CFP Property and Liability Insurance

Question 1

Property insurance provides protection for losses on

Answer 1

houses
condos
auto
boats
other property assets

Question 2

Liability Insurance protects individuals for loss associated with

Answer 2

legal action (generally due to property damage)
personal injury
loss of income

Question 3

PLUP covers

Answer 3

additional coverage for personal liability protection, in excess of the liability protection from auto and homeowner’s policies

Question 4

Homeowner’s Insurance: BASIC COVERAGE

Answer 4

12 PERILS:
Fire
Vehicle
Lightning
Smoke
Windstorm
Vandalism
Hail
Explosions
Riots
Theft
Aircraft
Volcano

Question 5

Homeowner’s Insurance: BROAD COVERAGE

Answer 5

12 peril + 6 MORE:

Falling objects
Ice/snow/sleet
accidental discharge or overflow of water or steam
Sudden /accidental appliance damage
freezing of plumbing, HVAC, fire sprinkler
sudden/accidental electrical

Question 6

Homeowner’s Insurance: OPEN COVERAGE

Answer 6

All perils, except those specifically excluded

Question 7

General exclusions from most Homeowner’s policies

Answer 7

Earthquake
Ordinance/law
Damage from rising water
Nuclear hazards
power failure
intentional acts
neglect

Question 8

Endorsements available include:

Answer 8

sink hole collapse
earthquake
sewage backup
refrigerated property coverage

*flood

Question 9

Section 1: Coverage A: Dwelling

Answer 9

Repair and replacement for damage to the house and any attached structures

Paid on a replacement basis

Amount of Insurance Carried / (Coinsurance Requirement x Replacement Cost)
x
Amount of Loss

Question 10

Section 1: Coverage B: Other Structures

Answer 10

Detached structures on the property are covered by homeowners

(garages, greenhouses, storage buildings)

Typical limit: 10% of dwelling limit

replacement cost basis

*Other structures that are used for business purposes are NOT covered under homeowners

Question 11

Section 1: Coverage C: Personal Property

Answer 11

Furniture, entertainment equipment, music collections, paintings, etc.

Typical limit is 50% of the Coverage A (dwelling)

Actual cash value basis

Question 12

Section 1: Coverage D: Loss of Use

Answer 12

Coverage will pay for additional living expenses incurred when the insured is unable to occupy the dwelling due to damages caused by a covered peril.

typically limited to 30% of dwelling

Question 13

Section II: Coverage E: Personal Liability

Answer 13

Claims that result from bodily injury and property damage to others (when responsible)

Minimum coverage is typically $100,000 per occurrence
(will also pay for legal defense and settlement costs)

Question 14

Section II: Coverage F: Medical Payments to Others

Answer 14

all necessary medical expenses without regard to liability for others

Must be incurred within 3 years of the accident

Typical limit basis $1000-5000. $10,000 upper limit

Question 15

HO-2 Broad Form

Answer 15

Provides coverage on broad perils (18 named)

Question 16

HO-3 Special Form

Answer 16

Provides coverage on an “open perils”

If not excluded, it’s covered

Question 17

HO-4 Renter’s Policy

Answer 17

Renters/Tenants

Personal liability coverage

Personal contents (min $6000)

Provides for loss of use of premises 30%

Question 18

HO-5 Comprehensive Form

Answer 18

Similar to HO-3 EXCEPT HO-5 provides personal property protection on an open perils, instead of broad perils basis

Question 19

HO-6 Condominium Owners Form

Answer 19

BROAD perils

no bldg coverage

minimum property coverage is $6k

Loss of use limit - 50% Coverage C

Question 20

HO-8 Modified Coverage Form

Answer 20

Repair cost coverage INSTEAD OF REPLACEMENT COST

“Functional replacement cost”

Typically older homes with expensive repairs

Question 21

When fine arts or antiques are written into a policy, how is the coverage written?

Answer 21

APPRAISED VALUE