Quiz 2

If a boat does damage to another vessel's hull, which coverage indemnifies for the loss? A)Protection and indemnity. B)Inland marine. C)Hull insurance. D)Medical payments.

A)Protection and indemnity.

In regards to personal property coverage in the homeowners program, all of the following statements are correct EXCEPT: A)Money and bullion are limited to $200. B)Scheduled personal property coverage of greater than the established limits is available through a Personal Articles Floater. C)The special form (HO 00 03) provides open perils coverage on personal property. D)Personal property coverage is usually 50% of the limit provided for Coverage A.

C)The special form (HO 00 03) provides open perils coverage on personal property.

An insured has a HO 00 05 homeowners policy with a $100,000 Coverage A limit, a $250 deductible and a $300,000 Coverage E limit. An individual has won a $500,000 bodily injury award from the insured with defense costs equaling $75,000. How much will the HO 00 05 policy pay? A)$375,000. B)$374,750. C)$300,000. D)$175,000

A)$375,000.

Which of the following items would be covered under a broad form homeowners policy? A)A neighbor's lawnmower borrowed by the insured. B)Property of an unrelated tenant. C)A detached garage damaged during an earthquake. D)Cassette tapes in the trunk of the insured's vehicle.

A)A neighbor's lawnmower borrowed by the insured.

Which of the following is covered by flood insurance? A)Contents of a dwelling damaged in a mudslide. B)Structural damage to a duplex caused by a landslide. C)Growing crops and livestock destroyed when a river overflows its banks. D)Looting of personal property in a flooded area.

A)Contents of a dwelling damaged in a mudslide.

Coverage D in a homeowners policy: A)Covers the necessary increase in living expenses incurred because of a covered peril. B)Will pay a maximum of 1/12 of the limit for each month the premises is untenable. C)Provides the same limit of coverage in all forms. D)All of the above.

A)Covers the necessary increase in living expenses incurred because of a covered peril.

Which of the following perils would NOT be covered under a DP-1? A)Falling objects. B)Explosion. C)Vandalism. D)Lightning.

A)Falling objects.

Under the various dwelling forms, permission is granted: A)For such use of the premises as is usual and incidental to a residence. B)For the premises to be vacant or unoccupied without limit of time on all coverages. C)To operate a small manufacturing venture with fewer than 4 employees. D)To use the premises for a small retail shop if operated by the insured.

A)For such use of the premises as is usual and incidental to a residence.

A homeowners policy provides coverage for all of the following EXCEPT: A)Medical payments for the insured. B)Property damage to others. C)Medical payments to others. D)Bodily injury to others.

A)Medical payments for the insured.

A party claiming that a child was injured by an abusive action of the insured has been awarded a judgment in a civil action. Section II of the homeowners policy would pay: A)Nothing. B)Legal defense costs only. C)The medical payment limit only. D)Up to the full limit of liability coverage afforded by the policy.

A)Nothing.

A dwelling and detached garage are insured under a homeowners policy with a $250 Section I "all peril" deductible. In event both buildings are damaged by fire, which of the following statements would be correct? A)One $250 deductible would apply since the deductible does not apply to each building separately. B)The $250 deductible applies to each building separately .C)No deductible applies unless the loss exceeds $500. D)No deductible applies if the insurance carried is 80% of the building's value.

A)One $250 deductible would apply since the deductible does not apply to each building separately.

The Personal Articles floater provides: A)Open peril, scheduled coverage on personal property anywhere in the world. B)Open peril, blanket coverage on limited amounts of personal property. C)Open peril, itemized coverage on personal property anywhere in the United States, Canada or Puerto Rico. D)Broad form, named peril coverage on scheduled personal property anywhere in the world.

A)Open peril, scheduled coverage on personal property anywhere in the world.

Dwelling forms may extend coverage to all of the following EXCEPT: A)Personal property of an unrelated tenant. B)Personal property of a servant. C)Personal property of guests. D)Personal property borrowed by the insured.

A)Personal property of an unrelated tenant.

The National Flood Insurance Program (NFIP) contains all of the following requirements and benefits EXCEPT: A)Provides open peril dwelling coverage to property owners unable to purchase property insurance in the normal market due to the increased risk of flood. B)Provides back-up reinsurance through FEMA allowing private insurers to provide the coverage at subsidized rates. C)Eligibility for the regular plan is restricted to communities meeting FEMA'S requirement for flood control practices. D)Rates paid by insureds for flood insurance will vary in accordance with the location of the property on the Flood Insurance Rate Map.

