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Insurance Abstract
A blanket insurance method and policy for insuring the owner of
an apartment or multi-unit dwelling from damage to his building
caused by his tenant's unintentional acts comprising: inputting
into a computer processor a database of building physical information,
occupancy information, and tenant rental information; inputting
into the computer processor an insurance qualification program for
renters legal liability insurance covering the building owner from
unintentional damage caused by the tenant from fire, smoke, explosions,
water damage, or negligence injuries by the tenant caused to third
parties pursuant to predetermined insurability criteria; qualifying
the building for renters legal liability insurance, and computer
translating and generating insurance coverage for the building owner
based on the number of units in the building and insurance coverage
limits desired, and billing the owner for renter's legal liability
insurance.
Insurance Claims
1. A blanket insurance method for insuring an apartment or multi-unit
dwelling unit with renters legal liability insurance covering the
building owner from unintentional damage caused by the tenant from
one or more of the perils selected from the group comprising fire;
smoke; explosion, including the explosion of gases or fuel within
the furnace of any fired vessel or within the flues or passages
through which the gases of combustion pass; and water that backs
up or overflows from a sewer, drain or sump, and water or other
liquids that leak, flow or overflows from plumbing heating air conditioning,
or other equipment fixtures, pursuant to predetermined insurability
criteria comprising: a. selecting objective building insurability
criteria from a set of absolute insurance standards including physical
information, the number of units in the apartment complex or multi-unit
dwelling complex to qualify the complex for fire insurance coverage,
actuarial insurance rates for renter's legal liability insurance,
and other relevant information, b. qualifying the apartment or multi-unit
dwelling in accordance with the objective building physical information
and number of units, and the tenant data for renters legal liability
insurance pursuant to predetermined insurability criteria, c. issuing
tenant insurance covering the building owner and/or property manager
of the complex from the perils selected from the group comprising
fire; smoke; explosion, including the explosion of gases or fuel
within the furnace of any fired vessel or within the flues or passages
through which the gases of combustion pass; and water that backs
up or overflows from a sewer, drain or sump, and water or other
liquids that leak, flow or overflows from plumbing heating air conditioning,
or other equipment fixtures at a rate based on the number of insured
units, and d. billing the owner for the renter's legal liability
insurance coverage.
2. A blanket insurance method according to claim 1, wherein the
building physical information comprises the full name of the insured,
the mailing addresses of the building units, the number of buildings
and units, the fire insurance policy on the building and rating
by the four basic types of construction recognized in fire insurance
coverage and including building owner coverage for negligence injuries
by the tenant caused to third parties.
3. A blanket insurance method according to claim 1, including adding
commission and management fees to the actuarial insurance rates
for inclusion in the billings of the owner.
4. A blanket insurance method according to claim 3, wherein the
tenant insurance information includes tenant rental information,
which may include lease agreement requirements, the limits of coverage,
a credit report on the tenant coded to meet legal confidentiality
requirements, a criminal background check of the tenant, and a character
reference check of the tenant to verify his past tenant conduct.
5. A blanket insurance method according to claim 1, wherein the
building physical information and tenant rental information is inputted
monthly.
6. A blanket insurance method according to claim 1, wherein the
renters legal liability insurance covers both the owner and the
tenant and the tenant's personal property within the unit.
7. A blanket insurance method according to claim 1, including generating
tenant occupancy insurance which provides a pre-set amount of coverage
for displaced tenants, and an additional sum for living expenses
to the tenant unintentionally causing damage to the dwelling unit.
8. A blanket insurance method according to claim 6, wherein the
renter's legal liability insurance covers the building owner's property
for replacement cost.
9. A blanket insurance method according to claim 6, wherein the
tenant occupancy insurance includes disability insurance, which
pays the lease payment in the event an insured tenant is disabled.
10. A blanket insurance method according to claim 9, wherein the
tenant occupancy insurance includes disability insurance, which
also provides income benefits to the disabled tenant.
11. A blanket insurance method according to claim 10, wherein the
tenant occupancy insurance includes an accidental death benefit
payable to a beneficiary in the event of death of the tenant.
