Chapter 7
Choose the false statement about an Umbrella Liability Policy.
Property in the care and custody of the insured is covered
All of the following statements regarding flood insurance are true, except:
The policy applies a deductible only to loss of contents
The National Flood Policy would not cover losses caused by which of the following?
Leakage of underground water systems
A flood damages a home that is in a community in early stages of participation in NFIP, but are not yet considered a participating community. What is the maximum a resident may receive for damages to personal property?
$10,000
A flood damages a single-family dwelling that is in a community in the early stages of participation in the NFIP, but they are not yet considered participating. What is the maximum a resident may receive for damages to their personal property?
$10,000
A flood damages a single-family home that is in a community in the early stages of participation with the NFIP. What is the maximum amount a resident may receive for damages to personal property?
$10,000
Under a Mobile Home policy, if the mobile home is insured under Coverage A for $70,000, how much coverage would ordinarily apply to personal property under Coverage C?
$28,000
Under a Mobile Homeowners policy, if the mobile home is insured under Coverage A for $100,000, how much coverage would ordinarily apply to personal property under Coverage C?
$40,000
If property under a Personal Floater risk is insured at a $5,000 valued basis, how much would the insured receive if the item is a total loss, the actual cash value is $4,000, and an auction is selling the same item for $3,500?
$5,000
Which of the following may be insured on a replacement cost basis under the National Flood Insurance Program?
1- to 4-family residences and residential condominiums
Under a Difference in Conditions policy, which of the following is correct?
A DIC policy carries a high deductible
A Mobile Homeowners policy is most similar to:
A Homeowners policy
Which of the following losses would not be covered under a NFIP policy?
A water main in the street breaks, flooding the insured's basement
All of the following are true of a Yacht Policy, except:
A yacht is covered regardless of its location
Personal Article Floater claims are normally settled on a(n):
Actual cash value basis with some exceptions
Under the Cameras Floater, which of the following is true?
Automatic coverage is provided on newly acquired items for 30 days, up to 25% of the policy amount
Inland Marine Insurance is not typically used to insure which type of property?
Autos
A boat and trailer worth $20,000 is damaged at a lake when the insured drove over a log. The physical damage is covered under which of the following policies?
Boatowners
A small fishing boat and trailer worth $20,000 are damaged at a lake when the insured drove over a log. The physical damage is best covered under which the insured's:
Boatowners policy
All of the following types of property may be covered by a Personal Articles Floater, except:
Buildings
All of the following are true of the Personal Articles Floater, except:
Claims are settled on a replacement cost basis
Mobile Home Insurance includes all of the following, except:
Coverage C with a limit of 50% of Coverage A
Which of the following is not true of the National Flood Insurance Program?
Coverage becomes effective 24 hours after the applicant completes the application and pays the premium.
Which of the following statements about the National Flood Insurance Program is false?
Coverage becomes effective after a 24-hour waiting period
The National Flood Insurance Program provides which of the following coverages?
Coverage for property removed to protect it from flood, for up to 45 days at other locations
All of the following are true of the Fine Arts Floater, except:
Coverage is written on a replacement cost basis
All of the following statements about the Fine Arts Floater are true, except:
Coverage is written on a replacement cost basis
Personal Umbrella Liability policies provide coverage on which basis?
Excess basis
A Difference in Conditions policy is a special form used to fill in coverage gaps found in a property policy. Which of the following is correct regarding DIC policies?
DIC policies are written on an open perils basis, excluding perils covered under standard property forms
Which of the following is covered by Crop Hail insurance?
Damage caused by freezing, drought, insects and disease
For an antique insured under a Personal Articles Floater, coverage would not be provided for damage caused by:
Damage caused by the insured during a heated argument
All of the following are true of an Umbrella Liability Policy, except:
Damage to property in the care and custody of the insured is covered
After being rejected by an insurer due to underwriting guidelines an applicant may request homeowners coverage under which of the following?
FAIR Plan
When a client's Homeowners policy application is rejected by an insurance company due to underwriting rules, an insurance agent may request coverage under which of the following?
FAIR Plan
A stand-alone Earthquake policy does not cover damage resulting from:
Flood
Which of the following is not covered by the Earthquake endorsement?
Flood
Which of the following statements is true regarding the eligibility of flood insurance?
In order to qualify for a federal loan, the property owner must purchase flood insurance if the property is located in a flood area
The Personal Articles Floater is used to do which of the following?
Insure individual personal property on a scheduled basis
Which of the following is true regarding the Musical Instrument Floater?
Insured instruments may not be played for remuneration during the policy term
The Lay Up Warranty under the Yacht Policy is best described by which of the following?
It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
Which of the following describes the Lay Up Warranty under the Yacht Policy?
It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
Which of the following describes the lay-up warranty under a Yacht policy?
It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
Which description of the Personal Articles Floater is incorrect?
It covers claims on a replacement cost basis
Which statement is true about Crop/Hail Insurance?
It covers only one growing season
All of the following are true of the Personal Jewelry Floater, except:
It has a 60-day automatic coverage for newly acquired items
Choose the best answer regarding the details of the Yacht Policy.
It is an Ocean Marine Form and provides both property and liability coverage
The Difference in Conditions Policy is a special form used to fill in gaps of a property policy. Which of the following is true regarding this policy?
