Insurance exam 2
Martin and Carrie Jones have an unendorsed HO-3. The replacement cost for their home is $300,000. They have the following insurance limits. Coverage A - $240,000; Coverage B - $24,000; Coverage C - $120,000 and Coverage D - $72,000. The home was damaged in a fire forcing the insureds to live in a hotel for 60 days. Undamaged personal property was stored in a rental unit while the home was begin rebuilt. Their monthly mortgage payment is $1,500. How much of the mortgage payment will the insurer cover? $0 $1,500 $1,200 $750
$0
John has an unendorsed HO-3 with $160,000 on the dwelling. The home has a replacement cost of $200,000. How much will John's insurer pay for a $1,000 painting damaged by vandals who broke into his home? $1,000 $0 $500 $800
$1,000
John has an unendorsed HO-3 with $160,000 on the dwelling. The home has a replacement cost of $200,000. How much will John's insurer pay for his stamp collection valued at $5,000 if it is stolen from his home? $1,500 $5,000 $200 $0
$1,500
Tom has an unendorsed HO-3 with the dwelling insured for $120,000. The replacement cost of the home is $200,000. Ignoring a deductible, answer the following. The water heater explodes and damages some household contents. The actual cash value of the damaged contents is $2,000 and the replacement value is $3,200. How much will Tom's insurer pay for the damaged contents? $2,000 $3,200 $2,700 $0
$2,000
Michelle purchased a HO-3 with no special endorsements. A fire occurred and destroyed a big-screen television. She paid $4,000 for the TV new and it was depreciated 25% when the fire occurred. The replacement cost of a similar television is $3,800. How much will Michelle collect for the loss, ignoring any deductible? $2,850 $3,000 $4,000 $3,800
$2,850
Tom has an HO-3 with the dwelling insured for $120,000. The replacement cost of the home is $200,000. Ignoring a deductible, answer the following. Hail breaks the window and rain damages the drapes. The actual cash value of the drapes is $400 and replacement cost is $600. How much will the insurer pay ignoring any deductible? $400 $600 $300 $200
$400
Jack and Gabriela rent the second floor of a two-family dwelling. They have an unendorsed HO-4 policy with a Coverage C—Personal Property limit of $90,000. Due to a fire on the first floor of the dwelling, Jack and Gabriela were forced to stay in a motel for five nights. The motel costs were $100 a night and they spent $50 a day on meals. They estimate their normal food budget to be $15 a day. There was no damage to the second floor of the dwelling or any of Jack and Gabriela's personal property, so they submitted a claim for $750 to their insurer. How much, if any, will their insurer pay? Select one: $500 $0 $750 $675
$675
Match the definition or formula on the left with the correct term on the right. 30% of Coverage A 50% of Coverage A 10% of Coverage A 100% of Coverage A
30% of Coverage A Coverage D - Loss of Use 50% of Coverage A Coverage C - Personal Property 10% of Coverage A Coverage B - Other Structures 100% of Coverage A Coverage A - Dwelling
Which one of the following would be an exception to the Coverages E and F Business exclusion to the liability coverage provided by the HO-3 policy? Select one: Mother running a full-time beauty salon in the home as a second income to support the family Home daycare services for a fee Full-time landscaping business A 12-year-old girl pet sitting the neighbor's dog for a fee
A 12-year-old girl pet sitting the neighbor's dog for a fee
The Coverage for Damage to Your Auto (Maximum Limit of Liability endorsement) covers each described vehicle for A stated amount of insurance that applies to collision and other than collision losses. A stated amount of insurance that applies to collision but not to other than collision losses. A specified limit for bodily injury and property damage liability coverage. A specified limit for medical payments and uninsured motorists coverage.
A stated amount of insurance that applies to collision and other than collision losses.
Which one of the following statements is correct? A tort is a legal wrong against society. Criminal negligence is based on the preponderance of the evidence. A tort is a legal wrong against an individual. A breach of contract is a legal wrong against society.
A tort is a legal wrong against an individual.
The major advantage of the Limited Mexico Coverage endorsement to the Personal Auto Policy (PAP) is that it provides Primary liability insurance within twenty-five miles of the United States border. Liability and physical damage coverage for trips to Mexico of more than ten days. Additional liability insurance within twenty-five miles of the United States border. All auto insurance coverages required by Mexican law.
