Hamilton/Ferguson, Personal Risk Management and Property-Liability Insurance – SK
Fair Access to Insurance Requirements (FAIR) Plans – an attempt to make standard lines of property insurance available for exposures outside the voluntary market.
Operation – a property owner outside the voluntary market applies to the state’s FAIR plan through an authorized agent/broker. FAIR plans can either operate as a policy-issuing syndicate; or contract w/ one or more voluntary insurers to act as servicers; In all cases, all licensed property insurers required to participate in losses in proportion to their share of premium within the state.
Eligibility – Insurance usually not refused because of environmental hazards (conditions arising beyond the property owner’s control). Not insurable are: vacant properties; property in poor physical condition or has unrepaired fire damage; property subject to poor housekeeping (accumulation of rubbish); property in violation of law; property not built in accordance w/ building & safety codes.
Coverages – fire, lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism, or malicious mischief; and sometimes also crime, sprinkler leakage, and EQ.
Beach and Windstorm Plans – found along Atlantic and Gulf Coast states where coastal regions are prone to hurricanes and winter storms. In 1969, NC started the first beach plan. Followed by AL, FL, LA, SC, and TX in 1970-1. Then MS in 1987. Sometimes, FAIR coverages are extended (HI and MA).
LA, MS – a single servicing carrier provides all services.
In the other states, the plans issue the policies and provide services.
In all plans, insurers share in the losses according to their premium share.
Eligible Property – practically everything except what’s not eligible under FAIR plans.
AL, LA, NC – fire, lightning, windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, vandalism or malicious mischief.
NC – also provides windstorm-and-hail-damage-only policy.
Remaining beach plans: windstorm-and-hail-damage-only.
No plans can become effective when a storm is coming.
Cancellation subject to 30-day notice except for: nonpayment of premium; material misrepresentation; and evidence of arson.
Farm Insurance (in Chapter 6)
The ISO forms do have two endorsements: Incidental Farming Personal Liability and Farmers Personal Liability; but these are often inadequate. Also the extensive farming exposures may make the property ineligible for a HO policy.
A farm policy provides cvg for personal exposures and also for farming exposures.
No-Fault Insurance (in Chapter 8) – before no-fault, many complaints:
Insurance costs were rising alarmingly.
Those injured in auto accidents weren’t being compensated for their injuries.
If they did recover damages, it was a slow and costly process, w/ attorney fees deducted from amts the victims received.
Insurers often overpaid small claims to avoid costly litigation.