Ohio Property & Casualty Insurance Prelicensing Online Course –
Unit 5
5.0
Homeowners Policy
5.1
Key Facts
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Since the Homeowners policy is a package, the insured must have both sections I and II.
Unlike the Dwelling policies, Homeowners policies demand owner-occupancy.
Up to a four-family residence can be insured by a Homeowners policy.
A dwelling purchased under a Land Contract or occupied under a Life Estate agreement
is eligible for a homeowner policy.
5. Seasonal dwellings are eligible if the insured’s primary residence is covered under a
homeowner policy.
6. Motorized vehicles that are not subject to road registration are covered for physical loss if they
are used to maintain the residence premises or designed to assist the handicapped.
7. The HO-5 is the Comprehensive form and provides all risk protection for both the dwelling and
contents.
8. The HO-8 indemnifies covered dwelling losses on a Functional replacement cost basis.
9. Business is defined by the Homeowners policy as any economic endeavor, full or part time, with
more than $2,000 income.
10. There is absolutely no Business Liability coverage in an unendorsed Homeowners policy.
11. Coverage F Medical Payments does not cover the insured and regular residents of the
household.
12. Wind damage to landscaping is not covered.
13. On an HO-6, contents are covered on a Named Perils basis.
14. On an unendorsed HO-6, the automatic Coverage A limit is $5,000.
15. On an HO policy, if the dwelling is vacant, freezing of plumbing is covered if heat is maintained.
16. Medical coverage on an HO is no fault and does not require a finding of negligence.
17. HO liability covers BI and PD to an injured third party.
18. An unendorsed HO does not cover personal injury, but it can be covered by endorsement.
19. Co-insurance requirements on an HO are based on the replacement cost (80%).
20. The land the insured’s house sits on is not insurable.
21. A detached other structure (i.e., a garage) used in whole or part for business purposes is not
covered, unless used solely to store business property of a non-combustible nature.
22. On an HO, if the combined cost of repairs and cleanup of debris equals the policy limits, an
additional 5% is available for debris removal.
23. All HO policies cover theft of contents and damage caused by burglars. Section I of an HO
covers property; Section II covers liability. Section I losses are subject to a deductible; Section II
losses are not.
24. Personal Liability and Medical Coverage to Others on an HO covers the insured’s activities both
on and off the premises.
25. Loss of Use coverage is indirect loss coverage and indemnifies only additional expenses during
the period of restoration.
Ohio P & C Insurance Prelicensing Online Course
Unit 5 – Homeowners (HO) Policy
10/23/2013
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An HO excludes BI and PD arising out of the loading or unloading of a motor vehicle.
An HO-8 is designed to insure older homes.
The exclusions on an HO-8 are generally the same as on the other HO forms.
All HO policies exclude loss to animals, birds, and fish.
An HO limits Coverage C contents to 10% of the Declarations page limit or $1,000, whichever is
greater, for loss to contents off premises if the property is regularly or permanently off the
premises or in a storage facility.
An HO covers the insured’s contents in full while moving, for up to 30 days.
Coverage C on an HO will cover property of guests while on the insured location.
Plants, trees, and shrubs are covered under an HO policy, up to $500 per item.
Permitted incidental occupancies on an HO include schools, studios, and some offices.
To determine who is an insured on an HO policy, read the Definitions section.
The Dwellings Rented to Others endorsement on an HO policy extends both personal liability
and medical payments to the described rental property.
An HO-6 does not cover loss to common area buildings.
An HO-2 is a Named Perils policy on dwelling, other structures, and contents. The named perils
are the Broad named perils.
An HO-3 is All Risk coverage on the dwelling and other structures, but Broad Named Perils for
contents.
The insurer’s duty to defend a lawsuit on an HO policy ends when the amount paid for damages
equals the Coverage E limit as defined by a settlement or judgment.
Coverage C on an HO policy will not cover property of roomers, boarders, and other tenants
unless related to the insured.
The definition of an “insured” under an HO includes residents of the insured’s household who
are relatives, or any other person under the age of 21 who is in the insured’s regular care. Fulltime students, up to age 24, are also considered insured.
Damage related to off-premises power failure is not covered by an HO.
The deductible on the optional HO Earthquake coverage is a percentage of the policy limits.
In case of loss to a pair or set, the insurer may elect to repair or replace the set to its value
before the loss, or pay the difference in value before and after the loss.
Teacher Liability for BI and PD may be added by endorsement to an HO.
Liability on an HO covers outboard motor watercraft with 25 total HP, 50 total inboard
horsepower motors, or sailing vessels under 26 feet in length.
All unendorsed HO policies cover contents on an ACV basis. However, replacement cost can be
added by endorsement.
All HO policies have additional coverages very similar to Dwelling policies.
Tree debris is covered up to $500 per tree, to a maximum of $1,000, if the debris damages a
covered structure or blocks a driveway.
An unendorsed HO policy provides Coverage E Personal Liability to a limit of $100,000 per
occurrence. This figure can be raised by endorsement. Coverage F Medical Payments to Others
is covered up to $1,000 per person, and this too can be increased.
The Section II additional coverage Damage to Property of Others provides up to $1,000 for loss
of other’s property in the insured’s care regardless of negligence. Coverage is afforded on a
replacement-cost basis.
The Section II exclusion for Damage to Property of Others in the insured’s care does not include
loss caused by fire, explosion, and smoke.
The optional inflation guard applies to Coverages A and B only.
An HO-4 is sold to renters and does not include Coverage A or B.
Ohio P & C Insurance Prelicensing Online Course
Unit 5 – Homeowners (HO) Policy
10/23/2013
Page 2 of 3
56. Under Coverage C, certain property is limited in the amount of payment received for a covered
loss. Money is limited to $200, watercraft is limited to $1,500, business property for a business
run on the residence premises is limited to $2,500, and business property off premises is limited
to $1500.
57. Jewelry is limited to $1,500, silverware to $2,500, and firearms and related equipment to $2,500.
However, these sub-limits apply only to the peril of theft.
58. An HO automatically includes 10% of Coverage A for Coverage B Other Structures.
59. An HO automatically includes 50% of Coverage A for Coverage C Contents.
60. In an HO policy, contents are covered anywhere in the world.
61. Building material to remodel or alter the dwelling is automatically covered under Coverage A.
62. Intentional injury is not covered under Section II Liability, unless it is self-defense.
63. An HO-8 is a Named Perils policy covering dwelling, other structures, and contents for basic
perils.
64. The standard HO deductible is $250.
65. A mobile home is a dwelling on axles and wheels. It is not on a fixed masonry foundation. As
such, it is not eligible for Homeowners Insurance.
66. A limited fungi, wet or dry rot, or bacteria coverage endorsement (HO 0426) provides up to
$5,000 for damage to covered property, the cost to remove and replace property to get to the
damaged property, and the cost to remove fungi from the property itself.
Ohio P & C Insurance Prelicensing Online Course
Unit 5 – Homeowners (HO) Policy
10/23/2013
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