Lesson 6 quiz questions
Jerry who lives in a rural area has experienced several animal-related losses to his home. Which one of the following losses would be covered under Jerry's HO-3 policy? Select one: A. A deer ran through Jerry's glass door and destroyed the door and other property. B. Jerry's cat brought in a squirrel that got away and later chewed electrical wiring, causing damage to Jerry's home. C. A bird built a nest in the wall, causing damage to the drywall. D. Jerry's dog chewed the leg of his coffee table, destroying the piece of furniture.
A. A deer ran through Jerry's glass door and destroyed the door and other property.
The Ordinance or Law provision of the Additional Coverages of the HO-3 policy Section I Select one: A. Applies to the increased construction costs from a covered loss resulting from enforcement of building codes. B. Includes coverage for Collapse which would include settling, cracking, shrinking and provides an additional limit. C. Adds coverage for increased costs required to deal with the effects of pollutants resulting from the loss. D. Provides an additional amount of $1000 for the increased costs from a covered loss resulting from enforcement of building codes.
A. Applies to the increased construction costs from a covered loss resulting from enforcement of building codes.
In the HO-3 policy, Coverage A—Dwelling coverage applies to three broad categories of covered property. One of these broad categories is Select one: A. Structures attached to the dwelling. B. Personal property that is owned. C. Structures separated by a clear space. D. Additional living expense.
A. Structures attached to the dwelling.
Some categories of personal property are subject to lower sublimits under Coverage C of the HO-3 policy. Which one of the following is subject to a special limit of liability? Select one: A. Theft of firearms B. Theft of credit cards C. Borrowed property D. Animals
A. Theft of firearms
Personal property that is owned or used by persons who qualify as insureds is covered property under Coverage C of the HO-3 policy. The standard Coverage C limit for personal property Select one: A. Usually located at the insured premises is 50% of the Coverage A—Dwelling limit. B. Usually located at the insured premises can be reduced down to 10% of the Coverage A—Dwelling limit. C. Located elsewhere while home renovations are being done is 10% of the Coverage C limit. D. At a secondary residence rented at the shore is 50% of the Coverage C limit.
A. Usually located at the insured premises is 50% of the Coverage A—Dwelling limit.
The HO-3 policy Coverage D provides coverage for Select one: A. Personal property. B. Loss of Use. C. The dwelling. D. Other Structures.
B. Loss of Use.
Beth has an unendorsed HO-3 policy. While cleaning the closet where she stores her stamp and coin collection, Beth spilled cleaning solution on one of the albums of stamps. The accident resulted in the loss of stamps valued at $500. Is this loss covered by Beth's HO-3 policy? Select one: A. No, this is not a covered property. B. No, this is not a covered peril. C. Yes, the loss exceeds the deductible. D. Yes, it is within the special sublimit.
B. No, this is not a covered peril.
Is mold damage to the dwelling covered by an HO-3 policy? Select one: A. Yes, if resulting from natural deterioration and wet rot. B. Yes, if hidden and it results from an accidental leak of water from a plumbing, heating, or air conditioning system. C. No forms of mold, fungus, or wet rot are covered. D. Yes, if resulting from a sump pump malfunction.
B. Yes, if hidden and it results from an accidental leak of water from a plumbing, heating, or air conditioning system.
Renee is an insured under an unendorsed HO-3 policy with a Coverage C—Personal Property limit of $100,000. She owns a secondary residence that contains $15,000 of personal property. Only her primary residence is listed on the declarations page of the HO-3 policy. A fire destroys all of Renee's personal property at her secondary residence. How much of this loss will be paid by Renee's HO-3 policy? Select one: A. $0 B. $1,000 C. $10,000 D. $15,000
C. $10,000
Which one of the following is a peril insured against for Coverage C under an HO-3 policy? Select one: A. Neglect B. War C. Aircraft D. Intentional loss
C. Aircraft
Ralph has an unendorsed HO-3 policy. While coming home from a coin show, Ralph discovers that his automobile was broken into and a package containing $2,000 in coins, some tools, and groceries was stolen. Disregarding any deductible that may apply, will Ralph's HO-3 insurer pay for the loss of the coins? Select one: A. No, theft of money is an excluded peril. B. No, leaving money in an unattended vehicle is negligent behavior, which is excluded. C. Yes, the coins are covered up to a specified limit. D. Yes, the coins are covered up to the limit of Coverage C as long as they are of a collectible nature.
C. Yes, the coins are covered up to a specified limit.
The HO-3 policy Coverage D—Loss of Use limit Select one: A. Is 10% of the Coverage A limit. B. Includes a time frame limit of 30 days. C. Applies separately for Additional Living Expenses and Fair Rental Value. D. Applies in addition to Coverage A, B, and C limits.
D. Applies in addition to Coverage A, B, and C limits.
A homeowners policy premium is determined by first developing the base premium. The base premium is influenced by certain factors, including which one of the following? Select one: A. Insurance score B. Claim history C. Package policy credits D. Dwelling location
D. Dwelling location
A homeowners policy premium is determined by first developing the Select one: A. Base premium. B. Premium adjustments. C. Construction factors. D. Package credits.
