Ch 5 Homeowners Flashcards
Is a five family structure eligible for a HO policy?
No. Must have 4 or fewer units
What are the different homeowners forms?
HO2: Broad HO3: Special HO4: tenants broad form HO5: comprehensive form HO6: condo
Is 4 unit structure where one unit has 3 boarders eligible?
No limit is 2 per family.
John has a house down the cape where he spends one month each year. When he is not there there is no other resident. Would he qualify for a HO?
If property is seasonal must be occupied for three months.
John and Samantha each buy one unit of a duplex. Can they purchase a HO policy?
Yes.
Herbert is getting old. He transfers his home into a life trust. Is the home eligible for a HO3?
Yes. Life estates can have a policy.
Can a tenant take out a HO policy?
Yes. HO4
John has an interesting property. He has a trailer park and a farm. The mobile home and travel trailer owners want to write HO3 policies but cannot? John wants to insure the farm portion but cannot purchase an HO3. Why?
All are excluded.
What are the coverage parts of Section I of a HO policy?
A: dwelling
B: other structures
C: in scheduled personal property
D: Loss of use
Does a property that is rented to others covered under part A?
No.
How is the coverage among of Coverage B determined?
10% of A
What is specifically excluded from Part B?
Damage to a fence, pool, patio, foundation, outbuilding, bulkhead, retaining wall caused by weight of water, ice, sleet, snow, whether wind driven or not.
Property used for business.
Property rented except for garage.
What is the amount of coverage automatically provided by Part c?
50% of A
Who is covered under part c?
Insured
Household member
Child at college
Where is property covered under part c?
Anywhere in the world. If property is at secondary residence, coverage is 10% of c limit or $1000
Does coverage c cover property borrowed or used by an insured?
Yes.
Which perils are property covered against under part c?
Broad form: 1) fire/lightning 2) windstorm/hail 3) explosion 4) riot/civil commotion 5) aircraft 6) vehicles 7) smoke 8) theft (includes robbery & burglary) 9) vandalism 10) falling objects 11) weight of snow, ice, sleet 12) accidental discharge or overflow 13) sudden and accidental tearing apart, cracking, burning or bulging. 14) freezing of plumbing/heating (if reasonable care used) 15) sudden or accidental damage from artificially generated electrical current 16) volcanic eruption. All but HO5 have this form
What is the sublimit for money?
$200
What is the sublimit for securities, tickets, passports & stamps?
$1,500
What is the sublimit for watercraft and accessories?
$1,500
What is the sublimit for theft loss of jewelry, watches, and furs?
$1,500
What is the sublimit for theft of firearms?
$2,500
What is the sublimit for theft of silverware?
$2,500
What is the sublimit for business property ON PREMISES?
$2,500
The insured’s fur coat is missing. She thinks she heard a sound overnight so she reports that she was burglarized. Police find no evidence of burglary. Is the loss covered as a burglary?
No. No signs of forcible entry.
The policy will not cover a theft loss:
1) committed by the insured
2) of materials stolen at site of dwelling under construction.
3) that occurs off the residence premises of trailers, campers, watercraft+equipment or PERSONAL PROPERTY AT A SWCONDARY RWSIDENCE
Uncle bills NH ski vacation home is burglarized while he is in MA for the summer. Is there coverage under his primary home’s policy?
No. Theft is only covers while temporarily living in the secondary.
Juan is down the Vineyard at his vacation home. His HO policy at his Weston residence has part A $2 million. He incurs a a covered Part C theft loss of $175,000. How much coverage is available? If he were at his primary residence, what would be covered?
Part C limit is 50% of Part A: 2MM/2 = $1MM. There is a sublimit of 10% for property usually located at a residence other than the primary = $100k if on premises. No coverage got theft of property if off premises. Other perils are covered if away.
Is a hobby or model aircraft covered under C.
Yes.
What is not covered under part C?
Motorized vehicles Hovercraft Aircraft RVs Animals / pets Business data Property belonging by unrelated tenant Property that is regularly rented to others
Is car stereo covered under part C?
No.
Where is a ride on mower covered under Part C?
Only on premises.
How is the coverage limit of Coverage D (loss of use) set?
30% of A. (HO2, 3, 5)
Limits vary on HO4 or HO6.
Can insured increase coverage D by endorsement?
Yes.
The neighbors house burns down in a fire. Investigators tell the neighbor (insured) he must vacate the premises. Would there be loss of use coverage?
Yes. Up to two weeks.
Which additional coverages does a HO provide?
1) debris removal
2) reasonable repairs
3) trees, shrubs, plants
4) fire dept. service charges
5) property removed
6) credit card, fund transfer, forgery
7) loss assessment
8) collapse
9) glass or safety glazing material
10) landlord furnishings
11) ordinance or law
12) grave markers
The insured has $200k coverage for A. Covered peril causes a $60k loss. Cost to remove debris is $5k.will both be covered?
