Personal Injury Insurance Definition - Personal Injury

Personal Injury Insurance Definition

PERSONAL INJURY

This is a good time to discuss the personal injury coverage that is included in some homeowners policies, or that is an optional coverage to be added by an endorsement to others (such at the ISO HO 3 policy). As noted, while there are some variations from insurer to insurer, personal injury liability coverage extends to five basic categories of acts or conduct. These include: 

1. false arrest, detention, or imprisonment:
2. libel, slander, defamation, or product disparagement;
3. malicious prosecution (which may include abuse of process);
4. wrongful eviction, wrongful entry, or violation of right of private occupancy; and,
5. invasion of or violation of right of privacy.

None of these categories of conduct can be an accident. As a result, most homeowners liability coverages refer to the covered events as offenses, rather than attempting to subject them to the policy's occurrence/accident requirement.

There is a temporal difference between the accident-base bodily injury and property damage coverage and the offense-based personal injury coverage. Coverage applies to bodily injury and property damage that occurs during the policy period, regardless of when the occurrence that causes the bodily injury or property damage takes place.
 
In contrast, the offense-based personal injury coverage applies to that the injured commits during the policy period. As noted, the injury offenses involve intentional conduct. There are, however, limitations on the scope of coverage for these categories of intentional acts. (These are discussed in the context of exclusions that apply to the personal injury coverages.) Personal Injury Insurance Definition

Personal Injury Additional Coverages

There is a single additional coverage under the ISO personal injury endorsement - for loss assessments up to $1,000 each assessment for the insured's share of loss assessments made as the result of covered personal injury. This provision is substantially similar to the bodily injury'and property and additional damage for loss assessments. 

BODILY INJURY

Bodily injury means bodily harm, sickness, or disease, including required care, loss of services, and death that results. There really are not any hidden concepts here. Everyone can readily appreciate that if someone is hurt as the result of an accident for which you may be held liable, that person's damages include many things, such as: 

• his or her medical and hospital bills;
• past and future wage loss or earning capacity;
• costs of ongoing care; and,
• damages for his or her inability to enjoy the activities enjoyed prior to the injury.

What can be an issue is whether mental or emotional distress constitutes bodily injury in the absence of physical injury. A growing trend in the law is the view that emotional distress that is the product of noncovered conduct does not constitute bodily injury within the meaning of standard liability policy definitions of bodily injury. 

For example, emotional distress that is the product of economic loss, such as the loss in value of an investment or savings, does not constitute bodily injury under this view.

PROPERTY DAMAGE

The standard ISO HO 3 homeowners policy contains the following definition of property damage.

Property damage means physical injury to, destruction of or loss of use of tangible property.
 
The concept of physical injury to tangible property is central to an understanding of the property damage coverage of liability policies. This physical injury to tangible property requirement has the effect of excluding coverage for damages claims based on injury to nontangible property interests. Even the loss of use portion of the property damage definition is tied to tangible property. Personal Injury Insurance Definition

Tangible property means property having physical substance, apparent to the senses. Examples of intangible property are things such as easements, leasehold interests, licenses, patents, copyrights, lost profits, loss of goodwill, loss of the expected benefit of a bargain, and loss of value of an investment.
 
Diminution in value of an investment constitutes economic loss, not property damage. However, diminution in value of tangible property as the result of physical injury can be used as a measure of damages resulting from physical injury to tangible property.
 
EXAMPLE:

Let's say an adjoining landowner has an easement across your property for access to the street or highway. You build a fence across your property, including across the easement, that prevents access. The adjoining landowner sues you. His lawsuit would not constitute a covered property damage claim. Your interference with his easement is interference with intangible property rights. The physical injury element is also missing.

Another example of a noncovered economic loss claim would be a suit against you arising out of your sale to another person of a car or motorcycle that breaks down and requires expensive repairs shortly after the sale. There is no property damage here. Rather, the essence of the claim is an economic loss - loss of the buyer's expected benefit of the bargain. The buyer paid a certain amount for the car or motorcycle on the expectation that it was in good working order, when, had its true condition been known, the fair purchase price would have been much less.
 
Similar comments would apply to a suit against you by a buyer of a house for alleged nondisclosure or concealment of defects in or damage to the house, such as nonpermitted alterations or remodeling.
 
What about loss of use property damage claims? An example of a covered loss of use claim is as follows. Your residence is situated upslope from one of your neighbors. The hillside, on your property, becomes unstable, causing the local authorities to order your neighbor and his family out of their home until the hillside can be stabilized. 

