Coinsurance for Building and Business Property

Basic to business property policies is the Coinsurance Clause.   This clause requires that you maintain insurance limits to a minimum percentage of full value at the time of a loss, or suffer a coinsurance penalty. The amount of the penalty is determined by the coinsurance formula.   This attachment illustrates how the formula works. Starting with basic policy information at the inception of the policy, we assume a property limit and coinsurance percentage, typically 90%.  From the illustration we assume a loss that is well within the...

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Admitted v. Non-Admitted–What’s It All Mean?

Any client who has been asked to sign the “California D1 Form” wonders why they are being shouted at–it’s a horrible form, a full page of information entirely in caps. To become an admitted insurance company in California, a carrier must submit itself to the Department of Insurance ‘prior-approval’ process for both rates and coverage forms. Customers of admitted companies are covered by the California Insurance Guarantee Association (CIGA), in the event the insurance company were to become insolvent.  (See...

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