Unit 7 - Homeowners Insurance Flashcards
Homeowners Policy
•Package policy
•Multiline
•Includes both property and liability
Homeowners Eligability
•Owner occupied (special version for a renter)
•No more than 4-family dwelling
•Primary purpose as a residence
•Dwellings under construction are eligible (for owner-occupant)
•Mobile homes (require mobile home endorsement)
•Farm dwellings NOT eligible
Insureds
•Named insured including a resident spouse
•Resident relatives
•Anyone under the age of 21 and in the care of an insured (foster child and exchange student)
•Full-time student under age 24, relative, and prior resident
•Represenative of the named insured in the event of death
Cancellation of Homeowners policy
•cancelation by insurance company
-During the first 60 days for any reason- minimum 10 days notice
-Other reasons after 60 days-minimum 30 days notice
>Material misrepresentation
>Substancial change in the risk
No payment of premium-10 days’ advance notice
Nonrenewal by insurance company
•30 days’ advance notice
Standard Mortgage Clause
•Can pay the premium
•File a claim up to Insurable interest
•Recieve advance notice of cancellation
•Dishonesty of insured doesn’t prevent mortgagee from collecting
Homeowners Policies
•HO-2 Broad Form: owner occupant
•HO-3 Special Form: owner occupant
•HO-4 Tenants of Renters
•HO-5 Comprehensive Form: owner occupant
•HO-6 Condominium Owners
•HO-8 Modified Form
Dwelling
•Including property attached
•Materials on the premises used in construction
•No coverage for a renter
Other Structures—separated by a clear space
•Not attached to dwelling
•Not used for business purposes
Personal Property
•Not attached to the dwelling
•Anywhere in the world
•Guest’s property (if requested)
Personal Property Excluded
•Pets
•Motorized vehicles (unless used to service the premises)
•Property of renters or boarders
Personal property—Special limits for theft
•$1,500 - jewelry, watches, and furs
•$2,500 - firearms and related items
•$2,500 - silverware, Goldware, and
pewter ware
Personal property — Special limits for ALL losses
•$200–money and securities
•$1,500–watercraft and related items
•$1,500–trailers
•$2,500–business personal property on premises
•$1,500–business personal property away from premises
•$1,500–portable electronic apparatus away from the premises
Personal property—Loss of Use
Indirect losses due to loss of use of home caused by a covered peril
•Additional living expenses
•Rental income
Personal property-Debris removal
•Expenses paid if caused by covered peril
•Removal of fallen trees covered if they damaged a covered structure or blocking roadway
• Maximum of $1,000 for tree debris removal per occurrence and $500 per tree
Personal property—Reasonable Repairs
•Pays cost for repairs necessary to protect from additional loss
Personal property—Trees, shrubs, and other plants
•Maximum of 5% of coverage A, in addition to limit (10% of coverage C for HO-4 and HO-6)
•Maximum of $500 per tree
Fire department service charge
•Maximum of $500
•No Desuctible
Property removed
•Protect from a sure and certain loss
•ALL perils for 30 days
Credit cards, forgery, and counterfeit money
•Maximum $500
•No deductible
Exception for HO-8
•Broken glass covered
Personal property—Loss assessment
•Loss assessment by homeowners association
-Maximum of $1,000
-Damage to property caused by a covered peril
-Deductible applied once
Other additional coverages in HO-2, 3 and 5
•Collapse
-Caused by a covered peril
-Not earthquake
•Landlord’s furnishings-$2,500
•Grave markers-$5,000
•Ordinance or law- increased cost up to 10% x dwelling limit
Peril
•Cause of Loss
Peril—Basic
•Fire, Lightning, explosion, wind, hail, smoke, aircraft, vehicles, volcanic eruption, vandalisim and malicious mischief, riot/civil commotion, and theft (all homeowners covers theft, not automatically covered in dwelling property policies)
Peril—Exclusions
•Theft by the insured
•Theft from dwelling under construction
•Theft from rental portion of premises
•Theft of watercraft off of the premises
•Mysterious disappearance
Peril—Broad
•All basic perils plus:
-Falling objects
-Accidentsl discharge of water (not flood)
-Weight of ice, sleet, or snow
-Freezing of plumbing (if care used)
-Artificially generated current
-Sudden tearing and breaking of heating and cooling system
Peril—Special
•Open Peril
-All direct causes of loss (to the dwelling and other structures) unless specifically excluded
Excluded Perils in All Homeowners Policies
•Enforcement of law or ordinance regulating construction, repair, or demolition
•Earth movement, including earthquake and mine subsidence
•Flooding and overflow from a sump pump
•Power interruption that takes place off the residence premises
•War
•Nuclear hazard
•The insured’s failure to save and preserve property after a loss, or to protect it from loss
•Losses caused intentionally by the insured or by someone else else at the insured’s direction
•Destruction, confiscation, or seizure of property by the government or a public authority
Peril—Claims Payment
•Actual cash value (replacement - depreciation)
-Personal property
-Awnings, carpeting, appliances, outdoor antennas, and outdoor equipment
-Structures that are not buildings
•Replacement
-Dwelling and other structures
-If insured for at least 80%
PropertyEndorsements- Personal property replacement cost
•Insures personal property on a replacement cost basis instead of ACV
The scheduled personal property endorsement provides a separate schedule of insurance for items of personal property
•Insured against open perils
•Replacement coverage
•Usually no deductible
Permitted incidental occupancies
•Removes $2,500 limit on business personal property
Earthquake
•Land movement including volcanic eruption
•One deductible for 72 hours
Limited fungi, wet or dry rot, or bacteria
•Caused by a covered peril while the policy is in force
Home day care
•Premium based on number of children
Two Major coverages in Section II
•Coverage E
•Coverage F
Section II—Personal liability
•Bodily injury and property damage
-Insured at fault
-Anywhere in the world
Section II—Medical Payments
•To others (not the insured)
•No-fault
•On or off premises if due to insured’s activities
•Covers domestic employees (on or off premises)
•Three years
Section II—Liability Exclusions
•Liability for injury or damage that is expected or intended by the insured
•Liability assumed through a contract
