Chapter 6 Homeowners

A home is insured on an HO-3 for $90,000. If the home sustains a total fire loss and the replacement value of the home at the time of loss is $120,000, how much does the insurer pay?

$90,000 Because the loss is a total loss, the insurer pays up to the $90,000 policy limit, despite the fact that the dwelling is insured for 75% of its replacement cost, rather than the 80% coinsurance requirement included in the policy. If the insured submitted a claim for a partial loss, a penalty would apply. because minimum requirement is 100,000

C's debit card is stolen, and $1,000 is subsequently stolen from their account. How much will C's HO-3 policy pay for the loss? A $0

500 Coverage up to $500 is paid for theft or unauthorized use of a credit card or electronic fund transfer card (debit card). This is provided as an Additional Coverage.

Under the HO-8 policy, the dwelling is valued on which basis?

Actual cash value HO-8 policies value the dwelling on an actual cash value basis because a replacement cost basis is not provided for older homes with obsolete, antique, or custom materials or construction methods. The functional equivalent of those materials or methods may be used for repairs or replacements, when needed.

An insured must add the Watercraft Liability Endorsement to their Homeowners policy if they want coverage for liability arising out of the use of which of the following watercraft?

An inboard motorboat the insured owns The Watercraft Liability Endorsement adds liability coverage for scheduled watercraft that would otherwise be excluded from Section II on the unendorsed Homeowners policy, such as a watercraft with an inboard motor. Watercraft in storage and sailing vessels under 26 feet in length are already covered by the standard policy. Neither the policy nor the endorsement covers watercraft rented to others.

FORMS FOR H.O COVERAGES

Broad Form(HO-2) Special Form(HO-3) Contents Broad Form (Tenant's Form)(HO-4) Comprehensive Form(HO-5) Unit-Owners Form(HO-6) Modified Coverage Form(HO-8)

HO-2 BROAD FORM (THEFT)

COV FOR THEFT IS LIMITED EXCEPTIONS: not provided if the theft is committed by any insured, IF DWELLING IS UNDER CONSTRUCTION OR IF THEFT IS IN PART RENTED BY OTHERS

Unit-Owners Form (HO-6)

Coverage A and Coverage C are provided for the part of the dwelling the insured owns, including building alterations and improvements, and the insured's personal property while anywhere in the world. Though Coverage B does not appear on the form, if the insured owns other structures on the premises and wants to insure them, the value of the other structures may be included in the Coverage A limit.

SPECIAL FORM COVERAGES FOR COVERAGE C

Coverage C protects against 16 named perils on broad form!!!! Under the Vehicle peril, the Special Form removes the exception—meaning coverage is given back—for losses to a fence, driveway, or walk caused by a vehicle owned or operated by the insured.

homeowners policy section 1 vs section II

I - Property Coverages and Section II - Liability Coverages.

HO-2 LOSS SETTLEMENT

Losses under Coverages A and B are settled on a replacement cost basis. Losses under Coverage C are valued on an actual cash value (ACV) basis.

On a Special Form Homeowners policy, Coverage C has a special limit of liability applicable to all of the following losses, except:

Misplaced pearl earrings Theft losses to jewelry or firearms, damage to passports resulting from a covered hail loss, and fire losses to portable electronic equipment in or on a motor vehicle all have a special limit of insurance under Coverage C on all Homeowners forms. However, only the HO-5 Comprehensive Form covers misplaced jewelry, firearms and equipment, and silverware.

Under a Homeowners policy, which statement about personal property coverages is incorrect?

Money is covered up to 500 per occurrence on an unendorsed policy

Under a Homeowners policy, medical payments provided by Coverage F are:

NOT an admission to the insured liabilty

HO-2 BROAD FORM

Off-premises theft is not provided for trailers, campers, watercraft and their equipment, or property at another residence owned by, rented to, or occupied by an insured on a non-temporary basis (other than student housing).

On a Special Form Homeowners policy, which of the following coverages is provided under the Property Removed Additional Coverage?

Open perils coverage for 30 days This Additional Coverage will cover property that is removed in order to prevent loss when the dwelling is threatened by a covered peril. As long as the dwelling was threatened by a peril that the policy covers, removed property will be covered for loss by any peril, for no more than 30 days.

HO-5 FORM

PERSONAL PROPERTY UNDER THE HO-5 IS INSURED ON OPEN PERIL BASIS THIS IS THE ONLY PERSOANL PROPERTY INSURED ON OPEN

Section II of homeowners policy cheat:

Payments are made regardless of negligence The coverage pays the replacement cost of the damaged property up to $1,000 per occurrence Coverage excludes property losses that are covered by Section I

The HO-2 protects against all of the following losses, except:

Rain damage to the interior after a window was left open during a storm Coverage is provided against windstorm and hail, but damage to the interior is only covered if rain, snow, sleet, sand, or dust enter through an opening formed due to external damage caused by wind or hail.