It is generally written on an open perils basis, excluding losses by perils that are covered under standard property forms
Which of the following is true regarding the Fine Arts Floater?
It provides automatic coverage on newly acquired items for 90 days
Which statement is false regarding the National Flood Insurance Program (NFIP)?
It provides coverage for direct and indirect loss to covered property as the result of flooding
An insured has a large watercraft. When the boat is in storage, which warranty allows for a return on premium under their Yacht policy?
Lay-up
The National Flood Policy defines all of the following as floods, except:
Leakage of underground water systems
Which of the following is not true of the Yacht Policy?
It provides coverage regardless of its territory
Section I of the Boatowners policy provides which type of coverage and settlement option?
It provides open perils coverage, and losses are settled on an actual cash value basis
Which of the following is true regarding the Boatowners Policy?
It provides open perils coverage, and losses are settled on an actual cash value basis
Choose the statement that is false about the FAIR plan.
It provides property coverage to both residential and farm dwellings
Which of the following is not true about the FAIR plan?
It provides property coverage to both residential and farm dwellings
All of the following statements about the National Flood Insurance Program are correct, except:
It provides unlimited coverage for properties in participating communities that are part of the Regular Program
When an insured's boat is in storage, which warranty allows for a return on premium?
Lay Up
The Personal Inland Marine Insurance covers which of the following?
Moveable property against direct loss
Which of the following statements regarding Multi-Peril Crop Insurance is correct:
Multi-peril crop insurance is reinsured by the federal government by FCIC
Which of the following is true regarding the Camera Floater?
Newly acquired are covered up to 25% of the policy amount until reported
All of the following statements about the Musical Instrument Floater are true, except:
No additional premium is required if instruments are played for hire
Under flood insurance provided by the National Flood Insurance Program, which of the following statements regarding flood insurance is NOT correct?
No deductible applies to loss of contents
The Personal Articles Floater is written:
Only on moveable property
The Scheduled Articles Floater provides which of the following coverages to described property?
Open Perils
All of the following are false concerning the National Flood Insurance Program, except:
Payment for losses are made by the federal government
An insurance agent would recommend which of the following floaters to his client who is traveling to Europe for a month's vacation?
Personal Effects Floater
What coverage is not included under the Yacht policy?
Personal Injury Coverage
The Boatowners Policy does not cover which of the following?
Personal Property
What coverage is not included under the Boatowners Policy?
Personal Property Coverage
B is traveling to Europe for a month's vacation. Which of the following coverages might her agent recommend to cover personal items?
Personal effects floater
What coverage is not included under a Yacht policy?
Personal injury coverage
Multi-Peril crop insurance covered causes of loss include all of the following, except:
Pollution
A personal umbrella policy will not provide coverage for which of the following?
Property damage liability to property in the insured's care
The Personal Umbrella Policy does not provide coverage for which of the following?
Property damage liability to property in the insured's care
A Personal Umbrella Liability policy does not provide coverage for which of the following?
Property damage liability to property in the insured's care, custody, or control
Crop/Hail Insurance is a specialized policy that:
Protects against reduced yield because of a covered loss before crops are harvested
When an underlying policy doesn't cover a particular loss, the umbrella will drop down and cover the entire loss, after payment by the insured of a:
Retention
Which of the following is true regarding Personal Inland Marine Insurance?
Since moveable property is also known as floating property, the policies are sometimes known as floater policies
Which statement regarding coverages provided by the National Flood Insurance Program (NFIP) is incorrect?
The Dwelling Form provides coverage for direct and indirect losses to covered property resulting from flooding
After being rejected by an insurer due to underwriting guidelines, an applicant may request Homeowners coverage through:
The FAIR Plan
Which statement about the Personal Effects/Personal Articles Floater is TRUE?
The Personal Effects Floater covers personal items carried by travelers, and the Personal Articles Floater covers high-value items of personal property
The Personal Articles Floater is similar to which of the following endorsements?
The Scheduled Personal Property Endorsement
For flood policies obtained by homeowners through the National Flood Insurance Program, which of the following statements is correct?
The federal government oversees and reinsures all flood insurance
Personal injury coverage is not provided by an insured's Homeowners policy, but is provided by the insured's Umbrella Liability policy. If the insured is sued for slander, which of the following statements is correct?
The insured must pay the Umbrella policy's self-insured retention
If personal injury coverage is not provided by an insured's homeowners policy, but is provided by the insured's umbrella policy, and the insured is sued for slander, which of the following statements is correct?
The insured must pay the umbrella policy's self-insured retention
Which statement is false regarding the National Flood Insurance Program?
The policy provides unlimited coverage for qualified property owners
Which statement about the Umbrella Liability Policy is false?
The standard deductible on an umbrella policy is $100,000
Which of the following is a false statement about the National Flood Insurance Program?
There is no deductible
Which statement regarding a Difference in Conditions policy is correct?
There is no standard DIC policy form
The intent of the Personal Effects Floater is:
To provide coverage worldwide for travelers
Under Personal Inland Marine Insurance, the Personal Articles Floater is:
Used to insure individual personal property on an itemized or scheduled basis
Some flood policies are written in the voluntary property market as a result of which program?
Write Your Own
Some flood policies are written in the voluntary property insurance market as a result of which program?
Write Your Own Program
