Chapter 5 - Homeowners Policy - actual whole chapter

Question 1

All All Homeowners forms, with the exception of the Contents Broad Form (HO–) and Unit-Owners Form (HO–), require the named insured to be the owner/occupant of the insured dwelling.

Answer 1

HO-4, HO-6

Question 2

_______ business occupancies such as offices, studios, and schools are permitted

Answer 2

incidental

Question 3

The Contents Broad Form (HO–4) and Unit-Owners Form (HO–6) are written to insure the personal_____ and personal _______ of the named insured who does not own the building in which they live.

Answer 3

property, liability

Question 4

The HO–__, The Contents Broad Form, is designed for tenants of residential units, such as dwellings and apartment units, and provides no coverage for buildings and other structures

Answer 4

HO-4

Question 5

The HO–___ is designed for the owners and tenants of condominium or cooperative units. Coverage is provided for the portion of the building the named insured owns (or is responsible for insuring), personal property, and personal liability.

Answer 5

HO-6

Question 6

Eligible residential dwellings are those containing 1 to ___ residential units and no more than __ roomers or boarders per family.

Answer 6

4, 2

Question 7

Dwellings under _______ that will be the primary residence of the named insured upon completion are also eligible for coverage.

Answer 7

construction

Question 8

This form provides named perils coverage for the dwelling (Coverage A), other structures (Coverage B), and personal property (Coverage C). Losses under Coverages A and B are valued on a replacement cost basis. Although coverage for personal property (Coverage C) is provided on the same named perils basis as the dwelling and other structures are, losses are valued on an actual cash value (ACV) basis.

The 16 named perils are:
Fire or lightning
Windstorm or hail
Explosion
Riot or civil commotion
Aircraft
Vehicles, except that this form will not cover losses to a fence, driveway, or walk caused by a vehicle owned or operated by the insured
Smoke
Volcanic eruption
Vandalism or malicious mischief
Theft (limited)
Falling objects
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam
Sudden and accidental tearing apart, cracking, burning, or bulging of heating or air conditioning systems (HVAC)
Freezing
Sudden and accidental damage from artificially generated electrical current

Answer 8

HO–2 (Broad Form)

Question 9

In the Special Form (HO–_ ), the dwelling and others structures (Coverages A and B) are insured on an ___ perils basis, meaning all perils are insured if they are not specifically excluded in the policy. Losses to the dwelling and other structures are valued on a _____ value basis just as they are in the HO–2. Personal property (Coverage C) is insured on a _____ perils basis that includes the same 16 named perils in the Broad Form (HO–2) and are valued on an actual cash value basis.

Answer 9

HO-3, open, replacement, named

Question 10

With HO-3, Special Form - removes the _____ —meaning coverage is given back—for losses to a fence, driveway, or walk caused by a vehicle owned or operated by the insured

Answer 10

exception

Question 11

The HO-3 ______ ______ provides open perils coverage on the dwelling, and coverage for personal property is provided on a named perils basis (also called the Broad Form named perils) like the HO-2.

Answer 11

Special Form

Question 12

The HO-__ Contents Broad Form is also known as the Renter’s or Tenant Homeowners Policy. It does not provide any coverage for the dwelling or other structures because it is designed to insure those who are tenants. The HO–4 insures personal property under Coverage C against loss from the 16 named broad form perils found in the HO–2 and HO–3 forms. Personal property losses are valued on an actual cash value basis, as they are on the HO–2 and HO–3 forms.

Answer 12

HO-4

Question 13

The HO-4 is the ______ _____ form

Answer 13

Contents Broad

Question 14

HO–__ (Comprehensive Form)

The Comprehensive Form provides the ____ coverage of any of the Homeowners forms.

Coverages A – Dwelling, Coverage B – Other Structures, and Coverage C – Personal Property provide insurance on an open perils basis. Losses to the dwelling and other structures are valued on a replacement cost basis, and losses to personal property are valued on an actual cash value basis.

Answer 14

HO-5, broadest

Question 15

In what way is the HO-5 Comprehensive Form different from the HO-3 Special Form?

Answer 15

Personal property under the HO-5 is insured on an open perils basis

Question 16

The HO- __Unit-Owners Form provides named perils coverage to the owner of a condominium or cooperative unit under Coverage A – Dwelling and Coverage C – Personal Property. Coverage B does not appear in this form; however, if the owners of condominiums or cooperative units wish to insure other structures, the value of other structures may be included in the Coverage A limit of insurance.

