Unit 4: Homeowners, Dwelling, & Related Coverages Intro Flashcards by Berta Jose

occupants of 1-4 family dwellings.
Allows up to two roomers or boards per family,
_____ must reside in unit

Owner

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What are the Homeowners eligibility requirements?

Owner
Renters residing in any building
Dwelling under construction
Condo & coop apartment occupants

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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

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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).

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An insured in the Homeowners insurance policy is any full time students under age of ____ related to named insured away at school.

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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.

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The insured may have up to ___ roomers or boarders.

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______ ______ 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

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Broad Form

HO-2

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Special Form

HO-3

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Contents Broad Form (Renters)

HO-4

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Comprehensive Form

HO-5

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Unit-Owners Form (Condominium Policy, including those rented)

HO-6

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Modified Coverage Form

HO-8

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___ ____ ___ 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

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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.

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Section I in each of the HO forms is divided into subsections:

Coverages
Perils Insured Against
Exclusions
Conditions

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The hurricane deductible applies on an _____

basis.

annual

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Homeowners Policy Coverage A — “Dwelling” covers

the dwelling building and attached structures.
construction materials and supplies on or adjacent
to the insured premises.

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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.

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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.

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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

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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

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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

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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

1. 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.

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

Firearms Increase To

$6,500

Business Property Increase To

$10,000

Electronic Apparatus Increase To

$6,000

Property at Secondary Residence Increase To

Higher Limits per Insurer Underwriting Guidelines

Loss Assessment increases to

Higher Limits per Insurer Underwriting Guidelines

Ordinance or Law Increase To

25% and 50% of Coverage A

Inflation Guard Increase To

% Dwelling increase to match construction cost increases

Homeowners insurance premiums are rated on three elements:

1. Fire Protection 2. Construction 3. Geographical location

Fire Protection means

proximity to a fire hydrant and fire station.

Construction means

mode of construction – frame, joisted masonry, masonry, superior.

Geographical location means. . .

inland, coastal, proximity to sinkhole, urban, suburban, rural.

The Dwelling Program insures –

- One to four-unit family dwellings. - Mobile Homes not having more than one apartment. - Dwellings rented to others by the owner. - Dwellings owned by corporations or other business entities. - Owner-occupied dwellings not eligible for homeowners insurance.

The Dwelling Policy can insure all BUT which of the following: a. owner-occupied dwellings not eligible for homeowners insurance b. dwellings rented to others by the owner c. corporately owned dwellings d. one to eight-unit family dwellings

d. one to eight-unit family dwellings

three Dwelling Coverage forms are –

1. DP-1 – Dwelling Property Basic Form Causes of Loss 2. DP-2 – Dwelling Property Broad Form Causes of Loss 3. DP-3 – Dwelling Property Special Form Causes of Loss

DP-1 is

Dwelling Property Basic Form Causes of Loss

DP-2 is

Dwelling Property Broad Form Causes of Loss

DP-3 is . . .

