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Flashcards in Section 3B Deck (40):

Homeowners contains two sections:

Section I: Property
(Has a deductible)

Section II: Liability
(Cost of Defense in addition to limits)
(No deductible)


HO-Section I

Cov A=Dwelling
Cov B=Other Structures
Cov C=Contents
Cov D=Loss of Use
(Fair Rental Value and Addditional
Living Expenses)


HO-Section II-Liability

Coverage E=Personal Liability
BI & PD to others
($100,000 per occurrence)

Coverage F=Medical Payments
($1,000 per person)


Homeowner's Policy

Cov A=declare a limit
Cov B=10% of Cov A
Cov C=50% of Cov A
10% of Cov C (off-premises)
Cov D=30% of Cov A

Ho's stack. Each
coverage is added to the others.


Named Insured

You and your spouse (if spouse is part of HH)


Bodily Injury

Bodily harm, sickness, or disease, including required care, loss of services, and death that results



You and residents of your HH
Including children under age 24 away at school and other ppl under 21 who are in your care.


Insured location

Your residence premises
Any part of premises where an insured is temporarily residing, vacant land (not farm land) owned by the insured, land owned by an insured on which up to a 4 family dwelling is being built as a residence for the insured and individual or family cemetery plots or burial vaults


Property damage

Physical injury to, destruction of, or loss of use of tangible property


Cov A (Dwelling)

It covers:

Residence premises, including attached structures, any materials and supplies located on residence premises and used to construct, alter, or repair the dwelling.


Cov B (Other Structures)

Other structures on the residence premises set apart from the dwelling by a clear space.

Business and farm structures are not covered.


Cov C-Personal Property

Covers personal property owned or used by an insured while it is anywhere in the world, for the perils named on the policy.

Property of others on the residence premises is also covered.


Off-Premises personal property coverage

Coverage up to 10% of the limit for Coverge C, or $1,000, whichever is more.

Personal property moved to a newly acquired principal residence is not subject to this limitation for 30 days from the time you start to move


Special Limits of Liabilty of Personal Property

$200-Gold, Money, Coins
$1500-Watercraft and Trailer/Theft of Jewelry,
Watches, Furs, Precious and Semi-
Precious Stones/ and Portable
Electronic Apparatus while in a motor
$2500-Theft of firearms
$2500-Theft of silverware and Business
Property at the Residence Premises/
$500 away


HO excludes the following Personal Property:

Animals, birds, fish
Motor vehs ( not counting those that service premises or assist the handicapped)
Aircraft, except model or hobby
Property of roomers, unless they are related to insured


HO -Coverage D: Loss of Use

Indirect Coverage due to a covered loss.
Indirect losses are aka 'consequential losses' or 'time-element losses'


Section I
All HO policies contain several additional coverages built into the contract and require no additional premium charge:

Debris removal
Credit card and forgery
Trees, shrubs, and plants
Fire department service charge
Ordinance or law
Glass breakage
Grave markers


HO-Section II coverages
(No deductible)

Cov E-Personal Liability
Provides defense at company's
Company doesn't need insured's
consent to settle
($100,000 per occurrence)

Cov F-Medical Payments to Others
Coverage applies to other persons on
an insured location with permission of
the insured, and to persons off the
insured location if the injury is caused
by the activities of an insured or
caused by an animal owned
by the insured
No-Fault coverage


Section I Property has a per occurrence deductible of



Section II
Several Additional Coverages in addition o policy limits:

Claim expenses ($250 a day, interest accrued,
First aid expenses

Damage to the property of others- not tenant or roomer or damaged intentionally by an insured 13 year old or older (R/C up to
$1,000 per occurrence)


HO-Section I:Perils Insured Against

HO-1, HO-2, HO-4, HO-6, and HO-8=named

HO-3 and HO-5=all-risk

All HO forms cover theft, personal liability, and medical payments to others.
All coverages in property area automatically stack and are in addition to each other with no additional premium required. (DP's Coverage A and Coverage C have to be declared separately on the Dec page and an additional premium paid, or there is no coverage.


HO Section I Conditions:

Loss settlement (80% co insurance clause)

Other Insurance (Pro-Rata Distribution or Pro-Rata Liability Clause)---- single/total

Recovered Property (Salvage)

Pair and Set Clause (Full Set- Remaining)


HO-Section II conditions

Lol will not be more than shown on the Dec page

Limit is the same regardless of the number of insureds who are sued regarding the same occurrence. This condition is known as 'severability' of insurance


HO Sections I and II Conditions

Conditions that apply to both property and liability sections. This includes the effects of concealment or fraud (voids policy), assignment (requires written consent of the insurer) and cancellation and/or non-renewal (10 days advance notice for nonpayment of premium)


HO Section I exclusions

On the named peril forms, you'll find that each specified peril comes with its own set of exclusions.

Vacancy is another exclusion if more than 60 consecutive days immediately before the loss.

No coverage for freezing of plumbing unless reasonable care was used to maintain the heat or has shut off the water supply and drained all systems and appliances of water.

Even if a policy names a peril, you cannot be sure it is covered unless you read the exclusions.


In Section I of the HO-3, you'll find excluded items in two places:

Under perils insured against (which excludes certain causes of direct loss)


Under exclusions, which refers to causes of either direct or indirect loss that are excluded regardless of any contributory event.


Typical exclusions relating to the property coverages (perils insured against) contained in most all-risk forms include:

Wear and tear
Inherent vice or latent defect (built in flaw, usually natural)
Mold, fungus, wet rot
Discharge of pollutants
Settling or expansion of pavements, walls or roofs
Damage caused by birds, vermin,rodents or insects


There is no coverage for fire

If it is caused by war


Other general exclusions listed in Section I include:

Ordinance or law
Earth movement
Water damage
Power failure
Nuclear hazards
Intentional losses


Inflation Guard Endorsement

Guarantee replacement cost coverage
Keeps pace with inflation
Avoid possible future penalties for underinsurance


Personal Articles Floater

No deductible
Items Commonly Scheduled (jewelry, furs, cameras, musical instruments and fine arts)
List (schedule personal property to be covered on Dec page)
Appraisal often requested
Coverage floats
Covered anywhere in the world
Fine Arts covers US and Canada


Agreed, or Stated, Value Basis

Insurer will pay policy limit without the need to adjust the claim.

If part of a set is damaged, the insurer will pay the full value of the set if insured turns over the remaining undamaged property to the insurer.

All other PAFs pay claims on n ACV basis.


Personal Injury Liability Endorsement

Pay an additional premium for it.

Protects insured seeking protection from defamation, libel, and slander.


Earthquake Coverage

Deductible $250
Deductible usually a percentage of the policy limit



Most popular HO form


HO coverage forms have the following in common. They...

Cover theft
Cover personal liability and medical payments to others ($100,000 per occurrence on Cov E and$1,000 per person on Coverge F)
Cover contents on a depreciated value basis (ACV)
Are package policies
Have special LOL


HO-4 for Renters

Contains no structures coverage

No Cov A or Cov B
Has Cov C, Cov D, Cov E, and Cov F


HO-6-Condo Unit Owners Form has

Limited Coverage A ($1,000) for alterations, built-in appliances, fixtures, and improvements


HO-3 Special Form:

All-Risk on Dwelling and Other Structures .

Contents are still named peril (broad form) but can be all-risk if HO-15 endorsement is added.


Mobile Homeowners

Mobile home is ACV
Percentages on Cov A, B, C, D, E, and F are like the HO's.