|D.A.R.B. Insurance Services, Inc.
|Affordable Friendly Service for a Lifetime of
|FREQUENTLY ASKED QUESTIONS
What is Co-Insurance?
The success of any fire insurance program is measured by it's effectiveness
following the loss of an insured. Thus, in establishing adequate coverage,
one must have firsthand information as to the insurable values at risk. Book
values do not fulfill this purpose. Insurable values are the present day
replacement costs with proper allowance for depreciation. Since
replacement costs fluctuate, it is necessary to keep a constant check on
insurance values. The insurance applying in the following example is subject
to the 90% Co-Insurance Clause. Under the terms of this clause, you should
insure the property at risk, to the stipulated percentage of value. If you fail to
do so, you will not be fully re-imbursed for any loss that may occur. The
manner in which the Co-Insurance Clause would operate (Under a 90%
Co-Insurance Clause) in the event of a partial loss is illustrated below and is
merely a hypothetical example:
The above example is merely to show you how Co-Insurance works. If at any
time you should substantially increase building values or contents values, you
must notify us immediately to increase your coverage, in order to avoid any
What is a Replacement Cost Valuation?
Actual Cash Value, or ACV, is calculated by determining an item's
replacement cost and then subtracting an amount for depriciation.
In some insurance policies, the company automatically agrees to pay the
replacement cost for all covered losses, with no depreciation, provided that
the insured meets certain specifications.
What is Actual Cash Value?
What is a Named Insured?
The Named Insured is the person, business, or other entity named on the
declarations page to whom the policy is issued.
What is the First Named Insured?
What is an Additional Insured?
If there is more than one named insured listed on an insurance policy, the
policy may assign a higher level of duties and/or rights to the person,
business, or entity listed first on the declarations page.
In addition to the Named Insured, an insurance policy may cover other
specified persons or entities, such as family members or mortgage
What is a Loss Payee?
Often times a mortgagee and/or lender may have an insurable interest in an
insured property. The Mortgage Condition, or Loss Payable Condition,
specifies the rights and duties of the Loss Payee under the policy. For
example, if a named insured fails to file a proof of loss, the mortgagee must
do so after being notified by the insurer to protect its rights under the policy.
Additionally, the mortgagee may be required to pay the premium if the
insured fails to do so.
What is a Bailee?
A bailee is a person and/or organization that has temporary possession of
someone else's property. A No Benefit to Bailee Clause states that the
bailee is not covered under the insured's policy while the bailee has
possession of the insured's property.
What are Rights of Subrogation?
The transfer of the insured's right of recovery to the insurance company is
known as subrogation. This condition allows the insurance company to pay
the insured's damages, then bring a suit and/or file a claim against the other
party on the insured's behalf. This condition is also refered to as the Transfer
of Right of Recovery Against Others To Us.
What is the difference between Primary and Excess Insurance?
Some insurance policies provide as a condition, that if other insurance
exists, they will only pay the excess beyond what the other insurance pays on
a loss. For example, if Company A pays $8,000.00 on a $10,000.00 loss,
then Company B will pay $2,000.00. In this scenario, Company A is the
Primary, and Company B is the Excess.
What is Assumption of Risk?
Assumption of Risk is when an individual knowingly exposes herself/himself
to danger and/or injury. When an individual assumes this risk, he/she may not
be able to recover damages from a negligent party.
What is Contributory Negligence?
In some jurisdictions, in order to establish liability an individual has to show
that the other party is negligent, and that the individual did not contribute to
the loss through any negligence on his/her own part. In other jurisdictions,
What is an Intentional Tort?
Liability Insurance generally provides No protection for intentional torts, in
which negligence is not established.
What is Intervening Cause?
Intervening Cause may serve as a defense against negligence. It occurs
when an independent action breaks the chain of causation and sets in
motion a new chain of events. This independent action becomes the
What is a Statue of Limitation?
These laws provide that certain types of lawsuits be filed with the court within
a specified period of time.
What is Vicarious Liability?
Imputed, or Vicarious Liability, is when a person and/or entity is held
responsible for the negligent act of another. A common form of Vicarious
Liability involves the relationship between an employer and employee.
What is an Aleatory Contract?
An insurance policy is an aleatory contract. It is contingent on an uncertain
What is Blanket Coverage?
Blanket coverage can mean either all personal property at a designated
premise, or all of the insured's property at any location
What is a Binder?
An oral or written statement that provides immediate insurance protection
until a policy is issued.
What is Business Income Coverage?
It is a form of Commercial Property Coverage that will pay for the Loss of
Income that an insured sustains due to a direct physical loss from a covered
peril that forces the insured to suspend operations.
What is a Claims Made Liability Form?
A form of Liability coverage that pays for losses for which a claim was first
made against the insured during the policy period.
What is Occurence Form?
A form of Liability coverage that pays for losses that occur during the policy