Dwelling Property Special Form Causes of Loss

The Dwelling Fire coverages are

``` A – Dwelling B – Other Structures C – Personal Property D – Fair Rental Value E – Additional Living Expenses ```

Deductibles are required to be listed in dollar amounts even if a percentage hurricane deductible is selected:

- The Standard deductible is $500 for all perils other than hurricane. - Hurricane deductible: is a minimum of $500 with the option of 2% – 5% – 10% of the stated Dwelling amount. - The All- Peril deductible applies on a per occurrence basis. - Hurricane deductibles apply on an annual basis (not per occurrence).

True or False? The Dwelling policy has coverage for Loss of Fair Rental Value or Additional Living Expenses depending on who lives in the home.

TRUE. the Dwelling policy has coverage for loss of Fair Rental Value or Additional Living Expenses depending on who lives in the home.

Coverage A – Dwelling covers –

- Specifically listed dwelling including its additions. - Building and outdoor equipment located on the premises used in the service of the building. - Building materials on or adjacent to the premises for use in alteration or repair.

_______ ___ - _______ _______ covers - Coverage ___ covers (this coverage must be selected and is not an automatic percentage of Coverage A) - Detached structures on the dwelling premises not used for commercial, farming, manufacturing and not rented or held for rental to others (except rented solely for a private garage or rented to a tenant of the main dwelling) Examples – - Fence - Shed - Detached Garage - Mother-in-Law Suite - Above Ground Pool

Coverage B – Other Structures covers

_____ __ _____ Property covers: - personal property usual to a dwelling occupancy. - personal property. - in the dwelling OR on the dwelling premises AND - which belongs to the insured OR insured’s family members OR guests or servants.

Coverage C Personal Property

True or False? Coverage C – Personal Property can be extended to guest and household servants if their property is in or on the dwelling premises.

It is true, Coverage C – Personal Property can be extended to guest and household servants if their property is in or on the dwelling premises.

Coverage D - Fair Rental Value :

- reimburses the insured for the fair rental value (the loss of fair rent) of the insured property. IF - damaged by a covered peril. AND - the dwelling is uninhabitable. - payments compensate for the necessary period of restoration.

True or False? Coverage D – Fair Rental Value requires that the insured dwelling be both damaged by a covered peril and be uninhabitable.

Right Again!!!, Coverage D – Fair Rental Value requires that the insured dwelling be both damaged by a covered peril and be uninhabitable.

Coverage ___ - Additional Living Expenses - Coverage __ - compensates the insured for the additional expenses incurred by the insured for the maintenance of the insured’s normal standard of living. IF - the insured’s property is damaged by a covered peril and - the dwelling is uninhabitable - payments compensate for the necessary period of restoration. - the coverage is available by endorsement on the DP- 1 policy form.

Coverage E

Coverage E - Additional Living Expenses compensates the insured for their additional expenses incurred to maintain their normal standard of living for:

the necessary period of restoration

The Dwelling Fire policy’s general exclusions include:

- Loss from enforcement of any law regulating use, construction, demolition or repair of property. Earth movement*. - Power interruption if the damaged power source is at other premises. - Neglect of the insured to protect property from damage. - War, Nuclear hazards, Intentional loss. - Governmental action. - Water damage from flood, rising waters, backing up of sewers or drains, overflow from a sump, or subsurface water. DP-1 excludes outside lawns, trees, shrubs or plants.

WHAT are the coverage forms?

1. DP-1 Basic Form 2. DP-2 Broad Form 3. DP-3 Special Form

Section I excludes loss from earth movement including:

a. earthquake, land shock waves or tremors before, during or after a volcanic eruption. b. landslide, mudslide or mudflow. c. subsidence or sinkhole. d. any other earth movement including earth sinking, rising or shifting.

Coverage B - Other Structures coverage in the DP-1 policy covers up to ____ % of the Coverage A - Dwelling limit.

10%

True or False? In the DP-1 policy, the Other Coverage section does increase the limits of insurance.

FALSE. In the DP-1 policy, Other Coverage DOES NOT increase the limits of insurance.

All of the following are OTHER COVERAGES in the DP-1 policy EXCEPT: 1. cost for reasonable repairs 2. governmental action 3. debris removal 4. fair rental value up to 20% of Coverage A

governmental action

In the DP-1 policy, OTHER COVERAGES provides property away from the insured premises coverage up to ____% of the Coverage C limit.

10%

The DP-1's Other Coverages provides OTHER STRUCTURES coverage up to 10% of the Coverage A Dwelling limit. 10% of Coverage C for property away from the residence premises and Fair Rental Value up to _____ of Coverage A Dwelling.

20%

The DP-1 policy form insures against the basic perils of:

1. Fire & Lightning 2. Explosion (explosion in the covered property) 3. Catastrophic Ground Collapse (by statute in Florida)

The DP-1 can be endorsed with Extended Coverage (EC) insuring against the additional perils of –

- Windstorm - Hail - Explosion (internal and external explosions) - Riot or civil commotion - Aircraft & Vehicles - Smoke (excluding smoke from fireplaces, agricultural smudging or industrial operations) - Volcanic eruption

True or False? Catastrophic Ground Collapse is a required peril in the DP-1 policy form by Florida statute.

true. Catastrophic Ground Collapse is a required peril in the DP-1 policy form by Florida statute.

Vandalism can also be added to the policy when Fire and EC coverage have been selected – Vandalism or malicious mischief (VMM) –

- excludes damage to building glass. - excludes crime losses (except building damage caused by burglars). - excludes coverage for vacancy of 60 or more consecutive days immediately preceding the loss.

Vandalism can only be added to the DP-1 policy form when Fire and ______ ________ have been selected.

Extended coverage

DP-1 Loss Settlement =

Actual Cash Value (ACV)

DP-1 Other Insurance provision =

pro-rata

A notice of cancellation for a new policy within its first 90 days must be given with a least a ____-day notice.

Three ________ 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 insurance company’s underwriting requirements).

EXCEPTIONS

There is a minimum of a ____-day notice for all other non-renewals, cancellations, or terminations.

120

WHAT does DP-2 Broad Form Cover? | Includes “FIRE”, EC, and VMM perils of DP-1 and add the following:

- Damage by Burglars - Falling Objects - Weight of Ice, Snow or Sleet - Accidental Discharge or Overflow of Water or Steam including – - Sudden and Accidental Tearing Apart, Cracking, Burning or Bulging including Freezing from within - Steam or Hot Water Heating system – Plumbing – Heating/Air Conditioning – - Sprinkler System, or Household Appliance - Sudden and accidental damage from artificially generated electrical current - Volcanic eruption

