Analysis

Since this is an extension of coverage to other policy forms, the property covered under this endorsement is listed as additional property. What is actually additional is the locations at which personal property is covered; property is covered at reported, acquired, or incidental locations. Reported locations are those locations that have been reported to the insurer at the time of the endorsement but are not listed on the declarations. Acquired locations are locations acquired by the insured after the inception date of this endorsement. Incidental locations are locations not listed in the declarations, not covered under acquired or reported locations, and with values of less than $25,000.

Not included as covered property is property at fairs or exhibitions. The significant amount of foot traffic and difficulties in protecting property at such events makes coverage difficult to provide, and it is not provided by this endorsement.

Reporting requirements

Analysis

This section delineates when the reporting values are due based on the type of reporting period selected. Basic to any reporting period is the requirement that a report must be filed at the end of each reporting period and at the expiration of the policy. The values of covered property must be identified separately for each location. The values of property shown on the report must be the values as they existed on the date the report was created. This shows the most current value.

The available reporting periods are daily, weekly, monthly, quarterly, and yearly. The daily reporting period (DR) requires that the values of property be indicated as of each day; the reporting period itself ends on the last day of the month. The weekly reporting period (WR) follows similar logic; the values are to be reported as of the last day of the week, and the reporting period ends on the last day of the month. Monthly reports (MR) show values as of the end of the month, quarterly reports (QR) values as of the end of the quarter, and yearly reports (PR) show values as of the end of the year.

When the policy is a renewal, reports are required within thirty days of the end of each reporting period and at expiration.

When coverage has not been issued before on a reporting form basis, the abbreviation for the reporting period is found in the declarations. When the reporting period is daily, weekly or monthly, the first report is to be submitted to the insurer within sixty days of the end of the first reporting period. The second report must be filed within thirty days of the end of the second reporting period. Therefore, the first and second report will be due at the same time. Each subsequent report is due within thirty days of the end of the reporting period. Reports are always due upon expiration of the policy.

When the reporting period is quarterly the inception date of the policy becomes important. If the inception date of the policy is in March, June, September, or December, the first report is to be filed within sixty days of the first reporting period, and each subsequent report is to be filed within thirty days of the end of the reporting period and an expiration. This is identical to the weekly, monthly and daily reporting period requirements. When the inception date does not fall into March, June, September, or December, then reports are to be filed within thirty days of the end of each reporting period, and at expiration of the policy. There is no extended period of time within which to submit the first report.

Policy year reporting is also an option, and a report must be filed within thirty days of the end of the reporting period and at expiration of the policy.

The values of property at incidental locations must be separated by state and the entire values of property in each state must be listed. When property is at incidental locations, the entire values for property in each state must be shown separately.

Inaccurate reports may not be corrected after loss or damage occurs.

Example of Under Reporting:
If: The values reported are			$	90,000
	The actual values on the report dates were		$	120,000
	The deductible is		$	250
	The amount of loss is		$	60,000

If: The value of the property is		$	400,000
	The amount of “specific insurance” is	$	50,000
	The Limit of Insurance under this form is	$	300,000
	Your report of values should show:
	Value of Property	$	400,000
	Amount of “Specific Insurance”	$	50,000
	Difference	$	350,000

If:	the amount of the “specific insurance” is $50,000;
	the Limit of Insurance under this form is $300,000;
	the Deductible applicable to the “specific insurance” is $5,000; and
	the Deductible applicable to this insurance is $1,000;

Amount of loss				$300,000
Deductibles
	“Specific Insurance”	$  5,000
	This insurance	$  1,000
Amount due from
	“Specific Insurance”	$50,000*
	$56,000	–	$ 56,000
The most this insurance will pay				$244,000

Amount of loss				$300,000
Deductibles
	“Specific Insurance”	$  5,000
	This insurance	$  1,000
Amount due from
	“Specific Insurance”	$37,900*
	$43,900	–	$ 43,900
The most this insurance will pay				$256,100

