Homeowners Policy Flashcards by Kerri Burriss

Provides protection for losses from named perils.

HO-2 (broad form)

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Provides protection for dwelling and other structures on an open peril basis and personal property is covered only for broad perils. Unlike under the HO-2 (broad form), vehicle damage to fences, driveways, or walks is covered even if caused by insured or resident.

HO-3 (special form)

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Also referred to as tenant broad form, insures personal property for broad perils. Coverage may not be issued to an owner-occupant. It may be written for a tenant who resides in a rented dwelling, apartment, or mobile home, but does not provide coverage on the dwelling itself.

HO-4 (contents broad form)

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Covers both the dwelling and other structures on an open peril basis. It also covers personal property on an open peril basis, with the exception of landlord furnishings in an apartment that is rented (or held for rental to others). Landlord furnishing is limited to $2500 limit and provided on a named peril basis.

HO-5 (comprehensive form)

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Expands coverage to include parts of the building, such as alterations and appliances that the insured is required to insure because of the condominium association agreement.

HO-6 (condominium unit owners)

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A unique homeowners form. It is intended for use when replacement cost coverage is not practical. When the market value of the structure is considerable lower than the replacement cost, such as some older homes, this form may be useful.

HO-8 (modified coverage form)

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What are the covered perils on HO-2 (Broad Form

Coverages A, B, and C

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What are the covered perils on HO-3 (Special Form)?

Coverages A&B – open peril; Coverage C – same perils as Form HO-2

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What are the covered perils on HO-4 (Contents Broad)?

Coverage C (same perils as Form HO-2 broad)

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What are the covered perils on HO-5 (Comprehensive)?

Building, other structures, and contents – open peril or special

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What are the covered perils on HO-6 (Condominium)?

Coverage A, B, and C for the same perils as Form HO-2 (broad)

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What are the covered perils on HO-8 (Modified Homeowners)?

Fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism; theft; volcanic eruption

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In homeowners, what kind of coverage covers personal liability?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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In homeowners, what kind of coverage covers other structures?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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In homeowners, what kind of coverage covers loss of use?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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In homeowners, what kind of coverage covers medical payments to others?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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In homeowners, what kind of coverage covers dwelling?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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In homeowners, what kind of coverage covers personal property?
A.	Coverage A
B.	Coverage B
C.	Coverage C
D.	Coverage D
E.	Coverage E
F.	Coverage F

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What Homeowners policy form is known as contents broad form?

HO-4 contents broad form

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What Homeowners policy form is known as a special form?

HO-3 Special Form

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What are the 2 liability coverages included in homeowners policy forms?

Coverage E – Personal liability, and Coverage F – Medical Payments to Others

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What HO form insures a tenant living in an apartment?

HO-4 (tenant broad form)

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What HO form covers a historic home with replacement cost more than the market value?

HO-8 (modified homeowners)

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What coverage forms are available in Homeowners policies?

HO-2, HO-3, HO-4, HO-5, HO-6, and HO-8

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What HO form covers condominium unit owners?

HO-6 (condominium unit owners)

What are the major coverages included in a homeowners policy?

Coverage A – Dwelling, Coverage B – Other Structures, Coverage C – Personal Property, and Coverage D – Loss of Use

Under Coverage C of an HO-3 policy, what is the amount of insurance provided for personal property?

At least 50% of the Coverage A limit (this applies to all policies except for HO-4 and HO-6)

In homeowners policies, which coverage provides protection against an indirect or consequential loss?

Coverage D – Loss of Use

What is the most limited HO coverage?

HO-8 (modified homeowners)

What does form HO-5 cover?

The dwelling and other structures, as well as contents and personal property

``` How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? A. $100 B. $500 C. $1,000 D. $5,000 ```

Elaborate homes and those with detailed designs or decorative architecture with replacement costs greater than ACV or market value are insured on A. HO-8 B. HO-8 with an inflation guard endorsement C. HO-3 D. HO-3 with an HO-15 endorsement

``` All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT A. Claims expenses B. Damage to the property of others C. Loss assessment coverage D. Personal injury ```

A neighbor’s tree has fallen into the insured’s yard. The insured’s homeowners policy will only pay to remove the tree if A. The damage is more than $1,000 B. The neighbor has no homeowners insurance C. The tree has caused damage to the insured’s vehicle D. The tree is blocking the driveway

``` Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment? A. HO-6 B. HO-2 C. HO-3 D. HO-4 ```

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section? A. Up to $10,000 aggregate for the policy period B. Up to $5,000 aggregate for the policy period C. Up to $1,000 per occurrence D. Up to $2,500 per occurrence

