FINN 3271 - Exam 2

The boat house at the Arthur's beach house is insured under Homeowners coverage: A (dwelling) B (other structures) C (pers. property) D (loss of use)

Other Structures

The swimming pool at the Arthur's residence is insured under Homeowners coverage: A (dwelling) B (other structures) C (pers. property) D (loss of use)

Other Structures

Which policyholder needs Loss Assessment coverage? Owner of a single family home Owner of a secondary home Owner of a condominium Apartment tenant

Owner of a Condominium

Which policyholder needs more than 10% coverage A for Ordinance or Law Coverage? Owner of a home built in 2010 Owner of a home built in 1955 Apartment tenant Owner of a new condo

Owner of a home built in 1955

Current tort reform proposals include all of the following except: Modifying Collateral Source Rule Alternative Dispute Resolution Allowing Joint and Several Capping Damages for Pain & Suffering

Allowing Joint and Several

Will Jim's Homeowners Policy Provide Liability Coverage for Fire Damage to the Apartment Building? Yes No

Yes

Stephen sustains hail damage to his roof. The cost to replace the roof is $25,000. Stephen has replacement cost coverage on the home with a $1,000 deductible. The home is insured at 90% of current replacement cost. After application of the deductible, what is the net amount that Stephen will collect for the roof replacement? $25,000 $24,000 $20,000 $19,000

$24,000

$300,000 home value, 80% coins, $240,000 policy amount, $250,000 loss. What amount paid? $250,000 $245,000 $240,000 $200,000

$240,000

Insurance is $168,000; Current RC is $350,000. What will the insurance company pay for the $50,000 fire loss? 80% coins and $500 deductible. $19,500 $23,500 $29,500 $49,500

$29,500

$350,000 home, $75,000 damage. $1,000 flat and 2% named storm ded. What is the deductible amount for Rita damage? $1,000 $1,500 $5,000 $7,000

$7,000

In a contributory negligence State, what will Matthew collect? 20,000 30,000 50,000 0

0

Matthew was involved in an auto accident and the jury determined that Matthew was 40% at fault and the other party was 60% at faulty. Matthew's damages were $50,000. In a comparative negligence state, what will Matthew collect? 20,000 30,000 50,000 0

30,000

The current replacement value of the primary home is $582,000. The market value is $505,991. What coverage A amount should be recommended? 582,000 524,000 506,000 466,000

582,000

Amanda's Beach House, $400,000 RC; $288,000 Insurance; $100,000 Loss; 2% deductible 88,000 84,240 66,240 64,000

84,240

All of the following are elements of negligence except: Damages or injury to claimant Failure to perform a legal duty Ability to pay damages Negligent act is proximate cause of damages

Ability to pay Damages

The valuation of the Arthur's homes for HO insurance should be based on: Original construction cost Current Repair Cost Current Market value Actual Cash Value

Current Rep. Cost

A property owner has the duty to warn, inspect for and eliminate property defects in the case of: Trespassers Customers Social guests All of the above

Customers

The garage at the Arthur's primary residence is insured under Homeowners coverage : A (dwelling) B (other structures) C (pers. property) D (loss of use)

Dwelling

The Arthur's primary home was built in 1995 with a RC value in 1998 of $381,961. The 2014 market value is $505,991. What homeowners form do you recommend to insure this home? HO 2 HO 3 HE 7 HO 8

HE 7

The Arthur's beach house was built in 2004 at a cost of $229,600. 2013 market value is $255,000. What HO form do you recommend, subject to Insurance Company approval? HO 2 HO 3 HE 7 HO 8

HO 3

A problem with the U.S. tort liability system is: Injured party can not collect for pain & suffering Injured party can not collect for loss of income Insurance does not pay for policyholder's negligence High expense of judicial system

High Expense of Judicial system

Richard purchases a home for $300,000 ($250,000 dwelling and $50,000 lot) and borrows $225,000 from Fidelity Bank to finance the purchase Richard insures the home under Homeowners policy for $250,000 with a mortgage clause to Fidelity Bank Richard develops financial problems and hires someone to burn the house down How will the loss be settled? Richard's home is a total loss from arson. Amount of insurance on the home is $250,000 with mortgage clause. Mortgage is $225,000

Insurance Company Pays 0 to Richard and $225,000 to the bank

Which of the Following is Covered under the HO? -Insured conducts quarterly trunk shows for women's sportswear in her home. -Insured is a financial analyst and uses one room in his home as an office. -Insured babysits her grandchild three days a week -Insured is a residential contractor and works from home

