Unit 4: Homeowners, Dwelling, & Related Coverages Intro Flashcards
occupants of 1-4 family dwellings.
Allows up to two roomers or boards per family,
_____ must reside in unit
Owner
What are the Homeowners eligibility requirements?
- Owner
- Renters residing in any building
- Dwelling under construction
- Condo & coop apartment occupants
Homeowners insurance not eligible:
1) Corporation
2) Partnership
3) Estate
4) Individual who does not occupy the premises
(exception: if a condo unit owner who rents the unit
to others is eligible)
5) Farms, except incidental farming is
eligible
Definition of Insured - Homeowners Policy
- The named insured and residing spouse.
- Residing relatives of either.
- Any person(s) under age 21 in the care of any such
persons above. - Full time students under age of 24 related to named
insured away at school. - Any person who is legally liable for animals or
watercraft owned by an insured (liability only).
An insured in the Homeowners insurance policy is any full time students under age of ____ related to named insured away at school.
24
Private Residential Occupancy - Homeowners Policy
- Insured with up to two (2) roomers or boarders.
- Incidental non-dwelling occupancies are eligible.
- The insured’s light incidental farming is eligible (does
not cover property on farm premises). - Dwellings under construction are eligible.
- Renters of a mobile home are eligible.
- Mobile homes by means of a special endorsement
are eligible.
The insured may have up to ___ roomers or boarders.
2
______ ______ is a package policy designed to protect against economic loss to residences and household personal property, and legal liabilities for injuries and damage arising from residences and personal activities.
Homeowners insurance
Broad Form
HO-2
Special Form
HO-3
Contents Broad Form (Renters)
HO-4
Comprehensive Form
HO-5
Unit-Owners Form (Condominium Policy, including those rented)
HO-6
Modified Coverage Form
HO-8
___ ____ ___ or ___ forms may be issued for two, three, or four-family dwellings jointly owned by two occupants. One of the owners is Named Insured and the other listed as Additional Insured, the 2nd owner may be issued an HO-4.
HO-2, HO-3, HO-5 or HO-8
Homeowners insurance premiums are rated on three main elements
- Fire Protection: proximity to a fire hydrant and fire
station. - Construction: mode of construction –frame, joisted
masonry, masonry, superior. - Geographical location: inland, coastal, proximity to
sinkhole, urban, suburban, rural.
Section I in each of the HO forms is divided into subsections:
- Coverages
- Perils Insured Against
- Exclusions
- Conditions
The hurricane deductible applies on an _____
basis.
annual
Homeowners Policy Coverage A — “Dwelling” covers
- the dwelling building and attached structures.
- construction materials and supplies on or adjacent
to the insured premises.
In the Condo Unit Owners policy form, HO-6 Coverage A covers. . .
- building additions and alterations.
- other real property at the condominium premises.
- property for which the insured has insurance
responsibility under an association agreement.
True or False? Under Coverage A - Dwelling “construction materials and supplies” are covered if they are adjacent to the insured residence premises.
true, construction materials and supplies are covered if they are adjacent to the insured residence premises.
Coverage B — “Other Structures” covers . . .
private structures on the residence premises that are not attached to the main dwelling such as a –
- detached garage
- guest house
- fence
- tennis court
- storage building
Coverage C — “Personal Property” covers . . .
personal property, wherever it is located, that is owned or used by “an insured.” Examples: - clothes - electronics - furniture - tools - household furnishings - lawn equipment - personal sporting equipment
Homeowners Coverage C excludes the following property –
1) Specifically insured articles
2) Animals, birds or fish
3) Motorized vehicles except those used to service an
insured’s residence or designed to assist the
handicapped
4) Tape decks, CB radios, tapes and similar equipment
designed to be operated solely by the power from
the electrical system of a motorized vehicle, but
only while the equipment is in the vehicle
5) Aircraft and parts (except model or hobby aircraft)
6) Hovercraft and parts
7) Property of roomers, boarders or other tenants,
unless such persons are related to the insured
8) Property in an apartment that is regularly rented or
available for rental to others
9) Property that is rented or held for rental to others
away from the residence premises
10) Business data whether contained in books and
paper records or electronics software media
11) Water or steam
Homeowners Coverage D-“Loss of Use” covers
increases over normal living costs if damage from a covered peril makes the residence uninhabitable (unfit) for occupancy.
