Maybe so; maybe not. The standard building policy probably covers the structure and the public or common areas.
The article will explain the nature of an insurance contract and important concepts relating to property and liability insurance. These concepts include the coverage commonly provided by homeowner's and business owner's property insurance policies and the basis for the premiums charged by insurers to cover property under an insurance policy.
Also, an explanation of liability insurance is provided along with information about the most common type of liability insurance, Commercial General Liability insurance, and exemptions that are typical in these policies.
Other issues that frequently arise in conjunction with property and liability insurance are also described, such as subrogation, reinsurance and bad faith causes of action.
This article also provides an explanation of some of the factors that affect insurance rates and policies, such as insurance regulation, risk and insurable interests.
Finally, the issues that commonly arise relating to the liability of insurers, such as the procedures that policyholders must follow to file claims, the defenses that insurers typically use to dispute claims and the measure of recovery that is used to assess claims and determine the proceeds paid by insurers in response to those claims, is explained.
Keywords Appraisal; Beneficiary; Claims; Estoppel; Insurable Interest; Liability; Premium; Subrogation Insurance Overview Insurance is essentially a way to manage risk and protect assets against potential financial loss. In exchange for a fee, known as a premium, risk is transferred from one entity to another.
There are many different types of insurance, and each one of these types provides coverage for different assets. For instance, life insurance provides a monetary benefit to a decedent's family upon the death of the insured, automobile insurance covers legal liability claims against Property insurance essay driver and any loss of or damage to the insured's vehicle itself, property insurance provides protection against risks to property arising from natural Property insurance essay or criminal activity and liability insurance covers legal claims that are brought by third parties against the insured.
Each type of insurance differs in the scope of coverage it provides, the premiums that are charged and the procedures that are required for policyholders to maintain coverage, file claims and receive payments.
Property and liability insurance are both common forms of insurance. Property insurance is often sold by insurers in tandem with other types of insurance.
For instance, when people purchase a home, they generally buy a homeowner's insurance policy that covers damage to the home and property and the replacement value of the owner's belongings.
The owner or management of a company may purchase a business owners policy that will cover damage or loss to the property. Liability insurance is also routinely purchased by businesses to cover any liability from damages or losses owed to a third party that arise from conduct relating to its business activities or its agents or employees.
The following sections provide a more detailed explanation of property and liability insurance policies. Basic Concepts in Property Insurance is a unique form of contract, known as a policy, between an individual or entity whereby the policyholder pays the insurer regular installments, called premiums, and in return receives financial protection or reimbursement against losses from the insurer.
The insurance company pools the premium payments of its policyholders along with other income-generating assets to create a reserve fund from which payments are made. Insurance companies also assess the risks involved in insuring various assets against loss or damage and use this information to determine whether to underwrite insurance policies and to develop appropriate rates for premiums and coverage limits for claims.
Property and liability insurance policies are commonly purchased by individuals and businesses to protect their most valuable assets. The following sections provide further detail about these two types of insurance policies.
Nature of Insurance An insurance policy is generally characterized by three elements: Risk distribution acts to mitigate the onus of an individual or business entity single-handedly bearing the full consequences of a misfortune.
Most individuals and businesses do not have sufficient cash reserves on hand to cover significant losses to their property or to pay substantial damages in the event of a lawsuit. However, most of these same individuals and business can afford to make reasonable monthly, quarterly or even annual payments to an insurer that will in turn pay these significant costs when they arise.
Insurers use statistics and the law of averages to determine when it is economically feasible to underwrite insurance policies. When insurers underwrite an insurance policy, the insurance company assumes the risks of the occurrence of any of the events it lists in the policy, which is a contract of insurance wherein the term, coverage, premiums and deductibles of the contract are listed in writing.
Insurers fix the premium rates that policy members pay by predicting the number and size of losses during the period of the insurance policy and then spreading these costs evenly among its members.
Although payments on a claim, or a request for reimbursement from an insurance company when the insured has suffered a loss that is covered under an insurance policy, can be substantial, they may not occur very frequently.
Thus, insurance companies are able to build their cash reserves by collecting premium payments by a substantial number of policyholders and only paying claims for losses that are relatively infrequent. The process whereby insurers allocate prospective risks among many members to minimize the economic liability for any one member is what distinguishes an insurance policy from a traditional contract.
In most contracts, one party is only willing to assume the liability of another for some consideration. For instance, a surety a person or organization that promises in writing to pay the debt of another in the event of default generally only accepts this responsibility upon receipt of payment or other type of consideration.
However, in an insurance contract, the insurer promises to cover an economic loss that falls within the scope of a policy held by any of its policyholders. Thus, the one-to-one nature of the exchange of liability for consideration in traditional contracts is diffused among many members in insurance contracts.
Finally, insurance policies differ from traditional contracts in that they are written by an insurer that is primarily in the business of insurance. There are other types of contracts that have the common elements of distribution of risk among a sizeable group of participants, as in warranty contracts that cover certain types of merchandise such as household appliances.
However, these appliance manufacturers are not primarily in the business of insurance and the purpose of the risk distribution in these contracts is merely to obtain an amount of immediate income to defray the potential future expense of rendering services on the appliances. Property Insurance Property insurance provides protection against most risks to property, such as damages resulting from fire, theft or weather events.
Specialized forms of property insurance may be sold to cover specific types of damage, such as fire insurance, flood insurance or earthquake insurance. Property insurance is often packaged with other types of insurance and sold as homeowner's insurance or a business owner's policy.Property insurance provides protection against most risks to property, such as fire, theft and some weather damage.
This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. Analysis and Valuation of Insurance Companies Industry Study Number Two.
– Companies with diversified interests in life, health, property and casualty insurance. Examples include American International Group Inc. (AIG), Hartford Financial Services Group Inc.
(HIG), and Assurant Inc. (AIZ). 4. In property insurance, there are six main principles that govern a contract of insurance. If one of those requirements is not met by the insured or. What Is Insurance: Insurance is a form of risk management in which the insured transfers the cost of potential loss to another entity in exchange for monetary compensation known as the premium.
Types of Insurance: There are many type of insurance,for example – Bond insurance Builder's risk insurance Flood insurance Fire insurance Health .
Property Insurance Essay INTRODUCTION INSURANCE Insurance is a social device that provides compensation for the effect of loss incurred. It’s also a mechanism of . Hurricane Catastrophe Fund, the Flood Insurance and the private homeowner insurance market in Florida from to , the second essay examines the moral hazard problems arising from government regulation and involvement in the private insurance sector.