P&C Chapter 3 Quizzes
What type of coverage is Coverage E in homeowners policies? a. loss of use b. personal property c. personal liability d. additional coverage
(personal liability) Coverage E is personal liability coverage
a business using its own trucks to move its own cargo would insure the cargo using a. motor truck cargo - owners form b. motor carrier form c. trip transit coverage d. motor truck cargo - truckers form
a business using its own trucks to move its own cargo would insure the cargo using a motor truck cargo - owners form
a businessowners policy is a a. monoline policy b. self contained prepackaged policy c. special policy designed for large retail operations d. part of a commercial package policy
a businessowners policy is a self contained prepackaged policy and is similar in structure to the personal lines homeowners policy except it covers a business exposure for both property and liability losses
which of the following would not be considered part of the insured location under the liability section of a homeowners policy? a. a family cemetery plot b. a lakeside cabin rented by the insured for vacation c. vacant farmland owned by the insured d. a residence where an insured is temporarily residing
farm property specifically is excluded from coverage
Which of the following is covered under the Camera and Musical Instruments Dealers floater? a. a customer's camera left at a camera shop for repair b. a musical instrument sold and delivered to a customer c. furniture, fixtures and office supplies in a music store d. money kept on premises of a camera shop
covered property includes customers property left for repair, cleaning or service. for example, a customer's camera left at a camera shop for repair.
In a commercial policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer? a. beneficiary b. insurer c. first named insured d. last named insured
some commercial policies may have more than one named insured. complications and confusion over contractual duties are reduced by making the insurer and the first named insured the primary parties for carrying out responsibilities.
which of the following terms best describes a trembling or shaking of the earth that is volcanic or seismic in origin? a. geotectonic inversion b. tsunami c. tectonic shifting d. earthquake
earthquakes are excluded by most standard property forms, but coverage may be added by endorsement to most property policies. Coverage may also be written in a Difference in Conditions policy.
All of the following are other coverages included in both broad and special form dwelling except: a. lawns, trees, shrubs and plants b. theft of personal property c. breakage of glass d. lawns, trees, shrubs and plants
theft of personal property can only be included by endorsement
An insured is a member of the neighborhood association, and has become liable for damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay? a. nothing b. up to $1,000 c. up to $500 d. $2,000
up to $1,000
how long is the waiting period upon purchase of flood coverage through NFIP? a. no waiting period b. 10 days c. 30 days d. 60 days
upon purchase of a flood policy, a 30 day waiting period is in place from the time of application and premium payment
which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? a. prop of others b. manuscripts c. works of art or antiques d. valuable papers and records
valuable papers and records are valued at the cost of blank materials for reproducing the records and labor to copy the records
what is the limit for the forgery and alteration coverage in a BOP? a. $500 b. $2,500 c. $1,000 d. ???
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Who would participate in a Write Your Own (WYO) flood insurance program? a. government insurance companies that write and service NFI policies b. businesses requiring NFI policies c. private insurers that wish to write and service NFI policies on a no risk-bearing basis b. llyod's associations
A WYO program is made up of private insurers that write and service NFI policies on a no risk-bearing basis through a special arrangement with Federal Insurance Administration. WYO programs retain part of the flood insurance premium to pay for commissions and admin costs. the remaining premiums, plus investment, are used to cover losses.
during a shipment, a driver at a contract carrier company stops at a truck stop for lunch, and makes sure to lock the truck before leaving it in the parking lot. the truck is broken into and cargo is stolen. which of the following is true about who is liable: a. the contract carrier company has absolute liability for cargo in its possession b. the rest stop company is liable c. the contract carrier company is not liable because the driver took all necessary precautions to protect loss of cargo d. none of the above are true
A contract carrier company would not be legally liable for this loss. If the company had been a common carrier instead of a contract carrier, then it would have been legally liable
if an insured covered under a mobile homeowners policy moves the mobile home to protect it from a covered peril, the policy will pay up to a. $350 b. $1,000 c. $750 d. $500
a mobile homeowners policy will pay up to $500 if the insured moves MH to a safer area to protect it from a loss by a covered peril
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true? a. loss by theft is covered b. loss by VMM is excluded c. glass breakage as a result of vandalism is covered d. damage to glass building blocks is not covered
after a vacancy of 60 consecutive days vandalism and malicious mischief coverage is excluded under a dwelling policy.
