HO Homeowners Property Coverage

Michelle's $300,000 home experiences $90,000 in damage from a lightning storm. The adjuster calculates depreciation at 25%, making the ACV loss $67,500. Although Michelle's policy covers repairs at replacement cost, she receives an initial check for $67,500. Actual repairs to her home end up totaling $79,500. How much, if any, further indemnification may Michelle receive from the loss?

$12,000 Recall that Replacement Cost policies allow the insurer to pay only the ACV at first. Then, once the repairs are complete, the insurer will indemnify the insured for the rest of the actual cost. This recoverable depreciation in Michelle's case equates to $79,500 - $67,500 = $12,000.

Elizabeth has a personal laptop worth $1,400. One night, while Elizabeth is out, a thief breaks into her home and steals her laptop. How much can Elizabeth expect to be indemnified by her insurer for the loss of her laptop (ignoring any deductible)?

$14,00.00

To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home?

$320,000 / 80% = $400,000

Sam's house is underinsured. It has a replacement cost of $200,000, but Sam's policy only covers losses up to $80,000. During a violent hailstorm, Sam's $20,000 roof is completely destroyed. Assuming his insurer requires the standard 80% level of coverage, how much will Sam receive as a settlement for the roof (ignore the deductible)?

10,000.00. The loss settlement provision in the HO policy states that, if the property is underinsured, the policy will pay a portion of the loss calculated as follows: (Amount of insurance / 80% of the property value) x the covered loss. 80% of Sam's property value is $160,000 (200,000 x 80%), so divide his policy limit by that number. $80,000/$160,000 = 0.5. Now, multiply Sam's loss by this number ($20,000 x 0.5) and the result is $10,000.

Which of the following expenses would NOT be covered under a homeowners policy additional coverage called Claims Expenses?

Admin costs

Recovered Property

After the claimant has been indemnified if either party has recovers any property they must let each other know.

In which section of the policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence."

Conditions

Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Which type of coverage could help Ron pay the cost of renting the apartment?

Coverage D - Loss of Use would pay for the increased living expenses, like the apartment rental, until the repairs to the insured premises have been completed.

Mike is wanting to upgrade his homeowner's insurance so he will have the best coverage possible. "You get what you pay for;" says Mike, "and, I'm purchasing total peace of mind." Which policy is Mike referring to?

HO-5 The HO-5 is the most comprehensive homeowners coverage available.

Mike is wanting to upgrade his homeowner's insurance so he will have the best coverage possible. "You get what you pay for;" says Mike, "and, I'm purchasing total peace of mind." Which policy is Mike referring to?

HO-5 is the most comprehensive and common

Covers who, when and how a claim will be paid

Loss Payment

Insurance to Value requirement at 80% value or more

Loss Settlement

During a heavy rainstorm, Ben's basement flooded and suffered extensive water damage. Which section of Ben's Homeowners 3 policy will cover this damage?

None

John is doing some lawn maintenance using a steel blade on his weed-whacker. He fails to properly tighten the blade and it comes loose while he is trimming some tall grass at the edge of his property. The blade flies off towards his neighbor's house and crashes into the HVAC unit, severing the lines and effectively destroying the unit. Which coverage in John's homeowners policy might pay for the damage he caused to his neighbor's HVAC system?

Personal property

Exclusions defined

Risks or causes of loss that the insurer decides not to cover

Greg is sitting in his home when he feels the ground shake and give way beneath him. He is just able to escape before a large portion of his house falls into an enormous hole. Which endorsement would help Greg cover the losses caused by the ground falling out from underneath his home?

Sinkhole Collapse endorsement

A neighbor stepped on a rusty rake while walking through Jake's backyard, unannounced. He ends up with a bad case of tetanus and has to stay in the hospital for three days. He files a claim against Jake, who protests any wrongdoing because he believes his neighbor was trespassing and should be responsible for his own injury. Jake wants a court of law to settle the dispute. How can the insurer settle the claim put forth by Jake's neighbor?

The insurer can settle anyway it finds advantageous to its interests.

Section I condition - Interest

The insurer does not have to pay more than the covered at time of loss

One or more volcanic eruptions are considered when what happens?

They occur in a 72 hour period

Under Coverage F - Medical Payments to Others, the Payment of Claim provision states:

Under Coverage F - Medical Payments to Others, the Payment of Claim provision states that Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer's liability.

Following a covered loss, which of these expenses would NOT be covered under Coverage F - Medical Payments in a homeowners policy?

Weight loss surgery

The Liberalization clause in a homeowners policy:

applies not only to changes made during the policy period, but also to any changes up to 60 days before it goes into effect.

Ben built a small shed in the backyard of the house he's renting, to hold his lawn equipment and other tools. One afternoon, a strong storm brought a tree down on Ben's shed, practically destroying it. Which type of coverage in Ben's HO-4 policy could indemnify him for the cost of replacing the shed?

building and Alterations Coverage

Personal Property is Coverage (A, B, or C)

c

ACV valuation subtracts

depreciation from cost of new item

Loss settlement formula if less than 80%, policy pays the higher of what?

insurance limit/80% Property Value = coverage damage

Elizabeth has a personal laptop worth $1,400. One night, while Elizabeth is out, a thief breaks into her home and steals her laptop. How much can Elizabeth expect to be indemnified by her insurer for the loss of her laptop (ignoring any deductible)

up to 1400.00

John's home is totally destroyed by a fire, and along with it most of his personal property. A few of the items were scheduled in his homeowners policy, such as his Rolex watch and a few antiques, but everything else was left as "unscheduled property." These "unscheduled" items,

will be covered under the normal policy limits.

Exclusions to HO Property Coverage:

● Ordinance of law ● Earth movement ● Water damage ● Off-premises power failure ● Neglect ● War ● Nuclear hazard ● Intentional acts