Your neighbor has lost use of tangible property, his house and premises, during the period required to stabilize the hillside. He would have a loss of use property damage claim against you. Some homeowners policies' property damage definitions only extend loss of use coverage to tangible property that has been physically injured. 

Thus, assuming the same facts as the preceeding example, under a policy whose property damage definition only extends to loss of use of tangible property that has been physically injured, your neighbor's suit against you would not constitute a covered property damage lawsuit.

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Insurance Liability Waiver - Liability Coverages

Insurance Liability Waiver

Liability Coverages 

The overall intent of the liability coverages of homeowners policies is to insure for liability to third parties arising out of the ownership, use, and occupancy of insured premises. The liability coverages of homeowners policies are not general liability coverages. Other liability exposures generally need to be insured separately. This can include the liability arising from business pursuits or from ownership and use of automobiles, watercraft, aircraft, and other vehicles (motorcycles, all terrain vehicles, snowmobiles, etc,).
 
The physical organization of the liability coverages of homeowners policies is essentially the same as that of the property coverages. The policy's declarations will specify the liability policy limits. If the policy's definition appear at the beginning, rather than at the end of the policy, they follow the declarations and contain the definitions of terms pertinent to the liability coverages.

The liability insuring agreement (or coverage grant) generally appears in the policy as the next section following the conditions applicable to the property coverages. The liability exclusions follow next, followed in turn by the liability additional coverages. The liability conditions appear next, The basic homeowners policy concludes with the conditions that apply to both the property and the liability coverages. Endorsements that modify the property and liability coverages are attached at the end of the policy after the basic policy form ends.

INSURED CAPACITY ISSUES 
 
As with the discussion of the property portion of the policies, the liability provisions will be examined based on the ISO HO 3 policy, and who is an insured and who is not marks the first step of analysis. Generally, resident relatives are insureds, as are resident nonrelatives under the age of 21 in the care of a named insured or a resident relative of the named insured. Insurance Liability Waiver

Unlike the case with property coverages of homeowners policies, there typically are no additional insured interests with respect to the liability coverages of homeowners policies. Correctly designating the named insureds under the liability coverages of homeowners policies where property that is the subject of the policy is owned by a trust is important. 

It is becoming increasingly common for persons to create trusts for estate planning and other purposes and to transfer titles to various kinds of property, including their personal residence, to the trust. If you have done this, you need to consult with your agent in order to assure that all persons are properly designated in the policy as insureds for purposes of the liability coverages. In most cases, all the following need to be designated as named insured:

• the trust itself;
• the trustees of the trust, designated by name and described as the trustees of the trust; and,
• (assuming the same individuals are the de facto owners and occupants of the premises) these individuals in their individual capacities.

INSURED LOCATIONS
 
The concept of insured location for purposes of the liability coverages of homeowners policies begins with the same definition as applicable to the property coverages. Insured location includes the residence premises as that term is separately defined and then extends to various other locations. 

The policy then limits that rather broad scope of insured location for purposes of the liability coverages by means of an exclusion that precludes coverage for liability arising out of premises:

• owned by an insured;
• rented to an insured; or,
• rented to others by an insured that is not an insured location.

Functionally, liability coverages are less location-specific than they are activity-specific. Thus, the geographic scope of coverage is controlled more by the nature of the liability-producing conduct than where the conduct takes place. 

INSURING AGREEMENT
 
The liability coverage-insuring agreement of the homeowners policy establishes two basic duties on the insurer's part to the insured: the duty to defend and the duty to indemnify. Insurance Liability Waiver

In contrast to the property coverages of the homeowners policy, the insuring agreement coverage grant of homeowners policies is relatively simple and can be summarized as follows. The insurer will pay damages that an insured becomes legally obligated (or liable) to pay because of bodily injury or property damage caused by an occurrence. The insurer will also defend the insured in suits seeking such damages by counsel chosen and paid for by the insurer.

The bodily injury or property damage must occur during the policy period. The insurer generally has the right to settle any claims or suit against the insured at its discretion. The insurer's duty to defend terminates upon payment of the full liability policy limits.
 
Thus, the meanings of bodily injury, property damage, and occurrence are crucial to an understanding of how liability coverages work. Occurrence is the most central concept applicable to liability insurance. The definition of occurrence in the ISO HO 3 homeowners policy states:

Occurrence means an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which result during the policy period in: (a) bodily injury; or, (b) property damage.

The concept of coverage for liability arising from accidents is how the fortuity element essential to insurance is incorporated into liability coverages. An accident is an unintentional, unexpected, chance occurrence or event. The occurrence is the causal event and the bodily injury or property damage is the result or consequence of the occurrence.
 
