Ch. 5 Property and Casualty
The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is: A 50% of Coverage A B 20% of Coverage A C 40% of Coverage A D 60% of Coverage A
A 50% of Coverage A 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.
Section II of a Homeowners policy may cover which of the following incidents? A Bodily injury caused by an insured's activities while picnicking at a city park B The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat C The homeowner's family dog bites their 2 year old son D An insured's guest damages the stair railing during a visit
A Bodily injury caused by an insured's activities while picnicking at a city park Bodily injury to others caused by the insured's activities is covered under the Homeowners liability section. Damages to the insured's property are not covered and damages caused by an owned inboard motorboat are excluded from coverage.
Structures on the premises separated by clear space from the dwelling are covered under which part of the Homeowners Policy? A Coverage B B Coverage D C Coverage A D Coverage C
A Coverage B Coverage B is the coverage for 'other structures' that are separated or detached from the dwelling. Structures attached to the dwelling are included under Coverage A.
Choose the false statement about the Homeowners Policy. A Coverage C extends to animals, birds, or fish owned by the insured B Motor vehicles do not meet the definition of contents C Personal property owned and used by the insured in a vacation home would be covered D Coverage D provides coverage for additional living expense
A Coverage C extends to animals, birds, or fish owned by the insured
Which of the following statements about Section II of the Homeowners Policy is false? A Coverage F limits are subject to a deductible B The obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence C Total liability Coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy D Insurer investigation expenses are paid in addition to the limits stated in Coverage E
A Coverage F limits are subject to a deductible
An HO-3 policy provides coverage on which basis? A Open perils coverage on the dwelling and broad form coverage on the personal property B Broad form perils coverage on both the dwelling and personal property C Open perils coverage on both the dwelling and personal property D Replacement cost coverage on both the dwelling and personal property
A Open perils coverage on the dwelling and broad form coverage on the personal property The H0-3 provides open perils coverage on the dwelling, and Named Broad Form perils coverage on the personal property. Losses to the dwelling are paid at replacement cost and losses to personal property are paid at actual cash value.
Which type of liability limit applies to Medical Payments coverage? A Per person B Combined C Per occurrence D Aggregate
A Per person
Which of the following endorsements to the Homeowners Policy adds coverage for injury resulting from libel, slander, false arrest, defamation, invasion of privacy and other such offenses that could result in a personal liability suit? A Personal Injury Endorsement B Additional Residence Rented to Others Endorsement C Permitted Incidental Occupancies Endorsement D Business Pursuits Endorsement
A Personal Injury Endorsement
Which of the following coverages is not included in a standard Homeowners policy? A Personal Injury liability B Property Damage liability C Medical Payments D Bodily Injury liability
A Personal Injury liability Coverage for Personal Injury (such as libel or slander) is not automatically provided in a Homeowners policy. It is available by endorsement.
Which of the following would not be covered under Section II of the Homeowners Policy? A Property damage to property owned by an insured B First aid expenses C The family dog bites someone three blocks from the residence premises D Injuries to guests visiting the insured's home
A Property damage to property owned by an insured Section II provides liability insurance for the loss of a third party. Property owned by the insured is not covered.
An employee, whose duties are related to the maintenance of the residence premises, is defined as which of the following under Section II of the Homeowners Policy? A Residence Employee B Contract Employee C Maintenance Employee D Casual Employee
A Residence Employee
Which of the following is not true concerning Section II of the Homeowners Policy? A The Damage to Property of Others duplicates coverage that is included in Section I B The coverage for Damage to Property of Others excludes property that is covered in Section I C Payment under Damage to Property of Others is made regardless of negligence D The coverage for Damage to Property of Others pays the replacement cost of the property damaged up to $1,000 per occurrence
A The Damage to Property of Others duplicates coverage that is included in Section I The Damage to Property of Others Additional Coverage supplements the Property Damage Liability Coverage by providing limited Coverage for damage, caused by the insured, regardless of negligence. Coverage does not apply to property damage covered under Section I of the policy.
Which of the following is not true of the HO-2? A The HO-2 pays for losses on an open perils basis B The HO-2 insures against the broad form perils C The HO-2 pays for losses to the dwelling on a Replacement Cost basis D The HO-2 covers owner-occupied dwellings
A The HO-2 pays for losses on an open perils basis The HO-2 insures the dwelling and contents against the broad form perils.
Which of the following is true regarding the HO-4 and HO-6 forms? A They are used to insure the personal property and personal liability of the insured, but do not include the structure itself B The amount of insurance on the dwelling containing personal property is 10% of the Coverage C amount of insurance C They provide open perils coverage on the personal property D Losses are paid on a replacement cost basis Sorry! 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.
