Property Insurance Basics and Policy Provisions
Policy architecture and property conditions
Property policies are built from declarations, insuring agreement, conditions, exclusions, and definitions. The declarations identify the named insured, property, limits, deductible, and forms. The insuring agreement states what is covered; exclusions narrow it; conditions state duties after loss, appraisal, salvage, and suit limitations. The mortgagee clause protects a lender’s interest: the lender can receive loss payment even if the insured’s acts would otherwise bar recovery, and the insurer may subrogate against the insured. Additional coverages-debris removal, reasonable repairs, trees and shrubs, fire department service charges-have their own limits. Commercial property forms add coinsurance, vacancy, and blanket or specific limits. “Pair or set” rules prevent payment for an entire set when only one item is damaged. “Vacancy” usually means no occupant and no business personal property; “unoccupancy” is different.
Worked example
Wind tears off part of a roof and drops a tree on a fence. The policy covers the dwelling and other structures on a replacement-cost basis, with a $2,000 deductible. The roofer’s replacement estimate is $18,000; the fence is $1,500. Both are direct physical loss from wind. The deductible applies once per occurrence, so the building and fence payment is $18,000 + $1,500 − $2,000 = $17,500, before any tree-removal sublimit. Tree removal is an additional coverage with a separate limit, not an unlimited cleanup benefit.
Traps
Do not apply the deductible to each item. Do not treat a mortgagee as a coinsured. Do not ignore policy conditions such as proof of loss or appraisal. Do not confuse “pair or set” with matching of undamaged siding.