Types of Property Policies
What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?
$10,000 for all expenses incurred during a 12-month period *The maximum the insurer will pay under this extension is $10,000 for all expenses incurred during a 12-month period.
Vandals do damage to glass that is a part of a covered building. Under the broad form of a building and personal property policy, each glass plate will be covered for up to
$100
The insured purchased a $200,000 extra expense policy. If the percentages applying to the limit of insurance are 40%, 80%, and 100%, what would be the maximum payable for a 47-day loss?
$160,000 *Extra expense coverage is written with a minimum of 3 applicable percentages that apply to the limit of insurance in the declarations. When the period of restoration is 30 days or less, the first percentage applies; when it is more than 30 days and not more than 60 days, the second percentage applies; when more than 60 days, the third percentage applies.
The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to
$250,000 *It is written for the value of the dwelling up to $250,000 on a replacement cost basis.
What is the limit for the forgery or alteration coverage in the businessowners policy?
$2,500
If an individual insures his dwelling and contents under a DP-3, he would be protected against loss by all of the following perils EXCEPT -damage to the dwelling caused by burglars -theft of personal property located in the dwelling -damage caused by the weight of ice, sleet, or snow -damage caused by vandals
-theft of personal property located in the dwelling
All of the following are perils covered under the BROAD form dwelling policy EXCEPT -lightning -collapse -theft -fire
theft
Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?
12:01 am the day after the application and premium payment are mailed *During the first 30 days after a community enters the emergency or normal programs, coverage on a flood policy begins at 12:01 a.m. the day after application and premium payment have been mailed. Review ContentNext Question
Within how many years of a loss may an insured bring a lawsuit against an insurer, according to dwelling policy?
2 years *If an insured wants to bring a suit against an insurer, the insured must comply with all policy conditions and start action against the insurer within 2 years of the loss.
Under the conditions of a Film Coverage Form, how long must the insured maintain records of each production?
3 years after the policy expires
How long is the waiting period after the application has been accepted before flood coverage goes into effect?
30 days *The waiting period is 30 days as required by the National Flood Insurance Program.
Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is
50% of the amount provided as coverage A *under HO forms, Coverage C is automatically provided as equal to 50% of the amount provided in Coverage A
Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days?
60 Days *Vandalism and malicious mischief will not be covered if the insured's premises have been vacant for more than 60 days immediately prior to the loss.
What is the coinsurance requirement for a theatrical property floater under an Inland Marine policy?
80% *Theatrical property intended for a specific theatrical production can be insured using this Inland Marine Coverage Form. Coverage is written with an 80% coinsurance requirement.
A businessowners policy is..
A self-contained prepackaged policy *A businessowners policy is similar in structure to the personal lines homeowners policy except it covers a business exposure for both property and liability losses.
Which of the following is covered under the Mail floater of Commercial Inland Marine policy ONLY if is sent by registered mail? A) Currency and unsold travelers checks B) Postage and revenue stamps C) Money orders, checks, drafts, notes D) Bonds, stocks, stock certificates, coupons attached to bonds
A) Currency and unsold travelers checks *Property covered only when sent by registered mail includes the following: bullion; platinum and other precious metals; currency and unsold travelers checks; or jewelry, watches, precious and semiprecious stones and similar property.
Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? A) Motor truck cargo policy - truckers form B) Motor truck cargo policy - owners form C) Trip transit policy D) Truckers coverage form
A) Motor truck cargo policy - truckers form *The motor trucker cargo truckers is liability insurance and the owners form is property coverage.
Which of the following is NOT one of the available additional coverages in the builders risk form? A) Vandalism B) Debris removal C) Fire department service charge D) Pollutant cleanup
A) Vandalism *The 4 additional coverages offered by the builders risk form are debris removal, fire department service charge, pollutant cleanup and removal, and preservation of property.
An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home is severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays at a motel while the repairs are made. How much will the HO-3 pay for their additional living expense?
