HO Policies

Mary has insured her home under a $100,000 HO-3 form. If she has a fire loss of $15,000 to her UNATTACHED garage, her homeowners policy will reimburse her for what amount?

$10,000 Remember: Cov. B Other Structures10% Cov. C Contents/Personal Property 50% Cov. D Loss of Use 30% A homeowners policy automatically provides 10% of the Coverage A limit for Coverage B (other) structures; 10% of $100,000 is $10,000, the maximum amount Mary will receive.

The insured's home has a replacement cost of $150,000. In order to have replacement cost coverage for partial losses to the dwelling, their homeowners policy must be written with a face amount equal to or greater than

$120,000 Co-insurance requires that the insured carry 80% of the actual replacement cost in order to receive full replacement of a partial loss. In this case, the insured must carry a minimum of $120,000. ($150,000 x 80% = $120,000)

A dwelling has an actual cash value of $100,000 and a replacement cost of $150,000. To make sure that the replacement cost provision of the homeowners policy applies, an agent should suggest that the minimum coverage amount for the dwelling be

$120,000 To trigger the replacement cost settlement, the home must be insured to 80% of its full value. Therefore, the agent will suggest $120,000 ($150,000 x 80%).

Dave owns a homeowners policy covering his residence for $250,000 with basic personal liability coverage. A visitor is injured on the premises and sues Dave, winning a $100,000 judgment. During the suit, legal expenses of $25,000 are incurred. How much will Dave's policy pay?

$125,000 The basic limit for Coverage E (personal liability) in the homeowner's policy is $100,000. In addition, defense costs are covered over and above the stated limit. Therefore, $125,000 is paid.

The insureds have an HO-3 policy valued at $150,000. They have a DETACHED garage that was destroyed by a covered peril. It will take $17,000 to replace the garage. Their homeowners policy will pay

$15,000 Coverage B (other structures) is paid at the rate of 10% of Coverage A. In this case, Coverage A was $150,000. 10% of $150,000 equals $15,000.

An insured's normal monthly living expenses are $1,600. She suffers a covered loss. If expenses increase to $2,000 to live away from home for a month, how much will her homeowners contact pay?

$400 Coverage D (additional living expenses) covers expenses in addition to normal living expenses due to not being able to live in your home after it is damaged by an insured peril. Therefore, if normal expenses are $1,600, but are $2,000 away from the house, the increase of $400 is reimbursed.

Suppose an injured party collects $1,000 under an insured's medical payments to others coverage and still sues the insured for pain and suffering. If the injured party is ultimately awarded $50,000, which includes the medical payments, what would the insured's liability pay?

$49,000 You cannot add medical payments pay to the liability limits.

Chris had her prize rose bushes vandalized during Halloween. What is the most the insurer will pay for each rose bush?

$500 per shrub Vandalism is a covered peril for trees, shrubs and plants. The maximum payable per shrub would be $500.

1) What is the dollar limit on money, gold, coins, silver? 2) Business property OFF premises? 3) Watercraft/trailer, theft of jewelry, portable electronics? 4) Theft of firearms? 5) Theft of silverware, business property at residence

1) What is the dollar limit on money, gold, coins, silver? $200 2) Business property OFF premises? $1500 3) Watercraft/trailer, theft of jewelry, portable electronics? $1500 4) Theft of firearms? $2500 5) Theft of silverware, business property at residence $2500

An HO-2 form does NOT set special coverage limits on 1) Television Sets 2) Boats 3) Money 4) Jewelry

2) Boats Only certain types of high-valued property (jewelry, furs, silverware, boats, etc.,) are limited under a homeowners policy. Conventional, typical property (clothing, furniture, hobby items, etc.) are not limited.

What homeowners policy provides all risk coverage to cover a detached garage? 1) HO2 2) HO3 3) HO4 4 )HO6

2) HO3 The HO-3 provides all risk coverage for Part A (dwelling) and Part B (other structures). The HO-2, HO-4, and HO-6 provide named perils coverage for all coverage parts.

Walt has a home with a replacement cost of $100,000. He has an HO-3 policy with a value of $60,000. Last week there was a fire at Walt's home resulting in $30,000 of damage. What will Walt's HO-3 pay for this loss?

22,500 Co-insurance requires you to carry 80% of your replacement amount. In this case, Walt would need a minimum of $80,000 to receive replacement cost for his loss. Since he carried only $60,000, he will receive only 75% of his loss. 75% of the loss of $30,000 = payment of $22,500.

What is the maximum "family size" for a dwelling to qualify for homeowners policy?

4 family dwelling

What boat would be afforded liability coverage under a homeowners policy?

9ft sail boat The homeowners policy has automatic liability coverage for certain vessels within certain parameters. A 30-foot speedboat, 35-foot sailboat, and 38-foot houseboat are all too big to be covered.

