Residential Package Policies and Property Coverage
adjuster must be familiar with the fundamental aspects of the insured's policy and
the law of contract
claim should be examined in relation to the actual policy wording
Review Framework of a Homeowner's Policy
Click here to find out all about homeowner's insurance
Review Framework of a Tenant's Policy
Home Business
property used for business is excluded from personal property
coverage is available for home businesses by endorsement
Building and Contents
circumstances of the claim and the type of property damaged must be assessed
under the insuring agreement
adjuster determines which part of the policy covers the loss
could be significant if all risks coverage is available for conte nts and named perils
coverage is available for building
Residential Property Policy Perils
insurers typically modify the model wording we have provided in the appendix in
some way
even in all risk policies, some parts of it limit coverage to named perils
Fire
fire has been defined as a type of combustion
Fire is a rapid oxidation process with the evolution of heat and light in varying
intensities
Ignition is the process of initiating self-contained combustion
Combustible indicates that something is capable of burning, generally in air under
normal conditions of ambient temperature and pressure, unless otherwise specified.
A hostile fire burns in an areas not intended for fire, burns something within an intended
fire area that was not intended to be burned, or escapes the area in which it was intended to
burn, thus causing unintended damage
A friendly fire burns as intended within an area where it is supposed to be. A friendly fire
has a useful purpose that does not exceed its intended purpose
Another factor to consider concerns the application of heat
has heat been applied?
resulting products of fire are in evidence?
insurer is not liable for damage caused solely by excessive heat from heating
apparatus or by any process involving the application of heat where there is no
actual fire
when a fire occurs the adjuster must establish what can be done to minimize the
damage
Residential Property Policy Perils
Lightning
bolt of lightning strikes an insured house, the resulting damage is covered
lightning may cause damage to electrical appliances by following power lines into a
house
some policies extend to provide coverage for power surges
Explosion
explosion is commonly associated with a natural gas leak and explosion
water hammer is a destructive force that may cause noisy, banging sounds as pipes
rattle and expand to absorb the pressure wave
Smoke
smoke losses result from something other than a fire
smoke peril covers damage caused by the sudden, unusual, and faulty operation of
any heating or cooking unit
Falling Object
peril covers falling objects that strike the exterior of the building
no coverage for objects that fall within the house
Impact of Aircraft or Land Vehicle
peril covers damage done to the dwelling by an aircraft or vehicle
Riot
three or more people involved in damaging property, could qualify as a riot under the
riot peril
Vandalism or Malicious Acts
intentional defacing of property and malicious mischief is the willful destruction of
another's property
legal distinction between these perils has been unclear
adjuster need not distinguish between them
vandalism and malicious acts have recently been at the centre of a legal debate
proximate cause has been an issue of the debate when mould and fire damages
ensures
Water Escape
named peril policies specifically cover the escape of water from a water supply
system
there are certain aspects to coverage under the peril, but they all relate to plumbing
systems
restrictions on frozen water pipes that have ruptured
no coverage unless precautions have been taken
other exclusions for continuous or repeated seepage or leakage of water
Windstorm
any wind strong enough to cause damage to insured property would qualify under
the windstorm peril
roof damage is the most typical claim
each claim assessed individually
policies exclude windstorm damage to outdoor antennae or satellite receivers
Hail
may cause roof shingles to split
may be necessary to replace the roof covering
some common roofing problem that have nothing to do with hail damage
o moisture trapped in the roofing material may cause bubbling
o sheathing that expands and contracts may cause wrinkling
o oils evaporate from the roofing materials may cause an alligator -type pattern
on the roofing surface
Glass breakage
glass that is part of the building is insured against accidental breakage
Transportation
coverage is provided for property that is damaged while being carried in an
automobile or attached trailer
Theft
peril covers insured personal property anywhere in t he world subject to certain limits
no coverage for theft caused by a tenant in a part of the insured's home that is
rented to the tenant
does not cover
theft from a dwelling under construction
theft of animals, birds, or fish
by fraud, or trickery, a change of ownership in property takes place with the
insured's agreement
A few facts the adjuster may want to establish:
When the loss occurred and from where
Who discovered it an when (time and day)
How the loss was discovered
If the police have been notified
Repairs that were done
What the insured believes happened?
