CPCU 555 Flashcards – Module 4
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[h] CPCU 555 – Module 4
[q] HO-3 policy
[a] A widely used homeowners policy developed by the Insurance Services Office (ISO). The policy is designed to cover the property loss exposures that most individuals and families face.
[q] Coverage A – Dwelling
[a] A coverage section of the HO-3 homeowners policy. This section applies to the dwelling on the residence premises listed on the Declarations page.
[q] Coverage B – Other Structures
[a] A coverage section of the HO-3 homeowners policy. This section applies to structures on the residence premises that are not attached to the dwelling.
[q] Coverage B – Other Structures exclusions
[a] Exclusions:
A structure rented to anyone who is not a resident of the dwelling.
A structure where business is conducted.
A structure used to store business property.
[q] Coverage C – Personal Property
[a] A coverage section of the HO-3 homeowners policy. This section provides coverage for items owned or used by the insured anywhere in the world.
[q] Coverage C – Personal Property sublimit for money and precious metals
[a] Sublimit is $200
[q] Coverage C – Personal Property sublimit for securities, documents, and records
[a] Sublimit is $1,500
[q] Coverage C – Personal Property sublimit for watercraft and trailers
[a] Sublimit is $1,500
[q] Coverage C – Personal Property sublimits applicable to theft losses
[a] Sublimits for theft:
Jewelry and furs – $1,500
Firearms – $2,500
Silverware – $2,500
[q] Coverage C – Personal Property not covered under HO-3 policy
[a] Property not covered:
Articles specifically insured in other insurance.
Animals, birds, or fish.
Motor vehicles, aircraft, and hovercraft.
Property of boarders unrelated to the insured.
Property in an apartment rented to others.
Property rented to others off premises.
Credit cards and business data.
Water or steam.
Property used for home sharing host activities.
[q] Coverage D – Loss of Use
[a] A coverage section of the HO-3 homeowners policy. This section provides coverage for:
Additional living expenses.
Fair rental value.
Loss of use due to civil authority.
[q] HO-3 policy Section I Additional Coverages
[a] Additional coverages:
Debris removal.
Reasonable repairs.
Trees, Shrubs, and Other Plants.
Fire Department Service Charges.
Property Removed.
Credit Card and Counterfeit Money.
Loss Assessment.
Collapse.
Glass.
Landlord’s Furnishings.
Ordinance or Law.
Grave Markers.
[q] HO-3 policy exclusions applicable to Coverages A, B, and C
[a] Exclusions:
Ordinance or law.
Earth movement.
Water.
Power failure.
Neglect.
War.
Nuclear hazard.
Intentional loss.
Governmental action.
[q] Open perils
[a] A form of property insurance coverage that provides protection against nearly every type of loss except those specifically excluded in the policy.
[q] Named perils
[a] A form of property insurance coverage that provides protection against the types of loss specifically described in the policy.
[q] Theft peril limitations in an HO-3 policy
[a] Excluded from coverage:
Theft committed by an insured.
Theft from a building under construction.
Theft from a part of the insured premises rented to someone else.
Theft of personal property from another residence the insured owns, rents, or occupies (unless the insured is temporarily living there).
Theft of property of an insured who is a student residing away from home.
Theft of watercraft away from the residence premises.
Theft of trailers and campers.
Theft arising from home-sharing host activities.
[q] Insurable Interest and Limit of Liability condition
[a] A property condition found in an HO-3 homeowners policy that limits the maximum payment for a single loss to the applicable limits shown on Declarations page. In addition, this condition requires the insured to have an insurable interest in the property at the time of the loss.
[q] Deductible condition
[a] A property condition found in an HO-3 homeowners policy specifying that the policy deductible applies on a per-loss basis and only the highest deductible applies when two or more deductibles apply to a loss.
[q] Your Duties After Loss condition
[a] A property condition found in an HO-3 homeowners policy that lists the insured’s duties after a property loss. Insured’s duties after a loss:
Promptly notify the insurer.
Notify the police.
Notify the credit card, electronic fund transfer card company, or access device company.
Protect the property from further damage.
Cooperate withthe insurer.
Prepare an inventory.
Verify the loss.
Sign a sworn proof of loss.
[q] Loss Settlement condition
[a] A property condition found in an HO-3 homeowners policy establishing how the amount payable for a property loss is determined.
[q] Loss to a Pair or Set condition
[a] A property condition found in an HO-3 homeowners policy that establishes the amount to be paid if an item that is damaged is part of a set.
[q] Appraisal condition
[a] A property condition found in an HO-3 homeowners policy that outlines a method for resolving a disagreement between the insurer and the insured regarding the amount of a loss.
[q] Other Insurance and Service Agreement condition
[a] A property condition found in an HO-3 homeowners policy that indicates if two or more policies cover the same loss, the loss will be shared proportionally.
[q] Our Option condition
[a] A property condition found in an HO-3 homeowners policy reserving the right for the insurer to repair or replace damaged property with similar property.
[q] Loss Payment condition
[a] A property condition found in an HO-3 homeowners policy that generally provides losses will be payable within 60 days after an agreement has been reached by the insurer and the insured.
[q] Abandonment of Property condition
[a] A property condition found in an HO-3 homeowners policy. Under this condition, if the insured abandons property after it is damaged or destroyed, the insurer is not required to take responsibility for it.
[q] Mortgage Clause condition
[a] A property condition found in an HO-3 homeowners policy establishing the rights of a mortgagee listed on the Declarations page.
[q] No Benefit to Bailee condition
[a] A property condition found in an HO-3 homeowners policy stating that a bailee who holds the property of an insured is responsible for the care of that property.
[q] Loss Payable Clause condition
[a] A property condition found in an HO-3 homeowners policy indicating that the insurer agrees to include the named loss payee when a claim is paid involving that personal property.
[q] Suit Against Us condition
[a] A property condition found in an HO-3 homeowners policy prohibiting an insurer from being sued under the policy until certain provisions and terms have been met.
[q] Recovered property condition
[a] A property condition found in an HO-3 homeowners policy indicating that if the insurer pays a claim for the loss of property, and the property is later recovered, the insured has the option of:
1) Taking the property and returning the claim payment, or
2) Keeping the claim payment and allowing the insurer to take over the property.
[q] Concealment or Fraud condition
[a] A property condition found in an HO-3 homeowners policy stating that any insured who conceals or misrepresents any material information or engages in fraudulent conduct is not covered under the policy.
[q] Volcanic Eruption Period condition
[a] A property condition found in an HO-3 homeowners policy stating that all volcanic eruptions occurring within a 72-hour period are considered one eruption.
[q] Policy Period condition
[a] A property condition found in an HO-3 homeowners policy specifying that coverage applies only to losses that occur during the policy period.
[q] Nuclear Hazard Clause condition
[a] A property condition found in an HO-3 homeowners policy that defines nuclear hazard.
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