Exam 13: Homeowners Insurance

Joe has an HO-3 policy. He also has an unattached converted garage that he has turned into an apartment, and he rents it to a full-time college student. The apartment is destroyed by fire. What will happen with the claim according to the HO-3 contract?

Which of the following is not an exclusion from the HO policy's Liability coverage?

Which of the following perils is not covered by the HO-3 form?

Why is there a "special limits of liability" section in the personal property section of the HO-3 contract?

All of the following are rights extended to mortgagees (banks) under the mortgage clause in the HO contract except:

The named insured leaves a suitcase filled with clothing on the seat of his unattended, unlocked automobile. The loss is valued at $900 replacement cost and a depreciated value of $700. The HO-3 contract has a $200 deductible on Section I. How much will the HO-3 contract pay for this loss?

The replacement cost of a home covered under the HO-3 policy is $100,000. Assume the home is insured for $50,000 and a $10,000 loss occurs (replacement cost). Also assume depreciation is set at 10% and a $500 deductible applies. How much will the insured recover if the damage is repaired?

Mary's house is burglarized and $22,000 in jewelry is stolen. What is the maximum amount her HO-3 policy will pay for this loss?

The term "named insured" includes spouses and children (if any are living at home) in the homeowners (HO) insurance policy.

The liability coverage of the HO policy commits the insurer to defend lawsuits brought against the homeowner, even if the lawsuits are frivolous and groundless.

Falling objects is a named peril for coverage of personal property in a HO-3 policy.

No consequential or loss of use losses are covered by the standard homeowners' policy.

You have an HO policy with the following limits: A = $50,000 (dwelling) B = $5,000 (other structures) C = $25,000 (personal property). A tornado strikes your property. You lose your house, which is worth $40,000 at the time of the loss. You also lose an unattached shed worth $8,000, and personal property worth $30,000. You will collect:

A coinsurance requirement, if not met, serves to limit the recovery of loss under the policy.

Mary's house catches on fire. $9,000 of her jewelry is destroyed by the fire. What is the maximum amount her HO-3 policy will pay for this loss?

All of the following are available under one of the HO forms except:

One purpose of exclusions in the HO policy is to eliminate losses due to moral hazard.

With respect to the HO dwelling coverage, select the most accurate statement.

The HO policy provides professional liability insurance coverage to the insured, provided the work leading to the lawsuit is done at home.

All of the following are available under the HO-3 contract except: