I NEED 120 QUESTION CORRECT TO PASS TEST WITH A 70

Which statement is true of Section I of a Homeowners Policy? $1,500 limit applies to a boat including the motor, trailer and equipment It provides coverage on owned golf carts and owned snowmobiles off premises It limits the coverage on utility trailers to $2,000 Theft of a boat while away from the premises is covered

$1,500 limit applies to a boat including the motor, trailer and equipment A limit of $1,500 applies to a boat, its trailer, motor and equipment.

A property purchased 10 years ago for $100,000 has a replacement value today of $200,000. It has depreciated 3% each year. What is today's actual cash value? $200,000 $140,000 $70,000 $100,000

$140,000 Current replacement cost of $200,000 minus 30% depreciation = $140,000.

Supplementary payments under Part A of the Personal Auto Policy will pay which of the following? Doctor bills when the insured is injured in an auto accident $250 for bail bonds A judgment against the insured in excess of liability limits Loss of earnings when the insured is disabled

$250 for bail bonds Of the items listed, only $250 for bail bonds is a supplementary payment.

What is the total claim an HO-3 policy with Coverage B amount of $25,000 pay including debris removal? $1,250 $15,000 $25,000 $26,250

$26,250 The Coverage B total is $25,000, and the policy allows for an additional 5% for debris removal: $25,000 + 5% or $1,250 = $26,250.

In addition to his $200,000 home, the insured has a $7,000 fence, a $15,000 detached garage, a $25,000 in-ground swimming pool, and a $1,000 gazebo. How much does the policy's automatic Coverage B limit need to be increased by endorsement to provide adequate insurance on all other structures? $48,000 $28,000 $20,000 $15,000

$28,000 7,000+15,000+25,000+1,000=48,000 200,000*.10=20,000 48,000-20,000= 28,000 10% of Coverage A, or $20,000. $48,000 minus $20,000 = $28,000.

What is the maximum Coverage the insured will have with the Water Back Up Endorsement added to his HO-3 policy for direct physical loss to property due to water backing up through the drains? $1,000 $2,500 $5,000 Coverage A amount

$5,000 The Endorsement provides up to $5,000 for overflow from a sump pump, even if caused by equipment breakdown.

With the Water Back Up endorsement, what is the maximum coverage the insured will have for direct physical loss to property due to water backing up through the drains? $1,000 $2,500 $5,000 Coverage A amount

$5,000 The endorsement provides up to $5,000 for overflow from a sump pump, even if caused by equipment breakdown

What is the limit of insurance available on an HO-3 policy for a tree totally damaged in a hail storm? 0% $250 $500 $1,000

0% The most paid for a covered tree is $500 but coverage is not provided for windstorm or hail losses.

An insured tenant may use up to what percentage of Coverage C to improve the premises? 0% 5% 10% 20%.

10% This additional coverage in the DP-2 and DP-3 (included in the DP-1) can also be used for alterations and additions at the insured's expense for the named insured's premises

At what age is an unrelated resident of the named insured no longer an 'insured'? 24, if in the care of the named insured or a resident relative 16 18 21, if in the care of the named insured or a resident relative

21, if in the care of the named insured or a resident relative Unrelated residents, such as an exchange student, are covered to age 21. Note: resident relatives are insured to age 24.

Under the Commercial Building and Personal Property Coverage Form, the building is considered vacant, unless at least ___________ or more of the square footage is rented or is used to conduct operations. 51% 41% for 60 days 31% 61%

31% Buildings under construction are not considered vacant. A building is considered vacant unless at least 31% or more of the total square footage is rented or is used to conduct operations.

Residential dwellings under the homeowners policy are eligible with no more than _____ residential units and no more than _____ roomers or boarders per family. 1 residential unit and 2 roomers or boarders 4 residential units and 5 roomers or boarders 2 residential units and 4 roomers or boarders 4 residential units and 2 roomers or boarders

4 residential unites and 2 roomers or boarders Residential dwellings eligible for the homeowners policy may contain one to four residential units and no more than 2 roomers or boarders per family.

Losses caused by vandalism are not covered under the Vacancy Clause of a Building and Personal Property Coverage Form if the property has been vacant for a period of ___________ days or more. 30 60 90 120

60 Because of the increase in risk of loss to vacant property, coverage is excluded for the perils of vandalism, glass breakage, water damage, and theft. The amount paid for damage by other perils is reduced by 15% during the period of vacancy.