12. A blanket insurance method according to claim 1, wherein the
owner is billed for renters legal liability and/or tenant occupancy
insurance to be paid by the tenant on lease renewal or generation.
13. A blanket insurance method according to claim 12, wherein the
provider of the renters legal insurance provides credits against
policies covering the property owner who has 100% of the tenants'
units insured.
14. A blanket insurance method according to claim 13, wherein the
tenant occupancy insurance includes traditional HO-4 form policy
coverage for the tenant.
15. A renter's legal liability insurance policy in a permanent
written or unalterable media embodiment listing the coverage provided
covering the unit according to the method of claim 1.
16. A renter's legal liability insurance policy according to claim
15, wherein the renter's legal liability insurance policy includes
additional tenant occupancy insurance coverage, which also covers
the tenant and the tenant's personal property in addition to damage
to the unit.
17. A renter's legal liability insurance policy according to claim
12, wherein the tenant occupancy insurance coverage policy allows
the tenant to acquire coverage by paying an additional insurance
premium as part of the unit rent.
18. A blanket insurance method and policy according to claim 1,
wherein the renters legal liability insurance to protect the landowner
from unintentional damage caused by the tenant from two or more
the perils selected from the group comprising fire, smoke, explosion,
including the explosion of gases or fuel within the furnace of any
fired vessel or within the flues or passages through which the gases
of combustion pass; and water that backs up or overflows from a
sewer, drain or sump, and water or other liquids that leak, flow
or overflows from plumbing heating air conditioning, or other equipment
fixtures, and negligence injuries by the tenant caused to third
parties pursuant to predetermined insurability criteria.
19. A blanket insurance method policy according to claim 1, wherein
the renters liability insurance protects the owner from unintentional
damage caused by the tenant from three or more perils selected from
the group comprising fire, smoke, explosion, including the explosion
of gases or fuel within the furnace of any fired vessel or within
the flues or passages through which the gases of combustion pass;
and water that backs up or overflows from a sewer, drain or sump,
and water or other liquids that leak, flow or overflows from plumbing
heating air conditioning, or other equipment fixtures, and negligence
injuries by the tenant caused to third parties pursuant to predetermined
insurability criteria.
20. A blanket insurance method and policy according to claim 1,
wherein the renters liability insurance protects the owner from
unintentional damage caused by the tenant from four or more perils
selected from the group comprising fire, smoke, explosion, including
the explosion of gases or fuel within the furnace of any fired vessel
or within the flues or passages through which the gases of combustion
pass; and water that backs up or overflows from a sewer, drain or
sump, and water or other liquids that leak, flow or overflows from
plumbing heating air conditioning, or other equipment fixtures,
and negligence injuries by the tenant caused to third parties pursuant
to predetermined insurability criteria.
Insurance Description
RELATED APPLICATIONS
[0001] This application is a continuation-in-part of the continuation-in-part
application of United States Letters Patent entitled METHOD AND
APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, filed Nov. 15, 2005,
Ser. No. 11/274,875 of the continuation-in-part application entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, filed
May 5, 2005, Ser. No. 11/134,643 of the continuation-in-part of
the continuation-in-part application of United States Letters Patent
entitled METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS,
filed Dec. 27, 2004, Ser. No. 11/020,152 of the continuation-in-part
of the continuation-in-part application filed Jul. 7, 2001, Ser.
No. 09/947,330 entitled "Method and Apparatus for Insuring
Multiple Unit Dwellings" of the continuation-in-part application
filed Aug. 3, 2001, Ser. No. 09/921,251 entitled "Method and
Apparatus for Insuring Multiple Unit Dwellings" of the original
application entitled "Method and Apparatus for Insuring Multiple
Unit Dwellings", Ser. No. 09/476,559 filed Jan. 3, 2000.
BACKGROUND OF THE INVENTION
[0002] 1. Field
[0003] This invention relates to methods for insuring owners of
and tenants occupying multiple unit dwellings and buildings. More
particularly, it relates to a method and policy to insure the owner
and tenants within apartments or multi-unit dwellings from accidental
losses caused by the tenant.