Limits of Insurance
The following are some typical limitations (review in full on in text):
o jewellery, watches and gems, fur garments, and garments trimmed with fur
have typical limit ranges from 2,000 to 5,000
o numismatic property has a limit of $200
o CDs, DVD, audio tapes and video tapes typically have a $250 limit when the
loss is from a motor vehicle or watercraft
Electricity
some policies provide coverage for electrical damage for voltage surges caused by
artificially generated electricity
Property Away from the Premises
question of ownership of the property must be established
coverage for property owned, worn, or used on the premises of the insured
personal property of students temporarily living away from home for the purpose of
attending school is insured
All Risks Coverage
adjuster must examine the scope of the insuring agreement to determine whether
the loss falls within it
common loss is mysterious disappearance
Extensions of Coverage
Typically these extensions do not increase the limit of insurance available under the policy
Debris removal
removing insured property
personal property is insured while in transit to another home
assessments levied against the property owner for the services of a fire department
are covered up to 1,000 in a typical extension of coverage
Additional Living Expense
due to an insured loss the insured has to live somewhere else while repairs are
underway
coverage is also provided for fair rental value
Review the case study and analysis in your text
Damage Claim Process
contractor may ask the insured to sign a certificate of completion
most insurers prefer to have repairs completed and pay a bit for the repair
determining the ACV requires some negotiation
Basis of Claim Payment
limited to the financial interest of the insured in the property
homeowner's building coverage pays for the cost of repairs or replacement without
deduction for depreciation
conditions:
o repairs or replacement must take place at the same location
o same occupancy must be maintained
o materials of the same quality must be used
o repairs or replacement must take place within a reasonable time after the
loss
Certain policies offer a single-limit option which allows the insured to use the sum of the
insured on building, detached private structures, contents and ALE as a single amount that
can be applied to any category as required
guaranteed replacement cost option on some policies pays to replace the building
even if the cost exceeds the amount of insurance purchased
to assess actual cash value the adjuster determines the value of the property as of
the moment immediately preceding the loss
to fulfill the insurer's obligation, the claim payment must involve the mortgagee
when property has salvage value, the adjuster must deduct this amount from the
claim if the insured keeps the item
Condominium Owners' Claims
condominium corporation is responsible for insurance coverage on the common
elements and the standard units
deductible owed is an insurable interest to the condominium unit owner
if a conflict arises the condominium act will prevail
Computer Claims
fair value of computer equipment requires some knowledge of this class of contents
Mould Damage
water damage to broadloom is a typical claim scenario
many companies have a protocol to prevent mould when the claim is covered
Personal Article Floaters
on a valued basis the insurer and the insured agree that items are worth a
particular amount
Review case study and analysis in your text
Estimating Damage Claims
adjuster review the details with the insured and the chosen contractor
agreement is reached as to the work to be done
scope of repair details measured areas room -by-room that have to be repaired,
replaced, or refinished
Scoping damage involves the following:
noting the cause and severity of damage
identifying each room
documenting the number of doors, windows and other openings
detailing each restoration activity
detailing the damage and what must be done to restore the property starting from
the floor to the walls
review the entire list in your text.
o once the scope is defined it can be circulated to prospective contractors
o insurers may select preferred contractors
Understanding Property Repair Estimates
Repair activity listed by:
function
unit amount
cost per unit
total cost
Once costs are determined the contractor adds profit and overhead
Broadloom Replacement
broadloom comes in 12 foot rolls and is sold by the square yard
Review the case study and the analysis in your text.
Roofing Claims
basis of roof measurement and repair must be understood
roofs come in a wide variety of styles
age of roofing material affects repairability
available suitable colour match
adjuster must be prepared for hidden costs
Review Hip Roof and types of roofs in the text
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