P&C Property
Additional coverage for damage to property removed for safekeeping is included in an FP 00 40 form. If a building is endangered by a covered peril, the insurer will pay for loss to covered property damaged by any cause during its removal from the endangered building and for up to how many days after its removal?
30 days
Neeraj is shopping for insurance on his new home. He is not sure whether he should have a homeowners policy or a dwelling policy. Which of the following is a principal difference between the two policies?
A dwelling policy only covers the dwelling, other structures, personal property, fair rental value, and additional living expenses. It does not cover liability.
Fire is a named peril that may be designated as 'friendly' or 'hostile.' Which of the following is least likely to be a friendly fire?
A fire in a forest
You are reviewing the eligibility guidelines for your insurer's Business Owners Policy (BOP). Which of the following businesses is not eligible for coverage on the BOP?
A manufacturer leasing 10,000 square feet of spaces
You are reviewing the eligibility guidelines for your insurer's Business Owners Policy (BOP). Which of the following businesses are eligible for coverage on the BOP?
A retail store in a building with an area of 5,000 square feet, A six-unit apartment building, A self-storage facility
Under the DP 1 form, coverage applies for loss by certain extended coverage perils, but only if a premium charge is shown in the declarations for these perils. Which of the following is not one of these extended perils?
Accidental discharge from a plumbing system
A wildfire is burning near Linda's house and the sheriff's department orders her to evacuate. What coverage on her homeowners policy will pay for the necessary increase in living expenses she incurs because of her evacuation by a civil authority?
Additional living expenses
Jeremy files a claim for a loss covered by a commercial inland marine policy. However, his insurer does not agree on the amount of the loss. Jeremy and the insurer have each selected an appraiser and the appraisers have selected an umpire to resolve this difference. One of the appraisers and the umpire agree on the value of the loss. What does this mean?
Agreement by any two of the three parties establishes the value of the loss.
Under the DP 1 form, coverage applies for loss by certain extended coverage perils, but only if a premium charge is shown in the declarations for these perils. All of the following are one of these extended perils?
Aircraft, Volcanic eruption, Riot or civil commotion
Darnell bought a dwelling policy on his new home while it was under construction. In addition, he purchased a dwelling under construction endorsement. When approximately one-third of the home was completed, lightning struck it and burned it to the ground. At the time of its destruction, what was the amount of insurance available to Darnell?
Approximately ⅓ of the coverage A limit
Mr. Davis, of Davis Dairy, is considering the purchase of a commercial property policy. You explain the different causes of loss forms to Mr. Davis and tell him he must select one of them. Which of the following are one of the causes of loss forms available on the commercial property policy?
Basic causes of loss form, Broad causes of loss form, Special causes of loss form
The three causes of loss forms available on a commercial property policy are
Basic, Broad, and Special.
What term involves physical harm to, or impairment of, the body?
Bodily injury
All of the following entities are eligible for the businessowners policy?
Botany Place Residential Condominium Association, Crepe Suzette's Caf, Happy Family Grocery Mart
Donovan's Supply Company is constructing an additional building to house its equipment and supplies. While the building is being constructed, Mr. Donovan wants assurances from his agent that the building, building materials and supplies, and temporary structures used to erect the building, are all covered. What type of insurance should he consider?
Builders risk coverage
A risk manager for a business wants to know what types of property are included in the term 'building property.' Which description is most accurate?
Buildings and structures, indoor and outdoor fixtures, including signs attached to the building, and personal property used to service the building
Cassie notices that a Scheduled Personal Property Endorsement (HO 04 61) is attached to her homeowners policy. She wonders what the endorsement does. You tell her that by adding this endorsement the insurer agrees to pay the lowest of the following values, for most types of property insured on the endorsement:
Cost of repairing the item, Item's actual cash value, Item's replacement cost
Bryan's homeowners insurance company responds to a claim for bodily injury filed by his neighbor. If the insurance company makes payment without regard to Bryan's legal liability, under what coverage is it paying?
Coverage F ' Medical Payments to Others
Cody should expect to find all of the following on the declarations page of his commercial property insurance policy EXCEPT:
Coverage provisions
What dwelling policy form provides the broadest coverage?
DP-3 Special Form
The liquor liability exclusion applies if
Delilah is in the business of selling, serving, or furnishing alcoholic beverages
Hector receives a summons and promptly sends it to his homeowners insurance carrier. Which liability condition is he complying with?
Duties after an Occurrence
All of the following are a standard flood insurance policy coverage form?
Dwelling Form, General Property Form, Residential Condominium Building Association Policy Form
Tom and Ann have just bought a condominium for their residence. As their agent, which homeowners coverage form should you offer them?