``` All of the following are broad form perils EXCEPT: A. falling objects B. weight of icem snow, or sleet C. earthquake D. damage by burglars ```

damage by burglars

DP-2 includes all of the DP-1 “OTHER COVERAGES” and adds the following:

- Other Structures coverage up to 10% of Coverage A as additional amounts of insurance. - Improvements, alterations and additions as a Renter up to 10% of Coverage C as additional amounts of insurance. - Thirty days coverage for removed property at temporary locations when property is removed from a premises endangered by an insured peril. - Coverages D and E are both covered up to 20% of Coverage A – as additional amounts of insurance no monthly limit as in DP1. - 5% of Coverage for loss to trees, shrubs and plants with a $500 limit per any one item. - Collapse. - Breakage of glass or safety glazing material – 60 day vacancy exclusion applies. - Building Ordinance or Law 10% of the Coverage A limit if the insured is the building owner – 10% of Coverage B if the insured is a tenant. - Loss settlement on building structures on a RCV basis.

True or False? The DP-2 covers building structures on a Replacement Cost basis.

true. The DP-2 covers building structures on a Replacement Cost basis.

All of the following are DP-2 "Other Coverages" EXCEPT: A. building ordinance or law up to 10% of Coverage A B. breakage of glass or safety glazing material C. other structures covered up to 10% of Coverage A D. inherent vice

inherent vice

Special Form DP-3 covers building structures on an “open peril”, the same as DP-2, except

for such things that are specifically excluded.

________ covers for enumerated named perils on an Actual Cash Value settlement basis.

Basic Form DP-1

_______ covers all DP-1 coverages, adds several additional named perils, includes broadened “Other Coverages”, and uses a RCV loss settlement basis on buildings.

Broad Form DP-2

_________ includes all features of Broad Form DP-2 and covers buildings on an open peril basis.

Special Form DP-3

- Automatic Increase in Insurance: provides an annual percentage increase in Coverages A & B. - Building Ordinance or Law may be added to the DP- 1. - Building Ordinance or Law may be increased beyond the 10% limit on DP-2 or DP-3. - Building additions and alterations, and condo association assessments may be added to a condo policy. - Business personal property may be covered by endorsement. - Broad Form Theft may be added by endorsement. - Limited Form Theft may be written for non-owner-occupied dwellings – on-premises only. - Personal Liability coverage available by endorsement. All of these describe what?