``` According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of the loss? A. 30 days B. 60 days C. 90 days D. 120 days ```

``` The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT A. All business pursuits B. Business liability C. Insured’s activities D. Bodily injury to the insured ```

Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy? A. Personal property injury endorsement B. Scheduled personal property endorsement C. Personal property replacement cost endorsement D. Blue skies endorsement

According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss? A. Either party may make a written request for an appraisal B. The insured is required to accept what the insurer is willing to pay C. The parties must pursue a lawsuit D. The policyholder is allowed to hire an appraiser and the insurer will pay the amount determined

Which of the following coverages is included in an unendorsed homeowners policy? A. Medical payment to others B. Personal property replacement coverage C. Fungi, wet or dry rot, or bacteria D. Earthquake

Which of the following perils is covered by the HO-2 and HO-3? A. Flood B. War C. Sudden and accidental rupture of a heating system D. Loss due to power interruption that occurs off the premises

The amount an insurer will pay under Coverage D (Loss of Use) depends on A. The length of time the dwelling is uninhabitable B. The amount of coverage on the dwelling C. How long a dwelling has been occupied D. If the dwelling is owner-occupied or rented out

``` Which of the following would NOT be covered by HO liability insurance? A. Intentional tort B. Bodily injury C. First aid expenses D. Property damage ```

``` When is liability coverage included in a homeowners policy? A. If the insured has form HO-4 B. If there is an endorsement C. It is included automatically D. If the insured has forms HO-2 or HO-3 ```

``` The insured’s home is covered by an HO-3. Two years ago, the insured bought the home for $58,000. Today, its replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage? A. $46,400 B. $48,000 C. $58,000 D. $60,000 ```

B (at least 80% of it’s value on the date of loss)

The HO-3 homeowners policy provides A. Open peril coverage on the dwelling and basic form coverage on personal property B. Basic coverage for the dwelling and broad form coverage for personal property C. All-risk coverage for both the dwelling and personal property D. Open peril coverage on the dwelling and broad form coverage on personal property

``` A grave marker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay? A. $3,000 B. $0 C. $500 D. $1,000 ```

A (pays up to 5,000 for grave markers under Coverage C)

Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will A. Either pay or defend as it decides B. Pay the alleged damages C. Proceed according to your request D. Defend with the hopes of not paying damages

The difference in the contents coverage on an HO-3 and HO-5 is which of the following A. Contents are covered open peril on HO-3 and named peril on HO-5 B. Contents are covered for replacement cost on HO-5 and ACV on HO-3 C. Contents are covered for replacement cost on HO-3 and ACV on HO-5 D. Contents are covered open peril on HO-5 and named peril and HO-3

D (Replacement cost coverage is available only by endorsement to either form)

``` The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss? A. 25% B. 40% C. 75% D. 80% ```

``` The homeowners policy form that covers condominium unit owners is A. HO-2 B. HO-3 C. HO-4 D. HO-6 ```

``` Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises? A. Professional liability B. Business income – report of values C. Permitted incidental occupancies D. Special limit of liability ```

The additional living expense coverage on homeowners policies A. Is automatically paid after any loss to the covered house B. Does not begin to pay until the family has been out of the house for at least 7 days C. Is intended to allow the family to stay in the lease expensive accommodations available D. Is intended to allow the family to maintain its normal standard of living

``` Under the HO-4 and HO-6 homeowner policy forms, property is insured against A. Comprehensive form perils B. Broad form perils C. Basic form perils D. Special form perils ```

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy? A. The insured’s granddaughter slips on the boat and needs stitches B. A friend borrows the boat and has an accident with another boater C. One of the insureds is taking the boat out and injures her grandson D. A friend rents their boat and runs it into a neighbor’s dock

``` Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms? A. None B. HO-2 C. HO-3 D. HO-5 ```

The insured’s mother-in-law broke her leg falling down the front steps of the insured’s premises. The insured’s homeowners medical payments coverage will A. Pay as excess over the mother-in-law’s health insurance B. Pay only if the mother-in-law has no health insurance of her own C. Share equally in the cost with the mother-in-law’s health insurance D. Apply to injuries of any guests or visitors

