Chapter 8

Question 1

List specialized dwellings 7

Answer 1

Secondary homes
High valued homes 
Mobile homes 
Rented dwellings 
Accommodation
Sharing seasonal dwellings 
Hobby farms

Question 2

How are secondary homes defined and differentiated from summer cottages ?

Answer 2

it’s the frequency of the insurance use of the secondary home that determines whether it qualifies for coverage as a secondary home. The secondary home is not a summer cottage but more like a traditional home. The insured cares for and maintains the dwelling with the same care as for the main home.

Question 3

How are high valued homes defined? With some unique features and contents of a high-valued home

Answer 3

a high-valued home is a distinctive home with a high replacement value. High value homes are distinctive in the way that they tend to be designed by architects and built with custom features not typically found in a standard home. Such custom features may include post and beam construction, marble countertops, hardwood floors, bold roof lines, designed windows, and state of the art kitchens. Also they may contain antique fine arts, wine collections, high-end audio and video equipment, or jewelry not usual in a normal home

Question 4

List some of the added features of high-valued home coverage

Answer 4

Kidnap expense coverage
Equipment breakdown
Home invasion coverage
Home appraisal
Disappearing deductible
Cash out option

Question 5

Compare and contrast mobile homes with modular homes and regular homes. How are they the same and how do they differ

Answer 5

mobile home - manufactured housing, commonly called House trailers, usually placed in one location and left their permanently, but retaining the ability to be moved, as required in many areas. Behind the cosmetic work fitted at insulation to hide the base, they are strong trailer frames, axles, wheels, and tow hitches.

modular home Dash a type of manufacturer housing that is built in a factory and moved to a building site in a large individual sections, it’s not movable and may be considered a permanent structure

Question 6

What key feature of mobile homes presents unique risk when evaluating them for insurance?

Answer 6

Mobile homes differ from controversially built dwellings in having built in equipment and furnishings. They incorporate many design features taken from ideas for the efficient use of space developed by the trailer and motorhome and boat builders. The interior components are often integral to the construction of a mobile home, because the weight of the unit must be kept to a minimum.

these differences lead insurers to believe that a minor loss in a controversially built dwelling might be a major loss in a mobile home, were damaged the interior components could imply structural damage as well. the difference is also seem to justify concern about the lifespans of the mobile homes, the manner and materials of their construction suggest they are less durable than conventionally built homes and so depreciate more quickly

Question 7

Why are modular homes insured with controversial homeowner forms?

Answer 7

modular homes are built in a factory and move to the building in a site in large individual sections. They are placed on a slab or basement foundation and include all electric heat or gas furnace. Unlike a mobile home, a modular home, once placed on the slab or concrete foundation, is not movable and maybe considered a permanent structure. Insurers usually cover modular homes under their homeowners forms.

Question 8

describe the emergency removal expense coverage that is unique to mobile homeowners. What is it used for? Is it mandatory or optional? What is the limit on its value as a percentage of coverage? Does a deductible apply?

Answer 8

Emergency removal expense is an option extension of coverage a unique to mobile home owners form. it permits the insured to use up to 5% of the amount of insurance under coverage a for any reasonable expense incurred to remove the building to protect it from an insured peril. Further? The deductible will not apply to this allocation of coverage.the emergency removal expense reimburses the insured for expenses incurred in moving the unit itself to prevent loss or damage

Question 9

Why is coverage for appliances, furniture, and pictures excluded from coverage C for mobile homes

Answer 9

the description of the mobile home building and coverage a includes appliances furniture or equipment forming a permanent part of the building. In the homeowners forms, those items are insured under coverage c. In the mobile homeowners form they are excluded under coverage c.

Question 10

Why might the special limits for manuscripts, and stamp collections be lowered in Mobile homes? Is this likely to lower premiums?

Answer 10

the special limits of insurance, which are part of coverage c, are identical between the homeowners basic form and the mobile homeowners form in all respects except that the limit for manuscripts, stamps, and psychedelic property is higher in the homeowners basic form then in the mobile homeowners form. In the IBC forms, the special limits are 1, 000 and 500 respectively

Question 11

explain the two exclusions that are particular to mobile homeowners forms. What do these terms embezzlement, conversion, and secretion mean in relation to a mobile home?

