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| November 2007, Volume 11 |
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Questionnaire Selection Coverage List PROPERTY INVENTORY This listing is intended to provide guidance in three areas:
Dwelling (Coverage A) The insured must carry limits equal to 80% of the replacement value of the dwelling if a loss is to be adjusted on a replacement cost basis. Land is not covered, so its value should not be included in any replacement cost calculation. Foundations, excavations, underground wiring and fixtures are covered but are not considered when determining the 80% insurance to value requirement.
Additional Structures (Coverage B) The automatic limit for all additional structures is 10% of the dwelling limit. Since HO-4 does not cover a dwelling, there is no coverage for additional structures. Under HO-6, there is $1,000 coverage provided for outdoor sheds or garages. List all:
Personal Property (Coverage C) Personal property is normally covered for up to 50% of the dwelling value when the policy includes Coverage A. This limit can be increased. Unit owners and tenants and others who do not purchase Coverage A, must specifically schedule their personal property. Loss settlement is based on an actual cash valuation. It is important to complete a property inventory to determine the actual limit needed. Items that are specifically scheduled, such as furs, silverware, golf equipment, coin collections, firearms and jewelry should not be part of calculating the general personal property's total value. Remember that carpeting, cabinets, countertops, appliances and bathroom fixtures are all personal property.
Off Premises Personal Property (Coverage C) Personal property that is normally off premises is covered for up to 10% of the personal property limit. The following inventory will help determine if additional limits are needed:
Loss of Use (Coverage D) The cost of living elsewhere following a covered cause of loss does not have a specific limit. Instead the limit is based on a percentage of either the dwelling limit or the personal property limit, as follows:
Unfortunately, accommodations are not always easily found because of special life considerations for a particular family. These families may be underinsured unless an inventory of needs and available resources has been developed in advance and additional coverage purchased. a. Evaluate the extraordinary needs of the household.
b. Evaluate the availability of accommodations. Does the insured own property where they can stay following a loss? ___Yes ___No Can the insured stay with friends or family? ___Yes ___No Is temporary rental housing available in the surrounding communities? ___Yes ___No Is temporary lodging (hotels, motels, etc.) available in the surrounding communities? ___Yes ___No If yes, what is the maximum length of stay? _____ Days Are there other facilities available to meet temporary housing needs of the insured? ___Yes ___No If yes, what are the vacancy rates? ____% If no to the above, what are the insured’s contingency plans if their house becomes uninhabitable? ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ c. Determine the costs of temporary housing. What is the "premium" or "bonus" cost the insured would have to pay in order to get space quickly? $___________ What is the daily cost of a rental unit that meets the minimum requirements of the insured? $ ____________ What are the per diem costs of other than room expenses? +$____________ Total per diem costs $ ____________ Maximum days to reconstruct X _______ = Maximum living expenses during reconstruction + $ ___________ Bonus costs plus living expenses – Total Coverage D $ ___________ d. Add the housing and other expenses together and multiply by the maximum number of days needed to rebuild the dwelling to finalize. Add this to the premium or bonus costs to estimate the amount of coverage needed. e. Compare the costs to the limit provided and adjust the policy if necessary. |
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