Question 1

The concurrent causation exclusion in the Homeowners 3 policy specifies that:

Accepted Answer

A) if two or more perils jointly cause a loss,there is no coverage if one of the perils is excluded. 
B) if the insured has two or more policies in force at the time of the loss,the loss is not covered. 
C) if the insured has two or more policies in force at the time of the loss,the loss is pro-rated between the insurers. 
D) if two or more perils jointly cause a loss,there is coverage as long as one of the perils is covered. 
A) if two or more perils jointly cause a loss,there is no coverage if one of the perils is excluded. 
B) if the insured has two or more policies in force at the time of the loss,the loss is not covered. 
C) if the insured has two or more policies in force at the time of the loss,the loss is pro-rated between the insurers. 
D) if two or more perils jointly cause a loss,there is coverage as long as one of the perils is covered. A

Question 2

Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true?

Accepted Answer

A) It applies to personal property losses only. 
B) Except for small losses,the insured must repair or replace the damaged property in order to receive full replacement cost. 
C) The insured is required to carry an amount of insurance equal to 100 percent of the replacement value of the insured property. 
D) Loss settlements are equal to 50 percent of the value of the loss if the insured is carrying less than the required amount of insurance. 
A) It applies to personal property losses only. 
B) Except for small losses,the insured must repair or replace the damaged property in order to receive full replacement cost. 
C) The insured is required to carry an amount of insurance equal to 100 percent of the replacement value of the insured property. 
D) Loss settlements are equal to 50 percent of the value of the loss if the insured is carrying less than the required amount of insurance. B

Question 3

Jose and Maria would like "open-perils" coverage on their home and their personal property.Which unendorsed homeowners form provides this coverage?

Accepted Answer

A) Homeowners 2 
B) Homeowners 3 
C) Homeowners 4 
D) Homeowners 5 
A) Homeowners 2 
B) Homeowners 3 
C) Homeowners 4 
D) Homeowners 5 D

Question 4

Betty's personal property is insured for $100,000 under her Homeowners 3 policy.If she usually keeps some personal property at a mountain cabin that she owns,how much coverage for this property is available under her homeowners policy?

Accepted Answer

A) $10,000 
B) $20,000 
C) $40,000 
D) $50,000 
A) $10,000 
B) $20,000 
C) $40,000 
D) $50,000

Question 5

One additional coverage under the homeowners policy makes available up to 10 percent of the Coverage A limit to cover increased repair costs after a loss in order to comply with a stricter building code.This additional coverage is called

Accepted Answer

A) ordinance or law. 
B) reasonable repairs. 
C) concurrent causation. 
D) debris removal. 
A) ordinance or law. 
B) reasonable repairs. 
C) concurrent causation. 
D) debris removal.

Question 6

Which of the following statements is (are)true regarding how the Homeowners 3 policy handles the peril of collapse?
I.Collapse is specifically excluded,and there are no exceptions to the exclusion.
II.Collapse that is caused by a Coverage C peril 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 7

Several different values can be considered when determining how much insurance should be carried on a dwelling (the Coverage A limit of the Homeowners 3 policy).The appropriate value that should be used is:

Accepted Answer

A) the home's market value. 
B) the home's actual cash value. 
C) the home's appraised value for property tax purposes. 
D) the home's replacement cost. 
A) the home's market value. 
B) the home's actual cash value. 
C) the home's appraised value for property tax purposes. 
D) the home's replacement cost.

Question 8

Michelle had four matching end tables in her home.A fire damaged the home,destroying two of the end tables.Michelle's home was covered by an unendorsed Homeowners 3 policy.Which of the following is true with regard to the settlement for the end tables in this case?

Accepted Answer

A) Loss to a pair or set is excluded under the policy. 
B) The insurer can elect to pay the difference in actual cash value of the property before and after the loss. 
C) The insurer will pay double the replacement cost of any partial loss. 
D) If a partial loss to a pair or set occurs,the insurer is liable for replacement of the entire pair or set. 
A) Loss to a pair or set is excluded under the policy. 
B) The insurer can elect to pay the difference in actual cash value of the property before and after the loss. 
C) The insurer will pay double the replacement cost of any partial loss. 
D) If a partial loss to a pair or set occurs,the insurer is liable for replacement of the entire pair or set.

