Wrecks & Fires

Table of Contents

Introduction

1

 

Renter's Insurance

40

Dear Reader . . .

2

 

Homeowner's Insurance

40

One Can Only Wish

5

 

Floaters and Endorsements

41

Chapter 1: The Insurance Company's Role

7

 

Section #1 - Property Exposures

41

Economic Benefits

7

 

Replacement Cost

42

Financial Intermediaries

7

 

Section #2 - Liability Exposures

42

Forms of Insurers

8

 

As a Recap

43

Chapter 2: Perils & Risk

9

 

Fire and Allied Coverage

45

Defining Risk

9

 

Section I of Form #1 (HO-1)

46

Insurable Exposures

10

 

Section II of Form #1

48

Law of Large Numbers

11

 

Form #2 (HO-2)

48

Chance of Loss

11

 

Form #3 (HO-3)

49

Morale and Moral Hazards

12

 

Form #4 (HO-4)

51

Two Basic Types of Risk

14

 

Form #5 (HO-5)

52

Reading the Policy

15

 

Form #6 (HO-6)

52

Chapter 3: Insurance For Wrecks

18

 

Form #8 (HO-8)

53

Insuring the Car

18

 

Exceptions

53

The Insurance Contract

18

 

National Disasters

55

Policy Deductibles

19

 

Volcanoes

57

Policy Components

19

 

Hurricanes and Tornadoes

58

Chapter 4: Auto Policy Divisions

24

 

Personal Property

58

Reading the Policy

24

 

Chapter 7: Umbrella Insurance

61

Declarations Page

24

 

Covering Large Assets

61

The Insuring Agreement

24

 

Choosing An Umbrella Policy

63

Exclusions in the Policy

25

 

Understanding Umbrella Insurance

63

Umbrella Policies

25

 

How Much Coverage?

64

The Family Automobile Policy

26

 

Variances in Price

64

Chapter 5: Liability Coverage

29

 

Liability Insurance for Liability Exposures

65

Bodily Injury Coverage

29

 

Torts

65

Single-Limit Policies

29

 

Intentional Torts

66

Split-Limit Policies

29

 

Intentional Interference - 2 Types

66

Investigation Costs and Settling the Claim

30

 

Unwanted Contact

66

Property Damage

31

 

Assault

67

Medical Payments

31

 

Mental Distress

68

Personal Injury Protection (PIP)

32

 

Defamation

68

Collision Insurance

33

 

False Imprisonment

69

Comprehensive Coverage

34

 

Intentional Interference With Property

68

Uninsured and Underinsured Motorists

34

 

Absolute Liability

71

Towing & Service/Rental Car Reimbursement

35

 

Strict Liability

72

Wage Loss and Substitute Services

35

 

Negligence

72

Setting Auto Insurance Rates

36

 

A Reasonable Man

73

No Fault Insurance

37

 

Third Party Forms

73

Chapter 6: Home Sweet Home

40

 

General Liability Forms

74

Actual Claims Result From Negligence

75

 

Declarations

105

Primary Underlying Policies

75

 

Insuring Agreements

105

Terms: Coverage & Liability

76

 

Exclusions

105

Legal Liability Must Exist

76

 

Conditions & Miscellaneous Provisions

105

Public Opinion

77

 

Definitions

106

Ownership & Liability

77

 

Endorsements & Riders

106

Everyone Wants a Chunk

78

 

Perils / Hazards

106

Paying for a Legal Defense

78

 

Chapter 10: Insurance Policy Layout

108

It Can Happen to Anyone

78

 

Understanding the Policy Language

108

Successful Liability Claims

78

 

Covering the Extras

109

Evidence of Negligence

79

 

Chapter 11: Negligence Laws

110

Daily Risks of Life

79

 

Prudent Man Rule

110

Dual Risk Contribution

80

 

Types of Negligence Laws

110

Injury Avoidance

80

 

Chapter 12: Loss-Adjustment Provisions

112

Shared Blame - Injured Party Preference

80

 

Safety First

112

Absolute Liability

80

 

Notice of Loss

112

Determining Monetary Damages

81

 

Processing An Auto Claim

113

Jury Awards

81

 

Dealing With Negligence

114

Using Umbrella Policies Effectively

82

 

Chapter 13: E&O Insurance

117

Excess Coverage

83

 

Public Awareness

117

Assessing Policy Risks

83

 

By Any Other Name . . .