Amount of loss				$360,000
Deductibles
	“Specific Insurance”	$  5,000
	This insurance	$  1,000
Amount due from
	“Specific Insurance”	$43,600*
	$49,600	–	$ 49,600
				$310,400

Analysis

A coinsurance clause applies to this endorsement. In the event of a loss, the value of the property at the location of the loss is compared to the values for that location as of the last reporting period. If the value of the property at the location of the loss exceeds the most recent report date values, only a proportion of the loss will be covered. The proportion is determined by taking the reported values of property for the loss location and dividing that by the values as of the last report date. The example provided gives $90,000 as the values as of the last report date. The actual values at the loss location are given as $120,000. Therefore, $90,000 is divided by $120,000 for a result of .75. This amount is then multiplied by the actual amount of loss, to determine the amount payable. This is not the last step; the deductible must be subtracted from the total amount. In the example the loss is $60,000, which when multiplied by .75 leaves $45,000.00. At this point the deductible of $250 is subtracted from the total, leaving a total payment of $44,750.00.

For locations newly acquired after the last reporting date, the proportion is calculated slightly differently. Since the location is newly acquired, there is no report of values at that location. Therefore, the total values of property reported at all locations are divided by the values of covered property at all locations as of the report dates. If the value of property at all locations is $120,000, and the value of property at all locations as of the last reporting date is $150,000; then $120,000 is divided by $150,000 to determine the proportion of loss to be paid.

If the values reported are above the limit of insurance, the final premium will be based on the values reported less specific insurance. Specific insurance is other insurance that covers the same property that this coverage form does, and is not subject to the same terms, conditions, or plan as this insurance and endorsement.

In the event of loss or damage and the values reported are above the limit of insurance, the most that will be paid is the limit of insurance applicable to the covered property.

Failure to provide reports as required affects any claim payments. If the first required report of values has not been made, only loss or damages at locations shown in the Declarations is covered. The insurer will pay no more than 75% of the amount that otherwise would have been paid had the report been timely filed.

If reports subsequent to the first report are not made, only loss or damages to property at locations reported in the last filing before the loss will be covered. No more will be paid for loss or damage than the values reported with the last filing at those locations.

When specific insurance exists, the amount must be included in the reports of value. Specific insurance is other insurance that covers the same property as this endorsement. The value of specific insurance is subtracted from the values when advance and final premiums are calculated under this endorsement. The final premium is based on values that exceed reported specific insurance during the policy year. In the example the property is valued at $400,000 and the specific insurance is $50,000. Therefore, the premium will be calculated based on the value of $350,000 which is the amount over the specific insurance.

For claim settlement, the most that will be paid is the amount in excess of specific insurance and the specific insurance deductible. For example, a loss is $300,000. Specific insurance is $50,000. The deductible for specific insurance is $5,000 and the regular deductible is $1000.00. The loss is $300,000. The specific insurance amount of $50,000 and the two deductibles of $5,000 and $1,000 are subtracted from the loss amount leaving $244,000 as the amount to be paid for the loss from this insurer. The remainder is not covered. As specific insurance is other insurance, the insured can look to that carrier for coverage for most of the remainder. The deductibles however are not covered by anyone.

Specific insurance is subject to provisions of the policy providing the specific insurance. Various factors such as the amount of loss, value of property at the time of loss, and any coinsurance provisions on the specific insurance policy will affect the amount of specific insurance used in calculations of loss payment in this policy.

Premium Adjustment

The premium charged at the inception of the policy is an advance premium. As the property covered varies in quantity and value over the course of the year, the final premium is determined based on values reported throughout the policy period. The insured will be billed for any additional premium due or will be refunded any excess premium.

Definitions

Analysis

The definitions are relatively self explanatory. The locations are defined and the different types of reporting periods are explained. Of note is that specific insurance, as it is other insurance, is not subject to the terms, conditions and provisions of this endorsement or policy.