Property & Casualty/ Property Mid-term Answer Key

$25,000

An insured carries $25,000 fire insurance with 80% coinsurance on a building worth $40,000. How much would she collect in the event of a total loss?

Debris Removal

Additional Coverages in a homeowners policy would cover:

Liberalization

All of the following makes property insurance policy an indemnity contract,

Sewer Backup

Losses caused by all of the following are covered under a National Flood Insurance program, except:

An insured collects from her insurance company for damage caused by a third party.

Subrogation may follow which of the following events?

Newly Acquired Property.

A Building and Personal Property Coverage Form automatically provides for which of the following extensions of coverage?

growing crops and lawns

A Building and Personal Property Coverage Form provides coverage for all of the following types of property except:

Open Perils (All Risk)

A Scheduled Personal Property Endorsement is usually issued on which of the following bases?

I. boat's motor is stolen before the insured reports its acquisition to his insurance to his insurance company II. A boat's motor is damaged while being serviced III A boat that sank in 40 feet of water is re-floated at a cost of $700 III only

A boat owners policy would pay for which of the following losses?

Physical

A dead tree beside a home is best described as which of the following types of hazard?

indemnity

A homeowner whose house suffered a $50,000 total loss was insured for $60,000. What principal would be violated if her insurance company paid him $60,000?

Extra expenses

A news is interested in protecting against additional costs of continuing to print the newspaper in the event its buildings were destroyed. Which of the following coverages should the newspaper purchase?

fail to do what a reasonable and prudent person would do.

A person may be considered negligent if her or she:

an accident

A sudden unintended and unexpected event is known as:

amount of liability

An insurance policy's Appraisal clause is used to determine the:

television sets

An HO-2 Form sets special coverage limits on all of the following items,

I. Be advised of the name of reporting agency. II. Examine his file by furnishing proper identification to reporting agency. III Require the insurance company to send him a copy of his report from the reporting. II and III only

An application for Homeowners insurance is denied based on a consumer report furnished to the insurance company. Under the provisions of the Fair Credit Reporting Act, the applicant has the right to do which of the following?

$250

An insured's Dwelling Property Broad Form (DP-2) provide $40,000 coverage on her dwelling and $25,000 coverage on its contents. The policy has a $250 Deductible. If vandals cut down a tree on her property valued at $500, the maximum amount she will receive is which of the following?

$30,900

Brian Gabriel insures his television repair shop under a Building and Personal Property Coverage Form with limits of $100,000 on the building and $50,000 on the contents. Afire cause causes $10,000 in damage to the building and $20,000 in losses to the contents. Mr. Gabriel also has to pay $1,000 for debris removal. If policy has a deductible of $100.00, Mr Gabriel will receive a maximum of which of the following amounts from his insurance company?

100%

Brian Hendricks is adequately insured with a homeowners policy containing 80% replacement cost coverage. If he suffered a partial loss to his dwelling structure, he would be able to collect which of the following percentage of loss?

I. To eliminate duplicate coverage II. To eliminate coverage for certain types of loss III. To eliminate coverage for uninsurable perils I,II and III

Exclusion exist in insurance policies for which of the following reasons?

The additional cost of continuing a business after a loss.

Extra Expense insurance covers which of the following?

property damage and bodily liability

Homeowners' policies provide liability coverage for which of the following?

time of loss

In property insurance, insurable interest must exist at the:

eliminate small claims

One purpose of a deductible is to:

$80,000

Ten years ago an insured purchased a building for $50,000 that would cost $100,000 to rebuild today. If the physical value of the building has depreciated $2,000 each year, the building's present actual cash value is:

$50,000

The ABC Office Supply Corporation carries $100,000 insurance on a storage building held under a $50,000 mortgage acknowledged in the policy. ABC stores dynamite in the building without informing the insurance company. There is an explosion and the building is destroyed. Which of the following amounts is the maximum that the mortgagee can recover?

I. The property location II. The insurance company's responsibilities III. The insured's responsibilities IV. The policy duration II and III only

The conditions section of an insurance contract specifies which of the following?

The insured's name and address and the time duration of the policy.

The declarations' section of an insurance policy provides which of the following?

I. Mrs. Grant's $800 shotgun is stolen out of a motel room while she is attending a national skeet-shooting match II. Mr. Grant losses his wallet containing his credit cards, and the finder demands a $400 reward. III The Grant's lawn mover is destroyed when their garage burns down. I and III only

The home of Mr. and Mrs Grant is insured by an Ho-3 Form with $50,00 coverage. Which of the following losses would be covered under the policy?

Bodily injury or property damage caused by the personal activities of an insured.

The personal Liability section of a homeowners policy covers which of the following?

an HO-1 Form (HO-8)

The plumbing in Mrs. Sander's home suddenly burst and the ceilings were damaged by water. All of the following homeowners forms would cover the loss, except:

encourage the insured to insure property to full value.

The purpose of the coinsurance clause is to:

$800

Under a Personal Articles Floater, a pair of antique salt shakers is broken, the remaining shaker is worth only $200. How much will the insured receive for the loss before the deductible is applied?

Actual cash value

Under a basic Building and Personal Property Coverage Form, loss valuation is based on on which of the following?

pay covered losses

Under the terms of property policy, an insurance company is obligated to:

$37,500

When homeowner's policy is issued with $75,000 coverage on a dwelling, what is the automatic amount of insurance on personal property?

uncertainty of loss

Which of the following best describes the concept risk?

none of the above

Which of the following conditions of a property policy, if any, describes the procedure for an insured to use in a disagreement with the insurance company about the amount of a loss?

A change in mailing address

Which of the following events would require a change on insured's homeowner's policy?

nuclear contamination

Which of the following is an excluded peril under a homeowners policy?

Take steps to reduce any further loss.

Which of the following must an insured do after suffering a property loss?

Personal Article Floater

Which of the following should an insurance agent recommend to a prospective insured that owns silverware, jewelry and furs valued in excess of $50,000?

They are included at no extra cost

Which of the following statements is true about additional coverages?

I. A central air-conditioning system II. Wall-to- Wall carpeting III. A permanently installed intercom system I, II and III

Which of the following types of property would be included under Coverage A of a Building and Personal Property Coverage Form?

I. Personal property of the insured's daughter who is away at college. II. The insured's driveway, if damaged by a falling object I and II only

Which of the following would be automatically covered under an HO-3 Form?