02.02. Structure of Insurance Policies

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02.02. Structure of Insurance Policies
2013-03-12 19:45:37
Structure Insurance Policies

Structure of Insurance Policies
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  1. Self-contained vs Modular policies
    • self-contained: within one doc, all provisions needed to make up a complete ins policy
    • (+) appropriate for insuring loss exposures that are similar among many insureds
    • modular policy: created by combining a set of individual components, such as one or more coverage forms / causes of loss forms / conditions forms
    • (+) minimize possibility of gaps and overlaps
    • (+) consistent terminology
    • (+) fewer forms required to meet wide range of needs
    • (+) uw simplified since most info analyzed applies to all lines
    • (+) reduces adverse selection by offering more lines of insurance to a single insured
    • (+) insurers often give package discount
  2. Preprinted vs Manuscript Forms
    • preprinted: developed for use with many different insureds. Declaration page adds insured's specific info
    • manuscript: custom forms developed for one specific insured - or a small group - with unique coverage needs
  3. Standard and Nonstandard Forms
    • standard forms: provided by insurance service and advisory organizations (ISO, AAIS)
    • company-specific / proprietary forms: used for high-volume lines of insurance (auto / homeowner)
    • provisions: nonstandard forms include provisions that vary from standard-form provisions and often contain coverage enhancements not found in standard forms
    • policy analysis: preprinted nonstandard forms typically easier than manuscript form insurance
  4. Endorsements and Other Related Documents
    • endorsements: may be preprinted, typewritten, handrwritten, etc. (1) takes precedence over any conflicting policy term (2) handwritten supersedes computer-printed
    • insurance application: documented request for coverage. Contains insured's info
    • other documents: premium notes, inspection reports, specification sheets