Assignment, PLPLI, BBA-BI 6th semester, Ace Institute of Management

1. •Aayush Raj Arjyal
•Ashish Baidya
•Chhitiz Shrestha
•Sapan Dulal
•Satish Khadka

2. What to get??????
 What is home owner
insurance?
 What are home
insurance policies?
 What are the types of
home insurance
policies?
 What are the coverage
of home insurance
policies?
 Underwriting
guidelines?

3. Introduction
 Home Owner Insurance, also commonly called Household
Insurance, is the type of property insurance that covers private
homes.
 Homeowners insurance is a package policy consisting of different
types of coverage for the house, its contents, additional living
expenses, personal liability claims against the policyholder and other
members of the household, and medical payments to others.
 It's a multiple-line insurance, meaning that it includes both property
insurance and liability coverage, with an indivisible premium,
meaning that a single premium is paid for all risks.

4.  The home insurance policy is usually a term contract—a contract that
is in effect for a fixed period of time.
 The insured must pay the insurer the premium each term.
 Most insurers charge a lower premium if it appears less likely the
home will be damaged or destroyed: for example, if the house is
situated next to a fire station or is equipped with fire sprinklers and
fire alarms; if the house exhibits wind mitigation measures, such as
hurricane shutters; or if the house has a security system and has
insurer-approved locks installed

5. Types of homeowner’s policies
HO1 – Basic Form Homeowner Policy .A basic policy form that
provides coverage on a home against 11 listed perils;. The perils
include fire or lightning, windstorm or hail, vandalism or
malicious mischief, theft, damage from vehicles and aircraft,
explosion riot or civil commotion, glass breakage, smoke,
volcanic eruption, and personal liability. Exceptions include
floods, earthquakes.
HO2 – Broad Form Homeowner Policy A more advanced form that
provides coverage on a home against 17 listed perils (including
all 11 on the HO1). The coverage is usually a "named perils"
policy, which lists the events that would be covered.
HO3 – it is Special Form Homeowner Policy .The typical, most
comprehensive form used for single-family homes. The
policy provides "all risk" coverage on the home with some perils
excluded, such as earthquake and flood. Contents are covered
on a named peril basis.

6. Contd..
 HO4 – Renter's Insurance The "Tenants" form is for renters. It covers
personal property against the same perils as the contents portion of the
HO2 or HO3. An HO4 generally also includes liability coverage for
personal injury or property damage inflicted on others.
 HO5 - Premier Homeowner Policy Covers the same as HO3 plus more.
On this policy the contents are covered on an open peril basis,
therefore as long as the cause of loss is not specifically excluded in the
policy it will be covered for that cause of loss. (can also be achieved by
endorsing an HO15 to the HO3)
 HO6 – this policy covers your personal items and your condominium's
interior when damage or loss occurs because of aircraft, civil
disturbance, explosion, falling objects, fire, hail, lightning, smoke,
theft, vandalism, vehicle or wind storm.
 HO8 – Older Houses. The "Modified Coverage" form is for the owner-
occupied older home whose replacement cost far exceeds the property's
market value

7. Coverage Description
Type
Coverage A: Covers damage to the house.
Damage to The face amount of the policy
House (for example $100,000) is the
most you will receive if your
house is totally destroyed
Coverage B: Covers damage to other
Other Structures structures or buildings, such as a
detached garage, work shed, or
fencing.
Coverage C: Covers damage to, or loss of
Personal personal property. Personal
Property property includes household
contents and other personal
belongings used, owned or worn
by you and your family

8. Coverage D: Covers additional living expenses when incurred.
Additional Living This means that the policy covers the necessary
Expense living expenses up to the stated limit, incurred by
the insured to continue, as nearly as possible, the
normal standard of living when the house cannot be
occupied due to a covered loss.
Coverage E: Covers personal liability. This coverage protects you
Comprehensive against claims arising from accidents to others on
Personal Liability property that you own or rent. With a few
exceptions, such as auto or boating accidents, it is
an all purpose liability policy that follows you
wherever you go.
Coverage F: Covers medical expenses. Coverage is limited to an
Medical Expense amount per person and per accident for injuries
occurring on your premises to persons other than
an insured, or elsewhere, if caused by you, a
member of your family, or your pets. An important
feature of this coverage is that payment is made
regardless of legal liability.

