Personal Lines - Homeowners Coverage

replacement cost (without deduction for depreciation)

Buildings covered under Coverage A or B are settled using what valuation method?

$2500

Coverage C special limits: What is the total limit for loss by theft of firearms and related equipment?

Declarations page

The insured location is defined on what page of the contract? (DICED)

The HO-4 is the policy for tenants or renters of a dwelling that need insurance protection for their personal property such as furniture and clothing No Coverage A or B because the property is not owned by the tenant/renter Coverage C - broad form perils Coverage D - 20% of Coverage C

What does the coverage for HO-4 include?

The HO-8 is the most basic Homeowners Policy and is designed for owner-occupied dwellings that do not meet the requirements for other HO Forms, usually due to age

Who is HO-8 designed for?

$500 No deductible applies for this amount

A Homeowners policy will pay up to ____________ for Fire Department fees

60

A proof of loss must be submitted within _________ days of the insurer's request

10% For example, if Coverage A is $200,000, then Coverage B will be $20,000. This amount is the maximum no matter how many other/appurtenant structures are damaged in a single occurrence

Coverage B is what percentage of Coverage A?

50% For example, if the Coverage A limit is $200,000, then the Coverage C limit is $100,000. For an additional premium, this amount can be increased by the use of an endorsement.

Coverage C is what percentage of Coverage A?

$1500

Coverage C special limits: What is the total limit for electronic apparatus and accessories used primarily for business while away from the residence premises and not in or upon a motor vehicle? [The apparatus must be equipped to be operated by power from the motor vehicle's electrical system while still capable of being operated by other power sources. Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus mentioned above]

$1500

Coverage C special limits: What is the total limit for electronic apparatus and accessories, while in or upon a motor vehicle, but only if the apparatus is equipped to be operated by power from the motor vehicle's electrical system while still capable of being operated by other power sources? [Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus mentioned above]

$1500

Coverage C special limits: What is the total limit for loss by theft of jewelry, watches, furs, precious and semiprecious stones?

$2500

Coverage C special limits: What is the total limit for loss by theft of silverware, silver-plated ware, goldware, gold-plated ware, platinumware, platinum-plated ware and pewterware. This includes flatware, hollowware, tea sets, trays and trophies made of or including silver, gold or pewter?

$200

Coverage C special limits: What is the total limit for money, bank notes, bullion, gold other than goldware, silver other than silverware, platinum other than platinumware, coins, medals, scrip, stored value cards and smart cards?

$500

Coverage C special limits: What is the total limit for property used primarily for business purposes away from the residence premises?

$2500

Coverage C special limits: What is the total limit for property used primarily for business purposes on the residence premises?

$1500

Coverage C special limits: What is the total limit for securities, accounts, deeds, evidences of debt, letters of credit, notes other than bank notes, manuscripts, personal records, passports, tickets and stamps? [This dollar limit applies to these categories regardless of the medium (such as paper or computer software) on which the material exists. This limit includes the cost to research, replace or restore the information from the lost or damaged material]

$1500

Coverage C special limits: What is the total limit for trailers or semitrailers not used with watercraft of all types?

$1500

Coverage C special limits: What is the total limit for watercraft of all types, including their trailers, furnishings, equipment and outboard engines or motors?

20% Though for HO-8, it is 10%.

Coverage D is what percentage of Coverage A?

$250

Deductible applies to Section I property losses only on a per occurrence basis. The minimum deductible is $__________ Higher deductibles are available

$190,000

If Jorge has an HO-3 policy with a $200,000 liability limit and a fire totally destroys the dwelling, the policy pays up to $200,000. If the cost to rebuild is $190,000, the insurer pays what amount?

70

If the Replacement Cost Endorsement is added, Coverage C is automatically increased to ___________% of Coverage A

20

If the insured and the insurance company fail to agree on the amount of loss, either may demand an appraisal of the loss. In this event, each party will choose a competent and impartial appraiser within __________ days after receiving a written request from the other.

umpire

If the insured and the insurance company fail to agree on the amount of loss, either may demand an appraisal of the loss. The two appraisers will choose a _________. If the appraisers cannot agree upon a ___________ within fifteen (15) days, either party may request that the choice be made by a judge or a court of record in the state where the residence premises is located

10

If the insurer decides to cancel or not to renew the policy, the mortgagee will be notified at least _____________ days before the date cancellation or nonrenewal takes effect

30

If the insurer gives the insured written notice within _________ days after the insurer receives the insured's signed, sworn proof of loss; the insurer may repair or replace any part of the damaged property with material or property of like kind and quality.

