Q: Our insured has an HO-160 Scheduled Personal Property endorsement on his homeowners policy covering camera equipment and jewelry. While on vacation, the camera, some jewelry and other unscheduled personal property were stolen from the car. The insurance company paid the jewelry loss on the amount scheduled but the camera loss was paid based as ACV. Is this correct?
A: The conditions of the HO-160 under b. Loss Settlement state that for jewelry and fine arts the company will pay the amount shown for each scheduled article which is agreed to be the value of the article. Other conditions apply for Coin and Stamp Collections and for other property. The loss settlement condition that would apply to the camera can be found under 6.b.(2) (c), which states the company will not pay more than the actual cash market value of the property at the time of loss.However, if the homeowners policy has the HO-101 (Replacement of Personal Property) endorsement attached, you should ask the company to reconsider its ACV loss adjustment on the cameras. It is the Independent Insurance Agents of Texas’ opinion that the HO-101 modifies the valuation provision of the HO-160 and provides replacement cost coverage on scheduled property except jewelry, fine arts and collections.
Q: We wrote a workers’ compensation policy for a rancher. During the audit our insured was told that his son’s payroll wasn’t needed because he wasn’t named on the WC policy and, therefore, wasn’t covered. Can you explain?
A: The auditor is correct. Under Section 406.164 of the Labor Code for Workers’ Compensation Insurance Coverage it states that “A person who purchases a workers’ compensation insurance policy covering farm or ranch employees may cover the person, a partner, a corporate officer, or a family member in that policy. The insurance policy must specifically name the individual to be covered.” The code also states “A member of an employer’s family is exempt from coverage under the policy unless an election for that coverage is made under this section.”
To elect coverage, endorsement WC 00 03 10 Sole Proprietors, Partners, Officers And Others Coverage Endorsement would need to be attached. Complete the “others” section of the endorsement by naming the individual family members who need to be covered.
Q: We thought that all short rate cancellations were prohibited in Texas but we have a carrier trying to apply a short rate penalty to a package policy where the insured requested cancellation. Is this correct?
A: Short rate cancellation has been eliminated in the personal lines manual for homeowners and dwelling fire. It has also been eliminated for all policies written using the rules and rates in the Texas Automobile Rules and Rating Manual, as well as the Texas Workers’ Compensation Manual.
If you have an Insurance Services Office (ISO) policy, the ISO Commercial Lines Manual still provide rules for short rate cancellation for commercial general liability, commercial property, boiler and machinery and crime. If you are using specific company forms, check with your company to determine what type of cancellation rules were included in their filing.
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