HOMEOWNERS INSURANCE

The Section II - Additional Coverages of Homeowners policies, damage to the property of others (whether or not in the insured's custody and regardless of fault) is covered up to:

$1,000 per occurrence. The limit is $1,000.

Which of the following is NOT a typical deductible amount found in Section I of a standard Homeowners policy?

$1,500.

Blake is covered by a Homeowners policy with a $50,000 Coverage C limit. Disregarding any deductibles, what is the most Blake can collect if his $1,500 boat is stolen from the insured premises?

$1,500. The insured can collect up to $1,500 because of the "special limits of liability" for Coverage C that apply to watercraft.

The Homeowners "additional coverages" includes coverage up to __________ for grave markers including mausoleums on or away from the residence premises by a peril insured against.

$5,000. The Homeowners policies provide as an additional coverage, up to $5,000 for this coverage. The perils insured against are listed in Coverage C.

Homeowners policies cover all of the following, EXCEPT:

A 2-family dwelling occupied by tenants who are renting the covered premises from the named insured. A 2-family dwelling occupied by tenants who are renting from the named insured would not be covered under a Homeowners policy. Rental property is covered under the Dwelling policies.

An "insured" under an unendorsed Homeowners policy can be all of the following, EXCEPT:

A childhood friend of the named insured who is visiting for a month from England.

Lightning strikes a 50-foot oak tree in an insured's yard splitting the tree in half. The tree falls hitting several small trees causing extensive damage to the trees and scattering debris in the yard. The HO-2 Homeowners Policy will pay:

A maximum of $500 per tree. The standardized Homeowners policies provide a maximum limit of 5% of coverage A and a maximum of $500 for any one tree, shrub or plant.

Which of the following is not eligible for coverage under any of the Homeowners forms?

A residence located on a farm.

Which of the following would NOT be covered under Coverage B of the Homeowners forms?

A separate building on the insured premises used for business.

Which of the following is eligible to be a named insured under a Homeowners policy?

A trust

Which of the following watercraft would be covered under Section II - Liability of the Homeowners forms?

A watercraft in storage.

Which of the following is NOT a type of "incidental business occupancy" permitted with a Homeowners policy?

An "Arts & Crafts" studio open to the public for the purposes of selling the items created. An "Arts & Crafts" studio open to the public for the purposes of selling the items created would NOT be a type of "incidental occupancy" that would be covered under a Homeowners policy. This is because of the liability created by conducting an open-to-the-public business on the residence premises.

The definition of "collapse" as defined in the additional coverage of the Homeowners forms includes:

An abrupt falling down or caving in of the structure or a part of the structure.

All of the following are eligible for a Homeowners policy, EXCEPT:

An individual who purchases a duplex in order to rent out both units. The owner must occupy one side of the duplex in order to be eligible for a Homeowners policy.

Under Section II of a Homeowners policy, a cemetery plot owned by the insured is considered to be:

An insured location.

Which of the following would cover "unattached structures" under a Homeowners policy?

Coverage B. Coverage B - Other Structures covers structures that are unattached to the covered dwelling.

An insured suffers a partial fire loss to his residence. Under an HO-3 policy what insuring agreement is available to pay for temporary, alternate living quarters?

Coverage D. Loss of use expense coverage (Coverage D) which includes additional living expense coverage would apply to this claim.

Which of the following would be covered under Section II - Liability of the Homeowner policy?

Damage to rented premises occupied by the insured caused by a fire accidentally set by the insured Damage to property rented to, occupied by, used by or in the care, custody or control of an insured for specified perils consisting of fire, smoke and explosion would be covered. An insured would have coverage under an HO-4 if he accidentally sets fire to the apartment where he is residing.

A deductible applies to all of the following additional coverages under the standard Homeowners forms, EXCEPT:

Fire Department Service Charge.

Which of the following Homeowners forms is intended to cover the possessions of the insured who is leasing an apartment?

HO-4

Perry has his home covered under an HO-5 policy. He borrows a friend's expensive camera and takes it on vacation, where it is stolen. Coverage for the stolen camera is:

Included anywhere in the world. The Homeowner policy provides coverage for the insured's items of personal property anywhere in the world. The policy covers personal property "owned or used" by the insured.

