Home Owners Insurance Flashcards
What are the two basic types of coverage for homeowners insurance?
Named Perils - provides protection from perils that are specifically listed
Open Perils coverage - designed to protect against all perils except those listed
Property sustains a loss will be valued on what two values?
Actual Cash Value (Replacement cost - depreciation
Replacement cost
What are the 6 standard homeowners policy forms?
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.
Each form contains two sections what are they?
Section I: coverage for property and loss of use of property
Section II: coverage for liability and medical expenses
Generally property losses are subject to a deductible what losses are not subject to a deductible?
Liability losses, or medical payments
Does not apply to losses and Paul, credit cards counterfeit money check forgery or ATM cards
Section I consist of five sections identified as A through D and additional coverage, what are they?
A - dwelling
B- other structures
C - personal property
D- loss of use
Additional Coverage - removal, damaged trees, and credit card loss
Coverage for partial losses on the dwelling is on a replacement cost basis provided that the amount of insurance coverage is at least what?
80%
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?
100% of the replacement cost
Inflation guard endorsement may be added to coverage
How much will homeowners insurance cover if you are not carrying enough insurance on your home? (Insured amount is less replacement cost.)
Amount Carried / (Should have Carried x Coinsurance %) = % insurance company will pay
Coverage B, what is the general amount of the insurance?
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)
Coverage C (personal property and contents), what is the amount of insurance?
50% of the insurance on the dwelling (dwelling is 150,000, 50% of personal property insured would be $75,000)
Coverage C (Personal Property and contents): what property is excluded?
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
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?
Additional living expenses, fair rental value, and prohibited use
Coverage E (Personal Liability) it protects the insured against what
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.
Coverage E (Personal liability) liability coverage applies to liability claims resulting from the actions of the following individuals on or off the premises…
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
Coverage F (medical payments to others) what does it insure?
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
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?
- Injury occurs while the person has permission to be at the insured location
- 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
- Insured injures another person while away from the insured location.
- 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.
- Animal owned by or in the care of the insured injures and individual off the insured premises.
All homeowners policies have eight exclusions that prevent coverage for a loss associated with these exclusions what are the eight exclusions?
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
What are the basic named 12 perils?
- Fire
- Lightning.
- Windstorm.
- Hail.
- Riot or civil commotion.
- Aircraft
- Vehicles.
- Smoke.
- Vandalism or malicious mischief
- Explosion.
- Theft.
- Volcanic eruption.
What are the 18 broad named perils?
All of the basic named perils, but include the following
- 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 a steam, hot water, air conditioning, or automatic fire protection sprinkler system, or from within a household appliance.
- Freezing of a plumbing, heating, air conditioning, or automatic fire sprinkler air system, or of a household appliance.
- Sudden and accidental damage from artificially generated electrical current.

