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SC Property & Casualty Exam Course > Homeowners > Flashcards

Homeowners Flashcards

1
Q

what are the 6 types of Homeowners Forms?

A 
Broad Form (HO-2)
 Special Form (HO-3)
Contents Broad Form (HO-4)
 Comprehensive Form (HO-5) 
Unit-Owners Form (HO-6)
Modified Coverage Form (HO-8)
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2
Q

What does each HO form include?

A

Section I- Property Coverages
Section II-Liability Coverages
could also include Other coverages and endorsements, and deductibles

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3
Q

What are multi line policies?

A

package policies that contain more than one type of insurance and offer advantages not found in monoline policies, such as premium savings, broader coverage, and the insured’s need for fewer policies.

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4
Q

which forms do not require the named insured to be the owner/occupant of the insured dwelling?

A

Contents Broad Form (HO–4) and Unit-owners Form (HO–6)

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5
Q

To be eligible, the dwelling must be…

A

The dwelling must be the principal residence of the named insured, and incidental business occupancies such as offices, studios, and schools are permitted.

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6
Q

These 2 forms are written to insure the personal property and personal liability of the named insured who does not own the building in which he/she lives.

A

Contents Broad Form (HO–4) and Unit-owners Form (HO–6)

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7
Q

The________is designed for tenants of residential units (i.e., dwellings and apartment units) and provides no coverage for buildings and other structures.

A

HO–4

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8
Q

The _______ is designed for the owners and tenants of condominium or cooperative units. Coverage is provided for the portion of the building the named insured owns (or is responsible for insuring), personal property, and personal liability.

A

HO–6

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9
Q

Eligible residential dwellings are those containing: ______________________

A

one to four residential units and no more than 2 roomers or boarders per family.

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10
Q

Are dwellings under construction, and that will be the primary residence of the named insured upon completion of construction, eligible for coverage?

A

YES

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11
Q

What are the 16 named perils under the HO-2 for CA,B,C?

A

fire/lightning
windstorm/hail
explosion

riot/civil commotion

aircraft
vehicles

smoke
volcanic eruption

vandalism/malicious mischief
theft(limited)

falling objects
weight of ice/snow/sleet

acc. discharge/overflow water

sudden acc. tearing…of HVAC

Freezing

sudden/acc. damage from art. generated electrical current…

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12
Q

Coverage A and B named perils are losses paid on a _______basis

A

replacement cost basis

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13
Q

Coverage C named perils’ losses are paid on an ______basis

A

actual cash value basis

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14
Q

HO-3/special form, the dwelling and other strutures are insured on an:_________________

A

open perils basis

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15
Q

he Special Form (HO–3) specifically excludes the following causes of loss under Coverage A and B:

A

Collapse, except as provided by Additional Coverages
Freezing of household appliances or a plumbing, heating, air conditioning, or automatic fire protective system unless the insured has taken reasonable care to maintain heat in the building or shut off the water supply and drained the appliances and systems of water
Freezing, thawing, pressure or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, retaining wall
Theft in or to a dwelling under construction, including construction-related materials and supplies
Vandalism and malicious mischief, including ensuing loss, if the dwelling has been vacant for more than 60 consecutive days immediately before the loss
Mold, fungus, or wet rot unless resulting from accidental discharge or overflow of water or steam that is hidden from view
Wear and tear, marring, deterioration, mechanical breakdown, latent defect, inherent vice, smog, rust, corrosion, dry rot
Smoke from agricultural smudging or industrial operations
Pollution including discharge, dispersal, seepage, migration, or release of smoke, vapor, fumes, acids, or other chemicals unless such discharge is caused by a Coverage C Peril Insured Against
Settling, cracking, bulging, or expansion of foundation, walls, floors, pavements, patios
Birds, vermin, rodents or insects
Animals owned or kept by an insured

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16
Q

Personal property (Coverage C) is insured on a_______________and are valued on an________basis

A

named perils basis that includes the same 16 named perils in the Broad Form (HO–2); actual cash value basis

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17
Q

Coverage C losses are valued on an actual cash value basis. It Includes:

A

losses to a fence, driveway or walk caused by a vehicle owned or operated by the insured.

