Assessment activity: Chapter 10 - Protecting Your Property Homeowner's and renter's policies include a variety of coverage limits and exclusions. Not understanding their significance can be very costly. To remedy this situation, a local insurance agent, Abigail Allen, decided to offer an insurance-oriented game show on a local TV station. The show, called Know Your Policy, awards each contestant who successfully answers five questions and one bonus question his or her choice of a 50-inch LCD television or a $1,000 pre-paid debit card. Each contestant is also invited to switch his or her insurance business to Abigail's insurance agency. 590,000 It is now your turn to appear on the show and demonstrate your knowledge of your homeowner's policy. The policy has the following current limits, provisions, and endorsements: Homeowner's Insurance Policy (HO-2) Section I Part A: Dwelling $180,000 Part B: Other structures $18,000 Part C: Personal property $90,000 Part D: Loss of use $36,000 Section I deductible $500 Section II Part E: Personaliability $300,000 Part F: Medical payments to others $1,000 Forms and Endorsements Replacement costs / contents con con sessment activity: Chapter 10 - Protecting Your Property Forms and Endorsements Replacement costs / contents Jewelry and furs Earthquake and flood endorsements $2,500 / $5,000 What is a Question 1 The term used to describe the dollar amount of a physical damage claim paid by the policyholder Floater O Coinsurance clause Deductible Question 2 In general, the method of calculating the basic limits specified in Parts B through D of a homeowner's policy. What is multiplying the Part A limit by 10%, 50%, and 10-20%, respectively O 10-20%, 10%, and 50%, respectively 25%, 10-20%, and 50%, respectively What is to Question 3 This is a smart strategy for reducing the annual premium on your homeowner's policy. Install smoke and burglar alarms O Reduce the policy's deductible Carry less coverage than is really needed What is Question 4 The maximum compensation available under your homeowner's policy for a garage and gardening shed that were recently damaged by a thunderstorm. The buildings were built 4 years ago for $9,000, were expected to have a useful life of 12 years, and if built today would cost $12,000. Actual cash value, rather than, replacement cost coverage is carried on the structures, and the insured carries a $0 deductible. Question 5 One way to increase your liability coverage. What is to O Purchase an earthquake or flood policy O Purchase a personal liability umbrella policy O Decrease the Part E limit on your policy Question 5 One way to increase your liability coverage. What is to Purchase an earthquake or flood policy Purchase a personal liability umbrella policy Decrease the Part E limit on your policy Bonus Question The two policy modifications, suggested by most insurance agents, to a customer's basic homeowner's coverage to provide better overall protection during periods of inflation What are Add an inflation rider Add an earthquake coverage Add flood coverage Increase the coverage on your home computer equipment Increase the coverage on the dwelling to 100% of its replacement cost Increase the coverage on your scheduled personal property Assessment activity: Chapter 10 - Protecting Your Property Homeowner's and renter's policies include a variety of coverage limits and exclusions. Not understanding their significance can be very costly. To remedy this situation, a local insurance agent, Abigail Allen, decided to offer an insurance-oriented game show on a local TV station. The show, called Know Your Policy, awards each contestant who successfully answers five questions and one bonus question his or her choice of a 50-inch LCD television or a $1,000 pre-paid debit card. Each contestant is also invited to switch his or her insurance business to Abigail's insurance agency. 590,000 It is now your turn to appear on the show and demonstrate your knowledge of your homeowner's policy. The policy has the following current limits, provisions, and endorsements: Homeowner's Insurance Policy (HO-2) Section I Part A: Dwelling $180,000 Part B: Other structures $18,000 Part C: Personal property $90,000 Part D: Loss of use $36,000 Section I deductible $500 Section II Part E: Personaliability $300,000 Part F: Medical payments to others $1,000 Forms and Endorsements Replacement costs / contents con con sessment activity: Chapter 10 - Protecting Your Property Forms and Endorsements Replacement costs / contents Jewelry and furs Earthquake and flood endorsements $2,500 / $5,000 What is a Question 1 The term used to describe the dollar amount of a physical damage claim paid by the policyholder Floater O Coinsurance clause Deductible Question 2 In general, the method of calculating the basic limits specified in Parts B through D of a homeowner's policy. What is multiplying the Part A limit by 10%, 50%, and 10-20%, respectively O 10-20%, 10%, and 50%, respectively 25%, 10-20%, and 50%, respectively What is to Question 3 This is a smart strategy for reducing the annual premium on your homeowner's policy. Install smoke and burglar alarms O Reduce the policy's deductible Carry less coverage than is really needed What is Question 4 The maximum compensation available under your homeowner's policy for a garage and gardening shed that were recently damaged by a thunderstorm. The buildings were built 4 years ago for $9,000, were expected to have a useful life of 12 years, and if built today would cost $12,000. Actual cash value, rather than, replacement cost coverage is carried on the structures, and the insured carries a $0 deductible. Question 5 One way to increase your liability coverage. What is to O Purchase an earthquake or flood policy O Purchase a personal liability umbrella policy O Decrease the Part E limit on your policy Question 5 One way to increase your liability coverage. What is to Purchase an earthquake or flood policy Purchase a personal liability umbrella policy Decrease the Part E limit on your policy Bonus Question The two policy modifications, suggested by most insurance agents, to a customer's basic homeowner's coverage to provide better overall protection during periods of inflation What are Add an inflation rider Add an earthquake coverage Add flood coverage Increase the coverage on your home computer equipment Increase the coverage on the dwelling to 100% of its replacement cost Increase the coverage on your scheduled personal property