CH. 5 Homeowners

An insured had $1,000 stolen from his debit account, and his HO-3 will pay up to what amount for his claim? 0% $250 $500 $1,000

$500 Coverage up to $500 is paid for theft or unauthorized use of a credit card or electronic fund transfer card (debit card).

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? A. $48,000 B. $28,000 C. $20,000 D. $15,000

Add total value of all structures =48,000 10%=Coverage B 200,000*.10=20,000 48,000-20,000=28,000

All of the following are covered under a Homeowners Policy, except: A. A garage that is rented to a neighbor for private garage purposes B. All living expenses that occurred elsewhere after a covered loss C. Property of guests and servants D. Equipment that is used to maintain the property

All living expenses that occurred elsewhere after a covered loss The policy does not cover all expenses, only the necessary increase or additional living expenses.

Which of the following is not excluded under Coverages E and F? A. Bodily injury arising out of the failure to provide professional services B. Bodily injury arising out of the normal use of prescription drugs C. Property damage or bodily injury arising out of mental abuse D. Injury caused while the insured is on a business trip

Bodily injury arising out of the normal use of prescription drugs The exclusion does not apply if the injury is due to the legitimate use of prescription drugs ordered by a licensed physician.

Coverage A & B covered for replacement cost and Named Perils Coverage C covered for actual Cash Value and named perils HO3-special form HO2-broad form names perils HO5-comprehensive broadest coverage HO6-unit owner

HO2-broad form names perils Coverage A=80% Coverage B=10% of coverage A Coverage C= 50% of coverage A Coverage D= 30% of coverage A

Coverage A & B covered on replacement cost value and open peril basis Coverage C covered on actual cash value named peril basis A. HO4-contents broad form-named perils B. HO3-special form C. HO5- comprehensive form broadest coverage D. HO-8 modified form

HO3- special form Coverage A=80% Coverage B=10% of coverage A Coverage C= 50% of coverage A Coverage D= 30% of coverage A

All of the following are true of a Comprehensive Personal Liability Policy, except: STUDY STUDY A. It automatically includes business exposures B. It has additional coverage for Damage to Property of Others C. The Medical Payments Coverage will cover medical expenses that are incurred within 3 years D. It essentially has the same coverages as Section II of a Homeowners Policy

It automatically includes business exposures Neither a Comprehensive Personal Liability Policy nor Homeowners Policy automatically cover business exposures. Business exposures may be addressed by various endorsements.

All of the following are true of Section II of a Homeowners Policy, except: A. Medical payments coverage would apply if the family dog were to bite someone 3 blocks from home B. First aid expenses are automatically included C. Loss assessment charges against the insured by a property owner's association are excluded D. 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 corporation or association of property owner's covered up to $1,000 AND WAS caused by a PERIL INSURED against under this policy. Coverage is additional Insurance

Which statement is true? A. Medical payments under a Homeowners Policy will cover the insured B. Medical payments under a Homeowners Policy will cover funeral expenses C. The Homeowners Policy will provide protection for the insured's use of a vehicle that is used for nonbusiness purposes D. Medical payments include personal injury

Medical payments under a Homeowners Policy will cover funeral expenses Funeral expenses are covered expenses under Homeowners Policy Section II.

Which statement is false under a Homeowners Policy? A. The personal property replacement cost endorsement may be added to cover the contents on a replacement cost basis B. The scheduled personal property endorsement provides open peril coverage C. Theft of silverware is covered up to $2,500 D. Money is covered up to $500 per occurrence

Money is covered up to $500 per occurrence The limit on money is $200.

The HO-3 dwelling and other structures coverages are insured on which basis? STUDY STUDY A. Named peril B. Open peril C. Actual cash D. Functional replacement cost value

Open peril Coverages A and B are insured on an open peril basis in which all perils are insured unless specifically excluded. Replacement Value-Open Peril Coverage A(Dwelling), B (Other Structures)

The quiz is currently paused. A. The HO-2 covers the broad form perils B. The HO-2 covers owner-occupied dwellings C. The HO-2 pays for losses to the dwelling on a replacement cost basis D. 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.

The Water Damage Exclusion does not apply to which of the following claims? A. Water damage resulting from damage from an animal B. Swimming pool leakage C. Overflow of sump pump D. Theft during the flood

Theft during the flood Direct loss by fire, explosions or theft resulting from the water damage is covered.

All of the following are true of a Homeowners Policy, Coverage F, except: A. Under Coverage F, a covered accident may occur during the policy period B. Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured's household C. Under Coverage F, coverage applies to persons that are on the insured location with permission D. 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.

Which statement about the Homeowners Policy is false? A. Under Section II, Coverage applies only to bodily injury or property damage that occurs during the policy period B. The policy will not provide Coverage for an insured that has intentionally concealed or misrepresented any material fact or circumstance C. Under Section II, Coverage includes defense costs, at the insurer's expense, even if the suit is groundless D. Under additional Coverages, First Aid Expenses include first aid to an insured in the event of an injury

Under additional Coverages, First Aid Expenses include first aid to an insured in the event of an injury First Aid Expenses do not apply to the insured or resident of the household.

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.

The amount of insurance provided to cover personal property of a Homeowners Policy is __________ of Coverage A. A. 40% B. 50% C. 60% D. 20%

50% The basic amount of Coverage C insurance is 50% of the Coverage A Limit. This amount can be increased by payment of an additional premium.

Choose the claim that would be covered under Coverage E of a Homeowners Policy. A. Bodily injury to a guest caused by the insured's pet dog B. Bodily injury to an insured C. The transmission of a communicable disease by an insured D. Bodily Injury arising out of the application of corporal punishment by an insured

Bodily injury to a guest caused by the insured's pet dog Coverage E of the Homeowners Policy provides Personal Liability Coverage for bodily injury or property damage arising out of an occurrence, with certain limitations and exclusions.

The Home Day Care endorsement does not provide which of the following? A. Covered under a sublimit on a per person per accident basis B. Includes medical payments C. Coverage on the residence premises D. Coverage for a day care employee

Coverage for a day care employee Injury to any employee arising out of the day care business is not covered.

Coverage A & B covered for replacement cost and C on actual cash value all 3 covered on open peril basis HO8- modified form HO2-broad form named perils HO4-contents broad form HO5- comprehensive form broadest coverage

HO5- comprehensive form broadest coverage Coverage A=80% Coverage B= 10% of coverage A Coverage C= 50% of coverage A Coverage D= 30% of coverage A

Coverage A & C named peril basis HO8- modified form HO2-broad form named perils HO5- comprehensive form broadest coverage HO6-unit owners

HO6 unit owner, personal property covered anywhere in the world Coverage D= 50% of coverage C

Moral Hazard, older home replacement on functional replacement value HO8- modified form HO2-broad form named perils HO5- comprehensive form broadest coverage HO6-unit owners

HO8- modified form Coverage D= 10% of coverage A

Coverage C covered for actual cash value on named peril basis HO8- modified form HO2-broad form named perils HO4-contents broad form HO5- comprehensive form broadest coverage

Ho-4 contenta broad form-limit of liability known as tenants/renters policy Coverage D= 30% of coverage coverage C

Choose the false statement regarding Section II of a Homeowners Policy. A. Liability arising out of the sale, use, manufacture, delivery, or possession of a controlled substance is excluded B. If the named insured or the spouse dies, coverage does not continue for the legal representatives C. At its own expense, the insurer will provide a legal defense against claims D. Insurer obligations end when it pays damages equal to the policy limit for any one occurrence

If the named insured or the spouse dies, coverage does not continue for the legal representatives In the event of the death of the insureds, coverage continues for the insured's legal representative. Relatives blood/resident, under the age of 21 and im the care of any insured. Full-time students living away if under age of 24 and are relative of named insured, residing before they moved away. age 21 and in the care of named insured or relative

Which statement is false about a Homeowners Policy? A. It will cover theft from a safe deposit box B. It has a $500 limit for trailers not used with watercraft C. The replacement clause eliminates the deduction for depreciation D. It will cover property that has been borrowed

It has a $500 limit for trailers not used with watercraft The limit for trailers not used with watercraft is $1,500.

All of the following are true of a Homeowners Policy, except: A. Dwellings under construction are eligible B. The HO-2 provides open peril coverage on the dwelling C. The HO-4 form is also called the Tenants Form D. Personal property of an insured's daughter while at college would be covered

The HO-2 provides open peril coverage on the dwelling The HO-2 covers the dwelling and contents on a Broad Form Named Peril basis.

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

Choose the correct statement regarding the HO-3. A. The dwelling and other structures are written on an Open Peril basis B. The contents are written on an Open Peril basis C. The dwelling and other structures are written on a Broad Form Perils basis D. Coverages A, B, and C are all written on a Replacement Cost basis

The dwelling and other structures are written on an Open Peril basis The HO-3 (Special Form) provides the broadest Coverage available on structures: Open Perils (or all-risk) Coverage.