Question

Homeowners insurance policies can be divided into two sections. Describe them.

Answer 1

HO section 1:

Property

Coverage A- dwelling

• covers the dwelling on the residence premises and any structure attached to the dwelling
• includes materials for construction
• specifically excludes land

Coverage B- other structure

• insures other structures on the residence premises
• excludes structures that are rented out or used for a business
• amount of coverage is based on the amount of insurance in Coverage A

Coverage C- personal property

• insures personal property owned or used by an insured
• amount of coverage is 50% of Coverage A, but can be increased

Under Section 1, this coverage excludes:
- animals, birds, and fish
- motor vehicles
- aircraft and parts
- hovercraft and parts
- property of roomers, boarders, and other tenants
- property in a regularly rented apartment

Coverage D- Loss of Use

• provides protection when the residence premises cannot be used because of a covered loss
• 30% of coverage A

HO section 2:

Casualty

Coverage E- personal liability

Third party loss exposures that result in bodily injury or property damage. Basic liability limits are $100,000 per occurrence

Coverage F- medical payments to others is generally set at $1,000 per person per accident. Covers reasonable medical expenses when insured is not legally liable.

Four types of additional coverage under Section II

Claim Expenses, First Aid Expenses, Damage to Property of Others, and Loss Assessment