P&C License: Types of Property Policies

What are the coverages for mobile homes?

- HO-2 or HO-3 1. Section I: Property - Coverage A: includes the mobile home, attached structures, equipment, and accessories originally built into the unit - Coverage B: other structures, 10% of coverage A - Coverage C: personal property, 50% of coverage A - Coverage D: loss of use, 30% of coverage A 2. Section II: Liability - Coverage E: personal liability - Coverage F: medical payments

DP-2 - Broad Form

1. Broader coverage than the DP-1 2. Named peril form, only those perils named on the policy are covered 3. Provides for: - Coverage A (Dwelling) - Coverage B (Other Structures) - Coverage C (Personal Property) - Coverage D (Fair Rental Value) - Coverage E (Additional Living Expenses) 4. *Claims are paid based on replacement cost for the dwelling and structures and based on actual cash value (ACV) for the contents

What are the three Dwelling Policy forms?

1. DP-1 - Basic form 2. DP-2 - Broad form 3. DP-3 - Special form

HO-8 Modified coverage form

- An owner-occupied older home whose replacement cost far exceeds the property's market value or where these are disproportionate (historic home) - Named peril form, only those perils named on the policy are covered - Perils covered are similar to DP-1 with extended coverage and vandalism and malicious mischief for the dwelling, other structures, and personal property - Provides for Coverage A, B, C, D - *Claims are paid based on functional replacement cost for the dwelling and other-structures (replace with a similar material of today) and actual cash value (ACV) for the contents (personal property)*

Coverage D - Loss of Use (HO)

- Coverage if the residence becomes uninhabitable due to a covered direct loss 1. Additional living expense 2. Fair rental value - Different limits of liability 1. 30% of Coverage A for HO-2, HO-3, and HO-5 2. 30% of Coverage C for HO-4 3. 50% of Coverage C for HO-6 4. 10% of Coverage A for HO-8

Other coverages (DP)

- For DP-1,2,3 1. Debris removal 2. Property removed 3. Reasonable repairs 4. Fire department service charge - Up to $500 5. Improvements, alterations and additions - For DP-2,3 1. Trees, shrubs and other plants - Covers from fire, lightning, explosion, riot or civil commotion, aircraft, vehicular damage by other than the insured's vehicle, vandalism and malicious mischief - Does not cover damage or loss due to wind, hail, weight of snow, ice or sleet, or theft - Limit up to 5% of Coverage A 2. Collapse - Pays for the collapse of a building by weight of snow, ice, sleet or rain, or hidden decay, insect damage, poor construction or material used in construction - Does not cover from earthquake and flood or settling, shrinking or expanding 3. Glass or safety glazing material - Breakage of glass or safety glazing material - Not covered if building has been vacant for more than 60 days 4. Ordinance or Law - Covers the insured cost due to enforcement of local, city, state or federal ordinances or laws regulating the construction, demolition, remodeling, renovation or repair of a covered building damaged by a covered peril - Up to 10% of Coverage A

HO-1 Basic form

- Has been discontinued in most states because homeowners look for the broader coverage in the other homeowners forms - Provides named peril coverage of: fire, lightning, windstorm, hail, vandalism and malicious mischief, theft, damage from vehicles and aircraft, explosion, riot or civil commotion, glass breakage, smoke, and volcanic eruption - Damage or loss due to flood and earthquake were excluded - Personal liability and medical payments to others

HO-5 Comprehensive form

- Most comprehensive or broadest property coverage - Dwelling and other structures and personal property are covered for all perils except those excluded - Provides Coverage A, B, C, D - *Claims are paid based on replacement cost for the dwelling and other structures and based on actual cash value (ACV) for the contents or personal property

Homeowners (HO forms)

- Multiline policy because it provides both property and liability coverages in a single policy - Possible gaps and/or duplication of coverage can be avoided - Reduces their administrative effort and costs and can pass these savings - Divide the coverages into several categories and coverage is typically based on a percentage of Coverage A

HO-2 Broad form

- Named peril form, only those perils named on the policy are covered - Provides for Coverage A, B, C, D - *Claims are paid based on replacement cost for the dwelling and other structures and based on actual cash value (ACV) for the contents (personal property)*

HO-3 Special form

- Open peril form, the dwelling and other structures are covered for all perils except those that are specifically excluded in the exclusions section - Personal property or contents is covered on a named peril basis - Provides for Coverage A, B, C, D - *Claims are paid based on replacement cost for the dwelling and other structures and based on actual cash value (ACV) for the contents (personal property)*

