Ch. 5: Homeowner's Policy
In what way is the HO-5, Comprehensive Form different from the HO-3, Special Form?
Personal property is insured on an open perils basis
Under the HO-8 policy, the dwelling is valued on which basis?
actual cash value
Under the HO-4 and HO-6, personal property is covered on which basis?
broad perils coverage
As the deductible increases, the policy premium ___________________.
decreases
Residence Employee
duties related to maintenance or use of a residence (household or domestic services) except temporary employees
Which perils does HO-8 not cover?
falling objects ice, sleet, or snow weight accidental discharge of water accidental tearing, cracking, burning, or heat/ac units freezing accidental damage from electrical generator
Which type of liability limit applies to Medical Payments coverage?
per person
What does Coverage C, Personal Property insure?
personal property owned or used by an insured while it's anywhere in the world
What is the standard homeowner's deductible?
$250
What are the HO-3 Special Form exclusions for Coverage A and B?
-collapse unless provided by additional coverages -freezing of household appliances or systems unless insured tried to maintain heat in building/shut off water -freezing, thawing, or water pressure on patio, fence, pool ,etc. -theft in or to a dwelling under construction related materials/supplies -Vandalism and Malicious Mischief (VMM) -mold, fungus, or rot -wear and tear, deterioration, mechanical breakdown -smoke from ag operations -pollution -settling, cracking, bulging, etc. -animals and insects wild or owned by insured
Which 4 property types aren't included under Coverage B (other Structures)?
-land -structures rented to others -structures business is conducted -structures used to store business property but owned by someone else
Residence Premises
-must appear on Dec pg. -1-4 fam dwelling where named insured lives in at least one unit -includes anywhere insured lives
What is the limit of insurance available under an HO-3 policy for a tree totally damaged in a hail storm?
0%
What is the limit for watercraft including trailers?
1500
Policyholder S has an HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay?
2,750; reasonable repairs additional coverage pays for damage and costs to prevent further damage
A related, full-time student away at school and under what age is considered an insured on the Homeowner policy?
24
What is the standard deductible?
250
The automatic limit for Coverage D - Fair Rental Value is what percentage of Coverage A under an HO-3, Special Form?
30
What is the insurance limit for Coverage C?
50% Coverage a limit of liability
Of the following statements concerning Homeowners policies, which is correct? A Borrowed property meets the definition of contents B Coverage is provided to property of boarders not related to the insured C Dwellings under construction are covered for theft D Coverage is not provided to a garage rented for private garage purposes
A
The duties required of an injured person seeking coverage under Medical Payments to Others include all of the following, except: A Help the insurer in settling the claim B Submit to a physical exam by the insurer's physician C Promptly notify the insurer of any notice or demand D Cooperate with the insurer
A
The following coverages are all found under Section I of the Homeowners Policy, except: A Personal Injury Liability B Dwelling C Personal Property D Other Structures
A
Which of the following Coverages is not found under Section I of the Homeowners Policy? A Liability B Additional Living Expense C Loss of Use D Other Structures
A
Which of the following is covered under Section II of a Homeowners Policy? A An injury to a guest of the insured B An injury to the insured's 10-year-old son C Liability arising from a business pursuit D An injury to the insured's employee
A
Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? A A residence employee B The named insured's spouse C A tenant who lives in a portion of the insured's residence D The named insured
A
Which statement is true concerning Coverage D of the Homeowners Policy? A The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living B The coverage will pay until the property is restored, plus 30 days relocation expense C If the insured must relocate permanently, payment will be made for 365 days, regardless of the time it takes the insured to settle at the new location D The coverage will pay for all the insured's living expenses until the property is restored
A
Which statement is true concerning Homeowners policies? A The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement B Section I limits coverage on utility trailers up to $500 C Section I limits coverage on fire department service charge to $100 D The HO-4 provides open peril coverage on both the dwelling and contents
A
Which coverage(s) have losses paid on a replacement cost basis?
A and B
All of the following are covered under Section II of the Homeowners Policy, except: A The insured's liability for damages to property of others B Property of the insured C Medical expenses for an accident arising out of the premises or non-business activities of an insured D The insured's liability for bodily injury to others
B
Coverage E of a Homeowners Policy would cover which of the following? A Bodily Injury to a guest caused by the insured's pet dog B The transmission of a communicable disease by an insured C Bodily Injury to an insured D Bodily Injury arising out of the sale of a controlled substance
B
Which of the following is NOT a 'residence premises' in the homeowners policy? A Other structures on the Declarations if shown as the 'residence premises' B Premises rented occasionally to the named insured for non-business purposes C A one-family residence where the named insured resides D A three-family dwelling where the named insured resides
B
Which of the following would not be covered under Section II of the Homeowners Policy? A The family dog bites someone three blocks from the residence premises B Property damage to property owned by an insured C Injuries to guests visiting the insured's home D First aid expenses
B
All of the following are true of the HO-2, except: A The HO-2 covers the broad form perils B The HO-2 pays for losses to the dwelling on a replacement cost basis C The HO-2 pays for losses on an open peril basis D The HO-2 covers owner-occupied dwellings
C
All of the following special limits of Coverage C are correct, except: A $200 for money B $2,500 for theft of firearms C $2,500 for business property away from premises D $1,500 for a trailer not used with watercraft
C
Coverage C of a Homeowners Policy includes: A Aircraft stored on the Residence Premises B The insured's personal automobiles, while on the residence premises C An owned camera used by the insured while on vacation in another country D The insured's pet animals
C
Which coverage(s) have losses paid on an actual cash value basis?