A)Provides open peril dwelling coverage to property owners unable to purchase property insurance in the normal market due to the increased risk of flood.

Which form of the homeowners program is tailored for condominium owners? A)Unit-owners form. B)Broad form. C)Special form. D)Contents form.

A)Unit-owners form.

A flood policy goes into effect at which of the following times? A)When the agent binds coverage. B)Upon the date of application. C)Thirty days after the date of the application. D)Sixty days after the date of the application

C)Thirty days after the date of the application.

John and Martha insured their home on a HO 00 02 for $100,000. A thief stole $15,000 worth of silverware. They could collect: A)Nothing. B)$10,000. C)$12,500. D)$15,000.

B)$10,000.

Under Coverage D of the basic dwelling form, how much can be recovered for one month on a $60,000 policy with a $100 deductible? A)$400. B)$500. C)$5,900. D)$6,000.

B)$500.

Which of the following losses would be covered under a HO 00 02? A)Food spoilage due to a power interruption that occurs away from the premises. B)A garage damaged by the named insured backing a vehicle into it. C)Theft of cassette tapes while in the insured's car. D)First aid provided to an insured person injured on the premises.

B)A garage damaged by the named insured backing a vehicle into it.

If two structures insured at the same premises and under the same dwelling policy were damaged in one windstorm, the deductible would: A)Apply separately to each structure. B)Apply as one loss. C)No deductible would apply. D)None of the above.

B)Apply as one loss.

Which of the following homeowners forms are purchased by an amount of Coverage A? A)Forms 00 04 and 00 06. B)Forms 00 02 and 00 03. C)Forms 00 02 and 00 04. D)Forms 00 02 and 00 06.

B)Forms 00 02 and 00 03.

The definition of rental value includes: I. Gross rental income from tenant occupancy. II. Fair rental value of the portion of a dwelling occupied by the insured held for rental. III. Expenses charged to tenants that cease when vacant. A)I only. B)I and II. C)I and III. D)I, II, III.

B)I and II.

Which of the following forms have no (or very limited) amounts of Coverage A? I. HO 00 02. II. HO 00 03. III. HO 00 04 IV. HO 00 06. A)I & IV. B)III & IV. C)II & III. D)II & IV.

B)III & IV.

Under the broad form homeowners policy, all of the following are covered EXCEPT: A)Unscheduled personal property. B)Liability in excess of the deductible. C)Additional living expenses. D)Medical payments to others.

B)Liability in excess of the deductible.

The broad form homeowners policy restricts coverage of money and securities to: A)MONEY SECURITIES$100 $500 B)MONEY SECURITIES$200 $1500 C)MONEY SECURITIES$500 $1500 D)MONEY SECURITIES$1000 $5000

B)MONEY SECURITIES$200 $1500

Covered items in a dwelling policy do NOT include: A)T.V. aerials. B)Stock certificates. C)Materials and supplies on the premises intended for use in the construction of the dwelling. D)Awnings.

B)Stock certificates.

All of the following statements regarding the HO 00 02 are correct EXCEPT: A)The dwelling structure is covered. B)This form provides open perils coverage. C)Other structures are covered. D)Losses caused by vandalism are covered.

B)This form provides open perils coverage.

What is the purpose of the National Flood Insurance Program? A)To provide open peril property insurance in flood prone areas. B)To encourage communities to implement flood control measures and plan future growth. C)To enable property owners to purchase basic property insurance at unsubsidized rates. D)To allow federal intervention in the regulation of property insurance rates.

B)To encourage communities to implement flood control measures and plan future growth.

Territorial limits of the personal articles floater are: A)Usually the United States and Canada. B)Usually worldwide. C)Usually the continental United States. D)Usually the continental United States and its territories and possessions.

B)Usually worldwide.

Which of the following occurrences would be provided a benefit under Coverage E of the HO program? A)An insured person injures another person while driving a golf cart to the golf course from the insured premises. B)An insured, with the Business Pursuits endorsement, damages someone's property while conducting their home improvement business. C)The insured does property damage to another person's boat while operating their 20 HP outboard motorboat at the lake. D)An insured, while volunteering at a church day care center, spanks and injures a child who is in the care of the center.

