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Accident Process: Loss of Profit: 1. Fire or Lighting

The document summarizes the perils covered under a property insurance policy. It explains that policies can specify covered perils or exclude uncovered perils. It then lists 14 common perils such as fire, windstorm, hail, explosion, riot, aircraft damage, smoke damage, vandalism, theft, falling objects, weight of ice and snow, water damage, building cracking, electrical current damage, and volcanic eruptions. It provides details on what each peril covers, such as damage from fire and lightning but excluding interior damage if the exterior is undamaged. It also notes exclusions like damage from vacant homes, mold, and earthquakes.

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Naga Mani Merugu
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21 views3 pages

Accident Process: Loss of Profit: 1. Fire or Lighting

The document summarizes the perils covered under a property insurance policy. It explains that policies can specify covered perils or exclude uncovered perils. It then lists 14 common perils such as fire, windstorm, hail, explosion, riot, aircraft damage, smoke damage, vandalism, theft, falling objects, weight of ice and snow, water damage, building cracking, electrical current damage, and volcanic eruptions. It provides details on what each peril covers, such as damage from fire and lightning but excluding interior damage if the exterior is undamaged. It also notes exclusions like damage from vacant homes, mold, and earthquakes.

Uploaded by

Naga Mani Merugu
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ACCIDENT PROCESS: LOSS OF PROFIT

Property insurance policies take one of two basic formats: (1) they may specify the perils that can produce an insured loss, or (2) they may omit identifying covered perils and specify the exclusions that apply. Both formats can produce about the same result. A policy may be written specifying 14 perils that can produce an insured loss, or on an open-perils basis but containing a list of exclusions so only 16 perils remain that can result in a covered loss. The open perils policy format still provides broader coverage, because if would pays for a claim in those cases where a peril goes unspecified in specifiedperils policy format but is not excluded in an open-perils contract.

1. Fire or Lighting: Fire means a hostile fire, one not contained in its proper place.
The word fire is ordinarily used and commonly understood by people. Yet when found in an insurance policy, it takes on a specific and restricted meaning. Lighting is a powerful discharge of natural electricity. Direct losses from lighting are sometimes hard to prove, especially when the only damage that occurs is to television sets and other appliances.

2. Windstorm or Hall: Insurance provides protection against tornadoes and all other
sources of violent wind damage. The coverage excludes damage to the interior of the buildings or contents if the exterior of the building first sustains no damage. Thus, damage sustained because a window is left open is excluded. Explosion: Explosion is a difficult term to define; it is not defined in the policy. There may be fire or loud noise and violent expansion of gases accompanying an explosion. When a combination of some or all these events causes damage, for instance, when a water heater explodes, insurance covers he damage. Riot or Civil Commotion: War, civil war, and insurrection are not covered but lesser hostilities are covered. For example, this peril provided coverage for any insured homes damaged in the Los Angles riots of 1992. Aircraft and Vehicles: Aircraft damage includes damage caused by spacecraft failing on a house and damage done by sonic booms or model planes. Insurance excludes losses to fences; driveways and walks caused by vehicles operated by an occupant the house. Sudden and Accidental Smoke Damage: The definition o sudden has been interpreted differently by various courts. In some cases, it has meant an unforeseen event of short duration. Other courts have omitted reference to the duration of the event. Thus, the smoke damage caused by a smoldering electric blanket may be

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covered under this provision, as may damage resulting from faulty cooking appliances. 7. Vandalism: if others willfully and intentionally damage the homeowners property, there is coverage for Vandalism. In the insurance contract, the coverage for these two paerils is suspended if the house has been vacant 60 consecutive days before the loss. 8. Theft: Theft means the crime of removing property without the owners permission. Theft generally does not include losses bny fraud or mysterious disappearance of property. Three exclusions to theft coverage ae in the HO, including theft committed by an insured. Additional restrictions apply if the theft occurs off the residence premises including in a college doorm or apartment. 9. Falling Objects: The building must sustan exterior damage before interior damage is covered. If a tree lib were to fall and break through the roof, coverage would be provided for the roof and damaged contents. If the homeowner drops a television destroying the television and a chair, no coverage is provided. 10. Weight of ice, Snow, or Sleet: This provision is more useful in Minnesota than in Florida. Yet of four feet of snow were to fall on an insured house in Florida and cause damage. Insurance would cover the loss. 11. Accidental Discharge or Overflow or Water or Steam: Loss caused by accidental discharge from plumbing, appliances, sprinkler systems, or air conditioners is covered. Damage to these items is insurance if he damage is caused by an insured peril as described in the next paragraph. Damage sustained if the building is vacant for more than 60 consecutive days before a loss is excluded, as is mold damage and damages attributed to the malfunction of a sump pump. 12. Sudden and Accidental Tearing Building, Cracking, Burning: the provision covers the explosion of water heaters, heating systems, air conditioners or sprinkle ers , but losses esulting from freezing are covered separately. 13. Sudden Damage from Artificially Generated Electric Current: Coverage is provided for electrical appliance excluding damage to tubes, transistors, and similar parts. If a surge of power was sent through the electric lines and burnet out a motor, there is coverage. Shot-circuit damage may also be covered in some cases. 14. Volcanic Eruption: Residents of Oregon, Washington, and California may be pleased to learn some volcanic damage is covered. Damage done by explosion, lava flow, or volcanic ash would be covered; earthquake damage is specifically excluded. When Mount St. Helens erupted; several questions were raised concerning insurance coverage. The new form resolves these issues. Simplifying a complex

issue, in general, the aboveground damage caused by a volcano may be covered, but the seismic (belowground damage) is excluded from coverage.

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