Chap 4 Homeowners Insurance Flashcards Preview

FIN 512 > Chap 4 Homeowners Insurance > Flashcards

Flashcards in Chap 4 Homeowners Insurance Deck (29):

Homeowners insurance

It is designed to provide protection from a financial loss in the event of a fire, flood, earthquake etc... And liability coverage if claims are made against the owner for damages or injuries incurred on the property


3 levels of homeowners insurance coverage

1) basic/standard policy
2) broad coverage
3) comprehensive coverage


Homeowners insurance/ basic or standard policy

It is a named peril policy, only perils listed such as fire, vandalism, and falling objects are covered


Homeowners policy/ broad coverage

Provides all risk coverage on the building and named perils on the content


Homeowners insurance/ comprehensive coverage

Covers building and content for all risks


Coinsurance requirement for homeowners insurance

It is the requirement that the property be insured for a min amount to receive full coverage. It can be from 80 to 100%


Homeowners insurance/ actual cash value

Puts the home back to the condition it was in at the time of the loss, including depreciation


Homeowners insurance/ guaranteed replacement cost

Pays the full cost to repair or replace the home and content with similar quality material even if it more than the policy limit as long as the property is insured 100%


Homeowners insurance/8 categories that determine insurance premiums

1) type of structure
2) detached semi-detached or row house
3) proximity of a fire hydrant
4) owner occupied or rented
5) type of heat
6) size of the deductible
7) personal history with insurance company
8) credit history


Homeowners insurance/ redlining

Denying coverage in an area based on geographical location


Homeowners insurance/ endorsement

Amendments to the original policy that adds subtracts or alters coverage. Folater for a property that moves from one location to another


Homeowners insurance 4 sections of insurance policy

1: declaration page
Section 1: insurance on your property
Section 2: insurance liability
Section 3: conditions


Homeowners insurance section 1: insurance on your property /coverage A

principal dwelling, attached structures and equipment against named perils


Homeowners insurance section 1: insurance on your property /coverage B

Additional buildings and other structures


Homeowners insurance section 1: insurance on your property /coverage C

Personal property. It details property and content coverage that will be provided


Homeowners insurance section 1: insurance on your property /coverage D

Loss of use. Details what will be paid under additional living expenses and or fair rental value coverage


Homeowners insurance section 1: insurance on your property /additional coverage

1) credit card
2) debris and protective removal
3) fire department
4) frozen food
5) inflation guard
6) lock replacement
7) mass evacuation
8) mortgage rate protection
9) outdoor greenery
10) personal record stored in personal computer
11) reward coverage
12) safety deposit box


Homeowners insurance section 2: insurance lyability /coverage E

Legal liability . Provides coverage if an individual injured or hurt on the property decides to sue. Also provides coverage for members of the home, but not for home business


Homeowners insurance section 2: insurance liability /coverage F

Voluntary medical payments. Provides payment for people injured on your property regardless of the fault. Does not cover business realted injuries


Homeowners insurance section 2: insurance liability /coverage G

Voluntary property payments


Homeowners insurance section 2: insurance liability /coverage H

Voluntary compensation for residence employees


Homeowners insurance section 3

General policy conditions defines the different terms and conditions to avoid misunderstandings


Condominium insurance

The condominium association has a master policy that covers the overall building and common areas as well as the bare walls in each units. Condo owners need insurance to cover upgrade, personal property and liabilities


Mobile home insurance

Mobile homes can only be insured for content


Mortgage life insurance

Pays the outstanding mortgage in the event the mortgager dies


Mortgage default insurance

It is mandatory if the down payment is less than 20% of property value.


Tennant insurance

Tenants are responsible for damage their guests cause to the building, harm to visitors, loss or damage to their property


Homeowners insurance/ title insurance

Protects owner or lender of money against any unknown defect in the title to the property


Mortgage fraud insurance

When the house is sold by someone other than the real owner