Chapter 5 Homeowners Policy P&C Test

Under the HO-4 and HO-6, personal property is covered on which basis?

D)Broad perils coverage -These two Forms provide Broad Form Perils Coverage. Open perils coverage is available by Endorsement for scheduled items at an additional premium.

All of the following are covered by Coverage F - Medical Payments to Others, except:

A) An injury to the insured while mowing the lawn B)A neighbor's injury caused by an insured's activity C)A guest is injured while visiting the insured at home D)An injury to another person caused by a residence employee while mowing the lawn A)Coverage under this section does not apply to the insured and regular residents in the insured dwelling.

Section II Additional Coverages includes Damage to Property of Others for what limit of insurance?

A)$1,000 -Up to $1,000 will be paid under this coverage for property damage by the insured to another person's property regardless of fault.

All of the following special limits of Coverage C are correct, except:

A)$2,500 for business property away from premises -Coverage C provides $500 for loss of business property away from premises.

Which of the following claims would be covered by the First Aid Expenses under the Homeowners Policy?

A)A neighbor is injured while helping the insured install a carpet -First Aid Expenses Coverage applies to first aid to others caused by Bodily Injury covered under the policy, but does not pay for first aid to an insured.

Of the following statements concerning Homeowners policies, which is correct?

A)Borrowed property meets the definition of contents -Coverage C covers property owned or used by the insured, including property owned by others.

Under the Homeowners Forms, Coverage C includes which type of coverage?

A)Contents and Personal Property -Coverage C provides coverage for losses to personal property.

Which statement is true concerning Section II of a Homeowners Policy?

A)Damage to Property of Others coverage is provided up to a specified limit regardless of negligence -Damage to Property of Others pays up to $1,000 regardless of whether the insured is liable or not.

Which of the following is a Section I exclusion in the Homeowner policy?

A)Debris removal B)Governmental action C)Loss assessment D)Property removed B-Governmental action is the destruction, confiscation, or seizure of covered property by order of the government and is excluded in the Homeowner policy.

Choose the false statement about a Homeowners Policy.

A)Earth movement is covered in all Homeowners policies -Earth movement is excluded from all Homeowners Policies.

Under the HO-8 policy, the dwelling is valued on which basis?

A)Functional Replacement Value -Functional replacement cost is the cost to replace the damaged property with property that performs the same function, but is not like-kind or quality.

Which of the following would be covered under the Damage to Property of Others additional coverage of the Homeowners Policy

A)Intentional damage by a child under age 13 is covered. -Intentional damage by a child under age 13 is covered.

The HO-3 dwelling and other structures coverages are insured on which basis?

A)Open perils -Coverages A and B are insured on an open perils basis, under which all perils are insured against unless specifically excluded.

The following coverages are all found under Section I of the Homeowners Policy, except:

A)Personal Injury Liability -Section I of the Homeowners Policy contains Property coverages. Liability coverages are set forth in Section II of the Policy.

Under a Homeowners Policy, Coverage A includes coverage for:

A)The dwelling on the premises plus structures that are attached to the dwelling -The policy does not cover theft in, to, or from a dwelling under construction, including materials used in the construction.

Which of the following is excluded under the Section II exclusions?

A)Vehicle used to assist the handicapped and parked in a public lot -Section II excludes coverage if a vehicle used to assist the handicapped is parked away from the insured location

An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a flood destroying the wood flooring. The policy will pay:

A)Zero -Flood is a Section I exclusion and is not covered.

A related, full-time student away at school and under what age is considered an insured on the Homeowner policy?

B) 24 -In order to qualify for coverage under the Homeowner policy, a full-time student living away at college is an insured if under age 24.

The duties required of an injured person seeking coverage under Medical Payments to Others include all of the following, except:

B) Help the insurer in settling the claim -An injured person isn't responsible for settling the claim.

Under the unendorsed Homeowners Policy, jewelry is covered up to what amount?

B)$1,500 for loss by theft -Jewelry, watches, furs, precious and semiprecious stones are covered up to $1,500 for loss by theft. Other named peril losses are covered up to the Coverage C limit.

The Water Back Up and Sump Discharge or Overflow endorsement provides how much coverage for damaged property?

B)$5,000 -This endorsement provides up to $5,000 of coverage for property directly damaged by water that backs up through sewers or drains or overflows from a sump pump.

The Landlord's Furnishings endorsement provides up to $ _______ of coverage.

B)2,500 -This endorsement provides up to $2,500 coverage for appliances, carpeting and household furnishings in a rental apartment located in the residence premises.

The amount of insurance provided for Coverage C is what percentage of Coverage A on a HO-3, Special Form?

B)50% The Coverage C limit is 50% of Coverage A in the standard Homeowner policy, and may be increased.

All of the following are considered an insured under a Homeowners Policy, except:

B)A 30-year-old friend living at the insured premises -The definition of insured includes other residents of the named insured's household who are: 1) Relatives of the named insured, meaning they are related by blood, or 2) Under the age of 21 and in the care of any insured.

Section II of a Homeowners policy may cover which of the following incidents?

B)Bodily injury caused by an insured's activities while picnicking at a city park -Bodily injury to others caused by the insured's activities is covered under the Homeowners liability section. Damages to the insured's property are not covered and damages caused by an owned inboard motorboat are excluded from coverage.

