HOMEOWNERS INSURANCE Q'S
Who would use a HO-6 homeowners form? A) Owner of a duplex. B) Tenant of a rental house. C) Owner of a condominium. D) Owner of a rental house.
C) Owner of a condominium. Most of the homeowners forms were created for owner-occupants of dwellings. Typically, neither tenants nor condominium owners own the entirety of the dwellings they occupy, so other policy forms had to be designed for them. For tenants, the HO-4 is available, and for condominium owners, HO-6 form is used.
Under the HO-6, the loss assessment additional coverage would apply to assessments made by a.) A corporation of property owners and a homeowners association b.) A homeowners association c.) A corporation of property owners d.) a government body
a.) A corporation of property owners and a homeowners association Loss Assessments pays up to $1,000 for the insured's share of loss assessment charged against the insured by a corporation or association of property owners.
Which of the following could be insured under Coverage B of a homeowners policy? a.) A detached garage rented to a neighbor to store his sports car during the winters b.) A detached garage rented to a friend to change the oil of the neighbors at a discounted price c.) A garage next to the house with only the roof connecting the two d.) A detached garage with a second floor room rented by a travel agent...
a.) A detached garage rented to a neighbor to store his sports car during the winters Coverage B - Other structures covers structures on the premises set apart from the dwelling by clear space, such as detached garage. The policy does not cover other structures rented to others for other than use as a private garage.
Which of the following coverages in the homeowners policy is used to protect Sam when a friend files suit after falling down basement stairs that Sam is repairing? a.) Coverage E - Personal Liability b.) Coverage A - Dwelling c.) Coverage D - Loss of Use d.) Coverage F - Medical Payments
a.) Coverage E - Personal Liability Coverage E - Personal Liability provides coverage to the insured if a claim is made or a suit is brought against the insured for damages because of bodily injury to property damage to others. Coverage E requires that Sam's negligence be the cause of the accident.
In homeowners policies, what does Coverage A insure? a.) Dwelling b.) Extra expenses c.) Other structures d.) Personal property
a.) Dwelling Coverage A provides dwelling coverage, Coverage B covers other structures, Coverage C insures personal property, and Coverage D covers loss of use.
Which of the following items could be insured under Coverage C of a homeowners policy? a.) Personal property usually located in a secondary residence b.) Exotic birds c.) Motorized go-kart d.) Snowmobile
a.) Personal property usually located in a secondary residence Coverage C covers personal property under a homeowners policy.
An insured has a homeowners policy for $60,000 on the dwelling. Lightning completely destroys the home, which has a replacement cost of $40,000. How much will the insured recieve? a.) $20,000 b.) $40,000 c.) $60,000 d.) $6,000
b.) $40,000
Vandalism or malicious mischief losses to property on the residence premises are not covered if the dwelling has been vacant for a.) 10 or more consecutive days b.) 60 or more consecutive days c.) 100 or more consecutive days d.) 25 or more consecutive days
b.) 60 or more consecutive days Vandalism and malicious mischief is a basic named peril and is not covered if the property is vacant for 60 or more consecutive days.
With a few exceptions, most personal lines insurance policies excludes losses arising out of all of the following EXCEPT a.) rendering of professional services b.) personal activities conducted away from the insured premises c.) work-related injuries d.) business activities
b.) personal activities conducted away from the insured premises Although there are limited exceptions, such as certain permitted incidental occupancies, personal lines policies typically exclude losses related to business activities, professional services, and work related injuries.
Trees, shrubs, and other plants are covered as additional coverages for coverages A - The coverage is limited to certain perils, however. All of the following perils are covered when damage to a tree or shrub EXCEPT a.) explosion b.) wind c.) riot d.) theft
b.) wind The insurer will cover trees, shrubs, plants or lawns at a residence premises for loss caused by fire, lightning, explosion, riot, civil commotion, aircraft, nonowned vehicles, vandalism & malicious mischief and theft. Wind, a common peril causing damage to trees is not covered.