A. Base premium.
Which one of the following Additional Coverages under the HO-3 policy provides defense coverage for the insured if needed? Select one: A. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money B. Fire Department Service Charge C. Loss Assessment D. Ordinance or Law
A. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money
Coverage A—Dwelling of an HO-3 policy applies to which one of the following? Select one: A. Deck attached to the insured dwelling B. Personal property within the insured dwelling C. Garage detached from the insured dwelling D. Fence attached to the insured dwelling
A. Deck attached to the insured dwelling
Under an unendorsed HO-3 policy Section I, earthquake and other types of earth movement, such as landslides, mudslides, mudflows, mine subsidence, and sinkholes, are Select one: A. Excluded perils. B. Covered perils. C. Subject to a special sublimit. D. Covered in excess of a large deductible.
A. Excluded perils.
Property described in Coverages A, B, and C of an HO-3 policy that is destroyed, confiscated, or seized by order of any governmental or public authority is Select one: A. Excluded. B. Covered. C. Covered, but subject to a special sublimit. D. Covered in excess of a large deductible.
A. Excluded.
Section I—Exclusions of the HO-3 policy excludes coverage both for Coverage A and B, buildings and for Coverage C, personal property. Which one of the following is true regarding these exclusions? Select one: A. Ordinance or Law is an exclusion but allows for limited coverage in the Additional Coverages section of the HO-3. B. The Water exclusion eliminates coverage by flood including loss by fire or explosion resulting from water damage. C. Any damage from and including ensuing fire or explosion, is excluded by the Earth Movement exclusion. D. The Power Failure exclusion applies to loss of power due to a tree falling damaging the home causing food to spoil.
A. Ordinance or Law is an exclusion but allows for limited coverage in the Additional Coverages section of the HO-3.
Which part of Coverage C—Personal Property of the HO-3 policy identifies lower limits for specified types of covered property? Select one: A. Special Limits of Liability B. Declarations C. Property Not Covered D. Exclusions
A. Special Limits of Liability
Property insurance coverage on dwellings and other structures covering all causes of loss not specifically excluded is known as Select one: A. Special form coverage. B. Functional replacement cost coverage. C. Replacement cost coverage. D. Named perils coverage.
A. Special form coverage.
Which one of the following homeowners policy additional coverages is NOT subject to a deductible? Select one: A. Landlord's furnishings B. Fire department service charge C. Debris removal D. Loss assessment
B. Fire department service charge
Under the HO-3 policy, which one of the following correctly describes the property covered under Section I, Coverage A—Dwelling? Select one: A. The dwelling on the "residence premises" on the declarations and land on which the dwelling is located B. The dwelling on the "residence premises" on the declarations, including structures attached to the dwelling and materials and supplies located on or next to the dwelling used to construct or repair the dwelling C. The dwelling on the "residence premises" on the declarations, not including structures attached to the dwelling D. The dwelling on the "residence premises" on the declarations, including structures attached to the dwelling and personal property owned or used by an "insured" while it is anywhere in the world
B. The dwelling on the "residence premises" on the declarations, including structures attached to the dwelling and materials and supplies located on or next to the dwelling used to construct or repair the dwelling
A homeowners policy premium is determined by first developing the base premium. The base premium is influenced by certain factors, including which one of the following? Select one: A. Insurance score B. Claim history C. Construction factors D. Package policy credits
C. Construction factors
In an HO-3 policy, the definitions Select one: A. Have no effect on the coverage provided. B. Must comply with applicable provisions. C. Might be different from dictionary definitions. D. Are the same as dictionary definitions.
C. Might be different from dictionary definitions.
The nine exclusions listed in Section I—Exclusions of the HO-3 policy apply to which one of the following coverages? Select one: A. Coverage C only B. Coverages A and B only C. Coverages A, B, and D only D. Coverages A, B, and C
D. Coverages A, B, and C
Which one of the following is used to calculate the base premium for a homeowners policy? Select one: A. Deductible changes B. Endorsements C. Claim history D. Dwelling location
D. Dwelling location
The standard limit for Coverage C of the HO-3 policy is Select one: A. 50% of the Coverage A limit. B. 10% of the Coverage A limit. C. 30% of the Coverage A limit. D. 25% of the Coverage A limit.
A. 50% of the Coverage A limit.
Under an HO-3 policy, Coverage C—Personal Property applies to the insured's personal property Select one: A. Not only in the insured's residence, but anywhere in the world. B. Only in the insured's residence, on the insured's property, or in the insured's owned automobiles. C. Only in the insured's residence or on the insured's property. D. Only in the insured's residence.
A. Not only in the insured's residence, but anywhere in the world.
The first step in determining the premium for an HO-3 policy is Select one: A. Considering the endorsements added. B. Developing the base rate. C. Reviewing the claim history. D. Determining the deductible.
