Homeowners InsuranceModule 2

District Training

Objective

Review Section I / Dwelling and Personal Property Review Homework Assignment Discuss Section II/ Liability Coverages Discuss Homework Assignment for next week.

Section I Review

What is the definition of insured location? What is covered under Section I, Coverage A of the

policy contract? What is covered under Section I, Coverage B of the

policy contract? What are the four parts of the policy contract? What is meant by “Extensions of Coverage”?

Section I Review

• Materials and supplies used in the construction of the dwelling or other structure are covered.

• Wall-to-wall carpeting attached to the dwelling is considered to be part of the dwelling.

• Other structures are covered if they are used in whole or in part for business purposes.

Answer True or False to the following:

Section I Review

• Under the HOB, loss by theft of gems, watches, jewelry, or furs is covered for $500 according to the policy contract.

• Aircraft and their parts are covered by the HOB policy contract.

• Animals and birds are excluded under the HOB policy contract.

Answer True or False to the following:

Pause here to ask regarding questions on pages 13 - 14 of Property I Module.

Section II - Liability Coverage

Section II - Liability Coverage

Liability insurance is designed to pay, on behalf of individuals, all sums that the insured becomes legally obligated to pay as a result of liability imposed upon them by law. It is often called third party insurance since the person injured or whose property is damaged is not a party to the contract between the insured and the insurance company.

Prop I- 35

Section II - Liability Coverage

Negligence may be the result of carelessness, ignorance, thoughtlessness, or inaction, but it is never an intentional act.

Prop I- 35

Negligence

Prop I- 35

Section II - Liability Coverage

•The existence of a duty to protect the injured person or his property;

•A failure to live up to that duty or obligation;

•An actual injury to another person or his property;

•The failure to exercise the proper degree of care must be the proximate cause of the injury.

Prop I- 35

Four Elements of Negligence

Section II - Liability Coverage

Liability Coverages•Personal Liability (Coverage C)

•Medical Payments to Others (Coverage D)

Prop I- 36

Section II - Personal Liability

DEFINITION OF “OCCURRENCE”

Occurrence is essentially defined as an accident, including exposures to conditions, resulting in either bodily injury or property damage during the policy period.

Prop I- 36

Medical Payments to Others

This coverage does not apply to injuries sustained by the named insured or regular residents.

Section II - Medical Payments

Prop I- 37

Section II - Medical Payments

Medical payments pays for necessary medical expenses incurred within 3 years from the date of the accident. Medical expenses include reasonable charges for services such as:

Prop I- 37

•Medical

•Surgical

•X-rays

•Dental

•Pharmaceuticals

•Funeral

•Ambulance

Section II - Medical Payments

Prop I- 38

This is considered by many to be a “good will” coverage; no proof of fault or liability is necessary. Payments made under this coverage may sometimes help to avert more costly lawsuits.

Section II - Medical Payments

Prop I- 38

There is no endorsement that would extend this coverage to apply to the named insured and resident relatives.

Section II - Additional Coverage

•Claim ExpensesExpenses and costs, such as court cost.

Premiums on bonds, such as an appeal bond.

Reasonable expenses the insured incurs for assisting in the defense.

Payment of interest on a court judgement, as specified.

Prop I- 38

Section II - Additional Coverage

•Imperative Medical Expenses to Others

We pay for expenses for immediate medical and surgical relief to others, if imperative, at the time of the accident.

Prop I- 39

Section II - Additional Coverage

•Damage to Property of Others

This is another good will coverage. It provides $500.00 for damage to the property of others, regardless of liability.

Prop I- 39

Exclusions Damage to Property of Others

•Property covered under Section I

•Property damage caused intentionally by an insured 13 years of age or older.

•Property owned by or rented to insureds, an insured’s tenant, or a resident of the named insured’s household.

•Property damage to property of others arising from business pursuits

•Property damage arising from ownership, maintenance or use of a motor vehicle, aircraft, or watercraft.

