Property and Casualty Insurance Flashcards
Name the 12 perils covered by basic homeowners insurance
Fire Lightning Windstorm Hail Riot or civil commotion Aircraft Vehicles Smoke Vandalism or malicious mischief Explosion Theft Volcanic eruption
Name the 6 perils covered by broad coverage
Falling objects
The weight of ice, snow or sleet
Accidental discharge or overflow of water or a stream
Explosion, cracking, burning, or bulging of hot water heater, air con, fire sprinkler or household appliance
Freezing of the above systems
Sudden and accidental damage from an artificially generated electrical current
What is open-perils coverage and what are the exclusions?
This coverage is so broad that it covers everything excluding: Earthquakes Floods Neglect War or nuclear hazards Power failure Intentional loss
What are the homeowners policy sections and their sub-coverages?
Section I: Property loss
- Coverage A: insures the dwelling
- Coverage B: insures other structures
- Coverage C: insures general personal property
- Coverage D: provide loss-of-use coverage
- Coverage B-D are a percentage of Coverage A*
Section II: Liability loss
- Coverage E: comprehensive liability
- Coverage F: medical payments to others
What is the HO-2 policy?
Broad form (named perils). Provides broad coverage for dwelling and personal property
What is the HO-3 policy?
Special form (open perils). The most popular homeowner policy. Real property is covered on an open-peril basis unless specifically excluded. Covers all perils in HO-2 as well
What is the HO-4 policy?
Contents broad (tenants or renters). Covers personal liability and loss of use
What is the HO-5 policy?
Comprehensive form. Similarly to HO-3, but personal property is also on open peril basis
What is the HO-6 policy?
Unit (condominium) form. Provides coverage for condo owners personal belongings and any structural area the condo owner is responsible for
What is the HO-8 policy?
Modified form for special risks. Use for older homes that have replacement costs exceeding its market value. This policy will provide replacement costs, labor and material, necessary to get the dwelling functional
What is inland marine or “floater” insurance?
Used to cover more valuable personal property rather than less valuable items around the house. (An art collection vs a blender)
Covers articles in transit
What is the market value of a home?
The price a willing buyer and willing seller, would exchange property
What is the assessed value of a home?
The value at which the taxation authority would levy property taxes - typically 60-80% of the market value
What is the replacement cost value of a home?
The amount it would cost to rebuild the home as is. This is the amount that should be insured
What is the coinsurance provision?
A provision that requires homeowners to insure at least 80% of their home’s replacement value.
What is guaranteed replacement costs?
A provision that insures replacement above 100% to guard against natural disasters when the cost of rebuilding goes up.
What is the inflation guard endorsement?
It automatically increases the dwelling coverage by an amount usually tied to an index
What are usual exemptions to comprehensive personal liability (CPL) insurance?
Professional or business liability Aircraft Watercraft Automobiles Communicable disease Rental property
What are the various types of liability policies?
HO, section II, Coverage E: comprehensive personal liability (CPL)
HO, section II, Coverage F: Medical payments to others
Personal injury liability: torts from certain injuries
Personal Liability Umbrella Policy (PLUP)
What are the three types of personal automobile policy (PAP) coverages?
Legal liability
Injury to the insured and family
Damage to the vehicle
What are the 6 parts to the personal automobile policy (PAP)?
Part A: liability coverage Part B: Medical payments coverage Part C: Uninsured motorist coverage Part D: Coverage for damage to your auto Part E: Duties after an accident Part F: General provisions
What are insurance endorsements?
Additions or deletions to the policy
What are monoline forms?
These are specific types of loss policies. Strung together, they can protect a businesses specific line of work
In Package Coverage insurance, what are the four sections of the policy?
Common Policy Declarations: defines the insured, date of policy and the premium for applicable coverages
Common Policy Conditions: contains provisions common to most types of coverage
Common Condition form: contains provision peculiar to this type of coverage
Exclusion: what the policy won’t cover
