Property Insurance FundamentalsQuestion 146 of 158
A homeowner's basement is destroyed when a nearby river overflows after several days of rain. The HO-3 policy will:
a.Pay the loss in full under the wind/hail peril
b.Pay 50% under the basic form because rain is a covered cause
c.Deny the loss; flood and surface water are excluded — separate NFIP or private flood coverage is needed
d.Pay only the deductible amount as a goodwill gesture
Explanation
Flood, surface water, waves, tidal water, and overflow of any body of water are EXCLUDED under every standard HO and DP form. Flood coverage in California must be purchased separately, usually through the National Flood Insurance Program (NFIP) or a private flood carrier. Wind/hail does not apply because the loss came from rising water, not wind.
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Related questions on this topic
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- Which statement BEST distinguishes replacement cost from actual cash value?
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