chapter 10

1. Chapter 10 Protecting Your Property

3. Principle of Indemnity Insured may be compensated an amount up to insured�s economic loss Cash value = replacement cost � depr Subrogation � insurance firm collects from party causing damage Limited to one policy covering same assets

4. Coinsurance Insured must buy insurance equal to at least a certain percentage of assets� replacement value (e.g., 80%) If not, insured is responsible for difference Make sure you have enough coverage!

5. Homeowner�s Insurance Policies Multiple perils Fire damage Theft Storm damage Breadth of coverage Magnitude of disaster

6. Basic Property Coverage Dwelling Other structures Personal property Loss of use Dwelling -- house and all attachments b -- detached garages c -- protects property regardless of where you are -- on vacation or at home. Protects guest and well and homeowner. Limits on certain items like cash, jewelry. Limit of coverage is 1/2 of house�s value D -- house burns down so you get up to 20% of house�s value for temporary living quarters. BUILDING INSURANCE -- 1/2 BECAUSE HOUSE IS ONLY HALF BUILT DURING CONSTRUCTION.Dwelling -- house and all attachments b -- detached garages c -- protects property regardless of where you are -- on vacation or at home. Protects guest and well and homeowner. Limits on certain items like cash, jewelry. Limit of coverage is 1/2 of house�s value D -- house burns down so you get up to 20% of house�s value for temporary living quarters. BUILDING INSURANCE -- 1/2 BECAUSE HOUSE IS ONLY HALF BUILT DURING CONSTRUCTION.

7. Personal Liability Coverage Protects against injury on property Medical costs Personal Liability (lawsuits) IF HAVE WORKMEN PAINTING. THEY FALL. IF THEY ARE NOT COVERED BY INSURANCE, YOUR INSURANCE PAYS. COVERS PETS ATTACKING PEOPLE.IF HAVE WORKMEN PAINTING. THEY FALL. IF THEY ARE NOT COVERED BY INSURANCE, YOUR INSURANCE PAYS. COVERS PETS ATTACKING PEOPLE.

8. Supplemental Coverage Personal article floaters Earthquake coverage Flood protection Inflation guard Personal property replacement cost coverage Professional liability FLOATERS -- ADDITIONAL COVERAGE ON PERSONAL PROPERTY,. E.G., JEWELRY. FLOOD -- IF TORNADO GETS YOU IN HURRICANE YOU WILL BE COVERED WITHOUT SPECIAL FLOOD INSURANCE. BUT IF RISING WATERS ARE WHAT DESTROYS HOUSE, TOO BAD, WITHOUT THIS SPECIAL COVERAGE INFLATION -- PREMIUMS AND PAYOFFS TRACK INFLATION REPLACEMENT -- WILL REPLACE ITEM AT WHATEVER CURRENT COST IS, INSTEAD OF ACTUAL CASH VALUE. IN ACTUAL CASH VALUE, INSURANCE PAYS THE REPLACEMENT COST LESS THE DEPRECIATED VALUE OF THE LOST ITEM. THAT CAN BE WELL BELOW THE REPLACEMENT COST. MUCH MORE EXPENSE (5 TO 15% MORE)FLOATERS -- ADDITIONAL COVERAGE ON PERSONAL PROPERTY,. E.G., JEWELRY. FLOOD -- IF TORNADO GETS YOU IN HURRICANE YOU WILL BE COVERED WITHOUT SPECIAL FLOOD INSURANCE. BUT IF RISING WATERS ARE WHAT DESTROYS HOUSE, TOO BAD, WITHOUT THIS SPECIAL COVERAGE INFLATION -- PREMIUMS AND PAYOFFS TRACK INFLATION REPLACEMENT -- WILL REPLACE ITEM AT WHATEVER CURRENT COST IS, INSTEAD OF ACTUAL CASH VALUE. IN ACTUAL CASH VALUE, INSURANCE PAYS THE REPLACEMENT COST LESS THE DEPRECIATED VALUE OF THE LOST ITEM. THAT CAN BE WELL BELOW THE REPLACEMENT COST. MUCH MORE EXPENSE (5 TO 15% MORE)

9. Renter�s Insurance

10. Keep Homeowner's Insurance Costs Down Cost factors -- location, type of structure, level of coverage Select a financially sound insurer with low comparative costs Consider other potential discounts and savings method Factors: location -- stay away from hurricanes and earthquakes; Huntsville and its tornadoes! Sink holes on the mountain. Type of structure -- older, less sound structures cost more Level of coverage -- more coverage costs more High deductibles Security systems Multiple policy discounts Pay premiums annually rather than quarterly Shop around Factors: location -- stay away from hurricanes and earthquakes; Huntsville and its tornadoes! Sink holes on the mountain. Type of structure -- older, less sound structures cost more Level of coverage -- more coverage costs more High deductibles Security systems Multiple policy discounts Pay premiums annually rather than quarterly Shop around

11. Are you insurable? Dogs Credit history Claims history for 5 years Water claims Wind/hail damage Burglaries CLUE reports $13 to $20 (www.choicetrust.com) Comprehensive Loss Underwriting Exchange Insurers competed with lower premiums. High claims bankrupt some. Now premiums higher and some people can�t get coverage.Comprehensive Loss Underwriting Exchange Insurers competed with lower premiums. High claims bankrupt some. Now premiums higher and some people can�t get coverage.

12. Recovering on a Liability or Property Loss Keep an inventory establishing proof of ownership (preferably on videotape). Videotape the exterior of the home to value landscaping or condition. Keep records concerning the value of your assets. Report your loss immediately. Keep photos, videotapes, records at a separate location in case the house is totaled. Keep photos, videotapes, records at a separate location in case the house is totaled.

13. Recovering on a Liability or Property Loss (continued) Make temporary repairs to protect your property. Make a detailed list of everything lost or damaged. Maintain records of the insurance settlement process. Confirm the adjuster�s estimate.

14. The Personal Automobile Policy Liability Medical Uninsured Motorist Damage to Your Car No - fault insurance Liability -- Covers bodily injury losses; Covers property damage losses; Can be a combined single limit or a split-limit coverage; Most states require a minimum coverage; Covers losses due to a lawsuit ; Covers defense cost in civil trials in addition to your policy limits Medical -- Covers all reasonable medical costs incurred, as a result of an accident, by the insured or the insured�s family members within three years; Recommended coverage of $50,000; Does not cover medical expenses if injured by a vehicle not designed for public streets Uninsured Motorist -- Provides coverage if injured by an uninsured motorist or a hit-and-run driver; The other driver must be at fault to collect on this coverage; Also covers costs in excess of the other driver�s liability coverage, if inadequate to pay for your losses Coverage for car -- Covers the damage to your automobile as a result of collision, fire or storms, theft or larceny, falling objects, earthquakes; Recommended limit is the cash-value of your automobile Exclusions -- Intentional injury or damage, Use without permission, Vehicle has less than four wheels, Someone else�s vehicle provided on a regular basis, Automobile not listed on your policy, Carrying passengers for a fee, Driving in a race or speed contest No-fault -- Only available in �no-fault� states; The idea is that your insurance pays for your losses and their insurance pays for their losses; You can still sue their insurance for �pain and suffering� Liability -- Covers bodily injury losses; Covers property damage losses; Can be a combined single limit or a split-limit coverage; Most states require a minimum coverage; Covers losses due to a lawsuit ; Covers defense cost in civil trials in addition to your policy limits Medical -- Covers all reasonable medical costs incurred, as a result of an accident, by the insured or the insured�s family members within three years; Recommended coverage of $50,000; Does not cover medical expenses if injured by a vehicle not designed for public streets Uninsured Motorist -- Provides coverage if injured by an uninsured motorist or a hit-and-run driver; The other driver must be at fault to collect on this coverage; Also covers costs in excess of the other driver�s liability coverage, if inadequate to pay for your losses Coverage for car -- Covers the damage to your automobile as a result of collision, fire or storms, theft or larceny, falling objects, earthquakes; Recommended limit is the cash-value of your automobile Exclusions -- Intentional injury or damage, Use without permission, Vehicle has less than four wheels, Someone else�s vehicle provided on a regular basis, Automobile not listed on your policy, Carrying passengers for a fee, Driving in a race or speed contest No-fault -- Only available in �no-fault� states; The idea is that your insurance pays for your losses and their insurance pays for their losses; You can still sue their insurance for �pain and suffering�

15. Buying Automobile Insurance Keeping your costs for auto insurance down Cars cheap to insure Raise deductible Improve driving record Pay annually Determinants of auto insurance cost Where the car will be driven Amount vehicle will be driven Personal characteristics of the driver Type of automobile Driving record of the insured Determinants of cost: Type of automobile, Use of automobile, Your personal characteristics, Your driving record, Where you live, Discounts you qualify for Figure auto insurance into purchase decision. Insurance on Ford trucks was very high in El Paso. Reason? Fords were made in Mexico so spare parts are available there. Trucks immediately driven across the border for difficulty in finding. Costs down -- Shop comparatively Consider only high-quality insurers Use discounts Buy vehicles that are relatively inexpensive to insure Improve your driving record Raise your deductibles Keep adequate liability insuranceDeterminants of cost: Type of automobile, Use of automobile, Your personal characteristics, Your driving record, Where you live, Discounts you qualify for Figure auto insurance into purchase decision. Insurance on Ford trucks was very high in El Paso. Reason? Fords were made in Mexico so spare parts are available there. Trucks immediately driven across the border for difficulty in finding. Costs down -- Shop comparatively Consider only high-quality insurers Use discounts Buy vehicles that are relatively inexpensive to insure Improve your driving record Raise your deductibles Keep adequate liability insurance

16. Questions?