Homeowners Insurance

What most people think of as homeowners insurance really is composed of several categories that include policies intended for: ◆ owners of single-family residences, including duplexes and triplexes where the property owner occupies one or more dwelling unit (i.e., homeowners policies); ◆ owners of homes that are not single-family residences, but rather where there are multiple units in a given building, where the building is jointly owned by the owners of individual living units (i.e., condominiums, townhouses, and cooperatives); and, ◆ tenants policies. Each of these categories of policies is structured and organized in the same overall fashion. That basic structure follows, with detailed information regarding specific parts discussed later in detail. First, the policy’s declarations appear, where the subject matter of the coverages afforded are stated. This material includes: ◆ the name of the insurer; ◆ the policy number; ◆ the inception and expiration dates of the policy (i.e., the policy period); Chapter 5 Homeowners Insurance ◆ the named insured; ◆ the named insured’s mailing address, and if different, the address of the premises insured; ◆ the policy limits applicable to: ■ the property coverages; ■ the liability coverage; and, ■ the medical payments coverage; ◆ the deductibles; ◆ the forms and endorsements comprising the policy; and, ◆ in states requiring that the agent countersign the policy, the agent’s countersignature. In addition, most states require that the declarations of the policy issued by nonadmitted insurers (that is, excess or surplus lines insurers) must inform the insured that he or she will not be protected by that state’s insurance guaranty fund in the event of insolvency of the insurer. The policy’s definitions section often follows, although some insurers’ policies reserve the definitions for the last se The policy’s conditions specifically applicable to the property coverages appear next. Policy conditions generally state acts that must be done or that the insured must refrain from doing in the event of a claim in order for coverage to exist. Policy conditions can also set forth items such as the manner in which claims will be valued, dispute resolution mechanisms, or may provide procedural mechanisms for how losses will be paid in the event of death or incapacity of the insured. There is usually a separate list of conditions that apply only to the liability coverages and another list of policy conditions that apply to both the property and the liability coverages. The most important typical conditions are highlighted later. The policy’s liability and medical payments coverage provisions appear next, and are usually presented in the same order as just outlined for the property coverages. First, the liability and medical payments insuring agreements (also known as coverage grants) are stated. The statement of these insuring agreements often includes the description of so-called additional coverages. In some circumstances, the statements of these additional coverages follows, rather than precedes, the exclusions. The exclusions applicable to the liability and medical payments coverages are stated. These exclusions are often broken down into several categories or groups, such as: ◆ the exclusions applicable only to the liability coverages; ◆ the exclusions applicable to both the liability and the medical payments coverages; and, ◆ the exclusions applicable only to the medical payments coverages. The conditions applicable to the policy’s liability and medical payments coverages are next stated. One of the most important groups of conditions applicable to the liability coverages is the one stating the insured’s duties in the event a third party sues or makes a claim against the insured. It is key if someone makes a claim against you or sues you to notify your insurer immediately. Keep copies of all demand letters you receive and all legal papers that are served on you. Give copies of these documents to your insurer promptly when it asks for them. Do not discuss the claim or the lawHomeowners Insurance 39 suit with the person who is making the claim or suing you, nor with that person’s attorney. Do not admit liability. Do not make any payments to the person who is suing you without the advance knowledge and consent of your insurance company. Such payments might later be characterized as an admission of liability. Your insurer should hire a lawyer to defend you. If you hire your own lawyer before the insurer hires a lawyer to defend you, the fees charged by your lawyer may not be covered. Most policies’ basic coverage forms conclude with a section that contains the conditions that apply to both the property and to the liability coverages. Finally, your policy probably will contain a number of endorsements that add to, delete, or modify provisions contained in the basic policy form. Endorsements are usually one, two, or three pages long each. Insurers use endorsements in order to reduce the administrative costs of reprinting their entire policy form in order to incorporate these new or changed provisions. Often, endorsements are used to restate a policy provision after a court decision interprets the provision in question in a manner different from how the insurer believed it should have been interpreted. Commonly, endorsements add exclusions not stated in the basic policy form. These often include exclusions for such things as sexual molestation, physical abuse, or mental abuse of minors; home daycare services performed for a profit; and dog bites. The following chapters discuss the principal coverages of the standard HO 2 and HO 3 homeowners policy forms published by the Insurance Services Office (ISO). ISO is an insurance industry support organization that develops rates and policies. Most insurers’ policies rely heavily on ISO policy language, even if they do not actually use ISO policy forms.

Aucun commentaire