.0 Property Insurance Basics
Learning Objectives
.1 Property Insurance Terminology
Fire Protection
.2 Types of Property Losses
Direct and Indirect Losses
.3 Methods of Valuing Losses and Writing Limits
Loss Valuation
.4 Common Property Policy Conditions
Coinsurance
.5 Standard Fire Policy
The Standard Fire Policy (SFP) of New York serves as the foundation for most modern property insurance policies. The policy is based on a standardized set of 165 lines of coverage language established by law to define the minimum protections provided under a property insurance contract. In states that have adopted the Standard Fire Policy, insurers are generally prohibited from issuing property insurance policies that provide less coverage than that required by the 165-line standard. While insurers may broaden coverage through endorsements or additional policy provisions, they cannot make coverage more restrictive than the protections established by the Standard Fire Policy.
Recap of Chapter Three
1. Property insurance is a form of first-party insurance in which the insured is the first party to the contract and the insurer is the second party. It provides financial protection against the loss of or damage to real property, such as buildings and structures, as well as personal property, including furniture, equipment, and other belongings. Property insurance is often referred to as fire insurance because protection against hostile fire—a fire that escapes its intended location or burns uncontrollably—is a fundamental component of property coverage. This protection originates from the Standard Fire Policy, which serves as the foundation for most modern property insurance policies. Although property insurance today covers many additional causes of loss, the Standard Fire Policy remains the basis upon which contemporary property insurance coverage is built.