Ch. 3 - Dwelling Policy Note Cards Flashcards
1
Q
Debris:
A
Remains of anything broken or destroyed.
2
Q
Incidental Occupancy:
A
Minor uses that are accessory to or support the predominant occupancy (e.g. a piano teacher giving lessons in her home)
3
Q
Occurrence:
A
An incident or event
4
Q
Ordinance
A
A law that must be complied with.
5
Q
Overinsurance:
A
When a property’s insurance coverage exceeds its cash value.
6
Q
Premises:
A
A house or building (including land and outer buildings) utilizes by a business.
7
Q
Vandalism:
A
Intentional destruction or damage to property.
8
Q
3 Things Dwelling Policies Can Insure:
A
Dwelling only
Content only
Both dwelling and content
9
Q
3 Coverage Forms of Dwelling Policy
A
Basic
Broad
Special
10
Q
Is liability included in a dwelling policy?
A
No, but it can be added.
11
Q
Liability:
A
Responsibility under the law.
12
Q
What are dwelling policies commonly used for?
A
Rental dwellings
13
Q
Dwelling Property Policy:
A
A policy that insures properties solely used for residential purposes in the following situations:
- Up to 5 roomers/boarders
- Up to 4 residential units
- Properties being constructed
- Owner occupied, tenant occupied, or both
- Permanent mobile homes that contain no more than one apartment
- Seasonal dwellings unoccupied for 3+ out of 12 months
- Not designed as farm property.
14
Q
Are businesses covered under dwelling policies?
A
No unless:
- Incidental
- Conducted by the insured.
- No more than 2 people work at the same time.
15
Q
What is the typical DP Form Structure?
A
- Agreement
- Definitions
- Deductible
- Coverages, Including Other Coverages
- Perils Insured Against
- General Exclusions
- Conditions
16
Q
Deductible:
A
The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.
17
Q
Dwelling Property 1 (Basic Form):
A
A named peril coverage form that provides the most limited coverage of the three forms. A very basic form that insures against the following: (DP 00 01 or DP-1)
18
Q
What is covered under a basic form?
A
- Fire
- Lightning
- Internal explosion
19
Q
A fire that was not intentional and not contained within its intended boundaries.
A
hostile fire
20
Q
A fire in a specific boundary that is kept safe from harming property, like a fireplace.
A
friendly fire
21
Q
What are the extended coverage perils for DP-1?
A
- Windstorm/Hail
- Explosion
- Riot/Civil Commotion
- Aircraft/Vehicles
- Smoke
- Volcanic Eruption
22
Q
W.H.A.R.V.E.S.
A
W - Windstorm H - Hail A - Aircraft/Vehicle R - Riot/Civil Commotion V - Volcanic Eruption E - Explosion S - Smoke
23
Q
What does VMM stand for?
A
Vandalism or Malicious Mischief
24
Q
When are VMM covered on a basic form?
A
If extended coverage perils are insured on the policy, additional coverage for vandalism and malicious mischief may be added:
25
What exclusions exist for VMM under a basic form?
1. Glass breakage or safety glazing material that is part of the building
2. Damage to the building resulting from theft or burglary
3. Premise is vacant for more than 60 days.
26
Expands coverages to the causes of loss insured under the basic form with extended coverage perils, and vandalism or malicious mischief purchased. (DP 00 002 or DP-2)
Dwelling Property 2 (Broad Form)
27
What are two big differences between a DP-1 and a DP-2 form?
1. Breakage of glass and safety glazing material for vandalism is covered on DP-2.
2. Explosion peril no longer has the exceptions listed as in the basic form.
28
7 Additional Broad Form Perils:
1. Damage by burglars.
2. Falling objects.
3. Weight of ice, snow, or sleet.
4. Accidental discharge or overflow of water or stream.
5. Sudden and accidental tearing apart, cracking, burning, or bulging.
6. Freezing
7. Sudden and accidental damage from artificially generated electrical current.
29
What is the acronym for the 7 additional broad form perils?
```
B - Bursting of heating systems
B - Burglary damage
B - Breaking of water heaters
I - Ice, snow, or sleet weight
C - Collapse of building or part of a building
E - Electrical damage (artificially generated)
G - Glass breakage
O - Objects falling from outside
L - Leakage of water or steam damage
F - Freezing of plumbing
```
30
What additional other coverages are included on a DP-2?