B. Developing the base rate.
Jack signs a contract to purchase a house. The house has a replacement cost of $250,000 and the land is worth $200,000. In selecting the Coverage A limit for Jack's homeowners policy, he should Select one: A. Include the value of the land, plus an extra 25%. B. Not include the value of the land. Land at the residence premises is specifically excluded for property coverage. C. Include the value of the land. D. Not include the value of the land. The value of the land should be included in his Coverage B limit.
B. Not include the value of the land. Land at the residence premises is specifically excluded for property coverage.
Which one of the following expenses would be covered under the additional coverage Trees, Shrubs, and Other Plants of the HO-3 policy? Select one: A. The cost to replace the shrubs along your driveway that were damaged by your teenager's car B. The cost to replace plants that were destroyed during the night by neighborhood vandalism C. The cost to remove a tree that has fallen on your house during a storm D. The cost to remove your neighbor's tree which has fallen on your property
B. The cost to replace plants that were destroyed during the night by neighborhood vandalism
Which one of the following is an excluded peril under Section I—Coverages A and B of the HO-3 policy? Select one: A. Volcanic eruption B. Theft of construction materials C. Aircraft D. Accidental leak of water from plumbing
B. Theft of construction materials
Which one of the following statements is correct regarding Section I Coverage C—Personal Property of the HO-3 policy? Select one: A. Damage caused by mold, fungus, or wet rot caused by a sump pump is covered. B. There is damage to personal property from rain and snow only if wind or hail first damages the building. C. Coverage is as broad as the special form coverage for dwellings and other structures. D. There is no coverage for damage from falling objects that penetrate the building.
B. There is damage to personal property from rain and snow only if wind or hail first damages the building.
In the HO-3 policy, the Coverage C limit for personal property usually located at the insured's resident premises is Select one: A. Reduced when the insured has one or more alternate residences. B. Stated as a dollar amount selected by the insured. C. Calculated as a percentage of the HO-3 Coverage A—Dwelling limit. D. Decreased when replacement cost coverage is chosen.
C. Calculated as a percentage of the HO-3 Coverage A—Dwelling limit.
A young working couple is purchasing their first home. Facing budget pressures, they are content to accept named perils coverage on the dwelling in exchange for a lower premium. Assuming there are no mortgage restrictions, which one of the following ISO policy forms would be most appropriate for this couple? Select one: A. HO-5—Comprehensive Form B. HO-6—Unit-Owners Form C. HO-2—Broad Form D. HO-4—Contents Broad Form
C. HO-2—Broad Form
One of the main factors used in developing a base premium for a homeowners policy is Select one: A. The effect of endorsements on the premium. B. The construction date. C. The public protection class. D. A change in the deductible from $500.
C. The public protection class.
In homeowners policy rating, the base premium is based on several factors. Which one of the following is one of these factors? Select one: A. Insurance score B. Package policy credits C. Claim history D. Public protection class
D. Public protection class
Which one of the following has special limits of liability within Coverage C of the HO-3 policy? Select one: A. Fire damage to jewelry B. Flood damage to a fur coat C. Fire damage to silverware D. Theft of firearms
D. Theft of firearms
Which one of the following is an example of a loss caused by animals that would be covered by an unendorsed HO-3 policy under Section I? Select one: A. A rat chews a hole in the garage door. The insured replaces the garage door. B. A deer leaps through a plate glass window of the insured's house, breaking the glass, and damaging interior walls before escaping through the broken window. C. The insured's dog scratched the door repeatedly over time. The insured replaces the damaged door. D. A group of birds nests in the chimney, causing a blockage. The insured cleans the chimney so that the fireplace can be used.
B. A deer leaps through a plate glass window of the insured's house, breaking the glass, and damaging interior walls before escaping through the broken window.
Mary and Bob have their house insured under an HO-3 policy. Bob intentionally sets fire to their home. Mary was not involved in the arson. The HO-3 policy will Select one: A. Cover the loss if Mary submits the claim, but Bob is not entitled to coverage. B. Cover the loss because fire is an insured peril. C. Exclude the loss under the Neglect exclusion. D. Exclude the loss under the Intentional Loss exclusion.
D. Exclude the loss under the Intentional Loss exclusion.
In Section I—Exclusions of the HO-3 policy, three perils are excluded for Coverages A and B only. The three perils that are excluded for these coverages are Select one: A. Government action, intentional loss, and nuclear hazard. B. War, neglect, and power failure. C. Water damage, earth movement, and ordinance or law. D. Weather, acts or decisions, and faulty workmanship.
