Common Policy Provisions

Duties After Loss

• Notify the insurer promptly

• Ignore the damage until further notice

• Submit a claim without proof of loss

• Refuse to cooperate with the investigation

Other Insurance

• Explains how coverage applies when more than one policy covers the same loss. Example: A homeowners and umbrella policy both cover liability; the umbrella applies excess.

• Describes the benefits of having multiple insurance policies for the same risk.

• Indicates that only one policy can cover a specific loss at a time.

• States that insurance policies cannot overlap in coverage.

Loss Payable Clause

• Specifies how claim payments are made to a third party with an insurable interest, such as a lender or lessor.

• Defines the terms of coverage for personal property in a rental agreement.

• Outlines the responsibilities of the insured in case of a claim.

• Details the process for renewing an insurance policy.

Named Insured Provisions

• Grants specific rights and responsibilities to the named insured, such as receiving notices and making policy changes.

• Allows any insured party to request cancellation or receive premium refunds.

• Only the second named insured can request cancellation or receive premium refunds.

• Provides no rights or responsibilities to the named insured.

Vacancy or Unoccupancy

• Vacancy means no people or property, while unoccupancy means property present but no people.

• Vacancy refers to a property that is occupied by people, while unoccupancy means it is empty.

• Vacancy and unoccupancy are the same, both indicating that a property is occupied.

• Vacancy means a property is present but unoccupied, while unoccupancy means it is completely empty.

Pro Rata

• Each insurer pays a share of the loss based on its proportion of total coverage. Example: Two insurers each cover 50% of a $100,000 building; each pays $50,000 on a total loss.

• Each insurer pays a fixed amount regardless of the total coverage.

• Insurers only pay for losses that exceed a certain threshold.

• Each insurer pays only for the damages they directly caused.

Insureds — Named, First Named, Additional

• Named Insured: Listed in declarations.

• First Named: Primary contact with special rights.

• Additional Insured: Added by endorsement.

• Additional Insured: Automatically included in all policies.

Third-Party Provisions

• Address the rights of parties not named in the policy but who may have a legal interest in the proceeds.

• Only apply to named insured parties in the policy.

• Are irrelevant to lienholders or mortgagees.

• Limit the rights of all parties involved in the policy.

Policy Period

• The time frame during which coverage applies.

• A specific type of insurance policy.

• The amount of premium paid for coverage.

• The duration of the claims process.

Cancellation and Nonrenewal

• An insurer must give 10 days’ notice for cancellation due to nonpayment.

• An insurer can cancel a policy without any notice.

• A policy can be renewed indefinitely without notice.

• An insurer must provide 30 days’ notice for cancellation due to nonpayment.