Intro to Homeowners Insurance Ch. 8 Flashcards
Define Vacant Dwelling
All occupants have moved out with no intention of returning and no new occupant has taken up residence, regardless of furnishings.
What are the three Homeowners Forms that can be used by insurers? Briefly describe each.
- Homeowners Basic Form- named perils only
- Homeowners Broad Form-dwelling building and detached private structures are insured on all risks basis, personal property is insured for Named Perils only.
- Homeowner’s comprehensive Form- All property (the dwelling building, detached private structures and personal property) is insured on an all risks basis.
What are the two main coverage sections on all Homeowner Forms?
Section 1- Property Coverages
Section 2- Liability Coverages
What are the four coverage components of Section 1- Property Coverage?
Coverage A- Dwelling Building
Coverage B- Detached Private Structures
Coverage C- Personal Property
Coverage D- Additional Living Expenses
Define Replacement Cost
Cost of restoring items to their original condition or buying new items of like kind and quality to the ones lost; there will be no deduction for depreciation.
Define Actual Cash Value
Replacement cost minus depreciation.
What factors are considered in calculating depreciation?
- age of the property
- condition of the property
- life expectancy of the property
What is the limit of insurance for detached private structures?
10%, in addition to the limits of insurance
Define Guaranteed Replacement Cost
The insurance company agrees to pay the full costs to rebuild, repair or replace the insured dwelling building even if those costs are greater than the amount of insurance purchased by the homeowner. Does not cover by-law requirement expenses, and requires insured to insure to 100% of the value of the property.
What is the limit of insurance on Coverage D- Additional Living Expenses?
20% of the limit of insurance provided for Coverage A-Dwelling Building
Define Fair Rental Value
When the insured’s have a tenant who is paying them rent and that tenant is forced to look for other accommodations because of insured damage to the home, the insurance company will reimburse the insured for the Fair Rental Value lost to them for the reasonable time required for repairs to be made.
Name three property exclusions in Comprehensive Forms
- property used for business or farming
- property at any fairground or exhibition
- wear and tear of property
Name three losses excluded in Comprehensive Forms
- water damage caused by flood due to rising water
- war, invasion
- damage caused by birds, vermin, rodents, except to building glass
List the four types of Liability Coverage provided on a Homeowners Form
Coverage E- Personal Liability
Coverage F- Voluntary Medical Payments
Coverage G- Voluntary Payment for Damage to Property
Coverage H- Voluntary Compensation for Resident Employees
What are two extensions of Coverage C Personal Property found in Tenants Insurance?
- improvements made by tenants
- damage up to a specified limit for damage to the inside of the premises by theft, attempted theft or vandalism