30

If the risk has changed substantially since the policy was issued, the insurer may cancel the policy with notice. Cancellation can be done by letting the insured know at least ________ days before the date cancellation takes effect

Named

Is HO-2 a named or open perils policy?

Coverage A and Coverage B are open perils Coverage C is named, identical to HO-2

Is HO-3 a named or open perils policy?

Coverage A, B and C are all open perils The difference between HO-3 and HO-5 is Coverage C

Is HO-5 a named or open perils policy?

(1) Operated in, or practicing for, any prearranged or organized race, speed contest or other competition (2) Rented to others (3) Used to carry persons or cargo for a charge (4) Used for any business purpose except for a motorized golf cart while on a golfing facility

Motor Vehicle/Watercraft Liability Exclusion What are the four main exclusions for motor vehicles and watercrafts under Coverage E and Coverage F under the Homeowners policy?

3

No legal action (lawsuit) can be brought against the issuer of the policy unless there has been full compliance with all of the terms under Section I of this policy and the action is started within _________ years after the date of loss

Coverage D - Loss of Use

Of the four coverage parts under Section 1 of the Homeowners policy, what is the one that deal with Indirect Loss?

72

One or more volcanic eruptions that occur within a _________ hour period will be considered as one volcanic eruption

supplementary payment

Payment for legal defense in a lawsuit brought against the insured is in addition to the limit of liability. The defense cost is referred to as a __________________

7

Policies can be written for up to __________ years

To determine the amount Frank will be paid for his loss, you must divide $200,000 (amount carried) by $240,000 (the minimum amount he should be carrying). Your result will be a percentage of .83333. Multiply the loss ($50,000) by .83333 and your result will be $41,666.50. That is the amount paid for his loss. Frank should have carried at least $240,000 to receive the full $50,000

The Coinsurance Requirement If Frank has a dwelling with a $300,000 replacement cost, he must carry at least 80% of the value or $240,000. If he carries this amount, any partial losses up to $240,000 are fully covered. If the loss exceeds the amount carried, the difference is not paid. If Frank only decides to carry $200,000 and he suffers a $50,000 loss, how much would he be paid for the loss?

multiple-line

The Homeowners Policy is referred to as a ________________ insurance contract.

$500

The Homeowners policy covers, without a deductible, losses up to _______ from good faith acceptance of counterfeit United States or Canadian paper currency

30

The Homeowners policy pays for property removed from the premises due to a covered endangering peril insured against for a period of no more than ___________ days after the loss

10

The Ordinance or Law coverage may provide up to _______ % of Part A to pay for increased costs due to construction requirements based on an ordinance or law

1) The named insured (premises owner) listed on the Declarations page of the policy and his or her spouse (of the named insured) as long as the spouse lives in the same household (insured residence premises) with the named insured 2) Any resident relative of the named insured and spouse (The resident relative can be the relative of the named insured and/or the spouse of the named insured. The relationship can be by blood (genetic) or by marriage. For example, the resident relative could be the named insured's Uncle Bob, the brother of the named insured's father.) 3) Students enrolled in school full-time which were residents of the named insured's household before moving to attend school, provided the students are under the age of twenty-four (24) 4) Any person under the age of twenty-one (21) living in the household who is in the care of the insured (i.e., a foreign exchange student) 5) For liability purposes, coverage extends to any person employed by the insured at the residence named in the Declarations such as a domestic or nanny.