D. Weather, acts or decisions, and faulty workmanship.
Dane has an unendorsed HO-3 policy to insure his single-family home. He started a small Internet business. Dane publicizes stamp and coin dealers and their inventories over the Internet and keeps the web site inventories and values current for his customers. As a storm passed over, lightning struck Dane's house. Dane's computer was damaged, destroying half the records of his customers' inventories. He estimates that it will cost $2,000 to reestablish his inventory records. Disregarding any deductible that may apply, what amount, if any, will Dane's insurer pay for these losses? Select one: A. $0 B. $500 C. $1,000 D. $2,000
A. $0
Coverage for other structures is automatically provided under the HO-3 policy with a limit that is Select one: A. 10% of the Coverage A limit. B. 50% of the Coverage A limit. C. 10% of the Coverage C limit. D. 50% of the Coverage C limit.
A. 10% of the Coverage A limit.
Which one of the following losses would be covered under the HO-3 policy additional coverage of collapse? Select one: A. Abrupt falling down of a part of a building due to hidden decay B. Settling of a building C. Expansion of a building wall D. Cracking of a cement walkway attached to a building
A. Abrupt falling down of a part of a building due to hidden decay
Some types of personal property are excluded under Coverage C of the HO-3 policy. Which one of the following is excluded from this personal property coverage? Select one: A. A daughter's property in a college dormitory B. Birds owned by the named insured C. The insured's clothing while on a cruise ship D. A laptop borrowed from a neighbor
B. Birds owned by the named insured
Josh has just built a large kennel in his backyard for his pet dogs. The kennel includes a heated shed and access to a large fenced area. Josh wants to make sure he has adequate insurance limits under his homeowners policy so that he can replace the kennel if it is damaged. Which one of the coverage limits should Josh check on his homeowners policy to determine whether his coverage on the kennel is adequate? Select one: A. Coverage A—Dwelling B. Coverage B—Other Structures C. Coverage C—Personal Property D. Coverage D—Loss of Use
B. Coverage B—Other Structures
Which one of the following is true regarding the water exclusion that is contained in the HO-3 policy? Select one: A. Coverage applies for damage to the home due to sewage that backs up from a toilet. B. Coverage applies for damage to the home due to a hot water pipe bursting. C. Coverage applies for damage to the home due to excessive rain that floods the area. D. Coverage applies for damage to the home due to the drain on the kitchen sink overflowing.
B. Coverage applies for damage to the home due to a hot water pipe bursting.
The Property Removed coverage of Section I of the HO-3 policy encourages the insured to save, by removing as much property as possible when it is endangered, due to a covered peril such as a forest fire. This Additional Coverage provides Select one: A. An extended limit for the personal property after it has been removed B. Coverage for all risk of direct loss while removed or being removed. C. A separate deductible for the removed property while it is at a temporary location. D. Coverage limited to the peril threatening loss during and while removed for protection.
B. Coverage for all risk of direct loss while removed or being removed.
A windstorm causes a tree on the insured's premises to fall, breaking the electrical lines that enter the house. The loss of electrical power causes the food in the freezer to thaw and spoil. This loss is Select one: A. Covered because damage resulting from loss of electrical power is covered. B. Covered because it was caused by a covered peril on the residence premises. C. Not covered because damage resulting from loss of electrical power is excluded. D. Not covered because food is not considered personal property.
B. Covered because it was caused by a covered peril on the residence premises.
Which one of the following is an insured peril under Coverage C of an unendorsed HO-3 policy? Select one: A. Damage to china and crystal from earthquake tremors B. Damage to furniture from sudden release of soot from the furnace C. Damage to the kitchen table from the ceiling fan that fell on it D. Damage to the outside awning from the weight of snow and ice
B. Damage to furniture from sudden release of soot from the furnace
The Millers insure their dwelling under an HO-3 policy. They recently purchased a shed for their back yard where they will store tools, bicycles, and other sporting equipment. Which one of the following property coverages under Section I of the HO-3 policy would apply to the shed? Select one: A. Coverage C—Personal Property B. Coverage A—Dwelling C. Coverage B—Other Structures D. Additional Coverage
C. Coverage B—Other Structures
The HO-3 policy Section I ordinance or law exclusion Select one: A. Applies to insured other structures but not dwellings. B. Applies to insured dwellings but not other structures. C. Eliminates coverage for losses resulting from any ordinance or law that reduces the value of the property or that requires testing for or cleaning up of pollutants. D. Eliminates coverage for the destruction, confiscation, or seizure by order of any governmental or public authority.
C. Eliminates coverage for losses resulting from any ordinance or law that reduces the value of the property or that requires testing for or cleaning up of pollutants.
Under the HO-3 policy, which one of the following perils is excluded for Coverages A and B only? Select one: A. Earth movement B. Neglect C. Weather D. Government actions
C. Weather
There are three exclusions in the HO-3 policy that apply only to Coverages A and B in addition to the basic nine exclusions in Section I—Exclusions. These three exclusions are weather, Select one: A. Ordinance or law, and faulty workmanship. B. Governmental actions, and faulty workmanship. C. Acts or decisions of any person, group, organization, or governmental body, and intentional loss. D. Acts or decisions of any person, group, organization, or governmental body, and faulty workmanship.
