Chapter 5 Homeowners Policy

Question 1

HO–2, Broad Form

Answer 1

insures the dwelling, other structures, & personal property for the 16 named perils. Losses under coverage A & B are valued on a replacement cost basis & coverage C is valued on an actual cash value basis

Question 2

HO–3, Special Form

Answer 2

insures the dwelling and other structures (coverages A & B) on an open perils basis and losses are valued on a replacement cost basis. Personal property (coverage C) is insured on a named perils basis & losses are valued on an actual cash value

Question 3

HO–4 Contents Broad Form

Answer 3

designed for tenants of a residential unit and provides no coverage for buildings and other structures. Personal property (coverage C) is covered against named perils & is valued on an actual cash value basis

Question 4

HO–5, Comprehensive Form

Answer 4

insures the dwelling, other structures, and personal property on an open perils basis. Loss valuation for the dwelling and other structures is on a replacement cost basis and loss valuation for personal property is on an actual cash value basis

Question 5

HO–8, Modified Coverage Form

Answer 5

used when insuring older homes where replacement value and market value are disproportionate or when a moral hazard would be created if insurance were written in an amount equal to 100% of a dwelling’s replacement value

Question 6

What are the different property coverages listed under section I?

Answer 6

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

Question 7

What are the different property coverages listed under section II?

Answer 7

Coverage E - Personal Liability

Coverage F - Medical Payments to Others

Question 8

Coverage D – Loss of Use

Answer 8

pays for any necessary increase in living expenses required by the named insured to maintain the household’s normal standard of living. Coverage is also provided for the fair rental value of the portion of the dwelling rented to others and in the event a civil authority prevents the use of the residence premises

Question 9

Section I – Additional coverages

Answer 9

include debris removal; reasonable repairs; trees, shrubs, and plants; fire department service charge; property removed; credit card, electronic fund transfer card or access device, forgery, and counterfeit money; loss assessment; collapse, and glass or safety glazing material

Question 10

Coverage E – Personal Liability

Answer 10

insurance is provided for claims made and suits brought against an insured because of bodily injury or property damage caused by an occurrence to which the insurance applies

Question 11

Coverage F – Medical Payments

Answer 11

to Others pays for the necessary medical expenses incurred within 3 years from the date of an accident causing bodily injury without regard to fault. Coverage is provided for injury to a person on the insured location with permission, or off the insured location if the injury is caused by the insured or a residence employee in the course of employment, or by an animal owned by or in the care of an insured

Question 12

Selected homeowners endorsements

Answer 12

provide Section II coverage include Home Day Care, Personal Injury, Home Business, and Watercraft Liability

Question 13

HO–6, Unit-owners Form

Answer 13

designed for the owners of condominium and cooperative units. Coverage is provided for the building and personal property (coverage A & C)