Homeowner's Policies Flashcards
What is the most common type of insurance?
Homeowner’s insurance
What’s another term for homeowner policies?
HO-2 policies
What coverage do HO-2 policies cover?
Fire or lightning, hail or windstorm, explosion, riot or civil commotion, damage from aircraft, vehicle damage, smoke damage, vandalism, theft, glass breakage, falling objects, weight of ice, snow, and sleet, accidental discharge or overflow of water or stream, sudden accidental tearing apart of heating, air conditioning, or hot water systems, freezing of plumbing, heating, air conditioning systems, or household appliances, sudden accidental damage from artificially generated electrical current, property lost as a result of removal from the premises when in danger from fire or other hazards, some liability coverage for personal injury and property damage caused by the policyholder
Does a basic homeowner policy include flood insurance?
No. Therefore, any homeowner who does not purchase this insurance for a property identified as being in a flood plain will not be eligible for any financial assistance.
What is a coinsurance clause?
Most homeowner’s policies have this. This clause requires that the homeowner has insurance that is equal to 80% of the home’s replacement value. This does not include the price of the land.
What is CLUE and what does it stand for?
CLUE means The Comprehensive Loss Underwriting Exchange Report. It’s a database used by insurance companies that provides 5-7 years of prior claim info on properties. It’s not available to insurance companies until after closing. At that time the language in the insurance policy may allow the insurance company to reject coverage.
What should you advise your buyers to do during their option period?
Advise them to make their offer subject to receiving and approving a copy of the seller’s CLUE report