Comprehensive Form (HO-5)

The Comprehensive Form provides the broadest coverage of any of the Homeowners forms. Coverages A, B, and C provide insurance on an open perils basis. Like the other forms, losses to the dwelling and other structures are valued on a replacement cost basis, and losses to personal property are valued on an actual cash value basis.

UNIT OWNERS HO-6 LOSS SETTLEMENT

The dwelling and personal property are protected from the Broad Form named perils. Losses to the dwelling are valued on a replacement cost basis, and losses to personal property are settled on an ACV basis.

H.O BROAD FORM (HO-2)

Windstorm or Hail peril includes loss to all watercraft and their trailers, furnishings, and equipment only if they are located inside a fully enclosed building The Smoke peril covers damage like smoke puffback, where a clogged furnace or oil burner backfires and the resulting smoke and soot damages the building or personal property.

The HO-3 covers losses to other structures causes by which of the following perils? wear and tear abrupt collapse from defective cinstruction materials smoke for smudging smog or rust

abrupt collapse from defective materials ollapse is covered as an Additional Coverage on Homeowners policies, subject to specific terms, like the collapse being abrupt and resulting from specified perils. Wear and tear, smog, rust, and smoke from agricultural smudging are named exclusions on the HO-3.

Which property would be settled for its actual cash value even if the Personal Property Replacement Cost Loss Settlement Endorsement is attached to an HO-3 policy?

antiques

SPECIAL FORM (HO-3) EXCLUSIONS UNDER COV A AND B

cheat: DOES NOT COVER WHAT BROAD FORM COVERS! EXCLUDES Freezing of household appliances unless the insured has taken reasonable care to maintain Freezing, thawing, pressure, or weight of water or ice on patios, fences, swimming pools, foundations, piers, docks, or retaining walls VMM AND THEFT IN OR TO UNDER DWELLING CONSTRUCTION ANIMALS

Contents Broad Form (HO-4) tenants form

coverage is not provided for real property, like the dwelling or other structures, as the insured is only a tenant of the dwelling and is not responsible for insuring the structure itself Coverage C will insure personal property against the Broad Form named perils, and losses are settled on an ACV basis.

HO-2 COV FOR VMM AND ACCIDENTAL DISCHARGE

does not apply if the dwelling was vacant for more than 60 days immediately before the loss. This Vacancy provision applies to all Homeowners forms. Dwellings under construction are not considered vacant. Excludes losses caused by mold, fungi, or wet rot, unless the mold, fungus, or wet rot is hidden within the walls, ceiling, or floors.

SPECIAL FORM (HO-3)

dwelling and other structures are insured on an open perils basis, covering all direct loss except for any excluded causes of loss.

special from lost settlement

dwelling and other structures are valued on a replacement cost basis, and losses to personal property are settled on an ACV basis.

SPECIAL FORM HO-3 COVERAGES

includes coverage for loss resulting from accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning, or automatic sprinkler system, or from within a household appliance. This coverage includes the cost to tear out and replace any part of a covered building when necessary to repair the system or appliance.

Which of the following claims would be covered under the Personal Injury Endorsement attached to an HO-3 policy? Liability arising from publication of material that defames, libels, or slanders another person liability arising out of disputes btwn insureds injury related to a business engaged by the insured civil activities for which the insured is paid

liability arising from the publication of material that defames, libels, or slanders another person

Under Coverage A of the HO-6, which of the following is not covered? other structure owned by insure materials and supplies alterations and improvements appliances and fixtures

materials and supplies On the other forms, coverage is provided under Coverage A for materials and supplies used to construct, alter, or repair the dwelling, but those materials and supplies are not covered by the HO-6.

The Scheduled Personal Property Endorsement on a Homeowners policy provides which of the following coverages to described property?

open perils with very few exclusions

H. O BROAD FORM (HO-2)

provides named perils coverage for the dwelling (Coverage A), other structures (Coverage B), and personal property (Coverage C). COVERS- FIRE, LIGHTNING, EXPLOSION COVERS WHARVVES COVERS VMM COVERS THEFT FALLING OBJECTS WEIGHT OF ICE AND SNOW ACCIDENTAL DISCHARGE SSUDDEN OR ACCIDENTAL TEARING APART FREEZING OF A PLUMBING HEAT, AC, OR AUTO FIRE SPRINKLERS SUDDENT DAMAGE FROM ARTIFICIAL ELECTRIC CURRENT