The following are all additional coverages under a Homeowners Policy, except:

B)Governmental Action -Governmental action is an exclusion; not an additional coverage.

Medical Payments under Section II of the Homeowners Policy would cover all of the following, except:

B)Loss of Income of an injured person Coverage F (Medical Payments to Others), pays necessary medical expenses incurred within three years from the date of an accident. This may include surgical, dental, hospital, ambulance, professional nursing and similar expenses.

All of the following are true of a Homeowners Policy, except:

B)Section II provides coverage for damage to the insured's property -Coverage for the insured's property is provided in Section I.

Which of the following would not be an insured under Section II of the Homeowners Policy?

B)The insured's tenant -Roomers or boarders are not considered insureds, and would need to purchase their own liability policies.

Which of the following claims would not be covered under Section II of a Homeowners Policy?

C)$500 a day for the insured's loss of earnings while defending a suit -Such claim related expenses are covered, but only up to $250 a day.

An HO-3 Policy will pay how much for a tree damaged in a hail storm?

C)0% -The most paid for a covered tree is $500, but coverage is not provided for windstorm or hail losses.

The automatic limit for Coverage D - Fair Rental Value is what percentage of Coverage A under an HO-3, Special Form?

C)30% -The automatic limit for Coverage D for the HO-2, HO-3, and HO-5 is 30% of Coverage A and 10% of Coverage A for the HO-8.

Which of the following boats is covered under the Watercraft Liability endorsement?

C)A 20-foot sail boat -This endorsement covers sail boats with or without power, and property damage or bodily injury arising out of the ownership, maintenance, use, loading, or unloading of the described watercraft.

Select the person who is not considered an insured under an HO-3 policy?

C)A friend who is renting a bedroom in the insured's house since it is only three blocks away from work -Since the friend is a tenant, not a relative or a person in the care of the insured, he/she would not be an insured under the policy.

The Homeowners Policy provides coverage for all of the following, except:

C)A motorized golf cart being driven to or from a golf facility -A golf cart must be on a golf course for coverage to apply.

Which of the following is covered under Section II of a Homeowners Policy?

C)An injury to a guest of the insured -An injury to a guest would be covered under Section II. Business pursuits, and injuries to insureds and their employees are excluded.

All of the following statements is correct about a Homeowners Policy, except:

C)Coverage D of a Homeowners Policy includes loss of income from an incidental business -Coverage D does not cover loss of income from an incidental business.

All of the following are true, except:

C)Coverage D of a Homeowners Policy includes loss of income from an incidental business -Coverage D does not cover loss of income from an incidental business.

The Home Day Care endorsement does not provide which of the following?

C)Coverage for a day care employee -Injury to any employee arising out of the day care business is not covered.

In what way is the HO-5, Comprehensive Form, different from the HO-3, Special Form?

C)Personal property is insured on an open perils basis -The HO-5 Comprehensive Form covers personal property for open perils whereas the HO-3 policy covers it for named perils.

The Watercraft Liability endorsement provides which coverage?

C)Property damage arising out of the racing of sailing vessels -The watercraft liability exclusion for racing does not apply to sailing vessels. Bodily injury sustained by an employee in the course of employment, damage arising out of boats rented to others, and damage arising out of watercraft being operated in a race are not covered.

An employee whose duties are related to the maintenance of the residence premises, is defined as which of the following under Section II of the Homeowners Policy?

C)Residence Employee -A Residence Employee might be either an inside domestic servant or an outside premise maintenance employee.

All of the following are true of the HO-2, except:

C)The HO-2 pays for losses on an open peril basis -The HO-2 pays all losses on a broad form (Named Perils) basis.

Homeowners policies cover:

C)Theft of furs and jewelry up to $1,500 -The limit for loss by theft of jewelry and furs is $1,500.

Coverage A - Dwelling does not cover vandalism and malicious mischief if the dwelling has been vacant for how many days?

D) 60 -Vacant means the dwelling is unfurnished and not occupied.

The amount of insurance provided to cover personal property of a Homeowners Policy is what percentage of Coverage A?

D)50% -The basic amount of Coverage C insurance is 50% of the Coverage A Limit.

All of the following are defined as insured locations under the Homeowners Policy, except:

D)Farmland owned by the insured -Farmland owned by the insured is not covered.

An owner of a condominium unit would purchase which Homeowner form?

D)HO-6, Unit-owners Form -The HO-6 covers the personal property of the condominium unit owner as well as building coverage.

Choose the correct statement regarding the HO-3.

D)The dwelling and other structures are written on an Open Peril basis -The HO-3 (Special Form) provides the broadest Coverage available on structures: Open Perils (or all-risk) Coverage.

In addition to the named insured in a property policy, coverage is automatically provided for:

D)The insured's spouse -The insured's spouse is also an insured under the policy.

Named Perils Basis

HO-2 Coverage C HO-3 Coverage C HO-6 Coverage C HO-4 Coverage C HO-2 Coverage B HO-2 Coverage A HO-6 Coverage A

Open Perils Basis

HO-3 Coverage A HO-5 Coverage A HO-5 Coverage C HO-3 Coverage B HO-5 Coverage B