Study 8 - Other Property Coverages Flashcards

1
Q

Secondary Home

A

A traditional home, unlike a summer cottage, that the insured lives in often throughout the year

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2
Q

High Value Homes

A

A distinctive home with a high-value replacement value - typically greater than $1 million

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3
Q

High-Value Home Insurance

A

Requires specialized insurance coverage that costs more than standard insurance. Includes:

  • Kidnap expense coverage
  • Equipment breakdown - provides a specified amount for accidental breakdown of the equipment or system including lack of maintenance
  • Home invasion coverage - high value homes are more attractive to thieves and burglars
  • Home appraisal expenses
  • Disappearing deductible - waive the deductible on losses above a specified amount
  • Cash-out option - insured able to receive cash payment up to the policy limit without deduction for depreciation
  • Increased special limits -
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4
Q

Mobile Home

A

Manufactured housing, commonly called house trailers. Usually placed in one location and left there permanently, but retain the ability to be moved as required in many areas.

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5
Q

Modular Home

A

A type of manufactured housing that is built in a factory and moved to a building site in large individual sections. They are not movable and may be considered a permanent structure.

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6
Q

Mobile Homeowners Form

A

There is a single IBC mobile homeowners form. It insures against named perils, which makes it most directly comparable to the IBC homeowners basic form.

Coverage A includes the optional extension of emergency removal expense which permits the insured to use up to 5% of the amount of insurance under coverage A for any reasonable expense incurred to remove the building to protect it from an insured peril. An example is a fire in the in the surrounding area.

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7
Q

2 Exclusions under the mobile homeowners form

A
  1. Loss or Damage occurring while the building is being moved, except in an emergency to protect it when endangered by an insured peril
  2. Loss due to conversion, embezzlement, or secretion by any person in possession of the building
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8
Q

Rented Dwellings

A

A house purchased by the insured not for use as their principal residence but purely for investment purposes. They can generate a higher than acceptable loss frequency if not underwritten properly. Hazards include:

  • Maintenance - may not be convenient for the owner to go to the dwelling on a regular basis
  • Marijuana Grow Ops and Meth Labs - Fires are more likely to occur, as are burglaries, and vandalism
  • Vacant dwelling - if a landlord does not have a prospective tenant ready to move in
  • Occupancy - Too many renters - can change the occupancy to a boarding house which is a material change in risk
  • Vandalism

The residential basic form is the most suitable for a rented dwelling

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9
Q

Accommodation Sharing (Airbnb)

A

An arrangement set up by means of a website or mobile app in which a property primarily occupied by its owner is rented for a short time period to a third party

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10
Q

Accommodation Sharing Issues

A

The homeowners forms may have a number of exclusions that limit coverage for exposures arising from accommodation sharing. Including:

  • Damage to Dwelling and Contents of Hosts - excludes damage to the dwelling and contents if the building is used for business purposes. Airbnb includes coverage to protect hosts from damage caused by guests under its “host guarantee”
  • Damage to Property of Guests - not covered under the host’s insurance policy due to the exclusion for property of roomers or boarders
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11
Q

Seasonal Dwellings

A

A second dwelling typically located in rural settings or on a lakefront that is owned by the insured. Seasonal dwellings are usually covered for limited named perils and may be allowed to remain unoccupied for longer periods of time without penalties.

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12
Q

Seasonal Residence Form

A

Named perils policy similar to the residential basic form.

The standard named perils omit vandalism or malicious acts but allows the insured to add coverage for an additional premium for that peril - burglary or robbery, vandalism or malicious acts, glass breakage

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13
Q

Hobby Farms

A

To cover small, personal farming operations, many insurers offer a special policy form or rider to cover limited farming activities. This form may be a hobby farm policy, sometimes called a country estate policy, or a hobby farm rider attached to a homeowners form

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14
Q

Determining whether a risk qualifies as a hobby farm

A
  • Primary dwelling owner-occupied
  • Less than 25 acres
  • Max of 5 farm animals
  • Max of 10 poultry
  • Max income from farming operations of $10,000
  • No employees involved in farm operations
  • No custom farming, horse boarding, training, or riding facilities
  • Max $25,000 of farm equipment
  • Max $25,000 of farm-related outbuildings
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15
Q

What is covered under a hobby farm policy

A
  • Outbuildings used for farming purposes
  • Livestock, which may include coverage for livestock mortality, feed, and other materials such as saddle and tack
  • Poultry and eggs
  • Farm produce
  • Farm equipment
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16
Q

Condominium

A

Individual ownership of a single unit in a multi-unit building or group of buildings, including a percentage interest in the part of the total property owned jointly by all unit owners. Condominium property requires special insurance treatment.

17
Q

Standard Unit Bylaw

A

Clarifies who is responsible - the unit owner or condominium corporation - for loss or damage to a unit and whose insurance policy should respond for repairing the improvements when damaged

18
Q

Coverages under the condominium unit owners forms

A

Coverages A & B for Dwelling and detached private structures are not included - covered under the condo corp’s policy
Coverage C - Personal Property
Coverage D - Additional Living Expense
Coverage U1 - Unit Improvements and Betterments
Coverage U2 - Loss Assessment - special assessment charged by the condo corporation if the insurance for the building is insufficient. Coverage U2 will pay up to the specified amount for the insured’s share of any special assessment
Coverage U3 - Unit Additional Protection - Insures the unit, excluding improvements and betterments to a specified amount if the condo corp’s insurance is inadequate, ineffective, or non-existent

19
Q

Tenants Forms

A

Tenants forms are designed to cover insureds who do not own the buildings or units they occupy as principal residences. They provide coverage for the tenant’s personal belongings not covered by the landlord’s policy.

20
Q

Types of Tenant Forms

A

Offered in a basic and comprehensive form. Coverage A & B is omitted as the dwelling or unit is covered under the landlord’s policy.

Coverage C - Personal Property
Coverage D - Additional Living Expenses

Extensions include tear out and damage to dwelling under certain circumstances