Yes. The combination of both falls within coverage limit.
Insured has a $200k coverage A limit. Has a total loss. Debris removal cost is $9k. Would removal be covered?
Yes. 5% additional coverage is provided. Policy would cover up to $10k
If a tree must be removed due to windstorm, hail, weight of ice, sleet, snow, is there coverage and it did not damage the structure or block the driveway, or block passage for disabled person?If so, how much?
Not covered unless it damages structure, blocks driveway, or impedes disabled. Up to $500/tree / $1000 max
If a neighbors tree falls and hits insured’s structure or blocks it, how much is paid?
$500/tree / $1000 max
How much are trees , shrubs, and plants covered for?
5% of A $500 per item.
Which perils are trees, shrubs, plants insured against?
TVV FLARE: Theft Vandalism Vehicles of others Fire Lightning Aircraft Riot Explosion
WINDSTORM AND INSUREDS VEHS ARENT COVERED.
What is the sub limit got business property off premises?
$500
How much is covered under FD service charges?
$500. No deductible.
What does the insured have to do to make sure he had $500 credit card, find transfer, and forgery coverage? Does a deductible apply?
Notify credit card company as all. As loss is discovered. No deductible.
How long is property removed covered for?
30 days.
What is the limit for loss assessment?
$1k.
Joe’s living room suddenly collapses. It was discovered that termites had been eating away at the structure. He had no idea and there was no evidence of termites prior to the collapse. Is this covered?
As long as it is hidden.
An earthquake occurs. As a result 4 windows are shattered in Lynn’s home. Shortly after, it rains and a her $3000 firearms collection is destroyed. Would the windows be covered? How about the firearms?
Yes. Glass is covered even for earth movement.
Yes. Direct loss due to broke glass is covered. Sublimit for firearms is $2500.
Juanita’s home is vandalized. Vandals smashes a huge picture window. The home has been vacant for 85 days. Is there coverage?
No vandalism claims for glass are only covered if within 60 days.
What are landlords furnishings or carpet covered for and what is the limit?
Broad form perils, minus theft. $2500.
How much coverage for ordinance or law does he HO provide?
Up to 10% of A.
What is not covered under ordinance or law?
1) loss in value due to ordinance or law.
2) costs to comply with ordinance or law in cleaning up pollutant.
Pierre’s family mausoleum which he owns is vandalized, causing $4000 in damage. Is there coverage? If so, how much?
Yes. $5,000 available but losses are paid as ACV.
What are the excluded perils in an open peril form?
Ordinance/law Earth movement (but other resulting losses such as fire are covered) Water: flood, sewer, drain/sump backup Off/premises power failure Neglect War Nuclear hazard Mold, fungus, wet rot Wear tear Mating/dererioration Intentional destruction
Which perils is collapse covered for?
Hidden decay
Hidden insect/Vermin damage
Weight of rain on roof
Weight of people
HIDDEN IS IMPORTANT
What are the two choices an insurer has if there is a loss to one earring?
1) pay different between ACV before and after
2) take possession of item and replace with lkq pair.
This third party provision states that if the insurer cancels the policy (or nonrenew) must tell lender within a certain number of days.
Also says that if insured increases risk without telling insurer, mortgages interest is protected.
Mortgagee clause.
When must an insurer notify a mortgagee?
1) insured fails to pay
2) insured fails to submit proof of loss
3) insurer camels the policy or plans to nonrenew
How many days does an insured have to provide a proof of loss?
60.
What does proof of loss contain?
1) time and cause of the loss
2) any other insurance that may cover the loss
3) an inventory of the damaged personal property.
4) detailed repair estimates
5) receipts for any additional living expenses
6) the interest of the insured and all others in the property involved
7) all liens on the property
8) any changes in title of the property
What is required under the replacement cost provision?
80% insurance to value.
If insurance to value is not carried, the lowest of which three amounts is paid?
1) ACV of dwelling
2) did / should x loss amount
What are the coverages under section 2?
E: personal liability
F: medical payments to others
Why does personal liability coverage (E) cover and what is the limit?
BI and PD to others / $100k / provides premises and personal liability, including defense costs
Does part e cover people injured on insureds premises but the course of employment? How about part E, medical payments?
Yes part e does. No, part f doesn’t.
What is the policy limit on part f medpay?
$1000
Who does part F apply to?
1) persons on insured location with insured’s permission.
2) person off insurer location if BI is cause by personal activities of th insured.
The insured’s 13 year old son vandalizes a neighbors car and causes $1,500 in damage. How much, if anything, is covered under coverge f?
