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Five Gaps In The BOP!

Businessowners Policies, traditionally referred to simply as “BOPs,” were introduced in 1976 and significantly revised in 1987. The BOP evolved gradually from the 1987 revisions to include risk classification and sizes not contemplated in the original or “first revision” editions of the form. Additionally, many insurance carriers have built upon the Insurance Services Office’s (ISO’s)…

Property Coverage for Businesses with Changing Needs

Some businesses have very stable property insurance needs as the value of their non-building property doesn’t vary much during the year. For example, an accountant’s office will have furniture, telephones, computers, reference books, and so on. The replacement costs of these items won’t be much different in July than they were in April. Other types…

What Additional Living Expense Coverage Means to Homeowners

Suffering major damage to a home is a traumatic event for any family. The experience brings shock, worry about family members and pets, grief at the loss of treasured possessions, and stress about the overwhelming task of replacing it all. Right on the heels of these emotions comes a more immediate question: Where will the family live now, and how will they pay for it? Fortunately, standard homeowner’s policies provide coverage for loss of use of a home.

The standard policy contains three Loss of Use coverages: Additional Living Expense, Fair Rental Value, and Civil Authority Prohibits Use. Additional Living Expense coverage pays for the homeowner’s necessary increase in living expenses when the home, damaged by a covered cause of loss, becomes unfit to live in. For example, assume that a severe windstorm knocks a tree into a home’s upstairs. It wrecks three bedrooms and two bathrooms, causing pipes to break and damaging electrical wiring. Since the policy covers windstorm damage and the home is unsafe for the family to occupy, this coverage will pay the extra amount the family must spend to live elsewhere for a period of time. However, the insurance company will pay only the amount necessary for the family to maintain its normal standard of living. If the family was not living in a luxury condo before the loss, the company will not pay for them to live in one after. The company will pay for the shortest period of time necessary to repair or replace the damaged property or to permanently relocate.

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