First aid costs for others injured on the insured’s premises A. Apply only if the insured is legally liable B. Also cover injuries to the insured’s family members C. Are deducted from the liability limit D. Are paid in addition to the liability limit

D (First aid costs for others apply even if you are not legally liable and are in addition to the stated limits, but do not apply to those regularly at the location)

The personal injury liability endorsement to an HO policy applies to all the following EXCEPT A. Slander B. Invasion of privacy C. False arrest D. A third party breaks a leg when the insured knocks him down

Personal property coverage under a homeowners policy would cover A. Property moved to a newly acquired residence after 60 days B. A pet that the insured is temporarily keeping for a friend C. The insured’s camera if it is stolen while the insured is on vacation D. A neighbor’s fence if damaged by the insured

An insured works outside the home. The insured’s sister lives with him and cares for his four children. When the insured’s home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured’s sister has to stay at a motel. How much will the HO-3 form pay for these additional living expenses? A. The cost of renting an apartment, but not the cost of the motel room B. The cost of renting an apartment and 50% of the cost of the motel C. Nothing D. All of the expense up to the Coverage D limit

``` An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured’s home, what will the insured receive on the claim under that endorsement? A. 70% of the replacement cost B. 80% of the replacement cost C. 100% of the actual cash value D. Nothing ```

D (The personal property replacement cost endorsement excludes property such as art and antiques)

Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS A. The dwelling had been vacant for no more than 90 days B. The insured purchased the water damage endorsement C. The insured had drained the plumbing system D. The insured purchased special form coverage

``` What type of coverage is Coverage E in homeowners policies? A. Additional coverage B. Loss of use C. Personal property D. Personal liability ```

An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover? A. A child has bruises on her legs from receiving a spanking from the insured and must be seen by her pediatrician B. A child riding the insured’s horse falls off breaking his collar bone C. A child trips over a toy in the driveway, cuts her knee, and requires stitches D. A child playing in the insured’s car puts it in drive and backs into the neighbor’s mailbox

C (Coverage excludes loss or damage that results from sexual molestation, corporal punishment, physical or mental abuse, and draft and saddle animals, including vehicles used with such animals, motor vehicles, aircraft, or watercraft)

``` An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase A. HO-2 B. HO-3 C. HO-4 D. HO-6 ```

``` In earthquake coverage provided by endorsement in a homeowners form, one or more earthquake shocks would be considered a single earthquake if they occur within what maximum time period? A. 1 hour B. 12 hours C. 24 hours D. 72 hours ```

Homeowners policies provide coverage for A. The land under the residence B. Property of tenants, roomers, or boarders not related to any insured C. Business property while on the residence premises D. Losses caused by off-premises power failure

Which of the following types of properties would be covered in homeowners coverage forms? A. Landlord furnishings in an on-premises apartment B. Structures used for business purposes C. Structures rented to others who are not tenants of the dwelling D. Animals, birds, or fish

Under additional coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? A. $500 B. $1,000 C. $5,000 D. Fire department service charges are not allowed

``` Which of the following liability coverages must be added by endorsement to a homeowners policy in order to apply? A. Property damage liability B. Medical payments to others C. Personal injury D. Bodily injury ```

All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT A. A 15-year old foster child residing in the premises B. The mother of the insured who is residing in the household C. The legal representative of a deceased insured D. The 22-year old niece of the insured who is visiting

While cutting grass in your yard with your brother’s borrowed lawnmower, the fuel line ruptures and the lawnmower is destroyed in the fire. How will your HO liability react? A. It will pay your brother’s property insurance deductible B. Your HO liability and your brother’s property coverage will share on a prorated basis C. It will cover the damage D. It will not cover the damage because you are not liable

The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks? A. Nothing B. The difference in the actual cash value as a pair and as a single C. The replacement cost of the pair D. The actual cash value of the pair

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? A. Damage to the dwelling caused by ash or dust from a volcanic eruption B. Damage to the dwelling caused by the insured when moving furniture C. Accidental scorching caused when a hot iron is placed upon a built-in counter top D. Interior damage caused by water seeping under the shingles on the roof

Which loss listed below would be fully covered by a homeowners policy? A. $2,000 silver tea set stolen B. $1,200 pedigreed golden retriever stolen (pets not covered at all) C. $24,000 bass boat destroyed in tornado (boats up to 1500 for any peril the policy covers) D. $5,000 firearm collection stolen

A (Tea sets are covered with a special limit of $2,500 for the peril of theft; the firearm collection is covered for no more than $2,500 if stolen; boats are covered for no more than $1,500 for any peril the policy covers; the dog is not covered at all)

Which of the following would NOT be covered by medical payments to others in Section II of your HO policy? A. You are walking your neighbor’s dog and it bites someone B. You allow the neighborhood kids to play flag football in your yard; one is injured C. You cut your leg while whacking weeds in your backyard with your neighbor’s weed whacker . D. Your child’s nanny falls while walking down your steps

C (Medical payments to others covers invitees, residence employees not covered by workers compensation, and injury to others caused by animals in your control. If you hurt yourself, accident and health insurance would be needed for your injuries.)

``` Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to A. Liability losses only B. Property and liability losses C. Specified losses D. Property losses only ```

``` With regards to a homeowners policy, which coverage provides for indirect or consequential losses? A. Coverage D B. Coverage A C. Coverage B D. Coverage C ```

Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct? A. The amount of coverage would be doubled B. The endorsement becomes excess coverage C. The endorsement becomes primary coverage and the HO contract is secondary D. Coverage C limits will no longer apply to the jewelry insured by the endorsement

``` An insured has a standard HO-4 policy with a $30,000 limit of coverage for personal property. While he was traveling, a fire in his hotel destroys clothes and luggage with a replacement value of $10,000 and jewelry with a replacement value of $10,000. Disregarding any deductible and assuming a depreciation of 20% has occurred in both properties, what amount is the insurer obligated to pay? A. $11,000 B. $16,000 C. $20,000 D. $30,000 ```

B (The loss would be settled on an actual cash value basis; $20,000 total for the loss minus $4,000 for depreciation. Remember the limitation on loss of jewelry applies to the peril of theft only)

The main difference between an HO-4 and an HO-6 is A. HO-6 does not cover additional living expenses B. HO-4 provides limited dwelling coverage as well as contents coverage C. HO-6 provides limited dwelling coverage as well as contents coverage D. HO-4 does not cover additional living expenses

C (HO-4 provides no dwelling coverage because a tenant does not own the dwelling; the condo owner does own the condo and is provided with coverage for improvements. Both HO-4 and HO-6 cover theft and additional living expenses)

Which of the following losses would NOT be covered by a homeowners policy? A. A $550 utility trailer blown away by a tornado B. A stolen silver tea set worth $2,000 C. A $800 outboard motor destroyed by hail D. A coin collection valued at $500 lost in a fire ,

D (An HO policy will pay up to $2,500 for silverware by theft, $1,500 for boats, motors, trailers

D (Personal injury may be added by endorsement)

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is A. Equal to the amount as Coverage B B. Equal to the amount provided as Coverage A C. 50% of the amount provided as Coverage B D. 50% of the amount provided as Coverage A

Theft coverage under an HO-8 is restricted to A. The larger of 10% of the personal property limit or $1,000 B. There is no theft coverage under an HO-8 C. $250 D. The actual cash value of what was stolen, with limits for certain classes of property