Insured babysits her grandchild three days a week

ATV - Covered Under Homeowners Off Residence Premises Yes No

No

Do Jimmy's roommates have any coverage under the homeowner policy of Jimmy's parents? Yes No

No

Drunk driver runs red light and hits Kristen's car, causing $9,000 damage. Kristen has collision coverage with a $500 deductible If Kristen recovers collision damage from her insurance company, may she also file a property damage claim against the negligent driver? Yes No

No

Jerry and Lois Gower own and operate Gower Painting Company They have an office in their home and keep paint supplies in an out building on their premises Jerry left a ladder standing against a house that he was painting. While Jerry is at lunch, the ladder falls and injures a neighbor visiting the premises Will Jerry's Homeowner Policy Provide Coverage? Yes No

No

Jet Ski Covered? Yes No

No

Will the jewelry ($8,000) and silver ($5,500) be covered for the full value under blanket personal property of the Homeowners in the event of theft? Yes No

No

In SC (comparative negligence state), Ed's potential recovery would be: $0 Percentage of damages Full recovery

Percentage of Damages

The Arthur's own silver, jewelry, and watercraft exceeding the special PP limits. What form can be used to insure these items to full value? Blanket Personal Property Personal Articles Floater Personal Property Replacement Cost Endorsement Broad Form Property Damage Endorsement

Personal Articles Floater

Which is most dangerous? Doberman Pit Bull Rottweiler Chow Chow

Pit Bull

Matthew needs knee surgery on his right knee to correct cartilage damage Dr. Jones, an orthopedic surgeon, performs the knee surgery When Matthew wakes up from the surgery, he finds both knees are bandaged Dr. Jones will probably be liable for injury to Matthew based on: Assumption of risk Last clear chance Res Ipsa Loquitur Contributory negligence

Res Ipsa Loquitur

Jim purchased a building from Richard in December 2016. Jim obtained a loan from Gateway Bank to purchase the building, and Gateway Bank has a mortgage on the building. Jim leased the building to Providence Café. Which of these parties has no insurable interest in the building in 2017? Jim, Richard, Gateway Bank, Providence Cafe

Richard

Which motorized vehicle would be covered under the Homeowners policy? Honda ATV Riding lawnmower Moped Motorized scooter

Riding Lawnmower

When two securities are perfectly negatively correlated, A risk-free asset must exist. Yes No

Yes

Does Port Authority have insurable interest on 9-11-2001? Yes No

Yes

Emily is a sales representative for Parkway Distributors,Inc. a wholesale firm. Emily was involved in an accident while she was driving her personal car to a sales call. Can Parkway Distributors, Inc. be held liable for injury to others caused by Emily's negligence? Yes No

Yes

In NC. would Michael be able to use contributory negligence as a defense? Yes No

Yes

Jimmy is an 18 year old freshman at UNC Charlotte and rents an apartment with two friends. Jimmy's parents live in Columbia, SC. Is Jimmy insured under his parent's homeowners policy? Yes No

Yes

Martha rents a snowmobile at a ski resort and accidentally collides with a skier. Marth is sued for $200,000 by the insured Will Martha's Homeowners Provide Coverage? Yes No

Yes

Michael and Ed are deer hunting Michael sees bush movement and fires his rifle, hitting and injuring Ed Is Michael Guilty of Negligence? Yes No

Yes

Ron and Linda Arthur own jewelry items valued at $8,000 and silverware valued at $5,500 Will the jewelry ($8,000) and silver ($5,500) be covered for the full value under blanket personal property of the Homeowners in the event of fire? Yes No

Yes

Smith Construction is building a residence Smith Construction leaves a tractor on the premises over night Fred, age 10, is playing on the tractor and releases the brake. The tractor rolls down hill, and Fred is injured Is Smith Construction liable for injury to Fred? Yes No

Yes

Sunfish Sailboat Covered? Yes No

Yes

The Johnson family decides to rent their SE Charlotte home for two weeks during the Democratic National convention Does the HO policy provide liability coverage for rental during the DNC? Yes No

Yes

Tom is late for class. He is running from East Parking to the Friday Building and runs across the street at the cross-walk even though the pedestrian light is red. Jessica sees Tom and has time to stop but fails to do so because she has a green light. In a contributory negligence state, can Tom collect from Jessica for damages related to his injury Yes No

Yes