1. Lawn, Trees, Shrubs, and Plants
2. Breaking of glass.
3. Collapse
31
An open peril form in which all perils are insured against except those specifically excluded. (DP 00 03 or DP-3)
Special Form
32
Which two forms have named perils?
Basic and Broad
33
What are the primary differences between a DP-2 and a DP-3?
1. Theft of property that is part of dwelling is covered in DP-3 Special Form.
2. Accidental Discharge/Overflow of Water/Steam is expanded to cover loss of accidental discharge/overflow from water/steam pipes that occurs OFF of the insured premises.
3. No exclusions for antennas, outdoor equipment, fences, or awnings from the peril of falling objects in DP-3 Special Form.
4. Provided coverage for damage to a roof caused by freezing/thawing water under roof shingles in DP-3 Special Form.
34
What is the standard deductible for all property coverages except Fair Rental Value and Additional Living Expense on a DP policy?
$250
35
What are the four core property coverages of a DP policy?
1. Coverage A- Dwelling
2. Coverage B - Other Structures
3. Coverage C - Personal Property
4. Coverage D - Fair Rental Value
36
What is the fifth coverage for a DP policy available on broad and special forms?
Coverage E - Additional Living Expense
37
What is covered for Coverage A - Dwelling?
1. Dwelling of premises listed on the declaration page/attached structures
2. Materials/supplies located on/next to the premise used to construct, alter, or repair the dwelling/structures.
3. Building equipment and outdoor equipment located on the premise/used to service the location.
38
What type of damage is Coverage A - Dwelling?
Direct damage
39
What is not covered on Coverage A - Dwelling?
Land, including land described in the declaration
40
What type of damage is Coverage B - Other Structures?
Direct damage
41
What is covered by Coverage B - Other Structures?
1. Structures that are separated by a clear space or connected only by a fence.
2. Other structures rented to anyone, other than a tenant of the dwelling, but only when used a garage
3. Structures used in commercial, farming, or manufacturing when storing property owned by the insured/tenant of swelling
42
What is not covered by Coverage B - Other Structures?
1. Land
2. Structures rented to anyone other than a tenant of the dwelling
3. Other structures that are used in business, whether whole or part unless used as noted above
4. Grave markers/mausoleums
43
What type of damage is Coverage C - Personal Property?
Direct damage
44
What is covered for Coverage C - Personal Property?
1. Personal property usual to a residence located on the location, as well as property of guests/servants
2. Model or hobby aircraft
3. Motor vehicles
4. Portable electronic equipment
5. Rowboats and canoes
6. Blank storage media/computer software
7. Property moved to a newly acquired residence for 30 days
45
What is not covered by Coverage C - Personal Property?
1. Coins, currency, gold and silver, medals, securities, bills, accounts, bank notes, deeds, passports, manuscripts, and evidences of debt.
2. Animals, birds, and fish
3. Aircraft used for flight beyond hobby aircraft
4. Hovercraft
5. Watercraft
6. Motor vehicles not used for handicap/maintenance
7. The cost to restore data stored in various mediums
8. Credit cards, debit cards, funds
9. Water or steam
10. Grave markers and mausoleums
46
What type of damage is Coverage D - Fair Rental Value?
Indirect damage
47
What is covered by Coverage D - Fair Rental Value?
1. Will pay the fair rental value of the described premises, but will deduct expenses that discontinue while the premises are unfit for use (such as heat/electricity).
2. Coverage continues until repairs are completed.
3. Expiration of the policy will not end the payment of an existing covered claim
4. If civil authority prohibits use of the insured property because of direct damage to a neighbor’s property, payment for loss will be covered for 2 weeks.
5. Coverage does not apply to any loss/expense associated with cancellation of a lease.
48
What type of damage is Coverage E - Additional Living Expense?
Indirect damage
49
What is the purpose of Coverage E - Additional Living Expense?
Pays for the increase in normal living expenses that insured incurs while the described premises are unfit for normal use.
50
On what DP forms is Coverage E - Additional Living Expense found?
Broad or special, but can be added as an endorsement on a basic form.
51
What is covered by Coverage E - Additional Living Expense?
1. Coverage will continue until repairs are completed.
2. The expiration of the policy will not end the payment of an existing covered claim.
3. If civil authority prohibits use of the insured property because of direct damage to a neighbor’s property, payment for loss will be covered for 2 weeks.