[0004] 2. State of the Art
[0005] Joint insurance coverage for owners of and tenants occupying
multiple dwelling units in a building is currently not possible
to write, because it is cost prohibitive to issue a large number
of small policies covering individual units. Further, many lease
clauses require renter's insurance coverage. However, approximately
90% of the 35 million apartment units in the United States are currently
uninsured. Landlords currently do not have a process to verify or
enforce the lease requirements of mandatory insurance. This places
an enormous burden on the insurance agent to try and maintain adequate
insurance coverage for the building owner. There is currently no
insurance liability trail back to the tenant. Nor is there a product
or method currently available to mass insure all tenants of an apartment
building or multiple unit dwelling complexes. Renters insurance,
unlike homeowners insurance, which normally has a third party, the
mortgagee, as the enforcer, has currently no means of enforcement.
This being the case, present insurance methods do not allow insurance
companies to apply the principles of large numbers. The principle
of large number provides for the spread of risk over members of
a similar pool, allowing insurance companies to actuarially lower
costs, increase profits and improve service.
[0006] The patent references of record fail to suggest insurance
coverage to protect both the landlord and tenant from negligent
acts by the tenant that affect the building owner from unintentional
tenant acts causing fire, smoke, explosion and water damage to the
building units, whether occupied or not. Luchs et al, U.S. Pat.
No. 4,831,526 issued in 1989 discloses a computerized insurance
premium quote request and policy issuance system primarily for use
in the automotive, watercraft, dwelling, and personal liability
insurance area. The method disclosed provides for preparing and
writing insurance contracts via computer terminals and correction
displays before printing out the policy. It does not address providing
limited streamlined multi-unit coverage to provide reduced group
rate insurance to building owners.
[0007] Dillard, U.S. Pat. No. 6,236,973B1 issued May 22, 2001 is
an apparatus and method for providing collateral construction loan
insurance coverage. It addresses a centralized automated apparatus
for lending institutions to track insurance coverage on buildings
used as collateral for construction loans under a single builder's
risk policy. This apparatus provides management reports for the
lending institution, and tracks premium payments and repayments
for closed loans, and loss evaluations. Again, this reference does
not address providing limited streamlined multi-unit group multi-unit
coverage to provide reduced group rate insurance to building owners.
[0008] Brown et al., U.S. Pat. No. 5,978,769 issued Nov. 2, 1999
is a system and method for determining and analyzing building occupancy
using geographically based structures to identify potential clients,
perform carrier exposure aggregation and associated with operations
performed by other occupants. This reference does not address issuing
limited streamlined multi-group multi-unit coverage for the building
owner, but is used as an actuarial risk-assessment rating tool.
[0009] Other business method patents address using computers to
gather information from building sales and complexes to generate
reports, which value and manage business complexes based on information
concerning each unit in the building. Weatherly et al, U.S. Pat.
No. 6,023,687 issued Feb. 8, 2000, utilizes a computerized system
and method for creating and managing lease agreements. This patent
tracks lease payments, issues lease policies, and provides periodic
reports. It also incorporates telecommunication links between lessor
computers and the lease control computer.
[0010] The Joao (U.S. Pat. No. 6,347,302) Labadorf et al. (Lead
Paint Removal: What Insurers Won't Tell You!) and Merritt Editors
(How to Insure Your Home) references previously cited by the Examiner
in the parent application to preliminarily reject applicant's insurance
method discuss insured occupied homeowners and lessee's premises
insurance providing coverage for protecting individuals and/or business
entities from liability which may arise as the result of excess
wear and tear and/or damage which may occur to a leased and/or rented
entity during the lease and/or rental term, and further for protecting
individuals and/or business entities from liability for post-warranty
repairs. The Joao, Labadorf and Merritt insurance products and method
rely on an actuarial risk evaluation of dwelling units occupied
by the owner or lessee of the unit. The insured was limited to those
who actually occupied premises. Previously, it was believed that
insured occupied dwelling units were subject to more control and
monitoring to minimize risk and losses to the real estate.
[0011] Damage exposure for the owner who did not occupy units was
thus not included in these homeowner insurance products. Nor was
the owner of a multi-unit building covered for the actions of a
tenant in his building.