HO-6 Unit-owners form

- People who own a condominium (their personal property and some limited coverage for the dwelling) - Named peril form, only those perils named on the policy are covered - Provides for Coverage A, C, D - *Claims are paid based on replacement cost for the dwelling and based on actual cash value (ACV) for the contents (personal property)*

HO-0 - Dwelling standard fire form

- Provide coverage on a home against fire, smoke, windstorm, hail, lightning, explosion, vehicles, and civil unrest - It does not cover the insured's personal property, personal liability, or medical payments - May be used by a mortgage lender to cover property in which they have an interest if the homeowner's property policy lapses

HO-4 Contents broad form

- Renters or tenants/renters form - For people who do not own their residence and are renting a property - Provides for Coverage C and D - Covers personal property against the same perils as the contents of the HO-2 and HO-3 - *Claims are paid based on actual cash value (ACV)* - Includes liability coverage for bodily injury or property damage for which the insured becomes legally liable

Broad Form

- Standard coverage form where the perils covered are specially named. - Perils covered are broader than those covered in the basic form

Basic Form

- Standard coverage form where the perils covered are specifically named - Very basic coverage for the perils of fire, lightning, and internal explosion only

How are the articles valued as?

1. Actual cash value 2. Cost to repair 3. Cost to replace with a substantially similar item 4. Limit of liability in the policy

Section II Liability - Exclusions

1. Both Coverage E and F - Intentional or expected by the insured - Out of business pursuits or failure to render professional service - Rental of any part of the premises unless it is rented as a residence - Out of aircraft, watercraft, or motor vehicles - War or warlike acts - Communicable disease by an insured - Sexual molestation, corporal punishment, or physical or mental abuse - Use, sale, manufacture, transfer, or possession of controlled substance 2. Only for Coverage E - Charge against the insured as a member of an association, corporation, or community of property owners - Damage by the insured - Under a contract or agreement - Eligible for workers' compensation - Under a nuclear energy liability policy 3. Only for Coverage F - Eligible for workers' compensation - Occurs off the residence premises and not related to the work - Nuclear reaction, radiation, or radioactive contamination

Endorsements (DP)

1. Broad theft coverage - coverage for theft of personal property related to the dwelling policy - Vandalism and malicious mischief is not covered if vacant more than 60 consecutive days - Covers personal property both on- or off-premises - Required to notify the police when a theft loss occurs 2. Personal liability and medical payments to others - Coverage L - Personal Liability: Coverage for damages the insured becomes legally obligated to pay for bodily injury or property damage - Coverage M - Medical Payments to Others: Coverage for necessary medical expenses for bodily injury incurred within three years of an accident - Covers fir aid expenses, damage to the property of others (up to $500 per occurrence), and claim expenses 3. Automatic increase in insurance - an annual increase in the Coverage A limit of liability 4. Dwelling under construction - Provides coverage to the dwelling owner during construction - Coverages ends when construction is completed 5. Deductible - Standard deductible is $250 but can be higher at the request of the insured

Section II Liability - Additional Coverages

1. Claim expenses 2. Loss assessment 3. First aid expenses 4. Damage to property of others

What are the coverages under the Dwelling Policies?

1. Coverage A (Dwelling) 2. Coverage B (Other Structures) 3. Coverage C (Personal Property) 4. Coverage D (Fair Rental Value) 5. Coverage E (Additional Living Expenses)

Section II Liability Coverages

1. Coverage E - Personal Liability 2. Coverage F - Medical payment to other

Coverage B - Other Structures (HO)

1. Covers other structures on the property separated from the dwelling by a clear space or connected to the dwelling by only a fence, utility line or similar connection 2. Others structures used to conduct business are not covered 3. If separated property, such as a garage, is rented to a non-resident of the household, it is covered 4. Coverage provided on others structures is 10% of Coverage A 5. Coverage B does not apply to the HO-4 Renters form or the HO-6 Unit-owner form

Coverage C - Personal Property (DP)

1. Covers the personal property or contents usual to the occupancy as a dwelling and owned and used by the insured or a family member 2. Does not cover animals, birds, or fish, aircraft, motor vehicles, boats (other than row boats or canoes), or money, currency, securities, deeds, manuscripts, bills, accounts, electronic data, computers, grave markers 3. 10% of the Coverage A

Coverage C - Personal Property (HO)