Answer 11

1. Loss or damage occurring while the building is being moved, except in an emergency to protect it when endangered by an insured peril
2. lost you to conversion, embezzlement, or secretion but any person in possession of the building

Conversion definition: applies when someone intentionally interferes with personal property belonging to another person

Embezzlement: a form of fraud where in a person or entity intentionally misappropriates assets for personal use

Secretion: the act of secreting or concealing as the secretion of dutiable goods

Question 12

True or false if not under written properly, rented dwellings generate a higher than acceptable loss frequency

Answer 12

True

Question 13

Why do grow ups and illegal meth labs, by renting tenants, pose particularly high risk for insurers? what perils are at an increased risk?

Answer 13

fires are much more likely to occur in a home or dwelling containing a grow operation, in part because of high intensity lighting needed to grow the plants. There is also an increased risk of burglary, vandalism, water damage, and mold, among other perils.

Question 14

What modifications may be made to the home to accommodate the lab or grow up?

Answer 14

• holes may be cut into the walls to install illegal wiring
• Windows may be covered or sealed to maintain humidity, which can result in mold
• water damage from watering the plants and the harmful air quality produced by such activities may make the dwelling uninhabitable

Question 15

What unique risks make vacant dwellings more susceptible to damage?

Answer 15

a vacant house may attract squatters or vandalism. Should a pipe burst, there is no one to lessen the water damage and thus mitigate the loss under the property policy

Question 16

what happens if a renter agrees to be a single occupant but then sublet several rooms in the house to others? Is any resulting damage covered? Why are why not

Answer 16

too many people occupying the same dwelling can be hazardous and may change the occupancy to a boarding house, which is a material change in risk that may render the insurance policy void. Most insurers restrict occupancy to no more than two or three unrelated individuals

Question 17

True or false acts of vandalism and malicious acts by tenants are never covered losses

Answer 17

False: acts of vandalism and malicious acts by tenants are sometimes covered losses

Question 18

Describe the residential basic form. What is covered and what isn’t? What are the benefits and what are the drawbacks

Answer 18

the residential basic form is a named perils form that offers coverage that is simpler or more modest than the popular package of property and liability insurance. The insured may choose to cover only the building or both the building and contents which is why the residential basic form is suitable for a rented dwelling.

the residential basic form may be thought of as a habitational version of the basic fire policy. It also serves those who are ineligible for an insurance package policy who have a location that is ineligible for broader coverage

Question 19

True or false accommodation sharing is so rare insurers don’t normally worry about it

Answer 19

False accommodation sharing has become a popular option for travelers and other people seeking short-term lodging and there are numerous apps to connect travelers looking for temporary accommodations with property owners. accommodation sharing creates risk exposures and potential insurance coverage gaps for both hosts and guests

Question 20

List and explain three types of exclusions, to accommodation sharing cases

Answer 20

Damage to dwelling and contents of hosts:
Damage to property of guests
Theft exclusions

Question 21

Explain how airbnb is insurance policy works. How are people who rent out their homes covered? Do they have privity of contract?

Answer 21

the host guarantee is provided under airbnb’s policy with its insurer. The host is not a party to the contract and has no rights under it. If airbnb or its insured decides there is no coverage, the host has no legal recourse

Question 22

if a guest at an airbnb suffers a loss from a fire or break-in, at the property what recourse do they have to recover the loss? List three possibilities

Answer 22

If there is a fire or breaking, the renter has no coverage under the host’s policy.

Many property policies cover the property of an insured who is temporarily residing at non-owned premises worldwide

The gas could seek in dignity for damaged property under the guest’s OWN policy.

if a guests property is damaged because of the host negligence or due to a negligent condition of the property, the guests could sue the host to recover this loss. the guest may even have a claim against the accommodation sharing service provider.

Question 23

how does a theft exclusion work and how is it applied differently when a single room is rented versus the entire dwelling?

