Insurance Ch 3 Flashcards
_______ insurance policies cover dwelling, contents, and personal liability under one policy.
Homeowners
The ______ is the part of an insurance policy containing representations of the applicant ( name, address, etc.).
Declaration page
Section 1 Coverage
A:
B:
C:
D:
A = dwelling
B = other structures
C = personal property
D = loss of use
Abode
Buildings
Crap
Damn! I can’t stay here
_______ insures the dwelling and any structures attached to the dwelling, such as a garage decks or fences. It also covers materials and supplies located on or next to the residence premises for construction, repair, or alteration of the dwelling or other structures on the residence premises. Land is specifically excluded from coverage.
Coverage A
_______ : other structures are set apart from the dwelling by a clear space examples include outdoor swimming pools, detached, garages, fences, patios, or detached living spaces.
Coverage B
Renters policies generally provide no Coverage ________
A or B
_________ covered anywhere in the world, not just when inside the insured home.
Homeowners policies generally ______ cover exposures related to being a landlord.
Will not.
Coverage applies for additional living expenses arising from damage to insured property. Coverage only pays for the necessary increase in living expense incurred by the insured to continue as nearly practical the normal normal standard of living.
Coverage D: loss of use
Coverage provides protection for damages for which an insured is legally liable arising out of bodily injury or property damage. The insurance company also agrees to defend the insured and has the right to settle any suit.
Coverage E: personal liability
Provides very limited amounts (1000/5000 typically) per person of coverage for necessary medical expenses of persons, other than the insured who are injured while on the insured location. This is not liability coverage.
Coverage F: medical payments
Perils
Basic form: remember WHARVVES/FLT
Windstorm, hail, aircraft, riot, vandalism, vehicles, explosion, smoke, fire, lightning, and theft
Perils
Broad form: everything in basic form plus RAFF
Rupture of a system
Artificially generated, electricity
Falling objects
Freezing of plumbing
The insurer agrees to pay for damage by any peril, except those specifically excluded
Open perils
________ is generally the appropriate choice for the CFP exam because it covers unusual risks that are not named under the basic and broad forms
Open peril coverage
Coverage for a mobile home
HO – 7
________ is broad form for all coverages whereas _______ his open perils for coverages A, B & D.
______ is much more comprehensive.
HO-2 / HO-3 / HO-3
This is a renters policy. It provides no coverage for the dwelling since the property is owned by others. It offers coverage for contents, loss, abuse, and comprehensive personal liability.
HO-4
This is a condominium policy. Normally, the condo association covers the structure. the condominium policy provides coverage for the interior. Loss assessment coverage provides protection against assessments made by a condo association because of losses to collectively owned property.
HO-6
Form HO-3 only provides _______ coverage on personal property
Broad form.
Form HO-6 loss of use limit is ______ of the policy limit on personal property
50%
Exclusions
Remember OPENN WIF
Eight general exclusions that apply to all of the homeowner forms
Ordinance of law
Power failure
Earth movement or earthquake
Neglect
Nuclear hazard
War
Intentional loss
Flood
Riot and civil commotion and explosion are _______ perils.
Covered
CLIENTs should cover valuable property like jewelry, golfers, equipment, stamps, coins, etc., by adding a _________ to their basic HO policy.
Scheduled personal property endorsement (Floater)
When losses are settled on a _______ basis, no deduction in benefits is made for depreciation. Under ________ , losses are settled under replacement cost less depreciation.
Replacement cost basis / actual cash value
The original cost is inmaterial in the calculation of actual Cash value.
When the amount of required insurance on the dwelling is less than 80%, the insurance company pays ___________ .
The greater of ACV or REPLACEMENT COST (less the deductible)
The ________ can be written on eligible vehicles, owned or leased by an individual or by spouses, living in the same household
Personal auto policy
A vehicle rented to others as a public or livery conveyance must be insured under a
———— policy.
Commercial
A _______ is any vehicle listed in the policy declarations.
