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CISR Auto and Home Class | 202 6 Questions
& Answers | 100% Correct | Verified
Determine if a described activity is a business as defined in the ISO Homeowners policy - ✔✔Business is a two part definition. A business is a trade, profession or occupation engaged in a full time, part time or occasional basis. If part one does not apply, part two needs to be looked at. A business is any activity engaged in for money or other compensation unless it is: an activity that received $12k or less per year, volunteer activity with no compensation, home day care with no compensation, or home day care of a relative even with compensation. Determine if there is an exclusion or limitation in the ISO Homeowners Policy for the Dwelling or any other structure used for business - ✔✔COV A Dwelling- No exclusion for business use on the main dwelling. COV B Other Structures- Up to 10% of coverage A dwelling limit. Three exclusions: exclusion for structure that is rented to anyone not a tenant unless used as a private garage. Exclusion when used as a business exposure. Exclusion for an other structure used to store business property unless owned solely by an insured or tenant of the dwelling and the business property is not gaseous or liquid fuel. Determine if there is an appropriate endorsement to the ISO Homeowners Policy to provide coverage for an other structure that is excluded because of a business exposure and explain the coverage it provides.
- ✔✔Structures rented to others- Residence premises= gives coverage for an other structure that is rented to others for use as a private residence. Example: Garage apartment or mother in law cottage. Permitted Incidental Occupancies- Residence Premises= Must be for a "YOU". covers certain business described in the schedule that is conducted at or from the residence premises. Determine if there is an exclusion of limitation in the ISO Homeowners Policy for personal property used for business - ✔✔There are two coverage C personal property special limits of liability that apply to property used primarily for business: $2,500 for personal property used primarily for business on the residence premise, $1,500 for personal property used primarily for business while away from the residence premises Determine if there is an appropriate endorsement to the ISO Homeowners Policy to provide coverage for personal property that is otherwise excluded because of a specific business activity and explain the
coverage it provides - ✔✔Increased limits on business property= increases limits of business property coverage on the premises from $2500 to a max of $10000. Increases limits of business property coverage away from the premises to 60% of the limit selected. Does not give coverage for business property that pertains to business actually conducted on the residence premises. Does not cover business property in storage or held as a sample or for sale or delivery after a sale. Permitted Incidental Occupancies- residence premises= removes the $2500 business limit for property on the residence for furnishings, supplies and equipment of the business described in the schedule. Landlord's furnishings= used to increase the landlord's furnishing limit to up to $10k. theft is still excluded. exclusions that pertain to business property - ✔✔property in an apartment rented or held for rental to others by and insured ( $2,500 is included for landlord furnishings, other than theft.) Business data such as books of account, drawings and paper records. Includes data stored in computers and related equipment. Determine if a business activity is excluded in section II- liability coverages of the ISO Homeowners Policy
- ✔✔The exclusions consist of four groups: Motor vehicle liability and watercraft liability exclusion- excludes the business use of any motor vehicle except gold cart used on a golfing facility. No bodily injury or property damage coverage for a business on an insured location, such as working from home. No bodily injury or property damage coverage for a business engaged in by an insured whether or not the business is owned or operated by the insured. No bodily injury or property coverage for a business that employs an insured. No bodily injury coverage arising out of the rendering of or failure to render professional services. StEmpire 1
Loading and unloading exposures: if an injury occurs during the loading and unloading of an auto, it may not be considered an auto accident resulting from the ownership, maintenance or use of the auto. Business auto provides coverage for the loading and unloading exposure. Determine whether or not business use of an auto is covered by the ISO Personal Auto Policy - ✔✔Exclusions for a client with a business exposure: bodily injury to an employee of that insured. A vehicle used as a public or livery conveyance. anyone in the auto business. Maintaining or using a vehicle for business unless it is a private passenger auto, pickup, van or trailer for use with a private passenger auto, pickup or van. Determine the section I property coverage provided by the Homeowners 3 Special Form for damage to owned recreational vehicles - ✔✔There is an exclusion for motor vehicles including their equipment and parts. For a Rec vehicle that is not required to be registered, coverage is only provided for loss by a covered peril if the recreational vehicle is used solely to service a residence. If a rec vehicle is not subject to the motor vehicle exclusion, the exclusion for property separately described and specifically insured must be considered. Describe the coverage provided by the owned motorized golf cart physical loss coverage endorsement to the homeowners policy - ✔✔Golf carts are the only rec vehicle that may be eligible for property coverage by an endorsement. Owned Motorized golf cart physical loss coverage= there are two coverage options: direct physical loss including collision, direct physical loss excluding collision. Golf carts are not meant to go faster than 25mph, not meant to carry more than 4 people and only used for the purpose of playing golf. Coverage for non permanently installed accessories, equipment and parts that are designed or made solely for the use of a golf cart is provided for up to 10 percent of the highest limit of liability shown in the schedule. coverage is on a direct physical loss basis. collision coverage is not provided unless the schedule indicated collision perils applies. StEmpire 2
