Whatcha think. Covered or not Personal residential issues

Transcription

1

2 Whatcha think. Covered or not Personal residential issues with Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CPIW Vice President of Technical Affairs Massachusetts Association of Insurance Agents This program is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. With special thanks to the Insurance Services Office, Inc. for advance information, continued support, and permission to use their forms and information. 1

3 Maintenance vehicles A homeowner is having work done on her home for which she is renting an excavator. A relative will be operating the equipment on her behalf. Would her liability cover this piece of equipment? From what I can see, she would have coverage under Section II Exclusions, "this exclusion does not apply to: " Part 4, A, a vehicle or conveyance not subject to motor vehicle registration which is: used to service an "insured's" residence.

4 Maintenance vehicles My client informed me that he has a utility trailer and trailers his very expensive riding lawnmower over to his aged mother s house to mow her lawn. If it falls out of the trailer and is damaged, is it covered? If someone gets injured while he is mowing is he covered?

5 Maintenance vehicles Well the answer for both questions depends on which edition of the ISO HO policy the client has. If the company is not ISO then one needs to READ the policy. The ISO HO-91 is the most user friendly and the ISO HO is the LEAST user friendly

6 Maintenance vehicles HO-91 Coverage C covers personal property anywhere in the world but does not cover Motorized land conveyances UNLESS: NOT subject to MVR USED to service insured s residence DESIGNED to assist handicapped eligibility issue if either applies EVER then ALWAYS covered

7 Maintenance vehicles HO-91 Coverage E is universe wide but excludes Motorized land conveyances UNLESS: NOT subject to MVR USED to service insured s residence DESIGNED to assist handicapped eligibility issue if either applies EVER then ALWAYS covered

8 Maintenance vehicles HO-2000 Coverage C covers personal property anywhere in the world but does not cover motor vehicles UNLESS: NOT subject to ANY REGISTRATION USED SOLELY to service an insured s residence DESIGNED to assist handicapped

9 Maintenance vehicles HO-2000 Coverage E is universe wide but excludes Motorized land conveyances UNLESS: NOT subject to ANY registration USED SOLELY to service an insured s residence DESIGNED to assist handicapped and being USED by handicapped

10 Maintenance vehicles HO-2011 Coverage C covers personal property anywhere in the world but does not cover motor vehicles UNLESS: NOT subject to ANY REGISTRATION USED SOLELY to service A residence DESIGNED to assist handicapped

11 Maintenance vehicles HO-2011 Coverage E is universe wide but excludes Motorized land conveyances UNLESS: NOT subject to ANY registration USED SOLEY to service A residence DESIGNED to assist handicapped and used by handicapped

12 Maintenance vehicles HO-91/2000/2011 An afterthought my answer was for the named insured But a relative is using the vehicle is the relative an insured? It appears so HO-2000/2011 but HO-91 same

13 Maintenance vehicles HO-91/2000/2011 HO-91 will cover this rental of excavator issue HO-2000 the word solely could get you..since other people rent it for other things. HO-2011 again the word solely could be a problem

14 Maintenance vehicles My client informed me that he has a utility trailer and trailers his very expensive riding lawnmower over to his aged mother s house to mow her lawn. If it falls out of the trailer and is damaged, is it covered? If someone gets injured while he is mowing is he covered?

15 Maintenance vehicles HO-91/2000/2011 HO-91 would definitely cover this question HO-2011 also..used solely to service A residence would cover HO-2000 no way used solely to service INSURED s residence

16 Bank request Not sure if you can help. X Bank is requiring a declarations page (not a binder) before there is a closing on a property. Supposedly this is a new requirement of FHA Loans. Most companies do not have immediate print on policies and why would they want to write a policy ahead of closing, when the closing date could change or the closing cancelled. The agent and the carrier would frequently be cancelling and rewriting. We just lost an account because of this and they went to a direct writer. This does not seem to be consumer friendly. Have you heard of this? Any suggestions?