Which of the following statements is TRUE regarding the HO-6 form?

It covers the walls, floors, and ceilings of dwelling unit.

All of the following items are given a "special limit of liability" under Coverage C of the Homeowners policies, EXCEPT:

Motorized land vehicles. Motorized land vehicles are not given a special limit of liability under Coverage C of the Homeowners forms.

Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority Prohibits Use" for:

No more than two weeks. The indirect loss coverage for "Civil Authority Prohibits Use" under the Homeowners forms, coverage is provided for additional living expenses and fair rental value for no more than two weeks.

Sam and Dan are working to clean out the gutters around the roof on Sam's house. Sam and Dan are standing at the top of separate ladders that are propped against the side of Sam's house, when Dan's ladder begins to wobble and ultimately falls into Sam's ladder. Both men and their ladders crash to the ground. Whose injuries will be covered by Sam's Homeowners policy under Coverage E - Personal Liability?

Only Dan's injuries would be covered. The Homeowners policy provides coverage under "Coverage E - Personal Liability" for sums the insured is liable for injuries to "OTHERS", therefore Dan's injuries would be covered. No one with the title of "insured" under a Homeowners policy can collect for injuries under the liability section of the policy, so Sam's injuries are not covered by his Homeowners policy.

A Homeowners policy is a personal package policy. All of the following are advantages of a personal package policy, EXCEPT:

Package policies allow for lower deductibles. Insureds select their deductible amounts, package policies do not allow for lower deductibles

If an insured covers his home with a standard unendorsed HO-5 form and purchases a Coverage A limit that meets the coinsurance requirement, which of the following would NOT be covered on a replacement cost basis?

Personal property.

Which of the following statements is TRUE regarding the sections of a Homeowners policy?

Section I coverages vary greatly between the different HO forms. This is because of the different perils insured against. Section II of the forms is identical on all forms and the additional coverage provided by Section I and Section II are different.

Which of the following statements is TRUE regarding the peril of theft under the Homeowners policies?

The HO-8 form specifies a limit of $1,000 for theft. The only true statement in the answer choices is: "The HO-8 form specifies a limit of $1,000 for theft." Theft from any part of the dwelling that is being rented is not covered, theft of watercraft is not covered except with a special limit of liability under Coverage C, which is less than $5,000. Only the HO-5 provides coverage for mysterious disappearance.

Which of the following would NOT be covered under the HO-2 form?

The insured hits and damages his fence with his car. The HO-2 policy is a named peril form and does not provide coverage for the insured damaging his own fence with his car. If someone else, who is not a resident of the household, strikes the fence with their vehicle there is coverage under the HO forms. The HO-3 and HO-5 would cover this loss because they are open peril forms and this is not excluded.

The insured is wearing a diamond ring while on vacation in Europe. Her ring is valued at $1,500 is stolen. What coverage would apply under her Homeowners policy?

The policy will pay the loss less the deductible. Personal property is covered anywhere in the world. The theft limit for jewelry is $1,500. The amount of the loss, less the deductible is covered.

James has purchased a 20-year-old home for $120,000. He covers it with an HO-5 form for $100,000 with a deductible of $500. The roof of the home needs to be replaced and James has this work performed and purchases a service agreement on the roof before moving into the home. The service agreement covers $1,000 for roof damage from any cause that occurs within 5 years of the installation of the new roof. Two years after moving into the home, a heavy thunderstorm hits James' neighborhood and large sections of his roof are damaged, totaling $3,000 in damage. How will this claim be paid?

The service agreement pays $1,000 first, leaving the remaining $2,000 minus the deductible ($1,500) for the insurance company to pay. The service agreement ALWAYS pays first because the Homeowners policies are considered EXCESS when there is a home warranty or service agreement in place. Therefore in the situation posed by the question, the service agreement pays $1,000, leaving the remaining $2,000 minus the deductible ($500) for the insurance company to pay.

