INSURANCE POLICIES

INSURANCE POLICIES

1. Application

   • The insured
     • Is still required
       • To make an application
         • It identifies
           • In more or less detail
   • Is an offer
     • To buy insurance
   • The agent
     • Induce
       • A potential insured
         • To make an offer
     • Fills out
       • The application
         • And asks for a signature
           • After careful study of it
   • Provide
     • Information about
       • The exposure
         • Involved

2. Is a contractual agreement

   • Subject to
     • Rules
       • Governing
         • Contracts.
       • Understanding
         • Those
           • Is necessary
             • For comprehending
               • Insurance policy

3. Binder

   • Temporary contract
     • To provide
       • Coverage
         • Until the policy
           • Is issued by
             • The agent or the company.
   • With cancelable policies
     • The insurer
       • Is responsible
         • Under a binder
           • For losses
             • That occur prior to cancellation
   • May be
     • Written or oral
       • The insured
         • Can made an oral application
           • The agent
             • Accept the offer
               • Creating an oral binder
               • May e-mail a "Written Binder"
                 • As evidence of the contract
                   • Until the policy is received
                 • Shows who is insured
                   • For what perils
                   • The amount of the insurance
                   • The company with which coverage is placed.
           • In case of a dispute
             • It may be difficult to prove its terms

4. Conditional and Binding Receipts

   • Similar to
     • The binders
       • In property/casualty insurance
         • But with important differences
   • Conditional receipt
     • Does not bind
       • The coverage of insurance
         • At the time it is issued
           • It have an retroactive effect
             • Of the date of the application
               • If one meets all the requirements for insurability
   • Binding receipt
     • Provides interim coverage
       • While the application is being processed
         • Whether or not the person is insurable

5. Insurance contracts

   • Declarations
     • Is the first part of
       • The insurance policy
     • Are statements
       • That identify
         • The person(s) or organization(s)
           • Covered by the contract
     • Give information
       • About the loss exposure
     • Provide the basis
       • Upon which the contract is issued
         • And the premium determined
     • Include
       • The period of coverage
         • The time duration
           • For which coverage applies
       • Limitations of liability
         • All insurance policies
           • Have these clauses
             • E.g -Life policies promise to pay the face amount of the policy. -Property insurance policies specify as limits actual cash value or replacement value
   • Insuring Clauses
     • The second major
       • Element
         • May vary greatly
           • From policy to policy
     • Is a general statement
       • Of the promises
         • the insurer makes to
           • The insured
     • Most specify the
       • Perils and exposures
         • Covered
     • The circumstances
       • Include
         • The covered
           • Loss-causing events
             • Called perils
               • Open-perils policy
                 • Called “all risk”
                   • Covers losses caused
                     • By all perils
                       • Except those excluded
                   • Provides
                     • Broader coverage
               • Named-perils policy
                 • Covers only
                   • Losses caused by
                     • The perils listed in the policy
     • Exposures to Loss
       • Defined
         • In the insuring agreement
           • Basis of valuation and types of losses covered
             • Is needed
   • Exclusions and Exceptions
     • These are: perils, risks, losses, and properties
       • That are not covered
         • In an all-risk policy
           • May exclude
             • Specified locations, perils, property, or losses.
     • Represent
       • The third major part
         • Of an insurance policy
           • E.g We do not cover loss or expense due to cancellation of a lease or agreement.”
     • Reasons
       • To avoid
         • Financial catastrophe
           • For the insurer
       • Losses caused
         • By war
           • Are excluded
             • In most policies
       • Exist
         • To limit
           • Coverage of nonfortuitous
             • Not accidental events
       • Are manifested
         • In limitations
           • On the following
             • Locations
               • Define
                 • The location
                   • Of coverage
             • Perils
               • These are unusual or
                 • Catastrophic
             • Property
               • Excluded because it is
                 • Insurable under other policies
             • Losses
               • Resulting
                 • From
                   • Ordinance
                   • Law
   • Conditions
     • The fourth
       • Major part
         • Of an insurance contract
     • Enumerate
       • The duties
         • Of the parties
           • To the contract
     • Define
       • The terms used
     • Characteristic
       • Of only certain
         • Types of contracts
           • Notice and Proof of Loss
             • All policies
               • Require that
                 • The insurer
                   • Be notified
                     • When
                       • The event, accident, or loss insured against
                         • Occurs
           • Suspension of Coverage
             • When a policy
               • Is suspended
                 • The effect
                   • Is only temporary
             • When a
               • Voidance of coverage
                 • Is incurred
                   • In an insurance contract
                     • Coverage is terminated
           • Cooperation of the Insured
             • All policies require
               • Cooperation
                 • The insured
                   • Must fulfill
                     • Certain conditions
           • Protection of Property after Loss
             • Contain provisions
               • Requiring the insured
                 • To protect the property
                   • The insured cannot be careless and irresponsible just because he/she has insurance
   • Endorsements and Riders
     • Two terms with
       • The same meaning
         • Riders
           • Make a change
             • In the
               • Life/health insurance policy
                 • Increases the benefits of a life insurance policy
               • Property/casualty insurance policy
                 • Guaranteeing home replacement cost
         • Endorsements