Under Coverage C - Personal Property, the homeowners policy (HO-3) covers property owned or used by an insured. When jewelry valued at $5,000 is stolen from the residence, the policy will pay a.) $5,000 b.) $1,000 c.) $1,500 d.) $0
c.) $1,500 The HO-3 insuring agreement contains the obligation of the insurer to pay covered claims, subject to specified conditions & exclusions. Under the special limits of liability sections, the policy limits loss by theft of jewelry, watches, furs, & precious & semiprecious stones of $1,500. If the insured needs additional coverage, the property may be scheduled, and an additional premium will be charged.
Which one of the following homeowners forms is used to cover tenants or renters? a,) HO-2 b.) HO-5 c.) HO-6 d.) HO-4
d.) HO-4 The HO-4 is the coverage from for tenants or renters. The HO-2 Broad Form is for homeowners insurance. The HO-6 provides coverage for condominium/townhome owners. The HO-5 is the Comprehensive Form.
Which of the following unendorsed policies provides open perils coverage on Coverage C- Personal Property? a.) HO-8 b.) HO-3 c.) HO-2 d.) HO-5
d.) HO-5 The comprehensive HO-5 policy is an open perils contract on personal property. Dwelling and other structures are also covered on an open perils basis. Open perils coverage provides coverage for all risks except those specifically excluded in the contract.
Robert wants open perils coverage on his dwelling and named perils coverage for his personal property. Which homeowners form should he choose? A) HO-6. B) HO-3. C) HO-2. D) HO-4.
B) HO-3. The homeowners HO-3 Special Form provides open perils coverage on the dwelling and named perils coverage on personal property. HO-2 is the Broad Form and HO-6 is the Condominium Owners Form.
Joan is a music teacher who teaches piano to 20 students who come to her home for weekly lessons. Which endorsement does Joan need to add to her homeowners policy to make sure she is covered if a student is injured on her property? A) Personal liability. B) Permitted incidental occupancies. C) Business pursuits. D) Personal injury.
B) Permitted incidental occupancies. The permitted incidental occupancy endorsement deletes exclusions in the policy pertaining to a business conducted on the resident premises.
Adding the personal injury endorsement to the homeowners policy protects the insured against all of the following EXCEPT: A) invasion of privacy. B) contractual liability. C) libel. D) slander.
B) contractual liability. The personal injury endorsement can be added to the homeowners policy to protect the insured from injuries to others caused by libel, slander, or invasion of privacy. The endorsement specifically excludes some injuries such as contractual liability and injuries caused by a violation of criminal law.
John's dog bites a friend who is visiting John's house. Which part of John's homeowners policy, if any, would cover the visitor's ensuing medical expenses? A) Coverage F only. B) This loss is excluded because it was caused by an animal owned by the insured. C) Either Coverage E or Coverage F. D) Coverage E only.
C) Either Coverage E or Coverage F. This loss could be covered under Coverage E if John is determined to be legally liable for the loss, or Coverage F. Loss caused by an animal owned by the insured is not excluded under Coverage E or Coverage F.
Frank's house has a replacement cost of $250,000. His HO-3 policy has a Coverage A limit of $180,000 and a $500 deductible. A fire causes a loss of $10,000. What is the most Frank can collect for his loss? A) $7,200 B) $9,000 C) $10,000 D) $8,500
D) $8,500 $200,000 X $10,000 = $9,000-$500 = $8,500
For a homeowners policy, which one of the following statements about insuring personal property normally kept at a residence other than the residence premises is CORRECT? A) It is not covered when located off the residence premises. B) It is covered for the full limit worldwide, whether on or off premises. C) It is covered only if the insured has paid an additional premium. D) It is covered for up to 10% of the coverage C limit.
D) It is covered for up to 10% of the coverage C limit. Unscheduled personal property kept at a location other than the main residence is covered up to a limit of 10% of the Coverage C limit. Personal property on the described premises is always covered.
After a fire damages a home, how much is the insured entitled to recover for buying materials to board up the windows under the homeowners policy? A) 5% of the Coverage A limit. B) $500.00 C) No coverage is available. D) Whatever it will reasonably cost.
D) Whatever it will reasonably cost. The additional coverage of reasonable repairs will pay the reasonable costs incurred by the insured for necessary repairs made solely to protect covered property from further damage.