[0012] Joao, provides an apparatus and a method . . . for providing
insurance products, services and/or coverage which provides insurance
coverage for protecting individuals and/or business entities from
liability which may arise as the result of excess wear and tear
and/or damage which may occur to a leased and/or rented entity during
the lease and/or rental term, and further for protecting individuals
and/or business entities from liability for post-warranty repairs,
Col. 2, lines 8-17. As such, it is a named peril type of insurance
coverage limited in scope to those perils described (excess wear
and tear and/or damage which may occur during the lease and/or rental
term). Joao does not teach a method wherein the type of insurance
generated includes coverage to protect the multi-unit dwelling building
owner from unintentional damage caused by his tenants from fire,
smoke, explosions or water damage, or from negligence injuries caused
to third parties, page 13 last paragraph Office Action mailed Mar.
24, 2004 in the parent application No. 09/921,251. Nor do Labadorf
et al. teach this deficiency. Labadorf et al. discusses submittal
of claims for lead contamination under all risk types of home owner's
insurance policies, see page 2, numbered paragraph 16 discussing
the 1973 comprehensive general liability policy.
[0013] Nor does the "How to Insure Your Home", Merritt
Publishing, Santa Monica, Calif. publication (Merritt) supply these
deficiencies. Merritt discusses standard homeowner's insurance policies
for condominium owners. Standard homeowner's insurance provides
insurance coverage to the owner occupant of the property in accordance
with the terms of the insuring agreement. The Merritt publication
thus addresses a particular type of owner occupied insurance, which
is not similar to applicant's insurance coverage for the building
owner of multi-unit dwellings, such as apartment houses, where the
owner most likely will not occupy the premises.
[0014] Cited for general interest are: Weatherly et al, U.S. Pat.
No. 6,049,784 issued Apr. 11, 2000 and 6,023,687 issued Feb. 8,
2000 provide predetermined financial information regarding a potential
tenant and a potential landlord to a lease control intermediary,
and uses computers to evaluate the information to determine the
acceptability of the financial risk associated with the potential
tenant. It creates a service product in the form of a rent guaranty
of periodic lease payments from the lease control intermediary to
the landlord. A computer is incorporated into the method for creating
and managing the lease agreement, if review of the tenant data falls
within acceptable pre-programmed risk levels.
[0015] Hough, U.S. Pat. No. 5,414,621 issued May 9, 1995 provides
a system and method for computing a comparative value of real estate
based on assessment percentages and sales data of comparable properties
using a computer and a multiple listing computer database. Information
from various building sales is then used to determine "assessed
value" and "phase value" based on price/tax factors.
[0016] Apgar, IV, U.S. Pat. No. 5,680,305 issued Oct. 21, 1997
provides another system and method for evaluating real estate based
on amount, price, area, grade, and risk to provide a scoring rating
system to provide a well-rounded picture of a particular real estate
situation.
[0017] Rothstein, U.S. Pat. No. 6,058,369 issued May 2, 2000 disclosed
a method and apparatus for monitoring the strength of a real estate
market to make lending and title insurance decisions based upon
a derived market index.
[0018] The method and apparatus described below provides insurance
coverage to protect both the landlord and tenant from negligent
unintentional tenant acts causing fire, smoke, explosion and water
damage to the building units.
SUMMARY OF THE INVENTION
[0019] The invention comprises a blanket insurance method for insuring
an apartment or multi-unit dwelling unit with renters legal liability
insurance covering the building owner from unintentional damage
caused by the tenant from one or more of the perils selected from
the group comprising fire; smoke; explosion, including the explosion
of gases or fuel within the furnace of any fired vessel or within
the flues or passages through which the gases of combustion pass;
and water that backs up or overflows from a sewer, drain or sump,
and water or other liquids that leak, flow or overflows from plumbing
heating air conditioning, or other equipment fixtures, pursuant
to predetermined insurability criteria. It comprises selecting objective
building insurability criteria from a set of absolute insurance
standards, such as the four basic types of construction recognized
in fire insurance rating: A, B, C, and D, and class of occupancy,
including physical information, the number of units in the apartment
complex or multi-unit dwelling complex to qualify the complex for
fire insurance coverage, actuarial insurance rates for renter's
legal liability insurance, and other relevant information. The apartment
or multi-unit dwelling is then qualified in accordance with the
objective building physical information, number of units, and the
tenant data for renters' legal liability insurance to issue pursuant
to predetermined objective insurability criteria for the locale.