All of the expense up to the Coverage D limit *Coverage D will pay the expenses incurred to maintain the same lifestyle as before the loss. Review ContentNext Question
The inspections and surveys condition in a businessowners policy..
Allows the insurer the right to inspect the insured's premises *The inspections and surveys condition gives the insurance company the right to inspect the insured's premises and operations at any reasonable time during the policy period. Inspections and surveys are not required. This condition does not make safety inspection, nor does it guarantee that the conditions are safe, healthful, or meet safety regulations.
Which coverage form would provide coverage for all incoming and outgoing shipments?
Annual Transit * Annual transit policies provide coverage for a shipper's or receiver's incoming and outgoing shipments during the year
The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will
Apply to injuries of any guests or visitors *Homeowners medical payments coverage applies to injury of any guests or visitors of the insured who are on the insured's premises with the insured's permission.
Which of the following would be covered by the broad theft endorsement on a dwelling policy? A) An antique car B) A camera the insured has with him on vacation C) A pedigreed show dog D) Fabric and patterns in a clothing designer's studio at her home
B) A camera the insured has with him on vacation *All of these examples except the camera are types of property specifically excluded from coverage under the broad theft endorsement.
Which of the following would NOT be considered a flood? A) Runoff of surface waters B) Sewer backup C) Overflow of tidal waters D) Mudslides
B) Sewer Backup *Flood is defined by the National Flood Insurance Program. It does not include sewer backup.
All of the following are essential elements of a commercial package policy (CPP) EXCEPT A) Policy conditions B) Valuations and/or settlement provisions C) Interline endorsements D) Declarations page
B) Valuations and/or settlement provisions *Regardless of how the policy is written, it will be comprised of the following essential elements: 1) declarations page; 2) conditions; 3) interline endorsements; and 4) coverage parts.
Which of the following claims would be included under the dwelling policy? A) Theft of the insured's auto from the detached garage B) Death to the insured's pet caused by smoke inhalation C) Fire damage to the insured's rowboat stored in the attached garage D) Fire damage to a garage located on the insured premises used as an auto repair shop.
C) Fire damage to the insured's rowboat stored in the attached garage * Rowboats and canoes are covered under the dwelling policy as personal property.
Which of the following additional perils is covered under both the basic form and broad form dwelling policies? A) Weight of ice, snow, or sleet B) Freezing of plumbing, heating, or air conditioning systems C) Internal explosion D) Falling objects
C) Internal Explosions *Internal explosion is included in all forms
The Physicians and Surgeons Equipment Floater in NOT intended for which of the following? A) Waiting room furniture in a doctor's office B) Office equipment located in a dentist's office C) Medical supplies located in a hospital D) Surgeon's supplies located in the surgeon's office
C) Medical supplies located in a hospital *This coverage form protects individuals in the medical or dental profession for loss to valuable medical and dental equipment, materials and supplies, including office equipment and furniture, and similar property of others. Coverage is not intended for hospitals, schools or other institutions.
Richard owns and operates a commercial business. He has included a business income coverage form with his commercial package policy. When Richard's business is severely damaged by fire, the business income coverage will pay for A) Annual sales less the cost of merchandise. B) Loss of total annual sales. C) Net income plus continuing expenses of the business. D) Sales value production less the cost of raw stock.
C) Net income plus continuing expenses of the business *In the event of a covered loss, the business income coverage will pay those profits that would have been realized if there had been no loss and the expenses of the business that continue, even though the business is not operating.
All of the following types of property are covered by a standard builders risk form EXCEPT A) Temporary structures. B) Machinery that will be permanently attached to the building. C) Tools 50 feet away from the building. D) The building itself.
C) Tools 50 feet away from the building * Property covered under a builder's risk coverage form includes the building or structure, temporary structures, foundations, fixtures, machinery, equipment, materials, and supplies within 100 feet of the premises if intended to become a permanent part of the building. Tools that are not intended to become permanent part of the structure will not be covered, no matter how close they are to the building.