Additional liability insurance within twenty-five miles of the United States border.
All of the following are types of damages except: General All are types of damages. Punitive Special Economic
All are types of damages
An HO-4 policy includes building additions and alterations coverage up to 10% of the limit of Coverage C—Personal Property. Which one of the following individuals would typically benefit from this coverage? Select one: An owner of an older house with obsolete construction A condominium unit owner who renovates the kitchen and installs more expensive cabinets than were originally in the unit An owner of a single family home who has installed wheelchair ramps at the doors of her home to accommodate her wheelchair An apartment dweller who has installed a power-lift chair at the stairway inside his two-story unit
An apartment dweller who has installed a power-lift chair at the stairway inside his two-story unit
The HO-3 policy excludes liability coverage for Select one: A motorized vehicle not requiring registration that is designed for recreational use off public roads and owned by an insured, and used on an insured location. A motorized golf cart owned by an insured and used on a golf course. A motor vehicle in dead storage on an insured location. Any motor vehicle that is rented to others.
Any motor vehicle that is rented to others.
The Section II Limit of Liability provision of the HO-3 policy stipulates that the limit of Coverage E—Personal Liability appearing on the declarations page is the total limit of coverage for Select one: Each insured separately. Each person injured in a claim. Any one occurrence. Each claim made relative to an occurrence.
Any one occurrence.
Collision coverage under the Personal Auto Policy (PAP) Applies to damage to a parked insured vehicle resulting from a passenger in another parked vehicle opening its door. Is less expensive than other than collision (OTC) coverage. Applies only to damage to a vehicle for which the owner of the vehicleIs less expensive than other than collision (OTC) coverage. is responsible. Applies to damage to a vehicle resulting from explosion or earthquake.
Applies to damage to a parked insured vehicle resulting from a passenger in another parked vehicle opening its door.
The Personal Auto Policy (PAP) contains a section outlining several important duties with which the insured must comply in order for the policy to provide coverage. Which one of the following is a general duty under the Personal Auto Policy (PAP)? Authorize the insurer to obtain medical reports and other pertinent records Provide prompt notice to the state insurance department regarding the accident or loss Submit the state required regulatory compliance forms to the insurer within a reasonable amount of time Agree to submit to a physical examination at the insured's own expense
Authorize the insurer to obtain medical reports and other pertinent records
A homeowners policy premium is determined by first developing the Base premium. Package credits. Construction factors. Premium adjustments.
Base premium.
All of the following usually are excluded by a personal umbrella policy, EXCEPT: Bodily injury Intentional injury Professional liability Damage to the insured's property
Bodily injury
Under the Personal Auto Policy (PAP), the named insured's rights and duties under the policy Can be transferred by a verbal agreement. Cannot be assigned to another party without the insurer's written consent. Can be transferred if the insured sells an auto. Can be assigned to another party without the insurer's written consent.
Cannot be assigned to another party without the insurer's written consent.
O.J. Simpson was found negligent under: Breach of contract Societal law Civil law Criminal law
Civil 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? Insurance score Construction factors Claim history Package policy credits
Construction factors
Last clear chance is an exception that can be used in state with: Comparative negligence Assumption of risk Contributory negligence Acts of God
Contributory negligence
The Personal Auto Policy (PAP) contains a section outlining several important duties with which the insured must comply in order for the policy to provide coverage. Which one of the following is a general duty under the Personal Auto Policy (PAP)? Provide prompt notice to the state insurance department regarding the accident or loss Agree to submit to a physical examination at the insured's own expense Cooperate with the insurer in the investigation, settlement, or defense of any claim or suit related to the accident or loss Submit the state required regulatory compliance forms to the insurer within a reasonable amount of time
Cooperate with the insurer in the investigation, settlement, or defense of any claim or suit related to the accident or loss
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? Coverage A—Dwelling Additional Coverage Coverage B—Other Structures Coverage C—Personal Property
Coverage B—Other Structures
All of the following are true regarding the HO-6 policy, EXCEPT: Select one: The definition of the residence premises refers to a "unit." Coverage A—Dwelling is included in the HO-6 policy subject to a basic limit. Coverage B—Other Structures is included in the HO-6 subject to a basic limit. Coverage C—Personal Property in the HO-6 is written for a limit selected by the insured.