After qualification, tenant insurance is then issued covering the
building owner and/or property manager of the complex from the perils
selected from the group comprising fire; smoke; explosion, including
the explosion of gases or fuel within the furnace of any fired vessel
or within the flues or passages through which the gases of combustion
pass; and water that backs up or overflows from a sewer, drain or
sump, and water or other liquids that leak, flow or overflows from
plumbing heating air conditioning, or other equipment fixtures at
a rate based on the number of insured units. The owner is then billed
for the renter's legal liability insurance coverage.
[0020] This blanket insurance method may be performed without a
technological aspect or via computer assistance. Examples of computer
methods and apparatus to perform the blanket insurance method are
found in the co-pending parent applications upon which this application
is dependent.
[0021] The blanket insurance method building physical information
generally comprises the full name of the insured, the mailing addresses
of the building units, the number of buildings and units, the fire
insurance policy on the building and rating by the four basic types
of construction recognized in fire insurance coverage and including
building owner coverage for negligence injuries by the tenant caused
to third parties.
[0022] In addition to billing for the insurance, commission and
management fees may be added to the actuarial insurance rates for
inclusion in the billings of the owner.
[0023] The tenant insurance information generally includes tenant
rental information, which may include lease agreement requirements,
the limits of coverage, a credit report on the tenant coded to meet
legal confidentiality requirements, a criminal background check
of the tenant, and a character reference check of the tenant to
verify his past tenant conduct.
[0024] Usually the building physical information and tenant rental
information is inputted monthly, but can be inputted more often,
particularly if the blanket insurance method employs a computer
network with continually updated data bases.
[0025] The renters' legal liability insurance of the blanket insurance
method generally covers both the owner and the tenant and the tenant's
personal property within the unit. The blanket insurance method
may also include generating tenant occupancy insurance which provides
a pre-set amount of coverage for displaced tenants, and an additional
sum for living expenses to the tenant unintentionally causing damage
to the dwelling unit.
[0026] This renter's legal liability insurance usually covers the
building owner's property for replacement cost, and may include
tenant occupancy insurance with disability coverage, which pays
the lease payment in the event an insured tenant is disabled, or
also provides income benefits to the disabled tenant, and an accidental
death benefit payable to a beneficiary in the event of death of
the tenant.
[0027] The owner is generally billed for renters' legal liability
and/or tenant occupancy insurance to be paid by the tenant on lease
renewal or generation.
[0028] The provider of the renters legal insurance may provide
credits against policies covering the property owner who has 100%
of the tenants' units insured.
[0029] The tenant occupancy insurance of the method may include
traditional HO-4 form policy coverage for the tenant. The renter's
legal liability insurance policy is issued in a permanent written
or unalterable media embodiment listing the coverage provided covering
the unit. This renter's legal liability insurance policy often includes
additional tenant occupancy insurance coverage, which also covers
the tenant and the tenant's personal property in addition to damage
to the unit.
[0030] The tenant occupancy insurance coverage policy may allow
the tenant to acquire coverage by paying an additional insurance
premium as part of the unit rent.
[0031] However, each blanket insurance policy provides at a minimum
renters legal liability insurance to protect the landowner from
unintentional damage caused by the tenant from two or more the perils
selected from the group comprising fire, smoke, explosion, including
the explosion of gases or fuel within the furnace of any fired vessel
or within the flues or passages through which the gases of combustion
pass; and water that backs up or overflows from a sewer, drain or
sump, and water or other liquids that leak, flow or overflows from
plumbing heating air conditioning, or other equipment fixtures,
and negligence injuries by the tenant caused to third parties pursuant
to predetermined insurability criteria.
[0032] In other blanket insurance method policies the renters liability
insurance protects the owner from unintentional damage caused by
the tenant from three or more perils selected from the group comprising
fire, smoke, explosion, including the explosion of gases or fuel
within the furnace of any fired vessel or within the flues or passages
through which the gases of combustion pass; and water that backs
up or overflows from a sewer, drain or sump, and water or other
liquids that leak, flow or overflows from plumbing heating air conditioning,
or other equipment fixtures, and negligence injuries by the tenant
caused to third parties pursuant to predetermined insurability criteria.
