Condo Insurance: How Much Is Enough?

One of the toughest property limits to determine is how much Coverage A is needed on a condo. Depending on the state, it could be governed by statute, association bylaws or other criteria. For years, the industry guidance has ranged from nothing, to 70% of the purchase price, to current market price.

How much is enough? The answer lies in who precisely owns what within the association and who is responsible for insuring what. That is often determined by a combination of state statutes, associa­tion bylaws and CC&Rs and the actual policy forms. Unfortunately, there is just no shortcut—all of these documents are necessary in order to ascertain the responsibilities of all parties. More…

Digging Deep to Find Homeowners Coverage

An insured’s brother-in-law was helping him clean up some storm damage when a tree limb damaged his lawn tractor. The adjuster denied the damage as a liability claim under the Damage to Property of Others because it requires the damage to be “caused by” an insured. In this case, the adjuster might be right—but that doesn’t mean the damage is not covered.

The presumption is often that a homeowners policy just covers the insured’s property in the Section I property coverages part of the policy. The reality is that it typically covers property you own or use, and in some cases, even property you’re not using.

Coverage C in the ISO HO-3 form says, “At your request, we will cover personal property owned by others while the property is on the part of the ‘residence premises’ occupied by an ‘insured.’” So, it appears that the brother-in-law’s riding mower is covered if (“at your request”) the insured turns in the claim. However, the search is not over.

Next we turn to the “Property Not Covered” section, which excludes motor vehicles, with some exceptions. One of those exceptions is vehicles not subject to motor vehicle registration that are “used to service an ‘insured’s’ residence.” Here’s an important note: This language is in the 1991 ISO HO-3 form, which just happens to be the edition belonging to this insured. If the insured had the more current edition (dated 2000), the exception only applies to such vehicles used solely to service an insured’s residence. And get ready because this language changes again in the brand new 2011 ISO HO-3 form.
In addition to reviewing the entire policy form, it’s just as critical to know precisely which policy form (ISO edi­tion or proprietary company form) is in question. More…

Floaters Versus Riggers

Probably the most common inland marine question the Virtual University has received over the years is whether an instal­lation floater and a riggers liability policy are equivalent.

Just as ISO forms represent the industry standard for fixed property, AAIS forms are probably the closest thing to an industry standard for movable property forms. Accord­ing to AAIS, “Rigging contractors are contractors who offer lifting services to others. Rigger’s liability coverage is specifically designed to provide coverage for contractors who lift, move and set in place the property of others. Covered property consists of the property of others that is being lifted.

“Installation floater coverage is designed to provide coverage for a single construction phase or pro­cess (e.g., plumbing, dry walling). Installation floaters are intended to cover materials, supplies, machin­ery, fixtures and equipment that are part of an installation, fabrication or erection project. Materials, sup­plies, machinery, fixtures and equip­ment can be the insured’s property or the property of others.

“Some insurers may use an installation floater to cover rigging contractors, especially if the contrac­tor sometimes operates as building contractor and sometimes as a rigging contractor. The installation floater is broad enough to cover both types of risks while the riggers’ liability form is specific to contrac­tors who only do rigging work.” More…

Bill Wilson (bill.wilson@iiaba.net) is director of the Big “I” Virtual University, an online learning center for agents and brokers.