Homeowners

Todd has a large gun collection and his wife, Tina, has several items of valuable jewelry. How does the homeowners policy limit coverage for these types of property? $1,500 each for jewelry and firearms $2,500 each for jewelry and firearms $1,500 for jewelry; no coverage for firearms $1,500 for jewelry; $2,500 for theft of firearms

$1,500 for jewelry; $2,500 for theft of firearms For some items of property that are subject to dollar limitations, the limit applies to loss by any covered peril. However, with respect to jewelry, firearms, and silverware, the limitation applies only to the peril of theft.

The amount of Molly's outstanding mortgage was $100,000 at the time her house was destroyed in an explosion. Molly's claim for damages under Coverage A of her policy was $200,000 and her claim for damages under Coverage C was $150,000. How much did Molly's insurance company pay to the mortgagee? $100,000 $150,000 $200,000 $350,000

$100,000 The company paid the mortgagee its insurable interest in the damaged building, which was the amount of the outstanding mortgage. The mortgagee had no insurable interest in Molly's personal property.

The liability coverage section of a homeowners policy excludes coverage for watercraft-related losses to all the following EXCEPT: 40-foot sailboat owned by the insured 25-foot sailboat the insured borrows from a friend yacht rented to host a business meeting fishing boat the insured owns and rents to others for a fishing excursion

25-foot sailboat the insured borrows from a friend

Jack operates a business from his home. Since his homeowners policy excludes coverage for a home business, Jack wants to know how he can protect himself and his business from bodily injury and property damage claims. What is the most appropriate advice the agent should give Jack? Add an endorsement to cover the home-based business. Cancel the homeowners policy and buy a commercial liability policy. Cease all business operations from home and rent office space away from home. Have business guests sign a disclaimer to hold Jack harmless from any liability.

Add an endorsement to cover the home-based business.

Which of the following statements correctly describes the personal liability coverage provided through each of the six homeowner policy forms? Each ISO homeowners form provides a different level of liability coverage. Only ISO's HO-3 Special Form includes liability coverage. The HO-4 Contents Broad form is the only ISO homeowners form that doesn't include liability coverage. All six HO forms have the same liability coverag

All six HO forms have the same liability coverage. The personal liability coverage is the same on all the ISO homeowners forms.

Mrs. Delaney hired a contractor to build a deck on the back of her house. She purchased the necessary lumber and it's piled in her backyard. Under what coverage part of her homeowners policy is the lumber insured? Coverage A - Dwelling Coverage B - Other Structures Coverage D - Loss of Use The lumber isn't insured by her policy.

Coverage A - Dwelling

Under what section of a homeowners policy is an in-ground pool insured, if at all? Coverage A - Dwelling Coverage B - Other Structures Coverage D - Loss of Use The pool isn't insured by her policy.

Coverage B - Other Structures

Bryan's homeowners insurance company responds to a claim for bodily injury filed by his neighbor. If the insurance company makes payment without regard to Bryan's legal liability, under what coverage is it paying? Coverage E - Personal Liability Coverage C - Personal Property Coverage F - Medical Payments to Others Coverage D - Loss of Use

Coverage F - Medical Payments to Others

Ava lives on a large estate and has many employees who work at the estate. Which of the following would NOT be considered a "residence employee" under her homeowners policy? Lola, her children's nanny Elena, a physical therapist who provides treatments in Ava's home Josef, one of the estate's gardeners Janine, a pastry chef on the estate

Elena, a physical therapist who provides treatments in Ava's home

Marilyn and Dan rent in an apartment. They want to buy insurance to cover their personal property and protect them against liability claims from third parties. Which homeowners insurance form is appropriate for Marilyn and Dan? HO 6 Unit-Owners Form HO 4 Contents Broad Form HO 3 Special Form HO 8 Modified Coverage Form

HO 4 Contents Broad Form

Tom and Ann have just bought a condominium as a secondary residence. Which of the following homeowners coverage form is best designed for them? HO 3 Special Form HO 8 Modified Coverage Form HO 7 Miscellaneous Coverage Form HO 6 Unit-Owners Form

HO 6 Unit-Owners Form

Victoria is considering purchasing a condominium unit and asks her insurance agent what type of homeowners policy would be best for her. Her agent correctly recommends an: HO 6 Unit-Owners Form HO 5 Comprehensive Form HO 4 Contents Broad Form HO 3 Special Form

