Homeowners Insurance
Which of the following statements concerning personal liability coverage are CORRECT? a) it covers damages the insured becomes legally obligated to pay bc of BI or PD b) the insurer will not defend liability claims brought against the insured that are groundless or false c) it applies to the insured's personal nonbusiness activities that occur anywhere
A and C - it covers damages the insured becomes legally obligated to pay bc of BI and PD and it applies to the insured's personal nonbusiness activities that occur anywhere. The insurance company will provide a defense for the insured at the insurer's expense, even when the charges are groundless.
Which of the following would be covered under Coverage A or Coverage B of the HO policy? a) a greenhouse attached to the porch of the insured's home b) a guest cottage on the insured's estate c) the insured's ranch style home d) a barn rented to a neighbor to use as a retail arts and crafts store e) a stack of lumber at the edge of the insured's property that will be used to construct a boat shed f) a detached shed rented to a neighbor as a private garage for an antique auto g) the insured's poolside cabana
A, B, C, E, F, and G Greenhouse attached to porch of insured's home. Gues cottage, insured's ranch style home, stack of lumber at edge of insureds property that will be used to construct a boat shed, detached shed rented to a neigh as a private garage for an antique auto and poolside cabana. --Dwellings and other structures may not be used for business purposes except for permitted incidental occupancies. An other structure rented to someone other than tenants of the dwelling is excluded unless the other structure is rented as a private garage.
Under the HO policy, which of the following classes of personal property have special limits for theft losses but not for other types of losses? a) money b) firearms c) silverware d) jewelry e) property used for business purposes f) watercraft
B, C, D - Firearms, silverware, jewelry The following classes of property have special limits for theft losses, but not for other types of losses. Jewelry, watches, furs, and prescoius and semiprecious stones; silver, goldware, or pewterware and firearms
Identify the HO endorsement used to provide each of the following coverages: A) Liability coverage for a business that is conducted away from the residence premises
Business Pursuits - This endorsement provides liability coverage for a business conducted away from the residence premises
Which of the following perils are covered in all HO forms? a) fire b) theft c) volcanic eruption d) weight of ice, snow, or sleet, e) falling objects f) smoke g) accidental discharge or overflow of water or steam h) freezing or plumbing systems
Fire, theft, volcanic eruption, smoke. There are examples of basic perils covered under all homeowners forms
Identify the HO endorsement used to provide each of the following coverages: Replacement Cost Coverage for losses to personal property
Personal property replacement cost. This endorsement adds replacement cost coverage for personal property
Under an unendorsed HO policy losses to the dwelling and other structures are paid on ACV / or replacement cost?
RC - Losses to the dwelling and other structures are paid on replacement cost basis
Which of the following statements concerning medical payments to others coverage are CORRECT? a) injury to an insured is not covered b) the insured does not have to be legally liable for coverage to be available c) injuries that occur off the insured location are never covered
A and B - injury to an insured is not covered and the insured does not have to be legally liable for coverage to be available. Injuries to the named insured or regular residents other than resident employees are not covered. Injuries sustained while the injured party is off the insured location are covered if certain conditions are met. There is no requirement under Coverage F that the insured be legally liable for injuries
In the Homeowners forms a) the property coverage varies in each form b) the property coverage is the same in each form c) the liability coverage varies in each form d) the liability coverage is the same in each form
A and D - the property coverage varies in each form and the liability coverage is the same in each form. The liability coverage is identical in all of the homeowner's forms. The property coverage varies w the HO form selected
The insured would have liability coverage under the HO policy while operating which of the following boats? (Assume there are no endorsements attached to the policy.) a) 8 ft boat w 25 horsepower inboard outdrive motor not owned by the insured b) 42 foot sailboat w no aux power owned by the insured c) 15 ft boat powered by a 50 horsepower outboard motor that was purchased by the insured before the policy inception date and not reported to the insurer d) 8 ft boat w a 25 horsepower inboard motor rented by the insured
A and D 8 ft boat w 25 horsepower inboard outdrive motor not owned by the insured and 8 ft boat w a 25 horsepower inboard motor rented by the insured - The policy makes some exceptions to the exclusion for liability arising out of the use of watercraft. In these examples the boats meet the policy's requirements for engine size and ownership
Which of the following losses would be excluded under all the homeowners forms? a) Earthquake damage to a home b) flood damage to a home c) Accidental and sudden discharge of water from a plumbing system d) An area power failure that shuts down the insured's refrigerator for 12 hours while he is on vacation causing meat to spoil
A, B, and D - Accidental and sudden discharge of water from a plumbing system is covered in all forms except the HO-8
Under all HO forms except HO-5, losses to personal property are paid on ACV or RC?
