.0 Homeowners Policy
Learning Objectives
.1 Eligibility
Most Homeowners policy forms require the named insured to own and occupy the insured dwelling as their primary residence. Two forms are designed as exceptions to this general eligibility requirement: the Contents Broad Form (HO–4), also known as the Tenant's Form, and the Unit-Owners Form (HO–6). The HO–4 is intended for tenants who occupy a rented dwelling or apartment unit. Because the tenant does not own the building, coverage primarily protects the tenant's personal property. The HO–6 is designed for individuals who own or occupy a condominium or cooperative unit. Coverage focuses on the insured's personal property and any portion of the building that the insured owns or is responsible for insuring.
.2 Homeowners Coverage Forms
All Homeowners forms are package policies that combine property coverage under Section I with liability coverage under Section II. The primary differences among the forms involve the perils covered under Section I and the methods used to settle covered property losses.
.3 Policy Definitions
Insured
.4 Section I – Property Coverages
Coverage A – Dwelling
.5 Section I Additional Coverages
Both sections of the Homeowners policy automatically include Additional Coverages. Under Section I, each Additional Coverage has its own limit of insurance. The limit may be stated as a percentage of the applicable Coverage A, B, or C limit, or it may be provided as a separate, specified dollar amount.
.6 Section I Exclusions
General Exclusions
.7 Section I Conditions
Duties After Loss
.8 Selected Property Endorsements
When attached to the policy, the following endorsements modify only Section I of the Homeowners policy. These endorsements affect the property coverage provisions and do not change the liability coverages provided under Section II.
.9 Section II – Liability Coverages
Liability coverage protects the insured when they become legally responsible for bodily injury or property damage sustained by another person. Coverage may apply when the injury or damage results from the activities of the insured or the insured's family members. Covered occurrences may take place on the insured premises, near the insured premises, or away from the insured premises. Liability coverage may also apply to injuries or damage caused by the insured's pets. This coverage is designed to protect the insured against personal liability exposures. It does not apply to liability arising out of business activities or automobile-related exposures.
.10 Section II Additional Coverages
Section II also includes four Additional Coverages. These coverages provide extra protection for certain liability-related expenses. Amounts paid under these Section II Additional Coverages are paid in addition to the applicable limit of liability.
.11 Section II Exclusions
Section II exclusions are organized into four main categories. Understanding these categories helps students determine which exclusions apply to a particular liability or medical payments claim.
.12 Section II Conditions
Conditions Applying Only to Section II
.13 Selected Endorsements
Selected Section II Endorsements
Recap of Chapter Six
1. Homeowners insurance is written as a package policy, meaning it includes both property coverage and liability coverage in the same policy. Most Homeowners forms are designed for owner-occupants of the insured dwelling. However, certain forms are available for tenants and condominium unit-owners. To be eligible for Homeowners coverage, a residential dwelling may contain up to 4 residential units. The dwelling may also have no more than 2 roomers or boarders per family. Certain incidental business occupancies may be permitted, and broader coverage for these exposures may be added by the Permitted Incidental Occupancies Endorsement. A dwelling under construction may also be eligible, as long as it is intended to become the named insured's primary residence. The residence premises is the dwelling where the insured resides. It also includes other structures and the grounds at that location. The insured location is broader than the residence premises. It may include the residence premises, temporary residences such as hotel rooms, vacant land other than farmland, and cemetery plots.