Question 1

Which of the following statements about covered perils and loss settlement under an unendorsed Homeowners 3 policy is true?

Accepted Answer

A) The dwelling is covered on a named-perils basis. 
B) Personal property losses are settled on an actual cash value basis. 
C) Losses to the dwelling are always settled on an actual cash value basis. 
D) Personal property is covered on an open-perils basis. 
A) The dwelling is covered on a named-perils basis. 
B) Personal property losses are settled on an actual cash value basis. 
C) Losses to the dwelling are always settled on an actual cash value basis. 
D) Personal property is covered on an open-perils basis.

Question 2

Which homeowners policy is designed for the tenants of a rented premises?

Accepted Answer

A) Homeowners 2 
B) Homeowners 4 
C) Homeowners 6 
D) Homeowners 8 
A) Homeowners 2 
B) Homeowners 4 
C) Homeowners 6 
D) Homeowners 8

Question 3

Under the Homeowners 3 policy,all of the following are options of the insurer for settling claims EXCEPT

Accepted Answer

A) paying the claim in cash. 
B) replacing the property. 
C) repairing the property. 
D) paying the claim with insurance company stock. 
A) paying the claim in cash. 
B) replacing the property. 
C) repairing the property. 
D) paying the claim with insurance company stock.

Question 4

All of the following statements about conditions under a Homeowners 3 policy are true EXCEPT

Accepted Answer

A) If an insurer broadens coverage without an additional premium during the policy period,the broadened coverage applies immediately to the present policy. 
B) A waiver or change in any policy provision must be approved in writing by the insurer to be valid. 
C) The insurer must give written consent for an assignment of the policy to be valid. 
D) If the named insured dies,coverage automatically ceases with respect to any property of the deceased. 
A) If an insurer broadens coverage without an additional premium during the policy period,the broadened coverage applies immediately to the present policy. 
B) A waiver or change in any policy provision must be approved in writing by the insurer to be valid. 
C) The insurer must give written consent for an assignment of the policy to be valid. 
D) If the named insured dies,coverage automatically ceases with respect to any property of the deceased.

Question 5

Ted borrowed $140,000 from ABC Bank to purchase a home and pledged the home as collateral for the loan.Shortly after purchasing the home,Ted lost his job.He could not find another job and could not pay the monthly mortgage.Ted set fire to the home.The claims adjuster suspected arson,and an investigation proved that Ted intentionally caused the loss.Under the mortgage clause of the Homeowners 3 policy,how will this loss be settled?

Accepted Answer

A) The insurer has no liability because the loss was intentional. 
B) The insurer will pay Ted the actual cash value of the loss as intentional loss is not excluded. 
C) The insurer will pay ABC the value of its insurable interest and pay Ted the value of his insurable interest. 
D) The insurer will pay ABC the value of its insurable interest and then attempt to recoup the loss payment from Ted. 
A) The insurer has no liability because the loss was intentional. 
B) The insurer will pay Ted the actual cash value of the loss as intentional loss is not excluded. 
C) The insurer will pay ABC the value of its insurable interest and pay Ted the value of his insurable interest. 
D) The insurer will pay ABC the value of its insurable interest and then attempt to recoup the loss payment from Ted.

Question 6

All of the following are duties of the mortgagee under the standard mortgage clause EXCEPT

Accepted Answer

A) to reimburse the insurer for any loss payments. 
B) to notify the insurer of any change in ownership of the property of which the mortgagee is aware. 
C) to provide a proof of loss form if the insured fails to do so. 
D) to pay the premium if the insured fails to do so. 
A) to reimburse the insurer for any loss payments. 
B) to notify the insurer of any change in ownership of the property of which the mortgagee is aware. 
C) to provide a proof of loss form if the insured fails to do so. 
D) to pay the premium if the insured fails to do so.

Question 7

Which of the following statements about the Homeowners 8 policy is (are)true?
I.Losses to the dwelling are settled on a replacement cost basis if the dwelling is insured for its full market value.
II.It is designed primarily for expensive,newer,dwellings.