HO 6 Unit-Owners Form.
Becky is asked to give examples of tangible property. She provides four examples, but only three are correct. Which examples are correct?
Her bicycle, The apartment building she lives in, An ice cream cone
Becky is asked to give examples of tangible property. She provides four examples, but only three are correct. Which example is incorrect?
Her funny brother's sense of humor
Which of the following is not a standard flood insurance policy coverage form?
Homeowners Form
What is the act of knowingly transferring or using, without legal authority, the identification of an insured with the intent to commit illegal activity?
Identity fraud
Mr. Ursini's home is located in an area that has a 1 percent chance of being flooded in any given year. Where does Mr. Ursini live?
In a special flood hazard area (SFHA)
The ordinance or law coverage endorsement does not cover which of the following losses?
Income lost during reconstruction or repairs
The manager at Don's Diner shut off the fire and burglar alarm after arriving at work because it developed a short and kept beeping. When the manager left for the night, he forgot to put the alarm back on. How did the Protective Safeguards endorsement on Don's Diner's BOP respond when the building was destroyed by a fire that night?
It excluded coverage for the fire loss
When Teddy bought his homeowners policy, he did not tell his agent or insurer that he owned three dangerous dogs who had attacked his neighbors. Even though the insurance application form inquired specifically about pets, Teddy indicated that he didn't own any. The dogs later attacked a mail carrier and seriously injured him. How will the insurer respond when it receives the claim?
It will deny coverage on the basis of concealment or fraud.
Goodness Grocery Store has a protective safeguards endorsement added to its businessowners policy. What must Goodness do to comply with the terms of this endorsement?
Keep the protective safeguards in working order
Which of the following perils is not excluded on a dwelling policy?
Lightning
Delilah's Diner hosts a party for its employees and their spouses. An employee gets drunk and gets into a fight with a co-worker's spouse. The spouse files a claim against the diner. What exclusion in Delilah's businessowners policy might preclude coverage?
Liquor liability
The ordinance or law coverage endorsement does covers which of the following losses?
Loss to an undamaged part of a building, Demolition of an undamaged part of a building, Increased cost of reconstruction or repairs
Mrs. Chang submits to you the bills she was given by the postman, who tripped and fell on her sidewalk. The postman is submitting a claim under the Medical Payments to Others coverage of Mrs. Chang's homeowners policy. Which of the following bills will not be paid?
Lost wages
Which two types of coverage are considered goodwill coverage and do not require the legal liability of an insured?
Medical Payments to Others and Damage to Property of Others
Cody should expect to find all of the following on the declarations page of his commercial property insurance policy :
Name of the insured, Addresses of covered premises, Limits of insurance
Mr. Davis, of Davis Dairy, is considering the purchase of a commercial property policy. You explain the different causes of loss forms to Mr. Davis and tell him he must select one of them. Which of the following is not one of the causes of loss forms available on the commercial property policy?
Open causes of loss form
Mary offers piano and guitar lessons in her home. She asks her agent if she is sufficiently insured under her homeowners policy for this activity. What is an appropriate coverage for the agent to recommend?
Permitted Incidental Occupancies endorsement
Mrs. Chang submits to you the bills she was given by the postman, who tripped and fell on her sidewalk. The postman is submitting a claim under the Medical Payments to Others coverage of Mrs. Chang's homeowners policy. Which of the following bills will be paid?
Physician's fee, Emergency room fee, Ambulance fee
All of the following perils are excluded on a dwelling policy?
Power failure, Neglect, War
Consolidated Carpenters has an automatic sprinkler system that malfunctioned last week. The company's owner assured their insurance agent that the sprinkler system would always be maintained as a condition of coverage under their businessowners policy. A fire severely damages the building because the sprinkler system failed to function. Is the fire loss covered under Consolidated's businessowners policy?
Probably not, if the insured had a protective safeguards endorsement.
Which of the following most closely describes the type of property covered by inland marine insurance?
Property in transit with some other relationship to transportation or communication
Cassie notices that a Scheduled Personal Property Endorsement (HO 04 61) is attached to her homeowners policy. She wonders what the endorsement does. You tell her that by adding this endorsement the insurer agrees to pay the lowest of the following values, for most types of property insured on the endorsement, EXCEPT:
Purchase price of the item
What endorsement should Jeffrey's Flowers add to its commercial property policy if it wants coverage for breakdown or contamination and power outage?
Spoilage Coverage
The valuation condition of the ISO commercial inland marine policy states property will be valued at the smallest of three amounts. Which of the following is one of those amounts?
The actual cash value of covered property at the time of loss, The reasonable cost to repair covered property, The cost to replace covered property with similar property
Which of the following would not be covered under Coverage B ' Other Structures in a dwelling policy?