Which one of the following is NOT an additional coverage found in homeowners policies? a.) Loss assessment b.) Market valuation c.) Debris removal d.) Fire department service charge
b.) Market valuation Debris removal, fire department service charges, and loss assessment costs are all additional coverages in the homeowners policies.
Which of the following is NOT a peril covered under the personal property coverage in the HO-3 - Special Form? a.) Hail b.) Water damage c.) Malicious Mischief d.) Freezing
b.) Water damage Water damage is specifically excluded. This includes for example, damage caused by flood, tidal water, water that backs up through sewers or water discharge from a sump pump.
An insured owns a personal auto policy and a homeowners policy. He purchases a new TV and puts it in the trunk of his car. On the way home he hits another car, and the crash totally destroys the TV. The damage to the TV is covered by which insurance policy? a.) Medical expense b.) Auto c.) Umbrella d.) Homeowners
d.) Homeowners Under homeowners policies, Coverage C - Personal Property covers all personal property of the insured, including TVs.
Which one of the following is NOT an appurtenant structure for purposes of a homeowners policy? a.) Storage Shed b.) Swimming pool c.) Fence d.) Tree
d.) Tree Appurtenant structures, for purposes of a homeowners policy, are any structures that are set apart from the dwelling by the clear space.
All of the following additional coverages are included in homeowners forms EXCEPT a.) debris removal b.) reasonable repairs c.) property removed d.) pollution removal
d.) pollution removal Additional coverages found in all homeowners forms include debris removal; reasonable repairs; trees, shrubs, and other plants; fire department service charge; And property removed as well as others.
Which one of the following statements regarding liability coverage is CORRECT? a.) It is added by endorsement to the dwelling policy, but automatically included in the homeowners policy. b.) It is added by endorsement to the homeowners policy. c.) It is added by endorsement to both the dwelling and homeowners policies. d.) It is automatically included in both the dwelling & homeowners policies.
a.) It is added by endorsement to the dwelling policy, but automatically included in the homeowners policy.
Which of the following individuals is NOT an insured under Section 1 of the homeowners policies? a.) Person hired by the insured to perform work on the insured premises b.) The spouse of the named insured c.) Resident relative of the insured d.) Person younger than 21 who is in the care of the named insured
a.) Person hired by the insured to perform work on the insured premises The definition of who is an insured under homeowners policies, while quite broad, is not all-inclusive and would not be extended to include people hired by the insured to perform work on the insured's premises.
Which of the following classes of property are NOT specifically excluded from Coverage C - personal property? a.) Property away from the residence b.) Animals, birds, or fish c.) Credit Cards d.) Property rented to others off of the residence premises
a.) Property away from the residence Property away from the residence premises shown in the declarations is covered for up to 10% of the Coverage C limit or $1,000, whichever is greater. This is worldwide coverage.
Which homeowners endorsement is used to insure high-value items of personal property? a.) Scheduled personal property b.) Personal property replacement cost c.) Personal effects d.) Business pursuits
a.) Scheduled personal property The scheduled personal property endorsement provides a separate schedule of insurance for 1 or more of 9 categories of valuable property.
Which of the following is NOT a factor in determining eligibility for coverage under a particular homeowners form? a.) Square footage b.) Occupancy c.) Intended use d.) Dwelling type
a.) Square footage Dwelling type, intended use, and occupancy are used to determine eligibility for coverage under each homeowners form.
Which of the following perils is excluded in the HO-2 broad form? a.) Accidental discharge of water from an appliance b.) Escape of pollutants that results from any cause of loss c.) Damage to the dwelling caused by a vehicle operated by a nonresident of the household d.) Loss caused by fireplace smoke
b.) Escape of pollutants that results from any cause of loss All homeowners forms cover losses caused by the escape of pollutants only if a result of a broad form named-peril cause of loss, not ANY cause of loss.
Which one of the following is NOT an exclusion found in Section 1 of the homeowners policy? a.) Earth movement such as earthquake, mudflow, & landslide b.) Failure of the insured to care for the property before the loss c.) Power failure occurring away from the insured's premises d.) Water damage from flood or surface water
b.) Failure of the insured to care for the property before the loss Earth movement, water damage, & power failure are all standard exclusions in the homeowners forms. Neglect of the insured to care for the property may be a hazard, but it is not an excluded cause of loss.