[0033] In still other blanket insurance method policies the renters
liability insurance protects the owner from unintentional damage
caused by the tenant from four or more perils selected from the
group comprising fire, smoke, explosion, including the explosion
of gases or fuel within the furnace of any fired vessel or within
the flues or passages through which the gases of combustion pass;
and water that backs up or overflows from a sewer, drain or sump,
and water or other liquids that leak, flow or overflows from plumbing
heating air conditioning, or other equipment fixtures, and negligence
injuries by the tenant caused to third parties pursuant to predetermined
insurability criteria.
[0034] Prior to applicant's blanket insurance method, no insurance
product provided insurance covering multi-unit dwelling building
owners from unintentional damage caused by tenants from fire, smoke,
explosions, and water damage, or negligence injuries by the tenant
caused to third parties pursuant to predetermined insurability criteria.
The policy is presently in existence and is therefore actually reduced
to practice. None of the references cited above present evidence
of similar insurance coverage. More importantly, no previous policies
similar to the present invention were reduced to practice to anticipate
or suggest the invention and insurance method. As a new insurance
product and method, there is no previous evidence of prior combinations
of references reduced to practice covering similar perils and insurance
contract provisions to anticipate or suggest the invention.
[0035] Based on the RLL building coverage, the tenant may apply
for tenant occupancy insurance (TOI). This coverage would be similar
to a present renter's homeowner's policy. Coverage could include
tenant property, liability to a third party and damage to the apartment
building pursuant to predetermined insurability criteria. As TOI
insurance is an add-on to the RLL building, it may be written at
a group rate, thereby allowing the tenant a more affordable rate
than heretofore available. The reason is because TOI insurance pricing
is based on larger numbers of the entire building complex rather
than the traditional underwriting for only one specific unit. This
results in a larger insurance coverage pool lowering costs to issue,
administer and cover any losses incurred in the building complex.
The exact premium for TOI insurance coverage is also dependent upon
the limits of coverage for personal property specified by the tenant.
By limiting the extent of coverage, TOI insurance pricing is not
open ended; thereby further reducing the premium charged. In addition,
the premium rates for RLL coverage on the building owner may be
reduced, depending upon the percentage of units in the building,
which are additionally covered by TOI insurance. The blanket insurance
method can therefore either be performed manually or with a computer
to take advantage of the law of large numbers providing universal,
capped, add on insurance coverage to the occupants of entire building
at a very low cost as described in the Renters Legal Liability LLC
co-pending patent applications:
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, filed
Nov. 15, 2005, Ser. No. 11/274,875 of the continuation-in-part application
entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, filed
May 5, 2005, Ser. No. 11/134,643 of the continuation-in-part of
the continuation-in-part application of United States Letters Patent
entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, filed
Dec. 27, 2004, Ser. No. 11/020,152 of the continuation-in-part of
the continuation-in-part application filed Jul. 7, 2001, Ser. No.
09/947,330 entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS of the
continuation-in-part application filed Aug. 3, 2001, Ser. No. 09/921,251
entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS of the
original application entitled
METHOD AND APPARATUS FOR INSURING MULTIPLE UNIT DWELLINGS, Ser.
No. 09/476,559 filed Jan. 3, 2000.
[0036] The blanket insurance method employs objective criteria
dependent upon "Building Physical Information" about the
apartment complex or multi-unit dwelling complex from all owners
and business managers seeking insurance coverage within a geographical
area. This information is reviewed and updated monthly, and contains
the full name of the insured, the mailing addresses of the units,
and the number of buildings. Additional information can be inputted
such as the fire insurance policy on the building and building rating
by the four basic types of construction recognized in fire insurance
coverage--i.e. a Class A building is one with walls, floors, and
roof of masonry or concrete, and with all load walls supported by
an independent steel frame. A Class B structure is similar to Class
A except that interior walls and floors are not constructed of masonry
or concrete. A Class C building does not meet all specific requirements
of Class B. A Class D building generally refers to frame structures
and includes most private residences.
