3-A Homeowners Section 1
It bundles property and liability coverage together.
A homeowners policy is called a "package" policy because:
Sally will receive $3,200 under Coverage B.
An out-of-control motorist careens off the road, smashing through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. Assuming Sally has a $100,00 homeowner's policy and the following costs for replacement: the lamp posts and mailbox: $700; the gazebo: $2,500; and the garage: $12,500, what will Sally's Coverage B pay for her losses?
Mike is referring to the HO-5 policy.
After many years of hard work, Mike has done very well for himself in the oil business. He has now decided to buy a Cadillac and also 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?
Ordinance or Law Coverage
After the collapse of Tiffany's porch, she finds there are many new code requirements when constructing a porch because of the 2003 Chicago Balcony Collapse. Which type of additional coverage can help with the added expenses when constructing the porch?
The lamp posts, mailbox, and gazebo would fall under Coverage B.
An out-of-control motorist careens off the road, smashing through Sally's front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. To no surprise, the reckless driver doesn't carry any insurance. Under Sally's homeowner's policy, which items might be covered under coverage B?
Since damage caused by wild animals is not an included peril in the Modified Form (HO-8) or the Broad Form (HO-2), Anton will need an "all-risk" or Special Form policy such as HO-3 or the HO-5. The least expensive of these two options is the HO-3.
Anton is purchasing a homeowners policy for his house in the woods. He wants to make sure he is covered for damage to the building caused by wild animals
Anton should choose the HO-5 policy.
Anton is purchasing homeowner's insurance for his house in the woods. He wants ti make sure it is covered from damages to the building caused by wild animals, and that it offers the BEST coverage available. Which policy should Anton choose?
Jill's Air Conditioning and Heating unit would be insured under Coverage A.
During a terrible storm, a tree falls right next to Jill's home, nearly taking out her roof. Fortunately the tree missed her house, but it landed on her HVAC unit, destroying it completely. Which coverage form might cover the loss of Jill's HVAC (Air Conditioning & Heating) unit?
$1,500 is the special limit on portable electronics.
Elizabeth has a laptop computer that she takes everywhere she goes. While she is at the grocery store, her car is broken into and the laptop is stolen. Assuming it is valued at $2,000, how much can Elizabeth expect to be indemnified by her insurer?
$1,400
Elizabeth has a personal laptop computer she uses occasionally at home. One night, while out at dinner, Elizabeth's home is broken into and the laptop is stolen. Assuming the laptop's value was $1,400, how much can Elizabeth expect to be indemnified by her insurer?
Falling Objects
Greg has an HO-2 policy on his home. One day, with a storm on the horizon, a plane flying overhead loses a tire which smashes through Greg's roof, leaving a huge hole in its wake. Capitalizing on Greg's misfortune, the storm, now overhead, decides to unleash its payload of rain and hail, soaking the contents of Greg's home. Greg files a claim with his insurer for the damages to his property. Under which named peril will Greg's policy cover the claim?
There are now five families living under the roof.
Greg owns a four unit brownstone, in which in he and three other families reside. Greg decides to finish the basement and leases it out as an apartment to another family, generating more income. After an intense blizzard causes the roof to collapse under the weight of the snow, Greg files a claims with his insurer. The claim is denied because:
Harold's claim is denied because the HO-6 form only covers the owner's belongings and finished surfaces, not the unit's structure.
Harold owns a condo on the East side of town. One night, a mild thunderstorm awakens Harold when a particularly loud thunder crack, followed by a huge crash, shakes the walls of his unit. The next morning, Harold finds a tree has fallen on the roof of his condo. He has maintained an HO-6 policy on the unit for five months and files a claim against his insurer for the cost of repairs. However, the claim comes back denied because:
The repairs to the shed-apartment would not be covered under Coverage b, because the shed-apartment was wholly rented out.
In Midland, where Delise lives, there is a massive housing shortage, so Delise decides to finish a storage shed and rent it out for $475/month. She places an ad on Craigslist and finds a suitable tenant. Shortly after the tenant moves in a drunk driver crashes into the storage shed-apartment be covered under Coverage-B? Why or why not?
Conditions. A policy condition "attaches some strings" to the policy's coverage. The insurer promise to pay, furnish a defense or provide other services only if an insured event occurs and the insured has fulfilled their contractual duties as set out in the conditions of the policy.
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."
Coverage D would help pay for the cost of lodging Jean, AND the lost rental income from Rita.
Jean operates a home business selling real estate licensing courses. She also leases her basement out to her friend Rita, who also works from home, providing a little extra income for herself. When a kitchen fire causes extensive smoke damage to her home, she and her tenant must find another place to live and work while repairs are being made, Which of the following expenses might Coverage D help pay for?
Since Jim was trying to keep his valuables safe from a hurricane, they are covered under the peril of wind, no matter what actually damages them during that time.
Just two days before a hurricane hits New Orleans, Jim brings most of his valuable items (TV, stereo, jewelry, firearms, etc.) to his parents' house in Hammond, to keep them safe from the storm. Two weeks later, Jim's valuables are destroyed when a flood sweeps through Hammond, severely damaging his parents' house. Under which peril are the valuables covered?