The "additional coverages" of the Homeowners forms pay for all of the following losses, EXCEPT:

The sudden cracking of a hot water heating system within the insured dwelling. The loss to the hot water heating system is not an "additional coverage". This type of damage is covered elsewhere in the cause of loss forms under the peril of "sudden and accidental tearing apart, cracking, burning or bulging." All of the other answer choices are "additional coverages" included on the Homeowners forms.

All of the following are "open-peril" exclusions of the HO-3 and HO-5 form, EXCEPT:

Theft Theft is included under the open perils of Coverage A & B included on both the HO-3 and HO-5 forms

Tom rents half of a duplex. During a severe storm, lightning strikes a tree in the front yard and it falls, causing damage on Tom's side of the duplex. Which of the following losses will be covered by Tom's HO-4 policy?

Tom's TV and entertainment system that were damaged when the tree fell through the roof. An HO-4 covers personal property if damaged by a covered peril. There is no coverage for real property under an HO-4 policy.

Which of the following statements is TRUE regarding Coverage F - Medical Payments to Others on the Homeowners policies?

Which of the following statements is TRUE regarding Coverage F - Medical Payments to Others on the Homeowners policies?

Under Coverage F - Medical Payments in Section II of the standard Homeowners policies, medical expenses for the injured party will be paid as long as the claim is submitted:

Within three years of the date the bodily injury occurred. Coverage F -- Medical Payments coverage, pays without regard to the negligence of the insured. All covered expenses up to the specified limit are paid for up to three years.

Section I of the Homeowners forms provides up to ________ when the insured is assessed by a corporation or property owner's association for damage to property owned collectively, but only if it was damaged by a peril insured against under Coverage A of the policy.

$1,000. Section I of the Homeowners policy provides as an "additional coverage" $1,000 when the insured is assessed by a corporation or property owner's association for damage to property owned collectively, but only if it was damaged by a peril insured against under Coverage A of the policy.

Lucy has insured her one-family home under a standard HO-3 form with a Coverage A limit of $100,000. If she suffered a $100,000 loss to her covered dwelling, how much coverage would be provided under Coverage B for her unattached garage on the premises?

$10,000. The HO-3 form provides 10% of the Coverage A - Dwelling limit for Coverage B - Other Structures. The most the insurance company will pay is $10,000 ($100,000 multiplied by 10%).

Under the "additional coverages" contained in Section II of the Homeowners forms, damage to "property of others" will not be covered if that damage was caused intentionally by an insured who is at least:

16 years of age

An insured has received actual cash value payment from the adjuster for a covered loss. At the time he is satisfied with the payment. He later changes his mind and wants the full replacement value. How many days does he have to submit the receipts to get the replacement cost payment under a HO-3 form?

180 days. The homeowner forms that provide for replacement cost coverage contain a clause which allows the insured to accept "actual cash value" for the loss. If the insured wants to pursue replacement cost for his damaged property, he must notify the insurance company of his intent to do so within 180 days after the date of the loss.

A standardized Homeowners policy is best described as:

A package policy that provides both property and liability insurance.

Which of the following property would be excluded from coverage for loss under Coverage C of the Homeowners policies?

A valuable baseball card collection owned by the named insured's son that is covered under a separate personal articles floater. Personal property more specifically insured elsewhere is excluded from Coverage C of the Homeowners policies.

Loss settlement for personal property that is covered under Coverage C of a standard unendorsed ISO Homeowners policy is on a(n):

Actual cash value basis. Unless endorsed, Coverage C - Personal Property of the standard Homeowners policies settles losses on an actual cash value basis, but no more than the cost to repair or replace the property.

Loss to insured property caused by self-propelled missiles is covered under which of the following perils of the Homeowners form?

Aircraft

Which coverage of a Homeowners policy would pay for damage to a neighbor's window caused by the insured?

Coverage E. Coverage E - Personal Liability would pay for the property damage to others caused by the insured under a Homeowners policy.

Homeowners policies provide personal liability coverage that follows an insured anywhere in the world under:

Coverage E. Personal liability coverage for the insured under a Homeowners policy is found in Section II - Coverage E of the Homeowners policy.