Coverage B—Other Structures is included in the HO-6 subject to a basic limit.
The Inflation Guard endorsement gradually and automatically increases limits throughout the policy period in homeowners policies for Select one: Coverages A and B only. Coverage A only. Coverages A, B, C, and D. Coverages A, B, and C only.
Coverages A, B, C, and D.
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. Megan spills a can of paint while painting the bedroom damaging the wall-to-wall carpet. Is the wall-to-wall carpet covered or not covered? Covered Not Covered
Covered
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. Megan's hotel room is broken into and a suitcase containing clothes, jewelry, and money are stolen. Are they covered under her HO-3? Covered Not covered
Covered
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. Megan's son hits a baseball through the living room window. Is the loss covered? Covered Not covered
Covered
1. Vandalism that occurs to a dwelling that has been vacant for 30 days is_______ 2. Personal items in luggage stolen from your hotel room in London is________
Covered Covered
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. A tornado destroys the house and kills her AKC award winning Brussels Belgium Frison dog. Indicate if house is covered for the tornado damage and the dog is covered under the HO-3. Covered/Not covered Covered/Covered Not covered/Covered Not covered/Not covered
Covered/Not covered
The Transportation Network Driver Coverage (No Passenger) endorsement uses the wording of the Public or Livery Conveyance Exclusion and includes an exception that Adds a transportation network platform definition. Specifies that coverage does not apply to Part C—Uninsured Motorists Coverage. Provides coverage when the insured is logged into a transportation network platform until the driver accepts a passenger's request. Covers share-the-expense carpooling and operation of an auto without passengers while the driver is logged into a transportation network platform.
Covers share-the-expense carpooling and operation of an auto without passengers while the driver is logged into a transportation network platform.
Match the exposure on the left with the correct term or coverage on the right. Debris Removal Loss Rental Value while under repair Property of a home-sharing occupant Fire Department Service Charge
Debris Removal Additional Coverages Loss Rental Value while under repair Coverage D - Loss of Use Property of a home-sharing occupant Coverage C Exclusions Fire Department Service Charge Section I - Additional Coverages
If an insured deliberately leaves his or her auto in an urban area, unlocked, with the keys in the ignition, and later claims that the car has been stolen, the insurer discovering these facts will Invoke the automatic termination provision in the policy. Subrogate against the insured. Deny coverage for the claim on the basis of the fraud condition. Invoke the appraisal provision in the policy.
Deny coverage for the claim on the basis of the fraud condition.
On a study abroad trip to Switzerland you take a day long trip to Interlacken where you paraglide, in tandem, over the Alps. You panic causing a very hard landing. You are injured and sue the paragliding company. You talk to an attorney in the US about suing the paragliding company. The attorney is most likely to: Deny your case because you had the last clear chance to avoid the accident. Deny your case because you are guilty of comparative negligence. Deny your case saying that you assumed the risk by participating in a very high-risk activity. Take your case and demand a settlement from the paragliding company because they are liable for your injury.
Deny your case saying that you assumed the risk by participating in a very high-risk activity.
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? The coverage amount affects base premium adjustments, but not the actual base premium. Construction factors affect base premium adjustments, but not the actual base premium. Different geographic divisions may have different basic premiums. An individual's insurance score may affect the package policy credits available to the insured.
Different geographic divisions may have different basic premiums.
Which one of the following is true with regard to coverage for acts of directors or officers under a personal umbrella policy? They are always covered. Directors or officers of a not-for-profit organization are covered. They are always excluded. Directors or officers of a for-profit organization are covered.
Directors or officers of a not-for-profit organization are covered.
A personal umbrella policy provides coverage for a particular loss, but the underlying policies do not. This feature of an umbrella policy is called Retention. Drop-down coverage. Self-insurance. Laser coverage.
Drop-down coverage.
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? Dwelling location Claim history Insurance score Package policy credits
Dwelling location
Which one of the following is used to calculate the base premium for a homeowners policy? Deductible changes Claim history Dwelling location Endorsements
Dwelling location
Under the Severability of Insurance condition in the HO-3 policy, Select one: Each insured seeking protection is treated as if that insured has separate coverage under the policy, but the limit of insurance is not increased for any one occurrence. Separate limits of liability exist for bodily injury and property damage. The insurer and the insured are subject to separate sets of conditions. The insurer's limit of liability is increased for any one occurrence if more than one insured is involved.
