Vocabulary: Chapter 8- Concepts of Home Ownership

Question 1

Coinsurance Clause

Answer 1

A clause in insurance policies covering real property that requires the policyholder to maintain fire insurance coverage generally equal to at least 80 percent of the property’s actual replacement cost

Question 2

Homeowners’ insurance policy

Answer 2

A standardized package insurance policy that covers a residential real estate owner against financial loss from fire, theft, public, liability, and other common risks

Question 3

Liability coverage

Answer 3

Insurance that covers injuries or losses sustained within the home

Question 4

PITI (principal, interest, taxes, and insurance)

Answer 4

The basic costs of owning a home-mortgage principal and interest, real estate taxes, and hazard insurance

Question 5

Replacement Costs

Answer 5

The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original