Question 1

Which statement regarding Section II of an unendorsed homeowners 3 policy is true?

Accepted Answer

A) Liability arising from intentional property damage caused by the insured's teenager is covered. 
B) Liability arising out of a home business is not covered. 
C) Medical expenses for the insured's injured child are covered. 
D) First-aid expenses for injuries suffered by guest at the home are not covered. 
A) Liability arising from intentional property damage caused by the insured's teenager is covered. 
B) Liability arising out of a home business is not covered. 
C) Medical expenses for the insured's injured child are covered. 
D) First-aid expenses for injuries suffered by guest at the home are not covered. B

Question 2

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 fewer homeowners claims than do individuals with good credit histories.
II.A poor credit history can be improved over time,allowing for the purchase of homeowners insurance at a lower premium.

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 B

Question 3

Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy?

Accepted Answer

A) property damage liability 
B) false arrest 
C) bodily injury 
D) business liability 
A) property damage liability 
B) false arrest 
C) bodily injury 
D) business liability B

Question 4

Which of the following statements about Coverage E: Personal Liability under the homeowners 3 policy is true?

Accepted Answer

A) Losses attributable to personal injury are covered. 
B) The liability limit stated in the policy is an aggregate limit for the policy period. 
C) The insured must be legally liable for insurer to pay damages. 
D) Bodily injury liability only applies to injuries that occur at the insured dwelling. 
A) Losses attributable to personal injury are covered. 
B) The liability limit stated in the policy is an aggregate limit for the policy period. 
C) The insured must be legally liable for insurer to pay damages. 
D) Bodily injury liability only applies to injuries that occur at the insured dwelling.

Question 5

Polly purchased a Homeowners 3 policy.She has a swing set in the backyard of her home.While her son and the neighbor's child were using the swing set,it collapsed.Both of the children required medical care.Which of the following statements is true?

Accepted Answer

A) The medical expenses Polly's son are covered under the policy. 
B) The medical expenses of the neighbor's child are covered under the policy. 
C) If Polly's son sues Polly and wins,the insurer will pay the damage award. 
D) If the neighbor sues Polly,Polly must pay for the lawyer who defends the suit. 
A) The medical expenses Polly's son are covered under the policy. 
B) The medical expenses of the neighbor's child are covered under the policy. 
C) If Polly's son sues Polly and wins,the insurer will pay the damage award. 
D) If the neighbor sues Polly,Polly must pay for the lawyer who defends the suit.

Question 6

Which of the following statements about the insurer's obligation to provide a legal defense under the personal liability coverage (CoverageE)of the homeowners policy is (are)true?
I.The insurer agrees to defend the insured only if the suit is not groundless,false,or fraudulent.
II.The insurer's obligation to defend the insured ceases after the amount paid for damages from an occurrence equals the policy limit.

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 7

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 property insurance claims filed on the home's previous owner 
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 property insurance claims filed on the home's previous owner 
D) because the home is located in an area that does not have a certified fire department

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

Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy?

Accepted Answer

A) bodily injury 
B) property damage 
C) slander 
D) professional liability 
A) bodily injury 
B) property damage 
C) slander 
D) professional liability

Question 10

Which of the following statements about an earthquake endorsement for a homeowners policy is (are)true?
I.The endorsement also covers landslides and volcanic eruptions.
II.The coverage for earthquakes is written without a deductible.

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 statements is true regarding the Homeowners 3 policy and identity theft?

Accepted Answer

A) Identity theft is covered under Coverage D-Loss of Use. 
B) Identity theft is covered under Coverage C-Personal Property. 
C) Identity theft is covered under Coverage E-Personal Liability. 
D) Identity theft is covered by adding an endorsement. 
A) Identity theft is covered under Coverage D-Loss of Use. 
B) Identity theft is covered under Coverage C-Personal Property. 
C) Identity theft is covered under Coverage E-Personal Liability. 
D) Identity theft is covered by adding an endorsement.

Question 12

Section II of the homeowners policy has exclusions applying to all of the following EXCEPT

Accepted Answer

A) activities of the named insured's minor children. 
B) business activities. 
C) transmission of a communicable disease. 
D) intentional injuries. 
A) activities of the named insured's minor children. 
B) business activities. 
C) transmission of a communicable disease. 
D) intentional injuries.