C
Which of the following boats is covered under the Watercraft Liability endorsement? A A jet boat B A watercraft rented to another person C A 20-foot sail boat D A boat used to practice for a race
C
Which of the following is not true of the HO-2? A The HO-2 pays for losses to the dwelling on a Replacement Cost basis B The HO-2 covers owner-occupied dwellings C The HO-2 pays for losses on an open perils basis D The HO-2 insures against the broad form perils
C
Which homeowner's coverages (sec. 1) are included under Section 1 Property Coverages?
Coverage A, B, C, and D
Under the Homeowners policy, which coverage provides indirect loss coverage?
Coverage D
Which homeowner's coverages (sec. 2) are included under Section 1 Property Coverages?
Coverage E and F
All of the following are considered to be insured under a Homeowners Policy, except: A A friend's 14-year-old daughter who is living with an insured B A 79-year-old father-in-law who is living with an insured C A son or daughter while away at college, who is 23 D A 25-year-old friend who is living with an insured
D
All of the following are covered by Coverage F - Medical Payments to Others, except: A A neighbor's injury caused by an insured's activity B A guest is injured while visiting the insured at home C An injury to another person caused by a residence employee while mowing the lawn D An injury to the insured while mowing the lawn
D
Which of the following statements about Section II of the Homeowners Policy is false? A Insurer investigation expenses are paid in addition to the limits stated in Coverage E B The obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence C Total liability Coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy D Coverage F limits are subject to a deductible
D
Which statement is false concerning a Homeowners Policy? A The HO-3 covers the dwelling on an open perils basis B The HO-3 covers the contents against the Broad Form Perils C The HO-4 is sometimes called a Tenants Form D The HO-4 covers the dwelling against the Broad Form Perils
D
T/F: HO-2 covers loss to a fence, driveway, or walk caused by a vehicle owned or operated by the insured.
FALSE
Which coverages under each form are provided under Open Perils Basis?
HO-3 A and B HO-5 A, B, and C
Section II Additional Coverages includes Damage to Property of Others for what limit of insurance?
1,000
Under a Homeowners policy, Coverage B is what percentage of Coverage A?
10%
Under Coverage D, what is the limit of insurance for form HO-8?
10% of Coverage A
An insured has a homeowners broad form with a $200,000 limit on the dwelling and the standard deductible. If the insured's $2,500 boat and trailer are stolen from his driveway, what is the most the insured will collect from the policy?
1250
Under Coverage D, what is the limit of insurance for forms HO-2, HO-3, and HO-5?
30% of Coverage A
Under Coverage D, what is the limit of insurance for form HO-4?
30% of Coverage C
What is the loss valuation method for HO-8, Modified Form?
Actual Cash Value (ACV)
Which statement about the Homeowners Policy is false? A Under Section II, coverage includes defense costs, at the insurer's expense, even if the suit is groundless B First Aid Expenses include first aid to an insured in the event of an injury C The policy will not provide coverage for an insured that has intentionally concealed or misrepresented any material fact or circumstance D Under Section II, coverage applies only to bodily injury or property damage that occurs during the policy period
B
Which statement is false concerning a Homeowners Policy? A The HO-3 covers the dwelling on an open perils basis B The HO-4 covers the dwelling against the Broad Form Perils C The HO-3 covers the contents against the Broad Form Perils D The HO-4 is sometimes called a Tenants Form
B
Which statement regarding medical payments under a homeowners policy is true? A Medical payments are provided by Coverage E B Medical payments under a Homeowners Policy will cover funeral expenses C Medical payments include personal injury D Medical payments under a Homeowners Policy will cover the insured's injuries
B
All of the following are covered under a Homeowners Policy, except: A Vandalism to a dwelling that was vacant for less than 60 days B Equipment that is used to maintain the property C Property of guests and servants D All living expenses incurred when a dwelling becomes uninhabitable after a covered loss
D
Coverage C of the Homeowners policy would cover which of the following? A Property of the tenant of an apartment located in the insured's garage B Business data stored on the insured's laptop computer C The insured's registered pet dog D A camera stolen while the insured is on vacation
D
Homeowners policies cover: A Money up to $500 B Water damage caused by flood, sewer backup and underground seepage C Theft of guns up to $3,000 D Theft of furs and jewelry up to $1,500
D
Under Coverage C of a Homeowners Policy, all of the following losses are included, except: A Property of the insured's child who is away at college B Property of a servant C Property of a guest D Property of a roomer, boarder or tenant
D
Which form provides NAMED perils coverage for dwellings under Coverage A, Coverage B, and Coverage C?