It is the liability-producing act or conduct that must be an accident, not the resulting bodily injury or property damage. Bodily injury or property damage that is unintended or unexpected by an insured is not covered if it is the product of intentional, nonaccidental conduct. Coverage turns on the insured's intent to commit the act in question, not on his or her state of mind in performing the act. 

Therefore, it does not matter whether the insured expected or intended his or her conduct to cause harm. An accident can result from a deliberate act, but only when some additional, unexpected, independent, and unforeseen event happens that causes the injury or damage in question.

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Homeowners Insurance Agencies Milton FL - Loss Payment

Homeowners Insurance Agencies Milton FL 

LOSS PAYMENT
 
This condition addresses several issues, including to whom and when a claim payment will be made. This condition provides that payment will be made to the named insured unless some other person is named in the policy (e,g., your spouse) or is legally entitled to receive payment (e.g, your mortgage lender). 

This condition further provides that loss payment will be made sixty days after the insurer's receipt of proof of loss and:

• the insured and the insurer agree to the amount of loss;
• there is an entry of a final judgment in the lawsuit; or
• there is the filing of an appraisal award with the insurer. 

ABANDONMENT OF PROPERTY 

This condition provides that an insurer has no responsibility for property abandoned by an insured, whether for purposes of repair, demolition, disposal, or otherwise. In effect, this condition confirms that the insurer's duty in the event of a covered loss is fundamentally one of paying money.

MORTGAGE CLAUSE 
 
This set of conditions sets forth the insurer's and mortgage lender's respective rights and obligations. (You can rest assured that most mortgage lenders are quite aware of their rights and obligations with respect to your policy.) The principal things that you need to know are that any loss payable for damage or destruction to the dwelling and other structures will be made both to you and your mortgage lender. Mortgage lenders often will require that claim payments be held in trust or in an account over which they have control in order to assure that the insured effects necessary repairs.

NO BENEFIT TO BAILEE 

In effect, this provision is designed to assure that if a moving or storage company hired by you damages, loses, or destroys any of your property, it will be liable for that loss, not your homeowners insurer. Homeowners Insurance Agencies Milton FL

NUCLEAR HAZARD CLAUSE 

This condition defines what constitutes nuclear hazard for purposes of the nuclear exclusion, and effectively provides that only direct loss by fire resulting from the nuclear hazard is covered, In the context of current times, this means that radioactive contamination of your property as the result of the leaks from a nuclear generating station would not be covered. Neither would radioactive contamination from a terrorist setting off a so-called dirty bomb.

RECOVERED PROPERTY
 
This condition details what will happen in the event stolen property is recovered that the insurer has paid for. It requires both parties to give notice to the other that property for which a claim has been made or paid has been recovered. This condition gives to the insured the choice of retaining the claim payment and surrendering the recovered property to the insurer or reclaiming the recovered property. 

If the insured elects to keep the recovered property, the loss payment will be adjusted down by the amount the insurer previously paid to the insured for loss of or damage to the property. This means that the insurer can deduct this amount from any outstanding amount of the claim from which payment will be made or that the insured will have to reimburse the insurer for the amount in question.

VOLCANIC ERUPTION

This condition provides that all volcanic eruptions that occur within a seventy-two-hour period will be considered one eruption. This provision is potentially relevant to how many:

• covered losses there may be and
• how many deductibles will apply.

POLICY PERIOD 

This condition provides that the policy only applies to loss during the policy period. Under the law of many states, a property loss is deemed to have occurred during the policy period when the damage becomes apparent to the insured. Notwithstanding the fact that some kinds of losses occur gradually over multiple policy periods, this provision in-effect provides that in such cases, only the policy in effect when the insured becomes aware (or should have become aware) of the loss will apply.

CONCEALMENT OR FRAUD

This is a highly important condition for all policyholders to be aware of. Concealment or fraud on the part of any person insured - at any time before or after a loss, including at the time of application - will void the policy of that insured altogether. There will be no refund of premiums. Homeowners Insurance Agencies Milton FL

Moreover, the consequences of misrepresentation, concealment, or fraud with respect to applying for an insurance policy or with respect to a claim are far-reaching. Most insurers maintain fraud databanks and share that information with each other and insurance regulatory authorities. If the fraud was in connection, with a claim and you received a payment to which you were not entitled because of your fraud, you could also be subject to criminal prosecution. 

Committing a fraud on an insurance company has the potential of affecting your ability to obtain insurance in the future. If you cannot get insurance you may not be able to register your car in some states. Lacking insurance, you may not be able to operate certain kinds of businesses.

