Lesson 12 - Property Insurance

Question 1

Deductible

Answer 1

-The amount of expenses that must be paid out of pocket before an insurer will pay
any expenses.

Question 2

Umbrella Policy

Answer 2

-Insurance policy that covers amounts above those covered under one or more other primary policies, and which does not pay until the losses exceed a certain sum. Also called excess insurance.

Question 3

HO-1

Answer 3

• Basic Policy
• This is a basic policy that insures the home and its contents against perils, including fire, theft, or vandalism. An HO-1 policy does not cover falling objects.

Question 4

HO-3

Answer 4

• Special Form Policy
• The most widely used and recommended homeowners policy. It covers the home for all risks or physical loss except damage caused by flood, earthquake, war, or nuclear accident.

Question 5

HO-4

Answer 5

• Tenants or Cooperative Owners Policies
• Commonly referred to as renters insurance, regardless if you are renting a home, condo, or apartment. This policy also covers cooperative owners since they hold a proprietary lease (not real property)

Question 6

HO-6

Answer 6

• Condominium Unit Owners Policies

- Insure against damage to the contents of an apartment, cooperative, or condominium.

Question 7

Flood Insurance

Answer 7

-Flood insurance is often not covered in a homeowner’s insurance plan. It may be purchased separately.
Homeowners in Special Flood Hazard Areas (SFHA) should obtain flood coverage.

Question 8

Liability Insurance

Answer 8

-Liability insurance is an example of a monoline policy.
It protects against claims alleging that one’s negligence or inappropriate action resulted in bodily injury or property damage.

Question 9

Commercial General Liability Insurance (CGL)

Answer 9

-Commercial general liability insurance is a basic business liability policy that covers four forms of injury: bodily injury that results in actual physical damage or loss, property damage that results in actual physical damage or loss, personal injury, and advertising injury.

Question 10

Actual Cash Value

Answer 10

– Actual cash value means that the insured is reimbursed for the replacement cost minus the physical depreciation of the lost or damaged property.

Question 11

Replacement Cost

Answer 11

-Replacement cost means that the insured is covered and reimbursed for the actual cost of replacing the damaged property.
For example, if a refrigerator is destroyed in a fire, the replacement cost will be the cost of buying another refrigerator.

Question 12

New York Property Insurance Underwriting Association (NYPIUA)

Answer 12

-The NYPIUA is a pool of all insurance companies writing fire insurance in New York.
It offers fire and extended coverage as well as coverage for vandalism, malicious mischief, and sprinkler leakage to consumers who are unable to purchase this type of insurance from individual insurance companies.