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18
Q

The burden of proof for losses to the dwelling and other structures falls to the:

A

insurer

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19
Q

the burden of proof for losses to personal property falls to the

A

insured

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20
Q

HO–4 (Contents Broad Form)

The Contents Broad Form is also known as the:

A

renter’s or tenant homeowners policy

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21
Q

The HO–4 insures _____ under Coverage C against loss from the 16 named broad form perils found in the HO–2 and HO–3 forms.

A

personal property

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22
Q

Personal property losses are valued on an ______basis

A

actual cash value basis

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23
Q

which form provides the broadest coverage of any homeowners forms?

A

HO-5 (comprehensive form)

24
Q

On an HO-5, Losses to the dwelling and other structures are valued on _____, losses to personal property are valued on ______.

A

a replacement cost basis; an actual cash value basis

25
Q

In what way is the HO–5, Comprehensive Form different from the HO–3, Special Form?

A

The HO-5 Comprehensive Form covers personal property for open perils whereas the HO-3 policy covers it for named perils.

26
Q

The Unit-owners Form provides named perils coverage to the owner of a condominium or cooperative unit under Coverage A - Dwelling and Coverage C - Personal Property._______does not appear in this form;

A

Coverage B

27
Q

This form insures real property (building and building items) for which the insured is responsible under the bylaws of the condominium association or cooperative corporation. It also insures personal property of the insured while anywhere in the world.

A

HO–6 (Unit-Owners Form)

28
Q

An owner of a condominium unit would purchase which Homeowner form?

A

HO-6, Unit-owners Form

29
Q

The loss valuation method for the Modified Coverage Form is typically ______. However, if exact materials are not available, they may be replaced with materials that will perform the same function and have the same efficiency, even if they aren’t of like kind and quality.

A

Actual Cash Value (ACV)

30
Q

The ______ Form is often used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost.

A

HO–8 (Modified Form)

31
Q

The HO-8 does not cover the following perils:

A

Falling objects
Weight of ice, sleet, or snow
Accidental discharge of water or steam
Accidental tearing apart, cracking, burning, or bulging of heating or air conditioning systems
Freezing
Sudden and accidental damage from artificially generated electrical current

32
Q

Who are considered “insured” under a homeowners?

A

The named insured and his or her resident spouse if the resident spouse is a member of the named insured’s household.

Other residents of the named insured’s household who are:
Relatives of the named insured, meaning they are related by blood, marriage, or adoption
Under the age of 21 and in the care of any insured

Full-time students living away at college if they:
Are under age 24 and related to the named insured
Were a resident of the named insured’s household before moving away to college, OR
Are under age 21 and in the care of the named insured or a resident relative

Under Section II Liability Coverages, any person or organization legally responsible for covered animals or watercraft owned by an insured, unless custody of such animals or watercraft is in the course of “business” — as defined by the policy.

ith respect to a “motor vehicle” to which liability coverage applies, persons using a covered vehicle on an insured location with the insured’s consent, and persons while engaged in the employment of the named insured or a resident relative.

33
Q

A related, full-time student away at school and under what age is considered an insured on the Homeowner policy?

A
18

B
20

C
24

D
19

A

C: 24

34
Q

On a homeowners policy, what does the insured location mean:

A

The residence premises
The part of any other premises, structures, or grounds used by the insured as a residence if it is shown in the Declarations or acquired by the named insured during the policy period for use as a residence
Any premises described above used by the named insured, such as a boat slip
Any premises not owned by an insured and where the insured is temporarily residing, such as hotel rooms and summer vacation rentals
Vacant land, other than farm land, owned by or rented to an insured
Land owned by or rented by an insured on which a 1, 2, 3, or 4-family dwelling is being built as a residence for an insured
Individual and family cemetery plots or burial vaults of an insured
Any part of a premises occasionally rented to an insured for other than business purposes, such as a banquet hall where a wedding reception is hosted

35
Q

Give an example of a residence employee

A

gardener or nanny

36
Q

a person hired to paint the insured’s house, as long as the insured doesn’t own a business that paints houses

A

can be a residence employee

37
Q

The 1-family dwelling where the named insured resides.
The 2-, 3-, or 4-family dwelling in which the named insured resides in at least one of the family units.
That part of any other building where the insured resides.
The ______ also includes other structures and the grounds at that location, such as the 5 acres upon which the insured resides, including the barn, detached garage, and swimming pool.

