Insurance Checklist Residen al Exposure Survey

Size: px

Start display at page:

Download "Insurance Checklist Residen al Exposure Survey"

Lee Lee
5 years ago
Views:

1 The Residence Exposure Survey is a guideline for providing the insurance company with the informa on they need to accept and underwrite the personal lines residen al risk and to obtain the necessary informa on from the insured in an effort to provide them with appropriate insurance coverages. This survey does not replace the necessity to complete an applica on but rather is supplemental informa on necessary to analyze the risk. These surveys are only provided as guidelines and do not replace the need to complete company applica ons or residen al es mators. There are two parts to conduc ng a survey on a residence. First, the residence exposures must be iden fied. Second, the appropriate insurance coverages must be chosen based on the exposures iden fied. The following outlines the steps that must be taken to analyze the risk to the point of comple ng the applica on. Step #1 Communicate with the prospec ve insured Most insurance companies expect that the broker/agent will personally meet with the prospect prior to wri ng residen al coverage. The underwri ng of a residence property includes assessing the premises and the individual to be insured for acceptability. Step # 2 Iden fy the types of residences to be insured An insured may have one or more residences. Residences can include permanently a ached homes as well as temporary or mobile homes. Some insureds live permanently in their mobile home, motor home, fi h wheel or other RV. For that purpose, the survey will include them in the survey to iden fy. The coverage checklist will include specific informa on on the insurance coverages appropriate to those risks. Step # 3 Iden fy the types of occupancy for each residence An insured might have mul ple residences that they own and/or rent. Some of the residences may be owner occupied as primary residences while others could be seasonal; part me; or rented to others. Step # 4 Conduct a Residence Inspec on Prior to wri ng new business for an insured on their residence(s), the broker/agent is expected to personally meet with the prospec ve client and to visit the residence to be insured to determine if there are any obvious hazards and to u lize the insurance company s valua on guidelines to assist the insured with understanding the minimum values for se ng the insurance limits. Broker/Agents should re-inspect the premises as necessary especially at renewal to determine if there has been any change in occupancy, hazard, or if the insured has improved the premises. An independent inspec on may be necessary and required by the insurance carrier. Step #5 Iden fy Hazards Based on the inspec on of the property and other underwri ng procedures, iden fy the physical hazards at the residence premises. Indicate those hazards on the survey sheet and complete ques onnaires rela ng to the hazards iden fied. Page 1

2 Step #6 Complete the Residence Loca on Survey Sheet Complete the Residence Loca on Survey Sheet for each of the loca ons the insured wants insured. There is space for ten residences. Step #7 Obtain informa on on the insured, ownership of the residence, and occupants Once you have iden fied the physical hazards the next step is to determine the per nent informa on relating to the ownership of the residence; iden fy the insured ; and individuals that occupy the home for the purpose of eligibility and issuance of the policy with the appropriate endorsements. Step #8 Complete the Insurance Company s Residence Es mator Most insurance companies have an on-line cost es mator for homes. Most insurance carriers require that the informa on on the home be input in the es mator to provide a minimum amount of insurance that would be acceptable. NOTE: It is very important to obtain as much specific informa on as possible to input in the system so that the es mator provides a realis c figure. NOTE: the agent must communicate to the perspec- ve insured that this is an es mate ONLY and that it is the responsibility of the insured to approve and accept the amount proposed. Step #9 Complete the Insurance Company Applica on When all of the steps are finished, the insurance company s applica on should be completed. The perspec ve insured is the individual that should be providing all of the informa on to the agent. The informa on will be transferred to an insurance applica on. Some mes the informa on will be provided by a business manager, CPA or insured s representa ve. The informa on will be used to complete the applica on: NOTE: the insured must sign the applica on. NOTE: any sec on that needs to be completed by the insured must be highlighted to draw a en on to the insured to complete and review before signing. Page 2

3 Residence Exposure Survey Informa on Account Name Address Type of Residence Occupancy Hazard Date Built Square Ft Purchase Price Type of Residence (a) Single Family Dwelling (b) Duplex (c) 3-4 Family Dwelling (d) Townhouse (e) Condominium (f) Coopera ve (g) Apartment Unit (h) Mobile Home (i) RV (Motor Home, Fi h Wheel, Other) Type of Occupancy 1. Own the residence and Occupy as primary residence 2. Own the residence and Occupy as a secondary or part me residence 3. Own the residence and Occupy as a residence on a farm 4. Own the residence on a farm and rent it out 5. Own and Occupy in part and rent out part of the residence (Duplex, 3-4 Family Dwelling) 6. Own and Rent to Others 7. Rent Hazard (BR) Brush; (FL) Flood; (EQ) Earthquake; (W) Wind; (V) Vacant Page 3