Prop I- 40

Exclusions - Personal Liability

•Liability assumed under a business contract or agreement.

•Punitive or exemplary damages or the cost of defense related to such damages.

•Property damage to property owned by an insured.

•Property damage to property belonging to others, when in the care, custody or control of an insured.

•Bodily injury to anyone, including residence employees, who are covered under Worker’s Comp or other specified laws.

Prop I- 41

Exclusions - Personal Liability

•Bodily injury to any resident of the residence premises, except a residence employee who is not covered under the Worker’s Comp or Employers’ Liability Coverage.

•Bodily Injury or property damage when an insured is covered under any nuclear energy liability policy, or even if the limits of that policy have expired.

Prop I- 41

Exclusions - Medical Payments

•To any resident of the insured household except a residence employee.

•To a residence employee off the insured location and not in the course of employment by the insured.

•To any person eligible to receive benefits provided under workers’ compensation or specified laws.

•From any nuclear hazard.

Prop I- 42

Exclusions

•Arising out of business pursuits.

•Arising from the rendering or failure to render business or professional services.

•Caused intentionally by or at the direction of the insured.

•Resulting from the legal liability of any insured because of home care services provided on a regular basis.

Prop I- 43

Personal Liability and Medical PaymentsThe company does not cover bodily injury or property damage:

Exclusions

•Arising out of the transmission of communicable (including sexually transmitted) disease.

•Arising our of a condition of an uninsured location owned by, or rented to, an insured.

•Caused by war, civil war, insurrection, etc.

•Arising from the ownership, maintenance or use of aircraft, motor vehicles or watercraft.

Prop I- 45

Personal Liability and Medical PaymentsThe company does not cover bodily injury or property damage:

Exclusions

Known or unknown property or structural defects

Known or hidden defects in plumbing, heating, and electrical systems

Known or unknown soil conditions or drainage problems

Concealment and misrepresentation of any known defects

Prop I- 45

Personal Liability and Medical PaymentsThe company does not cover bodily injury or property damage:

•Arising out of the sale or transfer of real property.

Section II - Conditions

Prop I- 46

Limit of Liability

The policy limit for Personal Liability coverage is generally the amount stated in the Declarations.

The limit applicable to Medical Payments to Others coverage is the total amount payable to any one person as a result of an occurrence (accident).

Section II - Conditions

Prop I- 47

Duties After Loss

Like the similar condition under Section I, this specifies what the insured must do when a loss occurs.

Section II - Important Points

Prop I- 49

•Clients need to understand the importance of maintaining adequate liability limits -- to help protect their present and future financial security -- whether it be by:

•Carrying the maximum limits of liability coverage on their homeowners policy or;

•Opting to purchase a Personal Umbrella policy, if they qualify.

Cancellation

Prop I- 51

This provision specifies the rights and obligations of the company and the insured with respect to cancellation of the policy.

•The insured may cancel the policy at any time.

•We can only cancel for the reasons specified in the policy.

Refusal to Renew

Prop I- 52

If the company opts not to renew the policy, the insured must receive written notice at least 30 days before expiration of the policy.

Subrogation

Glossary - Page 611

The transfer to the insurance carrier of the insured’s legal right of recovery against a third party responsible for a loss which the carrier has paid to the insured.

Part II

Other Property Policies

Other Property Policies

Prop I - 60

•Protector Plus Package Policy (Prop I - 60)

•Small Town Protector Package Policy

•Basic Form Homeowners Package Policy (HOA)

•Renters Package Policy (HOBT)

•Townhouse Package Policy

•Condo Owners Package Policy

•Mobile Homeowners Package Policy

•Texas Dwelling Policy

Pause here to take time to briefly review the different

types of policies.

Prepare for next week

•Complete the review exercise on pages 55 & 56.

•Read Property II pages 1-27.

Next weeks lesson

•Customer Selection