Question 1. The Homeowners 3 policy limits the amount of coverage provided on certain personal property (e. coin collections and silverware).

Question 1.

1. 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 (Points : 1)

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       adding an appraisal clause to the policy.

       lowering the deductible which applies to personal property losses.

       adding a schedule to the policy listing the property with specific amounts of insurance.

       storing the property away from the home at another location.

Question 2.

2. All of the following statements about the Homeowners 6 (unit-owners form) policy are true EXCEPT (Points : 1)

       It covers personal property on an “all-risks” basis.

       It provides limited coverage for loss assessments.

       It provides limited coverage for improvements and alterations.

       It includes personal liability coverage.

Question 3.

3. Which of the following statements about the medical payments coverage of the PAP is true? (Points : 1)

       The amount of the benefit typically is $100,000.

       Covered expenses must be incurred within 6 months of the accident.

       The benefit limit applies on a per-accident basis rather than on a per-person basis.

       Covered expenses include the cost of funeral services.

Question 4.

4. Rob purchased a Personal Auto Policy (PAP) with collision and other-than-collision coverage. All of the following losses are excluded under this physical damage coverage EXCEPT (Points : 1)

       Rob wrecked his car while using it as a taxi cab.

       A flash flood washed Rob’s car off the road and damaged it.

       Thieves took Rob’s radar detector from his car.

       The new tires Rob had on the car were defective and wore out after 2 months.

Question 5.

5. Which of the following statements about the uninsured motorists coverage of the PAP is true? (Points : 1)

       Unless higher amounts are purchased, the maximum benefit is normally limited to $1,000.

       A covered person’s only recourse is to sue the insurer if there is a disagreement over the amount of damages.

       The coverage applies only if the uninsured motorist is legally liable.

       The coverage usually applies only to property damage.

Question 6.

6. John occasionally borrows the car of his friend, Sophie. Sophie has a PAP with liability limits of 100/300/50. John also has a PAP, and his liability limits 250/500/50. John had an accident while using Sophie’s car and was found to be legally liable for $300,000 in bodily injury liability. How much will be paid by each policy? (Points : 1)

       Sophie’s policy will pay $100,000, John’s policy will pay $200,000.

       Sophie’s policy will pay $50,000, John’s policy will pay $250,000.

       Sophie’s policy will pay $150,000, John’s policy will pay $150,000.

       John’s policy will pay the entire amount.

Question 7.

7. All of the following are considered floods under the federal flood insurance program EXCEPT (Points : 1)

       the accumulation of surface water after a heavy rain.

       the overflow of tidal waters.

       a mudslide caused by an accumulation of water after a heavy rain.

       wind-driven rain which enters a dwelling through storm-damaged doors or windows.

Question 8.

8. Perils insured under Dwelling Property 1 (basic form) include which of the following?

I.Earthquake

II.Smoke (Points : 1)

       I only

       II only

       both I and II

       neither I nor II

Question 9.

9. Which of the following statements about the Personal Articles Floater is (are) true?

I.It is designed to cover several classes of personal property.

II.Coverage is written on an “open perils” (all-risks) basis. (Points : 1)

       I only

       II only

       both I and II

       neither I nor II

Question 10.

10. John has an auto which is covered for collision losses subject to a $250 deductible. Kate’s auto also has collision coverage but her deductible is $500. Which of the following statements describes how a $2,000 collision loss will be paid if it occurs when John borrows Kate’s car because his car is in the shop for repairs? (Points : 1)

       Kate’s policy will pay $1,750, and John’s policy will pay nothing.

       John’s policy will pay $1,500, and Kate’s policy will pay nothing.

       Kate’s policy will pay $1,500, and John’s policy will pay $250.

       John’s policy will pay $1,750, and Kate’s policy will pay nothing.

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