4. Coverage does not apply to any loss or expense associated with the cancellation of a lease.
52
What are Other Coverages on DP forms?
other coverages that are extensions of the major coverages A-E. that are included in the premium charged and are subject to the property deductible unless noted otherwise.
53
What are the 8 Other Coverages on all DP forms?
1. Other Structures
2. Debris Removal
3. Improvements, Alterations, and Additions
4. Worldwide Coverage
5. Rental Value and Additional Living Expense
6. Reasonable Repairs
7. Property Removed
8. Fire Department Service Charge
54
This Other Coverage allows the insured to apply up to 10% of the dwelling insurance amount (Coverage A) to cover other structures on the insured premises.
Other Structures
55
This Other Coverage provides coverage for reasonable costs to remove debris covered loss.
Debris Removal
56
This Other Coverage provides that if the insured is a tenant, up to 10% of the personal property limit (Coverage C) may be applied to loss or damage to improvements, alterations, or additions acquired by the tenant.
Improvements, Alterations, and Additions
57
This Other Coverage allows the insured to elect to apply up to 10% of the personal property limit (Coverage C) to pay for losses to personal property away from the premises while anywhere in the world.
Worldwide Coverage
58
What is excluded from Worldwide Coverage?
Row boats or canoes
59
Which from covers guest/servant property?
Worldwide coverage on broad/special forms
60
This Other Coverage provides p to 20% of the Coverage A limit of liability to be used for loss of both fair rental value and additional living expense.
Rental Value and Additional Living Expense
61
This Other Coverage covers reasonable costs incurred by the insured for repairs necessary to protect property from further damage at the time of a covered loss.
Reasonable Repairs
62
This Other Coverage pays for loss/damage to property removed from the premises when threatened by a peril insured against.
Property Removed
63
What happens to property removed during Property Removed coverage?
It converts to an open peril.
64
How is property covered for under a Basic Form for Property Removed?
5 days
65
How long is property covered for under a Broad/Special Form for Property Removed?
30 days
66
This Other Coverage allows up to $500 to be paid for costs incurred because of an agreement to pay the fire department if they respond to a fire.
Fire Department Service Charge
67
Is there a deductible for Fire Department Service Charge?
No
68
What Additional Coverages are there for Broad/Special forms?
1. Lawn, Trees, Shrubs, and Plants
2. Breakage of Glass
3. Collapse
4. Ordinance or Law
69
An abrupt falling down of the building or part of the building in which the building cannot be used for its intended purpose.
Collapse
70
Design to provide an insured an additional amount of insurance for costs associated with changes in building ordinances and codes after a covered loss.
Ordinance or Law
71
What general exclusions exist on all forms for DP?
1. Ordinance or law
2. Earth movement
3. Water damage
4. Power failure
5. Neglect
6. War
7. Nuclear hazard
8. Intentional loss
9. Government action
72
What special form exclusions exist?
1. Weather conditions from an excluded cause of loss
2. Acts, decisions, or failure to act
3. Faulty planning, design, or materials.
73
What conditions are included on all DP forms?
policy period, insurable interest/limit of insurance, concealment/fraud, duties after a loss, loss settlement, pair/sets, appraisal, other insurance, subrogation, suit against the insurer, insurer’s option to repair/replace, loss payment, abandonment, mortgage holder, no benefit to bailee, cancellation/nonrenewal, liberalization, assignment, death, nuclear hazard, recovered property, volcanic eruption, and loss payable clause.
74
If more than one person has an insurable interest in the property, the insurer will not be liable for more than the insured’s interest under the policy at the time of loss/for more than the applicable limit of liability.
Insurable Interest and Limit of Insurance Condition
75
Property losses are settled on ACV basis, subject to the insurance limit and cost to repair/replace damaged property.
Basic Loss Settlement Condition
76
Dwelling and other structures insured at least at 80% of the replacement cost at the time of loss are covered on a replacement cost basis per the insurance limit, cost to repair, or amount actually spent.
Broad/Special Loss Settlement Condition
77
If other fire insurance applies to the same loss, the insurer is liable only for the proportion of the loss that the limit of insurance bears to the total of all insurance.
Other Insurance Condition
78
May repair/replace missing piece to restore the set or compare the ACV of the pair, and pay the difference (of the lost value),
Pair or Set Condition
79
Losses will be paid within 60 days of receiving proof of loss/coming to agreement with the insured on amount payable.
Loss Payment Condition
80
What is included in the Cancellation and Nonrenewal Condition?