Answer 23

If the entire home is rented, it seems clear that theft of any property is excluded. if a single room is rented, property stolen from other parts of the home could be covered. Due to the wording of this exclusion, it can apply to thefts that are not committed by a guest or thefts that occur all the home is not rented by a guest

Question 24

What insurance options other than airbnbs own insurance are available to would be host why is the mark so underrepresented

Answer 24

the New York based insurance information institute has written about the issue it describes airbnb as a peer-to-peer home rental. The institute notes that if the rental is a one time event, some inters may allow policyholders to proceed without any special endorsement or change in policy.

if a person plans to regularly provide short-term rentals, standard homeowner policies do not provide any coverage for business activities conducted in the home.

Question 25

How is vacancy treated on seasonal dwellings?

Answer 25

seasonal dwellings are usually covered for limited named perils. Unlike other name types of dwelling, a seasonal dwelling may be allowed to remain unoccupied for longer periods of time without penalties

Question 26

List two extensions to the basic residential form for coverage a, that are omitted for seasonal dwellings. Why do the omissions make sense?

Answer 26

1. Fair rental value as a result of damage to the dwelling by an insured peril
2. Fair rental value because access has been prohibited by civil authority

Fair rental value would be deemed as a business and you would need different insurance

Civil authority would not apply to a seasonal dwelling because you already have a home separate from your seasonal dwelling

Question 27

list three extensions to the basic residential form for coverage see, that are omitted for seasonal dwellings. Why do the emissions make sense

Answer 27

1. Personal property away from the premises
2. Additional living expense as a result of damage to the dwelling by an insured peril
3. Additional living expense because access has been prohibited by civil authority

You already have a seperate home to place your valuable items

You don’t need additional living expense because you have another home

Question 28

How is coverage for burglary, vandalism and glass breakage treated for seasonal dwelling

Answer 28

in the seasonal form, the standard name perils omit vandalism or malicious acts. But the seasonal form allows the ensure to add coverage for that peril and two others by showing them on the coverage summary page and paying an additional premium

Question 29

List characteristics that can classify a property as a hobby form

Answer 29

Primary dwelling owner occupied
Less than 25 acres
Maximum of five farm animals
Maximum of 10 poultry
Maximum income from farming operations of $10,000
No employees involved in farm operations
No custom farming, horse boarding, training, or riding facilities
Maximum $25,000 of farm equipment
Maximum $25,000 of farm related out buildings

Question 30

What is covered under hobby farm policy or Rider

Answer 30

Old buildings used for farming purposes
livestock, which may include coverage for livestock mortality, feed, and other material such as saddles and tack
Poultry and eggs
Farm produce
Farm equipment

Question 31

List three exclusions that could be added to a hobby farm policy a rider

Answer 31

Coverage for livestock may be excluded injury to an animal caused by surgery
coverage for farm equipment May exclude mechanical breakdown
coverage for farm produce may be excluded well it is in or on the ground

Question 32

Listen features that make condominiums attractive to some people

Answer 32

condominiums tend to cost less than detached houses. They also free insurance from the regular maintenance such as yard work and building keep up, which required with some homeownership and offer the freedom to for example take a trip at a moment’s notice without having to arrange someone to check the house or pick up the mail while the insured is away

Question 33

True or false each province and territory has its own legislation that specifically governs condominiums

Answer 33

True

Question 34

Who sets the rights and duties of condominium owners within a given complex, subject to provincial legislation of course ie how are condominium complexes run and administered

Answer 34

the condominium owners elect a board of directors from among them to administer the affairs of the condominium corporation. they are responsible for managing the condominium and any assets of the condominium corporation according to the legislation.

Question 35

What is the purpose of a standard unit bylaw for condominiums

Answer 35

The standard unit bylaw clarifies who is responsible- the unit owner or the condominium corporation- for loss or damage to a unit and whose insurance policy should respond for repairing the improvements when damaged

Question 36

What happens to items not listed on the condominiums corporation policy?

Answer 36

the condominium corporation’s building policy covers the items listed in the bylaw, the items not found on the list are considered improvements and covered under the unit owners policy.

Question 37

True or false condominium corporation insurance coverage is a commercial policy

Answer 37

True

Question 38

describe a notable difference between IBC condominium unit owners forms and that of the IBC forms for detached structures

Answer 38

the IBC condominium unit owners forms are offered in a basic form and a comprehensive form. A notable difference from the homeowners basic and comprehensive forms is that the condominium forms omit coverages A and b for a dwelling and detached private structures

Question 39

How is damage to trees, plants and shrubs handled in the condominium unit owners forms? Same coverage from a, b, c, d,? Same precedent of limit?

