Chapter 5 - Homeowners

Question 1

Name the two sections Homeowner policies contain?

Answer 1

Section I - Property Coverage

Section II - Liability

Question 2

List the Coverages under Section I of a Homeowners Policy

Answer 2

Coverage A - Dwelling
Coverage B - Other Structures
Coverage C - Personal Property
Coverage D - Loss of Use

Question 3

List the 6 Homeowners forms

Answer 3

HO 2 - Broad
HO 3 - Special
HO 5 - Comprehensive
HO 4 - Tenant 
HO 6 - Unit Owner
HO 8 - Modified Form

Question 4

Coverage A, B, and C losses are valued on what basis for HO 2, 3,and 5?

Answer 4

Coverage A - RC
Coverage B - RC
Coverage C - ACV

Question 5

HO 2 Broad form is insured against which perils?

Answer 5

HO 2 coverages A, B, and C are insured against Named Perils (total of 16 - same as DP 2)

Question 6

HO 3 Special Form is insured against which perils?

Answer 6

Coverage A - Open Perils except those excluded
Coverage B - Open Perils except those excluded
Coverage C - HO 2 named perils

Question 7

HO 5 Comprehensive Form is insured against which perils?

Answer 7

Coverage A, B, and C are on an open perils basis.

Question 8

HO 4 Tenants Form is insured against which perils?

Answer 8

Coverage C is insured against 16 named perils

Question 9

HO 6 Unit Owners Form is insured against which perils?

Answer 9

Coverage A - Named Perils

Coverage C - Named Perils

Question 10

HO 8 Modified Form is insured against which perils?

Answer 10

The “basic-basic” perils - fire,lightning, wind, hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, volcanic eruption, VMM, theft (limited).

Question 11

What is the purpose of the HO 8 Modified Form?

Answer 11

To Insure properties that are so old, that if we insured the market value of the home, it would cause a moral hazard. The limit chosen for these homes are the functional replacement value.

Question 12

What percentage of Coverage A is the Coverage B limit for Homeowners?

Answer 12

10%

Question 13

What percentage of Cov A is the Cov C limit for Homeowners?

Answer 13

50%

Question 14

What value or percentage of Cov C is covered for property that is off premise? Example - property located at a dorm.

Answer 14

10% or $1000. Whichever is greater

Question 15

What special Coverage C limit is applied to money, coins, and medals?

Answer 15

$200

Question 16

What special Coverage C limit is applied to deeds, passports, tickets, and stamps?

Answer 16

$1500

Question 17

What special Coverage C limit is applied to watercrafts (including their trailers, engines, and furnishings)?

Answer 17

$1500

Question 18

What special Coverage C limit is applied to loss by theft of jewelry, furs, and stones?

Answer 18

$1500

Question 19

What special Coverage C limit is applied to loss by theft of firearms and ammunition?

Answer 19

$2500

Question 20

What special Coverage C limit is applied to loss by theft of silverware and tea sets?

Answer 20

$2500

Question 21

What special Coverage C limit is applied to property on the premise that is primarily used for business purposes (a personal computer)?

Answer 21

$2500

Question 22

What special Coverage C limit is applied to property away from the premise used primarily for business purposes?

Answer 22

$500

Question 23

What special Coverage C limit is applied to Electronic Apparatus and accessories equipped in motor vehicle?

Answer 23

$1500

Question 24

What special Coverage C limit is applied to electronic apparatus away from premises and not in a vehicle but can only be operated by power from the vehicle?

Answer 24

$1500

Question 25

What is the purpose of Coverage D - Loss of use?

Answer 25

Provides coverage for indirect losses caused by a direct loss.

Question 26

What three coverages are included in Coverage D?

Answer 26

Additional Living Expense Fair Rental Value Civil Authority Prohibits Use

Question 27

What are the Coverage D limits for all forms?