The attached garage on Brad's property
Which of the following would be covered under Coverage B ' Other Structures in a dwelling policy?
The detached garage on the premises of Jake's vacation home, The structure on the premises of Elaine's property that she rents out as a private garage, The detached tool shed on Olga's property
Betty's Bridal is insured on a BOP. Betty's Bridal assumes the tort liability of the landlord in its lease of the premises. Which of the following statements BEST describes how the contractual liability exclusion in the BOP treats the lease of premises?
The exclusion contains an exception for the lease
The valuation condition of the ISO commercial inland marine policy states property will be valued at the smallest of three amounts. Which of the following is not one of those amounts?
The market value of covered property
Which of the following statements BEST describes the homeowners endorsements that are used to provide coverage for fungi, wet or dry rot, and bacteria?
They provide limited coverage
If Madelyn wants coverage for business income or extra expense losses resulting from utility service interruption, she must purchase which BOP endorsement?
Utility Services'Time Element
Which of the following entities is not eligible for the businessowners policy?
Valley Bank & Trust
The condo association to which Walt belongs assessed him $2,500 for fire damage to a party room collectively owned by the condo's residents. Each of the association members was assessed $2,500 to cover repair costs. Will Walt's homeowners policy pay for his share of the loss assessment charged by the association?
Yes, his policy will pay, but only up to $1,000.
A windstorm tears away part of the roof to Donna's dwelling. To prevent more damage, Donna hires a roofing contractor to temporarily place a heavy canvas over the opening. Donna submits the roofer's bill of $400 to her insurer. Will she be reimbursed for this expense?
Yes. Donna is covered for protecting the property from further loss, provided the repairs are reasonable.
Djinn Enterprises rents office space and erects partitions and cabinets within the space. Although these are installed at Djinn's expense, it does not own them. The office sustains a fire and the cabinets and partitions are destroyed. Does Djinn's commercial property policy cover the loss?
Yes. They are covered as improvements and betterments.
A special flood hazard area (SFHA) is a location that has
a 1 percent chance of being flooded in any given year. In other words, it will flood once in a 100-year period.
Lighting is
a covered peril on all the dwelling forms.
The ISO commercial inland marine policy values covered property at the smallest of three amounts at the time of loss:
actual cash value, the reasonable cost to repair, or the cost to replace property with similar property.
The contractual liability exclusion doesn't apply to
an 'insured contract,' which is defined to include, among other things, a lease of premises, an elevator maintenance agreement, and an easement.
The homeowners policy requires
an insured to comply with certain duties after an occurrence, including to promptly forward to the insurer any loss notice, demand, summons, or other process.
The homeowners policy forms define 'bodily injury' as
bodily harm, sickness, or disease, which includes required care, loss of services and resulting death. In other words, bodily injury involves physical harm to, or impairment of, the body.
The builders risk coverage form covers
buildings under construction as well as to building materials and supplies, fixtures, machinery, and equipment intended to be permanently located in or on the building or within 100 feet of the premises. Also covered are temporary structures assembled on the site (such as scaffolding, cribbing, and construction forms), unless they are covered by other insurance.
A friendly fire is one that
burns where it was intended to burn. The courts generally designate fires as either "friendly" or "hostile" and find coverage only for hostile fires.
Improvements and betterments are made a part of a building that the insured occupies but does not own, and are built at the insured's expense but cannot legally be removed. They are insurable as
business personal property under the commercial property policy. There is no need to buy a special endorsement to cover such property.
The Spoilage Coverage endorsement is designed for
businesses that process, store, or sell perishable items. It provides coverage for breakdown or contamination and power outage.
The DP-3 Special Form provides
coverage for the dwelling on an open perils basis and for personal property on a named perils basis.
Reasonable repairs to protect the property from further loss or damage is
covered in all three dwelling policy forms.
A declarations page is not a form that contains coverage provisions. The declarations page contains
information that pertains to that particular policy, such as the name of the insured, the addresses of covered premises, the limits of insurance, the deductible amount, and so forth.
Additional coverage for damage to property removed for safekeeping is included in an FP 00 40 form. It pays for
loss to covered property damaged by any cause during or up to 30 days after its removal from the building endangered by a covered peril.
The endorsements restrict coverage for
mold by excluding loss from fungi, wet or dry rot, and bacteria and then adding back limited coverage.
The permitted incidental occupancies endorsement is
narrower than the home business insurance coverage endorsement, but is often used for incidental types of business conducted on the residence premises. The endorsement eliminates many of the unendorsed homeowners policy's limitations and exclusions that might otherwise apply.