Each insured seeking protection is treated as if that insured has separate coverage under the policy, but the limit of insurance is not increased for any one occurrence.
Ed and Genie Allen submitted a claim under an HO-2 policy for a property loss, and the insurer conducted an investigation. Under their HO-2, which one of the following statements is true regarding the burden of proof? Select one: Because the HO-2 policy is an all-risks policy, the burden of proof lies in the coverage investigation by the insurer. Ed and Genie must prove that the loss was caused by a covered cause of loss. Under the HO-2 there is no burden of proof on either the Allens or the insurer. The insurer must prove that the loss was caused by an excluded cause of loss.
Ed and Genie must prove that the loss was caused by a covered cause of loss.
Match the exposure on the left with the correct coverage on the right. Garden shed Golf clubs Construction materials for renovation beside house Hotel expenses incurred while home is being repaired
Garden shed Coverage B - Other Structures Golf clubs Coverage C - Personal Property Construction materials for renovation beside house Coverage A - Dwelling Hotel expenses incurred while home is being repaired Coverage D - Loss of Use
The primary reason for selling a personal umbrella policy is to provide Broad coverage with no retained limit. High liability coverage limits. Worldwide coverage. High property coverage limits.
High liability coverage limits.
Which one of the following causes of loss is covered under the collision section of the Personal Auto Policy (PAP)? Missiles or falling objects Hitting a tree Malicious mischief or vandalism Riot or civil commotion
Hitting a tree
An insured may have more than one auto covered by a single Personal Auto Policy (PAP). Which one of the following statements regarding coverage under Part D of the PAP is true? If a nonowned auto is damaged by a covered cause of loss, Part D of the PAP provides the broadest coverage applicable to any covered auto shown in the declarations. Part D of the PAP provides coverage for damage to nonowned autos made available for the insured's regular use. If a nonowned auto is damaged by a covered cause of loss, Part D of the PAP provides coverage only if the owner of the auto has physical damage coverage. Part D of the PAP provides primary coverage for damage to a nonowned auto regardless of the existence of other physical damage coverage on the auto.
If a nonowned auto is damaged by a covered cause of loss, Part D of the PAP provides the broadest coverage applicable to any covered auto shown in the declarations.
Which one of the following statements regarding the liberalization clause is true in a homeowners policy? Select one: The liberalization clause applies to any claim an insured files. If the insurer, during the policy period, adopts a revision that broadens the coverage without additional premium charge, the increased coverage will automatically apply to all existing policies on the date it is implemented. The liberalization clause applies to changes introduced when the insurer makes a general homeowners program revision that both broadens and restricts coverage. Policyholders insured under a current homeowners series of the homeowners policy would automatically benefit from any changes that might be introduced in a new policy edition introduced in future years.
If the insurer, during the policy period, adopts a revision that broadens the coverage without additional premium charge, the increased coverage will automatically apply to all existing policies on the date it is implemented.
The Personal Injury endorsement to a homeowners policy adds an additional liability insuring agreement expanding the homeowners policy to cover personal injury, which includes all of the following, EXCEPT: Select one: Intentionally publishing material known to be false False arrest, detention, or imprisonment Malicious prosecution Publishing oral or written material involving libel, slander, or invasion of privacy
Intentionally publishing material known to be false
Defense costs coverage is included under Section II—Liability Coverages in the HO-3 policy. This coverage Select one: Has a liability limit separate from the personal liability limit. Is excluded if the suit against the insured is groundless. Is supplemental to the liability limit. Is included in the personal liability limit.
Is supplemental to the liability limit.
Which one of the following is true with regard to uninsured and underinsured motorist protection under an ISO Personal Umbrella Liability Policy? It is provided as a drop-down coverage. It is available as an endorsement. It is always covered. It is always excluded.
It is available as an endorsement.