17 Bank request Per below MA MGL...I thought they HAD to accept a binder: CHAPTER 183. ALIENATION OF LAND. CONVEYANCE BY DEED. Section 65. Acceptance of written memorandum as evidence of insurance. Section 65. Any mortgagee doing business in the commonwealth who makes in excess of five mortgage loans per year shall accept a written memorandum of a preliminary contract of insurance pursuant to section ninety-eight of chapter one hundred and seventy-five as evidence of insurance from any duly licensed agent, broker or insurance company; provided, however, that a contract for insurance for a term of not less than one year is issued within thirty days of said memorandum, or in the event of the cancellation of said memorandum, the mortgagee shall be provided with prior written notification thereof. (Amended by 1986, 505.)

18 Rented jetski For a rented jet ski that exceeds the HP allowed on the homeowners policy, how would I get physical damage and liability coverage- by purchasing it at the place I rent the jet ski? I assume for an owned jet ski, I would need a separate boat owners policy, but can you please confirm? Thanks so much.

19 Rented jetski All the ISO HO editions deal with watercraft the same way. The ISO HO-2000/2011 get into the very broad watercraft liability definition but bottom line when the insured rents a jetski they respond the same way

20 Rented jetski- the following is the HO-2000/2011 The Exclusion does not apply to an inboard/inboard outdrive engine if RENTED <50 hp Of course jetskis are generally measured in cc not hp So Converting hp to cc Jet Ski PWC 1986 Kawasaki X cc is 52hp

21 Rented jetski If OWNED it is NEVER covered for free. Would need HO but probably a personal watercraft policy

22 Rented jetski Coverage C personal property would restrict coverage to special limit of $1,000 under the ISO HO-91 and $1500 under ISO HO-2000/2011 Also there is never any theft from off the residence premises And no windstorm damage unless in fully enclosed building

23 HO replacement cost does it end? I have a client that has had a terrible time getting a contractor that would agree to company appraisal. Work took 2 years and 2 months. She has the denial letter. What avenue would be open to her? Have you heard if this being waived for such course?

24 HO replacement cost does it end? The HO MA endorsement to ISO HO policy... any edition modifies Loss Settlement

25 HO replacement cost does it end? The ISO policy talks about 180 days One ALWAYS can have ACV I would file a consumer complaint and see what happens I know the horror stories of building

26 HO replacement cost does it end? Consumer complaint Might be in order

27 HO replacement cost does it end? To renege on paying R/C for a few months is poor business practice

28 Home sale and moving Have a client who is selling his primary home and will be living in a hotel for a few weeks until the construction for his new primary home is complete. He is inquiring about what type of policy he can have while his personal property is in storage. Can you advise? Thanks!

29 Home sale and moving Is the new home insured under a HO policy yet? HO-2000 if so... then the ISO HO-91 and HO-2000 provide complete coverage C in storage. HO-91

30 Home sale and moving Has previous policy been cancelled... one could "leave it open" for a bit... for contents and liability.. but will the house REALLY be done in a couple of weeks again... full coverage C in storage if HO-91 or HO Where they are temporarily residing could be an insured location HO-91 and HO-2000

31 Home sale and moving Where are they living temporarily - a tenant's policy under ISO HO- 91or HO gives full coverage C in storage also if one chooses to buy or one already cancelled the HO-3

32 Home sale and moving If the company writes their own or is ISO HO-2011 then with HO-2011 there is a 10% limitation for stuff in storage facility.