The Concealment or Fraud condition states that
no liability coverage is provided to any insured who has intentionally concealed or misrepresented any material fact, engaged in fraudulent conduct, or made false statements with respect to the insurance. Lying about the dogs and concealing their vicious nature on the application was material in that the underwriter would probably have refused to insure the risk had it known about them.
Stanley owns a dairy farm in Nebraska. He stores milk in refrigerated vats or silos. One day a sudden hail storm caused him to leave some milk in the open, where it soon spoiled. He filed a claim with his insurer. His farm policy will
not cover his claim even if the special causes of loss form applies.
Banks and other financial institutions are
not eligible for a businessowners policy, which is designed for small- to medium-sized businesses.
Most manufacturing concerns are
not eligible for coverage on the BOP.
The HO 6 Unit-Owners form is designed for
owners of condominiums and cooperative apartments. It primarily covers personal property on a named perils basis, with limited dwelling coverage (such as improvements and betterments and real property pertaining exclusively to the residence premises). It also covers loss of use, personal liability, and medical payments.
'Property damage' is defined as
physical injury to, destruction of, or loss of use of tangible property. 'Tangible property' is property that has physical form and can be seen, felt, touched, or handled. A sense of humor is intangible.
Unlike a homeowners policy, standard dwelling policies provide only
property coverage'for dwellings, other structures, personal property, fair rental value, and additional living expenses. Theft and liability coverage is not included but is often available as an optional supplement.
The Nationwide Marine Definition recognizes that
property qualifying for marine insurance coverage must be in transit or bear some other relationship to transportation or communication.
Medical Payments to Others pays for
reasonable and necessary medical expenses under certain circumstances without regard to the legal liability of the insured.
Medical Payments to Others does not require the legal liability of an insured. This is a type of goodwill coverage. Damage to Property of Others, if caused by an insured, is also considered goodwill coverage. Payment under these coverages does not
require the insured be legally liable for the loss.
The protective safeguards endorsement makes maintenance of the protective safeguards that are identified in the endorsement schedule (such as an automatic sprinkler system) a condition of coverage. An exception is made for
sprinkler systems shut off as a result of breakage, leakage, freezing conditions, or opening of sprinkler heads, if the insured restores full protection within 48 hours.
Coverage B'Other Structures applies to
structures on the residence premises that are separate and distinct from the dwelling by a clear space, or connected to the dwelling by only a fence, wall, wire, or related connection.
The DP 1 form does not cover accidental discharge from a plumbing system. This coverage is available through
the DP 2 or DP 3 form. The extended coverage perils are vehicles, volcanic eruption, windstorm, aircraft, smoke, hail, explosion, and riot or civil commotion.
Identity fraud is
the act of knowingly transferring or using, without legal authority, the identification of an insured with the intent to commit illegal activity.
The building property category includes
the building(s) identified in the policy declarations, as well as indoor and outdoor fixtures and personal property used to service the building. Additions under construction, alterations, and repairs to the buildings and structures identified in the policy declarations also qualify as covered building property if they are not covered by other insurance.
The standard flood insurance policy coverage forms are
the dwelling, general property, and residential condominium building association policy forms.
The protective safeguards endorsement makes the maintenance of the protective safeguards listed in the endorsement schedule a condition of coverage. There is no coverage if
the insured knew of an impairment in the protection device and failed to notify the insurer, or if the insured failed to maintain the safeguards in working order.
The Protective Safeguards endorsement precludes loss by fire if
the insured knew of an impairment to the system and failed to notify the insurer or failed to maintain the system.
Additional living expense coverage provides insurance for
the necessary increase in living expenses incurred by the insured because a civil authority prevents access to the residence premises because of a potential loss by a covered peril.
A Scheduled Personal Property Endorsement (HO 04 61) does not provide for
the payment of an agreed upon amount specified in the schedule. Instead, the insurer agrees to pay the lowest of the cost to repair, the actual cash value, the replacement value, or the amount of insurance shown in the schedule.
The value of a home under construction increases as different components of the building are put into place and finished. While the building is under construction, the available amount of insurance on any given date is based on
the proportion that the current value of the property bears to the value of the completed property.
Medical Payments to Others pays
the reasonable and necessary medical expenses incurred within 3 years from the date of an accident. Lost wages are not medical expenses.
The insurer will pay
up to $1,000 for the named insured's share of a liability loss assessment charged against him or her as the owner or tenant of the residence premises, during the policy period, by a corporation or association of property owners.
During the appraisal, agreement by any two of the three parties establishes the
value of the loss. Nevertheless, the insurer still has the right to deny coverage.
The special causes of loss form specifically excludes coverage for
windstorm or hail damage to dairy products left in the open.
