Section 3: Lesson 6 & 7

Question 1

Actual car value means:

Answer 1

replacement cost less depreciation

Question 2

HO-B policy affords what:

Answer 2

replacement cost coverage

Question 3

What is the purpose behind the coinsurance requirement?

Answer 3

to encourage homeowners to carry adequate insurance anther property.

Question 4

A policy holder is concerned about a receiving a coinsurance penalty and want to know why:

Answer 4

A penalty (reduction in payment) if a property is under-insured.

Question 5

Under HO-B or HO-C policies, if a homeowner dosent carry the right amount of insurance to comply with the coinsurance clause, application a coinsurance penalty means:

Answer 5

The homeowner would receive the greater of the ACV of the loss, or the amount of th loss less the coinsurance penalty.

Question 6

The most common Coinsurance % in homeowner’s insurance policy is:

Answer 6

80%

Question 7

If you are applying a coinsurance penalty when dealing with an HO-C policy, you should be aware that it is unique in that:

Answer 7

if the 80% coinsurance requirement is not met, claims ae adjusts to the greater of the ACV or the amount due after the coinsurance penalties taken

Question 8

Jane adjuster has already scoped a loss to which she has been assigned. she has determined that a coinsurance penalty should be applied and is now in the process of writing her repot to the insurance company. She should:

Answer 8

reduce the loss amount by the deductible before the coinsurance calculation.

Question 9

The squad footage method of deterring the replacement cost of a house is accomplished by multiplying the total square footage of the house by:

Answer 9

The cost of like kind and quality construction per square foot at todays prices

Question 10

In order to receive Replacement Cost for any covered loss under Texas HO-C, the policy must:

Answer 10

Have Coverage A limits equal to or greater than 80% of the replacement cost value of the home, excluding land, foudation of footings.