Chapter 7
How is Mobile Home insurance written? A By writing a separate Mobile Homeowners Policy only B By adding a Mobile Home Endorsement to a Homeowners Policy only C Either by writing a separate Mobile Homeowners Policy or by adding an endorsement to a Homeowners Policy D Mobile homes cannot be covered
Either by writing a separate Mobile Homeowners Policy or by adding an endorsement to a Homeowners Policy Insurance on mobile homes may be written by adding a Mobile Home Endorsement to a Homeowners Policy, or by writing a separate Mobile Homeowners Policy.
Umbrella policies provide coverage on which basis? A Open perils B Excess C Primary D Aggregate
Excess
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? A $30,000 B $42,000 C $28,000 D $35,000
28,000 Under the Mobile Homeowners Policy, Coverage C (Personal Property) is generally written at 40% of Coverage A, instead of 50% under the Homeowners Policy. 40% of $70,000 = $28,000.
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? A $4,000 B $3,500 C $5,000 D $4,000 less the deductible
5000 If an item is insured on a valued basis, that is how much the policy will pay for a loss.
Some flood policies are written in the voluntary property market as a result of which program? A Emergency B Write Your Own C Standard D National Flood Cooperative
A Write Your Own (WYO) company may structure its flood business according to guidelines and regulations of the NFIP and within its existing personal lines business.
All of the following are true of a Yacht Policy, except: A Lay up warranties are permitted B Is written on an Ocean Marine form C A yacht is covered regardless of its location D Includes both property and liability coverage
A yacht is not covered if it is navigated outside the territory.
All earth movements within what period of time are considered a single occurrence of earth movement? A 72 hours B 48 hours C 24 hours D 60 hours
All earth movements occurring within a 72-hour period are considered a single occurrence of earth movement.
Mobile Home Insurance includes all of the following, except: A Property Removal up to $500 B Coverage A Dwelling coverage C Coverage B with a limit of 10% of Coverage A D Coverage C with a limit of 50% of Coverage A
Coverage C with a limit of 50% of Coverage A The Personal Property coverage limit is written at 40% of Coverage A for the Mobile Home policy, instead of at 50%.
Which of the following statements about the National Flood Insurance Program is false? A Property removed to protect it from flood is covered for 45 days at other locations B Two deductibles apply separately to the building and contents C Coverage becomes effective after a 24-hour waiting period D Mudflow is covered; mudslide is not covered
Coverage becomes effective after a 24-hour waiting period Coverage usually become effective after a 30-day waiting period; some exceptions apply.
All of the following are true of the Fine Arts Floater, except: A It has a 90-day automatic coverage for newly acquired items B It covers such items as paintings, rare manuscripts and antiques C Coverage is written on a replacement cost basis D Coverage applies only to scheduled items
Coverage is written on a replacement cost basis Coverage is written on a 'valued' basis.
Which of the following is covered by Crop Hail insurance? A Failure to harvest a mature crop B Damage caused by freezing, drought, insects and disease C Non owned property (shared crop) D Non-visible crops
Crop Hail covers hail, fire, lightning, wind, freezing, drought, insects and disease.
A Mobile Home Insurance Policy is most similar to: A A Travel Trailer policy B A Homeowners Policy C An Auto policy D A Tenants policy
Homeowners Policy Mobile Home policies include Section I - Property and Section II - Liability, which are similar to the corresponding sections in a Homeowners policy.
Which of the following is not true about the FAIR plan? A Agents cannot bind FAIR plan coverage B It provides property coverage to both residential and farm dwellings C It provides basic property coverage to those who have been rejected in the standard market D FAIR means Fair Access to Insurance Requirements
It provides property coverage to both residential and farm dwellings Farm property is not eligible for coverage under the FAIR plan.
The Personal Articles Floater is used to do which of the following? A Replace Coverage B of the Homeowners Policy B Insure individual personal property on a scheduled basis C Insure personal property on a blanket basis D Provide replacement cost coverage on personal property
Insure individual personal property on a scheduled basis The Personal Articles Floater is used to insure personal property on a scheduled (or itemized) basis. Articles covered under this floater are no longer covered under Coverage C of the Homeowners Policy.
