Property Insurance
Homeowners and dwelling structure
Homeowners policies combine property and liability. Coverage A is the dwelling; B other structures; C personal property; D loss of use; E personal liability; F medical payments. HO-3 insures the dwelling on open-peril terms but personal property on named perils; HO-5 uses open perils for both; HO-6 is for condos; HO-8 uses functional replacement cost for older homes. A dwelling policy is property-only and often used for rental or nonowner-occupied risks.
Perils, exclusions, and settlement
Open peril means all direct physical loss unless excluded. Common exclusions include earth movement, flood, ordinance or law, neglect, intentional loss, and vacancy. Flood and earthquake need separate coverage or endorsement. Loss settlement may be actual cash value or replacement cost; special limits apply to money, jewelry, silverware, and business property. Additional coverages include debris removal, trees and shrubs, and fire department service charges. A mortgagee clause protects the lender's interest.
Commercial property
Commercial property uses coinsurance, business income, extra expense, blanket or specific limits, and inflation guard. Business income replaces lost net income and continuing expenses during restoration; extra expense pays costs to resume operations sooner.
Traps and worked rule
Questions confuse flood with water backup, named with open perils, and ACV with replacement cost. Worked example: wind opens a roof and rain enters-covered wind loss; rising floodwater-excluded. Rule of thumb: identify the proximate cause first, then check exclusions and settlement.