a. Coverage A—Dwelling
Covers the dwellings and the structure attached to the dwellings, such as the house attached garage or carport. Also, the materials and supplies for the dwellings will be covered too.
Example: a car rushed into the house, the house and the attached garage is being damaged and it would be covered under the coverage.
b. Coverage B—Other Structures
It covers the structures that separated from the house, like an unattached horse stable, garage or tool house. The structures that only connected with the dwellings by a fence or utility lines are also count as the other structures. The coverage amount to the structures is based on the amount of the dwelling coverage.
There are some exceptions that the detached structure are not included in the other structures. The first one is that if the structure is rent to someone who is not the tenant of the dwelling. The second is if the structure is for business use. The third is that if the structure used as business storage, while in this case, as long as it does not store the gaseous or liquid fuel, it still being covered.
Example: the detached garage caught on fire, the detached garage can get covered.
c. Coverage C—Personal Property
It covers your personal belongings and the things you borrowed in anywhere. It also covers things of your friends as your guest or employee that being damaged in your residence at the named insured’s request. The amount of the insurance is equals to 50% of the coverage on the dwelling. When the property is not being with the insured and being damaged, the insured could request a 10% of the coverage C, or $1000, whichever is greater.
Example case: if you lost your bank notes when you travelling, it can be covered.
d. Coverage D—Loss of Use
The coverage provide protections to the loss of use because of covered loss. It is in three forms, additional living expenses, fair rental value and prohibited use. The additional living expenses is compensated for the loss that occurred for the insured to keep a standard life. Fair rental values is paid when the insured’s rental house is being damage and for the rents lost because of the event. Prohibited use is paid for the expense and inconvenience incurred when someone is forced not to live in his own house because of neighbor situation.
Example case: the rental house get on fire and the house cannot be used for 3 month, the insured can get the 3 months rents covered.
e. Additional Coverages
Additional coverages covers debris removal, trees, shrubs, and other plats, reasonable repairs, fire department service charge, property removal, credit card, electronic fund transfer card or access device, forgery, and counterfeit money, loss assessment, collapse, glass or safety glazing material, landlord’s furnishings, ordinance or law and grave markers.
Example case: the boarded up window could be covered after storm to protect further property damage.
4. a. Briefly describe the special limits of liability that apply to certain types of personal property.
The limit of liability of the money and bank notes bullion includes gold and silver is 200$
The limit of liability of securities, valuable papers, manuscripts, personal records, passports, tickets, and stamps is $1500
The limit of liability of Watercraft of all types $1500
The limit of liability of Trailers not used with watercraft of all types is $1500
The limit of liability of Theft of jewelry, watches, furs, and precious and semiprecious stones is $1500
The limit of liability of Theft of firearms and related equipment is $2500
The limit of liability of Theft of silverware, goldware, platinumware, and pewterware is $2500.
The limit of liability of Property on the residence premises used primarily for business purposes is $2500
The limit of liability of Property away from the residence premises used primarily for business purposes. The limit does not apply to antennas, tapes, wires, records, disks, and other media that are (1) used with electronic equipment that reproduces, receives, or transmits audio, visual, or data signals; and (2) is in or upon a motor vehicle is $1500
The limit of liability of Portable electronic equipment that (1) reproduces, receives, or transmits audio, visual, or data signals; (2) is designed to be operated by more than one power source, one of which is the motor vehicle’s electrical system; and (3) is on or upon a motor vehicle is $1500
The limit of liability of Antennas, tapes, wires, records, disks, and other media that are used with electronic equipment that reproduces, receives, or transmits audio or visual signals and is in or upon a motor vehicle is $250
b. Why are these special limits used?
I think for these type of property, it is hard to determine the amount of its loss for the insure, for example if you loss a collection of coins, maybe the value of coins is known, the collection value is not easy to determine, also, the loss of the theft of jewelry, watches and other things is difficult to measure for the insure.
5. a. Coverage A and Coverage B under a Homeowners 3 policy insure the dwelling and other structures against “direct physical loss.” Explain the meaning of this phrase.
The loss happened directly to property physically and not caused by any special circumstances like vandalism, mold, fungus or dry out.
b. Coverage C under a Homeowners 3 policy covers personal property on a named-perils basis. List the various perils that are covered.
Fire or Lightning, Windstorm or Hail, Explosion, riot or Civil Commotion, aircraft, Vehicles, Smoke, Vandalism or Malicious Mischief, theft, falling Objects, weight of Ice, Snow, or Sleet, Accidental Discharge or Overflow of Water or Steam, sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging of a Steam, Hot Water, Air Conditioning, or Automatic Fire Protective Sprinkler System, or Appliance for Heating Water, Freezing of a Plumbing, Heating, Air Conditioning, or Automatic Fire Protective Sprinkler System, or Household Appliance, sudden and Accidental Damage from an Artificially Generated Electrical Current, volcanic Eruption.
7. Briefly describe the duties imposed on the insured under a homeowners policy after a property loss occurs
Give prompt notice.
Protect the property.
Prepare an inventory of damaged personal property
Exhibit the damaged property
File a proof of loss within 60 days after the insurer’s request.
- What is the meaning of occurrence under Section II of the homeowners policy?
In the policy period, the accident or event that exposed to the harmful conditions continually and repeatedly, which led to injure and damage loss.
4. Personal liability (Coverage E) and medical payments to others (Coverage F) provide protection to insureds at various insured locations. Identify the insured locations under Section II in the homeowners policy.
Residence premises shown in the declarations
Any other residence acquired during the policy period, such as a summer home
Rented garage or storage unit
Nonowned premises where an insured is temporarily residing, such as a motel room
Vacant land other than farmland
Land owned or rented to an insured on which a residence is being built for an insured
Cemetery plots or burial plots
Part of a premises occasionally rented to an insured for nonbusiness purposes, such as a hall rented for a wedding reception
5. List the major exclusions that apply to personal liability (Coverage E) and medical payments to others (Coverage F) in the homeowners policy.
Motor Vehicle Liability unless The vehicle is in dead storage on an insured location, the vehicle is used solely to service a residence, the vehicle is designed to assist the handicapped, the vehicle is designed for recreational use off public roads and is not owned by the insured, liability arising out of the use of a motorized golf cart owned by an insured is also covered.
Expected or Intentional Injury
Communicable Disease Exclusion
Sexual Molestation, Corporal Punishment, or Physical or Mental Abuse
Controlled Substance Exclusion
Property Owned by an Insured
Property in the Care of an Insured
Bodily Injury to an Insured
Injury to a Residence Employee Off an Insured Location
Persons Regularly Residing on the Insured Location