Question 9

If the insurer broadens coverage during the policy period without an increase in premium,and the broadened coverage is not part of a general program revision,the insured is entitled to the broadened coverage under which policy provision?

Accepted Answer

A) appraisal clause 
B) subrogation 
C) liberalization clause 
D) pair or set clause 
A) appraisal clause 
B) subrogation 
C) liberalization clause 
D) pair or set clause

Question 10

Linda wants to purchase a homeowners policy.She has some valuable personal property to which internal policy limits apply.Her agent said that she could obtain coverage under her homeowners policy by attaching a list of this valuable property with specific amounts of insurance.Such a listing is called a(n)

Accepted Answer

A) binder. 
B) schedule. 
C) application. 
D) warranty. 
A) binder. 
B) schedule. 
C) application. 
D) warranty.

Question 11

The Homeowners 3 policy limits the amount of coverage provided on certain personal property (e.g.coin collections and silverware).This personal property can be adequately insured by

Accepted Answer

A) lowering the deductible which applies to personal property losses. 
B) storing the property away from the home at another location. 
C) adding a schedule to the policy listing the property with specific amounts of insurance. 
D) adding an appraisal clause to the policy. 
A) lowering the deductible which applies to personal property losses. 
B) storing the property away from the home at another location. 
C) adding a schedule to the policy listing the property with specific amounts of insurance. 
D) adding an appraisal clause to the policy.

Question 12

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a roof with a replacement value of $16,000 but an actual cash value of $10,000 is destroyed in a fire?

Accepted Answer

A) $10,000 
B) $12,000 
C) $14,000 
D) $16,000 
A) $10,000 
B) $12,000 
C) $14,000 
D) $16,000

Question 13

If there is a conflict between state law and a provision in a homeowners policy,

Accepted Answer

A) the policy wording takes precedence. 
B) the state law takes precedence. 
C) the policyholder is entitled to whichever provides broader coverage. 
D) the policy is null and void. 
A) the policy wording takes precedence. 
B) the state law takes precedence. 
C) the policyholder is entitled to whichever provides broader coverage. 
D) the policy is null and void.

Question 14

Which of the following losses to a dwelling would be covered under an unendorsed Homeowners 3 policy?

Accepted Answer

A) smoke damage resulting from agricultural operations of a neighboring farmer 
B) damage to the structure caused by a flash flood 
C) damage to the structure caused by the weight of heavy snow on the roof 
D) damage to a floor caused by water backing up through a sewer pipe 
A) smoke damage resulting from agricultural operations of a neighboring farmer 
B) damage to the structure caused by a flash flood 
C) damage to the structure caused by the weight of heavy snow on the roof 
D) damage to a floor caused by water backing up through a sewer pipe

Question 15

Persons insured under Section I of the Homeowners 3 policy include which of the following?
I.A spouse of the named insured if living in the same household
II.The named insured's children who are under age 24 and who are full-time college students

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

Cal is renting an apartment.Which homeowners policy is specially designed to insure renters?

Accepted Answer

A) HO-2 
B) HO-3 
C) HO-4 
D) HO-6 
A) HO-2 
B) HO-3 
C) HO-4 
D) HO-6

Question 17

The homeowners policy excludes a loss brought about by two or more perils where one peril is covered under the policy and the other perils are excluded.This situation is called

Accepted Answer

A) ordinance or law. 
B) proximate cause. 
C) concurrent causation. 
D) nullification. 
A) ordinance or law. 
B) proximate cause. 
C) concurrent causation. 
D) nullification.

Question 18

Which of the following statements about eligibility requirements for homeowners insurance is (are)true?
I.A contract can be written on a twenty-unit apartment complex as long as the tenants are families.
II.Separate forms are available for renters and condominium owners.