D. Acts or decisions of any person, group, organization, or governmental body, and faulty workmanship.
Under the HO-3 policy, there is a list of excluded perils that applies to all coverages in Section I. Which one of the following statements is true regarding the excluded perils? Select one: A. Damage to a dwelling from weight of water or ice is excluded. B. Coverage for vandalism is excluded for dwellings unoccupied for more than 30 consecutive days. C. Water damage to buildings or other structures is excluded when it results from the accidental discharge or overflow of water or steam. D. Collapse is excluded, although coverage may result from some other causes of loss under Section I—Property Coverages.
D. Collapse is excluded, although coverage may result from some other causes of loss under Section I—Property Coverages.
Which one of the following losses is covered under Section I of the HO-3 policy? Select one: A. Wear and tear damage to the insured's walls B. Property damage caused by the insured's dog C. Damage to the exterior of the insured's house due to environmental pollution D. Damage to the insured's flooring due to a sudden leak in the insured's dishwasher
D. Damage to the insured's flooring due to a sudden leak in the insured's dishwasher
An insurer typically charges a premium for coverage that is based on a base premium and base premium adjustments. Which one of the following correctly describes a factor that assists in setting the base premium? Select one: A. An individual's insurance score may affect the package policy credits available to the insured. B. The coverage amount affects base premium adjustments, but not the actual base premium. C. Construction factors affect base premium adjustments, but not the actual base premium. D. Different geographic divisions may have different basic premiums.
D. Different geographic divisions may have different basic premiums.
Under the HO-3 policy, property losses that result from war, including the discharge of nuclear weapons, are Select one: A. Covered. B. Covered, but subject to a special sublimit. C. Covered in excess of a large deductible. D. Excluded.
D. Excluded.
The HO-8 policy contains a special building valuation clause that specifies that damage will be covered on a Select one: A. Replacement cost basis. B. Historical cost basis. C. Actual cash value basis. D. Functional replacement cost basis.
D. Functional replacement cost basis.
Sue and Rich are under contract to purchase a historic home in a city where local property values, including the value of the historic home, are far below replacement cost. Which one of the following ISO homeowners policies would likely be most suitable for Sue and Rich? Select one: A. HO-2—Broad Form B. HO-4—Contents Broad Form C. HO-6—Unit-Owners Form D. HO-8—Modified Coverage Form
D. HO-8—Modified Coverage Form
Which one of the following Additional Coverages under the HO-3 policy is dependent on another covered loss occurring? Select one: A. Collapse B. Glass or Safety Glazing Material C. Tree, Shrubs, and Other Plants D. Ordinance or Law
D. Ordinance or Law
A homeowners policy premium is determined by first developing the base premium. The base premium is influenced by certain factors, including which one of the following? Select one: A. Package policy credits B. Insurance score C. Claim history D. Policy form
D. Policy form
Which one of the following is an example of an ensuing loss? Select one: A. A gas leak following an earthquake caused a fire that damaged a house. B. An explosion at a chemical plant cracked the foundation of a house. C. The insured improperly stacked wood in the fireplace and failed to open the damper in the chimney. The house was damaged by smoke, and a log that rolled out of the fireplace burned the wood floor. D. The insured's cat chewed through the electrical cord to a lamp which damaged the lamp and caused a hazardous condition in the house.
A. A gas leak following an earthquake caused a fire that damaged a house.
Coverages A and B of the unendorsed HO-3 policy insure against direct physical loss to property described followed by a list of excluded perils. Which one of the following is true regarding the excluded perils that apply to Coverage A and B? Select one: A. Collapse is excluded as a cause of loss but is covered if it results from other causes. B. Freezing of plumbing and heating systems is excluded at all times unless endorsed. C. Freezing damage to external property is excluded unless reasonable precautions are taken. D. Vandalism damage is excluded if it occurs anytime the property is not occupied.
A. Collapse is excluded as a cause of loss but is covered if it results from other causes.
The HO-3 policy provides special form coverage rather than named perils coverage for which one of the following? Select one: A. Coverage A—Dwelling and Coverage B—Other Structures B. Coverage A—Dwelling only C. Coverage C—Personal Property D. Coverage D—Loss of Use
A. Coverage A—Dwelling and Coverage B—Other Structures
The water damage exclusion in the HO-3 policy eliminates coverage for losses caused by Select one: A. Flood, surface water, waves, and water or water-borne material such as sewage that backs up through sewers and drains. B. Flood, surface water, and waves, but not water-borne material such as sewage that backs up through sewers and drains. C. Flood caused by heavy rains, but not waves or tidal flooding. D. Waves and tidal flooding, but not flood caused by heavy rains.
A. Flood, surface water, waves, and water or water-borne material such as sewage that backs up through sewers and drains.
Which one of the following is true regarding the HO-3 policy Coverage D—Loss of Use? Select one: A. It reimburses the insured for loss of rental income if the rented portion of the residence is rendered unfit due to a covered peril. B. It excludes income loss from any business operation such as holding a portion of the residence for rental to others. C. It provides coverage up to the limit that is in place for the dwelling and personal property. D. It eliminates any coverage for loss of use of the insured residence due to civil authority prohibiting use due to damage occurring off premises.