which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? a. a mudflow b. overflow of inland or tidal waters c. unusual and rapid accumulation or runoff of surface waters from any source d. all of these
all of these (causes for flood conditions: -partial or complete inundation of two or more acres of usually dry land area or two or more properties from overflow of inland or tidal waters -unusual and rapid accumulation or runoff of surface waters from any source -mudflow)
which of the following would be covered by the broad theft endorsement on a dwelling policy? a. a pedigreed show dog b. an antique car c. a camera the insured brought with him on vacation d. fabric and patterns in a clothing designers studio at her home
all of these examples except the camera are types of property specifically excluded from coverage under the broad theft endorsement
which of the following losses would not be covered in an HO policy? a. $800 dollar outboard motor destroyed by hail b. $2,000 stolen silver tea set c. $550 utility trailer blown away by a tornado d. $500 coin collection lost in a fire
an HO policy will pay up to: $2,500 for silverware by theft $1,500 for boats, motors, trailers $1,500 for losses of trailers not used with boats $200 for coins
Which coverage form would provide coverage for all incoming and outgoing shipments? a. motor truck cargo b. trip transit c. annual transit d. mail coverage
annual transit policies provide coverage for a shipper's or receivers incoming and outgoing shipments during the year
Under the provisions of the business income coverage form, all of the following are true EXCEPT a. if the insured and insurer cannot come to an agreement as to the value of the loss, either party may make a written request for an appraisal b. the insured agrees to resume all or part of operations as quickly as possible c. the insured is reimbursed for payroll that continues after loss begins d. the insured is reimbursed for the loss from the date of loss to the date to the date of restoration or or policy expiration date, whichever comes first.
business income will pay beyond the expiration date of a policy. It will pay until the business is restored or the limits of coverage are exhausted.
what are common carriers required to issue to every shipper that it transports goods for? a. a common carrier cargo liability notice b. a uniform bill of lading c. a transit coverage form d. a motor truck cargo form
common carriers are required to issue a uniform bill of lading to every person (shipper) for which it transports goods
coverage territory of a BOP includes all of the following except: a. the US b. Mexico c. Canada d. Puerto Rico
coverage territory includes the US including its territories and possessions, Puerto Rico and Canada (so not Mexico)
the insured purchased a $200,000 extra expense policy. If the percentages applying to the limit of insurance are 40% 80% and 100%, what would be the maximum payable for a 47-day loss: a. $80,000 b. $120,000 c. $160,000 d. $200,000
extra expense coverage written w/ a min of 3 applicable percentages, 30 days or less, more than 30 but not more than 60, more than 60, the percentages apply respectively in this case the second percentage would apply because of the 47-day loss (80% of 200,000 is 160,000)
First aid costs for others injured on the insured's premises a. also cover injuries to the insured's family members b. are deducted from the liability limit c. are paid in addition to the liability limit d. apply only if the insured is legally liable
first aid costs for others apply even if you are not legally liable and are in addition to the stated limits, but do not apply to those regularly at the location.
an insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees? a. $75,000 b. $10,000 c. $60,000 d. $5,000
in broad and special forms, coverage b (other structures) is limited to 10% of coverage a. trees and shrubs are limited to no more than $500 for any one tree/plant and not to exceed 5% of coverage a. in this example 5% of coverage a is $5,000
which of the following is not true about earthquake coverage? a. coverage may be added to property policies by endorsements b. coverage may be written in a Difference of conditions policy c. coverage is commonly provided through a federally funded program d. coverage is excluded by most property forms
it is a peril excluded in most property forms. earthquake coverage may be added by endorsement on most prop policies or earthquake coverage may be written in a Difference of Conditions policy.