Answer 39

It is the same coverage for the condominium unit owners forms, coverage a to trees, plants, and shrubs on the premises can apply up to 5% of the amount of insurance on of coverage A

Question 40

What is coverage u?

Answer 40

condominium unit owner policies, in addition to providing insurance coverage for the unit owners personal property, cover losses and expenses that are unique to owners of the condominium unit

Question 41

U1: how are improvements made to the unit treated? Does it apply to improvements by previous owners or only to the current owner?

Answer 41

coverage u1 covers unit improvements and betterments made or acquired by the insured, up to the specified amount of insurance including

Any building, structure, or swimming pool on the premises and
Materials and supplies on the premises for use in such improvements and betterments

Question 42

U2: list four reasons the condo corpse Insurance may be insufficient requiring them to charge unit owners a special fee. How can unit owners cover themselves against such a sudden expense?

Answer 42

Under insurance
Application of a co-insurance penalty
a cause of loss that is not an insured peril or is excluded under the building policy
Breach of policy condition

Question 43

List two conditions for the remedy proposed in the last question

Answer 43

The assessment must be valid under the condominiums corporations governing rules

there must be direct loss to the collectively owned condominium property caused by apparel insured under the condominium unit owners forms

Question 44

What is the purpose of u3?

Answer 44

coverage u3 ensures the unit, excluding improvements in betterments to a specified amount if the condominium corporations insurance is inadequate, ineffective, or non-existent.

Question 45

Explain the underwriting concerns for the short-term residents and too many roommates

Answer 45

tenants can pack up their personal property and move if they find better living accommodations elsewhere. Sometimes they move without notifying their insurers. The frequency with which tenants move can generate additional work for the insurer that is time consuming and costly

the number of roommates living together in a dwelling or a self-contained unit can be of concern. Too many roommates living together may represent greater exposure than the insured is comfortable with. As the number of roommates increases so does the exposure to vandalism, theft, and liability. Generally, ensures limit the number of roommates to two per unit or dwelling

Question 46

discuss the differences for tenants insurance. How are improvements covered? How are additional living expenses covered?

Answer 46

under coverage C to the dwelling improvements in betterments made by the insured or acquired at the insurance expense but only in the portion of the dwelling that the insured occupies as a private residence. Improvements in betterments are covered for the same perils as the other property under coverage C and included in the amount of insurance that applies to coverage C

coverage d in the tenant’s comprehensive form is identical to coverage d in the homeowners comprehensive form, except that, for lack of coverage a, the amount of insurance for coverage d in the tenants form is set as a percentage of coverage C

Question 47

How do the tarot and damage to dwelling extensions differ for tenant insurance?

Answer 47

in the homeowners comprehensive form, the tarot extension applies to any walls, ceilings, or other parts of the insured building or structures that may be torn apart before insured water damage can be repaired. In the tenants comprehensive form, the tarot extension instead applies to any insured tenant improvements or betterments that must be removed or torn apart before insured water damage can be repaired. The difference from the homeowners form reflects the fact that the tenants form does not cover the building.

Question 48

List and explain the difference to exclusion for tenants comprehensive form and list and explain the differences between tenants basic and tenants comprehensive forms

Answer 48

there is no exclusion in the tenants form of buildings or structures used for farming or business purposes, because there’s no coverage for buildings

the tenants form excludes lawns and outdoor trees, shrubs, and plants, the homeowners form excludes only lawns

the exclusion in the tenants form of law due to settling, expansion, contraction, moving, bulging, buckling, or cracking omits the qualifier about resulting damage to building glass that is found in the corresponding exclusion of the homeowners form

the exclusion in the tenants form of loss caused by birds, vermin, raccoons, rodents, or insects amidst the reference to building glass that is found in the corresponding exclusion of the homeowners form

exclusion of theft or attempted theft in or from a dwelling under construction does not extend to materials or supplies for use in the construction as in corresponding exclusion of the homeowners form