Insurance Module 13/ Q&A/ Already Graded A+/ 2024-2025.
Homeowners insurance is known as - (answers)HOI and is commonly called 'hazard' or
'property' insurance.
Homeowners Insurance provides - (answers)coverage if a property is damaged or
destroyed by events specified in the insurance policy (i.e.; fire).
What is the purpose of HOI? - (answers)The purpose of homeowners insurance is to cover the
costs of repairing or replacing the home and restoring it to its full value and utility as collateral
for the loan.
six basic types of homeowners insurance - (answers)HO-1
HO-2
HO-3
HO-5
HO-6
HO-8
Definition of an HO-1 policy: - (answers)a basic policy that provides coverage on a property
against 11 listed hazards, including fire or lightning, windstorm or hail, vandalism or malicious
mischief, theft, damage from vehicles and aircraft, explosion, riot or civil commotion, glass
breakage, smoke, volcanic eruption, and personal liability.
Definition of an HO-2 policy: - (answers)a general form of homeowners insurance that covers
only named hazards. The hazards may be fire, lightning, hail, explosions, and so on. But if a
hazard is not listed, it is not covered by the insurance.
Definition of an HO-3 policy: - (answers)a unique type of homeowners insurance that includes
open hazards protection. Open hazards protection covers all direct physical losses to the property
and lists specific exclusions.
, Definition of an HO-5 policy: - (answers)form of homeowners insurance that covers open1
hazards and includes a rider (HO-15) that allows open hazards coverage on personal property in
addition to other coverage.
Definition of an HO-6 policy: - (answers)condominium owners insurance. It is also referred to as
a "walls in" policy. Besides covering personal property, this insurance covers improvements
made to the inside of the dwelling. All-risk coverage is also available as an option.
Definition of an HO-8 policy: - (answers)insurance against named perils. It insures the dwelling
for the repair cost or market value, instead of the replacement value. All-risk coverage is also
available as an option.
Required amount of HOI coverage is - (answers)The mortgage loan amount, which may include
a replacement cost endorsement that compensates for the full amount of damage/loss to the
improvements OR Depending on the lender, 100% of the insurable value of the improvement
Definition of Replacement Cost: - (answers)the cost to replace the property on the same premises
with other property of comparable material and quality and used for the same purpose
Replacement Cost indicators on an HOI decpage: - (answers)Replacement Cost
Extended RC
Guaranteed RC
100% or 125%
Definition of Actual Cash Value - (answers)(ACV) or "market value" is the standard insurance
companies prefer when reimbursing policyholders for losses. ACV represents the dollar amount
one could expect to receive for an item if sold in the marketplace.
ACV Calculation - (answers)replacement cost MINUS any depreciation
Key Items on an HOI Policy - (answers)Borrower's Name
Policy Type - Homeowners, Flood, or Condo
Homeowners insurance is known as - (answers)HOI and is commonly called 'hazard' or
'property' insurance.
Homeowners Insurance provides - (answers)coverage if a property is damaged or
destroyed by events specified in the insurance policy (i.e.; fire).
What is the purpose of HOI? - (answers)The purpose of homeowners insurance is to cover the
costs of repairing or replacing the home and restoring it to its full value and utility as collateral
for the loan.
six basic types of homeowners insurance - (answers)HO-1
HO-2
HO-3
HO-5
HO-6
HO-8
Definition of an HO-1 policy: - (answers)a basic policy that provides coverage on a property
against 11 listed hazards, including fire or lightning, windstorm or hail, vandalism or malicious
mischief, theft, damage from vehicles and aircraft, explosion, riot or civil commotion, glass
breakage, smoke, volcanic eruption, and personal liability.
Definition of an HO-2 policy: - (answers)a general form of homeowners insurance that covers
only named hazards. The hazards may be fire, lightning, hail, explosions, and so on. But if a
hazard is not listed, it is not covered by the insurance.
Definition of an HO-3 policy: - (answers)a unique type of homeowners insurance that includes
open hazards protection. Open hazards protection covers all direct physical losses to the property
and lists specific exclusions.
, Definition of an HO-5 policy: - (answers)form of homeowners insurance that covers open1
hazards and includes a rider (HO-15) that allows open hazards coverage on personal property in
addition to other coverage.
Definition of an HO-6 policy: - (answers)condominium owners insurance. It is also referred to as
a "walls in" policy. Besides covering personal property, this insurance covers improvements
made to the inside of the dwelling. All-risk coverage is also available as an option.
Definition of an HO-8 policy: - (answers)insurance against named perils. It insures the dwelling
for the repair cost or market value, instead of the replacement value. All-risk coverage is also
available as an option.
Required amount of HOI coverage is - (answers)The mortgage loan amount, which may include
a replacement cost endorsement that compensates for the full amount of damage/loss to the
improvements OR Depending on the lender, 100% of the insurable value of the improvement
Definition of Replacement Cost: - (answers)the cost to replace the property on the same premises
with other property of comparable material and quality and used for the same purpose
Replacement Cost indicators on an HOI decpage: - (answers)Replacement Cost
Extended RC
Guaranteed RC
100% or 125%
Definition of Actual Cash Value - (answers)(ACV) or "market value" is the standard insurance
companies prefer when reimbursing policyholders for losses. ACV represents the dollar amount
one could expect to receive for an item if sold in the marketplace.
ACV Calculation - (answers)replacement cost MINUS any depreciation
Key Items on an HOI Policy - (answers)Borrower's Name
Policy Type - Homeowners, Flood, or Condo
