Property Insurance and Claims
Property Insurance and Claims tests dwelling/homeowners and commercial property coverage, causes of loss, valuation, deductibles, and catastrophe claim handling. Mississippi exams emphasize wind, flood, and hurricane deductibles because coastal claims often involve both wind and rising water.
Coverage structure
- HO-3 policies provide open-peril coverage on the dwelling and named-peril coverage on personal property; HO-5 provides open-peril coverage on both.
- Commercial property forms use basic, broad, or special causes of loss and may include coinsurance, blanket limits, or specific limits.
- Flood is excluded on standard property policies; flood insurance through NFIP or a private flood policy handles rising water.
- Hurricane or named-storm deductibles are percentage deductibles triggered by the policy endorsement definition.
Claim steps
- Acknowledge the claim, inspect promptly, document damage, obtain a proof of loss when required, and apply the correct deductible.
- Separate covered wind damage from excluded flood damage; document cause and allocation.
- Business income claims require the period of restoration, actual loss, and extra expense analysis.
Worked example
A named storm tears off shingles, causing $30,000 of wind damage, and storm surge floods the first floor. The homeowners policy has a 2% hurricane deductible on a $400,000 dwelling, or $8,000. The policy excludes flood, so the wind claim pays $30,000 minus $8,000 = $22,000. The flood policy pays the surge damage subject to its own deductible. Paying all damage under the property policy would wrongly override the flood exclusion.
Traps
- Calling storm surge "wind-driven rain" to avoid the flood exclusion.
- Forgetting ordinance or law coverage when repairs require code upgrades.
- Paying replacement cost without the required depreciation holdback.
Key points
- HO-3 and HO-5 differ in personal property causes of loss.
- Flood is excluded on standard property policies.
- Hurricane deductibles are percentage deductibles.
- Wind and flood damage must be separated and documented.
- Business income requires period-of-restoration analysis.