HO 6 Unit-Owners Form

Fred and Sharon live in an older home whose replacement cost far exceeds its market value. What homeowners form would be most appropriate for their insurance needs? HO 8 Modified Coverage Form HO 2 Contents Broad Form HO 6 Unit-Owners Form HO 1 Basic Form

HO 8 Modified Coverage Form

Which of the following correctly describes "residence premises" under a homeowners policy? It is where the insured lives full-time and must be a single-unit dwelling. It is where the insured lives full-time and may be either a single-unit dwelling or a multi-unit building. It is where the insured lives full- or part-time and must be a single-unit dwelling. It is where the insured lives full- or part-time and may be either a single-unit dwelling or a multi-unit building.

It is where the insured lives full- or part-time and may be either a single-unit dwelling or a multi-unit building.

When Teddy bought his homeowners policy, he did not tell his agent or insurer that he owned three dangerous dogs who had attacked his neighbors. Even though the insurance application form inquired specifically about pets, Teddy indicated that he didn't own any. The dogs later attacked a mail carrier and seriously injured him. How will the insurer respond when it receives the claim? It will cover the claim because dog bites are not excluded. It will deny coverage based on the intended injury exclusion. It will deny coverage on the basis of concealment or fraud. It will deny coverage because the mail carrier assumed the risk of a dog bite while delivering mail.

It will deny coverage on the basis of concealment or fraud.

Samantha deliberately caused bodily injury to Theresa, who then sues her for damages. When Samantha submits a liability claim under her homeowners policy to cover Theresa's lawsuit, how will her insurer respond? It will deny the claim because Samantha's injury to Theresa wasn't accidental. It will pay the liability claim in full and then subrogate it to Theresa's insurer. It will submit the claim to an arbitrator to determine liability before paying it. It will pay a reduced amount to Samantha, recognizing her role in causing the injury.

It will deny the claim because Samantha's injury to Theresa wasn't accidental.

In addition to paying up to the limit of liability, how else will the Coverage E - Personal Liability section of a homeowners policy respond to a lawsuit brought against the insured? It will provide a defense. It will pay punitive damages. It will file a countersuit. It will subrogate against the plaintiff.

It will provide a defense. Coverage E pays up to the limit of liability shown on the Declarations and provides a defense, at the insurer's expense, even if a lawsuit is groundless or fraudulent. Defense costs are paid in addition to the limit of liability.

While a guest in Tanya's home, Mary contracts an infectious disease from Tanya's daughter. Mary files a claim against Tanya for medical expenses and medications. Will Tanya's homeowners policy cover the claim? Yes, because the guest contracted the disease in the insured's home No, due to the communicable disease exclusion in the homeowners policy No, because the guest should have expected to become exposed to the disease Possibly, if the guest can prove she was unaware that she had become exposed to the disease

No, due to the communicable disease exclusion in the homeowners policy

Jane is going to rent a room in her home to a local college student. Would the student's personal belongings be covered under Jane's homeowners policy? Yes, all personal property in the insured residence is covered by the policy. Yes, all personal property in the insured residence, or on the residence premises, is covered. Yes, but only up to $1,500. No, personal property of roomers or boarders is excluded under the homeowners policy.

No, personal property of roomers or boarders is excluded under the homeowners policy.

Which of the following statements correctly describes the difference between an HO 2 Broad Form homeowners policy and an HO 3 Special Form policy? The HO 3 includes several additional named perils not covered under the HO 2 policy. The HO 2 insures all property on a named perils basis while the HO 3 insures real property on an open perils basis and personal property on a named perils basis. The HO 2 is appropriate for tenants while the HO 3 is best suited for homeowners. Both the HO 2 and HO 3 insures real and personal property on a named perils basis but the HO 2 lists more covered perils than the HO 3.

The HO 2 insures all property on a named perils basis while the HO 3 insures real property on an open perils basis and personal property on a named perils basis.

If a lost or stolen piece of property is recovered after the insurer paid a $10,000 claim, which of the following statements correctly describes the options available to the insured? The insured must keep the $10,000 claim payment and surrender the recovered property to the insurer. The insured must keep the recovered property and accept a readjustment of the claim payment by the insurer. The insured may keep the recovered property and keep the $10,000 claim payment. The insured may either keep the recovered property and accept a readjustment of the claim payment or keep the $10,000 payment and allow the insurer to keep the recovered property.