Dwelling Fire Policy - Options

In the Dwelling Fire policy forms the exposure to and from loss by THEFT may be: a. both statements are correct b. added with limited form on-premises only theft for non-owner occupancies c. neither statement is correct d. added with a broad form theft endorsement for owner occupied dwellings

both statements are correct

_____ is defined as the partial or complete inundation of two or more acres of normally dry land or of two or more properties (with one of the affected properties being an insured property) from: - Overflow of inland or tidal waters. - Unusual and rapid accumulation of runoff of surface waters from any source. - Mudflow.

Flood or Flooding

By FEMA definition, a covered flood loss can be caused by ALL but which of the following? a. unusual and rapid accumulation of runoff of surface waters from any source b. wind driven rain through "any" opening c. mudflow d. overflow of inland or tidal waters

wind driven rain through "any" opening

By FEMA definition, a covered flood loss can be caused by ALL but which of the following? a. overflow of inland or tidal waters b. a leaky old hot water tank c. a broken water pipe in the kitchen d. unusual and rapid accumulation of runoff of surface waters from any source

- a leaky old hot water tank | - a broken water pipe in the kitche

The peril of Flood or Flooding is so catastrophic in nature that the Federal Government has become the dominant writer of Flood Insurance through the ...

National Flood Insurance Program (NFIP).

Flood insurance is available only for:

- “eligible” buildings. OR - “eligible” contents within “eligible” buildings. - coverage is available only if the building or contents are located within an “eligible” community. The NFIP permits private insurers to offer “Write Your Own” programs which are backed by the NFIP 100%.

- An _____ ________ is one that adopts and enforces federal floodplain management regulations that meet National Flood Insurance Program criteria. - NFIP flood insurance IS NOT available in any ______ that HAS NOT adopted and enforced federal floodplain regulations.

“eligible community”

- Communities apply for admittance to the NFIP program and request a study of the community’s potential for flooding. - The study determines the community’s Flood Hazard Boundary Map and limited coverage amounts then become available.

NFIP Emergency Program

In the NFIP emergency program, communities apply for admittance to the NFIP program and request a study of the community's potential for _____.

flooding

- Subsequent to the initial study a more detailed study is undertaken. This study determines the community’s Flood Insurance Rate Map (FIRM). - Higher limits of coverage become available after the community agrees to pass building code and zoning ordinances designed to lessen or eliminate future flooding.

NFIP Regular Program

What is determined in the REGULAR PROGRAM detailed study?

Flood Insurance Rate Map (FIRM)

______ ________ are structures located in an eligible community – - they are affixed to a permanent sit and - have two or more outside rigid walls and a fully secured roof and - have 50% or more of the value above ground level

Eligible buildings

_____ ______ include – - Property located in a fully enclosed building or secured to the building to prevent flotation out of the structure

Eligible contents

__________ - covers 1–4 family dwellings and detached garages. - detached garages are covered up to 10% of the dwelling limit (not an additional amount of insurance). Other detached structures at the residence premises which service the dwelling are insured under the dwelling form but these other detached structures require a separate Flood insurance policy (examples would include: garage apartments, utility buildings, storage sheds, etc.)

The Dwelling Form

_________________ (commonly referred to as PRP) is: - written for all risks except those eligible for the RCBAP - available only in flood zones B, C, and X; and is - subject to specific pre-packaged coverage limit combinations

The Preferred Risk Policy

The Preferred Risk Policy (PRP) is available in all of the following flood zones EXCEPT? C B X A

_________ is – | for all buildings and/or contents not eligible for coverage under the Dwelling Form.

The General Property Form

_____________ (RCBAP) is for one or more residential units if at least 75% of total floor area is residential and the building is located in a Regular Program Community. The picture below is of the Gateway at Riverwalk in Sanford, Florida. Gateway has Retail and Offices on the first floor and floors two through six are residential. Gateway would qualify because it has 75% of its total floor area as residential.

