LIAB

Front

What is the primary basis for determining the cost of homeowners insurance?

Back

Replacement cost value of the home

Answer explanation

The primary basis for determining the cost of homeowners insurance is the replacement cost value of the home, as it reflects the amount needed to rebuild the home in case of a loss.

Front

Material in older homes affecting insurance costs: Drywall, Plaster walls, Plywood, Sheetrock.

Back

Plaster walls

Answer explanation

Plaster walls are often found in older homes and can lead to higher insurance costs due to their susceptibility to damage and the expense of repairs. This makes them a significant factor in insurance assessments.

Front

Why might the cost of labor be higher when renovating an older home?

Back

Older homes require contractors skilled in period architecture

Answer explanation

Older homes often require contractors who are skilled in period architecture to maintain historical accuracy and integrity, which can lead to higher labor costs due to their specialized expertise.

Front

Avery is applying for homeowners insurance, but their roof is over 20 years old. What is a potential consequence Avery might face?

Back

The roof may be excluded from insurance coverage

Answer explanation

Avery's roof, being over 20 years old, may be considered too old for coverage, leading to its exclusion from the homeowners insurance policy. This is a common practice among insurers to mitigate risk.

Front

Which type of wiring in older homes is more likely to cause accidental fires?

Back

Aluminum wiring

Answer explanation

Aluminum wiring is more prone to overheating and can create fire hazards, especially if connections are not properly made. This makes it a significant risk in older homes compared to fiber optic, PVC, or copper wiring.

Front

Michael owns an older historic home and is looking for help finding insurance coverage for it. Which organization should he contact for assistance?

Back

National Trust Insurance Services (NTIS)

Answer explanation

Michael should contact the National Trust Insurance Services (NTIS) as they specialize in providing insurance coverage for historic homes, ensuring he gets the appropriate protection for his property.

Front

Anika is trying to buy an older home, but she's having trouble getting insurance for it. What might she need to do?

Back

Make updates like replacing old plumbing or wiring

Answer explanation

To secure insurance for an older home, Anika should consider making updates, such as replacing old plumbing or wiring, which can improve safety and meet insurance requirements.

Front

Type of homeowners insurance for homes where the cost to rebuild is higher than market value.

Back

Homes with a replacement cost greater than market value

Answer explanation

Henry's situation requires a policy for homes with a replacement cost greater than market value, as it ensures coverage that reflects the higher rebuilding costs, unlike standard market value policies.

Front

What does extended replacement cost coverage in a homeowner's insurance policy provide?

Back

Automatic increase in dwelling coverage by 25% to 50%

Answer explanation

Extended replacement cost coverage automatically increases dwelling coverage by 25% to 50%, ensuring that homeowners can rebuild their homes even if construction costs rise, rather than just covering the original policy amount.

Front

What type of coverage protects against water damage from sewer backups after a heavy rainstorm?

Back

Sewer or drain backups

Answer explanation

Maya's situation involves water damage from a sewer backup, which is specifically covered under 'Sewer or drain backups' insurance. Other options do not apply to her case.