A The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself
Which of the following would not be an insured under Section II of the Homeowners Policy? A The insured's tenant B Members of the family under the age of 24 living at school away from the home C Relatives of the named insured, meaning they are related by blood, marriage, or adopt
A The insured's tenant Roomers or boarders are not considered insureds, and would need to purchase their own liability policies.
Policyholder S has an HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay? A $500 B $2,750 C $2,250 D $250
B $2,750
Coverage C of the Homeowners policy would cover which of the following? A Property of the tenant of an apartment located in the insured's garage B A camera stolen while the insured is on vacation C The insured's registered pet dog D Business data stored on the insured's laptop computer
B A camera stolen while the insured is on vacation Property not covered under Coverage C includes animals, birds and fish; property of tenants; and business data, credit and electronic fund transfer cards.
Under the Watercraft Liability endorsement, an injury to which of the following people WOULD be covered under Coverages E and F? A A person who was renting the watercraft from the insured B A guest of the insured C The insured D An employee hired to operate the watercraft
B A guest of the insured Coverages E and F do not apply if the watercraft is being rented to others, or to any employee in the course of employment. Liability covers damages to others, not damages sustained by the insured themselves.
The Homeowners Policy provides coverage for all of the following, except: A A riding lawn mower pulling a two-wheel garden trailer B A motorized golf car being driven on a public beach C An ATV on the insured's premises D A motorized wheelchair
B A motorized golf car being driven on a public beach In order for coverage to apply, a motorized golf car must be used on a golfing facility or within a private residential community for approved purposes
Under the HO-8 policy, the dwelling is valued on which basis? A Market Value B Actual Cash Value C Replacement Cost D Agreed Value
B Actual Cash Value
All of the following are covered under a Homeowners Policy, except: A Property of guests and servants B All living expenses incurred when a dwelling becomes uninhabitable after a covered loss C Vandalism to a dwelling that was vacant for less than 60 days D Equipment that is used to maintain the property
B All living expenses incurred when a dwelling becomes uninhabitable after a covered loss The policy does not cover all living expenses, only necessary additional living expenses.
Choose the claim that would be covered under Coverage E of a Homeowners Policy. A Bodily injury to an insured B Bodily injury to a guest caused by the insured's pet dog C The transmission of a communicable disease by an insured D Bodily Injury arising out of the application of corporal punishment by an insured
B Bodily injury to a guest caused by the insured's pet dog
Of the following statements concerning Homeowners policies, which is correct? A Coverage is not provided to a garage rented for private garage purposes B Borrowed property meets the definition of contents C Coverage is provided to property of boarders not related to the insured D Dwellings under construction are covered for theft
B Borrowed property meets the definition of contents Coverage C covers property owned or used by the insured, including property owned by others.
All of the following are true, except: A Home schooling is permitted under a Homeowners Policy B Coverage D of a Homeowners Policy includes loss of income from an incidental business C A Homeowners Policy will not cover theft of a boat away from premises D Coverage D of a Homeowners Policy covers additional living expenses
B 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 would be covered under the Damage to Property of Others additional coverage of the Homeowners Policy? A Damage to property owned by the insured's tenant B Damage caused intentionally by the insured's 10-year-old son C Damage to property owned by the insured D Damage arising out of the insured's business pursuits Good Job! Intentional damage by a child under age 13 is covered.
B Damage caused intentionally by the insured's 10-year-old son Intentional damage by a child under age 13 is covered.
New home buyer S called his agent and told him that he wanted the broadest coverage available for his new home. Which policy would the agent be most likely to recommend? A HO-3 B HO-5 C HO-2 D HO-8
B HO-5 The HO-5 Comprehensive Form provides the broadest coverage of any of the homeowners forms as the dwelling, other structures, and personal property are all covered on an open perils basis.
Which of the following is true concerning the Home Day Care Coverage Endorsement to the Homeowners Policy? A It covers injury to an employee, as well as attendees, arising out of day care operations B It extends Section II coverages to the insured's home day care business C It covers injury to attendees while loading or unloading them from draft or saddle animals D It provides Commercial General Liability coverage for the day care operation
B It extends Section II coverages to the insured's home day care business
Which statement regarding medical payments under a homeowners policy is true? A Medical payments under a Homeowners Policy will cover the insured's injuries B Medical payments under a Homeowners Policy will cover funeral expenses C Medical payments include personal injury D Medical payments are provided by Coverage E
B Medical payments under a Homeowners Policy will cover funeral expenses Funeral expenses are covered expenses under Coverage F, Medical Payments.
Which of the following is not true about the Home Business endorsement? A The business must be owned by the insured B Only property damage is covered C Professional services are excluded D Advertising injury is covered
B Only property damage is covered The endorsement provides both business property and liability coverages for an eligible home business.