C)The insured does property damage to another person's boat while operating their 20 HP outboard motorboat at the lake.

Under a homeowners policy, what is the maximum amount that will be paid for the theft of manuscripts on all forms? A)$250. B)$1,000. C)$1,500 D)$2,500.

C)$1,500

Mr. Jones has a $50,000 HO 00 03 homeowners policy. He has a theft loss that results in $2,000 damage to his home and the theft of $250 in cash and $650 of plane tickets. How much will he collect? A)$2,750. B)$2,800. C)$2,850. D)$2,900.

C)$2,850.

Your house has a replacement cost of $100,000. In order to have replacement cost coverage without penalty for partial structural losses, your home must be insured for at least how much at the time of the loss? A)$50,000. B)$70,000. C)$80,000. D)$100,000.

C)$80,000.

Under a personal articles floater, a set of antique salt and pepper shakers are insured for $1,000. When one of the shakers is broken, the remaining shaker is only worth $200. How much will the insured receive for this loss? A)$200. B)$500. C)$800. D)$1,000.

C)$800.

Which of the following occupancies would NOT be acceptable under a homeowners policy? A)An office for the insured inside the dwelling. B)The daughter of the insured providing baton lessons for a fee. C)A beauty parlor operated by the next door neighbor. D)A part-time computer typesetting service operated by the insured.

C)A beauty parlor operated by the next door neighbor.

Which of the following examples best describes a consequential loss? A)A tree falling on the roof. B)A TV antenna blown off a roof. C)A dwelling fire causing a loss of rental income. D)A fire in a detached storeroom destroying accounts receivable records.

C)A dwelling fire causing a loss of rental income.

Which of the following is generally considered to be a definition of "vacancy" in respect to a dwelling? A)A dwelling that contains furniture or contents, but is not being used by a person B)Property of the insured surrendered to the insurance company after a loss for demand of payment. C)A dwelling from which the contents and occupants are removed. D)Both A and B.

C)A dwelling from which the contents and occupants are removed.

Which of the following is eligible to receive homeowners medical payments in the event of an injury at the insured's premises? A)The named insured. B)A burglar injured while breaking into the insured's home. C)A guest who was invited to a party. D)All of the above.

C)A guest who was invited to a party.

All of the following are included in the definition of personal injury EXCEPT: A)Slander. B)Defamation. C)Bodily injury. D)Libel.

C)Bodily injury.

All of the following coverage extensions are provided in the various HO policies EXCEPT: A)Coverage for plants, trees and shrubs up to a maximum of 5% of the Coverage A limit. B)Additions and alterations made by a tenant are covered up to $1,000. C)Business structures on the premises are covered for up to 50% of Coverage B limits. D)Expenses incurred to provide temporary protection of the property is covered.

C)Business structures on the premises are covered for up to 50% of Coverage B limits.

Coverage B of the homeowners program would apply to which of the following losses? A)Damage to building materials to be used to remodel the kitchen of the dwelling. B)Damage to a heat pump unit located on a concrete pad next to the dwelling. C)Damage to an in-ground swimming pool. D)Damage to a wood deck connected to the dwelling.

C)Damage to an in-ground swimming pool.

Which of the following coverages are NOT found in all homeowners policies? A)Personal Property (Coverage C). B)Loss of Use (Coverage D). C)Dwelling (Coverage A). D)Personal Liability (Coverage E).

C)Dwelling (Coverage A).

The personal article floater (PAF) is an insurance form used to insure individual personal property such as jewelry, furs, cameras, musical instruments, silverware, fine arts, golfer's equipment, stamps and coin collections, and outboard boats and motors, all on a (an): I. Itemized basis. II. Open perils basis. III. Blanket basis. A)I only. B)II and III. C)I and II. D)I, II, III.

C)I and II.

The coverages provided by the various Homeowners forms are: A)Named perils on the dwelling and open perils on the contents in the HO 00 03. B)Open perils on both dwelling and contents in the HO 00 04. C)Open perils on the dwelling and named perils on contents in the HO 00 03. D)Open perils on contents only in the HO 00 04.

C)Open perils on the dwelling and named perils on contents in the HO 00 03.

Under Coverage D of the broad form dwelling policy, what is the maximum amount that could be recovered for one month on a $60,000 policy with a $100 deductible? A)$500. B)$400. C)$5,900. D)$6,000.

