06.05. HO-3 Section I Conditions

  1. Insurable Interest and Limit of Liability
    • insured must have insurable interest in property at time of loss
    • regardless of nbr of insureds with insurable interest, max payable is the limit
  2. Deductible
    • on a per-loss basis
    • max deductible is applied for the loss
    • minimum deductible is $500
  3. Your Duties After Loss
    • give prompt notice
    • notify the police
    • notify credit card company
    • protect property from further damage
    • cooperate with insurer
    • prepare an inventory
    • verify the loss
    • sign a sworn proof of loss
  4. Loss Settlement
    • personal property: lesser of ACV or replacement / repair cost
    • losses to building: if limit is ≥ 80% of replacement cost, pay replacement cost up to limit; otherwise pay greater of ACV and replacement cost * (limit / 80% value)
    • insurer pays ACV, insured has up to 180 days to decide to repair and collect replacement cost
  5. Loss of a pair
    • either pay missing item
    • or pay difference between ACV of pair and remaining item
  6. Our option
    • most times insurers choose to pay the value of loss
    • however the Our Option clause reserves the right to the insurer to repair or replace damaged property with similar property if they can purchase repair or replacement items cheaper
  7. Mortgage Clause
    • loss is payable jointly to mortgagee and insured
    • mortgagee has independent rights to collect its insurable interest from insurer, even if claim was denied
    • in case of cancellation, insurer must notify mortgagee at least 10 days in advance
Card Set
06.05. HO-3 Section I Conditions
HO-3 Section I Conditions