A. It reimburses the insured for loss of rental income if the rented portion of the residence is rendered unfit due to a covered peril.
Is collapse a peril insured against under Coverages A and B of the HO-3 policy? Select one: A. No, but coverage for collapse that results from some other causes of loss is provided under the Section I—Property Coverages. B. No, collapse is not covered even if it results from some other cause of loss. C. Yes, it is a covered peril. D. Yes, it is a covered peril but it is subject to special sublimits.
A. No, but coverage for collapse that results from some other causes of loss is provided under the Section I—Property Coverages.
The HO-5 policy is designed to meet the risk management needs of Select one: A. Owner-occupants of dwellings who would like the broadest coverage available among ISO's forms for their property. B. Tenants of apartments or dwellings. C. Owners of condominium units. D. Owner-occupants of dwellings who may not meet insurer underwriting standards required for other policy forms.
A. Owner-occupants of dwellings who would like the broadest coverage available among ISO's forms for their property.
Under Section I—Additional Coverages of an HO-3 policy, which one of the following statements is true when an insurer reimburses an insured for reasonable costs to protect a property from further damage when it is damaged by a covered cause of loss? Select one: A. The coverage for expenses incurred does not increase the limit of coverage that applies to the covered property. B. The costs of materials would be paid as part of the loss under Coverage C. C. The deductible stated on the declarations page does not apply. D. The coverage for expenses incurred increases the limit of coverage that applies to the covered property.
A. The coverage for expenses incurred does not increase the limit of coverage that applies to the covered property.
Twelve Additional Coverages are provided in the HO-3 policy, Section I—Property Coverages. Which one of the following is true regarding one of these Additional Coverages? Select one: A. Fire Department Service Charge provides up to $500 as a donation to the local volunteer fire department to assist in maintaining fire protection service. B. Debris Removal grants an additional 5% of the limit of liability, if needed, due to a covered loss. C. Reasonable Repairs coverage increases the policy limit to provide for the cost of measures taken to protect the property from further damage. D. Trees, Shrubs and Other Plants coverage provides up to an additional $1000 for damage due to windstorm as well as other perils.
B. Debris Removal grants an additional 5% of the limit of liability, if needed, due to a covered loss.
Sally has an unendorsed HO-3 policy. Sally's swimming pool was drained by vandals who opened a drain valve. The water was replaced at a cost of $2,500 to Sally, including labor to deliver and pump the water. The HO-3 policy Select one: A. Covers the labor cost of replacing the water, but not the cost of the water. B. Does not cover the cost of the replaced water. C. Covers the full cost of the replaced water. D. Covers the cost of the water up to a $1,000 sublimit.
B. Does not cover the cost of the replaced water.
The earth movement exclusion of the Section I—Exclusions of the HO-3 policy Select one: A. Excludes coverage for flood surface water waves, and water or water-borne material. B. Excludes coverage for earthquakes and other types of earth movement. C. Covers mudslides and mud flows by exception. D. Excludes coverage for ensuing losses.
B. Excludes coverage for earthquakes and other types of earth movement.
Under an HO-3 policy, Section I—Exclusions contains an additional three exclusions that apply only to Coverage A—Dwelling and Coverage B—Other Structures. These exclusions include all of the following, EXCEPT: Select one: A. Weather B. Fraud C. Acts or decisions D. Damage that results from faulty construction, planning, or materials
B. Fraud
If law enforcement officials seize an insured's personal computer to search for files that might be related to a crime, the insured under an HO-3 policy may be unsuccessful in claiming a theft loss on the computer due to the Select one: A. Intentional Loss exclusion. B. Governmental Action exclusion. C. Ordinance or Law exclusion. D. Personal Computer exclusion.
B. Governmental Action exclusion.
Under the HO-3 policy, which one of the following excludes coverage for property seized by law enforcement officials investigating a crime? Select one: A. Ordinance or law B. Governmental action C. Intentional loss D. Acts or decisions
B. Governmental action
The HO-3 policy Ordinance or Law additional coverage applies to Select one: A. Increased construction costs resulting from ordinances or laws that deal with building and safety codes and those that do not deal with building and safety codes. B. Increased costs incurred due to the enforcement of any ordinance or law regulating the construction, demolition, remodeling, renovation, or repair of the insured building. C. Loss in value to the covered building resulting from the requirements of ordinances or laws. D. Increased construction costs resulting from ordinances or laws requiring a response to the effects of pollutants in or on the covered building.
B. Increased costs incurred due to the enforcement of any ordinance or law regulating the construction, demolition, remodeling, renovation, or repair of the insured building.
Under the HO-3 policy, a structure that is attached to the dwelling on the insured's residence premises, but only by a fence, utility line, or similar connection is Select one: A. Considered part of the dwelling. B. Not considered part of the dwelling, but is a separate structure. C. Considered personal property. D. Not considered to be covered property.