All of the following are considered to be persons insured under a Homeowners Policy, except: A son or daughter while away at college, who is 23 A 79-year-old father-in-law who is living with an insured A 25-year-old friend who is living with an insured A friend's 14-year-old daughter who is living with an insured

A 25-year-old friend who is living with an insured The definition of insured does not include anyone over the age of 21 that is not a relative.

Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? The named insured The named insured's spouse A tenant who lives in a portion of the insured's residence A residence employee

A Residence Employee Only the residence employee is eligible, (if injured in the course of employment).

Which statement about insurance binders is incorrect? A binder lists the covered perils A binder specifies the effective date of coverage A binder specifies the premium amount A binder specifies the insurer providing the coverage

A binder specifies the premium amount A binder includes everything, except it does not specify the premium amount. The Declarations of an actual policy would include the premium.

All of the following are requirements for recovery of a loss under replacement cost, except: The value of the property is determined at the time of loss The replacement is of like kind and quality Coverage must equal 80% of the cost of replacement A deduction for depreciation is calculated

A deduction for depreciation is calculated When property is covered on a replacement cost basis, there is no deduction for depreciation.

The Personal Auto Policy may be used to insure all of the following, except: A conversion van A farm pickup A station wagon A motorcycle

A motorcycle A motorcycle would not be covered unless added by endorsement

The Homeowners Policy provides coverage for all of the following, except: A riding lawn mower pulling a two-wheel garden trailer A motorized wheelchair An ATV on the insured's premises A motorized golf cart being driven to or from a golf facility

A motorized golf cart being driven to or from a golf facility The golf cart must be on a golf course for coverage to apply.

If a sidewalk is icy, it is causing which type of hazard? A. A natural hazard. B. A moral hazard. C. A morale hazard. D. A physical hazard.

A physical hazard

Which of the following is the best answer about changes made to a property insurance policy? A change in the policy must be delivered by the insurer to the insured's postal address A policy change must be requested by the insured in writing Every change to a policy is subject to a 5-day waiting period for processing the change A property policy change is made by the insurer's written endorsement

A property policy change is made by the insurer's written endorsement

Which location is not an Insured Location under Section II of the Homeowners Policy? A secondary location that the insured uses for a business Any non-owned premises where the insured is temporarily residing Land owned by an insured where a residence is being built for the insured Any other premises used by the insured as a residence that is shown in the declarations

A secondary location that the insured uses for a business In general, any business property or activity is not covered under the Homeowners Liability Coverages.

Your neighbor has a pet that is considered by most to be extremely dangerous. Another neighbor's son was teasing the pet, and the pet attacked the boy, who was taken to the hospital with serious injuries. After being sued by the boy's parents, the neighbor's insurance company claimed that the boy was injured knowing that the pet was dangerous, and therefore, the pet owner was not liable. The boy's lawyer claimed that the pet was so dangerous that it did not relieve the owner of liability, an example of which principle of law? Assumption of risk Last clear chance Respondeat Superior Absolute liability

Absolute liability Where there is a strong likelihood of harm to others when mishaps occur, the standard applied is Absolute Liability.

An unintended and unforeseen event from which a loss results is called which of the following? Proximate cause Risk Accident Occurrence

Accident Accident An accident is sudden, unforeseen, unintended, and unplanned.

The ___________ limit in Liability Insurance is the maximum amount payable for loss per location and/or person from all occurrences within a policy period regardless of the number of occurrences. Aggregate Combined Single Per Occurrence Per Person

Aggregate The Aggregate Limit is reduced by the amount paid each time a claim is paid during the policy term.

Which term describes the maximum amount payable for loss from all occurrences within a policy period? Per occurrence limit Aggregate limit Split limit Single limit

Aggregate limit The aggregate limit is the most the policy will pay for all losses in the policy period.

___________ is not a method used to determine the value of a loss. Agreed profit Actual cash value Replacement cost Stated value

Agreed Profit Replacement value is the cost to replace property with property of like kind and quality.

All of the following are methods of loss valuation, except: Agreed profit Actual cash value Replacement cost Stated amount

Agreed profit There is no valuation called Agreed Profit

Of the following statements about property policies, which is correct? Replacement value is the cost to replace minus depreciation Actual cash value is the cost to replace property at current pricing without a deduction for depreciation An example of a consequential loss is an explosion that results in damage to property of others An example of a consequential loss is the loss of rent due to a fire in a buildings

An example of a consequential loss is the loss of rent due to a fire in a buildings Loss of rent after a covered loss would be a consequential loss or indirect loss.

