FOI - Chapter 6

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Questions and Answers

What does Coverage A include in a Homeowners Form?

Personal liability coverage

Voluntary medical payments

Detached private structures

Dwelling building (correct)

Which of the following statements about Coverage D is correct?

It covers debris removal expenses.

It covers personal property.

It provides additional living expense coverage. (correct)

It includes voluntary compensation for employees.

What is the coverage duration for property moved to protect it from loss or damage?

90 days

60 days

Until the next scheduled renewal

30 days or until policy expiry (correct)

What does Coverage E in a Homeowners Form cover?

Personal liability Signup and view all the answers

How much is available for fire department charges without a deductible?

$1,000 Signup and view all the answers

Under what condition does coverage for loss due to change of temperature apply?

If physical damage to the dwelling or equipment is shown Signup and view all the answers

What does Coverage G provide in a Homeowners Form?

Voluntary payments for damage to property Signup and view all the answers

Which coverage extension is automatically provided for property in transit to another location?

Coverage for property removed Signup and view all the answers

What is a primary characteristic of the 1979 Homeowners Forms?

Simplified language for better understanding Signup and view all the answers

Eligibility for Homeowners forms primarily covers which type of property?

Single family dwellings for year-round living Signup and view all the answers

Which of the following is included in the definition of 'insured' under Homeowners policies?

Only the person named on the policy Signup and view all the answers

What type of damage is not covered under the Homeowners Comprehensive Form?

Mechanical breakdowns Signup and view all the answers

What must a common law partner prove to be covered under the Homeowners policy?

They have lived together continuously for three years Signup and view all the answers

What is the usual insurance limit for detached private structures?

10% of Coverage A Signup and view all the answers

What significant change was introduced in the Homeowners Basic Form (IBC 1151)?

Limiting eligibility to single family dwellings Signup and view all the answers

Which coverage is calculated as a percentage of Coverage A?

Coverage C - Personal Property Signup and view all the answers

What condition must exist for a spouse to make a claim under the policy?

The marriage must be legally recognized Signup and view all the answers

What is NOT an exclusion under the Homeowners Comprehensive Form regarding water damage?

Water from burst pipes Signup and view all the answers

Which form of the IBC Homeowners policy provides the most extensive coverage?

Homeowners Comprehensive Form (IBC 1155) Signup and view all the answers

What characteristic defines single limit policies in homeowners insurance?

Combined limits for multiple coverages Signup and view all the answers

What is the total annual expenditure on habitational property insurance?

$3 billion Signup and view all the answers

Which of the following is excluded from homeowners insurance coverage under the vermin clause?

Damage to exterior walls Signup and view all the answers

What is the typical coverage limit for voluntary medical payments per person?

$1,000 Signup and view all the answers

How is Coverage D - Additional Living Expenses typically calculated?

20% of Coverage A Signup and view all the answers

Which of the following items typically requires additional coverage under homeowners insurance?

Personal computers Signup and view all the answers

What is required immediately after estimating the replacement cost of the dwelling?

Estimating other property values Signup and view all the answers

What type of water loss is explicitly excluded by homeowners insurance?

Damage caused by continuous leakage Signup and view all the answers

Which of the following scenarios may result in coverage for water damage?

Sudden escape of water from a water main Signup and view all the answers

Which type of water is defined as water in soil under the ground surface?

Groundwater Signup and view all the answers

What is one condition under which homeowners insurance will not cover water damage?

Building under construction suffering water damage Signup and view all the answers

What causes damage to personal property inside a building during a windstorm according to the homeowners basic form?

Damage through a pre-existing opening in the building Signup and view all the answers

In homeowners coverage, which loss is NOT included under the windstorm or hail peril?

Damage from outdoor antennas Signup and view all the answers

Which of the following types of water damage is never covered under homeowners insurance?

Water that collects in a basement after heavy rainfall Signup and view all the answers

What type of water may be considered as surface water?

