Chapter 3 HOI Flashcards
Personal Lines (Homeowner’s Policy)
Most HOI policies have six sections of coverage that come standard with the policy:
Dwelling, other structures, personal property, loss of use, liability, and medical payments to others.
Dwelling
Covers your house building, plumbing, heating, AC, and any other attached structures or fixtures. When people seek to acquire HOI, this is most often the coverage that is the most important to them. This does not include land.
Other structures
Covers any structure on the property that is not attached to the home. Includes a detached garage, fence, mailbox, sheds, retaining wall, driveway, etc. The most you can pay is 10$ of coverage A limit of liability.
Personal Property
Covers all the contents of the home, including furniture, appliances, electronics, clothing, jewelry, and everything else owned in the home.
Loss of use
Used when the home has been damaged and you need to relocate to a hotel or another residence while your home is being repaired. On a reimbursement basis, it will cover you for any additional expenses you incur as a result of temporarily living away from your home.
The typical expenses that can be reimbursed under this coverage include lodging, additional food costs, additional gas for having to commute an extra distance, etc.
Liability
Protects from lawsuits; very broad and will protect you for liability acts due to your negligence away from your property. I.e. you hit someone in the head with a golf ball at the golf course and they sue. Liability coverage in your HOI policy does not typically extend to auto, watercraft, or slander/libel liability.
Medical payments to others
Covers welcomed guests to the residence that get injured while on your property and will pay for things like x-ray, dental work, ambulance rides, hospital bills, etc.
Additional other protections included at no charge usually
Debris removal - included with most HOI, free of charge and provides coverage for the debris removal of covered property that was damaged by a covered peril.
Trees, shrubs, plants, and lawns - HOI coverage extends to landscaping from specified causes of loss. Normally a limit of $250 per tree, 5% of the coverage A limit of liability for all trees. The deductible clause does not apply to trees, shrubs, plants, and lawns. These are covered for specified perils of fire/lightning, explosion, aircraft, vehicles not owned or operated by a resident of the premises, vandalism, riot, and theft. - not covered for windstorm.
HO-B Homeowners Policy
The HO-B policy is a combination of an “all risk” policy and a named perils policy. With the HOB, the dwelling is covered for all risks of physical loss, unless specifically excluded and the personal property are covered on a named perils basis. An all risk policy does not list the perils dwelling HOI covers; rather it lists the perils the home insurance does NOT cover. If the damage to the home is not caused by something on the exclusion list, then coverage will be extended.
Perils Insured Against
Coverage A - Dwelling
We insure against all risks of physical loss to the property described in Section I property coverage, Coverage A dwelling, unless the loss is excluded in Section I Exclusions.
Coverage B - Personal Property
Insure against physical loss of the property described in Section I Property Coverage, coverage B Personal Property caused by a peril listed below, unless the loss is excluded in Section I Exclusions.
1. Fire and lightning
2. Sudden and accidental damage from smoke
3. Windstorm, hurricane, and hail
4. Explosion
5. Aircraft and vehicles
6. Vandalism and Malicious mischief
7. Riot and civil commotion
8. Collapse of building or any part of the building.
9. Accidental discharge, leakage or overflow of water or steam from within a plumbing, heating, or air conditioning system or household appliance.
10. Falling objects
11. Freezing of household appliances.
12. Theft, including attempted theft and loss of property from a known place when it is likely that the property has been stolen.
Section Exclusions
The following exclusions apply to loss of property described under coverage A Dwelling or Coverage B Personal property but they do not apply to an ensuing loss caused by fire, smoke, or explosion.
- we do not cover loss to electrical devices or wiring caused by electricity other than lightning.
- We do not cover loss caused by smog or by smoke from industrial or agricultural operations.
- We do not cover loss covered by windstorm, hurricane, or hail to:
- Cloth awnings, greenhouses and their contents, buildings or structures located wholly or partially over water and their contents.
- Radio and television towers, outside satellite dishes.
- Personal property contained in a building unless direct force of wind or hail creates an opening in the roof or wall.
- We do not cover loss of the following property by theft, including attempted theft and loss of property from a known place when it is likely that the property has been stolen.
Personal property while away from the residence at any other residence owned by, rented to or occupied by an insured, except while an insured is temporarily living there.
Building material not on the residence premises
- We do not cover loss to machinery, appliances and mechanical devices caused by mechanical breakdown.
We do not cover loss caused by:
- wear & tear, deterioration
- Rust or rot
- Dampness of atmosphere, extremes of temperature
- Contamination
- Rats, mice, termites, moths or other insects
- We do not cover loss caused by animals or birds owned or kept by an insured or occupant of the residence premises.
- We do not cover loss under Coverage A (dwelling) caused by settling or cracking.
- We do not cover loss caused by flood.
- We do not cover loss caused by or resulting from freezing while the building is unoccupied unless you have used reasonable care to:
maintain heat in the building; or
Shut off the water supply and drain plumbing, heating and air conditioning systems of water. - We do not cover loss caused by earthquake, landslide or earth movement.
Governmental action
Building laws
War damage
Nuclear damage
Special Limits of Liability
These limits do not increase the Coverage B personal property limit of liability. The special limit for each numbered category below is the total limit for each loss for all property in that category:
- Money/Bank cards - $100 on money or numismatic property
- Bullion/Valuable papers - $500 on gold or silver bullion, manuscripts, notes, securities, st amps, bills, deeds, evidences of debts, credits, passport documents
- Jewelry/Watches/Furs - $500 for loss by theft of gems, watches, jewelry or furs.
- Business personal property. $2,500 on all personal property/contents that is used for business use.
We do not cover any business property:
a. that consists of samples or articles for sale or delivery; or
b. if the property is away from the residence premises.
Section 1 Deductibles
When you are adjusting a property claim, two deductibles will be listed on the Dec page. It’s up to you, the adjuster, to determine which one deductible that you will use on this claim.
Deductible Clause 1 - you choose the deductible Clause 1 for losses caused by Windstorm, Hurricane, Hail or wind driven rain.
Deductible Clause 2 - you choose this for losses caused by ALL OTHER PERILS.
Note - the majority of HOIs in Texas have a percentage deductible. Remember, if you have a percentage deductible, that percentage is always taken from the coverage A limit of liability.