Residential Condominium Building Association Policy Form (RCBAP)

______ values losses on a - replacement cost basis for single family building losses of a principal residence; keep in mind – the insured must live in the dwelling at least 80% of the time and the dwelling must be insured for at least 80% of its replacement cost. - building losses in the Residential Condominium Building Association Policy (RCBAP) are also settled on a replacement cost basis. - all other flood losses are settled on an actual cash value basis.

The Flood Insurance Policy

NFIP flood policies covering a principal residence cover losses on a ______ _______ basis if the dwelling is insured for at least 80% of its reconstruction value.

replacement cost

_______ _______ can be written on a mono-line basis or as part of a personal lines property policy;

Personal Liability

_______ ______ covers – - liability at private residences and the personal activities of an insured. - liability coverage is extended to anyone who becomes legally responsible for animals or watercraft owned by an insured. - by policy definition an insured can be: the named insured and residing spouse; residing relatives of either and any person under age 21 in the care of any such persons. - the basic policy limits are - $100,000 for Liability and $1,000 for Medical Payments to Others. - $1,000 for Damage to Property of Others. and - statutorily imposed vicarious parental liability with a $10,000 cap.

Personal Liability

Coverage may also be provided by endorsement to cover liability for certain watercraft – - sailboats 26 feet or more in length can be covered, with or without ancillary power - watercraft up to 26 feet in length and powered by an outboard motor exceeding 25 horsepower can be covered with either an inboard motor or an inboard- outboard motor

Watercraft Liability

policies provide increased liability limits on an excess or additional basis. 2 TYPES: - Follow Form Excess Liability - Stand Alone Excess Liability

Excess Liability

: which provides coverage in excess of underlying limits applying the exact same coverages, conditions, provisions, and exclusions as the underlying policy. NOTE: Just remember that ‘follow form’ provides less coverage.

Follow Form Excess Liability

: which provides coverage in excess of underlying limits but does not apply the same conditions, provisions, or exclusions as the underlying policy.

Stand Alone Excess Liability

________ AND _____ Policies provide additional liability amounts with broadened coverage. - Broadened coverages may include personal injury, some professional activities, and watercraft liability. - Umbrella policies have a self-insured retention (SIR) which is the insured’s first dollar responsibility if the umbrella policy becomes primary coverage.

Excess and Umbrella

Follow Form Excess Liability: provides coverage in excess of underlying limits applying the ______ same coverages, conditions, provisions, and exclusions as the underlying policy.

EXACT

- covers cargo travelling over land. - personal inland marine coverages are rated based as a rate per $100 of insurance. Example: Acme Jewelry Insurance Company charges $2 for every $100 of Jewelry coverage. Jill Jones has a $10,000 engagement ring, if she obtains a policy with Acme to insure the ring the policy will cost $200.

Inland Marine Insurance

The _______ _______ of eligible Marine risks categories includes –

- Imports - Exports - Domestic Shipments - Instrumentalities of Transportation or Communication - Personal Property Floater Risks - Commercial Property Floater Risks

Specific classes of property can be COVERED in an ____ _____ (IM) policy or scheduled in a Homeowners policy (using the Scheduled Property Endorsement).

Inland Marine (IM)