The following persons are considered an insured under a Homeowners policy:

1. Residence Premises which is a owner-occupied dwelling, other structure, grounds insured or the part of any other building where the insured resides that is defined in the policy Declarations 2. Premises acquired by the insured or spouse during the policy term and the premises is used as a residence by the insured 3. Non-owned premises where the insured temporarily resides or occasionally rents but does not use for business 4. Land that the insured owns or rents and is used for building a 1 ─ 4 family residence for the insured 5. The insured's individual or family cemetery or burial plots. Vacant land (other than farmland) that the insured owns or rents

The insured locations include the following:

three

The insurer pays medical expenses incurred or medically ascertained within _________ years from the date of the accident

60

The insurer will pay the insured unless some other person is named in the policy or is legally entitled to receive payment. Loss will be payable ______________ days after the insurer receives the proof of loss and an agreement is reached with the insured.

$2500

The insurer will pay up to ___________ for the insured's appliances, carpet and other furnishings in each apartment on the residence premises regularly held for rental

$1000

The minimum coverage limit for Part F (Medical Payment to Others) is __________, but larger amounts are available for an additional premium

$5000

The policy will pay up to ____________ for losses to grave markers and mausoleums on or off the residence premises from Perils Insured Against in the policy

True

True or False: Coverage E and F do not apply to any aircraft liability or hovercraft liability

False Coverage F (Medical Payments to Others) covers the treatment for bodily injuries (regardless of fault) to persons (other than an insured) injured from the insured's presumed liability

True or False: Coverage E covers the treatment for bodily injuries (regardless of fault) to persons (other than an insured) injured from the insured's presumed liability

True Personal Liability insurance comes standard with homeowner's insurance

True or False: Different from the Standard Fire Policy (SFP) and the Dwelling Forms, the Homeowners Policy automatically includes Personal Liability Insurance and Medical Payments to Others

False Debris of covered property if caused by a covered peril in the policy is covered up to 105% of policy maximum if needed $500 for the falling of a tree or neighbor's tree due to a covered peril

True or False: Homeowners Policies do not include debris removal as a covered expense.

True

True or False: If an insured fails to fix a loose stair step and a neighbor is injured due to the loose stair step while visiting the insured, the policy will pay for any bodily injury (BI) and property damage (PD) losses suffered by the neighbor up to the Section II policy limits

True

True or False: If the insured and the insurance company fail to agree on the amount of loss, each party will pay its own appraiser and bear the other expenses of the appraisal and umpire equally

True However, the policy would not pay the tenant for any of his or her losses

True or False: If the insured has a tenant that was forced to vacate the damaged residence, the policy would pay for lost rent since the tenant would not be paying rent during the period of restoration

True He should notify the insurance company immediately, but it is covered For it to be fully covered against a total loss without changes to premium, it cannot be more than 20% of the value of the house

True or False: In the middle of the year, a Homeowners policyholder builds an addition to his home. This is covered under Coverage A.

True as long as the house has not been vacant for sixty consecutive days immediately before the loss

True or False: The Homeowners policy covers the breakage of glass or safety glazing material which is part of the covered building, storm doors or storm windows

False The insured may cancel the policy at any time by returning it to the insurer or by letting the insurer know in writing of the date cancellation is to take effect

True or False: The insurer may cancel the policy at any time by returning it to the insured or by letting the insured know in writing of the date cancellation is to take effect

True

True or False: The insurer will not pay to any person or entity more than the amount of insurable interest he or she has in the property

True For example, making a repair to a hole in the roof after a fire that would otherwise allow rain to do further damage would be covered. This additional coverage does not increase the limit of liability in the policy

True or False: The policy pays for reasonable repair costs paid by the insured to protect the property from further damage by a covered peril

False Coverage is extended to any person under the age of twenty-one (21) living in the household who is in the care of the insured (i.e., a foreign exchange student)

True or False: Under a Homeowners policy, a 23 year old Foreign Exchange student residing with the family would be an insured.

True Students enrolled in school full-time which were residents of the named insured's household before moving to attend school, provided the students are under the age of twenty-four (24)

True or False: Under a Homeowners policy, a 23 year old child of the policyowner going to school in a different state would be an insured

True Any resident relative of the named insured and spouse (The resident relative can be the relative of the named insured and/or the spouse of the named insured. The relationship can be by blood (genetic) or by marriage. For example, the resident relative could be the named insured's Uncle Bob, the brother of the named insured's father.)