$1000 covers up to age 13.
What type of watercraft is covere under part II?
Kayaks, dinghies, rowboats, sailboat < 26 ft etc same as CPL coverage.
Name that endorsement: extends liability arising out of specified business activities. Only covers these activities. Good for people who do clerical sales (memorabilia, stamps, coins) and teachers. This does not provide coverage for business owners; only for employees.
Business pursuits
Name that endorsement: automatically increases dwelling coverage at various intervals.
Inflation guard
coverage for day care liability ho0497 What is excluded under liability?
Molestation or abuse; injury from saddle animals; motorized land vehicles and watercraft.
How much coverage does home day care property add? HO-04-96. What is a better option?
$2500 / home day care HO-04-97 increases property to coverage c limit.
An endorsement that negates exclusion for incidental business activities. (Ex. Piano lessons)
Permitted incidental occupancies
How many employees makes a business non incidental?
3.
How much coverage under C does an insured have with the permitted incidental occupancies endorsement?
The coverage C limit.
This endorsement adds personal injury (libel, slander, invasion of privacy, defamation, wrongful eviction)
Personal injury
Will the personal injury endorsement cover contract liability or violation of penal law?
No.
Where else can an insured obtain personal injury coverage?
Umbrella policy
An endorsement that let’s an insured list high value items. The values are taken out of the c limit.
Scheduled personal property.
Where is scheduled personal property covered?
anywhere in the world (except for fine arts)
How much coverage is available on a sump overflow/backup endorsement? What is the deductible?
$5000 / $250
How is the deductible of the earthquake endorsement set?
A percentage of the coverage limit. Minimum of $250
What are the eligibility requirements for the Hobiz endorsement?
Owned by insured as sole proprietor or joint venture with resident family.
Can product and completed operations be covered under a HO?
Yes with home business endorsement.
Can Hobiz cover loss of business income?
Yes, by endorsement.
What does tenant relocation endorsement cover?
Fire loss. Covers packing, storing, varying, search for new place, finding new utilities, disconnecting and reconnecting appliances.
Can coverage be added for fungi, wet rot, dry rot, baceteria that is not hidden and RESULTS FROM A COVERED PERIL? What is limit?
Yes. Usually limits of $10k/$25k/$50k
When the lead poisoning exclusion is attached, when is coverage excluded?
1) residence rented built before 1978
2) condo before 78
3) appliances, furnishings, fixtures (other than plumbing)
What does lead poisoning exclusion not apply to?
1) poisoning after inspector gives compliance letter
2) BI occurring within 14 days of insured being notified by inspector of the need to bring the property into compliance
3) BI resulting from exposure during first 90 days of property ownership.
What is covered under identity fraud?
1) notarizing docs
2) certified mail
3) lost income $200/day max $5k
4) costs to reapply for loans due to incorrect report info
5) reasonable attorney fees for defense
This HO form covers named perils plus loss by theft (same as DP2). Coverage B is 10% of A and can be increased by endorsement. Coverage C is 50% of A and Coverage D is 30% of A. Accidental vehicle damage to the property (including fences, driveways, pavement) is covered as long as it is accidental, caused by others, and is not caused by weight of ice snow and sleet.
HO-2
This HO form provides open peril coverage for A and B. Coverage C is broad form or named peril. Coverage B is 10% of A and can be increased by endorsement. Coverage C is 50% of A and Coverage D is 30% of A. Accidental vehicle damage to the property (including fences, driveways, pavement) is covered as long as it is accidental, caused by others, and is not caused by weight of ice snow and sleet.
HO-3
Is seepage of water from gutter overflow cover under a HO3?
Yes. Not specifically excluded.
What is the difference between HO3 and HO5?
HO5 adds open peril coverage for personal property C
This form covers a renter’s unscheduled personal property and loss of use. Coverage is broad form. Coverage D is 30% of A.
HO4
This form covers condo owners and is a broad form peril plan. 50% of part C is the limit for part D. Additions, alterations, or improvements are covered. $1000 loss assessment coverage is provided.
HO6
Which perils are excluded for fine arts on a scheduled property endorsement?
Breakage of art glass windows, marble, porcelains or other fragile articles, arts in exhibition at fair founds or national or international exposition (unless the premises is covered by the policy)
Where are fine arts covered?
US and Canada
What is the maximum amount paid on a scheduled policy for newly acquired fine arts? What is the insured’s duty?
25% of the amount of insurance for that type of property. Insured must report the objects to the insurer within 90 days and pay the additional premium.
What is the limit for newly acquired jewelry, furs, cameras, or musical instruments on a scheduled policy?
Less of
1) 25% of the amount of insurance
2) $10.000
