AINS 22 B Flashcards
Three general categories of people eligible for coverage under the ISO 2011 HO:
Individuals/families who own a private home in which they reside; rent or lease the premises in which they reside; own private condominium units used for residential purposes.
Meets most needs of owner-occupants for dwelling, other structures, and personal property coverage. Designed to meet the risk management needs of owner-occupants of dwellings.
HO-2
Provides special form coverage on dwellings and other structures. Also known as open perils coverage, protects property against direct physical loss that is not otherwise excluded by the coverage form. Provides named perils coverage for personal property.
HO-3 (Special Form)
Provides coverage for a tenant’s personal property on a named perils basis. Does not provide coverage for dwellings or other structures. Designed to meet the risk management needs of tenants and other occupants of apartments or dwellings.
HO-4 (Contents Broad form)
Provides open perils coverage on dwellings, other structures, and personal property. Designed to meet the risk management needs of owner-occupants of dwellings who would like the broadest coverage available among ISO’s forms for their property.
HO-5 (Comprehensive Form)
Provides coverage for personal property on a named perils basis, with limited dwelling coverage. Designed to meet the risk management needs of the owners of condominium units and cooperative apartment shares. Includes special provisions for loss exposures inherent in condo and cooperative unit ownership.
HO-6 (Unit Owners Form)
If a two-, three, or four-family dwelling is co-owned by the families who reside there, one of the owner-occupant forms may be issued in the name of one of the owner-occupants, while the others are named on what? This covers each party’s interest in the building.
Additional Insured Endorsement (HO 04 14).
Provides coverage for a dwelling, other structures, and personal property on a limited, named perils basis. Designed to meet the risk management needs of owners-occupants of dwellings that may not meet insurer underwriting standards required for other policy forms.
HO-8 (Modified Coverage Form)
The cost of replacing damaged property with similar property that performs the same function but might not be identical to the damaged property.
Functional replacement cost
A homeowner wishes the broadest coverage for his home and contents. Which of the six ISO Homeowners program forms would be best for his needs?
HO-5 (Comprehensive Form)
Which endorsement provides replacement cost coverage on personal property, awnings, carpeting, household appliances, and outdoor equipment? (These items are covered on ACV basis on an unendorsed HO-3 form.
Personal Property Replacement Cost Less Settlement endorsement (HO 04 90 05 11)
A homeowners policy premium is determined by first developing the base premium. The base premium is based on what factors?
Dwelling location, public protection class, construction factors, coverage amount, and the policy form selected.
Property insurance coverage covering all causes of loss not specifically excluded.
Special form coverage
An insurance policy in which the covered causes of loss are listed or “named” in the policy.
Named perils coverage
Insurance for property specifically listed on a policy, with a limit of liability for each item.
Schedule coverage
Endorsement designed to help prevent underinsurance caused by economic inflation and rising replacement costs.
Inflation Guard
Provides a means to buy coverage for this an earthquake.
Earthquake endorsement
Coverage to a relative of an insured who is a resident of a facility that provides assisted living services, such as meals, medical supervision, house keeping, and social activities.
Assisted Living Care Coverage
Provides a higher limit of coverage, up to $10,000, for losses resulting from unauthorized use of an insured’s credit card, bank transfer card, check forgery, or acceptance of counterfeit money.
Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money Coverage - Increased Limit
For insureds who operate an office/business from their homes.
HOMEBIZ
Any individual who owns a house could discover after a loss that repairs or upgrades must be made in order to comply with current ordinances or laws.
Ordinance / Law - increased amounts of coverage
Coverage for water or waterborne materials that originate from within the insured’s dwelling and back up through sewers or drains, or that overflow from a sump, sump pump, or related equipment.
Limited Water Back-Up and Sump Discharge or Overflow Coverage
Supplements additional charges (insureds living in communities with a neighborhood association are charged a monthly fee to cover the cost of the maintenance and upkeep of the common areas of the neighborhood) with an additional amount of insurance for the premises named in the endorsement. Also lists additional locations and schedule an amount of insurance for them.
Supplemental Loss Assessment Coverage
Indicates a starting date and an ending date within the policy period when the residency requirement will be removed from the definition of residence premises in a homeowners policy. This endorsement can be used when an insured may not be planning to reside in the premises on the inception date of the policy due to, for example, extensive renovations being made to the property prior to occupancy.
Broadened Residence Premises Definition Endorsement
Clarify that the HO-3 policy does not provide any property/liability coverage for home-sharing exposures. Adds new definitions for home-sharing activities and revises the existing definition of “business” to specifically address home-sharing host activities.
Home-Sharing Host Activities Amendatory Endorsement
Designed for insureds who own rental property not at the insured location.
Additional Residence Rented to Others - 1, 2, 3, or 4 Families
Used to provide property and liability coverage for home-sharing host activities.
Broadened Home-Sharing Host Activities Coverage Endorsement
Section 1 coverage listed on declaration, listed as the “dwelling” on the “residence premises” and includes structures attached to the dwelling.