No coverage for loss due to road damage to tires, power surges and faulty workmanship from a loss other than fire or explosion. Vandalism or malicious mischief is excluded if kept at any of the following types of locations: unoccupied, closed for the season, and not in operation for more than 60 consecutive days immediately before the loss. Explain whether or not damage to borrowed or rented recreational vehicles is a covered section II property damage loss in the Homeowners 3 special form. - ✔✔There are two consideration when determining whether or not the damage to the borrowed or rented recreational vehicle is a covered property damage loss: An insured has legal responsibility for the loss, and the damage was caused by fire, smoke or explosion. Must be legally responsible if fire, smoke or explosion to be paid. If a loss is excluded in Cov E, up to $1000 coverage may be provided by the additional coverage, damage to personal property of others. Does not need to be legally responsible for it to apply. covers damage to a rented or borrowed recreational vehicle as long as it was designed for rec use off public roads, was not used for business purposes, and was not subject to vehicle registration at the time of the occurrence. No coverage for property damage caused by a 13 year old or older. Coverage for an owned rec vehicle may depend on whether or not the occurrence takes place on one of the specified insured locations such as: Other residences shown on declarations, non owned residence where insured is temporarily residing, vacant land by or rented to an insured and any part of a premises occasionally rented to an insured for other than business use. Define motor vehicle liability in the homeowners 3 special form - ✔✔The definition contains both activities and legal concept: ownership of a motor vehicle, and maintenance, occupancy, operation, use, loading or unloading of a vehicle by any person. Determine the liability coverage provided by the unendorsed Homeowners 3 special form for losses arising out of owned, rented or borrowed recreational vehicles - ✔✔Part 1 of the motor vehicle exclusion takes away coverage for any recreational vehicle that at the time and place of the occurrence is: registered for use on public roads or property. Not registered for use on public roads or property but registration was required for the recreational vehicle to have been used at the place of the occurrence.
limitations to the endorsement: does not provide coverage for physical damage to the snowmobile. does not give coverage for injury to an insured or regular resident of the household. does not provide uninsured/underinsured motorist coverage. Incidental low power recreational motor vehicle liability coverage endorsement- Gives liability coverage for rec vehicles that are otherwise excluded when away from specified insured locations. Cov E and F extended to motor vehicles away from insured locations if they do not go more than 15mph and are not a motorized bike, scooter, moped or golf cart regardless of speed capability. Personal auto policy and recreational vehicles- Auto not designed to provide coverage for the recreational vehicle exposure. Exclusions that apply to rec vehicles: no liability coverage for a vehicle with fewer than four wheels or a vehicle designed mainly for use off public roads. Two exceptions to the exclusion that will apply coverage: if the vehicles are being used in a medical emergency or for non owned golf cart for other tan business use. Apply the coverages available under the snowmobile endorsement and the miscellaneous type vehicle endorsement to the personal auto policy - ✔✔Snowmobile endorsement- Can provide liability, medical payments, uninsured &/or underinsured motorists, other than collision and collision coverages. contains optional passenger hazard exclusion, which should never be checked off. gives broader coverage than the owned snowmobile endorsement. Miscellaneous type vehicle endorsement- Can provide liability, medical payments, uninsured/underinsured motorist coverage, other than collision and collision coverage for an owned rec vehicle including all terrain vehicles, golf carts, motor scooters and go carts. Determine the section I property coverage provided by the homeowners 3 special form for damage to owned, rented or borrowed watercraft - ✔✔Property coverage for watercraft- Cov C personal property, covers personal property owned or used by an insured anywhere in the world. Borrowed and/ or rented watercraft used by an insured is personal property. Watercraft including its trailer, furnishings, equipment and outboard engines or motors is limited to $1,500 per loss. All types of watercraft are subject to this special limit, such as rowboats, canoes, kayaks, paddle boats, sailboats, motor boats, personal watercraft. If the watercraft is covered under a separate policy, the $1,500 dollar limit does not apply to protect against double indemnity.