Which of the following other coverages is NOT included in the basic form dwelling policy? A) Personal property temporarily away from the insured premises B) Tenant's improvements, alterations, and additions C) Breakage of glass D) Removal coverage
C) breakage of glass * Breakage of glass is included in the DP-2 and DP-3 only.
Builder's risk is most often written on which form?
Completed Value Form
Which of the following is covered under the Camera and Musical Instruments Dealers floater? A) A musical instrument sold and delivered to a customer B) Furniture, fixtures and office supplies in a music store C) Money kept on premises of a camera shop D) A customer's camera left at a camera shop for repair
D) A customer's camera left at a camera shop for repair * Covered property includes customer's property left for repair, cleaning or service.
Which would be considered a single accident in equipment breakdown coverage? A) All accidents at all insured locations at same time by same cause B) All accidents at same location within a 24-hour period C) All accidents at same location within a 48-hour period D) All accidents at single location at same time by same cause
D) All accidents at single location at same time by same cause *If an accident causes other accidents, all related accidents will be treated as one accident. All accidents occurring at a single location at the same time, and having the same cause, will be considered to be one accident.
Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? A) Overflow of inland or tidal waters B) Unusual and rapid accumulation or runoff of surface waters from any source C) A mudflow D) All of the above could be considered flood sources
D) All of the above could be considered flood sources *A flood, as defined by the National Flood Insurance Program is a general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties from overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters from any source, or mudflow.
Which of the following is NOT covered under accounts receivable coverage form? A) Interest on loans required to offset uncollectible amount pending payment of the insurance proceeds B) Sums due the insured that are uncollectible due to a covered loss C) Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs D) Any loans required to offset uncollectible amounts
D) Any loans required to offset uncollectible amounts *Loan principal amounts are not covered under the form. However, other expenses, such as interest on necessary loans, are covered.
Which of the following risks ARE eligible for coverage under a businessowners policy (BOP)? A) Banks B) Automobile dealers C) Bars or taverns D) Condominiums ISO maintains a list of risks not eligible for consideration for a BOP. Financial institutions, auto dealers, and bars and grills are specifically excluded from coverage.
D) Condominiums ISO maintains a list of risks not eligible for consideration for a BOP. Financial institutions, auto dealers, and bars and grills are specifically excluded from coverage.
The commercial property declarations page contains which of the following information? A) Interline endorsements B) Cause of loss forms C) Description of the property insured D) Common policy conditions
D) Description of property insured *The declarations page provides the information as to who, what, when, where, and how much. The interline endorsements, policy conditions, and cause of loss forms are modular parts that are combined to create the contract.
All of the following are excluded in the equipment breakdown basic policy EXCEPT A) Ordinance or law coverage. B) Business interruption. C) Loss of power, lights, heat, steam, or refrigeration. D) Explosion of steam boilers.
D) Explosion of steam boilers *Equipment breakdown coverage covers the sudden and accidental breakdown of the vessel. Business interruption may be added by endorsement.
Which of the following would be covered under the Film Coverage Form? A) Deterioration of a film B) Exposure of a negative film to light C) Electrical erasure of a tape D) None of these are covered.
D) None of these are covered *The all-risk coverage form excludes the following additional causes of loss: deterioration, atmospheric dampness or changes in temperature; exposure of negative film to light; use of developing chemicals; developing, cutting, or printing of film or other laboratory work; electrical or magnetic injury, disturbance or erasure.
Which of the following would be the insured's duty in the event of a loss according to the duties in event of occurrence, claim or suit condition? A) Delivering a claim to the insured in person B) Initiating the investigation of a claim C) Promptly notifying the insurer of a claim by phone D) Providing specific details regarding an occurrence
D) Providing specific details regarding the occurrence *In the event of a loss, the insured's duties include the following: promptly notifying the insurer of the occurrence (how, when, where, names and address of any injured persons); prompt written notice of a claim; promptly notifying the insurer of any legal papers received related to the loss; and cooperating and assisting in the investigation of a claim.
Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT A) The insurer does not make safety inspections for the insured. B) The insurer does not guarantee that conditions are safe or healthful. C) The insurer does not guarantee that the insured is meeting all required safety regulations. D) The insurer does not have the right to inspect the insured's property and operations.
D) The insurer does not have the right to inspect the insured's property and operations. *The inspection and survey condition DOES allow the insurer the right to inspect the property and operations. These inspections are important in determining the insurability of the insured's property and operations, in setting proper insurance rates, and in making loss control recommendations.
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value? A) They qualify for maximum compensation under the flood insurance program. B) They are excluded from the flood insurance policy. C) They are subject to a $1,000 deductible. D) They are automatically provided with replacement cost coverage.
D) They are automatically provided with replacement cost coverage *Single-family dwellings are automatically provided with replacement cost coverage if insured to at least 80% of the replacement value, or the maximum allowed under the regular flood insurance program.
According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss?
Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers. *If the insurer and the insured are unable to reach an agreement as to the value of damaged property, either party may make a written request for appraisal.
Individuals in the business of selling construction equipment and mobile equipment should insure with a/an
Equipment dealers coverage form
A BOP (businessowners policy) is most similar to
Homeowners *The BOP is most similar in structure to the personal lines homeowners policy because both require that the policy provide property insurance and liability insurance in a single policy.
How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeowners policy?
It removes the coverage *The mobilehome endorsement makes the other coverage of law or ordinance inapplicable to the policy.
A business using its own trucks to move its own cargo would insure the cargo using
Motor truck cargo - owners form. *A business using its own trucks to move its own cargo would insure the cargo using the owners form.
What type of property does a Personal Floaters policy cover?
Moveable personal property, wherever it may be located *Personal floaters refers to an inland marine policy designed to cover movable personal property, wherever it may be located
The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land
Owned or leased by the resident of the mobilehome *The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land owned or leased by the resident of the mobilehome.
Who would participate in a WYO program?
Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis * A WYO (write your own) program is made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Administration. WYO programs retain part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses.
Your accounts receivable records have been destroyed or damaged. Your loss may be covered with
The accounts receivable coverage form *The accounts receivable coverage form reimburses the insured for amounts that can't be collected from customers due to damage to the company's records.
Contractor's equipment floater
The contractors equipment floater covers equipment left unattended on a job site until the project is finished.
Under the provisions of the business income coverage form, all of the following are true EXCEPT A) The insured is reimbursed for payroll that continues after the loss begins. B) The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first. C) If the insured and insurer are unable to come to agreement as to the value of the loss, either party may make a written demand for an appraisal. D) The insured agrees to resume all or part of operations as quickly as possible.
The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first. *Business Income will pay beyond the expiration date of a policy. It will pay until the business is restored or the limits of coverage are exhausted.
The type of insurance used to cover goods for one specific trip is called
Trip Transit *Trip transit policies cover a single shipment of goods for a specific trip.
Equipment Dealers coverage form
covers -dealer's stock in trade consisting primarily of agricultural equipment and construction equipment -property of others in the dealer's care, custody, or control *excludes coverage for autos, motorcycles, aircraft, and watercraft.
The major portion of the premium for an equipment breakdown policy pays
for inspections and examinations *inspecting the machinery to be insured is critical to the underwriting of equipment breakdown coverage. Finding flaws that could lead to losses and requiring corrective action is the purpose
The neighborhood association, of which an insured is a member, has become liable for the damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay?
up to $1,000 *The policy will pay up to $1,000 per occurrence for the insured's share of loss assessment charged against them as owner or tenant of the residence premises during the policy period by a corporation or association of property owners.