Which one of the following homeowners forms provides open peril coverages? a.) HO-4 b.) HO-3 c.) HO-8 d.) HO-2
b.) HO-3 The HO-2, HO-4 & HO-8 are all named peril policies. HO-3 provide open perils coverage on the dwelling (Coverage A) and named perils coverage on personal property.
Which homeowners policy would be written to cover personal property only? a.) HO-5 b.) HO-4 c.) HO-3 d.) HO-2
b.) HO-4 The HO-2, HO-3, & HO-5 all provide coverage on both the dwelling and personal property. HO-4 (referred to as the Tenant or Renters Form) dose not provide coverage on the dwelling because the insured does not own it.
Coverage D in homeowners insurance is for what type of loss? a.) Dwelling b.) Loss of use c.) Personal liability d.) Personal property
b.) Loss of use The 6 insuring agreements in the homeowners forms are Coverage A - Dwelling; Coverage B - Other Structures; Coverage C - Personal Property; Coverage D - Loss of Use; Coverage E - Personal Liability; and Coverage F - Medical Payments.
Doug, who is 7 years old, accidently throws a baseball through the neighbor's kitchen window. Which part of the homeowners policy will pay for the damages to the window? a.) Part F b.) Part B c.) Part E d.) Part D
c.) Part E Coverage E - Personal Liability covers property damages that the insured is legally obligated to pay.
Which of the following HO-3 endorsements will change coverage on specifically identified personal property from named peril to open peril? a.) Increased limit on personal property b.) Special personal property c.) Scheduled personal property d.) Personal property replacement cost
c.) Scheduled personal property The scheduled personal property endorsement allows the insured to separately schedule one or more of these major categories of property: jewelry, furs, cameras, musical instruments,..... The coverage is provided on an open peril basis with no deductible, even if the endorsement is attached to a named perils homeowners policy.
Losses to the dwelling and other structures are paid at replacement cost as long as the insured carries an amount of insurance equal to or greater than a.) 80% of the buildings actual cash value b.) 50% of the buildings replacement cost c.) 20% of the buildings replacement cost d.) 80% of the buildings replacement cost
d.) 80% of the buildings replacement cost To be paid for replacement, the insured must agree to replace the damaged property. Otherwise, the insured will be paid actual cash value.
Mary's purse was stolen from her as she walked down the sidewalk. She has an HO-2 policy. Will Mary's policy cover this loss subject to the deductible? a.) Yes - if Mary has added the scheduled personal property endorsement to her policy. b.) No - the loss occurred away from the insured premises c.) No - theft is not a covered peril in the HO-2. d.) Yes - theft is a covered peril under all of the homeowners forms.
d.) Yes - theft is a covered peril under all of the homeowners forms. The peril of theft is automatically included in all homeowners policies, whether theft occurs on the insured's premises or not.
Bill and Marge suffer the following losses as the result of a severe storm: $3,900 wind damage to their roof; $1,000 loss of income because a boarder in their house had to move; $1,250 in repair costs to prevent further loss to covered property; and $500 in medical expenses when Marge was hit by part of the falling roof. How much will their HO-3 policy pay for these losses? Assume all losses are within the applicable policy limit and ignore any deductible that may apply. A) $6,150 B) $6,650 C) $5,150 D) $3,900
A) $6,150 All of the losses are covered except for the medical expenses.
Max and Sam are neighbors who get into an argument over the placement of their common property line. The argument becomes a fight in which Sam's nose is broken. Sam sues Max for his medical expenses. How will Max's homeowners policy respond to this loss? A) The insurer will deny the claim because of the intentional injury exclusion. B) It will pay Sam's medical bills under Part F--Medical Payments to Others. C) It will pay Sam's medical bills under Part E--Personal Liability. D) It will pay Sam's medical bills under the first aid expenses additional coverage.
A) The insurer will deny the claim because of the intentional injury exclusion. Loss arising out of acts the insured expects or intends is excluded under both Coverage E & Coverage F.
For personal property coverage, who is NOT insured by a homeowners policy? A) A live-in housekeeper requested by the named insured. B) A nonresident uncle. C) The named insured. D) A 20 year-old resident.
