Review the new 2011 ISO Homeowners Program
By: Bill Wilson
September Forms & Substance
Review the new 2011 ISO Homeowners Program
The last major revision of the ISO Homeowners program was in October 2000. ISO has now filed a new homeowners program with an effective date in most states of May 1, 2011. The new filing includes changes which both broaden and reduce coverage. Some of the revisions are major and some are just minor editorial changes.
An example of one coverage reduction is that personal property in a storage facility will now be limited to 10% of the Coverage C limit. An example of a coverage broadening is that riding mowers are no longer limited to those used solely to service the insured’s residence. They will now be covered if used to service any residence. While this is a broadening, it leaves at least two situations uncovered: servicing vacant land and mowing performed by a business.
An example of both broadened and restricted coverage is that the term “vermin” is being removed from the Section I exclusions; however, damage arising from infestation, secretion and other descriptive verbs won’t be covered. More…
Valuing Property in CGL Claims
A third party files a claim demanding replacement of property negligently damaged by your insured. Does the CGL policy respond on a replacement cost (RC) basis or actual cash value (ACV)? What if there is a contract in place that requires replacement cost and not ACV for valuation of damage?
The CGL policy pays amounts for which the insured is legally responsible. Usually this is legal liability in tort and most jurisdictions hold that the valuation method is ACV, not RC. The insured can incur liability by contract, but the CGL only responds if the insured would have been liable for such damages in tort in absence of the contract (not the case here) or if it is an “insured contract.” So, for example, if a lease is involved, could such a contractually-imposed valuation method be binding on the CGL carrier? More…
Does the CGL Cover undeclared Premises?
A corporation parks its vehicles on a lot owned by the sole stockholder. A pedestrian is injured in a trip and fall and sues the corporation. The adjuster denies the claim on the basis that the insured corporation did not declare the premises. Are undeclared premises excluded by the CGL?
Why would a corporation declare premises they don’t own or rent for business purposes? Must corporations now list property owned solely by their stockholders? How the corporation can be legally liable for the injury is another matter left to the attorneys. At issue here is whether a defense is owed under the CGL policy.
Application information typically consists of representations, not warranties. The insured is covered for BI and PD anywhere in the “coverage territory.” Unless the claim rep can cite an exclusion that removes this broad coverage grant, it’s covered.
Generally speaking, premises are an underwriting and rating issue, not a coverage issue absent a designated premises exclusionary endorsement such as the CG 21 44. The “coverage territory” is all that matters in this situation, absent exclusionary language. More…
Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University, an online learning center for agents and brokers.
Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University, an online learning center for agents and brokers.
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