Water on the ground that doesn’t usually accumulate Signup and view all the answers

What should condo unit owners purchase to protect against potential losses covered under the corporation's insufficient insurance?

Loss Assessment Coverage Signup and view all the answers

What can trigger a special assessment on unit owners according to the condo corporation's policy?

Application of a co-insurance penalty Signup and view all the answers

What is the standard limit for loss assessment coverage that unit owners should consider purchasing?

$5,000 limit Signup and view all the answers

When is unit additional protection necessary for condo unit owners?

When the corporation has no insurance for a loss Signup and view all the answers

On what basis is the claim payment for personal property in a condo unit typically made?

Replacement cost basis Signup and view all the answers

What is included in the Tenants Package Forms for individuals renting a residential property?

Coverage for additional living expenses Signup and view all the answers

Which condition does NOT lead to a special assessment against unit owners?

Damage due to a natural disaster Signup and view all the answers

What does the term 'unit improvements and betterments' refer to in condo insurance?

Additional renovations made by the unit owner Signup and view all the answers

Study Notes

Loss or Damage Not Insured

No coverage for wear and tear, deterioration, defects, or mechanical breakdown.
Wear and tear arises naturally from ordinary use, e.g., frayed carpets or worn upholstery.
Settling and movement of ground are not covered, except for resultant damage to building glass.

Homeowners Forms Coverages

No coverage for damage caused by animals like birds, vermin, or rodents, except for building glass.
Coverage for snowslides, earthquakes, and landslides only applies if they lead to fire or explosion, and resultant damage coverage is increasingly excluded.
Water damage exclusions mirror those in the Homeowners Basic Form (IBC 1151).

Underwriting Homeowners Forms

Coverage based on replacement cost for dwelling buildings, detached structures, and personal property.
Insurance for Coverage B (Detached Structures) is typically 10% of the Coverage A amount.
Coverage C (Personal Property) requires 70-90% of Coverage A’s valuation.
Coverage D (Additional Living Expenses) is usually set at 20% of Coverage A.

Coverage Details

Coverage E (Personal Liability): $1 million.
Coverage F (Voluntary Medical Payments): $1,000 per person.
Coverage G (Voluntary Payment for Damage to Property): $500 per occurrence.
Coverage H (Voluntary Compensation for Residence Employees): varies by schedule.

Single Limit Policies

Combine limits for Coverages A-D to provide flexibility for coverage allocation.
Ensure full coverage as limits are combined and not insufficient for specific losses.

Special Policies and Endorsements

Certain property items require additional coverage, including watercraft, jewellery, and fine arts.

Common Characteristics of Homeowners Forms

Adoption of a clear language approach for easier understanding.
Standard structures across forms facilitating efficient information retrieval.
Uniform policy definitions regarding who is insured, extending to spouses and partners under specific conditions.

Coverage Sections

Section I covers Property, including dwelling, detached structures, personal property, and additional living expenses.
Section II addresses Liability Coverages, including personal liability and voluntary medical payments.

Extensions of Coverage

Debris removal coverage applies when loss plus debris removal exceeds the insurance amount; an additional 5% is available.
Coverage is provided for property temporarily removed to prevent loss, effective for 30 days.
Fire department expenses up to $1,000 covered with no deductible.

Water Damage Exclusions

Continuous or repeated seepage or leakage is excluded to encourage preventive maintenance.
Specific exclusions for sewer backup, groundwater, surface water, and significant weather events like heavy rain.

Condo Unit Owners Considerations

Loss assessment coverage essential to protect against shortfalls in corporate policies in case of collective loss.
Unit additional protection ensures coverage for original fixtures within a unit when the corporation lacks sufficient insurance.

Tenants Package Forms

Targeted at individuals renting residential properties, featuring coverage similar to homeowners for personal property and additional living expense.

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Description

This quiz covers key aspects of homeowners insurance including exclusions for wear and tear, animal damage, and underwriting details. Understand the specific forms and coverages available in this context. Prepare to test your knowledge on how these elements affect insurance policies.