ExamFX Property
An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short term apartment, and the renter is forced to find other accommodations. Disregarding any extra-expense for meals, how much would an HO-3 will pay under Coverage D?
$1,050
Under Coverage E - Scheduled Farm Personal Property, livestock that is not specifically insured is limited to a coverage limit of
$2,000 per head
The personal property off-premises extension of dwelling forms provides limits of coverage up to
10% of Coverage C anywhere in the world
The term "functional replacement cost" refers to
A loss valuation method
Which of the following is consideration on the part of an insurer?
Paying a claim
Homeowners policies limit the amount of property and liability coverage available for boatowners. How much coverage is provided in the homeowners policy for damage to watercraft, accessories, equipment, and trailers?
$1,500
The businessowners policy extensions coverage form for personal property off-premises is limited to
$10,000
Under Business Personal Limit - Seasonal increase, if no percentage is specified in the declarations, seasonal fluctuations will automatically increase the limit for business personal property by
25%
An insured was told to leave his home because of endangerment by a brush fire that was out of control. The insured was able to have his personal property moved to storage away from the endangered area. For how long will the homeowners policy provide coverage for the stored property?
30 days
The Commissioner has determined that a producer is ineligible for appointment by an insurer. The Commissioner must notify the insurer within
5 days
An insured has extended her business income coverage part to a newly acquired location. The insured was able to take action because her coinsurance percentage is
50%
Farmer Steve's she'd has been vacant for an entire year. When he files a claim to cover some recent damage to the shed, how much will his farm policy pay?
50% of the limit of insurance
How long must an insured wait before business income coverage begins?
72 hours
Which of the following risks would be eligible for coverage under a dwelling policy form?
A duplex that is occupied by two families, each of which have a bedroom rented to a boarder
Which of the following could be insured with replacement cost coverage under the flood insurance program?
A single-family home
Homeowners policies consider all of the following insured locations EXECPT
A strawberry patched owned by the insured
Loss payment in a Michigan Standard Fire Policy is determined based on
Actual cash value
Which of the following is most likely INELIGIBLE for coverage under the businessowners policy?
An auto mechanic shop
When do binders expire?
As soon as the policy is issued
In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will
Be reduced by 10%
The HO-4 form designed for tenants covers losses on what basis?
Broad peril
How is a licensee's date of Continuing Education credit review determined?
By the licensee's month and date of birth
An insured's home catches fire. As a result, the insured's family must stay in a motel until his home is repaired. The cost of the motel stay would be considered a
Consequential loss
All of the following statements are TRUE about earthquakes coverage in property policies EXECPT
Coverage is commonly provided through a federally funded program
All of the following statements are TRUE about earthquake coverage in property policies EXECPT
Coverage is commonly provided through a federally-funded program
To determine the actual cash value of an insured property, what must be deducted from the current replacement cost?
Depreciated value
Loss valuations is best described as the process of
Determining the premium charged and the amount of insurance required on a specific property
The commercial crime coverage that would cover losses resulting from the theft or moeny, securities and other property by employees is
Employee theft
If an agent follows the rules and terms of his agent contract, he is exercising his
Express Authority
Which of the following is covered under a dwelling policy?
Fire caused by an earthquake
Which of the following losses would be excluded from coverage under the farm property special form?
Fire caused by curing tabacco
All of these types of property may be covered on a farm property coverage EXCEPT
Growing crops
A homeowner has misplaced some of her insured personal propertyand has no idea what may have happened to it. Which HO policy would cover such a loss?
HO-5
An insurance agent represents multiple companies on a non-exclusive basis and earns commissions on personal sales. What kind of marketing system is this agent working in?
Independent Agency
Which of the following is NOT found in the common policy declarations of a commercial package policy?
Insuring agreement
How does insurance distribute the financial consequences of individual losses?
It transfers the risk to all persons insured
Which of the following covers the interest of a secured lender in personal property?
Loss payable clause
The deductible under earthquake coverage is stated as what?
Percentage of loss
Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the
Policy
All of the following statements about mutual insurance companies are correct EXECPT
Policy dividends issued by mutual companies are guaranteed and not taxable
The declarations section in a homeowners policy provides all of the following information EXCEPT
Policy exclusions
According to the Insured Duties after a Loss provision in homeowners policies, in the event of loss, the insured must do all of the following EXECPT
Promptly hire an adjust to evaluate the property damage
Which of the following would NOT be covered by commercial inland marine policies?
Property lost due to a military action
The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of what?
Protective safeguards endorsement
What type of insurer used a formal sharing agreement?
Reciprocal insueres
If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?
The insurer will be reimbursed for the excess costs by the NFIP
An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?
The loss of income for the time the diner was closed
If an insurance policy has the additional coverage provision, how does it affect the policy premium?
There is no additional premium
An insured has the scheduled personal property endorsement attached to his homeowners policy. If the insured acquires new works of art, when must the insurer be notified for the new works of art to be covered under the endorsement?
Within 90 days
How is the premium paid for the businessowners policy?
One indivisible premium
All of the following are allowable reasons for an insurer to decline an application for Homeowners Insurance EXCEPT
Owning a dwelling containing 4 units
If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?
Retention
Which of the following clauses excludes assignment or granting of policy provisions to any person who repairs property for a fee?
No benefit to bailee clause
Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates?
Occupation
All of the following are allowed practices regarding producer's commissions EXECPT
Offering a financial reward to an unlicensed individual for providing a sales lead
Which of the following best defines the unfair trade practice of rebating?
Offering an inducement of something of value not specified in the policy
In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damages caused by the eruptions?
One
For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?
Riot
In contrasting stock insurers with mutual insurers, which statement is true?
Stock insurers are owned by the shareholders and issue nonparticipating policies
In contrasting stock insurers with mutual insurers, which statement is true?
Stock insurers are owned by the shareholders and issue nonparticipating policies.
What amount of coverage is provided on HO policies for watercraft?
Up to $1,500
Which of the following is NOT part of Section II of he boatowners policy?
Watercraft damage
Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. Which of the following is true?
The coinsurance penalty applies
Rates for earthquake coverage in property policies are generally deteremined by which of the following?
The type of constuction
Which of the following statements is correct regarding the debris removal coverage under the businessowners policy?
The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount
