1 HO-3 Section II - Liability Coverages Quiz

Liability coverage applies only to bodily injury and property damage that result from an occurrence. An occurrence can be any of the following, EXCEPT: A sudden event A gradual series of incidents A continuous condition A nonfortuitous event

A nonfortuitous event

The medical payments coverage in a homeowners policy covers certain medical expenses incurred by Select one: A. Nonresidents of the insured's household. B. Resident relatives of the insured. C. Residents of the insured's household other than residence employees. D. Insureds.

A. Nonresidents of the insured's household.

All of the following are included as insureds for the Section II—Liability Coverages of a homeowners policy, EXCEPT: Select one: A. The homeowners association that sends a loss assessment bill to the named insured B. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care C. The named insured's 17-year-old foster child D. The 19-year-old exchange student who temporarily lives with and under the care of the named insured and his spouse

A. The homeowners association that sends a loss assessment bill to the named insured CorrectCorrect. All are insureds under the policy except for the homeowners association. The Loss Assessment additional coverage provides up to $1,000 for an insured's share of a loss assessment charged to the insured by a corporation or association of property owners for certain types of losses, but the entity does not become an insured.

The Claim Expenses additional coverage under Section II of a homeowners policy covers Select one: A. The insured's reasonable expenses at the insurer's request. B. The insured's personal liability. C. Premiums on bonds exceeding the personal liability limit. D. Medical payments incurred by others.

A. The insured's reasonable expenses at the insurer's request. CorrectCorrect. It covers reasonable expenses at the insurer's request. (These expenses may include loss of earnings up to $250 a day.) It does not cover the premium on bonds exceeding the personal liability limit. Personal liability and medical payments coverages are not additional coverages, but rather, Coverage E and Coverage F, respectively.

All of the following are included as insureds under the Section II—Liability Coverages of a homeowners policy, EXCEPT: Select one: A. The named insured's separated spouse who resides and works in another state B. The named insured's 17-year-old foster child C. The named insured's grandmother who lives with her D. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care

A. The named insured's separated spouse who resides and works in another state

Regarding property damage coverage under the Section II—Additional Coverages for Damage to Property of Others in the HO-3 policy, the insurer will Select one: A. Not pay for intentional property damage to a neighbor's home caused by a 12-year-old insured. B. Not pay for any damage to property owned by the insured. C. Pay for damage to property owned by a tenant of the insured. D. Pay for damage to property owned by a resident of the named insured's household.

B. Not pay for any damage to property owned by the insured.

All of the following are included as insureds for the Section II—Liability Coverages of a homeowners policy, EXCEPT: Select one: A. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care B. The named insured's 30-year-old best friend who is not related but becomes a temporary resident of the named insured's household C. The named insured's spouse who lives with the named insured but is away on business most Mondays through Fridays D. The 19-year-old exchange student who temporarily lives with and under the care of the named insured and his spouse

B. The named insured's 30-year-old best friend who is not related but becomes a temporary resident of the named insured's household CorrectCorrect. All of the people identified in the answer choices are insureds under the policy except for the named insured's best friend. He does not qualify as a relative or fall into any of the categories granting insured status to young people or students.

An occurrence as defined in the HO-3 policy is Select one: A. A claim. B. A loss. C. An accident. D. An event.

C. An accident. CorrectCorrect. An occurrence is an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

An occurrence as defined in the HO-3 policy may include Select one: A. Property damage caused intentionally by an insured who is 13 years old or older. B. More than one accident with more than one injury. C. One accident involving injury to more than one person. D. A non-accidental event.

C. One accident involving injury to more than one person. CorrectCorrect. An occurrence is one accident, even if it involves injury to more than one person or damage to more than one piece of property.

Under Coverage E—Personal Liability of the HO-3 policy, the insurer's obligation to defend ends Select one: A. When policy limits are exhausted by the claim expenses. B. When the cost of defense exceeds the personal liability limits. C. When the liability limit for the occurrence is exhausted by payment of a settlement or judgment. D. When the costs of defense limits are exhausted.

C. When the liability limit for the occurrence is exhausted by payment of a settlement or judgment. CorrectCorrect. Under Coverage E—Personal Liability of the HO-3 policy, the insurer's obligation to defend ends when the liability limit for the occurrence is exhausted by payment of a settlement or judgment.

Defense costs coverage is included under Section II—Liability Coverages in the HO-3 policy. This coverage Select one: A. Is included in the personal liability limit. B. Has a liability limit separate from the personal liability limit. C. Is excluded if the suit against the insured is groundless. D. Is supplemental to the liability limit.

D. Is supplemental to the liability limit.

Sammy is the named insured on an HO-3 policy covering his family's home. Sammy and his wife, Sally, have a young daughter, Suzie, and a grown-up son, Steve, who lives with them, and they own a cocker spaniel puppy. While a neighboring couple and their five-year-old son, Jay, were visiting, the puppy bit Jay. Jay suffered a serious wound and his parents sued Sammy and Sally. All of the following are insureds under the HO-3, EXCEPT: Select one: A. Steve B. Sally C. Suzie D. Jay

D. Jay

Which one of the following terms contained in the HO-3 policy is defined as an accident, including continuous or repeated exposure to the same general harmful conditions? Select one: A. Claim B. Loss C. Exposure D. Occurrence

D. Occurrence CorrectCorrect. An occurrence is an accident, including continuous or repeated exposure to the same general harmful conditions.