Chapter 7 exam
A personal injury umbrella policy will not provide coverage for which of the following?
Property damage liability to property in the insureds care
All of the following statements regarding flood insurance are true, except:
The policy applies a deductible only to loss of contents A separate deductible applies to contents and building losses.
An insured who has coverage under the NFIP with a $500 deductible for the dwelling and contents sustains flood damage to both their home and personal property. What is the maximum the insured will have to pay for damages assuming the loss is under the policy limits?
$1,000 The deductible applies separately for the dwelling and the contents, therefore the insured is responsible for $1000 in deductibles.
A flood damages a home that is in a community in early stages of participation in NFIP, but are not yet considered a participating community. What is the maximum a resident may receive for damages to personal property?
$10,000 The home is covered under the Emergency Program and is eligible for contents coverage for up to $10,000.
Which of the following may be insured on a replacement cost basis under the National Flood Insurance Program?
1- to 4- family residences to residential condominiums
Under the personal earthquake endorsement, all earth movements are considered a single occurrence if they occur within:
72 hours
When an insured's boat is in storage, which warranty allows for a return on premium?
A 'Lay Up Warranty' applies when the insured boat is in storage and allows for a return of premium due to the reduced risk of the boat not being used when laid up. If the insured operates the yacht during the lay-up period (or lives on it), no coverage is provided.
A Mobile Home Insurance Policy is most similar to:
A homeowners policy
Which of the following losses would not be covered under a NFIP policy?
A water main in the street breaks, flooding the insured's basement
All of the following are true of a Yacht Policy except
A yacht is covered regardless of its location
All of the following are true of a Yacht Policy, except
A yacht is not covered if it is navigated outside the territory.
All of the following statements regarding flood insurance except ?
A yacht is not covered if it is navigated outside the territory.
Personal Article Floater claims are normally settled on a(n):
Actual cash value basis with some exceptions
Under the Cameras Floater, which of the following is true?
Automatic coverage is provided on newly acquired items for 30 days, up to 25% of the policy amount
All of the following types of property may be covered by a Personal Articles Floater, except:
Buildings Buildings are not personal property, and would need to be insured under a homeowners or similar policy.
Which of the following coverage statements is correct about the Fine Arts Floater?
Coverage is automatic on newly acquired items for 90 days
All of the following are true of the Personal Articles Floater, except:
Claims are settled on a replacement cost basis
Which of the following is not true of the National Flood Insurance Program?
Coverage becomes effective 24 hours after the applicant completes the application and pays the premium. Coverage becomes effective on the 30th calendar day after the applicant completes the application and pays the premium. This is to avoid insuring property that might already be in imminent or existing flooding conditions.
All of the following are true of the Fine Arts Floater, except:
Coverage is written on a replacement cost basis
All of the following statements about the Fine Arts Floater are true, except:
Coverage is written on a replacement cost basis
For an antique insured under a Personal Articles Floater, coverage would not be provided for damage caused by:
Damage caused by the insured during a heated argument Losses caused by the insured (intentional losses) are not covered.
How is Mobile Home insurance written?
Either by writing a separate Mobile Homeowners Policy or by adding an endorsement to a Homeowners Policy
After being rejected by an insurer due to underwriting guidelines an applicant may request homeowners coverage under which of the following?
FAIR Plan
Which of the following is not covered by the Earthquake endorsement?
Flood
Which of the following is true regarding Personal Inland Marine Insurance?
For the Inland Marine underwriter the term floating property simply means property that moves about.
Which of the following statements is true regarding the eligibility of flood insurance?
In order to qualify for a federal loan, the property owner must purchase flood insurance if the property is located in a flood area
The Personal Articles Floater is used to do which of the following?
Insure individual personal property on a scheduled basis
Which of the following is true regarding the Musical Instrument Floater?
Insured instruments may not be played for remuneration during the policy term
Which of the following describes the Lay Up Warranty under the Yacht Policy?
It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
Which description of the Personal Articles Floater is incorrect?
It covers claims on a replacement cost basis
Which statement is true about Crop/Hail Insurance?
It covers only one growing season
Which of the following is true is true regarding the Fine Arts Floater ?
It covers such items as paintings, rare manuscripts and antiques
All of the following are true of Personal Jewelry Floater, except:
It has a -day automatic coverage for newly acquired items
The Difference in Conditions Policy is a special form used to fill in gaps of a property policy. Which of the following is true regarding this policy?
It is generally written on an open perils basis, excluding losses by perils that are covered under standard property forms
Which of the following is true regarding the Fine Arts Floater?