What is a mobile home considered for HO policies? Modular homes? AND What is required to insure a mobile home?

A mobile home is one that is not on a permanent foundation. A modular home brought in sections and mounted on a permanent foundation is not a mobile home. Mobile home endorsement

The deductible required when adding the optional earthquake endorsement to the HO policy is

A percentage of the policy limit Earthquake coverage is available by endorsement, with a deductible stated as a percentage of the policy limit. A dwelling is insured for $100,000 with an earthquake endorsement with a 5% deductible. If an earthquake causes a loss to the structure, the deductible for this loss would be $5,000 (5% of the $100,000 policy limit.)

What is covered on all HO policies?

ALL HO coverage forms cover theft of personal property (contents). Personal property coverage is always written on a named peril basis.

There are no SPECIAL LIMITS under coverage C of the HO policy for

Antiques

Business property is covered under the homeowners policy for what amount? (2 numbers)

Business property is covered up to a maximum of $2,500 on the premises but only $1,500 off premises, as per the special limit coverage.

Under all homeowner forms would an insured driving her car into her rose bushed because she slid on ice be covered?

Coverage is excluded when damage is caused by a vehicle owned or operated by the resident.

What would NOT be a covered premise under Section II of a homeowners policy? Vacation property Farmland Cemetery Plot Vacant Land

Farmland is considered business property, and is not covered by the homeowners policy.

An individual lives in an apartment. What homeowners form should she have?

H04 Since the tenant does not own the building, she would need coverage only for personal property. HO-4 Section I covers Coverage C and D. There is no Coverage A or B.

The insured wants to get the maximum protection for his home and personal property. He should purchase the

H05 The HO-5 is all risk coverage on the buildings and personal property

Coverages A (dwelling) and B (other structures) of the HO-3 policy covers damage caused by

HO-3 is a special form type of coverage A wild animal

What does HO2, HO3, HO4, HO5, HO6, HO8 cover?

HO2-(Attached) broad form coverage for both the dwelling and personal property HO3- (Detached) special coverage on buildings but broad on the contents HO4- (Renters) No structural coverage but broad on contents HO5- (Maximum Protection) All Risk for Structures and Contents HO6-(Condos) Broad coverage up to $5,000 on buildings, broad coverage on contents HO8- (Old Homes) basic coverage on both buildings and personal property

What does coverage c cover?

It covers personal property while it is anywhere in the world. (Your daughter belongings while she is living in a college dorm)

Which of the following is NOT covered under Coverage A of the HO?

Land. Land does not burn, so there is no specific coverage for land.

Standard exclusions on HO policies? WELP NIWN

Law Earth movement Water damage Power failure Neglect War Nuclear hazards Intentional losses

Which home-operated business is NOT covered by the optional HO endorsement Permitted Incidental Occupancies? Law office Tutoring service Art studio Book keeping service

Law office is NOT covered High-risk occupancies such as those presented by police officers, lawyers, or physicians are NOT eligible. "Incidental" business that may be covered for an additional premium include an office in the home (real estate or insurance), professional activity (teaching), private school (piano lessons), or studio (artist's studio).

Which item should NOT be covered by a personal articles floater or scheduled personal property endorsement?

Loose Gem Stones

An HO-6 policy for condominium unit owners automatically provides $1,000 of coverage for what?

Loss Assessments The bylaws of a condo association might state the unit owners could be assessed for any loss to common property not covered by the master association policy. Therefore, the unit owner's HO-6 contract provides automatic coverage for $1,000 loss assessment.

On the homeowners policy, the indirect Coverage D is also called

Loss of use Which is indirect loss coverage, designed to reimburse the insured for all increased expenses due to the fact a covered peril made the dwelling uninhabitable until it can be repaired.

What is NOT provided by a homeowners policy? 1) Medical Payments coverage 2) Operations Liability coverage 3) Theft coverage 4) Personal Liability coverage

Operation liability coverage

What property could be insured under Coverage C?

Personal property Example: You old art collection

What does coverage d cover?

Provides hotel when your home is out of commission

What is another name for the HO-4?

Tenants form (Renters Insurance) HO-4 provides contents coverage for insureds who do not own the premises they inhabit. It contains no structures coverage, but still includes contents (personal property), loss of use, personal liability, and medical payments.

The personal articles floater is similar in coverage to which of the following endorsements to the HO policy?

The Personal articles floater is a separate policy and is similar to Scheduled personal property endorsement on the homeowners.

Which of the following situations would be covered under Coverage E, Personal Liability?

The insured injures someone while operating a golf cart on a golf course.

Mold is excluded on the all risk coverage form unless

Unless it results from a covered accidental discharge of water from a plumbing device.

When does medical payments to others have to be incurred?

Within 3 years of the accident