Covered auto
If the new automobile replaces an existing vehicle, it is automatically insured for Parts A, B, and C. With part D, there is no automatic coverage, unless the insurance company is notified within ______ days of acquisition of the new vehicle.
14
If the spouse ceases to be a resident of the same household, he or she is still covered under the personal auto policy until the ________ of the following:
-The end of the 90 days following the spouse’s change of residency
-The effective date for the spouse’s own new policy
-The end of the policy period
Earliest
Name the four types of drivers covered by a personal auto policy
- The named insured.
- A family member who is living in the same household.
- Any person using your auto with your permission
- The spouse of the named insured living in the same household.
Under a personal auto policy,_______ provides protection against judgments and covered exposures, resulting from bodily injury and property damage liability deemed to have been caused by the insured.
Part a – liability coverage
Under a personal auto policy, with ________ liability coverage, one amount applies in the aggregate to all bodily injury and liability claims arising from one incident.
Single limit
Under a personal auto policy with______ There are separate limits that apply to each accident.
Split limits
Maximum amount payable to one person for bodily injury / aggregate that will be paid for all bodily injury claims / aggregate property damage claim
With a personal auto policy, _______ provides payment for the reasonable and necessary medical expenses of an insured as a result of an automobile accident. Only those expenses for medical services rendered within three years of the date of an accident are covered.
Part B – medical payments
True or false
The following are covered for medical payments under part, B of a personal auto policy:
The named insured, spouse, and any family member, while occupying a motor vehicle, or when struck as a pedestrian by a vehicle
Any other person who is injured while occupying a covered vehicle
True
With this part coverage of a personal auto policy, The insurer agrees to pay compensatory damages that an insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury. The coverage applies to claims for medical expenses, lost, wages, and pain and suffering, but does not include punitive or exemplary damages.
Parts C uninsured motorist coverage
Part ___ a personal auto policy is coverage for damage to your own auto; the upset of your covered auto, or its impact with another vehicle or object.
D
The following sequence must be followed as the insured pursues a property insurance claim:
- Furnish a ________ to the insurer promptly.
- __________ the claim.
- File a ________ to the insurer.
- _______ claim.
- Notice.
- Investigate.
- Proof of loss.
- Pay or deny.
The insurer may repair or replace damaged property with that of like kind or quality, rather than pay the actual cash value or replacement cost of the loss.
Replacement option
The insured must surrender ownership of lost or damaged property to the insurance company, so that a total loss can be claimed.
Abandonment or salvage
The insurer may repair or replace any part to restore a pair, or set to its value before the loss, or to pay the difference between the actual cash value of the property before and after the loss
Pair or set
The _________ is for small to medium size businesses. The normal policy is a package that provides real property, contents, and liability, protection. Professional liability is specifically excluded.
Business owners policy
________ is generally appropriate where the substandard conduct may result in bodily injury - for example, for physicians or dentists.
Malpractice insurance
Generally appropriate, where the substandard conduct may result in property damage. Such situations include damage to intangible property, such as loss of money. Should be carried by lawyers, insurance agents, stockbrokers, and financial planners.
Errors and omissions insurance
Worker’s Compensation is an example of ________.
Absolute liability
Group disability payments are ______ because group disability insurance premiums are generally paid by the employer.
Taxable
Unemployment compensation is ________.
Taxable
Premiums for the following business policies are __________ :
Worker’s Compensation
Unemployment insurance
Commercial umbrella insurance
BOP Policy
Tax deductible
All the policy premiums create a tax deduction to the business. They represent necessary business expenses.
FUTA is the unemployment tax the business pays to the federal government.
Employer paid FUTA is______.
Tax-Deductible
______ is a renters policy. Renters do not need coverage on the structure. It has broad form coverage on personal property. The policy includes medical payments. The policy is for renters, not condo owners.
HO-4
Under the auto policy, earthquakes, floods, and falling objects are ________.
Covered
Normal wear and tear is not covered.
To collect under the uninsured motorist provision of the personal auto policy, the policyholder must file a claim against ______.
His own insurer.