True or False: Under a Homeowners policy, a brother-in-law of the policyowner who is living in the residence premises indefinitely would be an insured

False The named insured (premises owner) listed on the Declarations page of the policy and his or her spouse (of the named insured) as long as the spouse lives in the same household (insured residence premises) with the named insured

True or False: Under a Homeowners policy, the legal spouse of the policyowner who lives across town would be an insured

True For liability purposes, coverage extends to any person employed by the insured at the residence named in the Declarations such as a domestic or nanny.

True or False: Under a Homeowners policy, the live-in nanny of the policyowner would be an insured

10% of Coverage C or $1000, whichever is greater

Under Coverage C, property usually located at an insured residence other than the residence premises (i.e., a vacation home) is covered for up to how much?

$100,000

Under Section II of the Homeowners policy, the minimum personal liability limit is __________; this amount can be increased

4 Homeowners insurance is property insurance that covers 1 ─ 4 family private owner-occupied dwelling

Up to how many families can be covered on a single Homeowners insurance policy?

1) Boats in storage, 2) Boats with inboard or inboard-outboard motors equal to or less than 50 hp. not owned by an insured, 3) Boats with inboard or inboard-outboard motors with more than 50 hp. not owned by or rented to an insured, 4) Boats with outboard motors equal to or less than 25 total horsepower, 5) Boats with outboard motors with more than 25 total horsepower not owned by or rented to an insured, 6) Sail boats less than 26 ft. or sailing vessels of more than 26 ft. not owned by or rented to an insured.

Watercraft (boat) Liability covers the following:

Bodily injury (BI) or Property Damage (PD) arising out of: 1) the rendering or failure to render professional services 2) the sale, manufacture and/or distribution of a controlled substance 3) the transmission of a communicable disease 4) war, including undeclared war, civil war, insurrection, rebellion or revolution 5) sexual molestation, corporal punishment or mental or physical abuse

What are some common exclusions for Coverage E and Coverage F?

1) Animals, birds or fish; 2) Motor vehicles including its accessories, equipment and parts or electronic apparatus and accessories designed to be operated solely by power from the electrical system of the motor vehicle (Accessories include antennas, tapes, wires, records, discs or other media that can be used with any apparatus described above.); 3) The exclusion applies only while such property is in or upon the motor vehicle. The policy does cover motor vehicles not required to be registered for use on public roads or property which are used solely to service an insured's residence or designed to assist the handicapped. 4) Aircraft, meaning any contrivance used or designed for flight including any parts whether or not attached to the aircraft (The policy does cover model or hobby aircraft.); 5) Hovercraft and parts (Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flare-craft and air cushion vehicles.); 6) Property of roomers, boarders and other tenants, except property of roomers and boarders related to an insured; 7) Property in an apartment regularly rented or held for rental to others by an insured; 8) Property rented or held for rental to others off the residence premises; 9) Business data, including such data stored in books of account, drawings or other paper records or computers and related equipment (The policy does cover the cost of blank recording or storage media and of prerecorded computer programs available on the retail market.); 10) Credit cards, electronic fund transfer cards or access devices used solely for deposit, withdrawal or transfer of funds except as provided coverage elsewhere in the policy; 11) Losses caused by water or steam

What are some of the exclusions for Coverage C?

1) Ordinance or Law 2) Earth Movement 3) Water Damage 4) Power Failure 5) Neglect 6) War 7) Nuclear Hazard 8) Intentional Loss 9) Governmental Action

What are the 9 excluded perils in Homeowners coverage?

personal property moved to be repaired, renovated or rebuilt property moved to a newly acquired principal residence for 30 days from the time the insured begins to move the property

What are the Coverage C exclusions for property not at the residence premises?

1) Coverage A - Dwellings 2) Coverage B - Other Structures 3) Coverage C - Personal Property 4) Coverage D - Loss of Use (Indirect Loss coverage)

What are the four coverage parts under Section 1 of the Homeowners Policy?

1) HO-2 - Broad Form 2) HO-3 - Special Form 3) HO-4 - Contents Form 4) HO-5 - Comprehensive Form 5) HO-6 - Unit Owners Form 6) HO-8 - Modified Form

What are the six Homeowners policies under the North Carolina Rate Bureau (NCRB) adoption of the HO-2011 Insurance Services Office (ISO) Forms?

