Property Insurance (Building & Contents)
A. Purpose
The purpose of this statement is to provide guidance on insuring State-owned buildings, furniture, fixtures, and equipment against potential loss from fire and lightning, wind, hail, aircraft, riot, vehicle, explosion, smoke, vandalism and malicious mischief, water pipe damage, theft and business interruption.
B. General Guidelines/Applicable Policies
1. Property Insurance coverage underwritten by the State Property Fire Insurance Fund of the North Carolina Department of Insurance is administered through the University's Office of Procurement & Materials Management.
2. At a minimum, all University-owned buildings and contents including transformers and substations listed with the N.C. Department of Insurance are protected against loss from fire and lightning up to the replacement value of the building which is set by the N.C. Department of Insurance. For rating and informational purposes, the Department of Insurance calculates the replacement value for a given building equal to the cost to construct a replacement building of equal quality, function and size. The Department of Insurance uses values for all State-owned buildings based on average costs for various North Carolina areas. A building loss settlement, however, depends on the actual cost of replacement, and not necessarily the value that has been calculated using the average cost.
3. Unless notified by the department or school, Procurement & Materials Management utilizes the Capital Assets Management System (CAMS) current replacement new (CRN) values as the basis for the declared value on building contents for insurance purposes. Departments may and are encouraged to update their contents values as required.
4. Except as explained in item 6 below, each University building and its contents valued at $1,100,000 and over is protected for extended coverage (EC), with $100,000 deductible per building including contents, with a maximum deductible of $500,000 per occurrence. EC insurance provides coverage which includes protection against direct loss or damage by the perils of windstorm, hail, smoke, explosion, riot or civil commotion, aircraft, vehicles as follows:
a. Windstorm or Hail, but not including:
1.
Frost or cold weather;
2. Ice (other than hail), snow or sleet, whether
driven by wind or not; or
3. Loss or damage to the interior of any building
or structure, or the property inside the building or structure, caused
by rain, snow, sand or dust, whether driven by wind or not, unless the
building or structure first sustains wind or hail damage to its roof or
walls through which the rain, snow, sand or dust enters.
b. Smoke causing sudden and accidental loss or damage. This cause of loss does not include smoke from agricultural smudging or industrial operations.
c. 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. This cause of loss does not include loss or damage by:
1.
Rupture, bursting or operation of pressure relief devices; or
2. Rupturing or bursting due to expansion or
swelling of the contents of any building or structure, caused by or resulting
from water.
d. Riot or Civil Commotion, including:
1.
Acts of striking employees while occupying the described premises; and
2. Looting occurring at the time and place of
a riot or civil commotion.
e. Aircraft or Vehicles, meaning only physical contact of an aircraft, a spacecraft, a self-propelled missile, a vehicle, or an object thrown up by a vehicle, with described property or with the building or structure containing the described property.
This cause of loss includes loss or damage by objects falling from aircraft.
The Fund will not pay for loss or damage caused by or resulting from vehicles you own or which are operated in the course of your business.
At the same time, buildings and contents valued at less than $1,100,000 are covered with EC which includes the perils of wind and hail only. This coverage is also subjected to $100,000 deductible per building with a maximum of $500,000 per occurrence.
5. If EC coverage with a $500 deductible (including windstorm, hail, smoke, explosion, riot or civil commotion, aircraft and vehicles) is desired for any university buildings, the department is required to pay a premium charge based on the total value of the building as established by the Department of Insurance. If EC is not purchased through the State Property Fire Insurance Fund, the University may still have coverage through the State's excess property policy with its reinsurer, Industrial Risk Insurers (IRI) as explained in item 4 above. However, the State agency must pay for, or participate in the deductible in the policy. Coverage in the State's policy with IRI is complicated, and incident specific.
6. There are exceptions to the above described EC coverage for windstorm which affects the insurance on buildings and building contents in the following counties:
Beaufort, Bertie, Bladen, Brunswick, Camden, Carteret, Chowan, Columbus, Craven, Currituck, Dare, Duplin, Gates, Greene, Hertford, Hyde, Jones, Lenoir, Martin, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Pitt, Tyrell and Washington
Colleges or departments with facilities in these counties which purchase "Extended Coverage" from the Fund will continue to have a $500 deductible per occurrence for windstorm. However, if this coverage is not purchased the college or department will be responsible for a windstorm deductible of 1% of the total insured dollar value at the location with a minimum of $100,000 per building, including contents, and a maximum of $2,000,000 per occurrence for all coastal counties. The 1% deductible will apply only in situations where the wind damage is associated with a storm that is named by the National Weather Service or given an Insurance Services Offices (ISO) catastrophe number.
Windblown debris, including tree debris, is covered in the policy within 1,000 feet of a building up to a maximum of 25% of amount of the loss payable at each location, as designated by the insurer in the policy, minus the deductible.
As a point of clarification, the "total dollar value at a location" refers to the total value of all buildings and contents at a particular facility. For example, the total value of all buildings and contents at the Elizabeth City State University would represent one location.
7. Boiler and Machinery Coverage is provided for University boilers in a policy underwritten by Kemper Insurance Company with a limit of $5,000,000 and a deductible of $500. A separate Kemper policy provides coverage for the University's transformers and substations with a limit of $5,000,000 with a $10,000 deductible for substations and $5,000 deductible for transformers.
8. All loss payments through the N.C. Department of Insurance have a $500 deductible except theft which has a deductible of $1,000, as well as, those exceptions noted above.
9. Property insurance may further be endorsed at an additional premium to include, for example, coverage for vandalism, malicious mischief, water pipe damage, theft, all risk, and business interruption. If this coverage are desired, departments should contact Procurement & Materials Management for more information.
10. G.S. 58-191 - Losses are reimbursed on a replacement cost basis in lieu of an actual cash value basis (replacement cost minus depreciation).
C. Procedures
1. ECSU has the responsibility to list all state-owned buildings with the N.C. Department of Insurance and to determine the replacement value of building contents. Facilities Management is responsible to notify Procurement & Materials Management when a new building is added to their inventory of buildings. Procurement & Materials Management and Facilities Management review all University buildings and contents each year, comparing the State Property Asset Listing with the ECSU CAMS Listing, making adjustments where necessary.
2. Facilities Management may elect to update CAMS value at anytime during the year by contacting Procurement & Materials Management.
3. Fire and lightning coverage for most academic and office buildings is provided to the University through the State Property Fire Insurance Fund at "no cost."
4. Similar coverage is also provided to other University buildings/departments (those erected and/or operated from non-State fund sources) and their contents; however, premium cost is borne by the department.
5. Property losses are to be reported to Procurement & Materials Management by the end of the next workday after the incident occurs. Verbal notification should be followed up with written confirmation.
6. Procurement & Materials Management will
file the necessary claim with the State Department of Insurance.
How
are we doing?
Contact us with any comments or suggestions.
| Ruth
Williams, Director
Elizabeth City State University Procurement & Materials Management M.D. Thorpe Administration Building, Room 237 Elizabeth City, NC 27909 Phone: (252) 335-3219 Fax: (252) 335-3650 |
Return to Procurement Latest Revision: 04/23/2001
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