HO-2 (Broad Form)
Which coverages under each form are provided under Named Perils Basis?
HO-2 A, B, and C HO-3 C HO-4 C HO-6 A and C
Which homeowner's form is the Special Form and what does it entail?
HO-3; the dwelling and other structures (Coverages A and B) are insured on an open perils basis, meaning all perils are insured if they aren't specifically excluded in the policy
A tenant should buy which of the following Homeowner Policy Forms?
HO-4
Which form is designed for Tenants?
HO-4
Which homeowner's forms don't require the named insured to be the owner/occupant of the insured dwelling?
HO-4 and HO-6
Which homeowner's form is the Contents Broad Form and what does it entail?
HO-4; insures rented residence or apartment
New home buyer S called his agent and told him that he wanted the broadest coverage available for his new home. Which policy would the agent be most likely to recommend?
HO-5
Which homeowner's form is the Comprehensive Form and what does it entail?
HO-5; provides the broadest coverage of any of the homeowners forms. Coverages A - Dwelling, Coverage B - Other Structures, and Coverage C - Personal Property provide insurance on an open perils basis.
Which form is designed for the unit-owner of a condominium?
HO-6
An owner of a condominium unit would purchase which Homeowner form?
HO-6, Unit-Owners form
Which homeowner's form is the Unit-Owner's form and what does it entail?
HO-6; provides named perils coverage to the owner of a condominium or cooperative unit under Coverage A - Dwelling and Coverage C - Personal Property. Coverage B does not appear in this form
What types of coverage are insured under Coverage D, Loss of Use?
additional living expense fair rental value civil authority prohibits use
Deductibles
applies to all losses unless otherwise noted in the policy
Which of the following is a Section I exclusion in the Homeowners policy?
governmental action
The HO-3 dwelling and other structures coverages are insured against which perils?
open
If an owner-occupied home is totally destroyed without fraud by a fire, the amount of the loss is based on:
policy limit
What does the insured location include?
-residence premises -parts of premises used by named insured -any premise described by named insured (i.e. boat slip) -any premise not owned by insured but they're residing (ex. hotel) -vacant land owned or rented by insured besides farm -cemetery plots -any premise occasionally rented (ex. banquet hall)
The Water Back Up and Sump Discharge or Overflow endorsement provides how much coverage for damaged property?
5,000
The amount of insurance provided for Coverage C is what percentage of Coverage A on a HO-3, Special Form?
50%
The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is:
50% of Coverage A
Under Coverage D, what is the limit of insurance for form HO-6?
50% of Coverage C
Under a Homeowners Policy, how much coverage is provided for theft or unauthorized use of a credit card?
500
Coverage A - Dwelling does not cover vandalism and malicious mischief if the dwelling has been vacant for how many days?
60
Under an HO-3 policy, what is the coinsurance requirement?
80%
Which homeowner's form is the Unit-owner's form and what does it entail?
HO-6; rented condo or cooperative unit
Which homeowner's form is the Modified Form and what does it entail?
HO-8; often used to insure older homes when the replacement and market values of the dwelling are disproportionate or if a moral hazard would be created if insurance were written at 100% of replacement cost.
The Landlord's Furnishings endorsement provides up to $ _______ of coverage.
2500
Choose the false statement about the Homeowners Policy. A Coverage C extends to animals, birds, or fish owned by the insured B Motor vehicles do not meet the definition of contents C Coverage D provides coverage for additional living expense D Personal property owned and used by the insured in a vacation home would be covered
A
Coverage A under the Homeowners Policy includes coverage for which of the following? A The dwelling on the insured premises, plus any structures that are attached to the dwelling B Detached private structures on the residence premises C Theft from a dwelling under construction prior to its occupancy D Private structures owned by the insured at other locations
A
Which of the following is excluded under the Section II exclusions? A Vehicle used to assist the handicapped and parked in a public lot B Motorized golf cart approved for use while golfing C Non-owned vehicle used off public roads D Vehicle in dead storage
A
ich of the following best describes the Debris Removal coverage under the Homeowners policy? A The policy will pay the insured for removing debris from a covered loss B Coverage is limited to 10% of the Coverage A Limit C Debris Removal applies only to loss by fire, lightning, and windstorm D The debris must be removed within 30 days of the loss
A
Which of the following is not true concerning Section II of the Homeowners Policy? A Payment under Damage to Property of Others is made regardless of negligence B The Damage to Property of Others duplicates coverage that is included in Section I C The coverage for Damage to Property of Others excludes property that is covered in Section I D The coverage for Damage to Property of Others pays the replacement cost of the property damaged up to $1,000 per occurrence
B
Under Section II of the Homeowners Policy, an employee whose duties are related to the maintenance or use of the residence premises, is defined as:
residence employee