B. Not considered part of the dwelling, but is a separate structure.
Which one of the following is an excluded peril under Section I—Coverages A and B of the HO-3 policy? Select one: A. Unintentional loss B. Settling of the dwelling C. Hail D. Accidental leak of water from plumbing
B. Settling of the dwelling
Javiera owns a vacation home insured by an HO-3 policy. In order to save money, Javiera shut off the heat in the winter months, during which time she lived elsewhere. Javiera neglected to drain the water pipes. The pipes froze and burst, and when the weather warmed, the house flooded. Which one of the following statements is true? Select one: A. The damage is covered because water damage is considered "direct physical loss to property described in Coverage A. B. The damage is not covered because Javiera failed to take reasonable precautions against freezing. C. The damage is not covered because the HO-3 excludes coverage for water damage. D. The damage is covered because the HO-3 covers all water damage to an insured dwelling.
B. The damage is not covered because Javiera failed to take reasonable precautions against freezing.
Under an HO-3 policy, an insured who is moving from one principal residence to another will have Select one: A. Half the limit of Coverage C available at each location for 30 days. B. The full limit of Coverage C available at both locations for 30 days. C. The full limit of Coverage C available at both locations for one year. D. No Coverage C limit available until the move is complete.
B. The full limit of Coverage C available at both locations for 30 days.
Tom owns and occupies a home covered under an HO-3 policy. The property has a detached garage that Tom does not use. One of Tom's neighbors has an extra car and arranged to rent Tom's garage to store the car. Which one of the following is true of Tom's HO-3 policy? Select one: A. Tom's premium will be increased due to this change in the use of the garage. B. The garage continues to be covered under Coverage B with no changes in the policy. C. Tom must obtain a separate policy as the garage is no longer used for residential use. D. Tom must have the policy endorsed to cover this change as it is now business use.
B. The garage continues to be covered under Coverage B with no changes in the policy.
Which one of the following statements is correct regarding coverage under Section I, Coverage D—Loss of Use of an HO-3 policy. Select one: A. Additional Living Expenses and Fair Rental Value have separate coverage limits. B. Coverage is limited to 30 days or the time required to repair or replace the residence premises, whichever is shorter. C. A claim may be filed when the residence premises are unlivable because of a covered cause of loss and there has been an increase in living expenses. D. Coverage is provided only when civil authority prohibits use of the premises.
C. A claim may be filed when the residence premises are unlivable because of a covered cause of loss and there has been an increase in living expenses.
Which one of the following could fit the definition of a "residence premises" under an HO-3 policy if all other conditions are met? Select one: A. A two-family dwelling that the named insured owns and rents to others B. Another structure at a location different than that shown on the declarations page of the policy C. A four-family dwelling where the named insured resides in one of the units D. An apartment building that the named insured owns and manages, but in which he does not reside
C. A four-family dwelling where the named insured resides in one of the units
Cristal owns a residential premises insured under an HO-3 policy. The property includes Cristal's residence and four other structures that are separated from the dwelling by clear space. Cristal's Coverage B limit Select one: A. Applies separately to each structure. Each structure is separately insured up to the Coverage B limit. B. Does not apply to the other structures. C. Applies to all the other structures collectively, not to each structure individually. D. Applies separately for a maximum of two detached structures. Additional structures need to be covered separately by endorsement.
C. Applies to all the other structures collectively, not to each structure individually.
A storm causes power lines to break 10 miles from the insured's premises. The loss of electrical power causes food in the insured's freezer to thaw and spoil. Coverage for this loss is Select one: A. Covered because damage resulting from loss of electrical power is covered. B. Covered because it was caused by a covered peril off the residence premises. C. Excluded because the power failure occurred off the residence premises. D. Not covered because food is not considered personal property.
C. Excluded because the power failure occurred off the residence premises.
A family must live in a temporary apartment until the damage to their residence caused by a covered cause of loss has been repaired. The HO-3 policy Coverage D—Loss of Use would likely cover all of the following expenses, EXCEPT: Select one: A. Commuting costs for the extra 10 miles to work each day B. Rental expenses for the temporary apartment C. Food costs to prepare meals in the apartment D. Laundromat costs to wash their sheets, and towels, and clothes
C. Food costs to prepare meals in the apartment
Jim and Sue, a young married couple, are under contract to purchase a condominium unit. Which one of the following ISO policy forms is best designed to meet their homeowners insurance needs? Select one: A. HO-2—Broad Form B. HO-4—Contents Broad Form C. HO-6—Unit-Owners Form D. HO-8—Modified Coverage Form
C. HO-6—Unit-Owners Form
Under the HO-3 policy, Coverage B—Other Structures applies to structures Select one: A. On the residence premises and attached to the residence premises by permanent structures. B. On the residence premises and more than 100 feet from the dwelling. C. On the residence premises that are not attached to the dwelling and are separated from the dwelling by clear space. D. Not on the residence premises but owned by the insured.