Coverage D - Loss of Use provides coverage to the insured if the Dwelling is
uninhabitable
Lightning strikes Sal Sleaves’ residence premises destroying all of the electronics in the home and starting a fire which consumes over one-half of the house. As a result of the electrical damage, fire, smoke, and water damage to put out the fire the house is basically a standing total loss. How will Coverage D - Loss of Use respond if immediately after the loss the insured rented a hotel room.
COVERED BY LOSS OF USE: Loss of Use covers cost associated with normal living expenses if the residence premises is damaged by a covered peril.
Lightning strikes Sal Sleaves’ residence premises destroying all of the electronics in the home and starting a fire which consumes over one-half of the house. As a result of the electrical damage, fire, smoke, and water damage to put out the fire the house is basically a standing total loss. How will Coverage D - Loss of Use respond if the insured had expenses of drycleaning and eating out.
COVERED BY LOSS OF USE: Loss of Use covers cost associated with normal living expenses if the residence premises is damaged by a covered peril.
Lightning strikes Sal Sleaves’ residence premises destroying all of the electronics in the home and starting a fire which consumes over one-half of the house. As a result of the electrical damage, fire, smoke, and water damage to put out the fire the house is basically a standing total loss. How will Coverage D - Loss of Use respond if the home was considered a total loss and the insured rented a home during its reconstruction.
COVERED BY LOSS OF USE: Loss of Use covers cost associated with normal living expenses if the residence premises is damaged by a covered peril.
Coverage A – Dwelling limit
Stated as 100% of the dwellings replacement value.
Coverage B – Other Structures Limit
10% of the Coverage A amount (may be endorsed up or down).
Coverage C – Personal Property Limit
50% of the Coverage A amount (may be endorsed up or down).
Coverage D – Loss of Use Limit
30% of the Coverage A amount (may be endorsed up or down).
Coverage limits are expressed as a percentage of the Coverage A Dwelling amount. Coverage B is ____
% of Coverage A.
10%
Coverage limits are expressed as a percentage of the Coverage A Dwelling amount. Coverage D is ___% of Coverage A.
30%
Other Residence Coverage Limit
10% of Coverage C is extended to an “other residence”.
Money/Gold/Platinum/Silver/SmartCards Coverage Limit
$200
Business Property AWAY from the residence premises Coverage Limit
$1,500
Securities, similar property coverage limit
$1,500
Watercraft, trailers, and accessories coverage limit
$1,500
Jewelry, watches, furs, stones by theft coverage limit
$1,500
Firearms and equipment by theft coverage limit
$2,500
Silverware, goldware, pewter by theft coverage limit
$2,500
Business property on the residence premises coverage limit
$2,500
Portable electronic equipment coverage limit
$1,500
Tapes, wires, records, disks, or other media coverage limit
$250
Personal property owned by the insured and located at another residence premises is covered under the Homeowners policy up to
10% of Coverage C on the primary residence policy
What is Homeowners Program Coverage A
Dwelling
What is Homeowners Program Coverage B
Other Structures
Is NOT in the H0-4 or H0-6
EX: guest house, detached garage
What is Homeowners Program Coverage C
PERSONAL PROPERTY
Automatically 50% of Coverage A: Dwelling
What is Homeowners Program Coverage D
LOSS OF USE
The Following are included in Homeowners ______ Coverages:
- Debris removal after a loss
- Trees, shrubs, and plants
- Fire Department service charges
- Property removal to protect from further loss
- Credit card, fund transfer forgery, counterfeit
- Loss assement ($2,000 for H0-6 Condo)
- Landlord furnishings for insured who rents to other
- Breakage of building glass if not vacant
- Building ordinance 10% of Coverage A
- Additions, alterations, & additions by tenant H0-4
only
Additional
Debris removal after a loss Coverage Amount
5% of Coverage A
Trees, shrubs, and plants Coverage Amount
5% of Coverage A but no more than $500 per item
Fire Department service charges coverage amount
$500
Property removal to protect from further loss coverage amount
30 days
Credit card, fund transfer forgery, counterfeit coverage amount
$500
Association Loss assement ($2,000 for H0-6 Condo) coverage amount
$1,000
Landlord furnishings for insured who rents to other coverage amount
$2,500
Breakage of building glass if not vacant coverage amount
- includes replacement with safety glazing materials if
required by ordinance of law - covered unless home is vacant for over sixty (60)
consecutive days
Building ordinance coverage amount
10% of Coverage A
Additions, alterations, & additions by tenant H0-4 only coverage amount
10% of Coverage C
All Risk or Open Peril is . . .
