Risk Management

Finance 138

Principles of Risk Management & Insurance

Study Guide for Exam #2

Spring 2014

Dr. Eric C. Lin

Homeowners Insurance Sections I & II

➢ Know the comparison of ISO Homeowners coverages:

o HO-2, HO-3, HO-5

o HO-4, HO-6

➢ Identify the persons who are insured under a homeowners policy.

➢ Know the types of coverages and additional coverages in Section I of HO-3 policy:

o Dwelling, Other structures, Personal Property, Loss of Use

o Additional coverages

➢ Know the concept of additional living expenses.

➢ What are the major exclusions and conditions in Section I of HO-3 policy?

➢ Understand the 80% co-insurance clause and how to calculate the amount of claim payments based on the amount of insurance carried.

➢ Know extended replacement endorsement and guaranteed replacement cost policy.

➢ What are the duties imposed on the insured under a HO policy after a property loss?

➢ Homeowners Section II – personal liability and medical payments:

o Go over the application questions posted on SacCT

➢ What is a personal umbrella insurance policy? How is the policy used in personal risk management?

The Liability Risk (Ch19)

➢ Read and understand the McDonald’s Coffee case

➢ What is negligence?

➢ What are the elements of negligence?

➢ Contributory negligence vs. comparative negligence.

➢ Know the various imputed negligence.

➢ What is Res Ipsa Loquitur?

➢ Understand the concept of trespasser, licensee, and invitee with regard to a property owner’s role in the law of negligence.

➢ What is the Attractive Nuisance Doctrine?

➢ What are compensatory damages and punitive damages?

Analysis of Insurance Contracts (Ch10)

➢ Know the basic parts (components) of an insurance contract.

➢ Know the...