Answer 27

HO 2, 3, and 5 = 30% of Cov A HO 4 = 30% of Cov C HO 6 = 50% of Coverage C HO 8 = 10% of Coverage A

Question 28

List the Additional Coverages for Homeowners policies

Answer 28

``` Debris Removal Reasonable Repair Trees, shrubs, and plants Fire Department Service Charge Property Removed Credit Cards, EFT Card, Counterfeit Money Loss Assessment Collapse Glass or Safety Glazing Material Landlord's Furnishings Ordinance or Law Grave Markers ```

Question 29

How much will we pay for Debris Removal?

Answer 29

Payment is included in the limit of insurance but if that limit is exceeded, we will pay an additional 5%. $1000 limit applies to debris removal from windstorm

Question 30

Describe the reasonable repairs additional coverage?

Answer 30

Provides coverage for costs the insured endures to protect their property from further damage. Example - tarp for a hole in the roof

Question 31

Describe the trees shrubs and plants additional coverage?

Answer 31

Provides 5% of coverage limit for plants damaged by "basic-basic" perils. $500 limit per plant

Question 32

Describe the Fire Department Service Charge

Answer 32

Provides $500 to cover for fire department charges. Does not apply if fire department is part of the jurisdiction of the covered property. This is additional insurance. No deductible.

Question 33

Describe the Property Removed additional coverage

Answer 33

Provides coverage for property that is removed due to a covered peril threatening the home. Covers the property for the first 30 days.

Question 34

Describe the Credit Card, EFT card, and Counterfeit Money Additional Coverage

Answer 34

Provides up to $500 for insured's legal responsibility because of theft or unauthorized use of credit cards, EFT, or access devices issued to insured.

Question 35

Describe the Loss Assessment Additional Coverage

Answer 35

Provides up to $1000 to cover shared losses to common spaces. Usually seen in policies where there is an HOA. This is additional insurance.

Question 36

Describe the Collapse Additional Coverage

Answer 36

Provides coverage for the abrupt falling or caving in of the property. Does not cover fences, awnings, pools.

Question 37

Describe the Glass or Safety Glazing Material Additional Coverage

Answer 37

Provides coverage for broken glass but not if property is vacant for 60 days (exception is if breakage occurs due to earthquake).

Question 38

Describe the Landlord's Furnishings Additional Coverage

Answer 38

Provides up to $2500 of coverage for furnishings that the Named Insured provided and rented to others. Does not increase the limit of insurance.

Question 39

Describe the Ordinance or Law Additional Coverage

Answer 39

Provides 10% of Coverage A for increased costs the insured incurs due to the reinforcement of any ordinance or law. This is additional insurance.

Question 40

List out the Section I Exclusions

Answer 40

``` Ordinance or Law, except what is included in the Additional Coverage Earth Movement Water Damage Power Failure Neglect War Nuclear Hazard Intentional Loss Governmental Action ```

Question 41

Describe the Mobile Home Insurance Endorsement

Answer 41

Allows for a mobile home to be covered under an HO -2 or HO - 3. Allows for tenants to be covered under HO - 4

Question 42

Describe Other Structures on the Residence Premises - Increased Limits Endorsement

Answer 42

Allows for an increase of limits for other structures if 10% of Coverage A is not enough.

Question 43

Describe the Back Up and Sump Discharge or Overflow Endorsement

Answer 43

Allows for the Insured to buyback coverage that is excluded under Water Damage exclusion.

Question 44

Describe the Personal Property RC Loss Settlement Endorsement

Answer 44

Allows to have personal property valued at RC instead of ACV. Applies to Antennas, jewelry, furs, cameras, silverware, and related equipment. Antiques, art, and collectors items are not subject to this endorsement

Question 45

Describe the Scheduled Personal Property Endorsement

Answer 45

Allows to increase personal property limit by scheduling certain items. Coverage is provided on an open-perils basis and excluded vermin, wear and tear, war, and nuclear hazard. Deductible does not apply. Insured has 30 days (90 days for art) to notify the insurer. Insured World Wide.

Question 46

Describe the Earthquake Endorsement

Answer 46

Provides coverage for earthquake damage to Cov A, B, and C. A single earthquake is considered 1 or more shocks within 72 hours. Does not cover flood or the cost of filling land. Deductible percentage of A, B, or C, whichever is greater, applies.

Question 47

Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement

Answer 47

Provides $10K of coverage for loss caused by fungi, bacteria, or dry rot. Covers the testing of the air, removal of the fungi, and the tearing out and replacement of any part of the building to gain access to the fungi. Higher limits are available.