Two perils have limitations that apply to watercraft and their trailers, furnishings, equipment and outboard engines or motors. 1.) Loss caused by windstorm or hail is only covered while the watercraft, trailers, equipment and outboard engines or motors are inside a fully enclosed building. 2.) No theft coverage while the watercraft and its trailer, furnishings, equipment and outboard engines or motors are off the residence premises. Coverage C perils do not include causes of loss that are most likely to occur to watercraft such as capsizing, collision, flooding and sinking. If the client has an HO5 policy, there is coverage for: theft of watercraft that occurs away from the residence premises, wind/hail while the watercraft is not in a fully enclosed building. Excludes losses due to collision, other than collision with a land vehicle, sinking, swamping or stranding of watercraft, including their trailers, furnishings, equipment an outboard motors. Explain whether or not damage to borrowed or rented watercraft is a covered section II property damage loss in the homeowners 3 special form. - ✔✔Section I property may not provide the coverage needed by clients when there is damage to watercraft they rented or borrowed due to the following: $1,500 special limit, named perils with wind, hail and theft limitations, and there is a deductible. Two considerations when determining whether or not the damage to borrowed or rented watercraft is a covered property damage loss. both must be met for a loss to be covered: An insured must be legally responsible for the loss, and the property damage has to be caused by first, smoke or explosion. When the damage to the rented or borrowed watercraft is caused by fire, smoke or explosion And the client is legally responsible, the loss is covered up to the Cov E limit. The $1,000 provided by the Section II additional coverage damage to property of others is not available as it excludes damage to watercraft. explain the definition of watercraft liability in the homeowners 3 special form - ✔✔Watercraft means sailing and engine motor powered watercraft. Watercraft does not mean rowboats, kayaks, canoes, paddleboats, and others that are not sail or engine motor powered. Still subject to the $1,500 watercraft special limit. StEmpire 4
Apply the coverage provided by the ISO personal auto policy for a trailer used with watercraft - ✔✔The personal auto policy does not provide either Part A liability coverage or Part D coverage for damage to your auto coverage for a watercraft. The personal auto policy may provide coverage for an accident involving a trailer used to transport watercraft. A trailer is defined as a vehicle designed to be pulled by a private passenger auto or pickup or van, most boat trailers fit into this definition. If an insured has an auto accident with the trailer, liability coverage would be provided. A boat trailer is eligible to be insured for physical damage if: the trailer is shown in the dec with other than collision or collision coverages, the trailer would be covered for an other than collision loss. Insuring the trailer on the personal auto policy would result in the trailer being excluded from the homeowners policy, taking away the $1,500 special limit of liability for watercraft because of the exclusion for personal property separately described and specifically insured. Explain the reasons personal umbrella/excess liability coverage should be recommended to clients - ✔✔We live in a society that likes lawsuits, clients need to be protected in the event of a loss, clients current and future assets and incomes need to be protected, it improved account retention, revenue is increased to the agency, and E/O are reduced. Explain how a personal umbrella, and excess liability, and a hybrid umbrella/ excess policy differ from one another - ✔✔Personal umbrella policy- gives excess liability over the auto, home, watercraft or rec vehicle policy. Gives broader coverage by providing primary coverage for losses that are not covered by the client's home, auto and watercraft/ rec vehicle policy. Excess liability policy- gives excess liability over other policies. Is not meant to give broader coverage, if the loss is not covered on other policies, it is not covered. Hybrid umbrella/excess policy- This is a policy that is not a true umbrella or an excess umbrella. It may provide excess liability for those losses that are covered by the clients other policies. It may provide broader coverage for losses not covered by the clients other policies. may provide broader coverage for some exposures but be narrower than the underlying policies for others. It may be narrower in the excess coverage provided that the coverage provided by the underlying policies. it may be an umbrella policy with a following form endorsement or endorsements. StEmpire 5
Explain how the ISO personal umbrella liability policy provides protection in conjunction with the client's other personal lines policy - ✔✔Underlying requirements address both the type of underlying insurance required and the minimum limits that are acceptable. explain how coverage under the ISO personal umbrella liability policy is affected if the required underlying insurance is not in force at the time of a loss. - ✔✔Maintenance of underlying requirements: underlying policies and minimum required limits must be in force throughout the policy period of the personal umbrella liability policy. If underlying insurance is not in force, the personal umbrella policy pays as if the underlying was in force. if the underlying policy is not in force if a client's limits are reduced to less than the required underlying limits and a loss occurs, there is going to be problem with the coverage and/or the amount of coverage available from the clients personal umbrella liability policy. There are factors that contribute to the client's gap in coverage: the agency does not write the underlying coverage but the umbrella or excess policy is written with a carrier other than the underlying carrier, information in the agency's automated system doe not clearly indicate there is umbrella/excess coverage in force, the agency does not review underlying policies and limits at renewal to make sure the underlying insurance requirements have been met. Explain the application of the self insured retention and apply it to specific losses - ✔✔Self insured retention defined- the amount of covered loss that the client is responsible for paying when the personal umbrella liability policy drops down to provide primary coverage. When the SIR is applied- stops the personal umbrella policy from paying the first dollar or any claim. the ISO personal umbrella liability policy does not use the term SIR, it instead uses the term deductible. Understand the defense coverage included the personal umbrella liability - ✔✔Insuring agreement- policy will pay damages for personal injury, bodily injury and property damage in excess of the retained limit for which an insured is legally responsible because of an occurrence. prejudgment interest included. Defense coverage is provided if a claim or suit is brought against an insured that is covered by the policy. Defense costs are paid in addition to the limit of liability. the insurance company has the right to investigate and settle claims as it sees fit. the insurance companies duty to defend ends when the limit of liability has been exhausted either by judgement or settlement. Additional coverages- Defense expenses incurred by the insurance company. premium bonds required in a lawsuit that the insurance company defends. Reasonable expenses incurred by an insured at he request of the insurance company, includes loss of earnings up to $250 per day for an insured who misses work assisting in the investigation of defense of a claim or suit. Post judgments interest.
