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Chapter 24: Property Insurance

If you own real estate, you take the risk that your property may be damaged due to fire or other catastrophe .

Property Insurance

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Fire insurance is the foundation of property damage policies .

INSURANCE

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Insured = HomeownerInsurer = Insurance

CompanyInsurance Premium =

Payment

INSURANCE TERMS

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Insured Risks

HailTornadoEarthquakeRiotWindstormSmoke damage

ExplosionGlass breakWater pipe leaksVandalismFreezingBuilding collapse

Endorsements

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Contains coverage deemed by insurance experts to be the most useful to persons who own the home in which they live.

HOMEOWNER POLICY

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HOMEOWNER POLICY COVERAGE: PERILS COVERED BY INSURANCE

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HOMEOWNER’S COVERAGE

Tenant’s policy – provides coverage for personal property of renter.

Condominium policy – covers personal property of owner.

OTHER INSURANCE

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Today’s costto replace the

damaged portion

Insurance carried

80% of today’s cost toreplace whole structure

RECOVERY

x

=

A P P L I C A T I O N O F T H E C O - I N S U R A N C E R E Q U I R E M E N T

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Medical Payments

Endorsements

LIABILITY COVERAGE

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Flood InsuranceGuaranteed Replacement Cost

Flood InsuranceLandlord Policies

LENDER REQUIREMENTS

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old for oldPolicy pays only the depreciated cost.

new for oldPolicy pays replacement cost.

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COVERAGE

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NEW FOR OLD CALCULATED

A borrower carry fire and extended coverage on the mortgaged structures.

The reason is to protect the value of the security for the loan.

The lender will be named on the policy along with the property owner, and any checks from the insurance company for damages will be made out to the borrower and the lender jointly. © OnCourse Learning

LENDER REQUIREMENTS

Flood InsuranceLandlord PoliciesPolicy Cancellation

Policy TakeoversHome Buyer’s Insurance

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ADDITIONAL COVERAGE

Key Terms

All-risk policy Broad form (HO-2) Endorsement Homeowner policy Insurance premium

Insured New for old Old for old Peril Public liability

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