B) A nonresident uncle. A homeowners policy issuers the personal property of the named insured, all relatives of the named insured who live in the same household, and any other residents who are under the age of 21 and in the care of any member of the insured's family. On request of the named insured, the personal property of guests or a residence employee may be covered.
Jim and his family are considering a move to the West Coast but are very concerned about earthquakes. Jim called an insurance agent for advice. What is the best advice the agent could give Jim about adequately covering his new home for possible earthquake damage? A) A separate earthquake policy should be purchased to provide full coverage for earth movement. B) Adding the earthquake endorsement will provide the coverage needed. C) The homeowners policy automatically provides earthquake coverage. D) A state insurance fund will cover any damage that occurs.
B) Adding the earthquake endorsement will provide the coverage needed. The basic homeowners policy specifically excludes earthquakes, including the land shock waves or earth movement caused by a volcanic eruption; landslides; mine subsidence; mudflow; and earth sinking, rising, or shifting. The earthquake endorsement must be added to the homeowners policy to provide coverage for damage caused by earth movement.
Bart keeps a dog that is known in the neighborhood to be vicious. One day the dog attacks a neighbor while she is working in her own yard. The court orders that the animal be put to sleep. Bart's homeowners policy will cover all of the following expenses related to this incident EXCEPT: A) damage to the neighbor's yard. B) cost to have the dog put to sleep. C) the neighbor's medical expenses. D) damage to the neighbor's clothing.
B) cost to have the dog put to sleep. The neighbor's medical expenses and property damage losses would be covered by Section II of Bart's homeowners policy. There is no provision in the policy for covering expenses incurred wile complying with a court order that is the result of a claim.
Bill and Marge have a HO-2 policy insuring their main residence for $150,000. How much coverage do they have for personal property kept at their summer cottage? A) $15,000.00 B) $30,000.00 C) $75,000.00 D) $7,500.00
D) $7,500.00 The HO-2 policy provides an additional 50% of the amount of coverage on the dwelling for loss of personal property, but only 10% of the personal property limit can be applied to property not located at the insured's primary residence.
Sandy and Stewart had a fire loss, and the insurance company reimbursed them for their damaged personal property. They believed that they did not get enough for this property because the settlement was based on actual cash value. Which endorsement would have provided a better loss settlement? A) Special limits of liability. B) Scheduled personal property endorsement. C) Coverage C--Personal property increased limits. D) Personal property replacement cost endorsement.
D) Personal property replacement cost endorsement. The personal property replacement cost endorsement modifies the basis of loss settlement from actual cash value to replacement cost. Payment at the time of loss will be no greater than the replacement cost, the limit of Coverage C, or any other special limits of liability stated in the policy.
Stephanie is an agent in a local insurance agency. While visiting a client in his home, Stephanie accidentally leaves a coffee cup on an antique coffee table, damaging the wood surface. She asks her sales manager whether she has coverage under her homeowners policy. Which of the following is the best advice given to Stephanie? A) Your homeowners policy provides coverage for this exposure. B) The personal injury endorsement should be added to your policy to provide coverage for injury or damage you may cause to a client. C) You need to buy a commercial liability policy. D) The business pursuits endorsement should be added to your homeowners policy to protect you if you personally damage property while conducting business.
D) The business pursuits endorsement should be added to your homeowners policy to protect you if you personally damage property while conducting business. The business pursuits endorsement provides homeowners liability coverage for personal damage or injury caused while conducting business as a salesperson working for a company. The basic homeowners policy does not provide this coverage automatically.
Four separate property coverages are provided by the homeowners policy under Section !. Coverage A covers a.) dwelling and structures attached to the dwelling. b.) other structures c.) personal property d.) loss of use
a.) dwelling and structures attached to the dwelling.
All of the following are homeowners Section II additional coverages EXCEPT a.) first aid provided to the insured b.) first aid provided by the insured c.) claim expenses d.) damage to property of others
a.) first aid provided to the insured Section II provides coverage to third parties. First aid provided to the insured is not covered because the insured is not a third party.
