Types of Property

1. Both the broad theft and limited theft endorsements on the dwelling program exclude all of the following types of property EXCEPT

• A. Credit cards.

• B.Motor vehicles licensed for the road.

• C. Aircraft.

• D. Watercraft.

Answer explanation

Canoes have limited coverage.

Which of the following would NOT be considered an insured under a homeowners policy?

• A. Residents of the household that are blood relatives of the insured

• B. An individual under age 21 in the care of but not related to the insured

• C. Individuals named in the policy declarations

• D. A divorced spouse living in another state

Answer explanation

Insureds are defined as the named insured and spouse, if a resident of the same household, and persons related to the named insured by blood or marriage who are residents of the household, as well as persons under age 21 not related to but in the care of the insured.

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?

• A. 5 days after the application and premium payment are mailed

• B. 12:01 am the day after the application and premium payment are mailed

• C. 30 days after the application has been accepted

• D. 12:01 pm on the 5th day after the endorsement request has been mailed

Answer explanation

During the first 30 days after a community enters the emergency or normal programs, coverage on a flood policy begins at 12:01 a.m. the day after application and premium payment have been mailed.

If a loss occurs, the insured with a homeowners policy is required to do the following EXCEPT

.

• A. Arrange for an appraisal by an unbiased third party.

• B. Provide the insurer with prompt notice of the loss

• C. Notify the police if a loss is caused by theft.

• D. Protect the property from further damage, and keep records of any repair expenses.

Answer explanation

The appraisal system would be used only if there is a disagreement as to the size of loss. Then, each side picks an appraiser, and the appraiser selects the unbiased third party.

Dwelling policy Coverage C – Personal Property will cover all of the following EXCEPT

.

• A. Hobby aircraft.

• B. Computer software.

• C. Canoes.

• D. Animals and birds

An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees?

• A$5,000

• B$10,000

• C$60,000

• D$75,000

Answer explanation

In the broad and special form, Coverage B (Other Structures) is an additional amount of insurance, limited to 10% of Coverage A (in this example, $10,000). Trees, shrubs, and plants are covered, limited to not more the $500 for any one tree or plant, and not to exceed 5% of Coverage A in total (in this example, $5,000).

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

• A. 6 months

• B. 12:01 am the next day

• C. 5 days

• D. 30 days

Answer explanation

The waiting period is 30 days as required by the National Flood Insurance Program.

Who would participate in a Write Your Own (WYO) flood insurance program?

• A. Businesses requiring National Flood Insurance policies

• B.Private insurers that write and service National Flood Insurance policies on a no risk-bearing basis

• C.Lloyd's associations

• D.Government insurance companies that write and service National Flood Insurance policies

Answer explanation

A WYO program is made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Administration. WYO programs retain part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses.

Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT

• A.Damage to a third-party property for which the insured is legally liable.

• B.Claims expense.

• C.Expenses the insured incurs rendering first aid for bodily injury to third parties.

• D.Damage to the property of others

Answer explanation

Legal liability coverage is a primary liability coverage, not an additional coverage.

Which of the following would be covered under the Broad Form (DP-2) policy’s falling object peril?

• A. Exterior pavement and patio damage

• B. Interior building damage if the exterior was damaged first

• C. Damage to the building's awnings

• D. Damage to outdoor television antennas if there is no interior damage

Answer explanation

In DP-1 and DP-2 policy forms, loss or damage resulting from falling objects is covered, except for damage to awnings, fences, outdoor equipment, outdoor radio and television antennas or aerials, masts, or towers. Damage to the interior of the building is covered only if the exterior has been damaged first.