Which statement is false regarding the National Flood Insurance Program (NFIP)? A The Regular Program allows coverage on a single family dwelling up to $250,000 B It provides coverage for direct and indirect loss to covered property as the result of flooding C The Emergency Program applies after a community has agreed to, but has not yet completed, the process to adopt flood control measures D Coverage includes the increased cost of compliance with flood plain management ordinances
It provides coverage for direct and indirect loss to covered property as the result of flooding The National Flood Insurance Program does not provide any indirect financial loss coverage. It covers direct loss only to the insured property from those conditions that constitute the definition of flood under the Program.
The National Flood Policy defines all of the following as floods, except: A Overflow of inland or tidal waters B Unusual and rapid accumulation or runoff of surface water C Leakage of underground water systems D Mudflow caused by accumulation of water
Leakage of underground water systems Underground leakage is not considered a flood under the policy.
What coverage is not included under the Yacht policy? A Personal Property coverage B Personal Injury Coverage C Towing D Protection and Indemnity
personal injury coverage In addition to providing property and liability coverage, a yacht policy also offers protection and indemnity coverage for the insured's legal liability for bodily injury and damage to property of others, personal property coverage for property on the yacht, and coverage for fuel spills, commercial towing, and dinghies. Personal injury is not covered.
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: A Premium B Copayment C Commission D Retention
Retention Similar to a deductible, a retention is an amount paid by the insured before the insurer's obligation to pay takes effect.
An insurance agent would recommend which of the following floaters to his client who is traveling to Europe for a month's vacation? A Personal effects floater B Personal articles floater C Scheduled personal property floater D Camera floater
The Personal Effects floater provides worldwide open peril coverage for items worn or carried by tourists.
The Personal Articles Floater is similar to which of the following endorsements? A The Scheduled Personal Property Endorsement B The Guaranteed Replacement Cost Endorsement C The Special Personal Property Endorsement D The Personal Property - Replacement Cost Endorsement
The Scheduled Personal Property Endorsement The PAF and the Scheduled Personal Property Endorsement to the Homeowners Policy are nearly identical.
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? A $100,000 B Nothing since they are not participating yet C Coverage C on the homeowners policy D $10,000
The home is covered under the Emergency Program and is eligible for contents coverage for up to $10,000.
All of the following statements regarding flood insurance are true, except: A Protection is provided to property that is on normally dry land B Communities in the earliest stage of participation in the NFIP are in the Emergency Program C Coverage is available from participating private insurers and directly from the NFIP D The policy applies a deductible only to loss of contents
The policy applies a deductible only to loss of contents A separate deductible applies to contents and building losses.
Which Statement is true regarding a Difference In Conditions Policy? A The standard deductible is $250 B There is a pro rata clause C There is always a coinsurance clause D There is no standard form
There is not standard form There is no coinsurance or pro rata clause and the standard deductible is in the range of $10,000.
The intent of insuring under the Personal Effects Floater is: A To insure personal property on a scheduled basis B To insure hard-to-value property like fine art or heirlooms C To provide coverage worldwide for travelers D To provide coverage for property kept at the home
To provide coverage worldwide for travelers Generally, the Personal Articles Floater coverage is worldwide since it is written on the moveable type of property insureds carry with them when traveling, both domestically and overseas.
All of the following types of property may be covered by a Personal Articles Floater, except: A Golf equipment B Stamps C Buildings D Jewelry
buildings Buildings are not personal property, and would need to be insured under a homeowners or similar policy.
Which statement is true about Crop/Hail Insurance? A It is reinsured by federal government B It covers only one growing season C It only covers the peril of hail D It is not subject to any deductible
covers only one growing season Crop/Hail Insurance coverage ceases when the crop is harvested.
All of the following are true of the Personal Jewelry Floater, except: A It has a 60-day automatic coverage for newly acquired items B Appraisal is usually mandatory C It can be written on a valued basis D It has a Pair and Sets Clause
it has automatic coverage for 60 days Automatic Coverage under the Personal Jewelry Floater is 30 days.
When an insured's boat is in storage, which warranty allows for a return on premium? A Lay Up B Houseboat C Dry Dock D Storage
lay up A 'Lay Up Warranty' applies when the insured boat is in storage and allows for a return of premium due to the reduced risk of the boat not being used when laid up. If the insured operates the yacht during the lay-up period (or lives on it), no coverage is provided.
All of the following are true of an Umbrella Liability Policy, except: A Specific minimum limits for underlying coverage are required B Damage to property in the care and custody of the insured is covered C Coverage is excess over the underlying policy D Coverage is worldwide
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.