Of the following fires, which is considered a hostile fire? A fireplace containing a roaring wood fire The fire in the firebox of one's furnace An uncontrolled campfire in the woods The fire in a trashcan being used to burn leaves

An uncontrolled campfire in the woods

Which of the following best describes a direct loss? A. Loss of rents from a dwelling made uninhabitable because of fire A named peril policy Bursting of a water pipe that causes water damage A Proximate Cause

Bursting of a water pipe that causes water damage The direct loss to the property is the damage to the property caused by an insured peril.

Which of the following determines a loss ratio? A. Multiplying actual cash value of loss by the coinsurance factor. B. Dividing operating expenses by total premium. C. Dividing losses plus loss reserves by total earned premiums. D. Multiplying replacement cost by insurance premium.

C. Dividing losses plus loss reserves by total earned premiums

An insurer cannot cancel a personal auto policy after the first 60 days of coverage for which of the following reasons? Non-payment of premium Claims history Material misrepresentation Driver's license suspension

Claims history Claims history is often a reason for non-renewal of an automobile policy, but not for a mid-term cancellation.

All of the following are true, except: The purpose of coinsurance is to encourage one to carry insurance to value Named peril policies cover only stated perils Open peril policies cover all perils, except those excluded Coinsurance costs more

Coinsurance costs more Generally, the higher the coinsurance, the lower the rate.

All of the following are methods of writing property insurance limits, except: Specific coverage Scheduled coverage Concurrent coverage Blanket coverage

Concurrent coverage Specific, Scheduled and Blanket are all methods of writing property insurance limits.

The defense that prevents recovery for injuries caused by a negligent party if the claimant was also negligent is called: Comparative negligence Contributory negligence Gross negligence Absolute liability

Contributory Negligence The Contributory Negligence defense denies payment to an injured party if they were partly at fault.

Choose the false statement about the Homeowners Policy. Coverage D provides coverage for additional living expense Coverage C extends to animals, birds, or fish owned by the insured Motor vehicles do not meet the definition of contents Personal property owned and used by the insured in a vacation home would be covered

Coverage C extends to animals, birds or fish owned by the insured There is no coverage for exotic pets in a Homeowners Policy.

All of the following are true, except: Coverage D of a Homeowners Policy covers additional living expenses Coverage D of a Homeowners Policy includes loss of income from an incidental business Home schooling would be permitted under a Homeowners Policy A Homeowners Policy will not cover theft of a boat away from premises

Coverage D of a Homeowners Policy includes loss of income from an incidental business Coverage D does not cover loss of income from an incidental business.

Which of the following is provided by the Additional Coverages part of a property insurance policy? The company will voluntarily waive the deductible The insured requests extra coverage be provided by endorsement The insured requests coverage to supplement the deductible Coverage supplements the Coverages set forth as basic Coverages

Coverage supplements the Coverages set forth as basic Coverages The Additional and Supplementary coverages are coverages for incidental expenses that often accompany the losses insured against by the policy

Which loss is not included under Other Than Collision coverage? Damage caused by a painter who, while working on a building, sprayed paint on an insured vehicle A car that is stranded in a creek and damaged by rising water Damage caused by students standing on the hood during a football game Damage to the auto due to crashing into a tree

Damage to the auto due to crashing into a tree Crashing into a tree is collision damage.

Choose the use of an automobile that is not eligible for the Personal Auto Policy. Driving over 25,000 miles annually Delivery of pizza Sales calls Car pool

Delivery of Pizza Delivery or commercial use of an eligible vehicle is ineligible under the Personal Auto Policy and requires a business auto policy.

Choose the statement about direct or indirect losses that is incorrect. A direct loss is a loss resulting directly from a peril insured against An indirect loss is the same as a consequential loss Water damage done by firefighters is considered a direct loss Direct losses include additional living expenses

Direct losses include additional living expenses Additional Living Expense is an indirect loss, not a direct loss.

Water damage caused by which of the following is a covered loss? Overflow of water from a sump pump Discharge caused by a plumbing failure Leaks through a driveway Water below the surface of the ground

Discharge caused by a plumbing failure Water damage is also excluded if caused by surface water, tidal water, and leakage through a building, foundation, or other structure.