The insured may either keep the recovered property and accept a readjustment of the claim payment or keep the $10,000 payment and allow the insurer to keep the recovered property.

Under a homeowners policy, what is the effect of an insured's bankruptcy or insolvency on the insurer's contractual obligations? The insurer is released from its contractual obligations to the insured. The insurer allows the insured a grace period for payment of future premiums. The homeowners policy is automatically cancelled. The insurer is not released from its contractual obligations to the insured.

The insurer is not released from its contractual obligations to the insured.

Which of the following statements correctly describes the purpose of the optional fungi, wet or dry rot, and bacteria endorsement to a homeowners policy? They provide coverage at the Coverage A limit. They provide coverage at the Coverage C limit. They provide coverage on an open perils basis. They limit or exclude coverage for losses due to these perils.

They limit or exclude coverage for losses due to these perils.

Darryl borrows formal dinnerware and glasses from his neighbor, Tanya, to use at a large party at his home. While Darryl and his guests participate in an enthusiastic line dance, he accidentally smashes several of Tanya's plates. Will Darryl's homeowners policy cover this loss to Tanya's property? Yes, because the provision for Damage to Property of Others covers such loss. No, because Darryl doesn't own the property. Yes, as long as Darryl is legally responsible for the loss. No, because Darryl intentionally participated in the act that caused the damage

Yes, because the provision for Damage to Property of Others covers such loss.

The condo association to which Walt belongs assessed him $2,500 for fire damage to a party room collectively owned by the condo's residents. Each of the association members was assessed $2,500 to cover repair costs. Will Walt's unendorsed homeowners policy pay for his share of the loss assessment charged by the association? Yes, his policy will pay the entire assessment. Yes, his policy will pay, but only up to $1,000. No, his policy will not pay, coverage for loss assessments is excluded. No, his policy will not pay because Walt lives in a condo.

Yes, his policy will pay, but only up to $1,000.

Coverage B - Other Structures of the homeowners policy covers which of the following detached structures? a shed rented to someone who is not a tenant of the dwelling a garage rented to a non-tenant who uses it as a private garage a structure from which a business is operated a storage shed rented by a non-tenant to store business property

a garage rented to a non-tenant who uses it as a private garage

Damage to a swimming pool will be settled on what basis under an unendorsed homeowners policy? replacement value original installation cost actual cash value agreed value

actual cash value

Mary offers piano and guitar lessons in her home on a part-time basis and wants liability coverage to cover the risk of a student's parents suing her for some reason. If she wants additional liability coverage than her homeowners policy provides, which of the following is the most practical solution? add the Home Day Care Coverage endorsement purchase a second homeowners policy add the permitted incidental occupancies endorsement purchase a dwelling policy

add the permitted incidental occupancies endorsement

Which of the standard homeowners policies includes malicious mischief as a named peril? only HO 3 all forms except HO 5 and HO 8 all forms except HO 5 all forms

all forms except HO 5 The perils covered by the homeowners policy vary by form. Vandalism and malicious mischief is a named peril in all of the standard homeowners policies except HO 5 (Comprehensive Form) because it is the only homeowners policy that provides open perils coverage for all types of covered property.

Through the Scheduled Personal Property Endorsement (HO 04 61) to a homeowners policy, the insurer agrees to pay the lowest of the following values, for most types of property insured on the endorsement, EXCEPT: cost of repairing the item the item's actual cash value the item's replacement cost an amount agreed upon between the insured and the insurer

an amount agreed upon between the insured and the insurer

Bridget reported the theft of her Rolex watch to her insurance company. The insurance company says it will replace the watch instead of making a loss payment. An insurer has this option: because Bridget's homeowners policy has a repair or replace option if the insurance company gives the insured oral or written notice of its intent to do so if the insurance company gives the insured written notice within 60 days after receipt of the proof of loss if the insurance company gives the insured written notice within 30 days after it makes the decision to select the replacement option

because Bridget's homeowners policy has a repair or replace option

Beatrice works from her home, on a part-time basis, as a hairdresser. What definition in the homeowners policy describes Beatrice's activities as a hairdresser? residence premises insured location business compensable

