Study Guide RMI3011 Test 2 2 14 Characteristics of Homeowners Insurance Package policy Property 1st party coverage Liability 3rd party Eligibility Rules Focus is on Owner Occupied property Insurance Co 2nd party coverage Includes loss of use coverage o Up to 4 unit home as long as the owner occupies one unit As soon as 5th unit is added different type of policy is required Deductible for Property Loss Ex Florida has a higher chance of getting a hurricane then North Dakota Eligibility Rules Private residential purpose Limited business selling Mary K beauty products from home One additional family Ex grandparents living with children and grandchildren No more than 2 roomers boarders o Home daycare sometimes covered under limited business up to 3 non blood children Section I Property Section II Liability Intended to eliminate small claims Increase loss control awareness Deductibles Effect reduction of premium Two types of Deductions Wind percentage of coverage A 2 5 in FL o Includes hail storms o Wind from named storm Unnamed storm Tropical depressions hurricanes no others are named Some policies apply to named storms only the rest would fall under AOP o Wind Deductible usually a percentage of coverage A Ex 300 000 of cov A X 5 wind deductible 15 000 deductible Not 5 of loss all other perils AOP Sometimes per occurrence 3 occurrences 45 000 deductible but no more then once per season year It is best to select the highest deductible you can bear Persons Insured Named insured and spouse as long as a resident o If a resident o Marriage only endorsements for others Family members resident relatives Under 21 care of the insured foster foreign exchange student Under 24 full time student away from home Any person legally responsible dogs dog walker Homeowner Forms Single Family Multi unit allowed HO 2 Broad Form do not ever buy HO 3 Special Form most common HO 5 Comprehensive Form Apartments HO 4 renters tenants Condo HO 6 limited building coverage Older homes HO 8 Differences between HO 2 HO 3 HO 5 are Perils covered Valuation at time of loss Policy Construction Section I Cov A Dwelling house Cov B other structures shed Cov C personal property TV Cov D loss of use Section II Cov E Cov F around it w out touching the home Cov A house 1 to 4 units limited business Cov B other structures separated by clear space you can walk Specifically excludes land cannot insure dirt Cov A and Cov B are based on Replacement Cost recovery o Penalty for failure to insure to value called the Coinsurance Penalty must insure up to 80 of replacement cost of Cov A Additional coverage s include debris removal reasonable repair Ex tree falls on your house you buy tarps to keep your house dry and the Insurance company will pay for the tarps and other costs Cov C unscheduled personal property items do not have to be listed until after a loss Cov C is based off of a of Cov A Contents anything owned or used by an insured party Actual Cash Value ACV recovery o Can be endorsed for replacement cost o Covers property off premises o Covers property worldwide Some property subject to limits Special limits only based on peril of theft o Regardless of peril Boats have 1500 absolute limit Cash up to 200 o Limits on theft loss of jewelry furs guns silver pewter wear No coverage for animals under Homeowners policy Some property excluded Exclusions o No automobile coverage under HO policy o Exception to Exclusion E2E if it is used to maintain property such as lawn mower o No coverage for aircraft E2E is hobby craft toy planes o No water steam coverage pool sauna o No hovercraft coverage o There are 12 additional coverage s KJ just said to know there are more Cov D loss of use result of Cov A B or C Pays after covered loss of property Pays on basis of actual loss sustained for living expense o Additional o Lost rent and lost rental value o Prohibited use maximum of two weeks of coverage evacuated for fire smoke and forced to rent a hotel room insurance company will pay up to two weeks worth Prohibited use does not apply to hurricanes because there are not mandatory evacuations they are suggested evacuations A 100 Ex 200 00 B 10 20 000 cannot reduce percentage C 50 100 00 70 if Replacement Costs D 30 60 000 B C D can be increased if needed but never reduced by endorsement Homeowner Perils Named Perils fire hurricane damage Open Perils everything not specifically excluded No coverage for flood HO 2 Broad Form building contents Named perils Fire lightning Extended perils wind hail smoke Vandalism Theft Glass breakage Broad form perils falling objects weight of ice and snow HO 3 open perils on coverage ABD Special form Same as HO 2 on Cov C HO 4 Tenants form No Coverage s Same as HO 2 for coverage s C and D HO 5 Comprehensive form recently reintroduced Open perils on all coverage s A or B HO 6 Condo Form NO Same as HO 2 for coverage s C and D A or B does cover owners improvements o Named perils policy unendorsed can be changed HO 8 Modified form older homes deals w coinsurance issues Less then named perils HO Property Section Exclusions Ordinance or Law building laws Always purchase if have older home 25 50 of Cov A for increased cost of construction Will pay to demolish if certain is damaged Earth movement excluded by policy sink hole coverage in FL through endorsement by state Question of what exactly a sinkhole is often arises Ex A 1 foot hole or 35 foot hole line breaking and ice maker lines Water damage floods excluded most common is washing machine Insurance policy requires you maintain heat In FL Mold fungus and dry rot not usually covered and is excluded in the policy However mold can be endorsed by an E2E Power Failure no coverage under HO policy there is food spoilage Neglect failed to take care of trash if you burn your trash and fail to coverage watch the fire and it burns down your house not covered Intentional Losses Vacant if a house is vacant more then 60 days policy is suspended Duties after a loss Notice of loss have to tell Insurance company promptly reasonable coverage can be replaced with a dwellings policy time Wait to sign proof of loss till repairs are completed Cooperate with insurer don t dispose of property Proof of loss agreeing the amount is correct If you sign proof of loss very difficult to get insurance company to insure additional damages found does not Mortgage clause The mortgage company can choose to pay insurance premium if owner PITI property interest tax insurance in Escrow funds Sign proof of
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