4 Hazard Ques onnaire and Solu ons Brush Hazard Ques ons 1. Are any of the residences located in or near hazardous brush? Yes No a. Which residence is located in brush? Residence #. b. What steps has the insured taken to clear the brush from the site? c. What is the distance of the brush from the home? d. What steps has the insured taken to further protect their home from brush fire damage such as: 1. Boxing in the eaves: Yes No 2. Elimina ng any combus ble shrubbery: Yes No 3. Installing fireproof vents so that embers do not enter roofing system: Yes No e. Does the insured have a sprinkler system? Yes No 1. Does the house have an opera ve par al, interior sprinkler system? Yes No 2. Does the house have an opera ve full interior sprinkler system? Yes No 3. Does the house have an opera ve par al exterior sprinkler system? Yes No 4. Does the house have an opera ve full exterior sprinkler system? Yes No 5. Does the house have an opera ve roof sprinkler? Yes No Page 4

5 Brush Hazard Solu ons 1. Determine if the residence is eligible for coverage with standard markets. 2. If not eligible for standard markets, consider placing coverage with an E & S Broker. 3. If not eligible for standard markets or E & S, consider the FAIR Plan and addi onal coverage such as a DIC or Wrap Around. 4. If wri ng with a FAIR Plan check the maximum amount available. If sufficient limit is not available with the FAIR Plan then an Excess Insurance policy can be purchased for the addi onal limits required. If excess insurance is being purchased you must no fy the FAIR Plan. Check all states programs as they may differ in eligibility and amounts available. Flood Hazard Ques ons 1. Determine the designated flood zone for the residence (Use FEMA mapping to determine Flood Zone) FEMA mapping informa on is available with the Flood Carriers. a. What is the numerical coding for the flood zone and is there an eleva on cer ficate? b. What is the distance to Tidal Water? Miles Feet Flood Hazard Solu ons 1. Check with the primary carrier to make certain the residence is eligible for standard coverage such as a Homeowners Policy. 2. Offer Flood Insurance Coverage either directly through the NFIP or with a Write Your Own Flood Carrier. 3. Check the limits available through the Flood Program. Not only is the NFIP limited in terms of the amount of coverage available, there are also many categories of property not covered or subject to restric ve language. 4. Addi onal limits can be provided with the E & S market through Excess Flood Policies. Page 5

6 Earthquake Hazard Ques ons 1. Determine if the residence is in an earthquake prone area. Yes No a. Most insurance companies have catastrophe mapping. This will determine rate and indicate EQ factors and suscep bili es such as liquefac on; PML; and company capacity in a given area. b. The type of construc on is a major considera on in the earthquake suscep bility for a home. Determine what steps have been taken to earthquake proof the home. i. Retrofit the home: Yes No ii. iii. iv. Bol ng to founda on: Yes No Cripple Wall Bracing: Yes No Seismic Gas Shutoff Value: Yes No Earthquake Hazard Solu ons 1. Check with the primary carrier to make certain the residence is eligible for standard coverage such as a Homeowners Policy. 2. Offer Earthquake Insurance either through the a standard market or with an E & S Carrier. 3. Some states, such as California, have a residual risk pool known as the CEA which some companies par cipate in. 4. Earthquake insurance typically has a high deduc ble expressed as a percentage of insured value. Some insurance carriers will provide a coverage known as Deduc ble Buyback Insurance. Page 6

7 Windstorm Hazard Ques ons 1. Are any of the residences located in a designated windstorm area? a. Which residence is located in the windstorm area? Residence # b. Are there Storm Shu ers at the home Yes No c. Is the glass Hurricane Resis ve Yes No Windstorm Hazard Solu ons 1. Check with the primary carrier to make certain residence is eligible for standard coverage, such as a Homeowners Policy. 2. Check the primary policy to make certain there are no windstorm exclusions or limita ons. 3. Check to see if the property is eligible for Windstorm Pool coverage, which is available in some states. Vacancy Hazard Ques ons 1. Are any of the residences vacant beyond 30 consecu ve days? (This does not include RV residences) a. Which residence is vacant? Residence # b. How long has the home been vacant? c. Was the home ever occupied by the insured? Yes No d. If the home is currently vacant, when does the insured intend to move in the premises? e. Is the home undergoing any remodeling or renova on? Yes No Page 7

8 f. If yes, when will the renova on be completed? g. Is the home in foreclosure? Yes No h. Is the foreclosure the reason for the vacancy? Yes No i. Is the home in foreclosure AND the insured is s ll residing in the home? Yes No j. Are any of the residences unoccupied for more than 60 consecu ve days? (This does not include RV residences) Yes No Vacancy Hazard Solu ons 1. Check with the primary carrier to make certain residence is eligible for standard coverage, such as a Homeowners Policy. Most insurance companies will not write Homeowners Insurance on a vacant home, however, some carriers will issue the coverage but will surcharge the policy and endorse with a vacancy permit. 2. If a Homeowners Policy is not available, then the homeowner must purchase a Dwelling Fire Policy, however, many carriers will not write a Dwelling Fire Policy on a vacant property. The vacancy must be divulged to the carrier for considera on. 3. If a Dwelling Fire Policy is not available to the insured on the vacant property through normal insurance carriers, then they can seek coverage through the FAIR Plan. Other Hazard Ques ons Ques ons rela ng to a sprinkler system were asked under the Brush Hazard sec on of this survey. However, a home may not be located in a brush area but based on size and construc on type will be required to have a sprinkler system so these ques ons need to be answered. 1. Does the insured have a sprinkler system? Yes No a. Does the house have an opera ve par al, interior sprinkler system? Yes No b. Does the house have an opera ve full interior sprinkler system? Yes No c. Does the house have an opera ve par al exterior sprinkler system? d. Does the house have an opera ve full exterior sprinkler system? Yes No e. Does the house have an opera ve roof sprinkler? Yes No Page 8