business

All of the following are benefits provided by the Loss of Use coverage (Coverage D) in a homeowners policy EXCEPT: car rental expense additional living expense fair rental value prohibited use

car rental expense

What term refers to monetary compensation paid to someone who has suffered a loss? loss retribution allocation subrogation damages

damages

Ivy fails to comply with a number of the Duties after an Occurrence listed in the conditions section of her homeowners insurance policy. If Ivy's failure impedes the insurer's processing of a claim, what may the insurer do? have Ivy arrested cancel Ivy's policy deny Ivy's claim charge Ivy a failure to comply fee

deny Ivy's claim

Which of the following would NOT be covered under Coverage B - Other Structures in a homeowners policy? detached shed from which a tool repair business is operated gazebo detached garage swimming pool

detached shed from which a tool repair business is operated

Which liability coverage under a homeowners policy would cover a liability claim arising from the insured's destruction of a neighbor's fence when the insured lost control of his car? bodily injury personal liability medical payments to others claims expenses

personal liability

Toby's Aunt Bertha trips on a throw rug while visiting his home. She breaks an arm in several places and requires surgery. Toby knows Aunt Bertha's medical expenses will be high and wonders if his homeowners policy will cover her expenses. Where will he find this information? the amount listed on his policy's declaration page for loss of use the amount listed in his policy's insuring agreement the amount listed in his policy's conditions provision the amount listed on his policy's declarations page for medical payments

the amount listed on his policy's declarations page for medical payments

All of the following types of personal property are covered by a homeowners policy EXCEPT: the insured's Labrador Retriever the insured's bicycle the insured's computer the insured's golf clubs

the insured's Labrador Retriever

Which of the following would be recognized as a residence employee under the liability section of a homeowners policy? the insured's CPA who is meeting at the insured's home to review business tax plans the insured's gardener who lives in a small cottage on the insured's land the insured who works out of her home an independent contractor hired by the insured to construct a new addition to the insured's home

the insured's gardener who lives in a small cottage on the insured's land

In the liability section of a homeowners policy, "business" refers to a full-time, part-time, or occasional trade, profession, or occupation a person engages in for money or other compensation of at least: $100 per year $500 per year $2,000 per year $10,000 per year

$2,000 per year

Someone broke into Mr. Johnson's house and stole $5,000 worth of firearms. What Coverage C special limit of liability applies to the loss? No special limit applies to firearms. $500 $1,000 $2,500

$2,500

What sublimits, if any, apply to stolen cash and securities under a homeowners policy? $200 for money, $1,500 for securities $1,000 each for money and securities $200 for money; no coverage for securities no limit for money; $1,500 for securities

$200 for money, $1,500 for securities Coverage for money is typically limited to $200 and $1,500 for securities. Specific dollar sublimits for these types of property may vary among editions of homeowners policies.

Jack and Jill are vacationing at a golf resort when a thief enters their room and steals a laptop computer, golf clubs, cash, and clothing. Jack and Jill contact their homeowners insurer and ask the claim representative whether they are covered for this loss. What does the representative tell them? Coverage does not apply to a theft away from the residence premises. Coverage applies but is limited to $1,000. Coverage applies but the claim will be adjusted on a pro rata basis with the resort. Coverage applies just as it would if were stored at the insured's home.

Coverage applies just as it would if were stored at the insured's home.

Barbara sells cosmetics from her house. She earns almost $10,000 a year from this activity. While leaving the house after picking up an order, a customer slips on a rug and falls, breaking her arm. She files a claim against Barbara. Will Barbara's homeowners policy cover this? Yes. The accident occurred in Barbara's home so liability and medical payments coverage would apply. Coverage would apply, unless Barbara is liable for the injury. No. Injury or damage sustained in connection with a business conducted from an insured location or engaged in by an insured is excluded. Coverage for medical payments would apply, but not for liability

No. Injury or damage sustained in connection with a business conducted from an insured location or engaged in by an insured is excluded.

Kevin came home from work to find that his house had been vandalized. Under what additional coverage did his homeowners insurance company reimburse him because he incurred expenses to board up the broken windows? Debris Removal Property Removal Fire Department Service Charge Reasonable Repairs

Reasonable Repairs

Mr. and Mrs. Jones are each sued and submit claims under their homeowners policy. What liability condition states that coverage applies separately to each of them as insureds? Severability of Insurance Duties after an Occurrence Limit of Liability Liberalization

Severability of Insurance The Severability of Insurance condition states that liability insurance applies separately to each insured against whom a claim or suit is brought.