Which of the following is not included in the standardized policy structure for insurance policies? Insuring agreement Conditions Duties Exclusions

Duties The duties of the insured and the insurer are found in the policy conditions.

Which of the following IS a relationship that involves vicarious liability? Employer and employee Wholesaler and retailer Man and woman Teacher and student

Employer and employee Employers are always vicariously liable for their employees, however, the same cannot be said of the other choices.

Statutory Law Defenses are determined by which of the following? A. Judicial decisions. B. Executive decisions. C. Enactment of Legislatures. D. Administrative decisions.

Enactment of Legislatures When legislatures have felt that some Common Law Defenses are not adequate for the time or locale over which they have jurisdiction, they have replaced them with Statutory Defenses.

All of the following are defined as insured locations in the Homeowners Policy, except: A non-owned premises where the insured is temporarily residing Farmland owned by the insured Cemetery plots Any premises named in the Declarations

Farmland owned by the insured Farmland owned by the insured is not covered.

Choose the most correct statement. A peril in insurance terminology is defined as a hazardous situation Coinsurance applies only in the event of a total loss Under the coinsurance principle, it is the responsibility of the insurer to maintain the requested percentage Fire damage to an insured residence is considered a direct loss

Fire damage to an insured residence is considered a direct loss The fire, any resulting smoke damage, or water damage done by the fire department in extinguishing the fire would all be a direct loss. Direct loss must be caused by an insured peril that set the loss in motion.

An insurer organized in another state than the state in which it is authorized to do business is known as which type of insurer? A. Domestic. B. Admitted. C. Alien. D. Foreign.

Foreign

Gasoline stained clothes stored by a furnace are considered a ___________. A. Hazard. B. Risk. C. Severity. D. Adverse selection.

Hazard

Which statement is true of a Dwelling Policy Special Form? If an insured dies, coverage continues for the insured's legal representatives Coverage is provided for collapse of a building There is coverage for structures used for commercial, manufacturing, or farming purposes Losses caused by power failure or by any ordinance or law are covered

If an insured dies, coverage continues for the insured's legal representatives The insured's legal representative is automatically covered in the event of the insured's death.

A disrupted chain of events, thus freeing the defendant from liability, defines: Intervening cause Proximate cause Lost cause Concurrent causation

Intervening cause Intervening cause breaks a natural and continuous sequence of events that are necessary to establish negligence.

Which statement is false regarding automobile physical damage Coverage D? It covers damage to the insured auto regardless of liability It covers damage to the insured auto and to another auto with which it collided Collision coverage usually is written with a deductible Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision Coverage

It covers damage to the insured auto and to another auto which it collided Automobile physical damage would not cover damage to the other vehicle. Damage to vehicles of others would be under liability coverage.

All of the following are true of negligence, except: It is a type of tort It does not include breach of contract It does not require a duty to be owed It is the failure to use ordinary care

It does not require a duty to be owed For an act to be negligent, the injured party must prove the alleged wrongdoer owed a duty to the injured party or to the public.

Which of the following best defines a hazard? It is a cause of loss It increases the risk or severity of loss It eliminates the chance of loss It increases the amount of loss

It increases the risk or severity of loss

The property insurance condition that states that the insured may not file suit against the insurer unless all terms of the policy have been complied with, is: Ordinance or Law condition Legal Action Against Us Claim settlement condition Loss Payment condition

Legal Action Against Us An insured cannot ignore their responsibilities under the policy, then subsequently bring legal action against the insurer.

All of the following are true about 'liability', except: In the case of negligence, the prudent person standard is used Normally, the burden of proof is on the injured party to prove that the other party was negligent Liability policies pay costs incurred by the insured to sue negligent third parties A characteristic of occurrence is that the loss may take place over a period

Liability policies pay costs incurred by the insured to sue negligent third parties Liability policies pay the cost to defend the insured against suits by third parties.

Which clause allows the insurer to broaden coverage with no increase in premium and no endorsement? Assignment Liberalization Endorsement Changes

Liberalization The Liberalization clause specifies that the broadening of coverage will apply to existing policies without the need for an endorsement.

Which clause allows the insurer to broaden coverage with no increase in premium and no endorsement? Assignment Liberalization Endorsement Changes

Liberalization The Liberalization clause specifies that the broadening of coverage will apply to existing policies without the need for an endorsement.