Most of H's jewelry is covered under the Coverage C special limits except for her $10,000 necklace inherited from her mother. Which of the following endorsements might H's agent recommend? A Personal Property Replacement Cost B Scheduled Personal Property C Increased Limits - Coverage C D Open Peril Personal Property
B Scheduled Personal Property The Scheduled Personal Property is used to increase limits of liability for certain categories of personal property and to broaden the perils insured against that apply to that property.
Which of the following is true regarding Section II of the Homeowners Policy? A Section II of the HO-6 is modified to adapt to the exposures of the Condominium unit owner B Section II is the same in all Homeowners Forms C Section II of the HO-4 (Tenants Form) is modified to adapt to the Tenant's exposures D Section II of the HO-3 (Special Form) has broader coverage than Section II of the HO-2 (Broad Form)
B Section II is the same in all Homeowners Forms Since the liability exposures of individuals and families have little to do with their mode of residence, Section II is the same in all Homeowners Policy forms.
All of the following are true of a Homeowners Policy, except: A Cemetery plots, burial vaults and vacant land are insured locations B Section II provides coverage for damage to the insured's property C The language in Section II is the same in all Homeowners Policies D Coverage E is written on a single limit basis
B Section II provides coverage for damage to the insured's property Coverage for the insured's property is provided in Section I.
Choose the true statement concerning Homeowners Policies. A The HO-4 provides open peril coverage on both the dwelling and contents B The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement C Section I limits coverage on fire department service charge to $100 D Section I limits coverage on utility trailers up to $500
B The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement The Scheduled Personal Property Endorsement has no deductible.
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, payments apply to necessary medical expenses incurred within a maximum of 1 year C Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured's household D Under Coverage F, coverage applies to persons that are on the insured location with permission
B 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 of the following best describes the reason to purchase an HO-8? A When looking for a policy that covers the dwelling on an ACV basis B When insuring an older home that might create a moral hazard when insurance is written at replacement cost C When insuring homes with a replacement cost exceeding $250,000 D When insuring homes namely located on farms
B When insuring an older home that might create a moral hazard when insurance is written at replacement cost The HO-8 is designed for the well-maintained older homes, which may contain property or construction features difficult or impossible to replace.
If the insured fails to use an available fire extinguisher to put out a shed fire that results in $1,000 damage, how much will an HO-3 Policy pay for the claim? A $900 B Zero C $500 D $1,000
B Zero The Neglect Exclusion prevents coverage since the insured failed to use all reasonable means to save covered property.
Policyholder C's debit card is stolen, and $1,000 is subsequently stolen from his account. How much will his HO-3 pay for the loss? A 0% B $250 C $500 D $1,000
C $500 Coverage up to $500 is paid for theft or unauthorized use of a credit card or electronic fund transfer card (debit card).
Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? A The named insured's spouse B A tenant who lives in a portion of the insured's residence C A residence employee D The named insured
C A residence employee
Which of the following homeowners coverages does not have a deductible? A Personal Property B Other Structures C Damage to Property of Others D Dwelling
C Damage to Property of Others Damage to Property of Others is an Additional Coverage under Section II, which is not subject to a deductible.
A deer chews a hole in an insured's shed sitting next to a pond. Which of the following forms could cover this damage? A HO-8 B DP-1 C HO-3 D HO-2
C HO-3 The HO-3 Special Form covers everything except what is excluded. A deer is not a listed exclusion as it is not considered a bird, vermin, rodent, or insect.
The HO-5 personal property coverages are insured on which basis? A Broad Perils B Basic Perils C Open Perils D Modified Perils
C Open Perils The HO-5 is the broadest policy providing open perils coverage on Coverages A, B, and C.
Which of the following is not covered under Section II of the Homeowners Policy? A The insured's liability for damages to property of others B Medical expenses for an accident arising out of the premises or non-business activities of an insured C Property of the insured D The insured's liability for bodily injury to others
C Property of the insured
Choose the true statement concerning Homeowners Policies. A The HO-4 provides open peril coverage on both the dwelling and contents B Section I limits coverage on utility trailers up to $500 C The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement D Section I limits coverage on fire department service charge to $100
C 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 statement is true concerning Coverage D of the Homeowners Policy? A The coverage will pay for all the insured's living expenses until the property is restored B The coverage will pay until the property is restored, plus 30 days relocation expense C The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living D If the insured must relocate permanently, payment will be made for 365 days, regardless of the time it takes the insured to settle at the new location
C The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living
Which person is not a covered resident under the Homeowners Policy? A A 22-year-old son enrolled in school full time away from home B A 20-year-old exchange student who is a resident of the household C The insured's tenant D The insured's spouse
C The insured's tenant Tenants must acquire their own insurance to cover their personal property and liability.
Under Coverage A of the Homeowners Policy, all of the following are covered, except: A An attached garage B Lumber in the insured's yard to be used to build a deck off the kitchen C The land on which the dwelling is located D The dwelling on the residence premises
C The land on which the dwelling is located
An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a flood destroying the wood flooring. The policy will pay: A $1,500 B $1,000 C Zero D $1,250
C Zero Flood is a Section I exclusion and is not covered.
