Question

Mark has a Homeowners 3 (special form) policy that provides $120,000 of insurance on his dwelling and $100,000 on personal property. The replacement cost of the home is $200,000. Assume the coinsurance requirement is 80% and ignore any deductible. Treat each case separately

7. Mark’s house is by Mississippi river and his house is badly damaged by flood. As a result of the flood, the front lawn has a 3-foot crack and is now uneven. (1 point) Would it be covered from Mark’s policy? Yes No If yes, explain your answer: If no, explain why not:

Answer 1

Homeowners 3 (special form) policy insures the following:

1. occupied dwelling
2. private structures connected with dwelling
3. Unscheduled personal property either on the premises or away from the premises
4. Loss of use.
5. Personal liability coverage and medical payments coverage

Case: Not Covered by policy

Mark house is by Mississippi river and his house is badly damaged by flood. As per the Homeowners 3 (special form) policy the damage from water such as Flood, surface water, waves, tidal water overflow of a body of water etc. is excluded from the policy. Hence, the damage to the front lawn i.e. 3-foot crack and uneven structure of lawn is not insured under the policy. So, it is not covered from Mark’s policy.

Case: Covered by policy

1. It is covered by the policy because as per the policy holder Homeowners 3 (special form) it covers private structures connected with dwelling, Unscheduled personal property either on the premises or away from the premises and loss of use of the property is insured. The mark house replacement cost is $200,000 and he already maintained more than the replacement cost of the home.