Dwelling (A)
Structures on residence premises, other than dwelling building. NOT attached to the dwelling (shed, pool, detached garage).
Other Structures (B)
Contents of the insured premises and personal property owned/used by an insured anywhere in the world (luggage, borrowed skis that are stolen).
Personal Property (C)
Insured’s exposure to financial loss, apart from property damage itself, if premises where the insured resides are damaged so badly they are unfit for use.
Loss of Use (D)
Certain direct property losses or consequential expenses that are not covered by A, B, C, or D.
Additional Coverages
Section II, third party coverage for those who are injured/property damaged by insured. (Basic limit typically $100,000).
Personal Liability (E)
Necessary medical expenses incurred by others (not an insured) within three years of injury.
Medical Payments to Others (F)
Provides named perils coverage for personal property.
HO-3
Minimum deductible for the ISO Homeowners program is:
$500
The following Section I Exclusions (weather - contributes to any previous excluded perils, acts or decisions, or damage from faulty planning, zoning, surveying, designing, workmanship, construction, renovation, materials, & maintenance) apply to which two property coverages?
A (Dwelling) and B (Other Structures)
What are the following directions called?
Give prompt notice, notify police, notify credit card, electronic fund transfer card company, or access device company, protect property from further damage, cooperate with insurer, prepare inventory, verify loss, and sign a sworn proof of loss.
Duties After Loss
How many days does the insured have after loss to notify the insurer of intent to complete repairs and make settlement on replacement cost basis rather than ACV basis?
180 days
What does the Other Insurance and Service Agreement state happens if two or more insurance policies cover the same loss?
The loss will be shared proportionally by all policies.
Reserves right for insurer to repair/replace damaged property with similar property.
Our Option
How many days is the loss payable after the insurer receives proof of loss and either an agreement has been reached by the insurer and the insured/court judgment/appraisal award has been entered?
60 days
What amount is considered “small losses”?
Under $2,500
What happens if the insured abandons the property after it is damaged/destroyed?
The insurer need not take responsibility for it.
In what clause does the insurer agree to include named loss payee when a claim is paid involving personal property?
Loss Payable Clause
Who pays the following expenses? Expenses we incur, premium on bonds, reasonable expenses, postjudgment interest.
The INSURER will pay these items when handling a claim.
How much does Damage to Property of Others pay when damage to property of others is caused by an insured, regardless of fault or legal liability?
$1,000
Homeowners policy EXCLUDES all aircraft (except model/hobby aircraft) liability under which coverage?
E (Personal Liability) and F (Medical Payments to Others)
Hovercraft liability is EXCLUDED under which coverages? (No exceptions)
E (Personal Liability) and F (Medical Payments to Others)
Bodily injury/ property damage that results from continuous/repeated exposure to the SAME harmful conditions are considered what?
They are considered to be one OCCURRENCE.
The following are duties AFTER a(n) what?
Give written notice to the insurer asap, cooperate with insurer’s investigation, settlement, and defense, forward legal documents promptly to the insurer, provide claims assistance to insurer, submit evidence or damage to property of others when a claim is made under the additional coverage for damage to property of others, and do not make voluntary payment.
Duties After an Occurrence
The following are duties of who under F? Give insurer written proof of claim asap, authorize insurer to obtain copies of medical reports and records, submit to a physical exam by a doctor chosen by the insurer as often as the insurer requires such examinations.
Duties of Injured Person
Intentional relinquishment of a known right.
Waiver
Which homeowners policy was designed specifically for people who live in rented houses/apartments?
HO-4
Provides the broadest property coverage of any ISO homeowners form.
HO-5
Has special limits for stolen, misplaced, and/or lost items at these amounts: $1,500 jewelry & furs, $2,500 firearms, & $2,500 silverware.
HO-5
Designed for use when the replacement cost of an owner-occupied dwelling significantly exceeds its market value.
HO-8
Insurance for property specifically listed (scheduled) on a policy, with a limit of liability for each item.
Scheduled Coverage
Endorsement designed to help prevent underinurance caused by economic inflation and rising replacement costs.
Inflation Guard
Provides a means to buy coverage for causes of loss from earthquake.
Earthquake Endorsement
Provides scheduled coverage for specific items, such as jewelry, furs, musical instruments, silverware, fine arts, and rare coins. Covers more causes of loss than HO-3 and other homeowners forms. The special limits and Coverage C deductible do NOT apply to this endorsement.
Scheduled Personal Property
Adds coverage for water or waterborne materials that originate from within the insured’s dwelling and back up through sewers or drains, or that overflow from a sump, sump pump, or related equipment.
Limited Water Back-Up and Sump Discharge or Overflow Coverage
Supplements those additional coverages with an additional amount of insurance for the premises named in the endorsement. The insured can also list additional locations and schedule an amount of insurance for them. Typically for insureds living in communities with neighborhood associations and are charged a monthly fee to cover cost of maintenance and upkeep of common areas of the neighborhood.