Question 48

Describe the Permitted Incidental Occupancies Endorsement

Answer 48

Allows for specified limit to be applied for a structure that is on the property and used to conduct business.

Question 49

Describe the Identity Theft Expense Endorsement

Answer 49

Pays up to $15,000 for identify theft discovered during the policy period, not from business activity. Must notify the Insurer within 60 days.

Question 50

Are Section II coverages subject to a deductible?

Answer 50

No.

Question 51

What are the two coverages within Section II?

Answer 51

Coverage E - Personal Liability | Coverage F - Medical Payments to Others

Question 52

Describe Coverage E

Answer 52

Pays up to the limit of liability for damages the Insured is legally liable for. Includes defense costs even if the suit is groundless.

Question 53

Describe Coverage F

Answer 53

Provides payment for medical expenses that arise from from bodily injury on the insured's premises. Can be caused by the Insured's activities or animals owned by the insured.

Question 54

List the Section II additional coverages?

Answer 54

Claim Expenses (Supplementary Payments) First-Aid Expenses Damage to Property of Others Loss Assessment

Question 55

Describe the Loss Assessment Section II Additional Coverage

Answer 55

Covers defense expenses and expenses the insured incurs by requests the insurer makes. Provides payments up to $250 for loss of earnings when the insured is requested to do something for the insurer.

Question 56

Describe the First-Aid Expenses Section II Additional Coverage

Answer 56

Provides payments for expenses the insured incurs in providing first aid to someone who sustained bodily injury on their property from an insured peril.

Question 57

Describe the Property of Others Section II Additional Coverage

Answer 57

Payment up to $1000 is made for damage to property of others caused by an insured. Payment is made regardless of negligence. Does not cover property covered under Section I or any property owned by the insured or engage in business.

Question 58

Describe the Loss Assessment Section II Additional Coverage

Answer 58

Provides up to $1000 for the insured's share in losses charged by an HOA. Must be the result of Bodily Injury or Property Damage

Question 59

What exclusions apply to all of Section II?

Answer 59

Liability arising from Motor Vehicles except when in storage and there is no battery in the VH or off road vehicles not owned by an insured or owned by the insured and used on the premises. Aircraft and hovercraft are excluded.

Question 60

What exclusions apply to Coverages E and F?

Answer 60

Expected or intended injury, except when use to protect people or property Bodily Injury or Property Damage arising out of business War BI or PD arising from a communicable disease from an Insured Useage of a watercraft

Question 61

What exclusions apply to only Coverage E?

Answer 61

Anyone eligible for WC Property damage to others (additional coverage minimizes this exclusion) BI to the named insured or any insured

Question 62

What exclusions apply to only Coverage F?

Answer 62

Anyone who is eligible for WC benefits | Anyone who resides on the premises (includes tenants) other than a resident employee.

Question 63

Coverage E is on a per ____ and Coverage F is on a per _____

Answer 63

Coverage E is on a Per Occurrence and Coverage F is on a Per Person

Question 64

Describe the Home Day Care Endorsement

Answer 64

Extends Section I and II to home day c are businesses on the described premise. Provides an policy year aggregate for the sum of Coverage E (per occurrence) and Coverage F (per person).

Question 65

Describe the Personal Injury Endorsement

Answer 65

Adds liability coverage for personal injury - false arrest, wrongful eviction. Does not cover personal injury sustained by the named insured.

Question 66

Describe the Home Business Endorsement

Answer 66

Provides coverage for business property and liability. Includes coverage for premise operation, advertising injury and personal injury No coverage for professional services.

Question 67

Describe the Watercraft Liability Endorsement

Answer 67

Modifies the exclusion and states that Coverage E and F do not apply if the watercraft is used to carry people, rented to others, used for businesses, or used in racing.

Question 68

Describe the Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement

Answer 68

Provides coverage if a third party claims illness as a result of exposure. Limit of $50K.

Question 69

Describe the Permitted Incidental Occupancies Endorsement

Answer 69

Modifies the Section II exclusion that does not allow Coverage E and F to apply during business pursuits. The premise must be used primarily as a residence and the business must be owned by the insured. Typically used for studios or offices.

Question 70

Describe the Business Pursuits Endorsement

Answer 70

Extends liability coverage for the Insured's involvement in businesses they do not own. Example - teaching and sales.