[0037] It also employs objective "Occupancy Information"
about the apartment complex or multi-unit dwelling complex from
all owners and business managers seeking insurance coverage within
a geographical area specifying the total number of units occupied,
and the total number of units vacant at the last reporting period.
[0038] In addition objective "Tenant Rental Information"
may be utilized from all owners and business managers and tenants
within a geographical area seeking insurance coverage containing
the lease agreement requirements, a credit report on the tenant
coded to meet legal confidentiality requirements, a criminal background
check of the tenant, and a character reference check of the tenant
to verify his past tenant conduct.
[0039] The above objective criteria are then measured against the
building owner's particular property to qualify the building for
renter's legal liability coverage (RLL), which begins on the date
of occupancy and after data has been entered and qualified for coverage,
and ends as of the date the tenant leaves and is removed from coverage.
Continuous monitoring insures that empty units are not covered,
and that the current tenant is covered as an additional insured.
This lowers the overall cost of insurance to the owner by avoiding
payment for non-existent insurance coverage on empty units. This
may be done manually or electronically via a computer.
[0040] RLL, unlike other off the shelf products, is specifically
designed to cover the multi-unit property owner from tenant liability
as a single interest product. Off the shelf products do not allow
this provision for the reason that the tenant is the named insured
instead of an added insured. As previously stated, as named insured,
the building owner is only protecting its interests and as such
does not need to be a licensed insurance agent. Contractually tenant
agrees to allow landlord to add their unit to the landlord's master
policy.
[0041] The tenant's rent payment includes the renter's legal liability
insurance coverage acquired by the landlord as named insured. This
charge is added to the monthly rent bills a surcharge for the added
insurance coverage.
[0042] The second step of the method is comprised of first compiling,
inputting and expanding the database of tenant insurance information
into a computer processor. A matching program is then inputted into
the computer processor to repeatedly sort by building address a
working database of the insurance status of each tenant. To insure
the accuracy of the database, a statistical sampling and verification
of the data provided is periodically performed.
[0043] The computer processor then generates a real time series
of reports to the building owner, business manager, and various
insurance carriers listing all of the insured and uninsured tenants
of an apartment complex or multi-unit dwelling. Expired tenant insurance
lists including but limited to self-purchased TOI and traditional
HO-4 insurance may also be sent to these parties.
[0044] The insurance carrier generally pre-qualifies the apartment
complex or multi-unit dwelling for renter's legal liability insurance,
or tenant occupancy insurance via an actuarial assessment computer
program inputted into the computer processor that establish the
premiums required for each building. This qualification is generally
conditioned on periodic updates of the database being provided by
the building owner or manager that the occupancy and types of tenants
do not materially fall to unacceptable levels. Once the building
is pre-qualified, tenant risk will be insured against by renter's
legal liability insurance when the tenant rents an apartment or
dwelling unit. This renter's legal liability insurance will provide
coverage to protect the landlord from unintentional acts of his
tenants. RLL coverage is limited to the perils of fire, smoke, explosion
and water damage, as well as liability incurred by the tenant so
that the coverage can be automatically pre-approved and extended
without any independent review triggered by additional risk factors
involved in coverages, such as bodily injury. Typically, RLL insurance
is capped at the value of the apartment unit, or a pre-set limit.
For example, replacement cost as opposed to Actual Cash Value representing
the depreciated value of the building in the event of loss could
be specified to cover the real property to avoid a financial burden
on the building owner in the event of loss. Actual cash value cost
would still be specified for the tenants' personal property to eliminate
any financial incentives for the tenants to start a fire to replace
worn out personal property.
[0045] RLL insurance can be purchased incrementally to only cover
units occupied by tenants or on a blanket policy basis covering
all of the units in a multi-unit apartment or dwelling. The incremental
purchase method progressively covers the entire complex as the units
become fully occupied to become a blanket policy. In addition, the
insurance actuarial rates per unit may include additional management
and commission fees for administering the RLL insurance policy as
a cost in the fees charged the owner and tenants for RLL insurance
coverage.
