Question 1

All of the following losses are covered under Section II of an unendorsed Homeowners 3 policy EXCEPT

Accepted Answer

A) The homeowner accidentally dropped a bowling ball,injuring another bowler's foot. 
B) A baby sitter slipped and fell at the insured's home,breaking her ankle and incurring medical expenses. 
C) The insured slandered a city council member at a city council meeting. 
D) The insured's dog bit a neighbor. 
A) The homeowner accidentally dropped a bowling ball,injuring another bowler's foot. 
B) A baby sitter slipped and fell at the insured's home,breaking her ankle and incurring medical expenses. 
C) The insured slandered a city council member at a city council meeting. 
D) The insured's dog bit a neighbor. C

Question 2

One of the "Tips for Buying a Homeowners Policy" is to consider purchasing a personal umbrella policy.What coverage is provided by a personal umbrella policy?

Accepted Answer

A) blanket property coverage for any damage caused by water 
B) excess liability coverage and coverage for some liability claims excluded by underlying policies 
C) all-risk,replacement cost,property coverage 
D) coverage for business and professional liability 
A) blanket property coverage for any damage caused by water 
B) excess liability coverage and coverage for some liability claims excluded by underlying policies 
C) all-risk,replacement cost,property coverage 
D) coverage for business and professional liability B

Question 3

All of the following situations are excluded from coverage under Section II of the homeowners policy EXCEPT

Accepted Answer

A) the rental of a spare bedroom which is used by the tenant as an office. 
B) the use of a rented airplane to take a vacation. 
C) the ownership of a ten-unit apartment house as an investment. 
D) the performance of professional services by the insured at the residence premises. 
A) the rental of a spare bedroom which is used by the tenant as an office. 
B) the use of a rented airplane to take a vacation. 
C) the ownership of a ten-unit apartment house as an investment. 
D) the performance of professional services by the insured at the residence premises. A

Question 4

Which of the following statements is (are)true concerning the use of an individual's credit history as an insurance rating factor?
I.Individuals with poor credit histories,as a group,generally file more homeowners claims than do individuals with good credit histories.
II.The use of credit history as an insurance rating factor is controversial.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 5

Tom and Tammy Evans were ready to purchase a home.The home was to serve as collateral for their mortgage loan.Two insurers declined to insure the home,citing "an adverse CLUE report." Why would an insurer reject a homeowners insurance application because of an adverse CLUE report?

Accepted Answer

A) because the previous owner had defaulted on the mortgage loan 
B) because the home is located in an area where the zoning law had been changed 
C) because there had been previous property insurance claims filed on the home 
D) because the home is located in an area that does not have a certified fire department 
A) because the previous owner had defaulted on the mortgage loan 
B) because the home is located in an area where the zoning law had been changed 
C) because there had been previous property insurance claims filed on the home 
D) because the home is located in an area that does not have a certified fire department

Question 6

All of the following persons are insured for personal liability under the homeowners policy EXCEPT

Accepted Answer

A) children of the named insured under age 24 who are attending college full time and temporarily residing elsewhere. 
B) foster children under the age of 21 who reside with the named insured. 
C) nonresident employees of the named insured. 
D) the spouse of the named insured if a resident of the same household. 
A) children of the named insured under age 24 who are attending college full time and temporarily residing elsewhere. 
B) foster children under the age of 21 who reside with the named insured. 
C) nonresident employees of the named insured. 
D) the spouse of the named insured if a resident of the same household.

Question 7

Reggie just purchased a home.A friend told him to consider insurance coverage for natural disasters when insuring the home.Losses from all of the following perils are covered under an unendorsed Homeowners 3 policy EXCEPT

Accepted Answer

A) tornadoes. 
B) floods. 
C) hurricanes. 
D) forest fires. 
A) tornadoes. 
B) floods. 
C) hurricanes. 
D) forest fires.

Question 8

Robert purchased an unendorsed Homeowners 3 policy.He is concerned that if his personal property is destroyed,the insurer will take depreciation into consideration when determining the loss settlement and will pay him less than the amount needed to purchase new property.Which endorsement can Robert add to his Homeowners 3 policy to address this concern?

Accepted Answer

A) inflation guard endorsement 
B) personal injury endorsement 
C) personal property replacement cost endorsement 
D) earthquake endorsement 
A) inflation guard endorsement 
B) personal injury endorsement 
C) personal property replacement cost endorsement 
D) earthquake endorsement

Question 9

Which of the following statements regarding watercraft liability under Section II of an unendorsed HO-3 policy is (are)true?
I.No coverage is available for watercraft liability.
II.Liability arising out of the use of watercraft that are under certain length and horsepower limits is covered.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 10

Which of the following statements concerning the scheduled personal property endorsement with agreed value loss settlement?
I.The endorsement provides "all-risks" coverage on the scheduled property.
II.Losses under the endorsement are settled on an actual cash value basis.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 11

Which of the following situations would be covered under Section II of a homeowners policy?
I.The insured is sued by his girlfriend because he infected her with the AIDS virus.
II.The insured's son is sued after a friend suffered serious injury as a result of using illegal drugs sold to him by the son.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 12

Factors that affect the cost of homeowners insurance include which of the following?
I.Construction material
II.Deductible amount

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 13

Which of the following statements about the personal property replacement cost endorsement used with the homeowners policy is (are)true?
I.The damaged or destroyed property must be repaired or replaced,no matter the size of the loss.
II.It is designed primarily for antiques and fine art.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 14

Persons insured for personal liability under the homeowners policy include which of the following?
I.Relatives while visiting the named insured.
II.Overnight guests who are not relatives of the named insured.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 15

Which of the following statements about endorsements to the homeowners policy is (are)true?
I.The purpose of the inflation guard endorsement is to help prevent home owners from being under-insured.
II.The purpose of the watercraft endorsement is to provide coverage for watercraft when they are used outside the United States.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 16

Which of the following statements about the additional coverages included in Section II of the homeowners policy is true?