33 Who insures the ring? My client just bought his girl an engagement ring. He wants to know who insures it him or her?

34 Who insures the ring? What about the Diamond does his tenants policy cover that? Number one What is the contents limit on the HO-4 and how valuable is the diamond??? Number two you only have 16 named perils under the HO-4 UNLESS you have added the All risk endorsement HO Losing stone or ring STILL limited with open peril endorsement Number three. special limit for theft of jewelry

35 Who insures the ring? HO-91 COVERAGE C Personal Property Special Limits of Liability. These limits do not increase the Coverage C limit of liability. The special limit for each numbered category below is the total limit for each loss for all property in that category. 5. $1000 for loss by theft of jewelry, watches, furs, precious and semi-precious stones. HO-2000/2011 Coverage C Personal Property 3. Special Limits Of Liability The special limit for each category shown below is the total limit for each loss for all property in that category. These special limits do not increase the Coverage C limit of liability. e. $1,500 for loss by theft of jewelry, watches, furs, precious and semiprecious stones

36 Who insures the ring? So we most probably suggest SCHEDULING the ring WHO SCHEDULES IT Mike or Suzie???

37 Who insures the ring? Mike bought it and has insurable interest Proposal is a contract ring is the consideration bride-to-be must return ring if cancel engagement Suzie wearing it has custody could insure it and if live at home under mom and dad s policy

38 Who insures the ring? So we most probably suggest SCHEDULING the ring Under the HO-2000 /2011 you have the choice of the HO Scheduled Personal Property Endorsement or the HO Scheduled Personal Property Endorsement (With Agreed Value Loss Settlement) HO Both provide all risk coverage with very few exclusions

39 Who insures the ring? Perils discussion found in the HO and the HO C. Perils Insured Against We insure against risks of direct loss to property described only if that loss is a physical loss to property; however, we do not insure loss caused by any of the following: 1. Wear and tear, gradual deterioration or inherent vice. 2. Insects or vermin. 3. War, including the following and any consequence of any of the following: a. Undeclared war, civil war, insurrection, rebellion or revolution; b. Warlike act by a military force or military personnel; or c. Destruction, seizure or use for a military purpose. Discharge of a nuclear weapon will be deemed a warlike act even if accidental. 4. Nuclear Hazard, to the extent set forth in the Nuclear Hazard Clause of Section I Conditions. 5. If Fine Arts are covered: a. Repairing, restoration or retouching process; b. Breakage of art glass windows, glassware, statuary, marble, bric-a-brac, porcelains and similar fragile articles. We cover loss by breakage if caused by: (1) Fire or lightning; (2) Explosion, aircraft or collision; (3) Windstorm, earthquake or flood; (4) Malicious damage or theft; (5) Derailment or overturn of a conveyance. We do not insure loss, from any cause, to property on exhibition at fair grounds or premises of national or international expositions unless the premises are covered by this policy

40 Who insures the ring? HO Loss Settlement Covered property losses are settled as follows: c. OTHER PROPERTY (1) THE VALUE OF THE PROPERTY INSURED IS NOT AGREED UPON BUT WILL BE ASCERTAINED AT THE TIME OF LOSS OR DAMAGE. WE WILL NOT PAY MORE THAN THE LEAST OF THE FOLLOWING AMOUNTS: (a) THE ACTUAL CASH VALUE OF THE PROPERTY AT THE TIME OF LOSS OR DAMAGE; (b) THE AMOUNT FOR WHICH THE PROPERTY COULD REASONABLY BE EXPECTED TO BE REPAIRED TO ITS CONDITION IMMEDIATELY PRIOR TO LOSS; (c) THE AMOUNT FOR WHICH THE ARTICLE COULD REASONABLY BE EXPECTED TO BE REPLACED WITH ONE SUBSTANTIALLY IDENTICAL TO THE ARTICLE LOST OR DAMAGED; OR (d) THE AMOUNT OF INSURANCE. HO F. Conditions 1. Loss Settlement Covered property losses are settled as follows: a. Agreed Value We will pay, for each article or property designated in the Schedule, the full amount shown in the Schedule which is agreed to be the value of that article or property. At our request, you will surrender that article or property to us if not lost or stolen. The major difference between the normal Scheduled personal property floater HO and the HO is the LOSS VALUATION CLAUSE:

41 Who insures the ring? The HO doesn t guarantee payment it pays the LEAST of 1) ACV 2) Repair 3) OUR replacement 4) Stated limit The HO guarantees the limit shown on the endorsement as it is an agreed value coverage. Agreed value generally costs more It is better as long as the insured continually UPDATES the appraisal that activates the agreed value option!!!!!

