Personal Lines Insurance Coverages
Homeowners and Auto
Personal lines focus on Homeowners (HO) and Personal Auto policies. HO forms (HO-2, HO-3, HO-5, HO-8) differ in perils covered (named vs. open). Coverage A (dwelling), B (other structures), C (personal property), D (loss of use), E (personal liability), F (medical payments) are standard. HO-3 is special (open perils on dwelling, named perils on contents). HO-4 (renters) covers contents and liability, not building. HO-6 (condo) covers unit owner's property and improvements. Personal Auto Policy (PAP) includes Part A Liability, Part B Medical Payments, Part C Uninsured/Underinsured Motorist, Part D Coverage for Damage to Your Auto (collision and other than collision). No-fault states restrict tort liability.
Traps
Questions often test special limits (e.g., money, jewelry, silverware), deductible application (per occurrence), and coverage triggers (e.g., medical payments regardless of fault). Watch for endorsements that modify coverage, like scheduled personal property or water backup. Another trap: actual cash value vs. replacement cost in HO policies. Ordinance or law coverage may be limited.
Worked Example
A homeowner with HO-3 has a fire causing $50,000 dwelling damage and $10,000 contents loss. Deductible is $1,000. Coverage A limit is $200,000; Coverage C limit is $100,000. Payment: Dwelling: $50,000 – $1,000 = $49,000; Contents: $10,000 (no deductible again because same occurrence). Total $59,000, subject to policy limits.
Rule of Thumb
For HO, Coverage B is typically 10% of A; Coverage C 50-70% of A; Coverage D 20-30% of A. Use these percentages to check adequacy.