Homeowner's Insurance

Question 1

What is the HO - 2 policy form?

Answer 1

“Broad Form”

All named perils (instead of open perils) and least expensive

Question 2

What is the HO - 3 policy form?

Answer 2

“Special Form”

Most common for residences. Lots of (but not all) Open Perils

Question 3

What is the HO - 4 policy form?

Answer 3

“Contents Broad Form”

Most often used for rental situations

Question 4

What is the HO - 5 policy form?

Answer 4

“Comprehensive Form”

Most comprehensive policy; ALL open perils

Question 5

What is the HO - 6 policy form?

Answer 5

“Unit Owners Form”

Mostly condominium units and co-op apartments

Question 6

What is the HO - 8 policy form?

Answer 6

“Modified Coverage Form”

Coverage for older/historical homes

Question 7

How many classifications of coverage are in Section 1 of a homeowners policy?

Answer 7

Up to 5 (A,B,C,D, Additional)

Question 8

How many classifications of coverage are in Section 2 of a homeowners policy?

Answer 8

Up to 3 (E, F, additional)

Question 9

Coverage A for HO - 3

(4 things)

Answer 9

1. Covers Dwelling (includes all structures connected as well as materials and supply)
2. Open-perils
3. Can have co-insurance if policy doesn’t meet req amount (usually 80% of replacement value)
4. Replacement cost

Question 10

Coverage B for HO - 3

(4 things)

Answer 10

1. Covers structures on premises of residence not attached (e.g. pools, stables, sheds, etc.)
2. Open-perils
3. Can have co-insurance if policy doesn’t meet req amount (usually 80% of replacement value)
4. Replacement cost

Question 11

Coverage C for HO - 3

(4 things)

Answer 11

1. Covers personal property
2. 16 Named-perils
3. Actual Cash Value
4. Has sub-limits and excluded property

Question 12

Coverage D for HO - 3

(3 things)

Answer 12

1. Additional living expenses to maintain standard of living.
2. If portion of property is being rented, coverage includes lost rental income.
3. Provides up to 2 weeks of coverage if civil authorities prevent party from living in dwelling because neighbors are damaged by insured peril NO MATTER WHAT.

Question 13

Name some exclusions to all HO - 3 section 1 coverages

Answer 13

War, neglect, nuclear hazard, earth movement, water damage, intentional loss, etc.

Question 14

HO-3 Section 1

What are Policy Endorsements?

Answer 14

Policy owners can add these which can increase, decrease, or have no effect on premiums

(e.g. inflation guard endorsement, replacement cost for personal property, earthquake endorsement, etc.)

Question 15

True or False

Section 1 Additional Coverages are optional & selected by the policy owner AND require extra premium per coverage selected

Answer 15

False; Additional coverages are automatically included in the policy and are included in the policy’s premium

Question 16

True or False

When fine arts or antiques are insured under a homeowners policy by an endorsement, coverage is usually provided on an actual cash basis

Answer 16

False; Coverage is usually provided on a valued basis

Question 17

Coverage E for HO - 3

(2 things)

Answer 17

1. Liability: damages that are legally required as a result of bodily injury or property damage (up to limit)
2. Insured is in charge of defense, selects, counsel, can settle, etc.

Question 18

Coverage F for HO - 3

(2 things)

Answer 18

1. Coverage pays for medical and/or funeral expenses up to policy limit ($1,000 usually) for injuries incurred by each person per occurrence.
2. Coverage applies if injury results away from insured premises caused by activity of insured.

Question 19

HO - 3 Section 2 Additional Coverage

Answer 19

Paid expenses would be in addition to other limits of the policy and could cover:

-Expenses and costs in defending a lawsuit
-Expenses incurred by insured at insurers request
-First aid expenses
-Etc

Question 20

4 Common conditions to HO - 3 Section 1 & 2

Answer 20

1. Policy period
2. Concealment or fraud (applies before & after a loss)
3. Cancellation
4. Non-renewal

Question 21

Popular/practical endorsements that pertain to liability coverage (HO - 3)

(3 things)

Answer 21

1. Home Business Insurance Coverage Endorsement
2. Personal Injury Endorsement
3. Watercraft Endorsement

Question 22

What is a Watercraft Endorsement?

Answer 22

Expands upon the basic $1,500 upon of coverage offered in the HO - 3 offering expanded liability and medical payments coverage

Question 23

True or False

The insurer can choose to not renew coverage with a written notice at least 30 days prior to expiration date of the HO - 3 policy

Answer 23

True