Question 1

A credit-based score that is highly predictive of future claims cost is an individual's

Accepted Answer

A)  CLUE score. 
B)  insurance score. 
C)  motor vehicle record score. 
D)  underwriting score. 
A)  CLUE score. 
B)  insurance score. 
C)  motor vehicle record score. 
D)  underwriting score. B

Question 2

Which of the following statements about the additional coverage for damage to property of others in Section II of the homeowners policy is true?

Accepted Answer

A)  The maximum amount of coverage is $25,000 per occurrence. 
B)  Payments are made on the basis of the replacement cost of the damaged property. 
C)  There is coverage for property damage arising out of a business engaged in on a full-time basis by an insured. 
D)  There is coverage for intentional property damage by any insured who is a teenager. 
A)  The maximum amount of coverage is $25,000 per occurrence. 
B)  Payments are made on the basis of the replacement cost of the damaged property. 
C)  There is coverage for property damage arising out of a business engaged in on a full-time basis by an insured. 
D)  There is coverage for intentional property damage by any insured who is a teenager. 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 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 5

Which of the following statements about the personal liability coverage (Coverage E) of an unendorsed homeowners policy is true?

Accepted Answer

A)  Coverage is written on an accident basis. 
B)  Coverage is provided for bodily injury liability. 
C)  Coverage is provided for business and professional liability. 
D)  Coverage is provided for personal injury liability. 
A)  Coverage is written on an accident basis. 
B)  Coverage is provided for bodily injury liability. 
C)  Coverage is provided for business and professional liability. 
D)  Coverage is provided for personal injury liability.

Question 6

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 7

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 8

Which of the following statements concerning the scheduled personal property endorsement with agreed value loss settlement is (are) true?
I.The endorsement provides open-perils ("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 9

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 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

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 12

Jane would like to save money on her homeowners premium. All of the following steps will help her to reduce her homeowners premium EXCEPT

Accepted Answer

A)  raising the deductible in the homeowners policy to a higher amount. 
B)  shopping around a homeowners policy. 
C)  installing burglar alarms, smoke detectors, and dead-bolt locks. 
D)  adding a personal property replacement cost endorsement. 
A)  raising the deductible in the homeowners policy to a higher amount. 
B)  shopping around a homeowners policy. 
C)  installing burglar alarms, smoke detectors, and dead-bolt locks. 
D)  adding a personal property replacement cost endorsement.

Question 13

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 14

For which of the following situations would there be personal liability coverage under the homeowners policy?
I.The named insured accidentally injures her husband with a hammer.
II.The named insured breaks his wife's valuable vase while practicing his golf swing.

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

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 16

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 17

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 18

Which of the following losses would be covered under the personal liability coverage (Coverage E) of an unendorsed Homeowners 3 policy?

Accepted Answer

A)  liability arising out of the manufacture and sale of illegal narcotics 
B)  liability arising out of damage to a neighbor's property that occurred over time 
C)  liability arising out of a business operated in the home. 
D)  liability arising out of bodily injury to an insured 
A)  liability arising out of the manufacture and sale of illegal narcotics 
B)  liability arising out of damage to a neighbor's property that occurred over time 
C)  liability arising out of a business operated in the home. 
D)  liability arising out of bodily injury to an insured

Question 19

Which of the following persons is (are) eligible for benefits under medical payments to others (Coverage F) of the homeowners policy?
I. A friend who slips and falls on a wet patio while visiting the named insured
II. A neighborhood child who is severely scratched by a cat in the care 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 20

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

Exam 23: Homeowners Insurance, Section II

A credit-based score that is highly predictive of future claims cost is an individual's

Which of the following statements about the additional coverage for damage to property of others in Section II of the homeowners policy is true?

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

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

Which of the following statements about the personal liability coverage (Coverage E) of an unendorsed homeowners policy is true?

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 about Coverage E: Personal Liability under the homeowners 3 policy is true?

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 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.

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?

Jane would like to save money on her homeowners premium. All of the following steps will help her to reduce her homeowners premium EXCEPT

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

For which of the following situations would there be personal liability coverage under the homeowners policy? I.The named insured accidentally injures her husband with a hammer. II.The named insured breaks his wife's valuable vase while practicing his golf swing.

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

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

Which of the following losses would be covered under the personal liability coverage (Coverage E) of an unendorsed Homeowners 3 policy?

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?

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 I

Other Property and Liability Insurance Coverages

Commercial Property Insurance

Commercial Liability Insurance

Crime Insurance and Surety Bonds

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