Standard classes of eligible property in an IM or homeowners policy include –

``` cameras fine arts golfer’s equipment jewelry furs musical instruments stamps and coin collections silverware ```

_________________ – provides the ability to insure one or many classes of scheduled property; the classes of property and amount of insurance are scheduled. Coverage is on an Open Perils cause of loss – world-wide coverage – zero $$$ deductible applies. Loss valuation options include: (1) the cost to repair or replace; (2) specified scheduled “agreed value”; (3) ACV..

The Personal Articles Floater

_________: at the insurer’s discretion the company may elect to repair or replace or to restore the pair or set to its original value, or to pay the difference between ACV before and after the loss.

Pairs, Sets and Parts provision:

____________: is EXCLUDED in the PAF – inherent vice is an internal quality of the property which leads to its own damage; basically due to materials used (paper or fabric with a high acid content) or construction methods (cracking wood, faulty glue, weak metals) the item is damaged without any external cause or force. Consider for example: – large sculptures made of metal with weak soldering at joins – antique works made of old wood that may crack, extend, or widen – limestone and marble slabs or similar fine art objects that may shatter along internal fault lines

Inherent vice:

The PAF covers ______ which include – - items of personal adornment containing precious metals, jewels, pearls and/or semiprecious stones. - personal items are also eligible: including pens, flasks, smoking equipment, trophies and similar items. - newly acquired property is covered with – - 30 days automatic coverage for same class of property. - up to 25% of the policy coverage limit. - with a $10,000 maximum for newly acquired property.

Jewelry

The PAF covers ____ which include – - fur, imitation fur, garments trimmed in fur and fur rugs. - newly acquired property is covered with – - 30 days automatic coverage for same class property. - up to 25% of the policy coverage limit. - with a $10,000 maximum for newly acquired property.

furs

The PAF covers _____ which include – - personal photographic equipment and property such as binoculars, telescopes and microscopes. - newly acquired property is covered with – - 30 days automatic coverage for same class property. - up to 25% of the policy coverage limit. - with a $10,000 maximum for newly acquired property.

cameras

The PAF covers ________ which include – - musical equipment and sheet music. - personal equipment used in a paid performance can be covered by endorsement. - musical instruments used professionally are specifically excluded.

Musical Instruments

The PAF covers ______ which include – - silverware, silver-plated ware, gold-ware, gold-plated ware and pewter-ware.

silverware

The PAF covers _________ which include – - golf clubs, equipment and clothing (including street clothing contained in a locker). - golf balls for loss by fire or burglary (by forcible entry into a building, room, or locker). - the PAF covers golfer’s equipment on a blanket coverage basis only.

Golfer’s Equipment

The PAF covers _________ on a – - scheduled basis or blanket coverage basis. - the coverage is on an Agreed Value basis. - there is an exclusion for property on exhibition away from the insured premises; additionally. - there are exclusions for repairing, restoring, or retouching damage. The PAF covers private collections only of: paintings, etchings, statuary, marbles, bronzes, antique furniture pictures, tapestries, and other bona fide works of art such as valuable rugs, rare books, antique silver, manuscripts, porcelains, and rare glass.

Fine Arts

_______ Newly acquired property has – - 90 days automatic coverage for same class property. - is covered up to 25% of the policy limit. - the loss valuation of newly acquired property is at Actual Cash Value.

Fine Arts - Newly Acquired Property

The PAF covers ________ collections on a – - scheduled or blanket basis. - there is a $1,000 limit for unscheduled coin collections. - there is a maximum of $250 for any one stamp, coin or individual article. Damage exclusions include – (1) repairing, restoring, or retouching damage. (2) marring, inherent defect, climate damage. (3) collections in the custody of a transportation company. (4) disappearance.

stamps and coin

John wants to purchase a Personal Articles Floater to cover his professional musical equipment

The PAF specifically EXCLUDES coverage for professional musical equipment

All of the following items are eligible for coverage under the PAF covering furs EXCEPT: - IMITATION FUR - FUR RUGS - STUFFED ANIMALS - FUR GARMENTS

stuffed animals

