Homeowners and Auto Insurance

Question 1

Home Owners Insurance Section I Coverage

Answer 1

A- Dwelling - Includes structures attached and/or located next to dwelling for repair. land excluded. At least 80% replacement cost

B- Other Structures - pool, detached garage, fence, patio.

C- Personal Property- no animals, motor vehicles, aircrafts, or renters stuff. Jewelry $1500 Coins $250

D-Loss of use- covers ADDITIONAL living expenses from event. Total-Normal =

Question 2

Home Owners Insurance Section II Coverage

Answer 2

E- Personal Liability - bodily injury or property damage of another. $100k per occurrence min coverage

exclusions:
business or professional activity; motorized land vehicle (except atv and golf cart); watercraft over 50hp or sailboat over 25 feet
aircraft
workers compensation

F- Medical Payments to Others up to $1000
even if insured not liable
not applicable to household members

Question 3

Basic Perils

Answer 3

VVV WEATHR FS

vehicles
vandalism
volcano

windstorm
explosion
aircraft
theft
hail
riot

fire
smoke

Question 4

Broad Named Perils

Answer 4

RAFF
All Basic and :

Rupture of a system
Artificially generated electricity
Falling objects 9ice, snow, sleet)
Freezing pipes

Question 5

Exclusions to Broad Perils

Answer 5

OPEN WIF

Ordinance of Law - construction or demolition

Power Failure- power plant failure

Earth Movement - landslide earthquake

Neglect- must make reasonable means to save and mitigate loss

War - including nuclear hazard (power plant)

Intentional Acts - burning down home

Flood - including water underground and backing up from sewer

Question 6

Coverage HO 1

Answer 6

Dwelling - basic
Other structures - basic
Personal property- basic
Loss of Use - basic

Question 7

Coverage HO 2

Answer 7

Dwelling - broad
Structures - broad
Personal property- broad
Loss of Use - broad

Question 8

Coverage HO 3

Answer 8

Dwelling - open
Structures - open 10%A
Personal property- broad 50%A
Loss of Use - open 30% A

Question 9

Coverage HO 4

Answer 9

renters

personal property - broad
Loss of use -broad 30% PP

Question 10

Coverage HO 5

Answer 10

Dwelling - open
Structures - open
Personal property- open
Loss of Use - open

Question 11

Coverage HO 6

Answer 11

condo owner
Dwelling - covered by condo association.
Structures - interior part of structure, remainder covered by condo association.
Personal property- broad can change to Open Perils*
Loss of Use- broad can change to Open Perils* 50%C

*by endorsement (best exam answer)

Question 12

Scheduled Personal Property Endorsement Floater

Answer 12

Wealthy clients with high value items like jewelry, stamps, coins, golf equipment, art

covered open peril basis; separately insured certain amount.

Question 13

Replacement cost vs Actual cash value ACV

Answer 13

Replacement Cost - no deduction for depreciation (dwelling)
ACV - replacement cost-depreciation Contents

Example 10 year old fridge destroyed. Original cost $900. Typically last 15 years. New $1200.

5/15 X $1200 = $400 (less deductible) Original cost not necessary

Question 14

Property Loss Calculation

Answer 14

Insurance < %80 of dwelling cost, insurer pays greater of:
1. ACV (not applicable for >%80) (depreciation info must be given)
2. Replacement Cost
((Insurance carried/insurance required) x loss) - deductible = apportion of ins co

Replacement cost x coinsurance = insurance required

• homeowners replacement value always 80%
• commercial can be 90%
• always use 80% if none given

Question 15

Personal Liability Umbrella Policy (PLUP)

Answer 15

Covers what regular insurance does not or over regular ins amounts if not excluded.

may require higher liability limits on home and auto

Exclusions:

• Intentional damage/BI
• Business liability
• Your property (can’t sue yourself)
• Malpractice (failing to render services)
• Directors’ and Officer activities
• Workers Comp

Question 16

Covered Auto

Answer 16

Any vehicle in policy declaration

New Auto automatically covered under A,B,C
Covered under D if ins co is informed w/in 14 days of acquisition. 30 days all else

Question 17

Auto - who is covered

Answer 17

-named insured and spouse
(spouse moves- covered to earlier of: 90 days; effective date of spouse new policy; end of policy period. Spouse is defined as the non-named insured)
-family members living in house
-any person using car with your permission

Question 18

Auto- Liability Coverage Part A

Answer 18

Coverage for you, family member, using car with your permission, organization responsible for driving auto(owned or un-owned)

BI/PD
Bodily Injury and Property Damage

Single Limit - each accident
$300,000 BI and liability claims

Split Limit - each accident
$100,000; $300,000, $50,000

$100,000- max payable for bodily injury
$300,000- aggregate paid for all bodily injury
$50,000- aggregate property damage

No coverage theft

Question 19

Auto - Medical Payments - Part B

Answer 19

Reasonable and necessary - 3yrs date of accident

You, family member; you family member as pedestrian; any other person in car.

Per Person/ Per Occurrence

Question 20

Auto - Uninsured Motorists- Part C

Answer 20

pays what insured would have legally been entitled to recover from uninsured operator because of bodily injury.

Covers you, family member, person in your car (pedestrian included); any person entitled to recover because of injury to previous mentioned (emotional distress)

Covers towing

Question 21

Auto - Damage to Auto - Part D

Answer 21

our auto/rental/borrowed

Collision - accident involving car, driving off road into lake, wall or tree

perils including 
breakage of glass 
missiles
falling object
theft
earthquake
wind/hail
vandalism/riot
animal
explosion

Covers towing

Question 22

Claims Adjustment Procedure

Answer 22

1. Replacement option - MAY replace with like/kind instead of actual cash value or replacement cost
2. Abandonment or Salvage - insured MUST surrender to ins co so total loss can be claimed
3. Pair or set - a clause which states that if one half of a pair, or set is damaged, the value of the whole pair will be analyzed. The insurer is not obligated to pay for the loss of the whole set when only one part has been damaged. MAY choose