All of the following are true of Section II of a Homeowners Policy, except: Medical payments coverage would apply if the family dog were to bite someone 3 blocks from home First aid expenses are automatically included Loss assessment charges against the insured by a property owner's association are excluded Medical payments include guests

Loss assessment charges against the insured by a property owner's association are excluded Loss assessment charges against the insured by a property owner's association are covered up to $1,000.

Which statement is true? Loss of rent due to a fire would be considered a direct loss Food spoilage after loss of electricity due to a covered peril is a direct loss An explosion that results in damage to property of others would be considered a consequential loss Loss of rent due to a fire would be considered a consequential or indirect loss

Loss of rent due to a fire would be considered a consequential or indirect loss Loss of rent after a covered loss would be a consequential loss or indirect loss.

Which coverage is excluded under Section II of a Homeowners Policy? Damage to property of others Medical expense of a guest Medical expense of a boarder Third party property damage for which the insured is legally liable

Medical expense of a boarder Medical expense coverage for a boarder or regular resident is excluded.

A ___________ construction material has a fire-resistance rating between one and two hours for walls, floors and roofs. Fire Resistive Modified fire-resistive Non-Combustible Joisted Masonry

Modified fire-resistive The class of construction of a building greatly influences its insurance rate and insurability. Classes range from Framed Construction to Non-Combustible Construction. Modified Fire Resistive is defined as the materials used in the walls, floors, and roof of a structure must have a fire resistive rating of at least 1 hour, but less than 2 hours.

___________ specifies that coverage in the event of a claim will not benefit a person who is moving the insured's property for a fee. Limit of Liability Claim Settlement Assignment No Benefit to Bailee

No Benefit to Bailee This provision makes clear that the insurer has no obligation to a bailee, even if the bailment is to the benefit of the insured.

Which term describes the situation that occurs when two policies covering the same property contain different policy periods? Coinsurance Concurrent causation Nonconcurrency Blanket coverage

Nonconcurrency Nonconcurrency means not the same.

Which of the following is not an exclusion under a property policy? Ordinance or law Neglect Governmental action On-premises utility failure

On-premises utility failure Off-premises utility failure is a common exclusion in property policies.

Choose the incorrect answer regarding the Broad Theft Endorsement on a Dwelling policy. It may be added to any of the Dwelling forms It applies only to owner-occupied structures It also includes vandalism resulting from theft Only on-premises coverage is available

Only on-premises coverage is available The Broad Form Theft endorsement is attached to owner-occupied Dwelling policies to provide theft coverage for the owner-occupant's Personal Property. On-premises and off-premises coverage is available.

Which of the following is not true about the Home Business endorsement? Only property damage is covered Business must be owned by the insured Includes advertising injury coverage Professional services are excluded

Only property damage is covered The endorsement provides both business property and liability coverages for an eligible home business.

Which of the following coverages is provided under the HO-3 Additional Coverage of Property Removed? Open peril coverage for 30 days Named peril coverage for 30 days Open peril coverage for 10 days Named peril coverage for 15 days

Open peril coverage for 30 days. When property is removed because it is endangered by a covered peril, the coverage is open peril for 30 days.

Which statement is false? Named peril policies cover only perils that are stated in the insuring agreement Open peril policies cover only those perils that are stated in the Declarations Co-insurance results in a reduced rate An extension is coverage that is included beyond the face amount

Open peril policies cover only those perils that are stated in the Declarations Open peril policies cover risks of direct physical loss, and the perils are not named.

Each of the following is an example of special damages, except: Loss of earnings Expenses Repair costs Pain

Pain Special damages are paid for tangible loss or damage, and general damages are paid when losses cannot be calculated objectively.

All of the following are false of medical payments, except: They do not allow further action for recovery after medical payments have been accepted Payments are made without regard to negligence The insured must be legally liable for payment to apply They replace bodily injury coverage

Payments are made without regard to negligence Payments up to the limit are made without regard to fault.

The insuring clause (agreement) section of a policy describes: The duties of the insured in the event of a loss Perils that are not covered Perils that are covered Transfer of the rights of recovery

Perils that are covered The Insuring Agreement includes the perils covered.