Personal umbrella policies usually cover the insured's liability for personal injury. Under the ISO Personal Umbrella Liability Policy, which one of the following is included under the definition of personal injury? Property damage to property of others Libel Assault and battery intentionally committed Bodily harm
Libel
Personal umbrella policies usually cover the insured's liability for personal injury. Under the ISO Personal Umbrella Liability Policy, which one of the following is included under the definition of personal injury? Malicious prosecution Bodily harm Assault and battery intentionally committed Property damage to property of others
Malicious prosecution
In an HO-3 policy, the definitions Must comply with applicable provisions. Are the same as dictionary definitions. Might be different from dictionary definitions. Have no effect on the coverage provided.
Might be different from dictionary definitions.
The Snyder family purchased a three wheel all-terrain vehicle (ATV) for their children to use on an open field behind their property. Which one of the following endorsements should be attached to the Snyder's Personal Auto Policy (PAP) to provide liability coverage for the ATV? Coverage for Damage to Your Auto (Maximum Limit of Liability) Endorsement Miscellaneous Type Vehicle Endorsement Auto Loan/Lease Coverage Endorsement Named Non-Owner Coverage Endorsement
Miscellaneous Type Vehicle Endorsement
Lori has a company car with insurance coverage provided by her employer and she does not own a car. On occasion, Lori helps her elderly grandmother, Nell. Lori occasionally drives Nell's car to pick up prescriptions. Lori knows that Nell has low limits of liability and is afraid that Nell might allow the insurance on her car to lapse. What coverage can Lori purchase to provide insurance for herself when she drives Nell's car? Extended Non-Owned Coverage for Named Individual endorsement attached to a PAP Named Non-Owner Coverage endorsement attached to a PAP A Personal Auto Policy (PAP) covering her company car Miscellaneous Type Vehicle endorsement attached to a PAP
Named Non-Owner Coverage endorsement attached to a PAP
Under a personal umbrella policy, if the insured fails to maintain the required underlying insurance, the umbrella policy will pay The amount that would otherwise have been covered by the underlying insurance subject to a self-insured retention. Nothing. The amount that would otherwise have been covered by the underlying insurance. No more than it would have paid if the underlying insurance were in effect.
No more than it would have paid if the underlying insurance were in effect.
In general, the largest amount of the tort dollar goes to: Non-economic damages Administration and court costs Claimant attorneys Medical bills
Non-economic damages
The medical payments coverage in a homeowners policy covers certain medical expenses incurred by Select one: Resident relatives of the insured. Residents of the insured's household other than residence employees. Insureds. Nonresidents of the insured's household.
Nonresidents of the insured's household.
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. An earthquake causes a 3 foot crack to the front lawn. Is it covered? Not covered Covered
Not covered
Megan has an unendorsed HO-3. Indicate if the following loss is covered or not covered. During a windstorm a tree is blown over in Megan's yard. Is the tree covered under the HO-3? Not covered Covered
Not covered
An occurrence as defined in the HO-3 policy may include Select one: One accident involving injury to more than one person. A non-accidental event. More than one accident with more than one injury. Property damage caused intentionally by an insured who is 13 years old or older.
One accident involving injury to more than one person.
The Section II Limit of Liability provision in the HO-3 policy states that for Coverage E, all bodily injury and property damage that result from continuous or repeated exposure to the same harmful conditions are considered Select one: Three occurrences, namely, the bodily injury, the property damage, and the combination of bodily injury and property damage. Two occurrences, namely, the bodily injury and the property damage. Multiple occurrences, depending on how many events caused the bodily injury and property damage. One occurrence, even if the occurrence that caused the bodily injury or property damage was not a single event.
One occurrence, even if the occurrence that caused the bodily injury or property damage was not a single event.
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? Claim history Package policy credits Policy form Insurance score
Policy form
Amy used the valet parking services at her local mall. Her car was damaged while in the custody of the valet service. Amy had a Personal Auto Policy (PAP) which provided physical damage coverage for the cause of loss. The No Benefit to Bailee provision in the policy Provides that Amy's insurance is excess over the valet service's insurance. Allows Amy's insurer to pay only its proportionate share of the loss once negligence has been established. Preserves the right of Amy's insurer to recover from the valet service any amount it pays to Amy if the valet service was negligent. Allows the insurer to withhold payment to Amy until it is determined who was negligent.
Preserves the right of Amy's insurer to recover from the valet service any amount it pays to Amy if the valet service was negligent.
