7 HO-3 Coverage Case Quiz

Marta insured her home with an HO-3 policy that includes a Personal Property Replacement Cost Loss Settlement endorsement. Her large screen television fell off the wall and was damaged beyond repair. She had paid $2,000 for it. At the time of loss it had an actual cash value of $800 and a replacement cost of $1,500. Because she found that she had little time to watch television, she decided not to replace the TV. How much did her insurer pay on the claim? Select one: A. $0 B. $800 C. $1,500 D. $2,000

A. $0

Bill carves duck hunting decoys for sale in the basement of his home, which is insured with an HO-3 policy. This is his full-time job. One day, a customer picked up a sharp chisel after Bill told him not to touch it because it was dangerous. The customer mishandled it and severely cut his hand, requiring several stitches at the local emergency room. Would the Medical Payment to Others coverage in the HO-3 apply in this situation? Select one: A. Yes, if Bill's policy was endorsed with the Home Business Insurance Coverage endorsement B. Yes, if Bill's policy was endorsed with the Personal Injury Coverage endorsement C. No, because of the Home Crafter exclusion in the HO-3 D. No, because of the Personal Injury Liability exclusion in the HO-3

A. Yes, if Bill's policy was endorsed with the Home Business Insurance Coverage endorsement

Jackie insures her home with an HO-3 policy. She operates a seamstress service from her home. A customer was picking up some altered pants, tripped on a loose floorboard on her porch, and was injured. Is there coverage for this claim? Select one: A. Yes, if Jackie's policy was endorsed with the Home Business Insurance Coverage endorsement B. Yes, if Jackie's policy was endorsed with the Personal Injury Coverage endorsement C. No, because of the Business Liability Exclusion in the HO-3 D. No, because of the Home Business Exclusion in the HO-3

A. Yes, if Jackie's policy was endorsed with the Home Business Insurance Coverage endorsement

Steve and Julie purchased a HO-3 policy with a Coverage A limit of $200,000 and a Coverage C limit of $100,000. Steve and Julie added the Earthquake endorsement to their policy, which has the standard deductible. A landslide occurs and causes significant damage to their dwelling and property. If Steve and Julie suffered a $75,000 loss as a result of the landslide, how much coverage will their policy provide? Select one: A. $0 B. $65,000 C. $70,000 D. $74,500

B. $65,000 The policy will cover $65,000 worth of losses: $75,000 - $10,000 deductible (5% of Coverage A limit) = $65,000

Ben lost in his lawsuit against his neighbor, Jim, alleging that Jim had created a nuisance on his property. Jim has now filed a malicious prosecution claim against Ben. Under which endorsement to Ben's homeowners policy can coverage for this claim be found? Select one: A. Personal Liability endorsement B. Additional Liability Coverages endorsement C. Ordinance or Law—Increased Amount of Coverage endorsement D. Personal Injury Coverage endorsement

D. Personal Injury Coverage endorsement