FIN 512 Chapter Notes - Chapter 4: Home Insurance, Co-Insurance, Property Insurance
17 Jul 2012
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Three basic levels of coverage for home insurance: basic coverage is a named perils policy- only those perils listed, such as fire, falling objects, and vandalism are covered. This is the cheapest and the most risky of the three. A basic policy is also called a standard policy: broad coverage provides all-risks coverage on the buildings and named perils coverage on the contents, comprehensive coverage- covers the buildings and contents for all-risks that are not specifically excluded. It is the most expensive of the three and provides the most complete coverage. The policy as a contract: a homeowners policy is a contract & establishes the terms of the contract including: That it is an agreement between legally competent parties. The consideration, that is, the amount of the premium. The intent to do something that is legal. The details of exactly what losses are covered and for how much they are covered; and. The period of time covered by the contract.
