Common Property Conditions

NO BENEFIT TO BAILEE

A bailee is a person or entity having proper temporary legal custody of property belonging to others. The property owner, or bailor, has entrusted the property to the bailee for a specific purpose, such as safekeeping, repair, renovation, remodeling, processing, delivery or storage. The property owner is expecting to receive the undamaged and possibly improved property back from the bailee. A policy condition specifically states that the bailee has no access to the property owner’s insurance coverage.

TRANSFER OF RIGHTS OF RECOVERY AGAINST OTHERS TO INSURANCE COMPANY (SUBROGATION)

When the insurance company pays a loss it has the right to require the insured to transfer its rights of recovery against others that may be responsible for the loss to the insurance company. This is very important because the insurance company can legally pursue the parties that caused the loss and demand payment. The insured can waive their rights of recovery by doing so in writing and prior to the loss. It cannot waive such rights after the loss although there are some exceptions.

POLICY PERIOD

Coverage begins at 12:01 a.m., standard time, at the named insured’s mailing address.

TERRITORY

Coverage applies within the United States, its territories and possessions, Puerto Rico and Canada.

CONCEALMENT, MISREPRESENTATION

The entire policy is void if the named insured intentionally conceals or misrepresents a material fact concerning the coverage provided or the interest each insured has in the property.

FRAUD

The entire policy is void in the event of fraud or any fraudulent act by any insured relating to the insurance coverage provided.

CONTROL OF PROPERTY

The actions or neglect of a person other than the named insured do not affect policy coverage. This applies only if that person was not acting under the direction of the named insured. In addition, actions that breach the contract at one location do not automatically void coverage at another location.

LEGAL ACTION AGAINST THE COMPANY

Until all of the terms of contract have been satisfied, legal action cannot be brought against the insurance company. Such legal action must be brought within two years of the date of loss. The number of years and related issues may vary by state.

LIBERALIZATION CLAUSE

From time to time, insurance companies broaden coverage or language in policies and endorsements. When this is done without an additional premium charge, the liberalization clause extends the broadened coverage to apply to all policies already in force as of the date of the change. Because insurance companies usually prepare renewal policies well before the expiration date, the liberalization clause also provides that any liberalization effective within 45 days of the inception date also extends to policies already written but not yet in force.

INSURANCE UNDER TWO OR MORE COVERAGES

The insurance company does not pay more than the actual amount of loss even if two or more different policy coverages apply to it.

OTHER INSURANCE

A policy is liable for only its proportion of all insurance written on the same basis. If other insurance for the same loss is available under a policy written on a different basis, the first policy pays any excess of loss over the amount of coverage in the second policy, whether it can be collected or not.