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 19

A fire destroyed the home next door to Brad's home.The fire department chief was concerned that the damaged home would collapse on to Brad's home,so he ordered Brad to evacuate his home.Which of the following statements is true concerning the cost of Brad's hotel room while he is complying with the fire chief's order?

Accepted Answer

A) The cost of the hotel room is not covered,as Brad's home was not directly damaged. 
B) The cost of the hotel room is covered under the "fair rental value" coverage of Part D. 
C) The cost of the hotel room is covered under the "prohibited use" coverage of Part D. 
D) The cost of the hotel room is covered under the dwelling coverage of Part A. 
A) The cost of the hotel room is not covered,as Brad's home was not directly damaged. 
B) The cost of the hotel room is covered under the "fair rental value" coverage of Part D. 
C) The cost of the hotel room is covered under the "prohibited use" coverage of Part D. 
D) The cost of the hotel room is covered under the dwelling coverage of Part A.

Question 20

The purpose of the appraisal clause in the Homeowners 3 policy is to

Accepted Answer

A) determine the appropriate amount of homeowners insurance to purchase. 
B) set a value on the home for estate purposes if the homeowner dies. 
C) settle valuation disputes between the insurer and insured after a loss has occurred. 
D) determine a mortgage lender's insurable interest after a loss has occurred. 
A) determine the appropriate amount of homeowners insurance to purchase. 
B) set a value on the home for estate purposes if the homeowner dies. 
C) settle valuation disputes between the insurer and insured after a loss has occurred. 
D) determine a mortgage lender's insurable interest after a loss has occurred.

Exam 22: Homeowners Insurance,section I

The concurrent causation exclusion in the Homeowners 3 policy specifies that:

Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true?

Jose and Maria would like "open-perils" coverage on their home and their personal property.Which unendorsed homeowners form provides this coverage?

Betty's personal property is insured for $100,000 under her Homeowners 3 policy.If she usually keeps some personal property at a mountain cabin that she owns,how much coverage for this property is available under her homeowners policy?

One additional coverage under the homeowners policy makes available up to 10 percent of the Coverage A limit to cover increased repair costs after a loss in order to comply with a stricter building code.This additional coverage is called

Which of the following statements is (are)true regarding how the Homeowners 3 policy handles the peril of collapse? I.Collapse is specifically excluded,and there are no exceptions to the exclusion. II.Collapse that is caused by a Coverage C peril is covered.

Several different values can be considered when determining how much insurance should be carried on a dwelling (the Coverage A limit of the Homeowners 3 policy).The appropriate value that should be used is:

Michelle had four matching end tables in her home.A fire damaged the home,destroying two of the end tables.Michelle's home was covered by an unendorsed Homeowners 3 policy.Which of the following is true with regard to the settlement for the end tables in this case?

If the insurer broadens coverage during the policy period without an increase in premium,and the broadened coverage is not part of a general program revision,the insured is entitled to the broadened coverage under which policy provision?

The Homeowners 3 policy limits the amount of coverage provided on certain personal property (e.g.coin collections and silverware).This personal property can be adequately insured by

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a roof with a replacement value of $16,000 but an actual cash value of $10,000 is destroyed in a fire?

If there is a conflict between state law and a provision in a homeowners policy,

Which of the following losses to a dwelling would be covered under an unendorsed Homeowners 3 policy?

Persons insured under Section I of the Homeowners 3 policy include which of the following? I.A spouse of the named insured if living in the same household II.The named insured's children who are under age 24 and who are full-time college students

Cal is renting an apartment.Which homeowners policy is specially designed to insure renters?

The homeowners policy excludes a loss brought about by two or more perils where one peril is covered under the policy and the other perils are excluded.This situation is called

Which of the following statements about eligibility requirements for homeowners insurance is (are)true? I.A contract can be written on a twenty-unit apartment complex as long as the tenants are families. II.Separate forms are available for renters and condominium owners.

The purpose of the appraisal clause in the Homeowners 3 policy is to

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management

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

Annuities and Individual Retirement Accounts

Health-Care Reform;individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Auto Insurance

Auto Insurance Continued

Homeowners Insurance,section II

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

Filters