A

residence premises

38
Q

trade, profession, or occupation engaged in on a full-time, part-time, or occasional basis. Any other activity engaged in for money or other compensation

A

Business

39
Q

exeptions to business include:

A

Volunteer activities for which no compensation is received other than expense reimbursement.
Home daycare services for which no compensation is received other than the mutual exchange of day care services.
Rendering home daycare services to a relative of an insured.
Any other activity not described above for which no insured receives more than $2,000 in compensation during the 12 months before the current policy term

40
Q

residence premises must:

A

appear on a dec. page
1-4 family dwellng where named insured lives in at least 1
i

41
Q

The deductible applies to ___ unless otherwise noted in the policy

A

all losses

42
Q

standard homeowners policy deductible is _____

A

$250

43
Q

As the deductible increases, the ________.

A

policy premium decreases

44
Q

Under a homeowners: Coverage A-Dwelling, the following are NOT covered…..

A

Land on which the dwelling is located.
Theft in, to, or from a dwelling under construction, including materials used in the construction.
Vandalism and malicious mischief including ensuing loss, if the dwelling was vacant for more than 60 consecutive days immediately before the loss.

45
Q

In most cases, the insurer requires the named insured to purchase insurance in an amount that is no less than ____% of the dwelling’s replacement value.

A

80%

46
Q

The policy covers other structures on the residence premises that are___ and name some examples

A

set apart from the dwelling by a clear space;sheds, detached garages, built-in pools

47
Q

No coverage is provided under Coverage B for which 4 types of property?

A

Land, including land on which the other structures are located.
Other structures rented or held for rental to anyone who isn’t a tenant of the dwelling, unless the other structure is used solely as a private garage.
Other structures from which any “business” is conducted.
Other structures used to store business property that is owned by someone other than an insured or a tenant of the dwelling.

48
Q

This insurance limit is 10% of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsement.

A

Coverage B

49
Q

True or False: Coverage C – Personal Property covers personal property owned or used by an insured while it’s anywhere in the world.

A

True

50
Q

Coverage for ____ at another residence is limited. If ——— is usually located at an insured’s residence other than the residence premises, coverage is limited to 10% of——– or $1,000, whichever is greater.

A

Coverage C-personal property

51
Q

Property not covered under Coverage C includes:

A

Property specifically described and insured elsewhere, such as on another policy or by endorsement to the homeowners policy
Animals, birds, or fish
Motor vehicles, including equipment, parts, and electronic equipment and accessories that can only be operated by the motor vehicle. An exception exists (meaning coverage is provided) for motor vehicles not required to be registered for use on public roads, used solely to service an insured’s residence, or designed to assist the handicapped
Aircraft, including its parts, except model or hobby aircraft is covered if it’s not used or designed to carry people or cargo
Hovercraft, including its parts
Property of roomers, boarders, and other tenants—except those related to an insured
Property in an apartment regularly rented, or held for rental, to others by an insured—except for property covered under the additional coverage, Landlord’s Furnishings
Property rented or held for rental to others off the residence premises
Business data, credit cards, and electronic fund transfer cards—including data stored in books of account, on paper records, or on computers
Water or steam

52
Q

This insurance limit is ____ of the Coverage A limit of liability, does not reduce the Coverage A limit of liability, and may be increased by endorsement.

A

50%

53
Q

a wildfire burns near the insured’s home. If direct damage from the wildfire occurs to the residence premises, _____ coverages are triggered.

A

Additional Living Expense and Fair Rental Value

54
Q

If direct damage from wildfire occurs to the named insured’s neighbors, and a civil authority evacuates the named insured, _____ coverage is triggered.

A

Civil Authority Prohibits Use

55
Q

Loss and expenses due to the cancellation of a lease or agreement are___ covered.

A

NOT

SC Property & Casualty Exam Course (9 decks)

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