• What are four types of property/casualty
Interpret the nature, theory, and
different types of insurance
PROPERTY AND CASUALTY
& OTHER INSURANCES
• Homeowners policies require the insured
to carry a minimum of 80% of the value of
the home (called co-insurance) to get full
reimbursement for a claim made.
– Most claims are partial losses leading
policyholders to insure a home for less than
value since risk of total loss is low.
Cost Factors of Property
• Limit of coverage for property
• Location of property – fire district, city,
• Structural material - brick, block, frame
• Previous claims filed
FLOOD & EARTHQUAKE
• NOT COVERED UNDER HO POLICY
– Must buy separate flood insurance coverage
– Must buy separate earthquake coverage
• In property insurance, there is a high probability
of a partial loss claim. The insurance policy
requires actual value of property be insured.
• Co-insurance requires an insured to cover a
minimum of 80% of the value of the property
• If less than 80%, the claim amount is reduced at
the time of payment.
• Example: Insuring a $100,000 home for
$50,000 because the premium is cheaper and
chances are there will ever be a total loss.
• Covers property exposed to perils of sea
– The vessel
– The cargo
– Other property
– Liability for the vessel
• One of first types of insurance covering ancient
traders in the Mediterranean Sea.
• The term “underwriter” coined from the process
of insuring the ships and cargo.
• Covers personal property that is being
transport over land
• Transportation methods include:
• Also covers property such as jewelry, furs,
fine arts, musical instrument etc wherever
located and during their transport.
Fidelity and Surety Bonds
• An insurance policy against a financial
loss due to dishonesty
– Pays the employer money in the case of theft
– Guarantees the honesty of employees who:
• Handle large sums of money
• Have access to customers money or assets
– Example: A company that cleans offices after
hours might have a fidelity bond.
Lloyd’s of London
• An insurance company that covers unique
property and liability risks that are difficult
– An opera singer’s vocal chords
– Life insurance on insured with extremely risky
– Comprehensive and collision auto insurance
on drivers with numerous tickets and