C-II.C · Classes of Casualty Insurance
Surety, credit, automobile and aircraft
Surety (§105(a)): guaranteeing the behavior of persons and the performance of contracts, including bonds required in actions or proceedings, such as a court bond or a contractor's performance bond. It carves out insurance policies and payments secured by a mortgage, deed of trust or other lien on real estate. Under §105(c), a bank's indemnity for loss of securities does not apply to property in the mail or in the exclusive custody of a common carrier, except transportation by an armored motor vehicle.
Credit (§113): insurance against loss from the failure of persons to meet existing or contemplated obligations to the insured. It runs the opposite way from liability: in credit, someone owes the insured; in liability, the insured owes others. Credit insurance cannot be used if the coverage falls within financial guaranty insurance under §12100.
Automobile (§116(c)): an agreement promising repair or replacement after a mechanical or electrical breakdown, at no cost or reduced cost, is automobile insurance, unless it is a vehicle service contract subject to Part 8 of Division 2 or deemed not to be insurance under that part. Promising a repair instead of money does not avoid the class.
Aircraft (§118): insures aircraft owners, users, dealers and others with insurable interests against hazards incident to ownership, maintenance, operation and use, other than accident or physical injury to a natural person. A plane stored for months in a dealer's hangar with no shipment planned is aircraft insurance, not marine, because §103(a) excludes aircraft in storage not incidental to transportation.
Remember
· Surety = guarantee behavior or performance (court bonds included); not payments secured by real estate liens.
· Credit = someone fails to pay the insured; liability = the insured owes others.
· Breakdown repair promise = auto insurance unless a Part 8 service contract; stored aircraft = aircraft class.
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