Bob has a Personal Auto Policy (PAP) with physical damage coverages. Bob got up early one morning to go to work and found vandals had broken the rear window of his car during the night. Two nights later it rained heavily, which ruined the back seat upholstery. After a few days, Bob submitted a claim to his insurer. Which one of the Duties After an Accident or Loss in the PAP has Bob failed to comply with? Permit inspection and appraisal Proof of loss Prevent further loss Cooperation with the insurer
Prevent further loss
Which one of the following is usually excluded under a personal umbrella policy? Slander Professional liability False arrest Defense costs
Professional liability
In addition to general duties under a Personal Auto Policy (PAP), a person seeking coverage under Part C—Uninsured Motorists Coverage must perform additional duties. Which one of the following is one of these additional duties? Submit to a physical examination conducted by a doctor chosen by the insurer Permit inspection and appraisal Promptly notify police if a covered auto is stolen Promptly notify police if a hit-and-run driver was involved in the accident
Promptly notify police if a hit-and-run driver was involved in the accident
A statement of facts about a loss for which the insured is making a claim is known as a Deposition. Proof of loss. Fact sheet. Appraisal.
Proof of loss.
A neighbor's dog gets loose, comes into your yard and kills your two dogs. The neighbor's dog is half husky and half timberwolf. You file a claim with your neighbor's insurer. They accept liability and begin negotiations to settle the claim because their insured is most likely to be found negligent due to: Strict liability The reasonable and prudent person rule Last clear chance Comparative negligence
Strict liability
If the insurer makes a loss payment to a person who has a right to recover damages from a negligent third party, the insurer has which one of the following legal rights against that third party? Estoppel Subrogation Loss mitigation Salvage
Subrogation
An insurer's right to recover payment from a legally liable third party is Subrogation. Assignment. Salvage. Appraisal.
Subrogation.
All of the following persons can be held liable due to imputed negligence except: The host of a party for an intoxicated person An employer for an employee's acts A parent for a child's actions Subsequent damage occurring after the owner of a car reports it stolen to the police.
Subsequent damage occurring after the owner of a car reports it stolen to the police.
Linda was visiting the Arthur's at their home. Linda spilled her drink on the hardwood floor, stepped in it and slipped and fell. Which one of the following outcomes is most likely to occur? The Arthur's will be found negligent because they owed her a duty to keep premise safe. The Arthur's will not be found negligent because they didn't breach a duty owed. The Arthur's will be found negligent because Linda was injured. The Arthur's will not be found negligent because they did not owe her a duty.
The Arthur's will not be found negligent because they didn't breach a duty owed.
Which one of the following statements concerning the Scheduled Personal Property Endorsement is true? Select one: Cameras cannot be scheduled under the endorsement. The Section I deductible applies to scheduled items. The Coverage C special limits do not apply to scheduled items. The endorsement covers fewer causes of loss than does the HO-3 policy.
The Coverage C special limits do not apply to scheduled items.
Which one of the following statements concerning the Scheduled Personal Property Endorsement is true? Select one: The Coverage C special limits do not apply to scheduled items. The Section I deductible applies to scheduled items. The endorsement covers fewer causes of loss than does the HO-3 policy. Cameras cannot be scheduled under the endorsement.
The Coverage C special limits do not apply to scheduled items.
Which one of the following best explains why an HO-2 policy has a slightly lower premium than an HO-3 policy with similar limits? Select one: There is no coverage for other structures under the HO-2. Recovery under the HO-2 is on an actual cash value basis rather than on replacement cost basis for buildings. The HO-2 covers only the named insured and resident relatives for specific causes of loss. The HO-2 covers the dwelling building and other structures against fewer causes of loss.
The HO-2 covers the dwelling building and other structures against fewer causes of loss.
Which one of the following statements about the HO-2 policy and HO-3 policy is correct? Select one: Both the HO-2 and HO-3 provide named perils coverage for Coverages A, B, and C. The HO-2's Section I—Perils Insured Against is the same as that in the HO-3. The HO-2's Section I—Perils Insured Against is different from the HO-3. Both the HO-2 and HO-3 provide special form coverage for Coverages A, B, and C.
The HO-2's Section I—Perils Insured Against is different from the HO-3.