Question 13

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 14

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 15

Which of the following statements about buying homeowners insurance is true?

Accepted Answer

A) There is no reason to carry insurance for more than 80 percent of a dwelling's replacement cost. 
B) The deduction for depreciation will be increased if a personal property replacement cost endorsement is purchased. 
C) Premiums often can be reduced substantially by selecting a higher deductible. 
D) There is little reason to compare cost since the lack of competition results in little price variation among companies. 
A) There is no reason to carry insurance for more than 80 percent of a dwelling's replacement cost. 
B) The deduction for depreciation will be increased if a personal property replacement cost endorsement is purchased. 
C) Premiums often can be reduced substantially by selecting a higher deductible. 
D) There is little reason to compare cost since the lack of competition results in little price variation among companies.

Question 16

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 homeowner'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 homeowner's yard.

Question 17

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 18

Which of the following statements regarding the Coverage E limit in the homeowners policy is true?

Accepted Answer

A) It is an aggregate limit,and once the amount paid for one or more claims reaches the limit,no additional coverage is provided. 
B) The limit applies only if a court orders the insured to pay-there is no coverage for settlements reached out-of-court. 
C) Any legal defense costs incurred by the insurer are counted against the limit of liability. 
D) The limit applies on a per-occurrence basis to bodily injury and property damage liability. 
A) It is an aggregate limit,and once the amount paid for one or more claims reaches the limit,no additional coverage is provided. 
B) The limit applies only if a court orders the insured to pay-there is no coverage for settlements reached out-of-court. 
C) Any legal defense costs incurred by the insurer are counted against the limit of liability. 
D) The limit applies on a per-occurrence basis to bodily injury and property damage liability.

Question 19

Liability arising out of which of the following is covered under Coverage E of an unendorsed Homeowners 3 policy?

Accepted Answer

A) use of the insured's auto on a public road 
B) use of the insured's golf cart at a golf course 
C) use of the insured's motorcycle on a highway 
D) use of the insured's 40-foot boat with a 200 horsepower engine 
A) use of the insured's auto on a public road 
B) use of the insured's golf cart at a golf course 
C) use of the insured's motorcycle on a highway 
D) use of the insured's 40-foot boat with a 200 horsepower engine

Question 20

Which of the following statements regarding Section II coverage under the Homeowners 3 policy is true?

Accepted Answer

A) Medical payments to others are covered regardless of whether the insured is legally liable. 
B) Legal defense costs incurred by the insurer to defend the insured reduce the per-occurrence limit of liability available. 
C) The insurer is not required to defend the insured against a groundless,false,or fraudulent lawsuit. 
D) Any amount paid under medical payments coverage reduces the personal liability limit available for the same claim. 
A) Medical payments to others are covered regardless of whether the insured is legally liable. 
B) Legal defense costs incurred by the insurer to defend the insured reduce the per-occurrence limit of liability available. 
C) The insurer is not required to defend the insured against a groundless,false,or fraudulent lawsuit. 
D) Any amount paid under medical payments coverage reduces the personal liability limit available for the same claim.

Exam 23: Homeowners Insurance,section II

Which statement regarding Section II of an unendorsed homeowners 3 policy is true?

Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy?

Which of the following statements about Coverage E: Personal Liability under the homeowners 3 policy is true?

Polly purchased a Homeowners 3 policy.She has a swing set in the backyard of her home.While her son and the neighbor's child were using the swing set,it collapsed.Both of the children required medical care.Which of the following statements is true?

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?

Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy?

Which of the following statements about an earthquake endorsement for a homeowners policy is (are)true? I.The endorsement also covers landslides and volcanic eruptions. II.The coverage for earthquakes is written without a deductible.

Which of the following statements is true regarding the Homeowners 3 policy and identity theft?

Section II of the homeowners policy has exclusions applying to all of the following EXCEPT

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 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.

Which of the following statements about buying homeowners insurance is true?

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

Which of the following statements regarding the Coverage E limit in the homeowners policy is true?

Liability arising out of which of the following is covered under Coverage E of an unendorsed Homeowners 3 policy?

Which of the following statements regarding Section II coverage under the Homeowners 3 policy is true?

Risk and Its Treatment

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Introduction to Risk Management

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Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance and Contractual Provisions

Buying Life Insurance

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Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

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The Liability Risk

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Auto Insurance Continued

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