9 2. Does the insured have a burglar alarm? Yes No 3. Is the burglar alarm a local or silent center installa on? Local Silent Central 4. Has the burglar alarm been ac vated? Yes No 5. Are there smoke detectors in the home and are they ac vated? Yes No 6. Is there a gas shutoff valve? Yes No 7. Is there a water leak detector? Yes No 8. Is the home in a gated community? Yes No Residence Ownership and Occupancy Ques onnaire and Solu ons Name on the Deed of Trust Issues 1. The name on the policy should be the same as the deed of trust. If the spouse is not named on the Deed of Trust and their name is not included as a Named Insured, then they must be named as Addi onal Insureds. Family Trust or Other Trust Issues Many insureds have a Family Trust. All proper es owned by the family should be in the name of the Family Trust. 1. Does the insured have a Family Trust? Yes No a. Is the residence owned by the Family Trust and the Deed of Trust taken out in the name of the Family Trust? Yes No b. What is the name of the trust? c. Who are the members of the Trust? d. Who is the trustee of the Trust? Page 9

10 Family Trust or Other Trust Solu ons The name on the policy must include the name of the Family Trust. Insurance companies have different procedures in adding the trust. a. One method is to name the trust as a Named Insured with trustees as Named Insureds. However, if this is done, the CPL will respond to anyone who acts on behalf of the trust, which is very broad. Most companies do not want to name the Family Trust as the Named Insured because of the broadness of the CPL coverage. b. A preferable solu on is to name the trust as an Addi onal Insured, either by entry on the Declara on or a achment of an Addi onal Insured Endorsement. Limited Liability Company (LLC) Issues Some insureds have formed Limited Liability Companies (LLC) for ves ng of their homes and other proper es. This is also done for tax purposes as well as a privacy issues. 1. Does the insured have a LLC? Yes No a. Is the residence owned by an LLC and the Deed of Trust taken out in the name of the Family Trust? Yes No b. What is the name of the LLC? c. Who are the members of the LLC? d. Who is the trustee of the LLC? Limited Liability Company (LLC) Issues 1. LLC s are typically added as Addi onal Insureds on residence policies. Page 10

11 Mortgagee and Other Lenders on the Residence Issues 1. Is there a lender or mortgagee on the residence holding a First Trust Deed? Yes No 2. Is there a second mortgagee on the residence holding a Second Trust Deed Note? Yes No 3. Is there any other lien holder on the residence? Yes No Mortgagee and Other Lenders on the Residence Solu ons 1. The mortgagee holding the First Trust Deed must have a mortgagee clause built in the policy or endorsed on the policy which provides them with non-deriva ve (separate) protec on from the insured. 2. If there are Addi onal Interests that are lenders, they must be added to the policy, typically with an Addi onal Interest Endorsement. Residents in the Household Issues and Solu ons: 1. Do both spouses live in the residence? Yes No If NO: If a spouse is not in the residence and is not a named insured on the policy then they have no coverage under the Homeowners Policy and must obtain their own policy. 2. For an owned property are there any unrelated people living in the home (not a tenant paying rent)? Yes No If YES: For an unrelated person living in the home the company should add the Other Members of Your Household Endorsement. 3. Are there any unrelated people living in the home that are tenants paying rent? Yes No IF YES: There is no coverage for the property of the renters. They would have to buy their own Tenants Package Insurance. Page 11

12 4. Does the insured have a rela ve in an assisted living care facility? Yes No If YES: If the insured has a rela ve in an assisted living care facility, the rela ve would have an exposure for both personal property and liability. The insurance company can endorse the Homeowners Policy with the Assisted Living Care Endorsement. 5. Does the insured have any children that are students residing away from the premises while in school? Yes No If YES: For children living away while in school, the insurance company can endorse the Homeowners Policy with the Addi onal Insured Student Living Away From the Residence Premises Endorsement, however, some insurance policies automa cally provide coverage. If there are two unmarried people living in a rented residence, both names must appear on the insurance policy. Page 12

Insurance Checklist Premises Lease Exposure and Coverage Survey

Insurance Checklist Premises Lease Exposure and Coverage Survey The Premises Lease Survey is a guideline for obtaining and using informa on when reviewing a premises lease for risk and insurance solu ons. The survey is appropriate for an insurance agent-broker; property