Chapter 20 - Homeowners Insurance, Section I Flashcards Preview

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Flashcards in Chapter 20 - Homeowners Insurance, Section I Deck (35)
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1

A homeowners insurance can cover what six things?

-dwelling
-other structures
-personal property
-additional living expenses
-personal liability claims
-medical payments to others

2

HO-2 (Broad form) covers what?

Covers the dwelling, other structures, and personal property on a named perils basis
Covered perils include fire, lightning, windstorm, hail, explosion, and other perils.
The perils must be the proximate cause of the loss

3

HO-3 (Special form) covers what?

Covers the dwelling and other structures on a risk-of-direct-physical loss basis.
All direct physical losses are covered except those losses specifically excluded

4

HO-4 (Contents broad form) covers what?

covers a tenant's personal property on a named perils basis. Ex: tenants who rent apartments, houses, or rooms

5

HO-5 (Comprehensive form) covers what?

Provides open perils coverage ("all-risks coverage") on the dwelling, other structures and personal property
All direct physical losses are covered except those losses specifically excluded

6

HO-6 (Unit owners form) covers what?

covers personal property on a named perils basis. Designed for condominium units and cooperative apartments. A minimum of $5,000 of insurance is also provided on the condominium unit that covers improvements and additions

7

HO-8 (Modified coverage form) covers what?

designed for older homes. Dwelling and other structures are based on the amount required to repair or replace using common construction materials and methods

8

What are the four basic coverages in section I of the homeowner 3 policy?

Coverage A: Dwelling
Coverage B: Other Structures
Coverage C: Personal Property
Coverage D: Loss of Use

9

What four persons are considered "insureds" under the HO-3 policy?

Named insured and spouse
resident relatives
other persons under age 21
full-time student away from home

10

Section II coverage, in addition to the HO-3 coverage what are the other two persons covered?

Any person legally responsible for covered animals or watercraft
With respect to a motor vehicle covered by the policy (riding mower), persons employed by the named insured.

11

Coverage A covers the dwelling on the residence premises and any structure attached to the dwelling. What is also included with this coverage? Excluded?

Materials intended for construction or repair of the dwelling or other structures are included
The coverage specifically excludes land

12

Coverage B insures other structures on the residence premises. The amount of coverage is based on the amount of insurance in Coverage A. What is also included in this coverage? Excluded?

Includes a detached garage, tool shed, horse stable
structures that are rented out or used for a business are excluded

13

Coverage C insures personal property owned or used by an insured. What are the four characteristics of this coverage?

-personal property is covered anywhere in the world, both on and off the premises
-the amount of coverage is 50% of Coverage A, but can be increased if desired
-Coverage for personal property at another residence, such as a vacation home, is limited to 10% of Coverage C or $1000, whichever is greater
-Certain types of personal property have maximum dollar limits on the amount paid for nay loss.

14

What is the maximum dollar limit on the loss for Money,bank notes, bullion, gold, silver, platinum, coins, medals, stored value cards, and smart cards?

$200

15

What is the maximum dollar limit on the loss for:
-securities, valuable papers, manuscripts, personal records, passports, tickets, and stamps
-watercraft of all types
-trailers not used with watercraft of all types
-theft of jewelry, watches, furs, and precious and semiprecious stones
-Property away from the residence premises used primarily for business purposes
-Portable electronic equipment that reproduces, receives, or transmits audio, visual, or data signals.

$1,500

16

What is the maximum dollar limit on the loss for antennas,taps, wires, records, disks, and other media that are used with electronic equipment that reproduces, receives, or transmits audio or visual signals and is in or upon a motor vehicle.

$250

17

What is the maximum dollar limit on the loss for:
-theft of firearms and related equipment
-theft of silverware, goldware, platinumware, and pewterware
-property on the residence premises used primarily for business purposes.

$2,500

18

An insured can use a ______ to insure certain personal property for a specific amount

schedule

19

Coverage C excludes what six types of property?

-Animals, birds, and fish
-motor vehicles
-aircraft and parts
-hovercraft and parts
-property of roomers, boarders, and other tenants
-property in a regularly rented apartment

20

Coverage D provides protection when the residence premises cannot be used because of a covered loss. What are the four characteristics of this coverage?

-Coverage is 30% of Coverage A
-Additional living expenses is the increase in living expenses actually incurred by the insured to maintain the family's standard of living
-The policy pays the fair rental value for that part of the residence that is rented to others, but is not fit to live in
-Coverage applies if the home is not damaged, but a civil authority prohibits the insured from using the premises

21

Additional coverages in section I include? (12)

-Removal of debris following an insured peril
-Reasonable repairs to protect the property from further damage
-Trees, shrubs, and plants, for a limited set of perils
-Fire department service charge
-Removal of property that is endangered by an insured peril
-Unauthorized use of credit card, electronic funds transfer card or access device; forgery and counterfeit money
-Loss assessment charged against the named insured by a corporation or association of property owners because of the direct loss of property collectively owned by all members.
-Collapse of a building, for certain perils
-Breakage of glass or safety glazing material
-Landlord’s furnishings
-Increased costs of construction or repair because of a law
-Grave markers

22

What are the Section I Exclusions? (8)

-Concurrent causation losses
-Any loss due to an ordinance or law, except as described in the Additional Coverages
-Losses due to earth movement
-Certain water losses
-Losses due to neglect, power failure, or faulty design
-Losses which are intentional
-Losses due to war, government action, failure to act, or nuclear hazard
-Losses due to certain weather conditions

23

What are the deductions of section I

A deductible of $250 applies to any loss covered by section I coverages
premiums can be reduced by increasing the deductible
instates that are vulnerable to natural catastrophes, insurers can use percentage deductibles

24

What are the five duties that the insured must perform after a lose?

-Give prompt notice to insurer
-Protect the property from further damage
-Prepare an inventory of damaged personal property
-Exhibit damaged personal property
-File a proof of loss with 60 days after the insurer’s request

25

Losses to personal property are paid on the basis of actual cash value. if the insured purchases a replacement cost endorsement, what happens?

There is no deduction for depreciation

26

What must the insurer do first before he has the right to repair or replace any part of damaged property with like property?

give notice to the insured

27

Losses to the dwelling and other structures are paid on the basis of ______ ____ with no deduction for depreciation

Replacement cost
If the dwelling is insured for at least 80% of replacement cost at the time of loss, partial losses are paid in full
replacement cost is the amount necessary to repair or replace the dwelling with material of like kind and quality at current prices

28

If the dwelling is insured for less than 80% of the replacement cost, the insured receives the larger of:

1. The actual cash value of that part of the building damaged, or
2. (Amount of insurance carried/ 80%*Replacement cost)*Loss

29

Some insurers offer an extended replacement cost endorsement. What is this?

Pays 20% or more above the policy limits

30

What is a guaranteed replacement cost policy?

The insurer agrees to replace the home exactly as it was before the loss even if the replacement cost exceeds the amount of insurance stated in the policy