[0046] RLL insurance also includes the good neighbor coverage which
provides $1000 displacement costs for any non-negligent effected
tenant and the negligent tenant.
[0047] Alternatively, the tenant may elect to participate in tenant
occupancy insurance provided through the building owner. This allows
the tenant to purchase insurance through a rent surcharge to cover
tenant liability and personal property. The amounts of coverage
for the building units are pre-approved by the insurance carrier
and listed on internet screens. The tenant then simply checks the
coverage desired, and the bill is added to the monthly rent charge.
[0048] Premiums are then periodically generated and billed to the
building owner and tenant based on tenant occupancy and preferences
at the end of each payment period. This allows the building owner
the option to pay for insurance as the leases are renewed, rather
than paid in advance. The method does not contemplate any earned
premium at the inception for the reason that RLL insurance is mandatory
and not optional unless the resident can prove similar insurance
coverage is already in place. The blanket insurance method allows
the building owner or manager to minimize the exposure from accidental
tenant damage and provide another source of recovery in the event
of loss.
DESCRIPTION OF THE DRAWINGS
[0049] FIG. 1 illustrates a schematic flow diagram of a preferred
blanket insurance method. FIG. 2 illustrates schematic flow diagram
of a preferred configuration of the apparatus.
DESCRIPTION OF THE ILLUSTRATED EMBODIMENTS
[0050] FIG. 1 illustrates a schematic flow diagram of the basic
preferred overall blanket insurance method and legal liability policy
implemented manually or via computer. The first phase of the method
comprises selecting objective building insurability criteria from
a set of absolute insurance standards including physical information,
the number of units in the apartment complex or multi-unit dwelling
complex to qualify the complex for fire insurance coverage, and
regional actuarial fire and casualty insurance rates for covering
a dwelling with renter's legal liability insurance. Next, the apartment
or multi-unit dwelling is qualified in accordance with the objective
building physical information and number of units, and the tenant
data for renters legal liability insurance predetermined insurability
criteria. Tenant insurance is then issued covering the building
owner and/or property manager of the complex from the perils selected
from the group comprising fire; smoke; explosion, including the
explosion of gases or fuel within the furnace of any fired vessel
or within the flues or passages through which the gases of combustion
pass; and water that backs up or overflows from a sewer, drain or
sump, and water or other liquids that leak, flow or overflows from
plumbing heating air conditioning, or other equipment fixtures at
a rate based on the number of insured units. The owner is then billed
for the renter's legal liability insurance coverage.
[0051] FIG. 2 illustrates schematic flow diagram of a preferred
configuration of the method of FIG. 1 performed by a computer apparatus.
The method if performed by first inputting into a computer database
relevant building physical information, occupancy information, and
tenant rental information. This information is then expanded and
tested by the computer employing a matching program to insure that
there is one record per unit. Thus every unit is matched with a
tenant, and any renter's insurance policy. Reports of incomplete
data are then sent to the building owner or manager, or insurance
carrier to update and correct their files. An insurance qualification
procedure is executed to qualify the property for tenant insurance,
and establish the periodic premiums for payment by the tenant. In
some cases, a property may be qualified by default without going
through the qualification process procedures.
[0052] From the uninsured tenant lists, the building owner or manager
can take appropriate steps to enforce the lease provisions requiring
tenant insurance coverage. In addition, the working database can
be monthly audited and statistically sampled to insure its reliability.
Generally, this process produces monthly internal audit reports
and provides additional insurance leads to those tenants desiring
additional insurance.
[0053] The second phase of the method allows the uninsured tenants
to purchase directly on-line tenant occupancy insurance. The database
is then updated and a bill prepared based on the total number of
units in the building qualified for insurance and sent by the computer
to the landlord for inclusion in the monthly rent charges for the
insurance additional coverage.
[0054] This blanket insurance method can also be implemented via
computer networks as illustrated in the co-pending parent applications
described above.
[0055] The blanket insurance method and renters legal liability
policy thus provides a novel insurance product, which can be issued
manually or via technological assistance.
[0056] Although the foregoing specification refers to the illustrated
embodiments, it is not intended to restrict the scope of the appended
claims. The claims themselves recite those features deemed essential
to the invention.
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