LOSS PAYABLE CLAUSE
 
This condition bears some parallels to the mortgage clause. It provides that if the declarations show a loss payee for specified items of personal property, the policy's definition of insured is amended to include the loss payee with respect to that property.

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Affordable Insurance Company Texas - Loss To A Pair Or Set

Affordable Insurance Company Texas

This condition gives the insurer two alternatives in the event of a loss to a pair or set of personal property items. The insurer may:

1. repair or replace any part to replace the pair or set to its preloss value or
2. pay the difference between the actual cash value of the property before and after the loss.

APPRAISAL 

 
Appraisal can be invoked to determine the amount of loss. Such disputes might involve the valuation of items of damaged or destroyed personal property or involve the dispute over what constitutes like or equivalent construction.

Either the insurer or the insured may demand appraisal of a loss. If appraisal is demanded, each party chooses an appraiser - who the policy says should be competent and impartial - within twenty days after receiving a written request from the other party to submit the claim to appraisal. Affordable Insurance Company Texas

The two party-designated appraisers are to choose an umpire. If the party appraisers cannot agree on the umpire, either party may apply to a judge in a court of record in the state where the residence premises are located to choose the umpire.
 
The party appraisers then state the amount of the loss. If, on comparison of the party appraisers' respective loss valuation, they are in agreement, that is the amount of loss payable. If the appraisers differ as to their respective valuations of the amount of loss, they are to submit their differences to the umpire: A loss valuation agreed to by the umpire and one of the two party appraisers will determine the amount of loss.
 
The appraisal condition provides that each party will:

• pay its own appraiser and
• share the expenses of the appraisal and the umpire equally. (This can result in significant costs to the insured in certain circumstances.)
  

The appraisal condition it designed to be quick, relatively informal, relatively inexpensive and self-executing (i.e., without the need for lawyers or court proceedings).
 
As a practical matter, insurers rarely demand appraisal unless they are very confident in their evaluation of the amount of the loss. One of the reasons insurers will consider demanding appraisal in a case is when they believe the insured is considering suing for bad faith (i.e., that the insured contends the insurer is low-bailing the claim). If the outcome of the appraisal is at or very near the insurer's valuation of the amount of loss, then the appraisal demonstrates that the insurer's position was reasonable. 

It also then largely, if not completely, provides a defense if the insured nevertheless sues for bad faith, If the outcome is the opposite, that is, the appraisal award is significantly greater than the insurer's valuation of the loss, the insured's potential bad faith suit may have a greater likelihood of success, since the insured is then in the position of being able to argue that the insurer unreasonably undervalued the claim.

OTHER INSURANCE AND SERVICE AGREEMENTS 

This policy condition addresses who should pay for a loss when it is covered by another insurance policy or by some other agreement such as a home warranty agreement or an extended warranty agreement.

When there is other insurance, the two insurers will share the loss in the proportion that their respective policy limits bear to each other, As a practical matter, if one insurer refuses to pay, the other insurer will often pay the entire claim, and then proceed to sue the first insurer to recover the unpaid share. Affordable Insurance Company Texas

If there is a service agreement such as a home warranty plan, this condition provides that the insurance afforded by the policy will only pay the excess of any amounts payable under the service agreement.

SUITS AGAINST US 
 
Suits against us (no-action clauses) address two separate concepts. First, this condition provides that no action can be brought against the insurer unless there has been full compliance by the insured with all the policy's terms and conditions. As a practical matter, the insurer cannot prevent the insured from filing a lawsuit. All this clause does is provide the insurer with a legal defense to a lawsuit by an insured when the insured fails to follow the policy requirements, such as refusing to submit to an examination under oath or failure to comply with the proof of loss requirements.

Second, this condition provides that suit must be brought within two years after the date of loss. This provision again cannot prevent an insured from filing a lawsuit against the insurer. It does, however, afford the insurer a legal defense to a lawsuit by the insured if that lawsuit is not filed within the two-year limit. Check your policy - many policies contain only a one year period in which a suit must be brought. This provision is enforced in the same manner as is a statute of limitations.

In some states, the two-year period does not begin to run until the loss has become sufficiently apparent that a reasonable insured would know that his or her duty to give the insurer notice of the loss has been triggered. This is something that frequently becomes an issue in soils movement and foundation damage claims. Further, in some states, the clock on the two-year period stops running between the date when the insured gives notice of the claim and the date on which the insurer informs the insured of its coverage/claim decision.

Still further, if the insured is having difficulty completing the proof of loss, the insured and the insurer can enter into an agreement that the two year limitation on suit period can be extended, just as they can agree that the time for submission of the proof of loss can be extended. Any such agreement necessarily should be confirmed in writing.

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