Unit 7: Homeowners Insurance Flashcards
1
Q
Homeowners Policy
A
- Package policy
- Multiline (1. property, 2. casualty)
- Includes both property and liability
2
Q
Homeowners Eligibility
A
- Owner occupied
- No more than 4-family dwelling
- Primary purpose as a residence
- Dwellings under construction are eligible (for owner occupant)
- Mobile homes (require endorsement)
- Farm dwellings NOT eligible
3
Q
Insureds
A
- Named insured including a resident spouse
- Resident relatives
- Anyone under 21 and in the care of the insured
- Full time student under age 24, relative, and prior resident
- Representative of the named insured in the event of death
4
Q
Cancellation
A
- Insurance company can cancel during first 60 days for any reason (minimum 10 days notice)
- After 60 days (min 30 days notice) for material misrepresentation or substantial change in the risk
- Nonpayment of premium (10 days notice)
5
Q
Nonrenewal by Insurer
A
- At the end of the policy period, nonrenewed by insurance company (30 days notice)
6
Q
Standard Mortgagee Clause
A
- Can pay the premium
- File a claim up to insurable interest
- Receive advance notice of cancellation
- Dishonesty of insured doesn’t prevent mortgagee from collection
7
Q
HO-2
A
Broad Form; owner occupant
8
Q
HO-3
A
Special Form; owner occupant
9
Q
HO-4
A
Tenants or Renters
10
Q
HO-5
A
Comprehensive Form; owner occupant
11
Q
HO-6
A
Condominium Owners
12
Q
HO-8
A
Modified Form (older homes)
13
Q
Homeowners: Section I Property
A
A - dwelling
B - other structures
C - personal property
D - loss of use
14
Q
Homeowners: Section I Property - Coverage A Dwelling
A
- Including property attached
- Materials on the premises used in construction
- No coverage for a renter
15
Q
Homeowners: Section I Property - Coverage B Other Structures
A
- Separated by a clear space
- Not used for business purposes
16
Q
Homeowners: Section I Property - Coverage C Personal Property
A
- Not attached to the dwelling
- Anywhere in the world
- Guest’s property (if requested)
- Excluded: pets, motorized vehicles, property of renters or boarders
17
Q
Special limits for theft
A
$1,500: jewelry, watches, and furs
$2,500: firearms and related items
$2,500: silverware, goldware, and pewterware
18
Q
Special limits for ALL losses
A
$200: money and securities
$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
19
Q
Loss of Use
A
Indirect losses due to loss of home cause by a covered peril
- Additional living expenses
- Rental income
20
Q
Additional Homeowners Coverages: Debris Removal
A
- Expenses paid if caused by a covered peril
- Removal of fallen trees covered if they damaged a covered structure or blocking a roadway
- Maximum of $1,000 for tree debris removal per occurrence and $500 per tree
21
Q
Additional Homeowners Coverages: Reasonable repairs
A
Pays cost for repairs necessary to protect from additional loss
22
Q
Additional Homeowners Coverages: Trees, shrubs, and other plants
A
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
23
Q
Additional Homeowners Coverages: Fire department service charge
A
Maximum of $500
No deductible
24
Q
Additional Homeowners Coverages: Property removed
A
Protect from a sure and certain loss
ALL perils for 30 days
25
Additional Homeowners Coverages: Credit cards, forgery, and counterfeit money
Maximum of $500
No deductible
26
Additional Homeowners Coverages: Loss assessment
Loss assessment by a homeowners association
- Maximum of $1,000
- Damage to property caused by a covered peril
- Deductible applied once
27
Additional Homeowners Coverages in HO-2, 3, and 5
- Collapse (caused by covered peril, not earthquake)
- Landlord's furnishings: $2,500
- Grave markers: $5,000
- Ordinance or law: increased cost up to 10% x dwelling limit
28
Perils (causes of loss): Basic
Fire, lightning, explosion, wind, hail, smoke, aircraft, vehicles, volcanic eruption, vandalism and malicious mischief, riot/civil commotion, and theft (all homeowners covers theft; not automatically covered in dwelling property policies)
29
Perils (causes of loss): Broad
All basic perils plus:
- falling objects
- accidental 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
30
Perils (causes of loss): Special
Open peril: all direct causes of loss (to the dwelling and other structures) unless specifically excluded
31
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 at the insured's direction
- destruction, confiscation, or seizure of property by the government or a public authority
32
Claims Payment: ACV
replacement - depreciation
- personal property
- awnings, carpeting, appliances, outdoor antennas, and outdoor equipment
- structures that are not buildings
33
Claims Payment: Replacement
- dwelling and other structures
- if insured for at least 80%
34
Personal property replacement cost endorsement
insures personal property on a replacement cost basis instead of ACV
35
Scheduled personal property endorsement
provides a separate schedule of insurance for items of personal property
- insured against open perils
- replacement coverage
- usually no deductible
36
Permitted incidental occupancies endorsement
removes $2,500 limit on business personal property
37
Earthquake endorsement
- land movement including volcanic eruption
- one deductible for 72 hours
38
Limited fungi, wet or dry rot, or bacteria
caused by a covered peril while the policy is in force
39
Home day care endorsement
premium based on the number of children
40
Section II: Coverage E Personal Liability
bodily injury and property damage
- insured at fault
- anywhere in the world
41
Section II: Coverage F Medical Payments
- to others (not the insured)
- no-fault
- on or off premises if due to insured's activities
- covers domestic employees
- three years
42
Liability Exclusions pt 1
- liability for injury or damage that is expected or intended by the insured
- liability assumed through a contract
- BI or PD arising out of business pursuits or the rendering of or failure to render professional services
- BI or PD arising out of the rental of any part of the premises, except for the rental of part of an insured location as a residence
- Liability arising out of ownership, maintenance, use, loading, or unloading of aircraft, watercraft, and motor vehicles (except one used to service the premises or assist the handicapped)
43
Liability Exclusions pt 2
- liability arising out of the transmission of a communicable disease by an insured
- liability arising out of sexual molestation, corporal punishment, or physical or mental abuse; and liability arising out of the use, sale, manufacture, delivery, transfer, or possession of a controlled substance (does not apply to the legitimate use of prescription drugs)
44
Section II Watercraft covered
- watercraft not owned and not rented to an insured regardless of length or horsepower
- watercraft owned or not owned by an insured
- sailboats less than 26 feet
- boats with inboard motors of 50 horsepower or less
- boats with outboard motors of 25 horsepower or less
45
Additional Coverages (automatically included)
- defense costs - attorney fees, court costs, etc.
- court- ordered bonds
- post-judgment interest
- reasonable expenses, such as the insured's travel expenses to testify in court (lost income while in court $250/day)
- first aid expenses - reimburses the insured for expenses that the insured incurs for first aid to others at the time of an accident
- damage to property of others - pays up to $1,000 per occurrence for property damaged or destroyed by the insured, without regard to legal liability
- loss assessment - pays up to $1,000 of the insured's share of any loss assessment charged against the insured during the policy period by a corporation or association of property owners when the assessment is made as a result of an occurrence to which Section II applies