All of the following are eligibility requirements for the Home Business Insurance Coverage endorsement that can be added to a homeowners policy EXCEPT: The business must be owned by the named insured. The business must be operated from the residence premises. The business may have up to three employees. The business must manufacture food or personal care products.

The business must manufacture food or personal care products.

The homeowners policy only provides coverage for bodily injury or property damage that occurs or begins: when the insurer accepts the insured's policy application during the policy period during the policy period or 30 days prior during the policy period or 45 days prior

during the policy period

Hector receives a summons related to a lawsuit being brought against him, and promptly sends it to his homeowners insurance carrier. Which liability condition is he complying with? severability of insurance duties after an occurrence liberalization suit against insurer

duties after an occurrence

Boat owners who want more coverage than is provided by an unendorsed homeowners policy can increase coverage with a boatowners policy, which covers all the following EXCEPT: boats and motors boat trailers portable property, such as anchors, life jackets, and tow ropes garages where boats are stored off-season

garages where boats are stored off-season

Under the terms of the Duties of an Injured Person - Medical Payments Coverage condition of a homeowners policy, an injured person who is seeking medical payments for an injury occurring on the insured's property is obligated to do all the following EXCEPT: give the insured's insurer written proof of the claim, under oath if necessary give the insurer current financial statements and proof that he or she has no health insurance give the insurer any relevant medical reports and records submit to a physical exam by a doctor of the insurer's choosing, if the insurer believes it necessary

give the insurer current financial statements and proof that he or she has no health insurance

Vacant land owned by the insured is considered which of the following under the liability section of a homeowners policy? residence premises business dwelling insured location

insured location

Which of the following is identical in all six homeowners policy forms? liability coverage property coverage endorsements exclusions

liability coverage

All of the following are conditions under Section II - Liability of the homeowners policy EXCEPT: loss to a pair or set concealment or fraud duties to an injured person duties after an occurrence

loss to a pair or set The Loss to a Pair or Set condition is a property condition and appears in Section I of the homeowners policy.

Which of the following coverages found in a liability insurance policy is considered goodwill coverage? personal liability claims expenses loss assessment medical payments to others

medical payments to others

A typical homeowners policy does NOT cover: personal liability and medical payments dwelling, other structures, and personal property loss of use motor vehicles

motor vehicles

The motor vehicle liability exclusion under the liability coverage section of a homeowners policy applies to all of the following motor vehicles EXCEPT: motorized wheelchair car with a license plate all-terrain vehicle required by federal regulation to have a special sticker snowmobile required by state law to have a special sticker

motorized wheelchair The motor vehicle liability exclusion specifies that personal liability and medical payments coverage do not apply to any motor vehicle liability if the vehicle is required to be registered for operation on public roads. There is coverage for motor vehicles designed to assist the handicapped under certain circumstances.

Which of the following would NOT be included in the meaning of "insured" in a homeowners policy? household residents children away from home at college neighbor who voluntarily mows the insured's lawn person who cares for the owner's dog in his absence

neighbor who voluntarily mows the insured's lawn

As a condition for liability coverage under a homeowners policy, if a neighbor's child is accidentally injured on the insured's property, the insured is obligated to do all the following EXCEPT: give written notice of the accident to the insurer or its agent assume no obligation and make no payment directly to claimants notify the police of the accident immediately help the insurer in making a settlement, help with the subrogation process, attend any trial, and give witness information

notify the police of the accident immediately

A property and liability insurance policy that is essentially a bundled collection of different coverage forms is called a: split coverage policy package policy combined policy multi-policy

package policy

A homeowners policy extends liability coverage to an insured who rents a ballroom for all the following events EXCEPT: to host a wedding anniversary party to host a friend's retirement party to host a business conference to host a relative's 100th birthday

to host a business conference

An insurer may not be sued unless the insured has fully complied with the terms of the homeowners policy and the suit is brought within how many years of the loss date? one year two years three years four years

two years

As an open perils policy, the HO 3 Special Form covers all the following causes of loss EXCEPT: fire vandalism theft water damage

water damage