Which of the following would not be excluded under any of the Homeowners forms?

Explosion of a hot water heater that damages carpeting. Explosion is a covered peril on all the HO forms. The other three answer choices are exclusions of all the Homeowner forms.

Which of the following statements is NOT TRUE regarding the HO-3 form?

It provides coverage for the basic and broad perils for the Dwelling & Other Structures. The HO-3 does NOT provide coverage for the basic and broad perils for the Dwelling & Other Structures.

The insured is covered under a standard HO-5 policy. What coverage does the insured have for personal property?

Open perils. The HO-5 form provides open peril coverage on both the dwelling and personal property.

The insured has his home insured on a HO-2 policy. Lightning has struck the home and causes a fire. The insured takes as much personal property out of the house as possible while waiting for the fire department to arrive and extinguish the fire. The insured and some of his neighbors damage some of the property while moving it to safety in the back of a pickup truck not owned by the insured. What additional coverage would cover this damage to the insured's personal property?

Property Removed. The "Property Removed" additional coverage included on the Homeowners forms would cover the damage to the insured's personal property that was caused when moving the property to protect it from loss.

Sebastian puts a roast in the oven and decides to go to the movies, thinking that he has plenty of time before roast will be fully cooked. After the movie, he is caught behind a car accident and it takes him several hours to get home. When Sebastian finally arrives home, the roast is completely blackened and the contents of his home are thoroughly covered in soot from the smoke. Which of the following statements is true regarding how this claim would be handled under a Homeowners policy?

The loss would be covered under the peril of smoke. Even though the cause of this loss was not a fire, the loss is still covered under the peril of smoke. Property forms include the peril of smoke. This is a separate peril and the smoke damage does not have to occur as a result of a fire under a Homeowners policy.

Which of the following claims would NOT be covered under Section II -- Liability of a Homeowners policy?

The named insured files a claim for damage to his house caused by his dog. Section II addresses liability coverages for bodily injury or property damage to others. A claim for damage to the named insured's house is covered under Section I of the policy.

If an insured is covered under an HO-2 policy, damage caused by wind to his/her personal property would be covered if:

The wind created an opening in the structure, allowing the wind to damage the personal property inside. The HO-2 provides coverage for the broad form perils on personal property. However, for loss due to wind, the wind would first have to damage the structure, create an opening, and then damage the personal property inside the building. If the wind creates the opening in the structure, the damage to the person property is covered. If the insured creates the opening, such as leaving a door or window open, the damage to the person property will be excluded.

Which of the following is a covered basic form peril of the Homeowners policies?

Volcanic eruption. Volcanic eruption is a covered basic form peril of Homeowners policies. Earthquake, subsidence, and land shock waves are not covered.

Sally's home is covered under an HO-3 policy. Coverage F of that policy will pay medical expenses for which of the following?

Anyone who is invited onto Sally's property and is injured while there. Coverage F -- Medical Payments to Others under a Homeowners policy provides coverage for an injury occurring on the insured premises, to a non-resident invitee.

Under the standardized Homeowners forms, how much "additional coverage" is provided under Section II - Liability for loss of earnings by the insured to assist the insurer in the investigation or defense of a claim?

$250 per day. This limit is $250 per day to appear at hearings or trials to assist the insurer in the defense of the insured. This is the amount under the ISO standardized form.

A standard Homeowners policy has been issued with a $300,000 limit to cover a four-family dwelling. What is the automatic amount that will be provided for Coverage C?

$75,000. When a four-family dwelling is covered with a Homeowners policy, 25% of the Coverage A limit is automatically provided for Coverage C - Personal Property coverage. 25% of $300,000 is $75,000.

Coverages A, B, C, and D of Section I of a Homeowners policy are (in order):

Dwelling; Other Structures; Personal Property (Contents); Loss of Use. In order, the coverage of the Homeowners policy are: Coverage A - Dwelling; Coverage B - Other Structures; Coverage C - Personal Property; Coverage D - Loss of Use. You can view this as a simple list on the Introduction screen of Module C of the Homeowners chapter.