D. (Since HO-8 policies are for older homes, they insure dwellings at actual cash value, not replacement cost because the cost of rebuilding with the materials and details of the original home would make replacement cost coverage prohibitively expensive. Theft is the actual cash value of what was stolen, with limits for certain classes of property.)

``` An insured suffers a windstorm loss in which the insured’s driveway is blocked by two of the insured’s trees and two of the neighbor’s trees. The total amount of the removal adds up to the following: three trees at $300 per tree, and one tree at $600. How much will the insurer pay for the loss? A. $1,500 B. $1,400 C. $1,000 D. $900 ```

C. (It is important to pay particular attention to coverages that have a maximum amount of coverage and an additional sublimit for one particular item. The most the policy will pay for this loss is $1,000)

A deer chews a hole in an insured's shed sitting next to a pond. Which of the following forms could cover this damage? A HO-8 B HO-2 C HO-3 D DP-1

C (The HO-3 Special Form covers everything except what is excluded. A deer is not a listed exclusion as it is not considered a bird, vermin, rodent, or insect.)

Which of the following claims would be covered under the Personal Injury Endorsement attached to an HO-3 Policy? A Liability arising out of disputes between insureds B Injury related to a business engaged in by the insured C Liability arising from publication of material that violates another person's right of privacy D Civil activities for which the insured is paid

C (All are excluded under the unendorsed HO policy. The Personal Injury endorsement adds coverage for non-physical injuries to others, including invasion of privacy.)

Which statement regarding medical payments under a homeowners policy is true? A Medical payments under a Homeowners Policy will cover funeral expenses B Medical payments are provided by Coverage E C Medical payments under a Homeowners Policy will cover the insured's injuries D Medical payments include personal injury

A (Funeral expenses are covered expenses under Coverage F, Medical Payments.)

# Choose the claim that would be covered under Coverage E of a Homeowners Policy. A Bodily injury to an insured B The transmission of a communicable disease by an insured C Bodily injury to a guest caused by the insured's pet dog D Bodily Injury arising out of the application of corporal punishment by an insured

C (Liability coverage does not apply to BI or PD suffered by the insured. Communicable diseases and corporal punishment are excluded under the policy.)

L owns a home covered under an HO-3 for $200,000. Under Coverage D, how much coverage does L have for lost income if his basement apartment becomes uninhabitable due to a fire loss? A $30,000 B $150,000 C $300,000 D $60,000

D (For a covered loss, the Coverage D limit for additional living expense, fair rental value, and civil authority prohibited use is 30% of Coverage A. 30% of $200,000 is $60,000.)

All of the following are true of a Homeowners Policy, except: A Cemetery plots, burial vaults and vacant land are insured locations B Coverage E is written on a single limit basis C Section II provides coverage for damage to the insured's property D The language in Section II is the same in all Homeowners Policies

C (Coverage for the insured's property is provided in Section I.)

# Choose the false statement regarding the coverage of property under a Homeowners Policy. A The Personal Property Replacement Cost Endorsement may be added to cover the contents on a replacement cost basis B Theft of silverware is covered up to $2,500 C Money is covered up to $500 per occurrence D The Scheduled Personal Property Endorsement provides open perils coverage

C (The limit on money is $200.)

Which statement is true of Section I of a Homeowners Policy? A Theft of a boat while away from the premises is covered B Coverage on utility trailers is limited to $2,000 C Coverage is provided on owned golf carts and owned snowmobiles off premises D A special limit of $1,500 limit applies to watercraft

D (A limit of $1,500 applies to watercraft of all types, including their trailers, furnishings, equipment, engines, and outboard motors. Loss resulting from wind or hail is excluded unless in a fully enclosed building.)

Insured locations under a Homeowners Policy might include all of the following, except: A A banquet hall the insured rented for the insured's daughter's wedding B Vacant farm land C A hotel room used by the insured while on vacation D Individual and family cemetery plots

B (The definition of 'insured location' includes locations where the insured temporarily resides, is rented to the insured, and cemetery plots. However, farm properties are not eligible for coverage.)

What is the limit of insurance available under an HO-3 policy for a tree totally damaged in a hail storm? A $250 B $1,000 C 0% D $500

C (The most paid for a covered tree is $500 but coverage is not provided for windstorm or hail losses.)

Homeowners policies cover: A Money up to $500 B Theft of guns up to $3,000 C Theft of furs and jewelry up to $1,500 D Water damage caused by flood, sewer backup and underground seepage

C (The limit for loss by theft of jewelry and furs is $1,500.)

Which of the following is not true about the Home Business endorsement? A Professional services are excluded B Only property damage is covered C Advertising injury is covered D The business must be owned by the insured

B (The endorsement provides both business property and liability coverages for an eligible home business.)

Which of the following is not true of the HO-2? A The HO-2 insures against the broad form perils B The HO-2 pays for losses on an open perils basis C The HO-2 pays for losses to the dwelling on a Replacement Cost basis D The HO-2 covers owner-occupied dwellings

B (The HO-2 insures the dwelling and contents against the broad form perils.)

# Choose the correct statement regarding the HO-3. A Coverages A, B, and C are all written on a Replacement Cost basis B The dwelling and other structures are written on an Open Peril basis C The contents are written on an Open Peril basis D The dwelling and other structures are written on a Broad Form Perils basis

B (The HO-3 (Special Form) provides the broadest Coverage available on structures: Open Perils (or all-risk) Coverage.)

Which statement is false? A Coverage F limits are subject to a deductible B Obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence C Total liability coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy D Insurer investigation expenses are in addition to the limits stated in Coverage E

A (Section II coverages are not subject to a deductible.)