1. Covers the personal property or contents usual to the occupancy as a dwelling and owned and used by the insured or a family member 2. Does not cover animals, birds, or fish, aircraft, motorized vehicles unless they are used to service the premises or assist the handicapped, hovercraft, paper or electronic records containing business data, credit cards, or water or steam 3. Does not cover property of boarders or roomers not related to the insured, property in an apartment held for rental by the insured, or property rented to others off the residence premises 4. Coverage C is 50% of Coverage A 5. Personal property that is being moved from one permanent residence to a newly acquired permanent residence would be fully covered for up to 30 days 6. Personal property that is moved to a temporary residence or storage while the residence is being repaired or restored or is unfit to live in would be fully covered for up to 30 days

Section I Property - Additional coverages (HO)

1. Debris removal 2. Property removed 3. Reasonable repairs 4. Fire department service charge 5. Trees, shrubs, and other plants 6. Glass or safety glazing material 7. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money 8. Loss Assessment

Coverage A - Dwelling (DP)

1. Dwelling 2. Structures attached to the dwelling such as a garage 3. Materials and supplies for use in the construction, alteration, or repair of the dwelling or other structures on this location 4. Building equipment, such as air conditioning units, and outdoor equipment used to service the permises 5. Land associated with the covered dwelling is excluded

Coverage A - Dwelling (HO)

1. Dwelling described in the declaration page 2. Structures attached to the dwelling such as a garage 3. Materials and supplies for use in the construction, alteration, or repair of the dwelling or other structures on this location 4. Building equipment, such as air conditioning units, and outdoor equipment used to service the premises 5. Coverage not provided for: - Land associated with the covered dwelling - Theft if the dwelling is under construction - Vandalism and malicious mischief if the dwelling was vacant for 60 days 6. Automatic coverage for Coverages B, C, D based on percentage of Coverage A 7. Coverage A does not apply to HO-4 Renters form 8. Coverage A is limited for the HO-6 Unit-owners form

Coverage D - Fair Rental Value (DP)

1. If the dwelling is damaged as a result of a peril covered by the policy and the property is rented, the loss of rental income to the insured is covered 2. An indirect or consequential loss 3. Reimburse up to two weeks of rental income 4. Up to 20% of Coverage A 5. Under DP-1, fair rental value is not in addition 6. Under DP-2 and DP-3, an additional 20% of Coverage A is available to cover fair rental value

What are the six categories?

1. Imports 2. Exports 3. Domestic shipments 4. Instrumentalities of transportation or communication 5. Personal Property Floater risk 6. Commercial Property Floater risk *Imports and exports are eligible for Ocean Marine insurance.*

What are personal articles?

1. Jewelry 2. Furs 3. Cameras 4. Musical instruments 5. Silverware 6. Golf equipment 7. Fine art 8. Stamps 9. Coins

What are the definitions of a homeowners policy?

1. Named insured - person named on the declaration page and their spouse 2. Insured - named inusred plus: - Any relatives living in the named insured's household who are related by blood or adoption, including children, grandparents, uncles, aunts, and so on - Any children under the age of 24 living away at school as long as they have lived continuously with you until they left for school - Any persons under age 21 in the care of the named insured, such as foster children or foreign exchange students 3. Insured location - the residence premises specified in the declarations plus: - Any part of a premises where the insured is temporarily residing - Vacant land, other than farmland, owned by the insured - Land owned by the insured on which a 1- to 4- family is being built for the insured - Individual or family cemetery plots or burial vaults of the insured 4. Residence premises - up to four family dwellings plus other buildings and the land where the insured resides and that is shown in the declarations of the policy

What is considered eligible for a homeowners policy?

1. Named insured must be an owner-occupant of the dwelling or condominium or a renter who maintains a residential company 2. The home cannot have more than four families 3. The dwelling must be used exclusively as a residence, except for certain incidental occupancies such as offices, professional or private schools, or studios 4. Dwellings under constructions 5. Mobile homes can be covered with an endorsement *Farm property is not eligible to be insured using a homeowners policy

DP-1 - Basic Form

1. Named peril form, only those perils named on the policy are covered 2. Only covers three perils - fire, lightning, and internal explosion 3. Provides for: - Coverage A (Dwelling) - Coverage B (Other Structures) - Coverage C (Personal Property) - Coverage D (Fair Rental Value) - Coverage E (Additional Living Expenses) 4. *Claims are paid based on actual cash value (ACV) for dwelling, other structures, and contents

Section 1 Property - Exclusions (HO)

1. Ordinance or law 2. Earth movement 3. Water damage 4. Power failure 5. Neglect 6. Water and nuclear hazard 7. Intentional loss 8. Governmental action

Exclusions (DP)