D)$6,000.

John insured his home on a HO 00 02 for $100,000. In the case of a total loss, what would be the most he could collect under Coverages A, B, C, and D? A)$100,000. B)$110,000. C)$150,000. D)$180,000.

D)$180,000.

Which of the following structures would NOT be insured under Coverage B? A)A garage connected to the dwelling by utility lines. B)A tree house built in the back yard. C)A free standing utility building. D)A gazebo connected to the dwelling by a wood deck.

D)A gazebo connected to the dwelling by a wood deck.

Which of the following dwellings may NOT be covered under the Dwelling Program? A)An apartment building with 3 apartments. B)A frame structure considered too old to be insured on a homeowners policy. C)A single family dwelling with a beauty parlor operated by the insured. D)A single family dwelling on a farm of less than 30 acres.

D)A single family dwelling on a farm of less than 30 acres.

Which of the following homeowners forms is tailored for apartment renters? A)Unit-owners form. B)Broad form. C)Special form. D)Contents broad form.

D)Contents broad form.

The homeowners policy may provide: A)Monoline property coverage on property valued over $15,000. B)Replacement cost for personal property without endorsement. C)Property coverage for aircraft stored at the insured premises. D)Coverage on a secondary dwelling located in the same state if the coverage is written on a separate policy.

D)Coverage on a secondary dwelling located in the same state if the coverage is written on a separate policy.

Which of the following homeowners policies provides open peril coverage on personal property? A)HO 00 02. B)HO 00 03. C)HO 00 04. D)HO 00 05.

D)HO 00 05.

All of the following statements regarding watercraft or yacht coverage are correct EXCEPT: A)Protection and indemnity provides liability coverage to owners of watercraft. B)Liability arising out of towing a person behind a boat on skis may be provided by an endorsement. C)Coverage on certain types of watercraft can be obtained by endorsing the coverage to a homeowners policy. D)Hull insurance protects against damage to the hull of the insured's boat or another vessel damaged by the insured.

D)Hull insurance protects against damage to the hull of the insured's boat or another vessel damaged by the insured.

All of the following are true concerning the Medical Payments to Others coverage found in the homeowners policy EXCEPT A)It pays on a per person per occurrence basis B)It is part of the Section II coverage found in all homeowners policies. C)It has a standard limit of $1,000 per person. D)Its covers injuries to family members of the named insured residing at the insured premises.

D)Its covers injuries to family members of the named insured residing at the insured premises.

Liability coverage (Section II) of the homeowners policy provides: A)Different coverages in the broad and special forms. B)Medical expense coverage to uninvited intruders due to its no-fault concept. C)Medical expense coverage to an insured person. D)Legal defense costs in excess of the liability limit.

D)Legal defense costs in excess of the liability limit.

Contents coverage in Homeowners insurance: A)Must be purchased in addition to coverage on the dwelling structure. B)Restricts the coverage area to on premises only. C)Covers the personal property of the insured's unrelated roommate. D)Limits the amount payable for a theft loss to jewelry.

D)Limits the amount payable for a theft loss to jewelry.

Replacement cost coverage for partial structural losses is available on: A)All dwelling policy forms. B)Only on the special dwelling form. C)Only on the basic and broad forms. D)Only on the broad and special forms.

D)Only on the broad and special forms.

A dwelling is insured under two fire policies. Policy A is for $12,000 and policy B is for $8,000. If a loss of $10,000 occurs: A)Policy A pays the entire $10,000. B)Policy A pays $7,500; policy B pays $2,500. C)Policy A pays $5,000; policy B pays $5,000. D)Policy A pays $6,000; policy B pays $4,000.

D)Policy A pays $6,000; policy B pays $4,000.

The basic form Dwelling policy provides all of the following coverages EXCEPT: A)ACV recovery without an endorsement. B)Loss of rental value coverage in the amount of 1/12th of Part D limits per month. C)Removal coverage for 5 days. D)Single limit liability coverage on a per occurrence basis.

D)Single limit liability coverage on a per occurrence basis.

Which of the following losses would NOT be covered under the HO 00 02 policy? A)Collapse of a building due to insect infestation. B)Theft of $100 of business property from a vehicle owned by the named insured C)Damage to an appurtenant structure caused by a falling tree. D)Theft of a boarder's jewelry.

D)Theft of a boarder's jewelry.