1. Homeowners Liability Insurance
Chapter 10
Introduction of the topic and yourself (name, where you work, job title)

2. What is Liability?
Owners of property have duty to protect people who are on the premises for legitimate purposes from harm
Failure to do so can make them legally responsible
You can also become liable to others for injuries and damage that occur away from home
Speak to the students about cases that involved a homeowner, renter or business owner. What was the source of liability in each case? What injuries or damages were cause? Discuss dogs, pools and other risks insurers do not like 2

3. Homeowners Insurance
Provides protection for legal liability to others from bodily injury and property damage that arises out of the premises where the insured resides or his or her activities that take place away from the insured location
Coverage E in the Homeowners policy
Speak to the students about cases that involved a homeowner, renter or business owner. What was the source of liability in each case? What injuries or damages were cause? Discuss dogs, pools and other risks insurers do not like 3

4. Homeowners Policy
Package policy for individuals that own a home or rent a residence (apartment or home)
Includes both property and liability insurance
Liability section is same for all different types of homeowner policies (e.g., HO-3, HO-4, HO-6)
Liability divided into:
Coverage E: Personal Liability
Coverage F: Medical Payments to Others

5. Coverage E- Personal Liability
Two important elements:
Pay for damages for which the insured is legally responsible
Subject to policy limit. Basic limit is $100,000 per claim. It can be increased
Provide a defense to the insured for any suits covered by the policy
Coverage is unlimited. Additional coverage provided by the policy
In order to have coverage under a liability policy:
Insured must be legally responsible for the injury or damage
Occurrence must take place during the policy period
Event must be covered by the policy
Go over the basics of liability insurance in the homeowners policy.

6. Who is Insured? Homeowners policies liability coverage protect
Spouse living in household
Relatives living in household
Under 21 in your care: Exchange student, foster care
Relatives under age 24 enrolled in school full-time
Instructor- 2 minutes- more intro to Homeowners

7. Vicarious liability: Liability that is transferred from one person to another (e.g., parent responsible for child's actions)
Bodily injury: Bodily harm, sickness or disease including required care, loss of services and death that results from injury
Property Damage: Physical injury to, destruction of, or loss of use of tangible property
Occurrence: Accident including continuous or repeated exposure to harmful conditions
Go over these definitions so students understand what you are talking about later on in the presentation. You can add examples to each word to illustrate them better to the students if need me.

8. Insured Location Residence premises (property where home is located)
Non-owned premises where insured temporarily resides (e.g., hotel)
Secondary residence (e.g., beach house)
Vacant land
Location rented by insured (e.g., ballroom for wedding)
Instructor- 3 minutes

9. Coverage F-Medical Payments
Covers Individuals on premises
Applies to injuries that take place on the insured location and at other locations due to activities of insured
Does not cover you or anyone included in the definition of insured – this coverage is for your guests
Explain how medical payments works in the homeowners policy. Explain that First Aid coverage got its name because insurance companies want to payout quickly so the other party does not sue. Take care of the damages/injuries before they become worse. 9

10. Things Not Covered Under Liability and Medical Payments
Motor vehicles – covered under Personal Auto Policy
Motorized watercraft – small boats are covered but large ski boats, yachts, jet skis are covered under boat policy
Aircraft and Hovercraft
Intentionally hurting someone
Running a business out of your home
Professional liability
War, illegal substances, communicable diseases and abuse

11. More Medical Payment Exclusions
Injuries to residence employees (e.g., maid or nanny)
Injury to anyone who resides in house
Go over what is not covered and why it is not covered.

12. Discussion Question An insured owns a jet ski
It has a 25 horsepower inboard motor
If the insured injures someone while operating the jet ski – would the homeowner policy apply?
Instructor- 5 minutes- allow them to work in teams…use coverage form to answer
Answer: No- Exclusion for watercraft

13. Higher limits can be purchased
Coverage Limits
Basic Coverage:
Personal Liability $100,000
Medical Payments $1,000
Damage to Property of Others $1,000
Higher limits can be purchased

14. Homeowner Endorsements
Endorsements are optional coverages
Earthquake Endorsement
Personal Property Replacement cost
Scheduled Personal Property
Jewelry
Furs
Collectibles
Personal Injury – libel, slander
Identity Theft
Go over the different types of endorsements people can have with their homeowners dealing with liability in the policy. 14

15. Determining Premium Age and type of construction of dwelling
Type of roof
Location – fire protection
Value of home – Coverage A
Deductible chosen
Type of homeowner policy
Different perils covered HO-2, HO-3,HO-5
Optional coverages chosen
Premium receives a credit for:
Smoke alarms
Deadbolts
Central burglar system
Automatic sprinkler system
Instructor-4 minutes- discuss homeowner premiums…
Townhouses pay more due to multiple living units connected
Fire Protection Grade (Class)
Different communities receive different fire protection grades (by special bureaus). A fire protection grade is composed of an evaluation of the following factors:
the available water supply
competency of fire fighting personnel
type and quality of fire fighting equipment
distance from fire department and response time
distance from fire hydrants, etc.
The lower the grade, the better the overall fire protection and, therefore, the lower the rate. The grades go from one to ten, though the lowest rate that is awarded for the best overall fire protection is two. All of the communities (or residence locations) that fall within a given grade make up a fire protection class. Homes and other structures with a grade 9 or 10 are, for all intents and purposes, unprotected and receive the highest rates.
Give examples for types of construction