Dwelling and Homeowners
K owns a house with a replacement cost of $100,000. Her detached garage is damaged for $15,000. How much would a standard HO-3 pay?
$10,000
A DP-2 policy would pay a claim for in which scenario?
(Rioters set fire to the front porch of the home) A DP-2 policy covers the broad perils, which include the basic perils (Fire, lightning and explosion) as well as the basic extended perils WHARVES. The R in wharves stands for riot. In general riots are covered on your test.
A Dwelling Policy would most likely include which of the following?
(a duplex with two families and two boarders) A dwelling policy can have up to 5 housing units, with 1 family per house and 1 boarder per house. A duplex (2) with (2) families and (2) boarders, fits into the criteria for a dwelling. The other options do not.
Which of the following would be covered under Section I of a Homeowners Comprehensive policy?
(fire damage to a home) Section I is property insurance and fire damage causes property damage. Section II is liability insurance.
F had a water heater burst and it damaged her mink coat for 12,000. What amount will a DP-2 policy pay?
12,000 Water Heaters (Accidental Discharge) are covered under a DP-2 Broad policy. The full value of the coat is paid. On the state test, most "claims" are paid out fully, or "up to the policy limits", just add up the damage and that is how much is paid.
A home with an HO-3, has 80,000 in real property coverage with 40,000 in personal property insurance. The home has an electrical fire causing 10,000 damage to the structure and 2,000 damage to the kitchen personal property. It takes 2 weeks to have the property fixed with 2,000 in housing costs at a hotel. With a deductible of 100, how much total will this policy pay?
14,000 minus 100 deductible is 13,900
Which of the following is a characteristic of a dwelling policy?
5 boarders
Which of the following is covered under a DP-1?
A dwelling policy 1 (DP-1) is Basic and the 3 basic perils are Fire, Lightning and Explosion (FLE). The basic extended perils are WHARVVES (Wind, Hail, Aircraft, Riot, Vehicle, Volcano, Explosion, Smoke).
A fire department service charge is covered under which provision of a policy?
Additional Expenses are for PROPERTY insurance, which includes the Fire Department Service Charge, Debris Removal, Trees and Shrubs, Gravestones, etc. Supplementary payments apply to LIABILITY insurance and are legal costs, such as appeal bonds, post judgement interest, lawyer fees, etc.
Which of the following is true about a Dwelling policy?
All homeowners policies require the deductible to be met before any claims are paid.
The statement that best describes an HO-3 would be?
An HO-3 is known as special and special is open peril with exclusions.
The portion of a Dwelling policy that provides for indirect or consequential losses is:
An indirect loss means a loss of income, which is an inconsequential loss. Coverage D is Fair Rental Value, which pays for a loss of rental income if something happens to the dwelling. Since Income, Indirect and Inconsequential all start with IN, they all go together and Coverage D is the loss of income.
A person purchases a NAIC Dwelling Policy 0001 and decides to upgrade from the Basic coverage to a Broad coverage policy. Which of the following is automatically included in this upgrade?
Broad upgrades to the BIGAFFECT perils. Burglary, Ice, Glass, Accidental Discharge of Water, Falling objects, Freezing of Plumbing, Electrical, Collapse and Tearing Asunder.
Which of the following policies will provide for the broadest coverage on structures as well as contents?
Broadest means the best or most coverage. The policy that provides the most coverage is an HO-5 Comprehensive.
Which of the following best describes a Homeowners policy?
Coverage C (Contents, Personal Property) has a minimum requirement of 50% of coverage A. Coverage B (Other detached structures, sheds) is 10% of coverage A.
H has a homeowners policy with 75,000 in property coverage. What amount is automatically included for personal property?
Coverage C is personal property, contents, and is 50 percent of coverage A in homeowners insurance. 50 percent of 75,000 is 37,500.
The term that best describes a Dwelling Policy 2 would be?
Dp-2 is a named peril policy. It specifies the perils FLE, WHARRVES and BIGAFGECT.
All of the following are covered under a Dwelling Policy 1 except:
Dwelling insurance does not cover theft. Homeowners insurance does cover theft.
Which of the following is covered under a Basic Form Dwelling Policy?
Dwelling insurance will NOT cover theft, but basic insurance will cover vandalism.
What percentage is coverage C of coverage A in a Dwelling policy 0003?
Dwelling policies are a-la-carte and do not have minimum standards, thus zero percent is required. Homeowners however will require 50 percent minimum of coverage A.
The coverage under a dwelling policy that covers loss of rental income is best described as:
Fair Rental Value is coverage D of a dwelling policy and covers rental income.
What is excluded under a DP-1 Policy?
Foundation, Earthquake, Flood, Inherent Vice, Underground Pipes, Pollution, Water and Sewer Backup, Mysterious Disappearance, Wear and Tear are all excluded under homeowners.
F was changing a light bulb and yellow fluid from the bulb spilled on the linoleum floor causing damage. Which policy would cover said damage?
HO-3 is known as special and covers the structure on an open peril basis. HO-3 protects the house against almost anything.
All of the following can collect payments under homeowners insurance Medical Payments EXCEPT:
Medical payments under all policies -- except auto -- pay third parties. The insured cannot collect under medical payments.
Which of the following is automatically covered under a Basic Dwelling policy?
Outdoor structures are covered under Dwelling. Dwelling insurance covers structures, such as rental properties.
A type of coverage that provides Open Peril or Special Form coverage is known as
Personal Articles coverage is for jewelry, antiques, guns etc. It covers the item on an all-risk, open peril, special basis because the insured paid extra for this coverage.
A 10,000 ring covered under a Personal Articles floater, which of the following is NOT true?
Personal Articles policies do NOT have a coinsurance requirement. This is because they use Agreed value, which insures it at 100% of it's value instead of the 80% required by coinsurance.
A computer is damaged in a home due to a fire, it is paid on which of the following basis?
Personal Property (movable items) are always actual cash value.
Which of the following would be defined as an insured under the definition of medical payments under a Homeowners 005 Comprehensive Policy?
Property insurance Medical payments pays 3rd parties, which is a visitor to the home. Auto insurance Medical Payments pays the people in the car, not 3rd parties. (A visitor to the home)
A DP-2 policy would pay a claim for in which scenario?
Rioters set fire to the front porch of the home. A DP-2 policy covers the broad perils, which include the basic perils (Fire, lightning and explosion) as well as the basic extended perils WHARVES. The R in wharves stands for riot. In general riots are covered on your test.
Which of the following is NOT Specified (Named) peril?
Specified peril policies are Basic and Broad. An HO-5 is Comprehensive, which is special, open peril.
$500,000 home has correct coverages with a $100 deductible. A windstorm causes a tree to fall into an outdoor shed, causing $4,000 damage to the shed, $750 damage to the tree and $250 in costs to remove the tree. How much will the policy pay for this claim?
Super hard question. The shed damage (4,000) and the cost to remove the tree (250) are covered, then subtract the deductible of 100 which equals 4,150. The tree itself (750) is not covered because trees are only covered due to Fire, Lightning and Explosion not Wind.
Which of the following additional coverages is covered without requiring a deductible to be met?
The $500 fire department service charge, is an additional coverage/expense, that is included for free and has no deductible.
An HO-2 Broad Form Cause of Loss policy has coverage in the amount of 100,000 and a pipe bursts within the home. A contractor is fixing the pipe, which scenario would NOT receive coverage under the Homeowners policy?
The damage to the wall is by the contractor. His insurance would have to fix it, not the homeowners.
Section II of a Homeowners policy would cover which of the following?
The friend is a 3rd party (does not live there); everybody else is first party because they live there. Liability insurance only pays out to 3rd parties.
Which of the following perils would be covered under a Broad form Earthquake policy?
The keyword is Broad. Broad covers FLE, WHARV(Volcano)VES and BIGAFFECT. The other 3 options are flood. ( Volcano eruption)
A basic cause of loss form covers all of the following except:
Vandalism and Malicious Mischief (VMM) must be added on as an endorsement to Basic.
A vandal breaks the door into a home and cuts open the wall to steal the copper plumbing. On their way out, the floor is damaged by the vandal. Which of the following would the Vandalism and Malicious Mischief policy NOT cover?
Vandalism coverage does not cover theft, ever. After a property is vacant (empty) for 60 days, vandalism, theft and glass coverage are always excluded.
Dwelling policies will automatically cover which of the following buildings?
buildings under construction
What is covered under Section I of a Homeowners policy?
detached garages and structures