It provides automatic coverage on newly acquired items for 90 days
Which is a TRUE statement about the Boatowners Policy?
It provides both property and liability coverage, similar to a PAP
Which statement is false regarding the National Flood Insurance Program (NFIP)?
It provides coverage for direct and indirect loss to covered property as the result of flooding
Section I of the Boatowners policy provides which type of coverage and settlement option?
It provides open perils coverage, and losses are settled on an actual cash value basis
Which of the following is true regarding the Boatowners Policy?
It provides open perils coverage, and losses are settled on an actual cash value basis
Choose the statement that is false about the FAIR plan?
It provides property coverage to both residential and farm dwellings. Farm property is not eligible for coverage under FAIR plan
The Personal Inland Marine Insurance covers which of the following?
Moveable property against direct loss
Which of the following is true regarding the Camera Floater?
Newly acquired are covered up to 25% of the policy amount until reported
All of the following statements about the Musical Instrument Floater are true, except:
No additional premium is required if instruments are played for hire
Which of the following statements regarding flood insurance is not true?
No deductible applies to loss of contents
Which of the following statements regarding flood insurance is not true?
No deductible applies to loss of contents a separate deductible applies to contents and building losses
The Personal Articles Floater is written:
Only on moveable property
The Boatowners Policy does not cover which of the following?
Personal Property
B is traveling to Europe for a month's vacation. Which of the following coverages might her agent recommend to cover personal items?
Personal effects floater
Multi-Peril crop insurance covered causes of loss include all of the following, except:
Pollution Multi-Peril causes of loss include: adverse weather conditions, fire, insects, plant disease, wildlife, earthquake, and volcanic eruption.
The Personal Umbrella Policy does not provide coverage for which of the following?
Property damage liability to property in the insured's care
A personal umbrella policy will not provide coverage for which of the following?
Property damage liability to property in the insured's care Damage to property in the care, custody, or control of an insured is excluded under the personal umbrella policy.
Crop/Hail Insurance is a specialized policy that:
Protects against reduced yield because of a covered loss before crops are harvested
The Personal Articles Floater is similar to which Homeowners endorsement?
Scheduled Personal Property
Which statement about the Personal Effects/Personal Articles Floater is TRUE?
The Personal Effects Floater covers personal items carried by travelers, and the Personal Articles Floater covers high-value items of personal property
The Personal Articles Floater is similar to which of the following endorsements?
The Scheduled Personal Property Endorsement
Which of the following statements regarding Multi-Peril Crop Insurance is correct:
The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC).
Choose the true statement regarding the National Flood Insurance Program.
The federal government oversees and reinsures all flood insurance
If personal injury coverage is not provided by an insured's homeowners policy, but is provided by the insured's umbrella policy, and the insured is sued for slander, which of the following statements is correct?
The insured must pay the umbrella policy's self-insured retention
Which statement is false regarding the National Flood Insurance Program?
The policy provides unlimited coverage for qualified property owners
K has a 10-piece antique fountain pen set that is insured with a pair and sets clause and is valued at $10,000. Each pen alone is only worth $500. If one pen is destroyed in a covered loss, how much will the policy pay?
The remaining value of the 9 pens is $4,500 ($500 X 9). The loss of 1 pen has reduced the value of the set from $10,000 down to $4,500. Therefore, the policy will pay the difference of $5,500.
Which statement about the Umbrella Liability Policy is false?
The standard deductible on an umbrella policy is $100,000
In which of the following circumstances would the insured be required to pay a self-insured retention on an umbrella policy?
The umbrella drops down to act as the primary policy
Which of the following is a false statement about the National Flood Insurance Program?
There is no deductible
Choose the false statement about an Umbrella Liability Policy.
Umbrella policies exclude property in the care, custody and control of the insured.
Under a Mobile Home policy, if the mobile home is insured under Coverage A for $70,000, how much coverage would ordinarily apply to personal property under Coverage C?
Under the Mobile Homeowners Policy, Coverage C (Personal Property) is generally written at 40% of Coverage A, instead of 50% under the Homeowners Policy. 40% of $70,000 = $28,000.
The National Flood Policy defines all of the following as floods, except:
Underground leakage is not considered a flood under the policy.
Under Personal Inland Marine Insurance, the Personal Articles Floater is:
Used to insure individual personal property on an itemized or scheduled basis
Fine arts and antiques are classes of property insured on a:
Valued basis
Some flood policies are written in the voluntary property market as a result of which program?
Write Your Own
All of the following are true of the Personal Jewelry Floater, except:
t has a 60-day automatic coverage for newly acquired items