Answer 16

HO-6

Question 17

The HO-6 Unit-Owners Form The form insures real property (building and building items) for which the insured is responsible under the bylaws of the condominium association or cooperative corporation, and covers any _______ and improvements to the building. It also insures ____ property of the insured while anywhere in the world.

Answer 17

alterations, personal

Question 18

An owner of a condominium unit would purchase which Homeowners form?

Answer 18

HO-6 Unit-Owners Form

Question 19

The HO-__ Modified Coverage Form is often used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost.
The loss valuation method for the Modified Coverage Form is typically actual cash value (ACV). However, if exact materials are not available, they may be replaced with materials that will perform the same function and have the same efficiency, even if they are not of like kind and quality.

Answer 19

HO-8

Question 20

A related, full-time student away at school is considered an insured on the Homeowners Policy if they are under what age?

Answer 20

24

Question 21

Business refers to: Any other activity not described above for which no insured receives more than $_____ in compensation during the 12 months before the current policy term

Answer 21

$2,000

Question 22

the standard Homeowners Policy deductible is $_____

Answer 22

$250

Question 23

Coverage A - no dwelling coverage for ___ in or to a dwelling under construction, including materials and supplies & Vandalism and malicious mischief, including ensuing loss, if the dwelling was vacant for more than 60 consecutive days immediately before the loss

Answer 23

theft

Question 24

Coverage B – Other Structures, structures must be separated from swelling by a _____ _____This insurance limit is __% of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsement.

Answer 24

clear, space, 10%

Question 25

Under a Homeowners policy, the limit of insurance applicable to Coverage B is what percentage of the Coverage A limit?

Answer 25

10%

Question 26

Coverage for property at another residence is limited. If personal property is usually located at an insured’s residence other than the residence premises, coverage is limited to __% of Coverage C or $____ whichever is greater. For example: property usually located in a student’s dormitory or at the insured’s summer home. This limit does not apply to property being moved because it is:

Answer 26

10%, $1,000

Question 27

Coverage C – Personal Property does not or does not include animals?

Answer 27

Does not

Question 28

Coverage C - Personal Property insurance limit is __% of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsement.

Answer 28

50%

Question 29

Coverage D – is for ____ of ____ and includes additional living expense, fair rental value and civil authority prohibits use.

Answer 29

Loss of use

Question 30

Coverage D Loss of Use - Additional Living Expense - If a property loss covered by Section I of the policy makes the residence premises unfit to live in, the policy pays for any necessary ____ in living expenses incurred by the named insured to maintain the household’s normal standard of living.

Answer 30

increase

Question 31

Coverage D Loss of Use - Fair Rental Value - If a property loss covered by Section I of the policy makes that part of the residence premises rented to others unfit to live in, the policy pays for the fair rental value of such premises—less any continuing expenses—while it is unfit to live in. Payment is for the _____ time required to repair or replace the rented portion of the premises.

Answer 31

shortest

Question 32

Coverage D Loss of Use - Civil Authority Prohibits Use - If a civil authority prohibits the named insured from using the residence premises as a result of direct damage to neighboring premises by a peril insured against under the Homeowners Policy, the policy pays losses under Additional Living Expense and/or Fair Rental Value for no more than __ weeks.

Loss and expenses due to the cancellation of a lease or agreement are not covered.

Answer 32

2,

Question 33

Coverage D Loss of Use the standard limit for Loss of Use coverage on an HO-5 is:

Answer 33

20% of coverage A

Question 34

Section I Additional Coverages - The policy will pay the named insured’s reasonable expenses for the removal of debris of covered property if a covered loss occurs.

Payment is included in the limit of insurance for covered property that is damaged. If debris removal expenses and expenses for damaged property exceed the applicable limit of insurance, this coverage will provide additional insurance equal to __% of the limit available for such expense.

A limit of $_____ applies for reasonable expenses to remove from the residence premises debris of the insured’s trees felled by windstorm, hail, or the weight of ice, snow, or sleet.

Answer 34

5%, $1,000

Question 35

Property Removed
Coverage is provided for loss to covered property by any cause while being removed from a premises endangered by a Peril Insured Against. Coverage applies for no more than ___ days while removed. For example, if a wildfire threatens the insured’s home and property is removed, loss to the removed property that is caused by flood or earthquake would be covered during the first ___ days the property is removed. However, if flood threatened the insured’s home, coverage would not apply because the endangering peril is not a Peril Insured Against.

Answer 35

30, 30

Question 36

Credit Cards, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money
Coverage up to $___ is provided

Answer 36

$500

Question 37

Direct physical loss from collapse must be caused by a Coverage ___ named peril; hidden decay; hidden insect or vermin damage; weight of contents, equipment, animals, or people; the weight of rain collecting on a roof; or the use of defective materials or construction methods.

The policy does not cover collapse of awnings, fences, patios, swimming pools, underground pipes, cesspools, etc., unless damage is the direct result of the collapse.

Answer 37

C

Question 38

Glass or Safety Glazing Material
Coverage is provided for:

The breakage of glass or safety glazing material that is part of a covered building, storm door, or storm window, including loss caused by earth movement.
Direct physical loss to covered property caused solely by the pieces, fragments, or splinters of broken glass or safety glazing material.
Coverage is not provided for loss occurring on the residence premises if the dwelling was vacant for more than 60 consecutive days before the loss, except coverage is provided for loss caused by ______.

This coverage does not increase the limit of insurance that applies to the damaged property.

Answer 38

earthquake

Question 39

Ordinance or Law
The insured may use up to ___% of the Coverage A limit of insurance for increased costs the insured incurs due to the enforcement of any ordinance or law that requires or regulates:

Construction, demolition, remodeling, renovation, or repair of that part of a covered building damaged by an insured peril
The demolition or reconstruction of the undamaged part of a covered building, when that building must be totally demolished because of damage by an insured peril to another part of that covered building
The remodeling, removal, or replacement of the portion of the undamaged part of a covered building to complete the remodeling, repair, or replacement to that part of the covered building damaged by an insured peril
This coverage is additional insurance.

Answer 39

10%

Question 40

Grave Markers
The policy will pay up to $______ for grave markers, on or away from the residence premises, for loss caused by a peril insured under Coverage C.

This coverage does not increase the limits of insurance that apply to the damaged, covered property.

Answer 40

$5,000

Question 41

Loss Settlement
In most cases, the insurer requires the named insured to purchase insurance in an amount that is no less than __% of the dwelling’s replacement value. If, at the time of a loss, the amount of insurance on the dwelling is less than __% of the dwelling’s replacement value, a penalty will be applied to partial losses. If ___% replacement cost is not carried, ACV will apply to Coverages A and B.

In addition to this coinsurance requirement, the insurer will pay no more than the actual cash value of the damage until actual repair or replacement is completed by the insured.

Answer 41

80%

Question 42

Section II – Liability Coverages

The language contained in Section II – Liability Coverages is identical in each of the Homeowners forms. It provides the same coverages contained in a standalone Comprehensive Personal Liability (CPL) Policy. Section II coverages are ___ subject to a deductible.

Answer 42

Not

Question 43

Coverage E – Personal Liability Insurance is provided for claims made and suits brought against an insured because of bodily injury or property damage caused by an occurrence for which the insurance applies. The policy pays up to the limit of liability for the damages for which an insured is legally liable, including _______ interest awarded against an insured. ________ interest is the amount of interest that accrues on a judgment from the time of the accident or loss until the insurer makes payment or offers to make payment.

Answer 43

prejudgment

Question 44

Coverage F – _______ _______ to Others. Coverage F – Medical Payments to Others
The policy will pay necessary medical expenses that are incurred or medically ascertained within __ years from the date of an accident causing bodily injury.

Answer 44

Medical Payments, 3

Question 45

Coverage F – Medical Payments to Others Legal liability, negligence, and fault do not trigger this coverage. Medical Payments to Others is a ______ coverage and designed to discourage the submission of liability claims.

Answer 45

goodwill

Question 46

Section II Additional Coverages

The following coverages are provided and payments are made in addition to the limit of liability appearing on the Declarations.

Claim Expenses (Supplementary Payments) – Includes the insurer’s expenses for defending a claim, along with reasonable expenses incurred by an insured at the insurer’s request. Also covered as claim expenses are premiums on bonds required in a suit defended by the insurer, the insured’s actual loss of earnings up to $____ a day for assistance in the investigation or defense of a claim or suit, and post-judgment interest. Post-judgment interest is the amount of interest that accrues on a judgment after it is entered and before the insurer has paid or offered to pay.

First Aid Expenses – Includes expenses incurred by an insured for rendering first aid to others who sustain bodily injury covered under the policy. Coverage is not provided for first aid to an insured.

Answer 46

$250

Question 47

Section II Additional Coverages

Damage to Property of Others – Pays up to $_____, at replacement cost, for property damage to property of others caused by an insured. Payment is made regardless of negligence. For example, damage caused by an insured to a borrowed lawn mower.