Which of the following is NOT an eligibility requirement for a homeowners policy? a.) No more than 4 families occupy the home b.) Named insured lives on a farm c.) Dwelling is a seasonal residence d.) Named insured is the owner-occupied
b.) Named insured lives on a farm Farms are not covered under homeowners policies. They have their own specific farm policy. A homeowners policy requires that the named insured is the owner-occupant and there are no more than 4 families in the home. A seasonal residence may also be covered under a homeowners policy.
The Broad Form/HO-2 policy provides which type of coverage? a.) Open perils coverage for dwelling coverage only b.) Named perils coverage for dwelling & personal property coverage c.) Named perils coverage for personal property coverage, and open perils coverage for dwelling coverage d.) Open perils coverage for dwelling & personal property coverage
b.) Named perils coverage for dwelling & personal property coverage The HO-2 policy provides property coverage for both dwelling and personal property on a named-peril basis. Perils covered include fire; lightning; removal; glass breakage; extended coverages; theft; falling objects; weight of ice, snow, and sleet; accidental discharge of heating or cooling systems; freezing of plumbing systems or appliances; and bulging and cracking of steam or hot water heating systems.
George just returned from Europe with a beautiful Swiss watch valued at $10,000. He is concerned that his homeowners policy will not provide enough coverage. His insurance agent suggests that he add which endorsement to adequately cover his watch? a.) Coverage C - Personal Property b.) Scheduled personal property endorsement c.) Special property limits d.) Personal property replacement cost endorsement
b.) Scheduled personal property endorsement The scheduled personal property endorsement provides coverage for specific items of property, such as watches, that exceeds the internal limit of the policy. Loss settlement is based on the actual cash value up to the amount listed on the endorsement.
If the shrubs in front of a house burn when the house catches fire, how much is the insured entitled to recover for the shrubs under his HO-3? a.) Policy Limit b.) Replacement cost c.) 5% of the limit on Coverage A with a maximum of $500 for any 1 shrub d.) $500
c.) 5% of the limit on Coverage A with a maximum of $500 for any 1 shrub For all forms except the HO-4 & HO-6, trees, shrubs, and other plants are covered to 5% of the limit on Coverage A. There is a maximum limit of $500 for any 1 tree, shrub or plant. In the HO-4 & HO-6, the limit is 10% of the Coverage C limit or a maximum of $500 for 1 tree, shrub or plant.
Which of the following would NOT be covered by Coverage A in the HO-6? a.) Hardwood floors the insured has installed in her condo b.) Track lighting the insured has installed in her condo c.) A garage-like building the condominium complex provides for common storage, in which the insured keeps the family's bicycles d.) A freestanding storage building the insured has placed inside the fence surrounding his patio
c.) A garage-like building the condominium complex provides for common storage, in which the insured keeps the family's bicycles In the HO-6, the term residence premises refer to the unit where the insured resides that is listed in the policy declarations. The limited amount of Coverage A provided in the HO-6 applies specifically to property within the residence premises. This eliminates coverage for common property that is owned by the condominium association, such as a clubhouse or swimming pool.
How would a loss be adjusted under a homeowners policy with an insurance-to-value clause if a homeowner failed to carry coverage of at least 80% of the replacement cost of the home? a.) 100% of the loss b.) Cost to repair the property c.) Payment of the actual cash value or a proportional share of the loss, whichever is greater d.) Cost to replace the property
c.) Payment of the actual cash value or a proportional share of the loss, whichever is greater Failure to carry at least 80% of the replacement cost value results in the payment of the greater of 2 sums: the actual cash value or the result of dividing the policy limit by 80% of the replacement cost, multiplied by the cost to repair or replace less the deductible. The insurance-to value provision of homeowners policy's seek to reward those who carry the adequate amount. If not, the insured will at least receive the actual cash value of the loss or an amount between ACV and replacement cost.
All of the following properties can be insured under an unendorsed homeowners policy EXCEPT a.) a townhouse that is owner-occupied b.) a duplex that is owner-occupied c.) a mobile home that is owner-occupied d.) a home under construction that the owner intends to occupy
c.) a mobile home that is owner-occupied All of the types of property described can be insured under a homeowners policy, but only mobile homes require a special endorsement.
