Chapter 17: Homeowners Insurance; Nonbusiness Property Coverages

Question 1

Home Owners Policy

Answer 1

A policy that provides coverage for a family’s home, personal possessions and liability that arises out of many activities of family members. Several home owners forms provide varying degree’s of coverage for different types of homeowners and tenants.

Question 2

ISO

Answer 2

Insurance Services Office
An advisory service that provides various services to insurance companies, including the development and filing of standardized insurance forms.

Question 3

There are six standard ISO homeowners forms:

Answer 3

• Homeowners 2—Broad Form
• Homeowners 3—Special Form
• Homeowners 4—Contents Broad Form
• Homeowners 5—Comprehensive Form
• Homeowners 6—Unit-Owners Form
• Homeowners 8—Modified Coverage Form

Question 4

Additional living expense

Answer 4

The extra cost of maintaining a family’s standard of living while the home is being repaired or rebuilt following a covered loss. Covered by home owner’s policies.

Question 5

Functional replacement cost

Answer 5

The cost to repair or replace damaged real property with less costly construction materials and methods that are functionally equivalent to the old construction.

Question 6

Dwelling Policy

Answer 6

One of a series of policies for the insurance of dwellings. The forms are somewhat less comprehensive than home owner policies and can be used for dwellings that do not meet certain home owner standards.

Question 7

Mobile Home Insurance

Answer 7

Insurance coverage, similar to homeowner insurance, that provides coverage to owner occupants of mobile homes.

Question 8

National Flood Insurance Program

Answer 8

A federal program that provides subsidized insurance for the peril of flood.

Question 9

FAIR

Answer 9

Fair Access to Insurance Requirements
A state run program to provide property insurance, within limits, if a property owner is unable to obtain coverage in the standard marketplace. The actual coverage is usually written by a pool or a syndicate of private insurers.

Question 10

Floater

Answer 10

A property insurance policy to provide broad insurance protection on property that is subject to being moved.

Question 11

Personal Articles Floater

Answer 11

An open perils policy for certain scheduled and valuable items of personal property owned by an individual or family.

Question 12

Insured

Answer 12

An insured is a party entitled to protection under the policy. Persons who fall within the definition of “you,” as defined in the policy, have somewhat more protection than other insureds.