All of the following items are DAMAGE EXCLUSIONS in the PAF covering Stamp and Coin collections EXCEPT: - marring, inherent defect, climate damage - theft - repairing, restoring, or retouching damage - damage when the insured property is in the custody of a transportation company

THEFT

True or False? Fine Arts can only be covered on a blanket basis.

false. Fine Arts can be scheduled per item or covered on a blanket basis.

Property covered on the PAF are covered on a ______ .

open perils cause of loss form

The PAF covering jewelry provides coverage for newly acquired property for the same class of property for ____% of the policy coverage limit with a $10,000 maximum.

25%

True or False? Golfer’s equipment can only be covered on a blanket basis.

true golfer’s equipment can only be covered on a blanket basis.

The Personal Articles Floater –

- the classes of property and amount of insurance are scheduled. - coverage is on an Open Perils cause of loss – world-wide coverage – zero $$$ deductible applies.

1) Water 2) Tear 3) Deteriorations 4) Inherent vice 5) Government action 6) Insects 7) Vermin

Exclusions to Open Perils:

In the Dwelling Program Coverage D remburses the insured for _____ of the insured property.

fair rental value

some classes of propert can be covered in an Inland Marine policy or _______ in a Homeowners policy.

scheduled

This Homeowners policy endorsment provides an additional amount of insurance over and above the stated Coverage A Dwelling amount.

Extended Replacement Cost

In the Personal Inland Marine policy coverage for Fine Arts excludes property on _______ away from the insured permises.

Exhibition

This Homeowners policy coverage covers increases over normal living costs if damage from a covered peril makes the residence unfit for occupancy.

Coverage D - Loss of Use

The Homeowners policy per occurrence limit for loss of money or related property.

$200

The Homeowners policy per occurrence limit for loss to watercraft.

$1,500

The Homeowners policy per occurrence limit to loss by theft of silverware, goldware, and pewterware.

$2,500

The Homeowners policy per occurrence limit to loss by theft of firearms and related equipment.

$2,500

The Homeowners policy per occurrence limit for loss to to business property on the residence premises.

$2,500

The Homeowners policy "per occurrence limit" for loss to business property way from the residence premises.

$1,500

The Homeowners policy Additional Coverage - fire department service charge limit. .

$500

The Homeowners policy Section II basic limit of Medical Payments to Others coverage.

$1,000

This Homeowners policy Additional Coverage reimburses the insured for such expenses incurred for first aid to others at the time of an accident.

First Aid Expenses

The DP-1 Dwelling policy insures on a ___________ form cause of loss.

Basic

The DP-2 Dwelling policy insures on a ___________ form cause of loss.

broad

Coverage in the Dwelling Fire policy which reimburses the insured for the fair rental value of the covered property if it becomes uninhabitable from damage by a peril insured against.

Coverage D - Fair Rental Value

Fire, lightning, explosion, smoke, windstorm, hail, riot, civil commotion, aircraft, vehicles, vandalism, sprinkler leakage, catastrophic ground collapse, and volcanic action.

Basic Form Causes of Loss

Dwelling Form covering for limited named perils and actual cash value loss settlements.

DP-1

Dwelling Form covering for additional named perils, broadened "Other Coverages" and a replacement cost loss settlements on buildings.

DP-2

Dwelling Form covering buildings on an "open perils" basis and on a replacement cost loss settlements basis.

DP-3

This Homeowners policy coverage covers the dwelling building and structures attached, as well as construction materials and supplies on or adjacent to the premises.

Coverage A - Dwelling

Personal property of the insured usually situated at a residence other than the main dwelling is covered up to __________ percent of the Coverage C limit.

10%

The Homeowners policy per occurrence limit to loss by theft of jewelry, watches, furs, and precious and semiprecious stones.

$1,500

The Homeowners policy Additional Coverage - cost of debris removal and reasonable repair after coverage limit.

5% of the Coverage A Limit

This Additional Coverage pays the costs of defense, premium on appeal bonds, interest on judgments, prejudgment interest, and reimbursement to the insured of expenses to aid in defense, including up to $250 per day for loss of earnings.

Claims Expenses

The DP-3 Dwelling policy insures on a ___________ form cause of loss.

Special

This Homeowners policy coverage covers personal property, wherever it is located, that is owned or used by "an insured."

Coverage C - Personal Property

The Homeowners policy per occurrence limit for loss of securities or similar property.

$1,500