C. On the residence premises that are not attached to the dwelling and are separated from the dwelling by clear space.
The HO-3 policy provides Select one: A. Named perils coverage on dwellings. B. Open perils coverage on personal property. C. Open perils coverage on dwellings. D. Named perils coverage on other structures.
C. Open perils coverage on dwellings.
Which one of the following statements is true regarding Coverage A—Dwelling as it applies to the dwelling on the "residence premises" listed on the HO-3 policy declarations page? Select one: A. The land at the residence premises is specifically included in the property coverage. B. Coverage A does not apply to structures attached to the dwelling, such as a garage or deck. C. The HO-3 could cover the entire building for a policyholder who owns a four-family home, lives in one unit, and rents the other units to tenants. D. When buying insurance, a homeowner should determine the Coverage A limit based on the cost to replace the dwelling including the cost of the land.
C. The HO-3 could cover the entire building for a policyholder who owns a four-family home, lives in one unit, and rents the other units to tenants.
Steve owns a home insured under the HO-3 policy. While Steve was painting his living room, he accidentally dropped an open paint can from his ladder which spilled onto his wall-to-wall carpet and sofa. The carpet and sofa were damaged beyond repair and needed to be replaced. What damage to Steve's property is covered under his HO-3? Select one: A. The damage to the sofa is covered; the damage to the carpet is not covered. B. Damage to the carpet and sofa are both covered. C. The damage to the carpet is covered; the damage to the sofa is not covered. D. None of the damage is covered.
C. The damage to the carpet is covered; the damage to the sofa is not covered.
There are 12 Additional Coverages under Section I of the HO-3 policy. Which one of the following statements is true regarding coverage for trees, shrubs, and other plants? Select one: A. The deductible stated on the declarations page applies to each tree, shrub, or plant. B. The additional coverage is dependent on another covered loss for it to apply. C. The limit is $500 per tree, shrub, or plant with the total amount not to exceed 5% of the Coverage A limit. D. The limit is $500 per tree, shrub, or plant, subject to a $1,000 maximum.
C. The limit is $500 per tree, shrub, or plant with the total amount not to exceed 5% of the Coverage A limit.
In Section I—Exclusions of the HO-3 policy, there are three additional exclusions (weather, acts or decisions, and faulty workmanship) that apply only to Coverage A—Dwelling and Coverage B—Other Structures. Which one of the following statements is true regarding these exclusions? Select one: A. The HO-3 excludes ensuing losses resulting from these three perils. B. Weather is an excluded peril only if it contributes to a covered peril. C. Weather is an excluded peril only if it contributes to a previously excluded peril. D. The HO-3 covers losses directly from these perils unless excluded elsewhere in the policy.
C. Weather is an excluded peril only if it contributes to a previously excluded peril.
Which one of the following losses is covered under Section I of the HO-3 policy? Select one: A. Damage to the exterior of the insured's house due to environmental pollution B. Injury to the insured's dog C. Wear and tear damage to the insured's walls D. Damage to the insured's flooring due to a sudden leak in the insured's dishwasher
D. Damage to the insured's flooring due to a sudden leak in the insured's dishwasher
Larry owns and occupies a home with a detached garage that is insured under an HO-3 policy. Due to the cold winters, Larry has decided to connect the garage to his home with an enclosed breezeway, permanently connecting the dwelling and the garage with a connected roof, to avoid going outside to get to and from his automobile. Which one of the following is true regarding Larry's homeowner policy coverage? Select one: A. Larry should consider the breezeway a "fixture" to be covered under Coverage A of the policy. B. Larry should reduce his Coverage B limit for the value of the garage. C. Larry should include the cost of the land the garage is on for the Coverage A limit. D. Larry may need to increase his Coverage A limit for the value of the garage and breezeway.
D. Larry may need to increase his Coverage A limit for the value of the garage and breezeway.
The HO-3 policy special limits of liability Select one: A. Are considerably higher than the Coverage C limit. B. Increase the Coverage C limit. C. Apply only to loss by theft. D. Provide the total limit for a loss in specific property categories.
D. Provide the total limit for a loss in specific property categories.
The insuring agreement of a homeowners policy specifies that Select one: A. Five property coverages are provided by the policy. B. Endorsements are available to modify the contract. C. Defined words have special meanings when they are used within the policy. D. The insurer will provide policy coverage in return for the premium and compliance with policy provisions.
D. The insurer will provide policy coverage in return for the premium and compliance with policy provisions.
Under Coverage C—Personal Property of the homeowners policy, which one of the following statements is true? Select one: A. Loss caused by smoke from agricultural smudging or industrial operations is covered under Coverage C. B. Theft is included under Coverage C for watercraft, including its furnishings and equipment, away from the residence premises. C. Theft from a building under construction and theft of construction materials are covered under Coverage C. D. Windstorm or hail damage to personal property inside a residence is not covered unless the building is first damaged.
D. Windstorm or hail damage to personal property inside a residence is not covered unless the building is first damaged.