All of the following definitions are true of a Homeowners Policy, except: Bodily injury -- Bodily harm, sickness or disease, including required care, loss of services and death that results Occurrence -- An accident, including exposure to conditions that result during the policy period in bodily injury or property damage Residence employee -- An employee of an insured whose duties are related to the maintenance or use of the residence premises Property damage -- Physical injury to tangible property, but does not include loss of use of that property

Property Damage --Physical injury to tangible property, but does not include loss of use of that property. Property Damage does include loss of use of the property.

All of the following definitions are true of a Homeowners Policy, except: Bodily injury -- Bodily harm, sickness or disease, including required care, loss of services and death that results Occurrence -- An accident, including exposure to conditions that result during the policy period in bodily injury or property damage Residence employee -- An employee of an insured whose duties are related to the maintenance or use of the residence premises Property damage -- Physical injury to tangible property, but does not include loss of use of that property

Property Damage — Physical injury to tangible property but does not include loss of use of that property Property Damage does include loss of use of the property.

Which of the following is not covered under Section II of the Homeowners Policy? The insured's liability for damages to property of others Property of the insured The insured's liability for bodily injury to others Medical expenses for an accident arising out of the premises or non-business activities of an insured

Property of the insured Section II is Liability Coverage, not Property Coverage. Section I would cover property of the insured.

A ___________ is allowed to charge a subscriber more for a pro rata share of losses. Lloyd's Insurer Stock Insurance Company Reciprocal Insurer Fraternal Insurer

Reciprocal Insurer

A client with an HO-3 policy does not want her personal property covered for Actual Cash Value, so her agent suggested an Endorsement to change that Actual Cash Value to which of the following? Agreed value Stated Value Replacement Cost Functional Replacement Cost

Replacement Cost The Personal Property Replacement Cost Endorsement meets her needs, but does not pay Replacement Cost for antiques, fine arts, paintings, and any articles whose age or history affects the value.

No-fault liability is described as each of the following, except: Typically applies to auto insurance Restricts the rights of the injured party to sue for any amount of damage Injured party collects from own insurance Negligence is not determined

Restricts the rights of the injured party to sue for any amount of damage Most no-fault laws restrict the rights of the injured party to sue unless the injuries are severe, such as paralysis or death, and meet a threshold

Choose the false statement about Section II of the Homeowners Policy. Damage to Property of Others pays up to $1,000 per occurrence Individual and family cemetery plots qualify as an insured location Property damage to the neighbor's wheelchair caused by the insured is covered Section II losses are subject to a standard $250 deductible

Section II losses are subject to a standard $250 deductible. Section II losses are not subject to a deductible. All remaining responses are true.

Which of the following vehicles is not excluded under Part B - Medical Payments of the personal auto policy? 3-wheel vehicle Share-the-expense vehicle Vehicle used as a residence Family member's company car

Share the expense vehicle A share-the-expense vehicle is not considered a public or livery conveyance which is excluded.

Which of the following best describes a hazard? A. Something that increases the chance of a loss. B. A reduction in, decrease in, or disappearance of, value. C. The possibility of a loss. D. The loss itself.

Something that increases the chance of a loss

Under the Personal Property Replacement Cost Loss Settlement endorsement, which of the following would continue to be settled for actual cash value? Outdoor equipment Appliances Souvenirs Carpeting

Souvenirs Property that cannot be replaced, such as souvenirs, antiques, and paintings are not eligible for the replacement cost coverage.

Which type of risk involves the possibility of loss or gain? A. Pure. B. Speculative. C. Insurable. D. Stable.

Speculative

The following are all correct, except: Coinsurance applies only in the event of a partial loss The stated amount would be the loss valuation method used to insure agricultural products The Declarations contain statements made by the insured on the application The insuring agreement describes the perils that are covered under the policy

Stated amount would be the loss valuation method used to insure agricultural products Market value in the loss valuation method used to insure goods and commodities whose value fluctuates with market conditions such as agricultural products.

All of the following are options for dealing with risk, except: Avoiding the risk Transferring the risk Subrogating the risk Retaining the risk

Subrogating the risk

All of the following are true of the HO-2, except: The HO-2 covers the broad form perils The HO-2 covers owner-occupied dwellings The HO-2 pays for losses to the dwelling on a replacement cost basis The HO-2 pays for losses on an open peril basis

The HO-2 pays for losses on an open peril basis The HO-2 pays all losses on a broad form (Named Perils) basis.

Choose the answer that is true regarding the Homeowner HO-4 and HO-6 Forms. The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance Losses are paid on a Replacement Cost basis Both provide Open Perils Coverage on the personal property The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself

The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself Since the insured under the HO-4 Form does not own the structure, there is no Coverage on the building.