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 8

All of the following are additional coverages under Section I of the Homeowners 3 policy EXCEPT

Accepted Answer

A) the reasonable expenses of removing debris after an insured loss. 
B) fire department service charges for which the insured is liable by contract or agreement. 
C) damage to trees and shrubs caused by a windstorm. 
D) losses incurred from the unauthorized use of a stolen credit card. 
A) the reasonable expenses of removing debris after an insured loss. 
B) fire department service charges for which the insured is liable by contract or agreement. 
C) damage to trees and shrubs caused by a windstorm. 
D) losses incurred from the unauthorized use of a stolen credit card.

Question 9

Which of the following types of water damage is covered under an unendorsed Homeowners 3 policy?

Accepted Answer

A) damage from a flood caused by torrential rain 
B) damage from water backing up through a drain 
C) damage from water below the surface of the ground that seeps into a basement 
D) damage from water that overflows from a malfunctioning washing machine 
A) damage from a flood caused by torrential rain 
B) damage from water backing up through a drain 
C) damage from water below the surface of the ground that seeps into a basement 
D) damage from water that overflows from a malfunctioning washing machine

Question 10

Following catastrophic hurricane losses,South Coast Insurance Company changed its deductible provision.Rather than using a specified dollar value,$250 for example;the dollar value of the deductible increases with the size of the loss.The type of deductible that South Coast changed to is called a(n)

Accepted Answer

A) calendar-year deductible. 
B) aggregate deductible. 
C) straight deductible. 
D) percentage deductible. 
A) calendar-year deductible. 
B) aggregate deductible. 
C) straight deductible. 
D) percentage deductible.

Question 11

Which of the following is (are)included among the duties of an insured following a loss covered under the Homeowners 3 policy?
I.To file a proof of loss within a specified time period after the insurer's request
II.To prepare an inventory of damaged personal property

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

Which of the following statements about the additional coverages under Section I of the Homeowners 3 policy is true?

Accepted Answer

A) There is coverage for the reasonable cost incurred to protect property from further damage after a covered loss occurs. 
B) There is unlimited coverage for furnishings of the landlord in an apartment on the premises that is rented to others. 
C) Property removed from the premises because it is endangered by an insured peril is covered on a named-perils basis while it is outside the insured premises. 
D) There is no coverage for the increased cost of construction or repair to comply with an ordinance or law. 
A) There is coverage for the reasonable cost incurred to protect property from further damage after a covered loss occurs. 
B) There is unlimited coverage for furnishings of the landlord in an apartment on the premises that is rented to others. 
C) Property removed from the premises because it is endangered by an insured peril is covered on a named-perils basis while it is outside the insured premises. 
D) There is no coverage for the increased cost of construction or repair to comply with an ordinance or law.

Question 13

Which of the following statements about the Homeowners 6 (unit-owners form)policy is true?

Accepted Answer

A) It includes personal liability coverage. 
B) It covers personal property on an open-perils basis. 
C) It covers the dwelling on an open-perils basis. 
D) It is designed for tenants who rent an apartment or a home. 
A) It includes personal liability coverage. 
B) It covers personal property on an open-perils basis. 
C) It covers the dwelling on an open-perils basis. 
D) It is designed for tenants who rent an apartment or a home.

Question 14

Glenda insured her home for its full replacement cost under an unendorsed Homeowners 3 policy.Which of the following statements is true?

Accepted Answer

A) The dwelling and other structures are covered on a named-perils basis. 
B) Losses to personal property are settled on a replacement cost basis. 
C) The personal property is covered on an open-perils basis. 
D) Partial losses to the dwelling will be settled on a replacement cost basis. 
A) The dwelling and other structures are covered on a named-perils basis. 
B) Losses to personal property are settled on a replacement cost basis. 
C) The personal property is covered on an open-perils basis. 
D) Partial losses to the dwelling will be settled on a replacement cost basis.

Question 15

Which of the following statements about the appraisal clause in the Homeowners 3 policy is (are)true?
I.It is used to determine a value for personal property when the policy is issued.
II.It is used to help settle disputes over the amount of a loss after a loss has occurred.

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

Ellen believes the value of the loss to her home is $30,000.The insurer has offered $18,000 to settle the loss.If Ellen and the insurer cannot agree on the value of the loss,which homeowners policy provision specifies how this dispute will be settled?

