Home Owners Insurance

Question 1

What are the two basic types of coverage for homeowners insurance?

Answer 1

Named Perils - provides protection from perils that are specifically listed

Open Perils coverage - designed to protect against all perils except those listed

Question 2

Property sustains a loss will be valued on what two values?

Answer 2

Actual Cash Value (Replacement cost - depreciation

Replacement cost

Question 3

What are the 6 standard homeowners policy forms?

Answer 3

HO-2: Broad Form, Home owner, Insures the dwelling, other structures, and personal property

HO-3: Special Form Homeowner, insures the dwelling and other property on an open peril basis

HO-4: Contents Broad From Tenant, provides protection from named perils for a tenants personal property

HO-5: comprehensive form homeowner: provide open perils coverage for personal property

HO-6: unit owners form, condominium owners: insures the personal property of the insured for named perils

HO-8: modified coverage form homeowner: provides protection for dwellings with a fair market value that is less than their replacement value.

Question 4

Each form contains two sections what are they?

Answer 4

Section I: coverage for property and loss of use of property

Section II: coverage for liability and medical expenses

Question 5

Generally property losses are subject to a deductible what losses are not subject to a deductible?

Answer 5

Liability losses, or medical payments

Does not apply to losses and Paul, credit cards counterfeit money check forgery or ATM cards

Question 6

Section I consist of five sections identified as A through D and additional coverage, what are they?

Answer 6

A - dwelling

B- other structures

C - personal property

D- loss of use

Additional Coverage - removal, damaged trees, and credit card loss

Question 7

Coverage for partial losses on the dwelling is on a replacement cost basis provided that the amount of insurance coverage is at least what?

Answer 7

80%

Question 8

Financial planners should recommend what percentage of the replacement cost of the home with regard to homeowners insurance coverage? What endorsement may be added to coverage to keep up with this?

Answer 8

100% of the replacement cost

Inflation guard endorsement may be added to coverage

Question 9

How much will homeowners insurance cover if you are not carrying enough insurance on your home? (Insured amount is less replacement cost.)

Answer 9

Amount Carried / (Should have Carried x Coinsurance %) = % insurance company will pay

Question 10

Coverage B, what is the general amount of the insurance?

Answer 10

10% of the amount of insurance on the dwelling applies his insurance on structures ( if home is insured for $150,000 and structures are insured for $15,000)

Question 11

Coverage C (personal property and contents), what is the amount of insurance?

Answer 11

50% of the insurance on the dwelling (dwelling is 150,000, 50% of personal property insured would be $75,000)

Question 12

Coverage C (Personal Property and contents): what property is excluded?

Answer 12

Articles that are specifically and separately insured under the homeowners policy or another insurance policy

Animals, birds, or fish

Motor vehicles

Aircraft and their parts

Property of tenants not related to the insured

Property in a unit that is rented or held for rental

Property held for rental

Business data, such as papers, software, or drawings

Credit cards and ATM cards

Question 13

Coverage D(provide for living expenses or loss of income in the event of loss of use with three types of benefits are provided under coverage D?

Answer 13

Additional living expenses, fair rental value, and prohibited use

Question 14

Coverage E (Personal Liability) it protects the insured against what

Answer 14

Claims arising out of both bodily injury and property damage. Personal injury claims are typically not covered. Insure will cover both the damages and the cost of any defense of a covered claim or suit.

Question 15

Coverage E (Personal liability) liability coverage applies to liability claims resulting from the actions of the following individuals on or off the premises…

Answer 15

The insured

Family members residing in the household

Any person under age 21 who is in the care of one of the individuals just listed

Question 16

Coverage F (medical payments to others) what does it insure?

Answer 16

Provides coverage for medical payments to others for injuries that arise, even where the insured is not liable for the injury

Does not cover medical expenses of the insured or members of the insured household

Question 17

Coverage F (Medical payments to others) Medical payments are not based on fault ensure pays regardless of who is responsible what conditions must be met for an individual to receive medical payment coverage from an insured coverage?

Answer 17

1. Injury occurs while the person has permission to be at the insured location
2. Injury occurs while the person is away from the insured location and is caused by a condition at the insured location or on property immediately adjoining the insured location
3. Insured injures another person while away from the insured location.
4. Injury occurs as a result of the actions of a resident employee away from the insured location and while the employee is in the course of employment.
5. Animal owned by or in the care of the insured injures and individual off the insured premises.

Question 18

All homeowners policies have eight exclusions that prevent coverage for a loss associated with these exclusions what are the eight exclusions?

Answer 18

Ordinance or law

Earth movement

Water damage (water damage in the form of a burst pipe is covered)

Power failure

Neglect

War

Nuclear hazard

Intentional loss

Question 19

What are the basic named 12 perils?

Answer 19

1. Fire
2. Lightning.
3. Windstorm.
4. Hail.
5. Riot or civil commotion.
6. Aircraft
7. Vehicles.
8. Smoke.
9. Vandalism or malicious mischief
10. Explosion.
11. Theft.
12. Volcanic eruption.

Question 20

What are the 18 broad named perils?

Answer 20

All of the basic named perils, but include the following

13. Falling objects.
14. Weight of ice, snow, or sleet.
15. Accidental discharge or overflow of water or steam.
16. Sudden and accidental, tearing apart, cracking, burning or bulging of a steam, hot water, air conditioning, or automatic fire protection sprinkler system, or from within a household appliance.
17. Freezing of a plumbing, heating, air conditioning, or automatic fire sprinkler air system, or of a household appliance.
18. Sudden and accidental damage from artificially generated electrical current.

Question 21