Answer 47

$1,000

Question 48

Limit of Liability – A ____ _____ limit applies to losses covered under Coverage E – Personal Liability, and a per person limit applies to losses covered under Coverage F – Medical Payments to Others.

Answer 48

per occurrence

Question 49

Scheduled Personal Property (HO 04 61) - Coverage is provided on an ___ perils basis and contains very few exclusions, including wear and tear, insects or vermin, war, and nuclear hazard. Scheduled property is insured ______.

Answer 49

open, worldwide

Question 50

Fine Arts

Fine arts include items like paintings, etchings, pictures, tapestries, rare manuscripts, and antiques.

The endorsement covers art acquired during the policy period on an actual cash value basis.

When the policyowner newly acquires fine arts, they must report the property within __ days and pay the additional premium from the date acquired.

Answer 50

90

Question 51

Jewelry, Furs, Cameras, and Musical Instruments

Newly acquired property will have a coverage limit of the lesser of either__% of the amount of insurance for that class of property or $_____.

The insured must report newly acquired items within 30 days and pay the additional premium.

Answer 51

25%, $10,000

Question 52

Personal Property ___ Cost (HO 04 90)
This endorsement changes the valuation method for most property insured under Coverage C from actual cash value (ACV) to replacement cost. This also applies to awnings, outdoor antennas and equipment, carpeting, and household appliances.

Answer 52

Replacement

Question 53

Permitted Incidental Occupancies (HO 04 42)
This endorsement covers a described business conducted at or from the residence premises, located either in the dwelling building or in another structure. It provides expanded coverage for _____ occupancies, such as offices, schools, or studios.

Answer 53

incidental

Question 54

Water Back-Up and Sump Discharge or Overflow (HO 04 84)
This endorsement allows the insured to buy back some coverage that is excluded under the Water Damage exclusion. It provides a scheduled limit of coverage for direct physical loss to property insured under Section I (Coverages A, B, and C) caused by water or waterborne material that:

Backs up through sewers or drains
Overflows from a sump, sump pump, or related equipment, even if the overflow results from mechanical breakdown
This does not cover ____ loss to the sump pump or equipment itself. Coverage will not apply if the back-up or overflow is a result of a flood, or if damage is caused by the negligence of an insured.

Answer 54

physical

Question 55

Refrigerated Property Coverage (HO 04 98)
This endorsement provides $500 for property stored in refrigerators or freezers on the residence premises, if the failure is caused by an interruption of electrical service or the mechanical failure of the refrigeration unit.

The deductible for damages covered under this endorsement is $___

Answer 55

$100

Question 56

Business Pursuits (HO 24 71)
The endorsement extends liability coverage for the insured’s involvement in a business that the insured does ____ ____, have financial control over, or have a partnership interest in. The pursuit must be named in the endorsement, and is commonly added for those in the teaching profession.

Coverage is excluded for bodily injury or property damage arising out of rendering professional services other than teaching, such as architectural, medical, and beauty services.

Answer 56

not own

Question 57

Special Provisions (HO 32 32)
Business

This endorsement amends the definition of business to include full- or part-time activity of any kind that is engaged in for economic gain, including the use of any part of any premises for that purpose. The definition also adds ____ ____ host activities.

Under Section II, bodily injury or property damage arising out of or in connection with an insured’s business is excluded. Exceptions to this exclusion include:

An insured minor involved in part-time, self-employed business pursuits normally undertaken by minors, unless the minor is employed by a business
The rental of an insured location on an occasional basis if it is used only as a residence
Home-sharing host activities if the policy also includes the Broadened Home-Sharing Host Activities Coverage Endorsement

Answer 57

home-sharing

Question 58

Coverage C – Personal Property

In all Homeowners forms except HO–8, the following special limits are amended:

The special limit for theft of firearms and related equipment is 10% of the Coverage C limit, subject to a maximum of $______
The special limit for theft of silverware and goldware is 25% of the Coverage C limit, subject to a maximum of $______

Answer 58

$10,000

Question 59

Mobile Homeowners policies will cover losses due to flood, which is an Exclusion for all Homeowners policies. The MH–F is written on an ___ perils basis, with losses to the mobile home valued on a replacement cost basis and property valued on an ACV basis. Coverage D is included on Mobile Homeowners policies.

Answer 59

open

Question 60

Damage to Property of Others is an Additional Coverage under Section II, which is not subject to a ______.

Answer 60

deductible