Accepted Answer

A) Damage to property of others is covered only if the insured is legally liable. 
B) Damage to property arising out of a business engaged in by the insured is covered. 
C) Interest that accrues on a judgment after the judgment is awarded but before the judgment is paid is covered under claims expenses. 
D) First aid expenses incurred by the insured for a bodily injury covered under the policy are not covered. 
A) Damage to property of others is covered only if the insured is legally liable. 
B) Damage to property arising out of a business engaged in by the insured is covered. 
C) Interest that accrues on a judgment after the judgment is awarded but before the judgment is paid is covered under claims expenses. 
D) First aid expenses incurred by the insured for a bodily injury covered under the policy are not covered.

Question 17

Liability arising out of all of the following are covered under the personal injury endorsement to the homeowners policy EXCEPT

Accepted Answer

A) property damage. 
B) false arrest. 
C) libel. 
D) slander. 
A) property damage. 
B) false arrest. 
C) libel. 
D) slander.

Question 18

Gail lives in southern Illinois,near the New Madrid Fault Line.She added an earthquake endorsement to her Homeowners 3 policy.All of the following statements about the endorsement are true EXCEPT

Accepted Answer

A) The deductible is expressed as a percentage of the coverage limit rather than as a dollar amount. 
B) The endorsement also covers landslides and volcanic eruptions. 
C) Aftershocks occurring within 72 hours of an earthquake are considered part of the same occurrence. 
D) The endorsement also covers flood losses. 
A) The deductible is expressed as a percentage of the coverage limit rather than as a dollar amount. 
B) The endorsement also covers landslides and volcanic eruptions. 
C) Aftershocks occurring within 72 hours of an earthquake are considered part of the same occurrence. 
D) The endorsement also covers flood losses.

Question 19

All of the following losses are excluded from coverage under Section II of an unendorsed Homeowners 3 policy EXCEPT

Accepted Answer

A) Phyllis,a medical technician,misread a lab test and the patient is suing her. 
B) While using his canoe,Bert hit another canoe.The other canoe sank.Bert is being sued. 
C) Violet runs a for-profit daycare service in her home.The parents of a child injured while in Violet's care are suing Violet. 
D) The homeowner's son was injured when he fell off a swing in the homeowners's yard. 
A) Phyllis,a medical technician,misread a lab test and the patient is suing her. 
B) While using his canoe,Bert hit another canoe.The other canoe sank.Bert is being sued. 
C) Violet runs a for-profit daycare service in her home.The parents of a child injured while in Violet's care are suing Violet. 
D) The homeowner's son was injured when he fell off a swing in the homeowners's yard.

Question 20

Which of the following statements is (are)true concerning the home business insurance coverage endorsement?
I.It increases the coverage on business personal property at the insured residence from $2,500 to the Coverage C limit.
II.It excludes coverage for liability arising out of the home business.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Exam 21: Homeowners Insurance,section Ii

All of the following losses are covered under Section II of an unendorsed Homeowners 3 policy EXCEPT

One of the "Tips for Buying a Homeowners Policy" is to consider purchasing a personal umbrella policy.What coverage is provided by a personal umbrella policy?

All of the following situations are excluded from coverage under Section II of the homeowners policy EXCEPT

Tom and Tammy Evans were ready to purchase a home.The home was to serve as collateral for their mortgage loan.Two insurers declined to insure the home,citing "an adverse CLUE report." Why would an insurer reject a homeowners insurance application because of an adverse CLUE report?

All of the following persons are insured for personal liability under the homeowners policy EXCEPT

Reggie just purchased a home.A friend told him to consider insurance coverage for natural disasters when insuring the home.Losses from all of the following perils are covered under an unendorsed Homeowners 3 policy EXCEPT

Which of the following statements regarding watercraft liability under Section II of an unendorsed HO-3 policy is (are)true? I.No coverage is available for watercraft liability. II.Liability arising out of the use of watercraft that are under certain length and horsepower limits is covered.

Which of the following statements concerning the scheduled personal property endorsement with agreed value loss settlement? I.The endorsement provides "all-risks" coverage on the scheduled property. II.Losses under the endorsement are settled on an actual cash value basis.

Factors that affect the cost of homeowners insurance include which of the following? I.Construction material II.Deductible amount

Which of the following statements about the personal property replacement cost endorsement used with the homeowners policy is (are)true? I.The damaged or destroyed property must be repaired or replaced,no matter the size of the loss. II.It is designed primarily for antiques and fine art.

Persons insured for personal liability under the homeowners policy include which of the following? I.Relatives while visiting the named insured. II.Overnight guests who are not relatives of the named insured.

Which of the following statements about the additional coverages included in Section II of the homeowners policy is true?

Liability arising out of all of the following are covered under the personal injury endorsement to the homeowners policy EXCEPT

Gail lives in southern Illinois,near the New Madrid Fault Line.She added an earthquake endorsement to her Homeowners 3 policy.All of the following statements about the endorsement are true EXCEPT

All of the following losses are excluded from coverage under Section II of an unendorsed Homeowners 3 policy EXCEPT

Which of the following statements is (are)true concerning the home business insurance coverage endorsement? I.It increases the coverage on business personal property at the insured residence from $2,500 to the Coverage C limit. II.It excludes coverage for liability arising out of the home business.

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