protection for the insured from loss arising from any peril other than those perils specifically excluded in the policy
HO-2 Broad Form (1-4 family) Perils Insured Against
named perils for all Section I Coverages
H0-3 Special Form (1-4 family) Perils Insured Against
“all-risk” coverage for Coverages A&B and named perils of HO-2 for Coverage C
H0-4 Contents (Renters) Perils Insured Against
named perils for all Section I Coverages
H0-5 Comprehensive (1-4 family) Perils Insured Against
“open” perils coverage for Coverages A, B, & C (broadest form available) - keep in mind that “open perils” and “all risk perils” are the same.
H0-6 Unit Owners Form (Condos/Cooperatives) Perils Insured Against
named perils coverage
H0-8 Modified Form (1-4 family) Perils Insured Against
first (10) HO-2 named perils + volcanic eruption and catastrophic ground collapse; residence premises theft limited to $10,000 and building glass breakage limited to $100
The HO-2 Homeowners Insurance policy BROAD FORM perils are:
1) Fire
2) Lightning
3) Explosion
4) Windstorm
5) Hail
6) Riot or Civil Commotion
7) Aircraft
8) Vehicles
9) Smoke
10) Vandalism or Malicious Mischief
11) Theft
12) Falling Objects
13) Weight of Ice, Snow or Sleet
14) Accidental Discharge or Overflow of Water or
Steam
15) Sudden and Accidental Damage from Artificially
Generated Electrical Current
16) Volcanic Eruption
17) Catastrophic Ground Collapse (required by
Florida statute)
True or False? Catastrophic Ground Collapse is required by statute in all Florida personal lines policies.
TRUE
Homeowners Policy General Exclusions
- Earth Movement* (except catastrophic ground cover
collapse) - Water Damage: from flood, rising waters, backing up
of sewers or drains - Power Failure that occurs away from the residence
- Neglect to Preserve Property After a Loss
- War & Nuclear Hazards
- Intentional Loss by the Insured
- Governmental Action
– Earthquake*
Loss Settlement Actual Cash Value (ACV) applies . . .
- Buildings under Coverages A and B
- to Section I losses
Replacement Cost Valuation (RCV) applies . . .
- applies to the loss if coverage equals or exceeds
80% of the replacement value of the building. - proportionally to the loss if coverage is less than 80%
of the building’s replacement value.
NOTE: Florida Statute requires policies which provide RCV to pay the full RCV without hold-back for depreciation notwithstanding the repair or replacement of damaged property.
Section II - Liability Coverage contains two coverages
- E-Liability
2. F-Medical Payments to Others
What does Section II - Coverage E- Liability do?
protects the insured from financial losses associated with claims for legal liability for bodily injury or property damage to others.
What does Section II - Coverage F - Medical Payments do?
pays for medical and other related expenses for members of the public injured through the insured’s personal activities, without regard to the insured’s legal liability.
In Section II, Coverage E =
LIABILITY
In Section II, Coverage F =
MEDICAL PAYMENTS TO OTHERS
Section II - Personal (non-business) activities ___ _____ anywhere
are covered
______ __ _______: indemnifies the insured from claims made by others for the insured’s legal liability for bodily injury or property damage to others incurred at “insured locations” and from the insured’s personal activities anywhere.
Coverage E – Liability
________ ___ - ______ ______ ___ _______ : pays for medical and other related expenses for third party injuries incurred through the insured’s personal activities irrespective of legal liability (not based upon the insured’s legal liability).
Coverage F – Medical Payments to Others
What are the Insured locations?
- The residence premises described in the
Declarations - Newly acquired residences during the policy period
- Locations where an insured is temporarily residing
(i.e. a hotel room) or has rented for non-business use - Vacant land owned by or rented to an insured (but
not farm land) - Insured’s land where a one to four family dwelling is
being constructed as a residence - Cemetery plots or burial vaults
Homeowners policy Liability exclusions –
- Business or Professional Activities are excluded.