42 Who insures the ring? IF the fiancé moves in BEFORE she gets the wedding ring is she an insured under his tenant s policy does the policy cover her at all??? She is NOT an insured by definition under the ISO HO-91 or the HO-2000/2011 policies

43 Who insures the ring? HO-91 In this policy, you and your refer to the named insured shown in the Declarations and the spouse if a resident of the same household. 3. "Insured" means you and residents of your household who are: a. Your relatives; or b. Other persons under the age of 21 and in the care of any person named above. Under Section II, "insured" also means: c. With respect to animals or watercraft to which this policy applies, any person or organization legally responsible for these animals or watercraft which are owned by you or any person included in 3.a. or 3.b. above. A person or organization using or having custody of these animals or watercraft in the course of any "business" or without consent of the owner is not an "insured"; d. With respect to any vehicle to which this policy applies: (1) Persons while engaged in your employ or that of any person included in 3.a. or 3.b. above; or (2) Other persons using the vehicle on an insured location with your consent. HO-2000/ "Insured" means: a. You and residents of your household who are: (1) Your relatives; or (2) Other persons under the age of 21 and in the care of any person named above; b. A student enrolled in school full time, as defined by the school, who was a resident of your household before moving out to attend school, provided the student is under the age of: (1) 24 and your relative; or (2) 21 and in your care or the care of a person described in a.(1) above; or c. Under Section II: (1) With respect to animals or watercraft to which this policy applies, any person or organization legally responsible for these animals or watercraft which are owned by you or any person included in a. or b. above. "Insured" does not mean a person or organization using or having custody of these animals or watercraft in the course of any "business" or without consent of the owner; or (2) With respect to a "motor vehicle" to which this policy applies: (a) Persons while engaged in your employ or that of any person included in a. or b. above; or (b) Other persons using the vehicle on an "insured location" with your consent. Under both Sections I and II, when the word an immediately precedes the word insured, the word an means one or more insureds

44 Son at school in apartment My 20 year old son is living in a Non-Campus Apartment at UNH in NH. We live in Massachusetts. I have some people here at work telling me, no tenant policy needed because he is still my dependent and my HO3 policy would cover him and others saying because he is 20 and off campus my HO3 would not respond. What are your thoughts.

45 Son at school in apartment Two questions. Who is YOUR HO insurance carrier and what edition of ISO HO policy is it and if not ISO need to look at definition of insured Is living CURRENTLY didn t college end for summer is he living in it YEAR ROUND and when college not in session?

46 Son at school in apartment The answer is HO0003, 04/91 he is back and forth between school and home all summer, but apartment is rented 6/1/16-5/31/17,

47 Son at school in apartment but if the same apartment is rented the following year the insured location definition regarding temporarily residing gets gray d. Any part of a premises: (1) Not owned by an "insured"; and (2) Where an "insured" is temporarily residing I would ask the underwriter just to see the company s take on this issue they should have one since the HO-91 is over 2 decades old

48 Son at school in apartment An off campus apartment will be considered another insured s residence and contents limited to 10% If he leaves his stuff more than 45 days there is no theft Sometimes an HO-4 guarantees at least ONE policy will pay.

49 Son at school in apartment The ISO HO-2000/2011 creates a bigger problem with The definition of insured

50 Son at school in apartment The ISO HO-2000/2011 creates a bigger problem with The definition of insured Move out in August come back every May?? Move out as a Freshman and come back graduated as a senior?

51 Son at school in apartment This is NOT a cut and dried answer you really should be talking to the company not me and certainly not co-workers

52 Son at school in apartment Our insured s son will be renting an apartment when he goes to college but the parents are signing the lease will that be a problem?