Section II of the homeowners policy provides liability coverage for all of the following EXCEPT a.) actions of a residence employee b.) use of a 17-foot sailboat c.) renting the garage to a jewelry maker d.) actions of a domestic animal in the care of the insured
c.) renting the garage to a jewelry maker The homeowners policy excludes liability arising out of the rental of any part of the premises, except for the rental part of an insured location as a residence.
A house has a replacement cost of $150,000. To make sure that the replacement cost provision of a homeowners policy applies, the minimum policy amount for the dwelling should be a.) $300,000 b.) $150,000 c.) $100,000 d.) $120,000
d.) $120,000 The loss settlement provision of homeowners policies require that the insured carry a limit of insurance at least equal to 80% of the full replacement cost of the dwelling.
Under an HO-2 policy with a coverage limit of $50,000 on the dwelling, what is the amount of personal property coverage that would be available? a.) $30,000 b.) $50,000 c.) $20,000 d.) $25,000
d.) $25,000 Homeowners policies provide an automatic amount of coverage for other structures, personal property and loss of use. The amount of coverage for personal property is 50% of Coverage.
Credit card fraud is covered under a homeowner policy to a maximum of what amount? a.) $100 b.) $1,000 c.) $2,000 d.) $500
d.) $500 Credit card fraud is covered to a maximum of $500. Coverage does not apply to loss arising out of business use or the dishonesty of an insured.
Jennifer owns a home valued at $500,000. She purchases a policy insuring it for $300,000 with an 80% coinsurance clause and a $1,000 deductible. Faulty wiring causes a fire that results in a loss of $100,000. How much will the policy pay? a.) $239,000 b.) $399,000 c.) $59,000 d.) $74,000
d.) $74,000
Which of these situations would be covered under the homeowners policy? a.) A small businessowner forgot some critical work documents at home. He asks one of his employees to go to his house and pick them up. The employee falls down the steps at the house. He incurs $499 of medical expenses. b.) The insured is hosting a client appreciation and new products party at her house and one of her clients is injured during the product demonstration. The client incurs $3,000 of medical expenses. c.) The insured is an attorney. For his convenience, he asks a claimant and her attorney to meet him at his house. After a heated discussion, things get physical and the claimant breaks the attorney's jaw. The attorney incurs $7,000 of medical expenses. d.) The insured is playing golf (away from the premises described on the declarations page) and on his back swing accidentally hits a person in the head. The other person incurs $5,000 of medical expense.
d.) The insured is playing golf (away from the premises described on the declarations page) and on his back swing accidentally hits a person in the head. The other person incurs $5,000 of medical expense. Although there are limited exceptions, such as certain permitted incidental occupancies, personal lines policies (homeowners) typically exclude losses related to business activities, professional services, & work-related injuries.
Section II of a homeowner's insurance contract covers all of the following EXCEPT a.) property damage of another caused by the insured b.) liability for loss of use of another's property c.) bodily injury to others d.) bodily injury to one of the insured's resident family members
d.) bodily injury to one of the insured's resident family members Section II coverages are the same in all 6 forms. They cover personal liability of the insured and medical expenses of a person injured on the insured's premises (with permision), injured as a result of the activities of the insured, or during the course of employment for the insured or by an animal owned by the insured. Section II does not cover injuries to the insured or to the resident family members.
A dwelling policy can insure all of the following types of personal property EXCEPT a.) motorized wheelchairs b.) lawnmowers c.) furniture d.) sailboats
d.) sailboats Rowboats & canoes are the only type of watercraft that may be covered under a dwelling policy.
Section II of the homeowners policy contains two coverages: Coverage E - personal liability and Coverage F - medical payments. The primary difference between these coverages is a.) Coverage F has higher limits than Coverage E b.) Coverage E pays expenses incurred by third parties, while coverage F pays expenses incurred and family members c.) the insured must be legally liable for a loss for it to be paid under Coverage F d.) the insured must be legally liable for a loss for it to be paid under Coverage E
d.) the insured must be legally liable for a loss for it to be paid under Coverage E The key difference between these coverages is that Coverage E - personal liability only covers damages that the insured is legally liable to pay. Coverage F covers injuries to others (not the insured or family members) that occur on the insured's premises or result from the insured's activities, whether the insured is liable or not. There is no requirement under Coverage F that the insured be legally liable for the injuries.
