Bpp Analysis
Autor: Sara17 • September 23, 2018 • 1,367 Words (6 Pages) • 667 Views
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In the BPP, if covered property must be moved from the described premises to protect the property from a covered peril (e.g., fire), the policy provides coverage for damage to the property. While the property is being moved (or transported) by the insured owned trucks to a temporarily storage facility, the truck and the property is totaled from a collision. Is this loss to both truck and the covered property being moved covered by the BPP?
Damage to the property will be covered while it is being moved according to Preservation of Property. The damage to the truck would not be covered by the BPP, but rather by the insured’s commercial auto policy.
Case 6 – Newly acquired building – 1.5 points
Coverage Extensions (page 6 of 15)
ABC company has rented a unit in a strip shopping mall and been insured for its business personal property without the building coverage as a tenant. ABC just purchased the shopping mall from the landlord for the amount of $1.2 million. Due to a mistake by the general manager of ABC, ABC is not able to add the building to its current commercial property policy for two days. Would the current ABC’s commercial property policy (BPP form) extend the coverage to the building for the next two days, until ABC adds this building to its current policy? Explain.
No, the current ABC’s commercial property policy would not allow extended coverage for the two days because the extension is only applicable if the current policy covers Building.
Case 7 – Outdoor property – 1.5 point
Coverage Extensions (page 6 of 15)
The BPP can be extended to some of property that is not covered by the BPP, such as trees, shrubs, and plants. However, damage to these types of property is covered only if the loss to the property is caused by some named perils. What are these named perils?
Fire, Lightning, Explosion, Riot/Civil Commotion, and Aircraft
Case 8 - Coinsurance – 2.0 points
Jake’s Garage owns a building with an ACV of $100,000. How much would Jake’s Garage recover under its BPP in each of the following situations? Show your work.
Limit of Insurance
Coinsurance
ACV of Loss
Deductible
Payable by Insurer?
A
$80,000
80%
$15,000
$1,000
(1)
B
$60,000
80%
$15,000
$1,000
(2)
C
$80,000
90%
$15,000
$1,000
(3)
D
$80,000
80%
$90,000
$1,000
(4)
[pic 3]
- = $14,000[pic 4]
- = $10,250[pic 5]
- = $12,333.33[pic 6]
- = $89,000 (refer to a)[pic 7]
- Because the ACV of the property times the 80% coinsurance is greater than the cost of the loss, the insurance will only cover $80,000 of the $90,000 loss. The remaining $10,000 will need to be paid by the insured.
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