Unformatted text preview:

HOMEOWNERS INSURANCE PART I I POTENTIAL EXPOSURES OF HOME OWNERS OR RENTERS A Damage to destruction of Removal of 1 Real property attached to the land Part of the Real Estate 2 Personal property movable property B Loss of Home Use 1 Additional living expenses 2 Extra Expenses 3 Lost rent or rental value C Personal Liability in next chapter II Characteristics of Homeowners Insurance A It is a Package Policy 1 covers property damage through a 1st party 2 covers liability 3rd party 3 includes loss of use coverage B It has eligibility Rules the focus is on the owner occupied property C Existing Deductible for Property Loss III Eligibility Rules A Must be used for private residential purposes B Limited business activities must occur home day care or personal home office owners C Only one additional family can occupy the residence 2 family building can have a max of 3 families living in it D No more than 2 roomers or boarders can occupy E Separate policies are written for renters condominium unit IV Deductibles A Purpose eliminates small claims and increase loss control awareness Full deductible must be paid before any coverage for damages is paid B Effect of having a deductible reduces premiums paid C Types 1 Wind Percentage of coverage A dwelling Ex a 2 wind coverage on a 200 000 policy requires 4000 to be paid by policy holder before being paid for any claims 2 AOP All other perils percentage coverage is usually used in states with high catastrophic loss potential D In order to pay a lower premium try to have the highest deductible you can afford to pay in the event of a loss Types of Homeowners Policies V Homeowners Insurance has many components and it can get a little tricky so I am going to first list all of the types of policies you will see the HO forms then go in detail about all of the different types of coverages A D Then I am going to show you in more detail how each coverage is related to each policy Each form below is its own policy Based on your financial position where you live and the value of your personal properties when purchasing HO insurance you would choose one of the below policies A Single Family Policies HO 2 HO 3 HO 5 1 HO 2 Broad Form covers dwelling and other structures against specifically named perils Also covers additional living expenses in event of loss 2 HO 3 Special Form most common Insures dwelling all real property against all physical loss to the property except specifically excluded perils Paid with replacement cost with no depreciation deducted Personal property under this form is covered the same as real property on the HO 2 form Covers additional living expenses 3 HO 5 Comprehensive Form Insures the dwelling other structures and all personal property against direct physical loss to property All direct physical losses are covered except those specifically excluded Covers additional living expenses Open perils on all coverages B Apartment Tenants HO 4 Contents Broad Form covers specific personal property damage liability and additional living expense costs No dwelling or other structures coverage C Condominium HO 6 Unit Owners Covers personal property for the same named perils as the HO 2 policy Also covers for loss of use and any improvements made by owner D HO 8 Modified Form designed for an older home whose replacement cost substantially exceeds its market value Fewer named perils covered than on the HO 2 and limited theft coverage is given This policy reduces moral hazard because it does not cover the replacement cost which is higher than the actual cash value which is covered of repairs VI Person s Insured A Name insured and spouse Both must be residents and must be an official B Resident Family members C Dependents of the named insured marriage for spouse to be considered part of the policy s name insured 1 must be under 21 yrs old if not a resident or 2 under 24 years old full time student non resident D Any person legally responsible dogs motor vehicles VII Homeowners Insurance Coverage Types Each HO form is divided into 2 coverage parts Part I Property A D and Part II is liability E F This chapter focuses on the property coverages A D Remember that each HO form covers different amounts of each letter A D and one form may have full coverage for every peril that is not specifically excluded Open for example on A but only have coverage for listed perils named on a certain coverage type for example B This will become less confusing as you read on Side Note Floods are never covered under any private HO policy 1 Coverage A Dwelling 100 of policy face value This coverage includes the building of residence as well as any attached structure like a garage If the policy provides open coverage for A such as HO 3 then all perils not excluded are covered does not include flood If the policy has a list of perils that are covered for A then it is a named coverage open or closed can apply to all letters A F Also coverage A does NOT include the land on which the house is built so if a plane crashed down and damaged the land your HO policy would not cover it under A 2 Coverage B Other structures Structures on the residence separated from the dwelling by a clear space ex shed Also excludes land Based on which HO form your total coverage B can be a of your dwelling coverage Usually only 10 This coverage does not apply to other structures being leased out to someone that is not a tenant of the main residency or if the structure is being used for business purposes Ex you rent a shed to someone of a separate residency for any purpose and it burns down Coverage B does not apply 3 Coverage C Personal Property 2 Types scheduled non scheduled Scheduled personal property is anything that is a special C listing with a specific total amount that can be covered which hedges moral hazard Non scheduled is general personal property with no coverage limitations other than the specific percentage of your coverage C Here are the general rules of non scheduled personal property 1 Usually amounts to 50 of your coverage A based on actual cash value replacement cost depreciation 2 Can be located anywhere in the world as long as it is under ownership of the named insured Includes property of dependents temporarily living away from home for the school year 3 Personal property of a guest or resident employee can be covered if the damage happens on the residence at insured request 4 Property that is permanently located at another residence vacation home or self storage facility


View Full Document

FSU RMI 3011 - HOMEOWNERS INSURANCE PART I

Documents in this Course
Risk

Risk

26 pages

Exam #2

Exam #2

7 pages

Exam #2

Exam #2

7 pages

Exam #3

Exam #3

9 pages

Exam #3

Exam #3

9 pages

Exam 1

Exam 1

12 pages

EXAM 1

EXAM 1

13 pages

Exam 1

Exam 1

12 pages

Test 2

Test 2

13 pages

Test 1

Test 1

6 pages

Chapter 1

Chapter 1

56 pages

Test 2

Test 2

22 pages

Test 1

Test 1

5 pages

TEST 2

TEST 2

16 pages

Chapter 1

Chapter 1

56 pages

Notes

Notes

18 pages

Load more
Download HOMEOWNERS INSURANCE PART I
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view HOMEOWNERS INSURANCE PART I and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view HOMEOWNERS INSURANCE PART I 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?