ACV - In all HO forms except HO-5 personal property losses are paid at ACV the HO -5 provides replacement cost coverage for personal property
Which homeowners form should someone who lives in an apt purchase to cover personal property? a) HO-3 b) HO-4 c) HO-6 d) HO-8
B - HO-4 is designed for tenants. Provides broad coverage for personal property and no coverage for dwelling
What is the standard liability limit for Coverage E? a) $100,000 aggregate b) $100,000 per occurrence
B - The standard liability limited provided for all BI or PD arising out of any one occurrence is $100,000
Which homeowners form provides broad coverage for both the dwelling and its contents? a) HO-2 b) HO-3 c) HO-6 d) HO-8
B HO-3 -provides open peril coverage for the dwelling and named peril coverage for personal property . HO-8 provides basic coverage for the dwelling and personal property. The HO-6 offers limited coverage on personal property\\
Which of these statements about Coverage C of the HO policy are CORRECT? A) It only covers the insured's personal property while it is at the residence premises. b) At the insured's request, coverage applies to a guest's property while the guest is in the insured's residence. c) Property normally kept at a residence other than the residence premises is covered for 10% of the Coverage C limit or $1,000, whichever is greater. d) There is no coverage for property being moved from the residence premises to a new principal residence
B&C Personal property is covered while it is away from the residence premises. When property is being moved to a new principal residence, full coverage applies for 30 days from the start of the move. Coverage for property belonging to an insureds guest or residence employee is available on request but is not automatically provided
Which of the following classes of personal property have special limits under the HO policy? a) animals, birds, fish (excluded) b) money c) watercraft d) property of boarders e) furniture (personal property) f) kitchen appliances g) clothing h) valuable papers i) trailers
B, C, H, and I. Money, Watercraft, valuable papers, trailers. Animals, birds, fish, and property of boarders are excluded. The items listed in the other answer choices are covered w no special limits of liability
A HO Policy has been in force 30 days and the company discovers the insured has misrepresented certain material facts. The insurer wants to cancel the policy. Under what circumstances may it do so? a) the company must wait until the policy has been in force for 60 days before it may cancel. b) the company must give the insured 30 days written notice of cancellation c) the company must give the insured 10 days written notice of cancellation d) under no circumstances ; a policy cannot be cancelled bc of material misrepresentation by the insured
C - The insurance company may cancel a policy for any reason w 10 days written notice to the insured during the first 6- days of a policy term
The collapse additional coverage is included in which homeowners forms? a) HO-2 and HO-3 b) HO-4 only c) all forms except HO-8 d) all forms
C - all forms except HO-8. The collapse additional coverage is included in all of the homeowners forms except the HO-8
A hose on a washing machine in the insured's condominium comes loose and leaks water all over the floor. The repair person has to tear out part of the wall to fix the defective hose. The insured's HO-6 would cover: a) the water damage to the floor b) the cost to repair the damaged wall c) both A and B
C -In the HO-6 the accidental discharge or overflow of water or steam peril includes coverage for the costs to tear out and replace any part of the building necessary to repair the system or appliance from which the water or steam escaped.
Which of the following could be covered by an unendorsed HO policy? a) mobile home b) home rented to another person c) home occupied by the insured and 2 boarders d) home owned and occupied by the insured
C and D - Home occupied by insured and 2 boarders and home owned and occupied by the insured. Up to 2 boarders per family are allowed if the home is also occupied by the insured. An endorsement is required to insure a mobile home under a homeowners policy. The insured must live in the dwelling to qualify for HO coverage
A homeowner who wants the maximum protection for her home and personal property should purchase the: a) HO-2 b) HO-3 c) HO-4 d) HO-5
D - HO-5 - the comprehensive form provides open peril coverage for dwellings, other structures and personal property
Which of the following would be excluded under Section II of the HO policy? a) the insured has been feuding w her neighbor for years. One night, she hooks a rope from the front bumper of the neighbor's car to her neighbor's porch railing. When the neighbor's drives away, the front porch rail is ripped free of the porch, causing extensive damage (intent) b) The insured attorney meets w clients in his home. He is later sued for giving erroneous advice (biz policy) c) The insured owns a private plane. A friend injures her finger when the insured closes the door on it. d) all of the above
D All of the above - Choice A is excluded bc the damage was expected or intended by the insured Choice B is excluded bc the loss arose from the rendering of professional services Choice C is excluded bc the injury arose out of the ownership of aircraft
Identify the HO endorsement used to provide each of the following coverages: Coverage for losses arising out of the libel and slander
Personal Injury - this endorsement modifies the definition of BI to include personal injury
Identify the HO endorsement used to provide each of the following coverages: Scheduled coverage for certain classes of personal property
Scheduled personal property. This endorsement provides open peril scheduled coverage for 9 optional classes of coverage
A person is injured on insured's premises and sues for the cost of nursing care required during the recovery period. Could the insured's liability for these expenses be covered under Coverage E of the HO policy? Y or N
YES - The definition of bodily injury includes required care, loss of services, and death.
The insured damaged a neighbor's tool shed when a tree he was cutting down in his yard fell on the neighbor's shed. Not only does the neighbor have to repair the shed, but he must find the temporary storage for the garden equipment he stored in the shed. Could the insured's liability for these expenses be covered under Coverage E of the HO policy? Y or N
Yes. The definition of property damage includes loss of use.