Coverage in the Dwelling Fire policy covers the additional expenses incurred to maintain the insured's normal living standards when the property becomes uninhabitable through damage by a peril insured against, for the necessary period of restoration.

Additional Living Expenses

The number of days' notice required by an insurance company to the insured when cancelling for non-payment of premium.

10 Days

The general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties requiring at least one of the properties to belong to the insured.

The NFIP Definition of "Flood"

NFIP definition of a structure with two or more outside rigid walls and a fully secured roof, affixed to a permanent site, with 50% or more of the value above ground level.

Eligible Building

NFIP policy form covering any condominium association with one or more residential units.

Residential Condominium Building Association Policy Form

This Homeowners policy coverage 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 or storage building.

Coverage B - Other Structures

Provides broad coverage for an individual's or family's liability exposure for bodily injury or property damage. Similar to coverage included in Homeowners contract.

Personal Liability Policy

The Homeowners policy Section II basic limit of Liability coverage.

$100,000

Umbrella policy characterized by incorporating into the umbrella the terms, conditions, limitations and exclusions found in the listed underlying policies.

Follow-Form Umbrella Policy

The Homeowners policy Additional Coverage - loss assessment limit.

$1,000

Umbrella policy characterized by having its own terms, conditions, limitations and exclusions. In other words, the coverage provided by the underlying policies does not affect the umbrella policy.

Stand-Alone Umbrella Policy

Liability coverage in the Homeowners Policy defines an insured as which of the following? (select all that apply) - the named insured - residing relatives of the named insured - anyone legally responsible for animals or watercraft owned by the named insured - any person under 21 in the care of a named insured or spouse

any person under 21 in the care of a named insured or spouse residing relatives of the named insured the named insured

In the Homeowners Insurance Policy ‘debris removal and reasonable repairs’ after a loss are covered up to ___% of Coverage A.

25 n the Homeowners Insurance Policy “debris removal and reasonable repairs” after a loss are covered up to 5 % of Coverage A.

The NFIP flood insurance _____ available in any community that HAS NOT adopted and enforced federal floodplain regulations.

is not NOTE: An “eligible NFIP community” is one that adopts and enforces federal floodplain management regulations that meet National Flood Insurance Program criteria. NFIP flood insurance IS NOT available in any community that HAVE NOT adopted and enforced federal floodplain regulations.

In the Personal Articles Floater (PAF) policy newly acquired jewelry, furs, and cameras are covered for:

30 days automatic coverage for same class of property up to 25% of the coverage limit but no more than $10,000

Which, if any, of the following statements are true regarding Coverage A- Dwelling coverage? Statement One: Coverage A covers the dwelling and structures attached to it Statement Two: Coverage A covers construction materials and supplies on or adjacent to the residence premises

both Statement One and Statement Two are correct

In the Dwelling Fire DP-1 policy form, ‘other coverages’ ____ increase the limits of insurance for each stated coverage.

do not

The ‘additional coverages’ section of the Homeowners Insurance Policy provides up to $_____ coverage for property damage to property of others caused by the insured irrespective of legal liability.

$1,000

The Broad Form DP-2 policy includes all of the DP-1 coverages and adds which of the following perils (choose as many as apply). - falling objects - weight of ice, snow or sleet - volcanic eruption - flooding - nuclear - accidental discharge or overflow of water

- falling objects - weight of ice, snow or sleet - volcanic eruption - flooding - accidental discharge or overflow of water

All of the following are ‘general exclusions’ in the Homeowners Insurance Policy EXCEPT?

VANDALISM The Homeowners Insurance Policy list several “general exclusions including: earth movement, flooding, power failure away from the residence premises, neglect of the insured in the preservation of property after a loss, war, nuclear hazards, intentional loss by the insured, and government actions.

In the Personal Articles Floater (PAF) policy the ‘pairs, sets and parts provision reserves the insurance companies right to:

elect to repair or replace or to restore the pair or set to original value, or to pay the difference between ACV before and after the loss

may be non-renewed

Optionally Renewable