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Homeowners' Policies
Ga P & C Insurance Exam - Homeowners' Policies
| Question | Answer |
|---|---|
| What was the first example of a "package" ins. policy and what coverages are in that package policy? | Homeowners Policy; Property and Liability (Casualty) coverages |
| What are three chief differences between a dwelling fire and homeowners policy? Which is more efficient? | Homeowners has: 1. automatic liability cov 2. automatic theft cov 3. Cov C = % Cov A (declared amt at application in dwelling) Home owners is more efficient |
| What are three qualifications for a homeowners policy? | 1. Residential structure 2. Owner occupied 3. < or = 4 units |
| Can a house under construction qualify for a homeowners policy? | yes |
| What are the two types of owner occupied? | 1. Owner occupied primary home 2. Owner occupied secondary home |
| Could an owner of a duplex who lives in one unit and rents the other unit qualify for a homeowners policy? | yes |
| Could a duplex or <5 unit residential structure qualify for a homeowners if the owner does not reside in one unit? | No |
| Does a farm house qualify for a homeowners policy? | NO- must use a Farm Owner's Policy |
| Can a mobile home ever qualify for a homeowners policy? | Yes, with Mobile Hme Endorsement; must have a permanent address, no wheels, tied down, & min 40' L x 10' W |
| What are the two sections of a homeowners policy and their subsections? | I. Decl Page II. Homeowners Form 1. Property 2. Liability |
| What are the coverages included with a Homeowners Form? | 1.Property (Cov A- Dwelling, Cov B- Other Structures, Cov C- Pers Prop, Cov D- Loss of Use) 2. Liability (Cov E- Pers Liab, Cov F- Med payments to others) |
| Which coverages of a homeowners policy / form are the same for all dif homeowners policies? | Cov E- Pers Liab. and Cov F- Med Payments (under Section II - Liability) |
| Of the six possible homeowners forms which are used to insure a personal dwelling? | HO-8 Basic, HO-2 Broad, HO-3 Special, HO-5 Comprehensive |
| Which homeowners form was formerly known as HO-1 and what type of dwelling does it insure? | HO-8 Basic; older house (especially one not renovated) |
| Why is HO-8 better for insuring older homes, especially when not renovated? | beacause HO-8 uses ACV and others use replacement (cost more to rebuild same house today & ACV accounts for depreciation and using repl would create moral hazard/ temptation to create total loss) |
| Would an older home that has been maintained well and renovated only qualify for HO-8? | No- renovations make replacement loss payments on other forms OK |
| On which homeowners form would a Victorian or other home with historic, intricate work (economically infeasible to replace) be covered? How are those features rebuilt after a claim? | HO-8; Newer reproductions of older work is used |
| Which homeowners form is used to insure 98% private homes? | HO-3 Special |
| Which form is used to insure high value homes? | HO-5 |
| List in order of best to worst the four homeowners forms used to insure personal dwellings. Why for each? | 1. HO-5 (all risk for Cov A,B & C) 2. HO-3 (all risk on Cov A, B) 3. HO-2 (more named perils than HO-8) 4. HO-8 (fewest named perils, uses ACV, $100 per occ max theft cov, $250 max to replace tree) |
| Among the four homeowners forms used to insure personal dwellings, compare differences in Cov A-D. | Cov A: HO-8 uses ACV and others use repl. Cov B: 10% Cov A for all Cov C: 50% Cov A for all Cov D: 10% Cov A for HO-8, 30% Cov C for HO4, 50% Cov C for HO6 and 30% Cov A for others |
| What is the major difference between dwelling policies and homeowners policies with respect to Cov C- Pers Prop? | Dwelling uses stated amt for limit whereas homeowners forms HO8, HO2, HO3, & HO5 use 50% Cov A (HO4 & HO6 use stated amt) |
| What are examples of losses that are covered by Cov D- Loss of Use on a homeowners policy? | 1. loss of rental income after damages 2. additional/ above normal living expenses |
| What is required to be the most valuable property insured on a homeowners policy? | dwelling |
| What two options are available to insure pers prop with very high value? Who decides which to use? | 1. PAF = Personal Articles Floater (separate policy) 2. Scheduled Pers Prop Endorsement (Underwriter determines which to use) |
| Which homeowners form is used to insure renters? | HO-4 |
| What are the limits of Cov A-D with an HO-4 homeowners form? | Cov A: NOT included Cov B: NOT included Cov C: declared limit Cov D: 30% Cov C |
| What are the limits of Cov A-D with an HO-6 homeowners form? | Cov A: $1000 (can be raised at appl. & only for additional alterations) Cov B: NOT included Cov C: declared limit Cov D: 50% Cov C |
| What damages are covered under an HO-6 form's Cov A- Dwelling? Why? | only additional alterations to condo because condo assoc. insures structures with its own policy |