$20,000
Mr. Dewit has a $200,000 limit of liability for Coverage A- Dwelling under his homeowners policy. How much coverage will his policy automatically provide for Other Structures (assuming no endorsements)?
Laura's liability coverage
Peggy is visiting her friend Laura at Laura's home. During the visit, Peggy trips over Laura's dog and takes a nasty fall down the stairs. Which homeowners coverage would pay for Peggy's injuries?
Fred could be indemnified up to $2000 for the trees he recently planted.
Protesters surround a pet store near Fred's house to protest the pet store's treatment of animals. As police try to break up the protesters, a riot ensues which spills into Fred's property. Protesters and pet store employees uproot his trees and destroy his fence, Fred's fence will be covered under Coverage B, but under which coverage and how much can Fred be indemnified for the 4 White Oaks he recently planted.
$6,000 will be covered under Coverage D.
Ron works from home as an underwriter for a commercial insurance firm. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Not knowing how long the repairs will take, Ron signs a 6 month lease at $1,500/month. The repairs are completed in just four months time. Assuming Ron holds a $200,000 standard HO-3 policy, how much will he be a covered under Coverage D?
The damage to Sally's home is covered, because the HO-3 is an "all perils" or open-peril policy, without an exclusion for wildlife.
Sally has an HO-3 policy on the $150,000 home. She loves the fact that she lives in the country and can observe wildlife on a regular basis. One evening, however, a bear decides he needs to get into Sally's kitchen for a snack and breaks down her back door in the process. Sally files a claim with her insurance company. Will the damage to Sally's home be covered? Why or why not?
Sam should have has at least $160,000 (200,000 x 80%), but he only has $80,000 of coverage. $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.
Sam Samson's house is under-insured. It has a replacement cost of $200,00, 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 imposes the standard coinsurance penalty, how much will Sam receive as a settlement for the roof (ignore the deductible)?
Reasonable repairs is the additional coverage that might reimburse Mark for the cost of the materials purchased.
Strong winds have blown many shingles off of Mark's roof, and the weather forecast is predicting an 80% chance of rain the next day. Mark heads to his local hardware store and purchases a ladder and tarp so he can temporarily keep water out of his home until the roof can be repaired. Which type of additional coverage might reimburse Mark for the cost of the materials purchased?
The HO-6 is for condo unit owners. Coverage A provides for "alterations, appliances, fixtures, and improvements which are part of the building contained within the 'residence premises.'" Since an exterior light is outside the unit, it would probably be owned in common by all unit owners, so the particular unit owner would not be responsible for it.
The HO-6 policy would likely NOT cover which of the following?
The insuring agreement is the most important part of an insurance policy.
The most important portion of an insurance policy is the section with the shortest paragraph, usually one sentence long. This section, commonly referred to as the heart of the policy, is the:
Theft committed by an insured and theft in or to a dwelling under construction. Only the insured's property is a covered under the policy, and this coverage applies anywhere in the world.
Theft is a covered peril under a homeowners policy, but not all theft losses are covered. What are some general exclusions to the peril pf theft?
Collapse Coverage
Tiffany and her apartment mates decide to hold a party to bring in the new year. Over 80 people attend the party , 40 of which end up on the balcony for some fresh air. Under the weight of so many people, the wooden frame of the balcony gives way, but luckily no one is injured in the fall. Which type of coverage would help pay to rebuild the balcony?
The HO-4 provides coverage mainly for contents (with come coverage provided for building additions and improvements made by the tenant) and is this designed for renters.
Which ISO homeowners form is designed for renters and covers personal property only?
Coverage C- Personal Property provides coverage for loss or damage to items owned by an insured while they are anywhere in the world. Personal property of others, such as tenants, is not covered in the Homeowners forms.
Which of the following items would NOT be covered against loss or damage under Coverage C of a homeowner's insurance policy?
Fire, windstorm, and theft are all named (specified) perils in the HO-2 Broad form. Earth movement is a policy exclusion.
Which of the following perils in NOT covered under the HO-2 Broad Form?
Books do not have a special limit of liability in the Homeowner's policy forms. Losses involving books are subject to the full Coverage Property limit of liability.
Which of the following personal property items does NOT have a special limit of liability in the Homeowner's forms?
Shannon's two-bedroom house in town, which he rents out to four college students would NOT fall under the definition of "Residence Premises" in Shannon's Homeowners policy.
Which of the following would NOT fall under the definition of "Residence Premises" in Shannon's Homeowner's policy?
None of the damage will be covered.
While backing out of his driveway, Gary accidentally puts the car into drive and plows into the side of his house, arriving in his living room surrounded by a sea of rubble. The total damages climb to $89,000 to repair the wall and clean up the mess. Assuming Gary has an HO-2 'Broad" policy, how much of the damage will be covered?
Building additions and alterations coverage
While renting a home in Jacksonville, FL, Ben built a shed to house his lawn equipment and other tools. One afternoon, particularly ornery storm decided that shed would look much better with a 20 foot tree laid horizontally on its roof. Which type of coverage could indemnify Ben for the cost of replacing the shed?
A small business that makes less than $70,000
Who would not be eligible for a homeowners policy?
