Lesson 8: Homeowners, Property, Liability Ins.

Question 1

property insurance

Answer 1

Insure against losses against property
Insure against losses due to damages the insured caused to others
*must have insurable interest at time of loss

Question 2

Homeowners Policy Sections

Answer 2

Section 1: Property
Coverage A: Dwelling
Covers repair or replacement of the house, attached structures, and building materials on the premises.
Purchase an amount equal to replacement cost (the cost to rebuild) of the building.
***Insured must carry at least 80% of the replacement cost of the building (coinsurance)

Coverage B: Other Structures
detached garages, storage buildings, etc.
Limit is usually 10% of the amount of Coverage A
Other not covered if used for business purposes

Coverage C: Personal Property
furniture, electronics, clothing, paintings, etc.
Standard coverage is for actual cash value.
Limit is usually 50%

Coverage D: Loss of Use
combination of additional living expenses and loss of rental income
limit usually 30%

Question 3

Homeowners Policy Sections 2

Answer 3

Section 2: Liability
Coverage E: Personal Liability:
–Protects the insured against claims arising out of both bodily injury and property damage.
The insurer will cover both the damages and the costs of any defense of the claim or suit.
The minimum amount of coverage is $100,000 per occurrence.

Coverage F: Medical payments to others
This coverage is not liability insurance coverage and is not based on fault.
One of the following conditions must be met for an individual to receive medical payments coverage from the insured:

The injury occurs while the person has permission to be at the insured location.

The injury occurs while the person is away from the insured location and is caused by a condition at the insured location or on property immediately adjoining the insured location.

For example, ice on the sidewalk or driveway and someone slips and falls

The insured injures another person while away from the insured location.

An animal owned by or in the care of the insured injures an individual off the insured premises.

Exclusions to Coverage F (Med. Payments Only)

Coverage F will not provide coverage for bodily injuries:
Sustained by the insured or any family member.

Sustained by a regular resident of an insured location.

Sustained by a residence employee of the insured that occur outside of the scope of employment.

Sustained by anyone eligible to receive benefits for their injuries under a worker’s compensation or similar disability law.

Resulting from nuclear reaction radiation, etc., regardless of how caused.

Question 4

Auto Insurance

Answer 4

Part A: Liability Coverage
ex) Split limits of 50/100/25 means a bodily injury expense limit of $50,000 per person and $100,000 per occurrence as well as a $25,000 property damage expense limit.

Part B: Medical Payments 
Per Person, Per Occurrence Basis
$5,000 limit per person, four persons in a car, then $20,000 limit
Exclusions:
Public livery (using the car as a taxi or for another business purpose)
Racing
Auto used without permission. 
Pets if struck by the covered auto

Part C: Uninsured Motorists 
-pays what they should have paid
-Under-insured or uninsured must have been at fault
Exclusions:
Public livery
Regular use of a non-owned vehicle
Auto used without permission
Auto used in insured’s business
Coverage is not provided for punitive damages

Part D: Coverage for Damage on your auto
-Provides direct damage coverage on your covered auto and any non-owned auto
-collision - Protects against an accident involving another car, running off the road, into a creek or lake, tree, wall
-Other-than-Collision (formerly, Comprehensive)
Covers the following perils: falling objects, fire, theft, explosion, earthquake, windstorm, hail, water, flood, mischief, vandalism, riot, contact with a bird or animal and breakage of glass
-company can pay for repairs or ACV of your auto
-Exclusions:
Public livery
Radar detectors
Most electronic equipment
Nuclear damages
Auto used without permission
Auto used in insured’s business.

Part E: The duties of the insured after an accident or loss
–Notify the insurer
File a proof of loss (affidavit)
Cooperate with the insurer in the investigation of the loss
The insured must file a police report if the cause of the loss was theft or uninsured motorist

Part F: General Provisions
Only provides coverage in the United States, Puerto Rico and Canada.
A personal auto policy is not effective in Mexico.

Question 5

Personal Auto Policy Definitions

Answer 5

Your Covered Auto is:
Any vehicle shown in the policy declarations.
Any vehicle shown in the policy declarations.
Any new vehicle in addition to those shown in the declarations, but only for 30 days or until the new vehicle is reported to the insurer. The insurer will charge a premium from the date the vehicle was acquired. The new vehicle will have the broadest coverage provided on any declared vehicle for the 30-day period.
Any new vehicle in addition to those shown in the declarations, but only for 30 days or until the new vehicle is reported to the insurer. The insurer will charge a premium from the date the vehicle was acquired. The new vehicle will have the broadest coverage provided on any declared vehicle for the 30-day period.
-Any new vehicle that replaces a vehicle shown in the declarations.
-trailers the insured owns
-trailers insured does not owned but uses while covered vehicle unavail. due to loss/breakdown/repair/service

Question 6

Auto Policy Premiums

Answer 6

Based on:
Age and sex of operators
Use of the automobile
Driving record of the operators

Question 7

Personal Liability Umbrella Policy (PLUP)

Answer 7

• provides protection against legal obligations that arise from negligent acts
• for a PLUP to be utilized, an insured must be sued for over $300,000
• high limits and low cost

Some umbrella policies offer coverages that auto and home policies do not cover. Which of the following are examples of coverage provided by umbrella policies but not auto and home policies?
Libel and slander 
False arrest and unlawful detainment 

exclude professional and business liabilities
(look at slide for types prof. and bus. liability ins)