replacement cost coverage is provided in both broad and special forms when a. the amount of insurance on both the dwelling and pp is at least 80% of its replacement cost when the policy is written. b. the amount of insurance on the dwelling is at least 90% of its replacement cost when the policy is written c. the dwelling is insured for 100% of its replacement cost at the team of loss d. the amount of insurance on the dwelling is at least 80% of its replacement cost at the time of the loss
it is always a requirement on property forms that provide replacement cost coverage that insurance on the dwelling be at least 80% of its replacement cost at the time of the loss
The National Flood Insurance Program would insure an eligible single - family dwelling for up to a. $150,000 b. $250,000 c. $100,000 d. $200,000
it is written for the value of the dwelling up to $250,000 on a replacement cost basis
which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? a. truckers coverage form b. motor truck cargo policy - truckers form c. trip transit policy d. motor truck cargo policy - owners form
motor truck cargo policy - truckers form (motor truck cargo policy truckers form is a liability policy, owners form is property coverage, the truckers liability policy covers the carrier)
which of the following could be covered by an HO policy? a. sports car kept in an attached garage b. an oriental rug in an on-premises apartment c. birds, fish, animals d. property of a tenant not related to the insured
oriental rug in an on premises apartment
In which of the following situations would a jewlers block extension cover a loss? a. jeweler agrees to exhibit a necklace and earring set in a showcase off premises. case is broken into and set is stolen b. employee of jewelry store is wearing a brooch and ring set to display to customers. brooch falls off and employee can't find it c. jeweler fixes necklace, sends it back to owner by registered mail. necklace arrives damaged d. a jewelry store is robbed while displaying jewelry at a public exhibition
property in transit by registered mail is covered under jewelers block extension
if insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for_____ a. 3o days b. 60 days c. 90 days d. 5 days
personal property being moved to a new location can be covered for up to 30 days without notice to the insurer
All of the following are additional causes of loss covered in a broad form commercial prop policy EXCEPT: a. water damage b. replacement cost c. falling objects d. weight of ice snow or sleet
replacement cost (broad form causes of loss adds: falling objects, weight of ice snow or sleet, water damage, collapse, and breakage of glass to causes of loss already included in basic form)
a unique feature in a bailee form is that it covers a. all loss and has no exclusions b. the building occupied by the insured whether it is owned or leased c. customers' property whether or not the insured has been negligent d. fire and theft losses to the insured's stock held for sale without any deductibles
the bailee/customers form is liability coverage for the customers' property that the bailee has accepted into his care. negligence on the part of the bailee is not required for a loss to be covered.
when other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover a. all of the loss b. a share of the loss c. the loss on a primary basis d. the loss on an excess basis
the commercial property other provision states that the insurer will be responsible for only a proportional share of an insured loss when the insured also has other insurance written according to the terms and conditions
the commercial property declarations page contains which of the following information? a. cause of loss forms b. interline endorsements c. common policy conditions d. description of the property insured
the declarations page provides the info as to who what when where and how much, including descriptions of the property insured
an installation floater is used to insure a. all types of for sale merchandise b. dams, power plants, water plants, and other such installations c. appliances intended to become a permanent part of the building d. buildings under construction
the installation floater covers the interest of the owner, seller, or contractor of refrigeration systems, elevators, or other pieces of equipment and appliances intended to become a permanent part of the building on a location awaiting or in the process of being installed or tested
under a BOP, the insured can cancel the policy: a. at any time with 10 days advance written notice b. only after policy has been in force for 120 days c. only at renewal d. at any time via written request for cancellation
the insured may cancel the policy at any time by written request for cancellation
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? -$180,000 -$200,000 -$100,000 -$175,000
the limit of the equipment breakdown policy applies to property of the insured, property of others, and expediting expenses in any combination as long as the expediting expenses do not exceed $25,000
what is the max amount an insurer will pay under the equipment dealers pollution cleanup and removal extension added tp an inland marine policy? a. $5,000 for all expenses incurred during a 12-month period b. $10,000 for all expenses incurred during a 12-month period c. $15,000 for all expenses incurred during a 12-month period d. $20,000 for all expenses incurred during a 12-month period
the maximum amount and insurer will pay under the equipment dealers pollution cleanup and removal extension added tp an inland marine policy is $10,000 for all expenses incurred during a 12-month period
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value? a. they qualify for maximum compensation under the flood insurance program b. the are excluded from the flood insurance policy c. they are subject to a $1,000 d. they are automatically provided with replacement cost coverage
they are automatically provided with replacement cost coverage (single family dwellings are automatically provided with replacement cost coverage if insured to at least 80% of the replacement value or the max allowed under the flood insurance program)
the Physicians and Surgeons Equipment Floater is not intended for which of the following a. surgeon's supplies located in surgeons office b. waiting room furniture c. medical supplies located in a hospital d. office equipment at a dentist's office
this coverage form protects individuals in the medical or dental profession for loss to valuable medical and dental equipment, materials and supplies, including office furniture, and similar property of others. Coverage is not intended for hospitals, schools, or other institutions