1) The land where the dwelling is located 2) Farms (Farms are not covered by Dwelling or HO policies) 3) Dwellings that are not owner occupied 4) Glass breakage when the dwelling is vacant for sixty (60) days immediately before the loss 5) Dwellings used in whole or in part for business purposes 6) Dwellings rented to anyone other than a tenant. (The exception is for private garage purposes.)

What are the six main exclusions for Coverage A and Coverage B?

1) Additional Living Expenses 2) Fair Rental Value

What are the two main elements Coverage D includes?

Coverage A insures the residence premises (dwelling) and any attached structures such as a two car garage. Included in the coverage is equipment and fixtures permanently attached to the residence premises such as kitchen cabinets. Loss of materials and supplies used in maintenance, repair or alteration is also insured

What does Coverage A include?

Appurtenant and Other Structures: cover unattached structures separated by clear space from the dwelling listed for Coverage A such as.... garages, swimming pools, cabanas, tennis courts, fences, driveways, walks, outdoor barbecues, tool sheds, guesthouses, bathhouses, gazebos, windmills, playhouses, tree houses and playground equipment

What does Coverage B include?

Personal Property covers normal household or personal property that belongs to the insured residents of the dwelling. The policy covers personal property owned or used by an insured while it is anywhere in the world. Property of others in the care, custody and control of the insured is also covered. Property of servants and guests may also be covered by request

What does Coverage C include?

Personal Liability

What does Coverage E insure?

Medical Payments to Others

What does Coverage F insure?

The HO-6 covers the property of owners of condos, townhouses and apartments. Coverage A - $1000 No Coverage B Coverage C - written in an amount as needed Coverage D - 40% of Coverage C

What does the coverage for HO-6 include?

a structure that is fixed to the land such as an in-ground swimming pool

What is an appurtenant structure?

Broad Form designed for single or multiple family dwellings covering perils on a named perils basis

What is the HO-2 policy known as?

Special Form designed for single or multiple family dwellings covering perils on an all risk basis for Coverage A and Coverage B

What is the HO-3 policy known as?

Contents Form designed for tenants or renters providing perils coverage on a named basis for Coverage C losses

What is the HO-4 policy known as?

Comprehensive Form designed for single or multiple family dwellings covering perils on an all risk basis for Coverage A, Coverage B and Coverage C

What is the HO-5 policy known as?

Unit Owners Form designed to cover condominiums and owned apartments on a named perils basis for Coverage A and Coverage C

What is the HO-6 policy known as?

Modified Form designed for single or multiple family dwellings that do not qualify for a HO-2, HO-3 or HO-5 typically due to age or construction. Perils are covered on a specific named basis

What is the HO-8 policy known as?

80%

What is the coinsurance requirement percentage?

If the insurer makes a change which broadens coverage under this edition of the policy without additional premium charge, that change will automatically apply to the insurance policy as of the date the change implemented in the insured's state, provided that this implementation date falls within sixty (60) days prior to or during the policy period stated in the Declarations

What is the liberalization clause?

The HO-8 normally insures the home at market value. Market value is typically referred to as Actual Cash Value (ACV). The HO-8 can also be written at Replacement Cost.

What valuation system is typically used when determining value for HO-8?

10

When the insured has not paid the premium, the insurer may cancel at any time by letting the insured know at least ________ days before the date cancellation takes effect

10

When the policy has been in effect for less than sixty (60) days and is not a renewal with the insurer, the insurer may cancel for any reason by letting the insured know at least ________ days before the date cancellation takes effect

pro-rata

When the policy is canceled, the premium for the period from the date of cancellation to the expiration date will be refunded _____________

30

When the policy is written for a period of more than one (1) year, the insurer may cancel for any reason at the policy anniversary by letting the insured know at least ________ days before the date cancellation takes effect.

the insured's domestic employee on or off the residence premises (not related to a business operation). This excludes a person employed in the insured's business who works at the insured's residence.

Who would be considered a residence employee?

the policy includes both property and liability coverage with one premium covering all the risks listed on the contract

Why is the Homeowners coverage considered a "multiple-line" policy?