Accepted Answer

A) insurer's option 
B) appraisal clause 
C) loss payment clause 
D) mortgage clause 
A) insurer's option 
B) appraisal clause 
C) loss payment clause 
D) mortgage clause

Question 17

Which of the following statements is (are)true regarding renters insurance?
I.Renters insurance is needed if you rent a house,but is not needed if you rent an apartment.
II.The ISO renter's policy provides open perils ("all-risks")coverage on the insured's personal property.

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

Mike and Susan built their "dream home." They insured their home for its full replacement cost.They also added an endorsement that will pay up to an additional 20 percent of the policy limit in case the cost of rebuilding the home after a loss is greater than the policy limit.The basis under which Mike and Susan insured their home is called

Accepted Answer

A) actual cash value. 
B) valued policy coverage. 
C) extended replacement cost. 
D) guaranteed replacement cost. 
A) actual cash value. 
B) valued policy coverage. 
C) extended replacement cost. 
D) guaranteed replacement cost.

Question 19

Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy?

Accepted Answer

A) medical payments to others 
B) debris removal 
C) personal liability 
D) intentional property damage caused by an insured 
A) medical payments to others 
B) debris removal 
C) personal liability 
D) intentional property damage caused by an insured

Question 20

Which of the following statements concerning coverage under the Homeowners 3 policy is true?

Accepted Answer

A) If a power failure away from the insured dwelling causes a loss,the loss is covered. 
B) If a Coverage C peril causes a collapse,the resulting damage is covered. 
C) If an insured peril damages a portion of a pair or set (e.g.matching lamps or end tables),the insurer must pay the full value of the entire pair or set. 
D) If a discharge from a home appliance causes the home to flood,the loss is excluded.. 
A) If a power failure away from the insured dwelling causes a loss,the loss is covered. 
B) If a Coverage C peril causes a collapse,the resulting damage is covered. 
C) If an insured peril damages a portion of a pair or set (e.g.matching lamps or end tables),the insurer must pay the full value of the entire pair or set. 
D) If a discharge from a home appliance causes the home to flood,the loss is excluded..

Exam 22: Homeowners Insurance,section I

Which of the following statements about covered perils and loss settlement under an unendorsed Homeowners 3 policy is true?

Which homeowners policy is designed for the tenants of a rented premises?

Under the Homeowners 3 policy,all of the following are options of the insurer for settling claims EXCEPT

All of the following statements about conditions under a Homeowners 3 policy are true EXCEPT

All of the following are duties of the mortgagee under the standard mortgage clause EXCEPT

Which of the following statements about the Homeowners 8 policy is (are)true? I.Losses to the dwelling are settled on a replacement cost basis if the dwelling is insured for its full market value. II.It is designed primarily for expensive,newer,dwellings.

All of the following are additional coverages under Section I of the Homeowners 3 policy EXCEPT

Which of the following types of water damage is covered under an unendorsed Homeowners 3 policy?

Following catastrophic hurricane losses,South Coast Insurance Company changed its deductible provision.Rather than using a specified dollar value,$250 for example;the dollar value of the deductible increases with the size of the loss.The type of deductible that South Coast changed to is called a(n)

Which of the following is (are)included among the duties of an insured following a loss covered under the Homeowners 3 policy? I.To file a proof of loss within a specified time period after the insurer's request II.To prepare an inventory of damaged personal property

Which of the following statements about the additional coverages under Section I of the Homeowners 3 policy is true?

Which of the following statements about the Homeowners 6 (unit-owners form)policy is true?

Glenda insured her home for its full replacement cost under an unendorsed Homeowners 3 policy.Which of the following statements is true?

Which of the following statements about the appraisal clause in the Homeowners 3 policy is (are)true? I.It is used to determine a value for personal property when the policy is issued. II.It is used to help settle disputes over the amount of a loss after a loss has occurred.

Ellen believes the value of the loss to her home is $30,000.The insurer has offered $18,000 to settle the loss.If Ellen and the insurer cannot agree on the value of the loss,which homeowners policy provision specifies how this dispute will be settled?

Which of the following statements is (are)true regarding renters insurance? I.Renters insurance is needed if you rent a house,but is not needed if you rent an apartment. II.The ISO renter's policy provides open perils ("all-risks")coverage on the insured's personal property.

Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy?

Which of the following statements concerning coverage under the Homeowners 3 policy is true?

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

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