| For all homeowners forms, can building materials on site ever be covered by Cov A- Dwelling? under what circumstances? | Yes- if owner purchased materials and intends to use them on insured dwelling (NOT for contractors) |
| For all homeowners forms, is theft of building materials on site covered under Cov A- Dwelling? | Not unless materials are physically attached/ installed to insured dwelling |
| For all homeowners forms, is theft of pers prop OFF insured premises covered under Cov C- Pers Prop? If so any exceptions? | Yes, except when insured's pers prop is located at other insured home the limit is 10% Cov C or $1k, whichever is higher) |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to cash losses? | Loss payment = $200 per occurrence |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to accounts, deeds etc losses? | Loss payment = $1500 per occurrence |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to watercraft? | Loss payment = $1500 per occurrence (more needs Boat owner's Policy) |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to trailers? | Loss payment = $1500 Per Occurrence (unless connected to auto) |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to jewelry? | Loss payment = $1500 per occurrence for theft and = max limit Cov C per occurrence in non-theft loss |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to silverware? | Loss payment = $2500 per occurrence |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to guns? | Loss payment = $2500 per occurrence |
| What are some special limitations to a homeowners form's Cov C- Pers Prop with regard to business property? | Loss payment = $2500 per occurrence if on premises and $500 if oof premises |
| What form of loss payment method do all homeowner forms use for Cov C- Pers Prop? Can this be changed, and if so how? | ACV; It can be changed to replacement method with a Replacement Cost Contents Endorsement (removes depreciation consideration) |
| What types of losses does Cov E- Personal Liability of section II on a homeowners form cover? | bodily injuries (BI) and pers prop losses to 3rd parties only when insured is negligent at insured location |
| Define insured location with respect to Cov E- Pers Liab on a homeowners policy. | locations that insured owns, rents, occupies or controls |
| What med problems are included in the term bodily injury? | bodily harm, sickness, disease or required care |
| Are all diseases covered as BI's under Cov E- Pers Liab of a homeowners policy? | Not communicable diseases |
| What are two examples of sickness covered under Cov E- Pers Liab of a homeowners policy? | 1. food poisoning from insured's food 2. chemical exposure in insured's home |
| What is the standard deductible for claims made against Cov C- Pers Prop in section I of a homeowners policy? | $250 |
| What is the standard deductible for claims made against section II of a homeowners policy? | None |
| What does the Care Custody and Control Exclusion exclude from coverage under Cov E- Pers Liab of a homeowners policy? Can such losses be covered elsewhere o a homeowners policy? | losses to others' prop while in possession of insured and on insured's premises; Yes- under Damage to Property of Others Cov in additional coverages |
| List 5 additional coverages and limits under section I of a homeowners policy. | 1. removal coverage (30 days) 2. debris removal expenses 3. cost for reasonable repairs 4. lawns, trees, etc ($500) 5. fire dept service charges ($500) |
| List two potential endorsements for section I of a homeowners policy. | 1. Earthquake 2. Replacement Lost Contents |
| List 4 additional coverages and limits under section II of a homeowners policy? | 1. Claim expenses 2. 1st Aid expenses 3. Damage to prop of others ($1k) 4. Loss assessment coverage |
| What are three types of claims expenses covered under section II of a homeowners policy? | 1. Defense 2. Loss of earnings ($250 /day) 3. Reasonable expenses |
| What types of expenses are covered under the additional coverage of 1st Aid Expenses in section II of a homeowners policy? | when insured pays for injuries to invited guests or resident employees after being injured on insured's premises |
| Are tenants' injuries after being injured on insured's premises covered under the 1st Aid Expenses additional coverage of section II of a homeowners policy? | No- only invited guests or resident employees |
| List seven section II Liability exclusions to coverage under a homeowners policy. | 1. War Action 2. Intentional Acts 3. Rendering or failure to render Professional services 4. Business liability 5. Automobile, aircraft, watercraft 6. Transmission of communicable disease 7. Abuse (Sexual, Physical or mental) (WIRBATA) |
| What are three optional endorsements available for section II- Liability on a homeowners policy? | 1. Rental Property Liability Endorsement 2. Incidental Occupancies Liability Endorsement 3. Personal Injury Liability Endorsement |
Created by:
jkbick
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