nationwide Marine Definition	118
Inland Marine Insurance Characteristics	120
All-Risks Protection	121
Excessive Hazard Property Normally Covered by Other Insurance	122 122
Wear and Tear	123
Dampness or Extremes of Temperature	123
Carelessness of the Insured Carelessness of Others	123 123
Mysterious Disappearance	124
Infidelity (a Disloyal Act) Artificially Generated Electricity	124 124
Earthquake and Flood War, Acts of War, and Nuclear Reaction	124 124
Underwriting: Moral and Morale Hazards	125
Assignment The Person or Entity Requesting Coverage	125 125
Imports and Exports (Categories A and B)	125
Domestic Shipments (Category C)	125
Transportation Policies	127
Parcel Post and Registered Mail Policies	128
Registered Mail Policy	129
First Class Mail Policy	130
Other Forms: Armored Car and Messenger Policy	130
Motor Truck Cargo Insurance	130
Public Trucker’s Legal Liability Forms	131
Means of Communication Coverage	132
Chapter 11 Risks & Protection	133
Personal Property Floater Risks	133
Scheduled and Unscheduled Floaters	133
Standard Provisions	133
Terminology of the Personal Property Floater	134
Floaters: Personal Property Floater	136
Personal Effects Floater	138
Personal Articles Floater	139
Government Service Floater	140
Snowmobile Floater Policy	140
Nearly Anything is Possible	141
Commercial Property Floater Risks	141
Livestock Floater	142
Accounts Receivable Insurance	143
Valuable Papers & Records Insurance	143
Floor Plan Merchandise Policy	144
Signs and Street Clocks Form	144
Dealer’s Block Insurance	145
Electronic Data Processing	146
Chapter 12 Consequential Loss Insurance	148
Loss of Business	148
Business Interruption Insurance COVID-19 and Loss of Business Loss of Earnings in Normal Times	148 149 151
A Separate and Specific Policy	151
Describing the Property	152
Indemnity Period	153
Forms	155
Gross Earnings Form	155
The Agreed Amount Endorsement	156
Premium Adjustment Endorsement	157
Extended Period of Indemnity	158
Deferred Loss Payment Endorsement	158
Payroll Endorsements	158
Simplified Earnings Forms	159
Contingent Business-Interruption Insurance	160
An Earnings Form of Business Interruption Insurance	161
Extra Expense Insurance: Business Interruption Means Loss of Business	162
Business Income Coverage Form	163
Policy Definitions	164
Individual Consequential Loss Insurance	165
Rent insurance	165
Forms Coinsurance	166 167
Period of indemnity Rates Additional Living Expense	167 167 168
Leasehold Insurance	168
Recovering Profit Losses	169
Chapter 13 Boiler and Machinery/Glass Insurance	171
Boiler and Machinery Insurance Premium	171 172
Inspection Services	172
Application for Coverage	173
Direct-Damage Policy	174
Primarily Property Coverage	177
Exclusions	178
Endorsements Business Interruption Endorsement	179 179
Extra Expense Insurance	181
Combined Business Interruption and Extra Expense	181
Consequential Damage Insurance Utility Interruption	182 182
Glass Insurance	182
Chapter 14 Insurance Ethics What Ethical Agents Know Insurance Perceptions Establishing Ethical Goals Why Be Ethical? Following the Law Ethics in the Workplace	184 184 184 186 189 190 191
Ethics Are the Same Regardless of the Name Used Understanding How the Past Affects the Future Companies Set Ethical Guidelines Promoting Ethical Behavior An Ethical Theory: Egoism Is it possible to teach ethical behavior to other people? What is the scope of ethics? What does it take to be a moral person? What quality of work does the individual want to perform? What is the legacy desired? Who Determines Ethics? What are an individual’s responsibilities to other moral people? The Theory of Objectivist Ethics Holding an Ethical Code Looking Professional Courtesy Mores Measuring the Ethical Values of Others General Education and State Mandated Continuing Education Getting Education in a Timely Manner Laying Out Policy Benefits and Limitations Policy Replacement When Agents Allow Misconceptions When the Premiums Seem Too High to the Client Obtaining Proper Application Signatures Keeping in Touch After the Sale Selling the “Fast Buck” Items Commingling Funds Professional Investment Advisors Preparing for Tomorrow Fixed and Variable Income Vehicles Financial Management Due Diligence Due Diligence Technical Versus Common-Sense Approach To Recap Public Images Selecting Insurers to Represent Does Legal Automatically Mean Ethical Too?	192 194 199 203 206 207 207 209 210 210 211 213 216 217 225 225 226 230 231 233 235 238 239 240 241 242 242 243 244 245 245 246 247 250 251 256 257 258

United Insurance Educators, Inc.

PO Box 1030

Eatonville, WA 98328

(253) 846-1155

mail@uiece.com