renewal Homeowners: 2
Steve received pilot training when he served in the Air Force, and he occasionally rents a small airplane for his personal use and to stay in practice. When Steve rents an airplane, he is usually required to
provide his own liability insurance.
Brock's pickup is insured under a PAP, but he plans to buy an ATV before he goes on a hunting trip next month. He can get the best protection while using the ATV by
purchasing specialty ATV insurance.
A landscaper, Neil, keeps his equipment in his home garage overnight. Neil is concerned that his homeowners policy's $2,500 limit on business property is inadequate and asks what other limits might be available. Which of the following is not one of the available options?
$12,500 the $2,500 limitation on property located on the residence premises and used primarily for business purposes limits may be increased to $10,000 in increments of $2,500.
Leslie's ponies are kept in a stable behind her house. Because Leslie has trained her ponies to perform a variety of stunts, she is frequently asked to have them perform at various public events, and she charges a fee for each such appearance. Leslie does not need to add the home business insurance coverage endorsement to her homeowners policy unless her annual income from these performances is more than
$2,000.
Gil's current homeowners policy, a standard ISO form with no endorsements, has a Coverage A Dwelling limit of $500,000. Therefore Gil has ordinance or law coverage for
$50,000. ISO's ordinance or law coverage in its homeowners policy is 10 percent of the dwelling limit.
Andreas just bought a German shepherd puppy. To prevent injury claims that might result from a dog bite, Andreas should take all the following risk management steps EXCEPT:
Add a canine liability exclusion to his homeowners policy.
Which one of the following classes of personal property is covered subject to a sublimit in a homeowners policy?
Cash The policy imposes a $200 maximum on money.
Felicia sells personalized hats and gloves from the back of her car at various fairs and exhibits. Because all sales take place away from her home, she understands that she is not eligible for a home-based business endorsement to her homeowners policy. Which one of the following policies for covering her business-related exposures should Felicia consider?
BOP That's correct! The BOP is a good policy for most small businesses to consider.
Every properly insured condominium association ought to have certain basic coverages and/or surety bonds, such as
D&O liability coverage with reasonably high limits. D&O liability coverage with reasonably high limits." Coverages that condominium or home owners' associations should have include guaranteed replacement cost property coverage for common areas, commercial umbrella coverage, workers compensation insurance (even if there are no association employees) to cover claims brought by uninsured independent contractors, and D&O liability coverage with reasonably high liability limits.
Angie is a wealthy retired home owner with several domestic employees. In addition to buying homeowners insurance, Angie should also consider
EPL insurance.
Although Scot is physically handicapped, he is able to drive a motor vehicle with hand controls. Which one of the following motorized vehicles Scot owns qualifies as covered property under Scot's homeowners policy?
His motorized wheelchair
Joe and Leslie have installed a pool at their home. Their agent tells them that they should do which of the following to minimize the hazards and control their liability?
Investigate installing a pool safety alarm
Lewis and Helena McKenzie recently retitled their home in the name of a trust. If they arrange homeowners coverage under an ISO policy to which ISO's new trust endorsement (form HO 06 15) is attached, the policy should be issued in the name of
Lewis and Helena McKenzie. The policy could be issued in the name of the grantor (who would be the named insured under the policy) rather than in the name of the trust. Including the name of the trust can result in unintended exposures for the insurer.
. Lyle just purchased a boat trailer that he will pull behind his SUV, which is insured under a PAP. What should Lyle do to obtain liability coverage on this trailer while he is towing it?
Nothing; his PAP automatically provides liability coverage on owned trailers.
Which one of the following coverages that is available in a separate boatowners policy is also available in a homeowners policy?
Property damage liability That's correct! Most watercraft policies include uninsured boatowners coverage, boat trailer coverage, personal effects coverage, and nonowned watercraft liability; some watercraft policies also cover wreck removal/salvage coverage (in terms of physical damage to the vessel) and pollution liability (e.g., oil or gas leakage).
Having duly been elected to a public office in her city, Marisol is now obligated to provide a bond. What type of bond would normally be required of a public official?
Public official bond Some public entities require elected or appointed public office holders to furnish a public official bond.
Mitch doesn't know much about insurance, but he has been told that his BOP provides all the property and liability coverage his small business needs. But does it? A business that Mitch deals with asks him to sign a contract in which he agrees to carry "fire and extended coverage insurance." Before signing this contract, Mitch should
ask an experienced attorney who understands insurance to evaluate the agreement.
Many of the home owners who purchase homeowners insurance from the insurance agency Marcelino manages have one or more domestic employees. In order to properly educate his staff and clients about any homeowners policy coverage gaps this entails, Marcelino should
become knowledgeable about workers compensation law in the state(s) where he does business.
Although Courtney does not have a company car, she has access to any of the vehicles in her employer's car pool whenever she needs to make a business trip. Courtney has a PAP on her own car with $500,000 liability limits. To make sure she is adequately protected when driving one of these pool cars, Courtney should probably add or buy
d. the extended non-owned coverage-vehicles furnished or available for regular use endorsement to her PAP. That's correct! Although Courtney is not assigned to one specific vehicle, liability arising from her use of the pool cars that are available for her regular use are not covered under her PAP unless the "extended non-owned coverage—vehicles furnished or available for regular use" (PP 03 06) or related endorsement has been attached. The endorsement provides excess liability coverage; her employer's coverage on the vehicle is primary.
Before agreeing to serve on the board of her condominium association, Lakisha asked to review a copy of the association's D&O liability policy to determine whether it would cover directors if an uninsured or underinsured loss occurs. To make that determination, Lakisha will read through the policy and look for a(n)
failure to maintain insurance exclusion. The policy provides E&O coverage unless a "failure to maintain insurance" exclusion appears in the policy or an endorsement to the policy.
