Homeowners Policy (HO) Flashcard

Front

What type of insurance policy combines property and liability coverage in one package for owner-occupied residential property?

Back

To insure owner-occupied residential property and combine property and liability in one package

Answer explanation

The primary purpose of a Homeowners Policy (HO) is to insure owner-occupied residential property, combining both property and liability coverage in one package, making it comprehensive for homeowners.

Front

Which of Charlotte's properties is NOT eligible for a Homeowners Policy? Options: A 1-family dwelling with one roomer, A 5-family dwelling, A 3-family dwelling with the owner occupying one unit, A seasonal dwelling with an HO-3 policy

Back

A 5-family dwelling

Answer explanation

A 5-family dwelling is not eligible for a Homeowners Policy, as these policies typically cover 1-4 family dwellings. The other options meet the eligibility criteria.

Front

What type of coverage does the HO-2 policy provide for a dwelling?

Back

Named-peril coverage

Answer explanation

The HO-2 policy provides named-peril coverage, meaning it only covers specific risks listed in the policy, unlike open-peril coverage which covers all risks except those specifically excluded.

Front

What is a named peril under an HO-2 homeowners insurance policy?

Back

Weight of ice and snow

Answer explanation

The HO-2 policy covers named perils, including 'weight of ice and snow.' In contrast, nuclear hazard, flood, and earthquake are not covered under this policy.

Front

What is the key difference between HO-3 and HO-5 homeowners insurance policies?

Back

HO-3 provides named-peril coverage for personal property, while HO-5 provides open-peril coverage for personal property.

Answer explanation

The key difference is that HO-3 provides named-peril coverage for personal property, meaning it only covers specific risks, while HO-5 offers open-peril coverage, covering all risks except those specifically excluded.

Front

What type of coverage is provided for personal property under an HO-3 homeowners insurance policy?

Back

Named-peril coverage

Answer explanation

Under an HO-3 policy, personal property is covered under named-peril coverage, which means it only covers specific risks listed in the policy, unlike open-peril coverage that covers all risks except those specifically excluded.

Front

Which policy is specifically designed for renters?

Back

HO-4

Answer explanation

The HO-4 policy, also known as renters insurance, is specifically designed for renters. It covers personal property and liability, unlike the other options which are tailored for homeowners.

Front

What does an HO-4 renters insurance policy NOT cover? Options: Liability, The building structure, Personal property, Loss of use.

Back

The building structure

Answer explanation

The HO-4 policy, also known as renters insurance, does not cover the building structure itself, as it is designed to protect personal property and liability, not the physical building.

Front

Aria is shopping for homeowners insurance and wants the policy that offers the broadest coverage for both her dwelling and personal property. Which policy should she choose?

Back

HO-5

Answer explanation

The HO-5 policy offers the most comprehensive coverage for both dwelling and personal property, covering all risks unless specifically excluded, making it broader than HO-2, HO-3, and HO-8.

Front

What key feature should Ava look for in an HO-5 policy to ensure her personal property is replaced without factoring in depreciation, unless specifically stated?

Back

Replacement cost on personal property without depreciation unless stated

Answer explanation

The HO-5 policy is known for providing replacement cost coverage on personal property without depreciation, unless otherwise stated. This means policyholders can receive full value for their belongings at the time of loss.