All the following are provisions in the HO-2 contract that can decrease amounts payable by the insurance company except:

Question

Quizplus · Accepted Answer

A) Deductibles - Deductibles are a provision in insurance policies that require the policyholder to pay a specified amount of money towards a loss before the insurance company pays out. This can decrease the amount payable by the insurance company because the policyholder is responsible for the initial portion of any claim.
B) Coinsurance/Replacement Cost Provisions - Coinsurance is a provision that requires the policyholder to carry insurance equal to a certain percentage of the value of the property to receive full reimbursement on a loss. If the policyholder does not maintain that level of insurance, they may receive a reduced payout on a claim. Replacement cost provisions allow the policyholder to be reimbursed for the cost of replacing an item with a new one of similar kind and quality without deduction for depreciation, which can increase the amount payable by the insurance company, not decrease it.
C) Special Limits on Certain Types of Property - Special limits are provisions that cap the amount of coverage for certain types of property or losses. For example, there may be a limit on the amount of coverage for jewelry, watches, or electronics. This can decrease the amount payable by the insurance company because it limits their exposure to high-value claims on specific categories of property.
D) Mortgage Clause - The mortgage clause is a provision that protects the mortgage lender's interest in the property. It ensures that the insurance company will pay out to the lender to the extent of its interest in the property in the event of a loss. This clause does not decrease the amount payable by the insurance company; rather, it designates who receives the payment in the event of a claim. The presence of a mortgage clause does not reduce the insurance company's obligation to pay on a valid claim; it simply directs the payment to the mortgagee (lender) up to the balance of the mortgage.
Therefore, the mortgage clause (D) is the provision that does not decrease the amounts payable by the insurance company.

All the Following Are Provisions in the HO-2 Contract That