Study 5 Flashcards
(23 cards)
What is the purpose of the opening statements in a homeowners form?
To establish the identity of the insurer and insured, and confirm the agreement between them.
What is the ‘Guide to the Policy’ section in homeowners insurance?
It helps the policyholder navigate the contents of the policy and understand its structure.
Why are definitions important in a homeowners policy?
They clarify the meaning of key terms to ensure consistent interpretation.
What is Coverage A – Dwelling Building?
It insures the dwelling and attached structures such as garages and decks.
What is Coverage B – Detached Private Structures?
It covers other buildings on the premises not attached to the dwelling, such as sheds.
What is Coverage C – Personal Property?
It insures the contents of the dwelling and property owned by the insured.
What is Coverage D – Additional Living Expense?
It provides compensation for extra costs incurred if the insured dwelling becomes uninhabitable.
What is Fair Rental Value under Coverage D?
It reimburses the insured for lost rental income if a covered peril makes a rental unit uninhabitable.
What are extensions of coverage in homeowners forms?
Additional coverages provided without requiring an endorsement, such as debris removal or property of guests.
What are some limitations of coverage in homeowners policies?
Limits may apply to items like jewelry, business property, or property off-premises.
What is the purpose of exclusions in a homeowners policy?
To list specific events or types of damage not covered by the policy.
What is the basis of claim payment?
The method used to determine the amount payable for a covered loss.
What is inflation protection in homeowners insurance?
An automatic adjustment to the coverage amount to account for inflation.
How is claim payment determined for buildings and detached private structures?
Usually on a replacement cost basis, if conditions of replacement are met.
How is claim payment determined for personal property?
Often on an actual cash value basis unless replacement cost is specifically included.
What is the ‘Pair and Set’ clause?
It limits the insurer’s liability when only part of a pair or set is lost or damaged.
What is the ‘Parts’ clause?
It limits liability to the value of the lost or damaged part, not the entire item.
What is the deductible in a homeowners policy?
The amount the insured must pay toward a loss before the insurer pays the remainder.
What does the subrogation clause do?
Allows the insurer to recover from third parties after paying a claim to the insured.
What are the statutory conditions in homeowners forms?
Legally required conditions that govern cancellation, requirements after loss, and other obligations.
What is the purpose of the ‘Proof of Loss’ condition?
It requires the insured to provide a written statement supporting their claim.
Why is ‘Notice to Authorities’ sometimes required?
To ensure proper investigation and documentation, especially in cases like theft or vandalism.
What does ‘Actions Against the Insurer’ mean?
Conditions under which a policyholder can take legal action against the insurer.
