Q We have a company that says they are not going to use the benchmark rates approved in June for residential property. Can they do that and how do the benchmarks work?
A If it is a Texas Lloyds company, it is not required to use the benchmark rates. However, other companies had to file their new rates within 30 days of June 15, 2000, and begin using those rates within 60 days of filing.
Q We have a male operator who just turned 25 and the insurance company told us they do not have to change the classification until the renewal. Is this correct?
A No, according to TDI the classification should be changed now. Rule 11. F. (in the Texas Automobile Rules and Rating Manual) states that changes in classification, surcharges or applicable credits should be made during a policy term, and that the additional or return premium is computed using rules and rates in effect at the original inception date of coverage for the auto(s).
Q We have an insured, covered on a PAP, who was pulling an owned trailer and the trailer was hit by an uninsured motorist, damaging the property in the trailer. Would this be covered under UM?
A Yes, the insuring agreement for UM says that it covers bodily injury or property damage caused by an accident. Property damage means injury to or destruction of or loss of use of any property owned by the insured or any family member or other person occupying your covered auto while contained in your covered auto. Your covered auto in the PAP includes any trailer you own.
Q Correction – In the Oct. 9, 2000 issue the following question appeared
Our insured has an HO-160 Scheduled Personal Property endorsement on his homeowners policy that covers camera equipment and jewelry. While on vacation, the camera and some jewelry and other unscheduled personal property were stolen from the trunk of his car.
The insurance company paid the jewelry loss on the amount scheduled but the camera loss was paid based on actual cash value. Is this correct?
A The correct answer should be as follows:
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 and separate conditions apply for Coin and Stamp Collections.
However, the HO-160 states the provisions of the policy not in conflict with any provision of the endorsement, will apply. So for the loss to the camera equipment, since there is not a separate loss condition in the endorsement, the adjuster would need to go back to the loss conditions of the homeowners policy.
If the homeowners policy has HO-101 (Replacement of Personal Property), the loss settlement would be on replacement value. If the insured does not have the HO-101 only then should the settlement be based on ACV.
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