- Motorized Land Conveyances are excluded w/
exceptions
Motorized Land Conveyances exclusion are:
- Vehicles in Dead Storage and those used to service
the residence ARE COVERED. - Golf Carts at the Insured Location and Golf Course
ARE COVERED. - Owned Off-road Recreational Vehicles (RV) at
residence premises ARE COVERED. - Non-owned RVs Worldwide ARE COVERED.
- Vehicles to Assist the Handicapped ARE COVERED.
Watercraft Exclusions in the Homeowners Policy are:
- owned inboard or inboard-outboard watercraft
owned by the insured. - rented watercraft exceeding 50 horsepower.
- owned or rented watercraft if powered by a jet
pump. - owned or rented sailboats if 26 feet or longer.
- owned outboard motorized watercraft exceeding 25
horsepower are excluded at inception BUT they are
covered if acquired during the policy term.
Other Exclusions in the Homeowners Policy are:
- Aircraft (except model or hobby craft are covered).
- Damage to Property Owned by an Insured.
- Injury to any Insured.
- Property Rented to, Occupied or Used by or in the
Care of an Insured. - Insured’s Responsibilities Under a Workers
Compensation or Similar Law.
Homeowners Program - Additional Coverages are:
- Claim Expenses
- First Aid Expenses
- Damage to Property of Others
- Loss Assessment
_____ ______ – Defense cost, appeal bond premiums, judgments and prejudgment interest, including up to $250 per day for loss of earnings.
Claim Expenses
_______ _______ – Reimbursement for first aid medical expenses for injuries incurred at the time of an accident to a “non-insured” person.
First Aid Expenses
_______ __ ______ __ ______ – $1,000 coverage for property damage caused by an insured irrespective of legal liability (if not already covered under Section I).
Damage to Property of Others
______ ______ – $1,000 coverage for assessments against the insured by a property owner’s association if the loss to the association resulted from:
(1) an occurrence for which Section II coverages would apply at the residence premises, or
(2) acts or omissions of directors, officers or trustees a condominium.
Loss Assessment
The Homeowners policy provides Additional Coverages for claim expenses including up to $___
per day for loss of earnings while attending a trail at the insurer’s request.
$250
The Homeowners policy provides Additional Coverage for damage to property of others in the amount of $_____.
$1,000
Coverage E Liability: Basic Limits are $______ per occurrence.
NOTE: Statutorily Imposed Vicarious Parental Liability is capped at $10,000 in Florida.
$100,000
Coverage F Medical Payments to Others: Basic Limits are $_____ per person.
$1,000
WHAT are the conditions for deductibles?
- Hurricane Deductibles: $500 minimum applies.
- Company must offer insured hurricane deductibles of
2%, 5%, or 10% (for dwellings $500,000 and less in
value). - Policy must state not only percentage deductible
BUT MUST also provide the amount in dollars. - Hurricane deductible applies on an annual basis; not
per occurrence. - Hurricane deductibles can only be changed at
renewal. - Windstorm coverage can be completely rejected.
Any insured who rejects windstorm coverage must
hand write a specific statement and sign the
statement.
True or False? Hurricane deductibles apply per occurrence; not on an annual basis.
false. Hurricane deductibles apply on a calendar year.
Homeowners General Conditions - Cancellation Requirements:
- A notice of cancellation for non-payment of
premiums must be given with at least a 10-day
advanced notice. - A notice of cancellation for a new policy within its
first 90 days must be given with a least a 20-day
notice. - There are three exceptions to the 20-day rule:
(1) an insured’s material misrepresentation in an
application of insurance;
(2) the non-payment of a policy premium; or
(3) the insured’s failure to comply with the
inurance company’s underwriting erquirements). - There is a minimum of a 120-day notice for all
other non-renewals, cancellations, or terminations.
Florida law requires the insurer of a DP-1 policy to provide the insured with a minimum of a ____ day formal written notice of cancellation for non-payment of premium.
10
Policy Renewal requires ____ days written notice
45 days
Notice of Cancellation w/in first 90 days a policy is in force requires ____ days written notice
20 Days
Non-Payment of Premium requires ____ days written notice
10 days
Money/Securities Increase To
$1,000/$2,000
Jewelry and Furs Increase To
$5,000/$1,000 max on any 1 item
Silverware Increase To
$10,000