9. UNDERWRITING GUIDELINES
1. CLAIMS HISTORY
 All companies make underwriting
decisions based on claims history.
 Some companies will make adverse
underwriting decisions based on the
number of claims and/or the type of
claims filed by the applicant or on the
property to be insured.
2. LOCATION OF HOME
 Insurance companies make adverse
underwriting decisions because the
applicant’s home is located near
substandard or commercial property or
in a neighborhood with high crime
and/or declining property values.
3. CONSTRUCTION OF HOME
4. AGE OF HOME

10. Personal Umbrella Policies
 The personal umbrella policy is
excess liability insurance that
provides protection that is over
and above that provided by
auto, home insurance.
 Umbrella liability insurance is
designed to give one added
liability protection above and
beyond the limits on auto and
homeowners insurance
policies.
 People with significant assets
need an umbrella liability policy
to cover lawsuits that can
sometimes amount to millions
of dollars.

11.  The umbrella policy also has broad
coverage that covers some claims
that wouldn't be covered at all by
home and auto insurance.
 such as personal injury lawsuits
arising from false arrest, slander and
libel, or rental units that the insured
may own.
 The personal umbrella policy also
pays for the legal defense of lawsuits
that is in addition to the policy limit
for damages.
 So if you are sued and held liable for
$1 million, and your legal costs are
$200,000, then a policy providing $1
million of coverage will pay the full
claim plus the $200,000 for legal

12. Things to remember before purchasing
homeowner policies
 Shop Around.
Prices vary so it pays to shop around. Ask
friends, check the Yellow Pages, refer to
consumer guides, insurance agents, the
consumer phone line of the state's insurance
commissioner's office and the companies for
price information.
 Raise the deductible.
Deductibles are the amount of money the
homeowner pays toward a loss before the
insurance company starts to pay according to
the terms of the policy. Deductibles on
homeowners policies typically start at $250. By
increasing the deductible to $500, $1,000,
$2,500, or $5,000, discounts may be obtained,
depending on the insurance company.
 Buy home and auto policies from the same
insurer.
Some companies that sell homeowners and
auto coverage may reduce their premium if two
or more policies are purchased from them.

13.  Insure the house, not the land.
The land under the house isn't at risk from theft, windstorm, fire and other
perils covered in a homeowners policy. Therefore, the value of the land
should not be included in deciding how much homeowners insurance to buy.
 Beef up home security.
Some insurance companies offer discounts for smoke detectors, burglar and
fire alarm systems, or dead-bolt locks. Others offer discounts for homes
equipped with a sprinkler system and fire detection and burglar alarms that
ring at the police station or at a monitoring facility. Before buying such a
system, consumers should check with their insurers to validate that such as
system will be eligible for a discount and how much the device or system
would cost. Most importantly, the consumer should know how much may be
saved on premiums.
 Seek out discounts for seniors.
Retired people stay at home more and spot fires sooner than working
people. Retirees also have more time to maintain their homes. If a
homeowner is at least 55 years old and retired, he or she may qualify for a
discount at some companies.

14. Some points to remember for home
insurance policy
 When applying for home insurance, make sure you carry
along your detailed information such as marital status,
occupation and employment history, criminal history, credit and
insurance history, etc.
 The insurer will also take a look into the home insurance
claims you’ve made in the past.
 The factors to determine your premium are also based on the
age of the house, the square footage of the property, the
location, the number of rooms, and the materials used to build
your home.
 The insurer also looks at the overall condition of your home
and the number of people residing in it when determining the
premium for your home insurance

15. Homeowner’s claims settlement
 Report loss or damage to your insurance
agent or company as soon as possible.
 Take precautions if the damages require you
to leave your home: Secure your property,
and lock all windows and doors.
 Survey the damages and take photos or
videos of damaged areas, if possible, and
make them available to your insurance
company.
 Study and know your policy limits and
coverages. If you do not understand your
coverage, ask your insurance agent or
company representative to explain.
 Beware of fly-by-night contractors. Get more
than one bid, and hire a local, reputable
contractor to do the repair work.
 Make sure a written agreement between you
and your insurance company has been
signed before starting repairs.

16.  An insurance company has 30 days to complete an
investigation of your claim. If the company isn’t
finished in 30 days, it must provide a reasonable
explanation.
 There are no provisions requiring a company to pay
your claim within a certain amount of time.