ExamFX Property

An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short term apartment, and the renter is forced to find other accommodations. Disregarding any extra-expense for meals, how much would an HO-3 will pay under Coverage D?

$1,050

Under Coverage E - Scheduled Farm Personal Property, livestock that is not specifically insured is limited to a coverage limit of

$2,000 per head

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10% of Coverage C anywhere in the world

The term "functional replacement cost" refers to

A loss valuation method

Which of the following is consideration on the part of an insurer?

Paying a claim

Homeowners policies limit the amount of property and liability coverage available for boatowners. How much coverage is provided in the homeowners policy for damage to watercraft, accessories, equipment, and trailers?

$1,500

The businessowners policy extensions coverage form for personal property off-premises is limited to

$10,000

Under Business Personal Limit - Seasonal increase, if no percentage is specified in the declarations, seasonal fluctuations will automatically increase the limit for business personal property by

25%

An insured was told to leave his home because of endangerment by a brush fire that was out of control. The insured was able to have his personal property moved to storage away from the endangered area. For how long will the homeowners policy provide coverage for the stored property?

30 days

The Commissioner has determined that a producer is ineligible for appointment by an insurer. The Commissioner must notify the insurer within

5 days

An insured has extended her business income coverage part to a newly acquired location. The insured was able to take action because her coinsurance percentage is

50%

Farmer Steve's she'd has been vacant for an entire year. When he files a claim to cover some recent damage to the shed, how much will his farm policy pay?

50% of the limit of insurance

How long must an insured wait before business income coverage begins?

72 hours

Which of the following risks would be eligible for coverage under a dwelling policy form?

A duplex that is occupied by two families, each of which have a bedroom rented to a boarder

Which of the following could be insured with replacement cost coverage under the flood insurance program?

A single-family home

Homeowners policies consider all of the following insured locations EXECPT

A strawberry patched owned by the insured

Loss payment in a Michigan Standard Fire Policy is determined based on

Actual cash value

Which of the following is most likely INELIGIBLE for coverage under the businessowners policy?

An auto mechanic shop

When do binders expire?

As soon as the policy is issued

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

Be reduced by 10%

The HO-4 form designed for tenants covers losses on what basis?

Broad peril

How is a licensee's date of Continuing Education credit review determined?

By the licensee's month and date of birth

An insured's home catches fire. As a result, the insured's family must stay in a motel until his home is repaired. The cost of the motel stay would be considered a

Consequential loss

All of the following statements are TRUE about earthquakes coverage in property policies EXECPT

Coverage is commonly provided through a federally funded program

All of the following statements are TRUE about earthquake coverage in property policies EXECPT

Coverage is commonly provided through a federally-funded program

To determine the actual cash value of an insured property, what must be deducted from the current replacement cost?

Depreciated value

Loss valuations is best described as the process of

Determining the premium charged and the amount of insurance required on a specific property

The commercial crime coverage that would cover losses resulting from the theft or moeny, securities and other property by employees is

Employee theft

If an agent follows the rules and terms of his agent contract, he is exercising his

Express Authority

Which of the following is covered under a dwelling policy?

Fire caused by an earthquake

Which of the following losses would be excluded from coverage under the farm property special form?

Fire caused by curing tabacco

All of these types of property may be covered on a farm property coverage EXCEPT

Growing crops

A homeowner has misplaced some of her insured personal propertyand has no idea what may have happened to it. Which HO policy would cover such a loss?

HO-5

An insurance agent represents multiple companies on a non-exclusive basis and earns commissions on personal sales. What kind of marketing system is this agent working in?

Independent Agency

Which of the following is NOT found in the common policy declarations of a commercial package policy?

Insuring agreement

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured

Which of the following covers the interest of a secured lender in personal property?

Loss payable clause

The deductible under earthquake coverage is stated as what?

Percentage of loss

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the

Policy

All of the following statements about mutual insurance companies are correct EXECPT

Policy dividends issued by mutual companies are guaranteed and not taxable

The declarations section in a homeowners policy provides all of the following information EXCEPT

Policy exclusions

According to the Insured Duties after a Loss provision in homeowners policies, in the event of loss, the insured must do all of the following EXECPT

Promptly hire an adjust to evaluate the property damage

Which of the following would NOT be covered by commercial inland marine policies?

Property lost due to a military action

The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of what?

Protective safeguards endorsement

What type of insurer used a formal sharing agreement?

Reciprocal insueres

If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?

The insurer will be reimbursed for the excess costs by the NFIP

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

The loss of income for the time the diner was closed

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

An insured has the scheduled personal property endorsement attached to his homeowners policy. If the insured acquires new works of art, when must the insurer be notified for the new works of art to be covered under the endorsement?

Within 90 days

How is the premium paid for the businessowners policy?

One indivisible premium

All of the following are allowable reasons for an insurer to decline an application for Homeowners Insurance EXCEPT

Owning a dwelling containing 4 units

If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?

Retention

Which of the following clauses excludes assignment or granting of policy provisions to any person who repairs property for a fee?

No benefit to bailee clause

Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates?

Occupation

All of the following are allowed practices regarding producer's commissions EXECPT

Offering a financial reward to an unlicensed individual for providing a sales lead

Which of the following best defines the unfair trade practice of rebating?

Offering an inducement of something of value not specified in the policy

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damages caused by the eruptions?

One

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?

Riot

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies.

What amount of coverage is provided on HO policies for watercraft?

Up to $1,500

Which of the following is NOT part of Section II of he boatowners policy?

Watercraft damage

Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. Which of the following is true?

The coinsurance penalty applies

Rates for earthquake coverage in property policies are generally deteremined by which of the following?

The type of constuction

Which of the following statements is correct regarding the debris removal coverage under the businessowners policy?

The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount