[h] CPCU 555 – Module 6
[q] Dwelling policy
[a] A policy that covers owner-occupied one- to four-family dwellings. This policy can be used when a standard homeowners policy is not available or not practical.
[q] Dwelling policy eligible structures
[a] Coveraged structures include:
Owner-occupied 1-4 family dwelling.
Dwelling in the course of construction.
Mobilehome at a permanent location.
Houseboat (in some states).
Certain incidental business occupancies.
[q] DP-3 policy Coverage A – Dwelling
[a] A coverage part in the DP-3 policy that covers the dwelling on the described location shown in the declarations. Building equipment and outdoor equipment used for the service of the premises and located on the described location are also covered.
[q] DP-3 policy Coverage B – Other Structures
[a] A coverage part in the DP-3 policy that covers structures that are set apart from the dwelling by clear space or connected to the dwelling by only a fence, utility line, or similar connection.
[q] DP-3 policy Coverage C – Personal Property
[a] A coverage part in the DP-3 policy that covers personal property of a dwelling that is owned or used by the insured or resident family members.
[q] DP-3 policy Coverage D – Fair Rental Value
[a] A coverage part in the DP-3 policy that provides coverage for property rented to others.
[q] DP-3 policy Coverage E – Additional Living Expenses
[a] A coverage part in the DP-3 policy that provides coverage for the increase in living expenses for the insured if the described property becomes unfit for its normal use because of a loss by a covered peril.
[q] DP-3 policy general exclusions
[a] General exclusions:
Ordinance or law.
Power failure occurring off the location.
War, neglect, nuclear hazard, or intentional loss.
Faulty construction, planning, materials, or maintenance.
[q] DP-3 policy Coverage L – Personal Liability
[a] Coverage available in a DP-3 dwelling policy that is available through the addition of a personal liability supplement. This coverage is similar to Coverage E – Personal Liability coverage found in an HO-3 policy.
[q] DP-3 policy Coverage M – Medical Payments to Others
[a] Coverage available in a DP-3 dwelling policy that is available through the addition of a personal liability supplement. This coverage is similar to Coverage F – Medical Payments to Others coverage found in an HO-3 policy.
[q] Broad Theft Coverage endorsement
[a] An endorsement available for a DP-3 dwelling policy that provides coverage for theft and vandalism as a result of theft either on-premises and off-premises.
[q] Limited Theft Coverage endorsement
[a] An endorsement available for a DP-3 dwelling policy that provides coverage for on-premises theft and vandalism as a result of theft.
[q] Inland marine insurance
[a] Insurance that covers different classes of property that typically involve some element of transportation, such as jewelry and furs.
[q] Inland marine insurance policy characteristics
Coverage is tailored to the type of property.
Provides higher limits for certain property.
Insured may select the appropriate limits.
Often written without a deductible.
Usually insures property worldwide with open perils coverage.
[q] Inland marine insurance general exclusions
[q] Scheduled coverage
[a] Insurance coverage provided for property that is specifically listed on a policy, with a limit of liability for each item.
[q] Inland marine policy loss settlement – scheduled property
[a] Amount paid is the least of:
The actual cash value of the property.
The amount for which the property could be repaired.
The amount for which the property could be replaced.
The amount of insurance stated in the policy.
[q] Blanket coverage
[a] A method for insuring all items within a single amount of insurance without specifically identifying each item.
[q] Inland marine specialized form
[a] An inland marine coverage form used to cover a single category of personal property, such as fine arts.
[q] Personal Articles Standard Loss Settlement Form
[a] An inland marine coverage form providing special form coverage for several classes of personal property. A specific amount of insurance is shown for each class of property.
[q] Personal Property Form
[a] An inland marine coverage form providing worldwide coverage for 13 classes of unscheduled property. Does not cover jewelry or coins, but does provide coverage for appliances and clothing.
[q] Personal Effects Form
[a] An inland marine coverage form providing special form coverage on certain personal property. Covers property for people who are travelling.
[q] FAIR plans
[a] Plans that make insurance coverage available when insurers in the voluntary market cannot profitably provide it at a rate that is reasonable for policyholders.
[q] Property uninsurable under FAIR plans
[a] Generally uninsurable property:
Poorly maintained property.
Property that has unrepaired fire damage.
Property subject to unacceptable physical hazards.
Property not meeting building or safety codes.
[q] Beachfront and windstorm plans
[a] Similar to FAIR plans, these plans make insurance coverage available for properties with greater-than-average exposure to loss.
[q] Beachfront and windstorm plans eligible property
[a] To be eligible for coverage, the property must be ineligible for coverage in the voluntary market and must be located in a designated coastal area.
[q] ISO Farm Insurance Program
[a] A program developed by the Insurance Services Office that consists of various farm insurance forms:
Farm Dwellings, Appurtenant Structures, and Household Personal Property Coverage Form.
Farm Personal Property Coverage Form.
Farm Liability Coverage Form.
[q] Incidental Farming Personal Liability endorsement
[a] An endorsement available in an ISO homeowners policy that covers farm operations that are not the insured’s principal occupation.
[q] Farmers Personal Liability endorsement
[a] An endorsement available in an ISO homeowners policy that covers certain farm exposures by deleting the standard business-related exclusion found in the homeowners policy and replacing it with its own conditions and exclusions.
[q] Crop-hail insurance
[a] A type of crop coverage offered by private insurers. Covers hail damage to growing crops and often covers perils such as fire, windstorm accompanying hail, and damage caused by livestock and vehicles.
[q] Multiple Peril Crop Insurance
[a] A Federal Crop Insurance Corporation program that insures farmers against unexpected production losses resulting from natural causes.
[q] Animal mortality insurance
[a] Generally covers against loss of the insured animal by:
1) Death resulting from accident, injury, sickness, or disease.
[q] Feedlot insurance
[a] A type of livestock coverage which covers animals while in the custody of a commercial feedlot operator.
[q] National Flood Insurance Program
[a] A program managed by the Federal Emergency Management Agency that provides insurance to help reduce the economic impact of floods.
[q] Ways the National Flood Insurance Program provides flood insurance
[a] Methods to provide coverage:
Through a servicing representative designated by FEMA.
Through an insurer participating in FEMA’s Write-Your-Own (WYO) program.
[q] Special flood hazard area
[a] An area that the National Flood Insurance Program has classified as being expected to experience flooding at least once in 100 years.
[q] Flood insurance – emergency program
[a] The initial phase of a community’s participation in the National Flood Insurance Program. During this phase, property owners in flood areas can purchase limited amounts of insurance at subsidized rates.
[q] Flood Insurance Rate Map
[a] A map that shows boundaries for special flood hazard areas.
[q] Flood insurance – regular program
[a] The second phase of the National Flood Insurance Program. During this phase, the community agrees to adopt flood control and land-use restrictions.
[q] Flood Insurance – Dwelling Policy Form
[a] A flood insurance policy form that is used for homeowners, renters, and condo unit owners. The policy provides coverage for the building and/or contents.
[q] Flood Insurance – General Property Policy Form
[a] A flood insurance policy form that is issued to owners or lessees of nonresidential buildings or units, or residential condominium buildings that are uninsurable under the Residential Condominium Building Association Policy.
[q] Flood Insurance – Residential Condominium Building Association Policy Form
[a] A flood insurance policy form that is issued to condominium associations to insure eligible residential condominium buildings.