Supplemental Loss Assessment Coverage
Indicates a starting date and an ending date within the policy period when the residency requirement will be removed from the definition of the residence premises in a homeowners policy. Requires the insured reside in the premises on the inception date of the policy period.
Broadened Residence Premises Definition Endorsement
Clarifies that the HO-3 policy does not provide any property or liability coverage for home-sharing exposures. This endorsement adds definitions for home-sharing activities and revises the existing definition of “business” to specifically address home-sharing host activities.
Home-Sharing Host Activities Amendatory Endorsement
This can be used to provide property liability coverage for home-sharing host activities. Provides coverage for loss or damage to the premises and liability to others, subject to policy provisions, for insureds who engage in home-sharing host activities.
Broadened Home-Sharing Host Activities Coverage Endorsement
Designed for insureds who own rental property not at the insured location. Extends Coverage E and Coverage F to four-family residences that are owned by the insured and rented to others.
Additional Residence Rented to Others - 1, 2, 3, or 4 Families
Expands the liability coverage of a homeowners policy by adding the definition of personal injury and then adding coverage for personal injury. The following are personal injuries defined in this endorsement:
False arrest, detention, or imprisonment; malicious prosecution; invasion of privacy, wrongful eviction, or wrongful entry; publication, in any manner, of material that slanders or libels another party or disparages the other party’s goods, products, or services; publication, in any manner, of material that violates a person’s right to privacy.
Personal Injury Coverage
A basis for insuring all items with a single amount of insurance without specifically identifying each item.
Blanked basis
Forms used to cover a single category of personal property, such as outboard motor and boats, fine arts, cameras, or motorized golf carts.
Specialized forms
Forms which are broader and generic in nature. There are three of these forms and are commonly used to provide coverage on a single form for many kinds of personal property, including: Personal Articles Standard Loss Settlement Form, Personal Property Form, and Personal Effects Form.
General Forms
A quality of or condition within a particular type of property that tends to make the property destroy itself.
Inherent vice
This form excludes losses caused by wear and tear, deterioration, inherent vice, or insects/vermin.
Personal Articles Standard Loss Settlement Form
This form provides special form coverage on unscheduled personal property owned or used by the insured and normally kept at the insured’s residence.
Personal Property Form
This form is designed for frequent travelers and provides special form coverage on personal property such as luggage, clothes, cameras, and sports equipment normally worn or carried by tourists and travelers.
Personal Effects Form
Personal property items owned by individuals that are personal in nature such as jewelry, clothes, wallets, or purses.
Personal effects
Accidental causes of loss that are peculiar to the sea and other bodies of water
Perils of the sea
Insurance that covers physical damage to vessels, including their machinery and fuel but not their cargo.
Hull insurance
What basis are yachts typically insured upon?
An agreed value basis
In the event of a total loss, the insurer pays the full amount stated in the policy declarations as the total, or agreed, value of the hull.
Agreed value
What are typical deductibles of small boats?
$100 - $250
Which size boat carries a deductible equal to 1 % - 10% of the insured value of the watercraft?
Medium
Insurance that covers shipowners against various liability claims due to operating the insured vessel.
Protection and indemnity (P&I) insurance
Coverage for the insured’s bodily injury incurred in a boating accident caused by another boat’s owner or operator who is uninsured and who is legally responsible for the injury; similar to the PAP’s uninsured motorists coverage.
Uninsured Boaters Coverage
A federal statute that eliminates the right of most maritime workers (other than crew members of vessels) to sue their employers and, in return, requires such employers to provide injured or ill workers with benefits like those provided by state workers compensation statutes.
United States Longshore and Harbor Workers’ Compensation Act (LHWCA)
Area that the NFIP has classified as being expected to experience flooding at least once in 100 years.
Special flood hazard area (SFHA)
A temporary map designed to identify flood-prone areas in the community.
Flood hazard boundary map
Initial phase of a community’s participation in the NFIP in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates.
Emergency Program
A map that shows exact boundaries for special flood hazard areas, the various flood zones, and base flood elevations.
Flood Insurance Rate Map (FIRM)
Second phase of the NFIP in which the community agrees to adopt flood-control and land-use restrictions and in which property owners purchase higher amounts of flood insurance than under the emergency program.
Regular Program
A program allowing private insurers to write flood insurance under the NFIP.
Write-Your-Own (WYO) Program
A group of insurers or reinsurers involved in joint underwriting to insure major risks that are beyond the capacity of a single insurer or reinsurer; each syndicate member accepts predetermined shares of premiums, losses, expenses, and profits.
Syndicate
What plans make standard lines of property insurance available for exposures located in areas underserved by the voluntary market?
FAIR plans
Policy that covers on an “all-risks” basis to fill gaps in the insured’s commercial property coverage, especially gaps in flood and earthquake coverage.
Difference in Conditions (DIC) Policy / DIC Insurance