Under an HO-3 policy, what is the coinsurance requirement? A 75% B 50% C 90% D 80%
D 80% If Coverage A is less than 80% at the time of a loss to the dwelling, a penalty will be applied to the partial dwelling loss claim payment.
All of the following are considered to be insured under a Homeowners Policy, except: A A son or daughter while away at college, who is 23 B A 79-year-old father-in-law who is living with an insured C A friend's 14-year-old daughter who is living with an insured D A 25-year-old friend who is living with an insured
D 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 claims would be covered by the First Aid Expenses under the Homeowners Policy? A The named insured is injured while off the premises B A member of the insured's family is injured while on the premises C Nonfamily residents of the household are injured while on the premises D A neighbor is injured while helping the insured install a carpet
D A neighbor is injured while helping the insured install a carpet First Aid Expenses Coverage applies to first aid to others caused by Bodily Injury covered under the policy, but does not pay for first aid to an insured.
Under the Homeowners policy, which coverage provides indirect loss coverage? A Coverage B B Coverage A C Coverage C D Coverage D
D Coverage D Coverage D provides for the insured's additional living expenses necessitated by damage to the dwelling, an example of indirect loss.
The Home Day Care endorsement does not provide which of the following? A Coverage on the residence premises B Medical payments C A policy year aggregate limit for personal liability and medical payments D Coverage for a day care employee
D Coverage for a day care employee
How is Mobile Home insurance written? A By writing a separate Mobile Homeowners Policy only B Mobile homes cannot be covered C By adding a Mobile Home Endorsement to a Homeowners Policy only D Either by writing a separate Mobile Homeowners Policy or by adding an endorsement to a Homeowners Policy
D Either by writing a separate Mobile Homeowners Policy or by adding an endorsement to a Homeowners Policy Insurance on mobile homes may be written by adding a Mobile Home Endorsement to a Homeowners Policy, or by writing a separate Mobile Homeowners Policy.
Which statement is false regarding the National Flood Insurance Program (NFIP)? A Coverage includes the increased cost of compliance with flood plain management ordinances B The Regular Program allows coverage on a single family dwelling up to $250,000 C The Emergency Program applies after a community has agreed to, but has not yet completed, the process to adopt flood control measures D It provides coverage for direct and indirect loss to covered property as the result of flooding
D It provides coverage for direct and indirect loss to covered property as the result of flooding The National Flood Insurance Program does not provide any indirect financial loss coverage. It covers direct loss only to the insured property from those conditions that constitute the definition of flood under the Program.
Which of the following claims would be covered under the Personal Injury Endorsement attached to an HO-3 Policy? A Liability arising out of disputes between insureds B Civil activities for which the insured is paid C Injury related to a business engaged in by the insured D Liability arising from publication of material that violates another person's right of privacy
D Liability arising from publication of material that violates another person's right of privacy
Which of the following coverages is provided under the Additional Coverage of Property Removed? A Named peril coverage for 15 days B Named peril coverage for 30 days C Open peril coverage for 10 days D Open peril coverage for 30 days
D 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 of the following is NOT a 'residence premises' in the homeowners policy? A A one-family residence where the named insured resides B Other structures on the Declarations if shown as the 'residence premises' C A three-family dwelling where the named insured resides D Premises rented occasionally to the named insured for non-business purposes
D Premises rented occasionally to the named insured for non-business purposes A location rented occasionally to the named insured for non-business purposes is an 'insured location.'
In respect to Section II of a Homeowners Policy, all of the following are true, except: A Damage to Property of Others pays up to $1,000 per occurrence B Individual and family cemetery plots qualify as an insured location C Bodily injury or property damage arising from a vehicle used to assist the handicapped, such as a wheelchair, is covered D Section II losses are subject to a standard $250 deductible
D Section II losses are subject to a standard $250 deductible Section II losses are not subject to a deductible.
Which statement is true concerning Homeowners policies? A The HO-4 provides open peril coverage on both the dwelling and contents B Section I limits coverage on utility trailers up to $500 C Section I limits coverage on fire department service charge to $100 D The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement
D The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement
Choose the correct statement regarding the HO-3. A The contents are written on an Open Peril basis B The dwelling and other structures are written on a Broad Form Perils basis C Coverages A, B, and C are all written on a Replacement Cost basis D The dwelling and other structures are written on an Open Peril basis
D The dwelling and other structures are written on an Open Peril basis
Which of the following is true regarding eligibility of a Homeowners Policy? A The dwelling may be multi-family with up to 5 families B The dwelling must be less than 30 years old C There may be no business occupancies in the dwelling D The dwelling must be the principal residence of the insured
D The dwelling must be the principal residence of the insured
