Insurance 101 Review

Question 1

Sections in HO and Commercial policies?

Answer 1

Section 1 – property losses / exposures
Section 2 – personal liability and medical payments to others

Question 2

HO-3 Coverage – Section 1

Answer 2

Coverage A – Dwelling (amt to rebuild, includes attached garage, up to two family home w/other side rented)

Coverage B – Other Structures (detached, usually 10% of Coverage A, no coverage for portions rented out / used in a business)

Coverage C – Personal Property (usually 50% of Coverage A, sublimits for jewelry etc, worldwide coverage, coverage for others property at your place)

Coverage D – Loss of Use (20% of Coverage A, responds only for covered peril resulting in loss of use of home)

Question 3

HO-3 Coverages – Section 2

Answer 3

Coverage E – Personal Liability (extends to you, spouse, relatives living in house, residents under 21, anyone taking care of pet or watercraft; limits starting at 100k up to 1M+, “underlying limit” for personal umbrella)

Coverage F – Medical Payments (for ppl other than the insured, starting at 1k)

Insurer has duty to defend (in addition to a duty to indemnify)

Question 4

HO Reinsurance Issues

Answer 4

The HO policy requires reinsurance support due to its single risk (property),
catastrophic (many properties) and liability exposures (biggest risk often, dog bites)

HO policies are often sold “bundled” with the auto insurance thus making it hard
for insurers to “pick and choose” a good auto risk without getting the unwanted
HO policy

Question 5

PAP Policy Coverages

Answer 5

A. Bodily Injury (for others when liable)
B. Medical Payments (for yourself, family, and covered persons)
C. UM
D. UIM
E. APD
F. Physical Liability