Which one of the following describes the difference between the HO-3 policy and the HO-2 policy? Select one: The HO-3 is designed for an owner-occupant of a house. The HO-2 is designed for a tenant-homeowner of an apartment. The HO-3 provides coverage for all causes of loss, unless specifically excluded, for Coverages A and B. The HO-2 provides coverage for named perils for Coverages A and B. The HO-3 is the preferred homeowners policy for homeowners who have had no prior losses. The HO-2 is designed for homeowners who have experienced some losses. The HO-3 provides Coverage C limits that are 50% of Coverage A. The HO-2 provides Coverage C limits that are 40% of Coverage A.
The HO-3 provides coverage for all causes of loss, unless specifically excluded, for Coverages A and B. The HO-2 provides coverage for named perils for Coverages A and B.
All of the following statements about the HO-5—Comprehensive Form (HO-5) policy are correct, EXCEPT: Select one: The HO-5 covers water damage for personal property away from a premises owned by an insured. The HO-5 generally covers personal property damaged by rain through an open window even if the building itself is not damaged. The HO-5 Coverage D provides broader coverage than the HO-3 Coverage D. The HO-5 special limits for jewelry and furs apply to items that are lost.
The HO-5 Coverage D provides broader coverage than the HO-3 Coverage D.
Which one of the following best describes what is included in a loss payment under the Auto Loan/Lease Coverage endorsement to the Personal Auto Policy (PAP)? The balance of the loan or lease amount for the vehicle Penalties imposed under a lease Balances transferred from previous loans or leases Overdue lease or loan payments
The balance of the loan or lease amount for the vehicle
All of the following are included as insureds for the Section II—Liability Coverages of a homeowners policy, EXCEPT: Select one: The 19-year-old exchange student who temporarily lives with and under the care of the named insured and his spouse The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care The named insured's 17-year-old foster child The homeowners association that sends a loss assessment bill to the named insured
The homeowners association that sends a loss assessment bill to the named insured
Which one of the following statements is true regarding "aircraft liability" coverage under the HO-3 policy? Select one: The homeowners policy excludes all aircraft liability. Hobby aircraft that do not carry people or cargo are considered to be "aircraft" in the HO-3 policy. Model airplanes that do not carry people or cargo are considered to be "aircraft" in the HO-3 policy. If the insured flies her radio-controlled model airplane through a neighbor's picture window, the resulting liability claim would not be covered.
The homeowners policy excludes all aircraft liability.
Under the Personal Auto Policy (PAP), legal action can be brought against the insurer only when Coverage has been denied. Insurance subrogation attempts have failed. The insured has fully complied with all of the policy terms. The liability of the insured is involved.
The insured has fully complied with all of the policy terms.
According to Part D—Coverage for Damage to Your Auto of a Personal Auto Policy (PAP), the insurer's limit of liability for a physical damage loss to a covered auto is The estimated value as established by at least two auto appraisers. The "blue book" value of the vehicle, taking into consideration the odometer reading and the vehicle condition. The lower of the actual cash value or the amount necessary to repair or replace the property with other property of like kind and quality. The lower of the cost to repair the vehicle or the total loss value.
The lower of the actual cash value or the amount necessary to repair or replace the property with other property of like kind and quality.
All of the following are included as insureds under the Section II—Liability Coverages of a homeowners policy, EXCEPT: Select one: The named insured's 17-year-old foster child The named insured's grandmother who lives with her The named insured's separated spouse who resides and works in another state The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care
The named insured's separated spouse who resides and works in another state
Under the cancellation condition in the HO-3 policy, Select one: Either the policyholder or the insurer can cancel the policy for any reason. The policy can only be cancelled by mutual consent of the insured and the insurer. Neither the policyholder nor the insurer can cancel the policy during the policy term. The policyholder may cancel the policy for any reason but the insurer can cancel the policy only for certain reasons set forth in state regulations.
The policyholder may cancel the policy for any reason but the insurer can cancel the policy only for certain reasons set forth in state regulations.
One of the main factors used in developing a base premium for a homeowners policy is The construction date. A change in the deductible from $500. The effect of endorsements on the premium. The public protection class.
The public protection class.
Which one of the following is correct regarding the Transportation Network Driver Coverage (No Passenger) endorsement and the Limited Transportation Network Driver Coverage (No Passenger) Endorsement to the personal auto policy? They cost the same amount of additional premium. They both exclude coverage when a passenger is occupying the vehicle. They both end coverage when an insured accepts a passenger's request. They both provide coverage until a passenger enters the vehicle.