1. 10 day advance notice is required if the policy is canceled for nonpayment of premium or any reason within first 60 days of coverage.
2. After 60 days, 30 day notice is needed for cancellation/nonrenewal.
3. Insurer can cancel policy midterm due to misrepresentation of material fact or risk change.
81
The insurer can repair or replace any damaged property with like property by providing written notice to the insured within 30 days after receiving proof of loss.
Insurer’s Option To Repair or Replace Condition
82
If the insurer makes any change that broadens coverage in the policy during the policy period/within 60 days before effective date, changes will automatically apply without needing to endorse the policy.
Liberalization Condition
83
In the event of an insured’s death, legal reps of the deceased insured will be considered an insured, but only with property covered at the time of death.
Death Condition
84
What is included in the Deductible Condition?
- Insurer will pay only the part of the total of all loss payable that exceeds the deductible shown in the Declarations
- If 2+ deductibles apply to the loss, only the high deductible will apply.
85
Any nuclear reaction, radiation, or radioactive contamination.
Nuclear Hazard
86
What is included under the Nuclear Hazard Condition?
- Losses caused by Nuclear Hazard are not to be considered fire, explosion, or smoke.
- Direct or indirect losses are not covered for Nuclear Hazard unless a fire ensues.
87
The coverage that states that any property recovered in which there has already been loss payment made for, the insured has the option of taking the property and returning the amount paid or giving the property to the insurance company.
Recovered Property Coverage
88
What is included in the Volcanic Eruption Condition?
- All volcanic eruptions occurring within 72 hours of the initial eruption are considered one occurrence.
- Because of this, there will only be one deductible.
89
What form must be attached to each DP-2 or DP-3 form issued in Ohio?
DP 01 34
90
What is the purpose of the DP 01 34 form?
It is a Special Provision form in Ohio that modifies the ISO form through endorsement.
91
What is an endorsement that may be added to a dwelling policy to increase the amount of insurance by an annual percentage to offset the effects of inflation, resulting in additional premium?
Automatic Increase In Insurance
92
What form covers Broad Theft Coverage?
DP-3 or Special Form
93
What is covered under Broad Theft Coverage?
1. On Premises Coverage: Property that is owned or used by the insured or a resident employee at the premises described in the policy. Includes property placed for safekeeping in a bank, public warehouse, or dwelling not owned/rented by the insured.
2. Off Premises Coverage: Protection for property that is either owned or used by the insured or owned by a resident-employee when it is away from the premises.
94
What is the coverage limit for money, gold, silver, platinum, coins, or metals under the Broad Theft Policy?
$200
95
_____ coverage for securities, accounts, deeds, evidences of debt, letters of credit, passports, tickets, stamps under Broad Theft Coverage
$1500
96
____ for watercraft, trailers, furnishings, other trailers, jewelry, watches, furs, and precious stones under Broad Theft Coverage.
$1500
97
_____ for firearms, silver plated ware, gold plated ware, flatware, tea sets, trays and trophies under Broad Theft Coverage.
$2500
98
What is excluded from Broad Theft Coverage?
Animals, fish birds, credit cards, aircraft, property in the mail, property of tenants, and much more.
99
Is a Dwelling Under Construction eligible for coverage?
Yes, if an endorsement exists to modify some policy provisions.
100
What limit of liability provisions exist for a Dwelling Under Construction?
1. Percentage of provisional limit based on the proportion of ACV at the time of loss.
2. Premium is based on average amount of insurance during construction.
101
Does DP included any coverage for personal liability?
No.
102
An endorsement that can be added to a dwelling policy for comprehensive personal liability (on/off premises liability) or premises-only liability if the dwelling is rented to others.
Personal Liability Supplement
103
What are the 3 Personal Liability Supplements that exist?
1. Personal Liability (Coverage L)
2. Medical Payments To Others (Coverage M)
3. Additional Coverages
104
Coverage for bodily injury or property damage to third parties that is caused by the insured’s negligence or a condition of the insured’s premises.
Personal Liability (Coverage L)
105
Coverage For necessary medical expenses incurred by persons other than an insured, who are injured on the insured’s premise or due to an insured’s activities off premise.
Medical Payments To Others (Coverage M)
106
Claims expenses, first aid to others, damage to property of others.
Additional Coverages
107
What is the medical payment limit for Personal Liability Supplement?
$1000 per person
108
What is the basic limit per occurrence for a Personal Liability Supplement
$100,000 per occurrence