Quintana Marina rented an outboard motorboat with a 40 horsepower engine to Lester, who was subsequently involved in a boating accident that damaged the hull. In addition to repair costs, Quintana Marina wants compensation for the rental fees it lost while the boat was being repaired. Lester is most likely to have insurance that covers these lost rental fees if he obtained watercraft coverage
from Quintana Marina when he rented the boat. The first area of potential coverage to check is under the client's watercraft policy (if one exists). If not, or if there are serious gaps in this coverage, the client should procure the necessary property coverage (with adequate limits) for the rented watercraft from the marina since boat rental companies will typically seek compensation for the rental fees they are unable to earn following damage to or loss of their craft, and this type of consequential loss is not typically covered under a homeowners policy.
Because he operates a small home-based business, Harris would like to add the home business insurance coverage endorsement to his homeowners policy. However, he discovers that his business is not eligible for this endorsement because the business
has $300,000 in gross annual revenues.
Because she added the personal property replacement cost loss settlement endorsement to her homeowners policy, Lolita's policy now has
household contents coverage with no deduction for depreciation. Personal property is typically valued, for insurance purposes, at its depreciated actual cash value. The "personal property replacement cost loss settlement" (HO 04 90) endorsement adds coverage on a replacement cost basis but by itself does not increase the policy's dollar limit on personal property.
1. Chelsea is in her insurance agent's office buying insurance on the new car she will pick up tomorrow. Since she is financing the vehicle over a 5-year period, she makes sure that the finance company is listed as a loss payee. The agent suggests she also have an auto loan/lease coverage endorsement added to her policy as an extra-cost option. Chelsea has already heard too much about extra cost options from her car salesman, so she asks her insurance agent what benefit she would receive from this endorsement. The agent explains that
if her car is totaled, the insurance proceeds with the endorsement will give her enough money to pay the outstanding balance on her auto loan. That's correct! Also known as a gap endorsement, this endorsement would pay the owner, in the event of a total loss, the outstanding balance of the auto loan rather than pay only its actual cash value.
Maura has heard that insurers tend to nonrenew homeowners policies for policyholders who have had a claim, so she resolves not to report any claims her policy might cover unless they are too big for her to handle by herself. If she is serious about that approach, Maura should also seriously consider
increasing her policy's deductible.
Because Lily now owns a 35 foot sailboat, she wonders whether she needs some kind of endorsement to her homeowners policy. In reviewing her homeowners policy, Lily finds that that her unendorsed homeowners policy includes
limited liability coverage on her sailboat. That's correct! Most unendorsed homeowners policies include limited liability coverage for owned or rented sailboats that are more than 26 feet long.
Carolyn would like to add the home business insurance coverage endorsement to her homeowners policy, in order to provide coverage for her home-based business. However, she discovers that her business is not eligible for this endorsement if the business is a
partnership jointly owned by Carolyn and her daughter who lives a few miles away. That's correct! Partnerships are eligible only if the partners are composed of the named insured and resident relatives: Carolyn's daughter is a relative, but she does not reside with Car
Delores often speaks before thinking, and a former friend has just sued her for slander following a regrettable slurred speech that Delores made at a wedding reception. Delores may have protection for this suit under her homeowners policy if it includes a
personal injury endorsement. A personal injury endorsement provides coverage for losses due to oral or written publication of any material that slanders another party.
While he was in Hawaii on business, Jerald purchased a time-share unit that he has a right to occupy for 2 full weeks every year. This time-share involves a "right to use" arrangement. Jerald
should notify his insurance agent of this arrangement. The insured should notify his insurance agent of this arrangement even though the homeowners policy will likely consider this time-share an "insured location," making an additional endorsement unnecessary.
To determine whether a specific vehicle is or is not covered, it is important to consider the meaning of certain terms like "motorcycle" that can be used in connection with motor vehicle insurance. A detailed definition of "motorcycle" appears only in
specialized motorcycle insurance policies. That's correct! Motorcycle insurance policies contain a detailed definition of a "motorcycle," but the miscellaneous type vehicle endorsement does not.
Trenton's $3 million home is located on a hill just outside the100-year flood plain. If Trenton tries to buy flood insurance on this home, he will find that
the NFIP will provide only $250,000 of coverage on his dwelling.
In reviewing a wealthy client's insurance portfolio, Brian comes across a charterer's legal liability policy. Brian had not heard of this type of policy before, but on examining it, he learned that it is used to cover
the liability exposures of an individual who charters a larger boat or yacht from its owner. " A charterers legal liability policy covers the liability exposures of an individual who charters a larger boat or yacht from its owner.
Tanks containing heating oil create a pollution problem when they leak. The biggest problem comes from oil storage tanks that are
underground.
To avoid an important coverage gap, a home owner should add the watercraft endorsement (ISO form HO 24 75) or its equivalent to his or her homeowners policy if the insured owns an outboard motorboat
with more than 25 horsepower. That's correct! Boat enthusiasts who own an outboard motorboat with more than 25 horsepower should consider adding the "watercraft" (HO 24 75) or related endorsement to their homeowners policy to provide extended liability coverage.
Adding the personal injury endorsement, or one that is similar, to a homeowners policy provides insured home owners with some protection against claims resulting from
wrongful eviction. Adding the "personal injury" (HO 24 82) or similar endorsement onto the homeowners policy provides some protection from allegations such as libel, slander, and wrongful eviction.
