Chapter 7 - Miscellaneous

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 The dwelling is covered under the Emergency program. The maximum amount of coverage for contents in a single-family dwelling is $10,000.

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 If an item is insured on a valued basis, that is how much the policy will pay for a loss.

All of the following types of property may be covered by a Personal Articles Floater, except:

Buildings Buildings are not personal property, and would need to be insured under a homeowners or similar policy.

Which of the following coverage statements is correct about the Fine Arts Floater?

Coverage is automatic on newly acquired items for 90 days

Which of the following statements about the National Flood Insurance Program is false?

Coverage becomes effective after a 24-hour waiting period Coverage usually become effective after a 30-day waiting period; some exceptions apply.

Choose the FALSE statement regarding Flood Insurance.

Coverage is provided for damage to growing crops Coverage for growing crops is excluded.

Which of the following is true regarding the Musical Instrument Floater?

Covered instruments may not be played for remuneration during the policy term If coverage is desired for musical instruments played for hire, the policy must be endorsed for such usage and an additional premium paid.

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 Losses caused by the insured (intentional losses) are not covered.

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 Damage to property in the care, custody and control of the insured is excluded from coverage.

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

Which statement is true about Crop/Hail Insurance?

It covers only one growing season

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 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

Choose the statement that is false about the FAIR plan.

It provides property coverage to both residential and farm dwellings Farm property is not eligible for coverage under the FAIR plan.

Which statement would NOT be included in a description of the National Flood Insurance Program?

It provides unlimited coverage for qualified property owners

Which of the following statements regarding Multi-Peril Crop Insurance is correct:

Multi-peril crop insurance is reinsured by the federal government by FCIC The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC).

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 Although private insurers sell and service flood insurance in addition to that provided by the National Flood Insurance Program, the federal government reinsures all flood insurance.

The Personal Umbrella Policy does not provide coverage for which of the following?

Property damage liability to property in the insured's care

Crop/Hail Insurance is a specialized policy that:

Protects against reduced yield because of a covered loss before crops are harvested

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 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

An insured who has coverage under the NFIP with a $500 deductible for the dwelling and contents sustains flood damage to both their home and personal property. What is the maximum the insured will have to pay for damages assuming the loss is under the policy limits?

The deductible applies separately for the dwelling and the contents, therefore the insured is responsible for $1000 in deductibles.

Choose the true statement regarding the National Flood Insurance Program.

The federal government oversees and reinsures all flood insurance

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

In which of the following circumstances would the insured be required to pay a self-insured retention on an umbrella policy?

The umbrella drops down to act as the primary policy

Which of the following is true regarding the Difference in Conditions Policy?

There is no coinsurance clause or pro rata clause and it may be written for a different amount from the policy it complements The DIC policy is not an excess layer of insurance. Rather, it provides coverage for perils not insured against under standard property policy forms.

Some flood policies are written in the voluntary property market as a result of which program?

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