Course topics as a whole
This section tests the course as an integrated whole: choosing the right homeowners form, recognizing when an endorsement is needed, and following a claim from facts to payment. No official weighting is published, so expect questions that combine property, liability, and conditions rather than isolate one definition.
Form selection
HO-3 insures the dwelling on an open-peril basis and contents on a named-peril basis. HO-5 is open peril on both. HO-2 is broad named peril. HO-4 is for tenants: it provides Coverage C, D, E, and F, but no Coverage A or B for the building. HO-6 is for condominium unit owners; it covers building property within the unit, improvements and betterments, loss assessment, contents, loss of use, and liability. HO-8 is for older or nonstandard homes and may use functional replacement cost or market value settlement. Endorsements can add replacement cost contents, water backup, scheduled personal property, business pursuits, ordinance or law, or increased limits.
Integrated claim method
First identify the form and every insured. Second classify each damaged item by coverage: A, B, C, D, E, or F. Third test the cause of loss against covered perils and exclusions. Fourth apply the limit, any sublimit, the deductible, and the valuation method. Fifth check conditions such as duties after loss, appraisal, other insurance, and subrogation. For a tenant or condo claim, also coordinate the building owner's or association's master policy.
Worked example
A tenant has an HO-4 with Coverage C of $60,000, Coverage D of $18,000, Coverage E of $300,000, Coverage F of $1,000, and a $500 deductible. A kitchen fire caused by the tenant's negligence makes the unit uninhabitable. The tenant's contents have an actual cash value of $9,000; additional living expense is $4,000; the landlord's damaged unit is $20,000. The building structure is the landlord's insurance issue, not the tenant's Coverage A. The tenant's policy pays $9,000 minus $500, or $8,500, for contents, subject to special limits. Coverage D can pay the $4,000 additional living expense. Coverage E can respond to the landlord's $20,000 property damage claim if the tenant is legally liable, without the property deductible. Coverage F would apply only to medical expenses of others.
Traps
Do not assume a tenant or condo policy covers the building shell. Do not stack special limits on top of the contents limit. Do not apply the property deductible to liability. Do not assume all forms use open perils. Do not ignore endorsements, loss assessment, or the master policy. Do not treat flood or earthquake as covered homeowners perils.