In Liability Insurance, which of the following is the maximum amount that the coverage will pay for loss to any one person regardless of overall policy limits? The Split Limit The Per Occurrence Limit The Aggregate Limit The Per Person Limit

The Per Person Limit The Per Person Limit is the amount of coverage available for each person that sustains bodily injuries in an occurrence.

Which statement is true concerning Homeowners policies? The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement Section I limits coverage on utility trailers up to $500 The HO-4 provides open peril coverage on both the dwelling and contents Section I limits coverage on fire department service charge to $100

The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement. The Scheduled Personal Property Endorsement has no deductible.

Which of the following is correct about the right of salvage? The insurer has the right to take possession of damaged property after payment of a loss The insurer is required to take possession of damaged property after a loss The insured has the right to keep damaged property after payment of a loss Neither the insured nor the insurer has the right to take possession of damaged property. It must be disposed of after a loss.

The insurer has the right to take possession of damaged property after payment of a loss After payment for loss, the insurer has the right to the salvage.

Which statement is false? Primary coverage pays first with respect to other policies An excess coverage policy pays only after a primary policy has been exhausted Pro rata is the distribution of liability among insurers that have policies on the same risk The per occurrence limit is the greatest amount recoverable during the policy period

The per occurrence limit is the greatest amount recoverable during the policy period The occurrence limit is the most that will be paid for any one occurrence.

Choose the true statement regarding the Difference in Conditions Policy coverage. There is no coinsurance clause or pro rata clause, and it may be written for a different amount from the policy it complements The minimum coinsurance allowed under the DIC form is 90% coinsurance The Standard Deductible is $10,000 The DIC policy provides excess amounts of insurance above the primary property policies

There is no coinsurance clause or pro rata clause, and it may be written for a different amount from the policy it complements The DIC policy is not an excess layer of insurance. Rather, it provides coverage for perils not insured against under standard property policy forms.

Which statement is false concerning a Homeowners Policy? The HO-4 is sometimes called a Tenants Form The HO-4 covers the dwelling for the Broad Form (named) Perils The HO-3 covers the dwelling on an Open Peril basis The HO-3 covers the contents for the Broad Form (named) Perils

There is no coverage for the dwelling under a HO-4, only contents coverage.

Which of the following is true regarding HO-4 and HO-6 forms? The amount of insurance on the dwelling or condominium containing the personal property is 10% of the Coverage C amount of insurance Losses are paid on a Replacement Cost basis They provide Open Perils coverage on the personal property They are used to insure the personal property and personal liability of the insured, but do not include the structure itself

They are used to insure the personal property and personal liability of the insured, but do not include the structure itself Since the insured under the HO-4 and HO-6 forms does not have an insurable interest in the dwelling, the coverage on the structure is limited.

All of the following are true of liability policies, except: They will pay sums that the insured becomes legally liable to pay They do not cover medical expenses incurred by the insured They will cover damage to the insured's own property They are designed to cover third party injuries or damages

They will cover damage to the insured's own property A liability policy does not cover damage to the insured's property, it covers damage to property of a third party.

Under Motor Truck Cargo Forms, the form that insures public truckers against their legal liability for loss or damage to cargo belonging to others in their possession, is called: Shipper's Form Trucker's Coverage Form Owner's Form Transit Form

Trucker's Coverage Form The Trucker's Form insures public truckers for their legal liability for loss or damage to cargo belonging to others in their possession.

All of the following are true of a Homeowners Policy, Coverage F, except: Under Coverage F, a covered accident may occur during the policy period Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured's household Under Coverage F, coverage applies to persons that are on the insured location with permission Under Coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year

Under coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year Coverage F will pay for expenses incurred up to three years after the accident.

Choose the claim that is covered under the DP-3. VMM to a dwelling vacant for 30 days before the loss Theft to a dwelling under construction Wind damage to TV antennas Freezing of an air conditioning unit

VMM to a dwelling vacant for 30 days before the loss Vandalism and malicious mischief and any ensuing loss is excluded if the dwelling has been vacant for more than 60 consecutive days immediately before a loss.

Your insurance agent is John, and who is the principal in this agency relationship? A. None. B. Your insurance company. C. Your insurance agent. D. You.

Your insurance company Your insurance company authorizes your agent to do business with you.