They both exclude coverage when a passenger is occupying the vehicle.
Mr. Arthur was pulling out of his driveway when a driver came speeding around the curve. The other driver's skid marks revealed he was driving at least 15 mph over the speed limit. What is the most likely outcome in a state with contributory negligence? They will each pay for their own damages with no recovery by the other party. Mr. Arthur will have all of his damages paid for by the other driver. They will each pay 50% of the other's damages. The other driver will have all of his damages paid for by Mr. Arthur.
They will each pay for their own damages with no recovery by the other party.
Jack and Linda are meeting with their insurance agent to review their homeowners and auto policies. The agent has suggested that they add an umbrella policy. Which one of the following is the best reason the agent will likely provide for purchasing this coverage? To offset the deductibles on their other policies To provide an increased limits policy with no exclusions To avoid any retained limits for the broader coverage To provide increased limits for large jury awards
To provide increased limits for large jury awards
Mary is a transportation network driver. The transportation network company (TNC) she drives for provides a commercial policy that begins when a passenger enters Mary's personal auto. Based on this, which one of the following should Mary add to her personal auto policy (PAP)? Transportation Network Platform Definition Endorsement Public or Livery Conveyance Exclusion Endorsement Limited Transportation Network Driver Coverage (No Passenger) Endorsement Transportation Network Driver Coverage (No Passenger) endorsement
Transportation Network Driver Coverage (No Passenger) endorsement
A company that uses a mobile application or website to connect riders with drivers and arrange transportation in a personal auto for a fee is called a Livery conveyance. Transportation network company. Personal auto company. Limited transportation network.
Transportation network company.
The Public or Livery Conveyance Exclusion Endorsement is designed to be attached to all personal auto policies (PAPs) And applies to only Part A—Liability Coverage. With insureds who are drivers for a transportation network company (TNC) but not to PAPs with insureds who are not TNC drivers. Unless one of the Insurance Services Office, Inc. (ISO) transportation network driver endorsements is attached. In combination with the Transportation Network Driver Coverage (No Passenger) Endorsement.
Unless one of the Insurance Services Office, Inc. (ISO) transportation network driver endorsements is attached.
The HO-3 policy excludes coverage for liability assumed under contract or agreement. However, exceptions apply, provided the loss exposures do not involve coverage excluded elsewhere in the policy. Which one of the following describes an exception? Select one: Agreements intending to injure a third party Liability assumed after an accident occurs First-party liability Written contracts relating to the ownership of an insured location
Written contracts relating to the ownership of an insured location
Jeremy owns a home covered with an HO-5 policy. He left a window open one night before he went to sleep. It rained during the night and rain water damaged a sofa under the window. There was no other damage. Is the damage to the sofa a covered loss? Select one: No, because the HO-5 does not cover damage by rain through an open window unless the building itself is damaged. No, because it would not qualify as flood damage. Yes, because the HO-5 typically covers damage by rain through an open window even if the building itself is not damaged. Yes, because it would be considered flood damage.
Yes, because the HO-5 typically covers damage by rain through an open window even if the building itself is not damaged.
Marisa lives in a two-story rental apartment and she has an HO-4 policy. Because she needs a wheelchair to get around, she had special ramps installed over the steps between floors. If a fire destroys the ramps, are the ramps covered under her policy? Select one: Yes, because they are a building addition and alteration. No, because tenant-added fixtures are excluded. Yes, because the ordinance and law provision applies to the Americans with Disabilities Act. No, because she has no insurable interest in the apartment.
Yes, because they are a building addition and alteration.
Coverage F—Medical Payments to Others in the homeowners policy applies to bodily injury to a residence employee in all of the following situations, EXCEPT: Select one: The residence employee is on the insured location but is not working The residence employee is away from the insured location but is working The residence employee is away from the insured location and is not working The residence employee is on the insured location and is working
he residence employee is away from the insured location and is not working
The Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money Coverage—Increased Limit endorsement may be appropriate for Select one: Insureds who hold credit cards. Insureds who use automated teller machines. Insureds who pay their bills online. Insureds who tend to overspend because of credit availability.
insureds who hold credit cards.
