Question 1

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 2

All of the following losses are subject to special limits of liability under the Homeowners 3 policy EXCEPT

Accepted Answer

A)  theft of firearms. 
B)  destruction by fire of property used for business purposes. 
C)  storm damage to a boat at a marina. 
D)  furniture destroyed by a fire. 
A)  theft of firearms. 
B)  destruction by fire of property used for business purposes. 
C)  storm damage to a boat at a marina. 
D)  furniture destroyed by a fire.

Question 3

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 4

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 5

Which of the following statements about coverage for loss of use (Coverage D) under the Homeowners 3 policy is true?

Accepted Answer

A)  If a covered loss makes the home unfit for living, the insurer pays additional living expenses the insured may incur as a result of the loss. 
B)  The duration of payments for additional living expenses is limited to a maximum of 30 days. 
C)  There is no coverage for loss of rent if an insured peril makes the part of the premises rented to others uninhabitable. 
D)  There is coverage for loss of business income if an insured peril forces a home business to be terminated. 
A)  If a covered loss makes the home unfit for living, the insurer pays additional living expenses the insured may incur as a result of the loss. 
B)  The duration of payments for additional living expenses is limited to a maximum of 30 days. 
C)  There is no coverage for loss of rent if an insured peril makes the part of the premises rented to others uninhabitable. 
D)  There is coverage for loss of business income if an insured peril forces a home business to be terminated.

Question 6

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 7

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 8

Which of the following statements about the coverage for other structures (Coverage B) under the Homeowners 3 policy is true?

Accepted Answer

A)  The coverage applies to a detached garage or tool shed on the residence premises. 
B)  Structures attached to the dwelling by a fence or utility line are considered to be part of the dwelling rather than other structures. 
C)  Coverage applies even if the other structure is used for business purposes. 
D)  There is no coverage for a private garage if it is rented to a tenant of the dwelling. 
A)  The coverage applies to a detached garage or tool shed on the residence premises. 
B)  Structures attached to the dwelling by a fence or utility line are considered to be part of the dwelling rather than other structures. 
C)  Coverage applies even if the other structure is used for business purposes. 
D)  There is no coverage for a private garage if it is rented to a tenant of the dwelling.

Question 9

All of the following are covered under the dwelling coverage (Coverage A) of the Homeowners 3 policy EXCEPT

Accepted Answer

A)  any structure attached to the dwelling. 
B)  the land on which the insured dwelling is located. 
C)  materials and supplies intended for alteration or repair of the dwelling. 
D)  materials and supplies intended for construction of a detached garage. 
A)  any structure attached to the dwelling. 
B)  the land on which the insured dwelling is located. 
C)  materials and supplies intended for alteration or repair of the dwelling. 
D)  materials and supplies intended for construction of a detached garage.

Question 10

Shauna purchased a condominium unit. Which homeowners policy is specially designed for condominium unit owners?

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 11

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)  Losses to the dwelling and other structures are 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)  Losses to the dwelling and other structures are settled on a replacement cost basis.

Question 12

Which of the following is a covered peril under the personal property coverage (Coverage C) of an unendorsed Homeowners 3 policy?

Accepted Answer

A)  earthquake 
B)  nuclear radiation 
C)  windstorm 
D)  flood 
A)  earthquake 
B)  nuclear radiation 
C)  windstorm 
D)  flood

Question 13

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 will pay the difference in actual cash value of the property before and after the loss. 
C)  The insurer will pay the replacement cost of the 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 will pay the difference in actual cash value of the property before and after the loss. 
C)  The insurer will pay the replacement cost of the 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 14

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 15

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 16

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 17

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 18

The major difference between the dwelling coverage (Part A) of the Homeowners 2 (Broad From) policy and the Homeowners 3 (Special Form) policy is that

Accepted Answer

A)  the HO-3 provides open perils ("all risks") coverage and the HO-2 provides named-perils coverage. 
B)  the HO-3 provides actual cash value coverage, the HO-2 provides replacement cost coverage. 
C)  the HO-3 is always written without a deductible, the HO-2 always written with a deductible. 
D)  the HO-3 can be used for any type of construction, the HO-2 is limited to wood frame homes. 
A)  the HO-3 provides open perils ("all risks") coverage and the HO-2 provides named-perils coverage. 
B)  the HO-3 provides actual cash value coverage, the HO-2 provides replacement cost coverage. 
C)  the HO-3 is always written without a deductible, the HO-2 always written with a deductible. 
D)  the HO-3 can be used for any type of construction, the HO-2 is limited to wood frame homes.

Question 19

Which of the following property is covered under the personal property coverage (Coverage C) of the Homeowners 3 policy?

Accepted Answer

A)  a pet dog owned by the named insured 
B)  a bicycle owned by a foster child living with the named insured 
C)  a motor vehicle owned by the named insured 
D)  a stamp collection insured under a separate policy 
A)  a pet dog owned by the named insured 
B)  a bicycle owned by a foster child living with the named insured 
C)  a motor vehicle owned by the named insured 
D)  a stamp collection insured under a separate policy

Question 20

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

Exam 22: Homeowners Insurance, Section I

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

All of the following losses are subject to special limits of liability under the Homeowners 3 policy EXCEPT

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 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 statements about coverage for loss of use (Coverage D) under the Homeowners 3 policy is true?

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

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

Which of the following statements about the coverage for other structures (Coverage B) under the Homeowners 3 policy is true?

All of the following are covered under the dwelling coverage (Coverage A) of the Homeowners 3 policy EXCEPT

Shauna purchased a condominium unit. Which homeowners policy is specially designed for condominium unit owners?

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 is a covered peril under the personal property coverage (Coverage C) of an unendorsed Homeowners 3 policy?

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?

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.

If there is a conflict between state law and a provision in a 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

The major difference between the dwelling coverage (Part A) of the Homeowners 2 (Broad From) policy and the Homeowners 3 (Special Form) policy is that

Which of the following property is covered under the personal property coverage (Coverage C) of the Homeowners 3 policy?

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?

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Enterprise Risk Management and Related Topics

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 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