Insurance and Flood Zones and Excise Tax Formula 🫧

Question 1

All the “DP” Insurance Types

Answer 1

1. DP-1 (Basic Form): This policy provides basic coverage for the dwelling against specific named perils, such as fire, lightning, windstorm, hail, explosion, and vandalism. DP-1 is the most basic form and offers limited coverage compared to other DP policies.
2. DP-2 (Broad Form): DP-2 provides more comprehensive coverage than DP-1. It covers the same perils as DP-1 but extends coverage to additional perils like theft, falling objects, weight of ice, snow, or sleet, accidental discharge or overflow of water or steam, and more.
3. DP-3 (Special Form): DP-3 is the most extensive and commonly used dwelling property policy. It’s an open perils or “all-risk” policy for the dwelling itself, meaning it covers all perils except those specifically excluded in the policy. Personal property coverage in DP-3 is typically on a named perils basis.
4. DP-4 (Contents Broad Form): This policy form provides coverage for personal property or contents against specific named perils, similar to DP-2. However, it doesn’t cover the dwelling structure itself.
5. DP-5 (Comprehensive Form): The DP-5 combines coverage for both the dwelling and personal property under a single policy. It provides broader coverage similar to DP-3 for the dwelling and similar to DP-4 for personal property.

Question 2

“DP” vs. “HO” Insurance Policies

Answer 2

DP insurance is focused on providing coverage for residential properties being rented out to tenants, focusing mainly on the structure.
HO insurance is designed for owner-occupied homes, offering comprehensive coverage that includes the dwelling, personal property, liability, and additional living expenses.

Question 3

All the “HO” Insurance Types

Answer 3

1. HO-1 (Basic Form): This is a basic and limited coverage policy that protects against a specific list of named perils, such as fire, lightning, windstorm, hail, theft, and vandalism. It’s the most basic and least common homeowners insurance form.
2. HO-2 (Broad Form): Offers broader coverage compared to HO-1. It covers a wider range of named perils, typically including those in HO-1 and additional perils like falling objects, weight of ice, snow, or sleet, accidental discharge or overflow of water or steam, and more.
3. HO-3 (Special Form): The most common and popular homeowners insurance policy. HO-3 is an open perils or “all-risk” policy for the dwelling (structure), covering all perils except those specifically excluded in the policy. Personal property coverage in HO-3 is usually on a named perils basis.
4. HO-4 (Tenant’s Form or Renters Insurance): Designed for renters rather than homeowners. HO-4 covers a tenant’s personal property against specific named perils and includes liability coverage but does not cover the structure itself, as it’s the responsibility of the landlord.
5. HO-5 (Comprehensive Form): Offers extensive coverage for both the dwelling and personal property. HO-5 is similar to HO-3 but generally provides broader coverage and fewer limitations for personal belongings. It’s often considered a premium or high-value policy.
6. HO-6 (Condo Form): Specifically designed for condominium owners. HO-6 covers personal property, improvements, and additions to the interior of the condo unit, as well as liability coverage. It typically excludes coverage for the structure (which is covered by the condo association’s master policy).
7. HO-7 (Manufactured Homes)

8.. HO-8 (Modified Coverage Form): Primarily designed for older homes where the replacement cost exceeds the market value. It provides limited coverage and is tailored to provide enough protection for the home’s actual cash value rather than full replacement cost.

Question 4

All the Flood Zones and their meanings

Answer 4

1. Zone X (Minimal Risk): Areas outside the 500-year and 100-year floodplains, having the lowest risk of flooding, but still susceptible to rare flooding events.
2. Zone C (Low Risk): Areas outside both floodplains with minimal flood risk, having a low chance of flooding.
3. Zone B (Moderate Risk): Areas within the 100-year floodplain but outside the 500-year floodplain, posing a moderate risk of flooding.
4. Zone V (Coastal High Hazard Area): Coastal areas facing significant risk due to high-velocity wave action and storm surge, presenting a high risk of flooding and wave impact.
5. Zone A (High Risk): Areas within the 100-year floodplain, facing a higher risk of flooding without detailed base flood elevation data.
6. Zone D (Undetermined Risk): Areas where flood hazards are undetermined due to insufficient data or lack of flood studies, warranting further assessment to determine flood risk.

Question 5

Mathematical formula for excise tax:

Answer 5

(number rounded to the nearest 500) / 12 x $1

Question 6

Mathematical steps to round a number to the nearest 500:

Answer 6

number/500

then

round that answer to the nearest whole number

then

whole number x 500