1. Ordinance or law - Loss by enforcement of a law or ordinance that regulates the use, construction, repair or demolition of the structure - Exclusion for only DP-1 2. Earth movement - Mudslides, sinkholes, and subsidence - Will cover due to volcanic eruption but not shockwaves or tremors - Will cover due to fire or explosion as a result of the earth movement 3. Water damage - loss due to flood, tidal, wave, or water that backs up through sewers or drains 4. Power failure - occurs away from the insured location 5. Neglect - insured's failure to save or preserve property after a loss or to protect it from a loss 6. War and nuclear hazard - caused by war, military action, nuclear reaction, radiation spillage, or radiation contamination

Coverage B - Other structures (DP)

1. Other structures on the property separated from the dwelling by a clear space or connected to the dwelling by only a fence, utility line or similar connection (carport, fences, or sheds) 2. Does not cover structures that are used in whole or part for commercial, manufacturing, or farming purposes 3. If separated property, such as a garage, is rented to a non-resident of the household, it is covered 4. Under DP-1, 10% of Coverage A; Under DP-2 and DP-3, an additional 10% of Coverage A

What are the requirements for a mobile home?

1. Owner-occupied 2. Insured on an actual cash value basis, not replacement cost 3. Damage to the mobile home from collision or upset while it is in transit is available as an optional coverage

Coverage E - Additional Living Expenses (DP)

1. Pays for additional living expenses the insured incurs as a result of a covered loss (hotel or apartment costs, dining, laundry and transportation expenses) 2. Available under DP-2 and DP-3 but not DP-1 3. Up to 20% of Coverage A

Additional Living Expenses (HO)

1. Pays for additional living expenses the insured incurs as a result of a covered loss (hotel, apartment costs, dining, laundry and transportation expenses) 2. Covers an increase in living expenses over the regular household expenses

What are the three commonly used personal inland marine forms?

1. Personal articles 2. Personal property 3. Personal effects

Personal effects form

1. Provide coverage for personal property when insured or family members are travelling 2. Open peril basis for property generally carried by tourists 3. Exclusions include: tickets, passports, currency, valuable papers, contact lenses, artificial limbs, and salesperson's samples

Endorsements (HO)

1. Scheduled personal property 2. Personal property replacement cost 3. Other structures - increased limits 4. Permitted incidental occupancies 5. Earthquake 6. Home day care 7. Home business endorsement 8. Limited fungi, wet or dry rot, or bacteria coverage endorsement 9. Personal injury endorsement 10. Watercraft liability endorsement 11. Business pursuits endorsement

What are the two sections for a homeowners policy?

1. Section I: Property - coverage for homeowner's or renter's property 2. Section II: Liability - coverage for homeowner's (the insured's) personal liability to others bodily injury or property damage

What types of property are eligible to be insured on a Dwelling Policy?

1. Single-family dwelling used as a residence 2. A dwelling with 1 to 4 single family units used as residences such as apartments or townhouses 3. Rental property limited to no more than 5 borders or tenants 4. Mobile home if it is secured to the ground and has its wheels removed, it is a permanent home 5. Specified secondary uses other than residential (eligibility varies by insurer) - Incidental business use, non-retail, for example, music lesson or home schooling - Studio or home office for a professional *Farm property is not eligible to be insured using a Dwelling Policy*

DP-3 - Special Form

1. Special form also known as all risk form 2. Open peril form, the dwelling and other structures are covered for all perils except those that are specially excluded in the exclusions section 3. Provides for: - Coverage A (Dwelling) - Coverage B (Other Structures) - Coverage C (Personal Property) - Coverage D (Fair Rental Value) - Coverage E (Additional Living Expenses) 4. *Claims are paid based on replacement cost for the dwelling and structures and based on actual cash value (ACV) for the contents

Mobile homes

1. Standalone policy or as an endorsement to a Homeowners policy 2. 40 feet or more in length and 10 feet or more in width 3. Must be mobile, but the wheels are removed 4. Securely tied down 5. Use DP-1 or HO-2 or HO-3

Fair Rental Value (HO)

1. The loss of rental income to the insured is covered by Coverage D while the property is repaired 2. Does not cover loss of rental income due to a cancelled lease or rental agreement

What are the exclusions for floaters?

1. War 2. Nuclear hazard 3. Wear and tear 4. Gradual deterioration 5. Insects and vermin

Dwelling Policy (DP Forms)

Provides insurance coverage for the structure of your home and its contents, personal property

Personal property form

Provides open peril coverage for personal property, generally on a blanket basis

What is an inland marine?

Risks that can be covered by either Ocean or Inland Marine insurance

Special Form

Standard coverage form that covers all perils other than those specially excluded

What is the pair and set condition?

The insurer will not reimburse the insured for the full value of a pair or set if the entire pair or set is not lost or damaged