120

Books of Business

83

 

Policy Elements

121

Underwriting Based on Exposures & Risks

84

 

E&O for Insurance Agents

124

Adverse Selection

85

 

E&O for Financial Planners

125

Risk Classifications

85

 

Standard of Care

126

Pricing Specific Contract Risks

85

 

In Summary

128

Actuarial Equity

86

 

Industry Variety

129

Subsidizing Rates

86

 

Professional Insurance Agents

130

Exposure Distribution

87

 

Professional Negligence

131

Recognizing the Underwriters

87

 

Presumed Negligence

132

You're the First Guy on the Scene

88

 

Contributory Negligence

133

Staff Underwriters

89

 

Imputed Negligence

133

Line Underwriters

89

 

Negligence in Tort Liability

133

Actual Underwriting Processes

89

 

Express Authority & Ostensible Authority

136

Insurers Rely On You, The Agent

90

 

Torts & the Basis for Liability Claims

137

Information & the Inspection Company

91

 

Torts & Contracts

138

Accepted or Rejected

92

 

Civil & Criminal Violations

138

Standard Risk Applicant

92

 

Breach of Contract

139

Preferred Risk Applicant

92

 

Breach of Implied Agreement Theory

140

Substandard Risk Applicant

93

 

Breach of Contract Theory

140

Post-Selection

94

 

Legally Binding Insurance Contract

141

Unique Aspects of Post-Selection

94

 

Relevance

141

Retention

95

 

A Contract of Adhesion

142

Line Limits

96

 

Investment Advisor's Liabilities

142

Underwriting & Production

96

 

Public Harm

144

Measuring Cost

97

 

"Triggers"

144

Chapter 8: Homeowner's Liability Insurance

98

 

Transferring Risk

145

Lawsuit Protection

98

 

What Type of Documentation?

147

Chapter 9: Premium Rates

101

 

Lying About What You Know or Did

147

Setting Premium Rates

101

 

Full Disclosure

148

Estimating Loss Exposures Determining Rates

101

 

Release of Liability Form

148

Basic Rate Guidelines

102

 

Keeping Current on New Trends

150

Risk Categories

102

 

Chapter 14: Insurance Ethics

151

Checking For Policy Errors

103

 

Consumer Regulations & Ethics

151

 

 

 

Stupidity Rather Than Intentional

153

 

 

 

Competency

154

 

 

 

Knowledge Is Always Better

155

 

 

 

Taking The Application

158

 

 

 

Full Disclosure on Health Questions

159

 

 

 

Using Proper Terminology

160

 

 

 

Mixing Your Money With Their Money

160

 

 

 

You Can't Sell Everyone

162

 

 

 

Ethical Importance - Existing Long Term

163

 

 

 

Religious Beliefs

164

 

 

 

People of All Kinds

165

 

 

 

Making Choices

167

 

 

 

Technology Eliminates the Agent

169

 

 

 

Sales Practices Have Consequences

169

 

 

 

Class Action Lawsuits

171

 

 

 

The Common Man's View

173

 

 

 

Twinkies & Other Myths

174

 

 

 

Acknowledging the Needs of Others

175

 

 

 

Become Vocal

177

 

 

 

Risk Control

178

 

 

 

Liability of Insolvency

179

 

 

 

Insuring Your Future Security

180

 

 

 

Conflicts of Interest

181

 

 

 

Failure to Place Necessary Insurance

181

 

 

 

Fraud

183

 

 

 

In Closing

184

 

 

 

Chapter 15: Glossary

185-

193

 

 

United Insurance Educators, Inc.

8213 - 352nd Street East

Eatonville, Washington  98328-8638

 

Telephone: (253) 846-1155

FAX only: (253) 846-7536

Email: mail@uiece.com