53 Son at school in apartment Well that is interesting and more of a legal question Since the parents are NOT going to live there then the HO-4 cannot be in THEIR NAME. Named insured MUST live there

54 Son at school in apartment The ISO HO-2000/2011 definition of residence premises under the ISO HO-4 is: HO91 is:

55 Son at school in apartment Can we add parents in addition to son. Otherwise I d prefer lease in just kid s name But I d ask a lawyer if there are legal ramifications

56 Tenant s policy and property damage to apartment I have a potential customer who is looking for a renters policy. She has a 75 gallon fish tank and needs liability coverage for in the event that the tank leaks and damages the floor in her unit. Would the HO 04 10/00 form cover this liability loss? I do not have a copy of the 10/2000 form. But reading the 1991 HO 04 form I understand that liability coverage does not apply to property damage to property rented to insured or in their care or custody. Does that apply to the unit?

57 Tenant s policy and property damage to apartment Under Section II personal liability exclusion one sees: F. Coverage E Personal Liability Coverage E does not apply to: The ISO HO-91/HO-2000/HO-2011 has same exclusion

58 Tenant s policy and property damage to apartment There is an additional coverage of $1,000 but that is it: The HO-91 only provides $500

59 Tenant s policy and building a house We have an insured with an HO-4 (10/00). They have purchased some land and are going to be building their new home on the land. Will the HO-4 provide personal liability coverage for the land while the home it being built?

60 Tenant s policy and building a house The ISO definition of "insured location" in HO- 2000/2011 (as well as HO-91)

61 Insureds suing insureds One of my customers asked if he has a relative living in the home who is a household member, and the relative is injured on the premises, can the relative go back and sue the homeowners for bodily injury? On the ISO-HO3 form the definition of insured also includes household members and I know that an insured cannot sue themselves. Is this something that commonly happens or insured's will run into? Please let me know.

62 Insureds suing insureds All of the ISO editions state that resident relatives are Insureds. This is HO-2000 but We have seen the HO-91 and HO-2011 previously

63 Insureds suing insureds Anyone can be sued by anyone. YES Does ANY ISO HO edition respond... NO MP states it does NOT apply to anyone living in your household

64 Insureds suing insureds Coverage E BI/PD excludes an "insured" suing an "insured"... no defense and no payout and "insured" does include "resident relative"

65 Golfcarts and HO policy A HO client has bought a golf cart and will drive it on private roads in an association he is a member of. His home is on the association property. Will liability coverage apply? Not sure but under 4.c. on page 1. the policy form says Any premises used by you in connection with a premises in 4a. - does this extend coverage?

66 Golfcarts and HO policy Hopefully you can help me with our bet. I say there is coverage Dave along with Company underwriter says no coverage. There is a Whole dollar on the line for this question so I am expecting a positive response in my favor.

67 Golfcarts and HO policy The company in question is an HO-91 carrier

68 Golfcarts and HO policy In YOUR question you said PRIVATE roads in an association if they are PRIVATE roads then the HO-91 should respond per the definition of insured location residence premises and any premises used in connection with residence premises or location used as a residence a. and b.

69 Golfcarts and HO policy The motor vehicle exclusion under the HO-91 reads: So it s a recreational vehicle Designed for off road use If owned it can be used On an insured location (common Areas) And While playing golf on golf course

70 Golfcarts and HO policy PRIVATE roads in a HO association SHOULD be considered an insured location and SHAME SHAME SHAME on a company that interprets otherwise. There is NOTHING in the policy that states the premises used in connection with needs to be ADJACENT to the residence premises. SHAME SHAME SHAME if a company takes this standpoint.

71 Golfcarts and HO policy If these are PUBLIC roads in an association such as The Villages in Florida there could be an issue as public roads do not meet the definition of insured location per se

72 Golfcarts and HO policy The ISO HO-2000 and HO-2011 loves owned golf carts for liability ANYWHERE in community including public roads

73 Thank you for attending Whatcha think Personal residential issues