3.) PERSONAL LINES QUIZ QUESTIONS Flashcards by Kay Acy

Rodney has a typical farm policy with a limit of $200,000 for the main house. During a storm, lightning strikes a $2,500 satellite dish, which sparks a fire that destroys a little guest house worth $25,000. How much can Rodney receive from his insurer in response to his claim?

A. $25,000
B. $20,000
C. $27,500
D. $26,000

B. $20,000

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All of the following are allowable reasons for a Louisiana insurer to cancel a motor vehicle liability policy after it has been in effect for more than 60 days, EXCEPT:

A. The named insured loses $1,500 to a fraudulent vehicle warranty scam.
B. The insured doesn’t submit an official application after getting a binder.
C. The insured’s 17 year old son has his driver’s license revoked.
D. An insured lied about her years of driving experience on her application.

A. The named insured loses $1,500 to a fraudulent vehicle warranty scam

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Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Which type of coverage could help Ron pay the cost of renting the apartment?

A. Coverage B - Other Structures
B. Coverage A - Dwelling
C. None
D. Coverage D - Loss of Use

D. Coverage D - Loss of Use

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Which of the following items would NOT be covered against loss or damage under Coverage C - Personal Property of a homeowners insurance policy?

A. A set of appliances stored in the main dwelling
B. A camera taken on vacation by the insured
C. A television that belongs to the insured’s tenant staying in the guest house
D. A set of golf clubs stored in a detached structure

C. A television that belongs to the insured’s tenant staying in the guest house

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During a heavy rainstorm, Ben’s basement flooded and suffered extensive water damage. Which section of Ben’s Homeowners 3 policy will cover this damage?

A. Coverage C – Personal Property
B. None
C. Discharge of Steam or Water
D. Coverage A – Dwelling

B. None

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Removal of Debris coverage would pay for the cleanup of which of the following occurrences?

A. A windstorm blows shingles from the policyholder’s roof all over the policyholder’s front yard.
B. A neighbor’s trampoline blows over the policyholder’s fence and into the policyholder’s yard.
C. A windstorm overturns a dumpster near a policyholder’s home, blowing hundreds of pounds of garbage onto the policyholder’s property.
D. Several very large branches fall from a dead tree in the policyholder’s backyard, without causing damage to the home.

A. A windstorm blows shingles from the policyholder’s roof all over the policyholder’s front yard.

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Elizabeth has a personal laptop worth $1,400. One night, while Elizabeth is out, a thief breaks into her home and steals her laptop. How much can Elizabeth expect to be indemnified by her insurer for the loss of her laptop (ignoring any deductible)?

A. $2,100
B. $1,500
C. $1,400
D. $500

C. $1,400

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After the collapse of the Smiths’ balcony, they find there are many new code requirements than there must have been when the balcony was originally constructed. Which type of of additional coverage can help with the added expenses needed to rebuild their balcony to current standards?

A. Ordinance or Law coverage
B. Collapse coverage
C. Product Liability coverage
D. Loss of Use

A. Ordinance or Law coverage

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What are the minimum required limits of liability coverage in Louisiana?

A. 15/30/25
B. 25/50/25
C. 20/40/10
D. 25/65/15

A. 15/30/25

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Which statement is FALSE about coverage for Trees, Shrubs, and Other Plants in the DP-2 and DP-3?

A. It includes the perils of windstorm and hail.
B. It pays in addition to the Coverage A limit of liability.
C. It is limited to $500 per tree or plant.
D. It cannot pay more than 5% of the Coverage A limit of liability.

A. It includes the perils of windstorm and hail.

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PIP coverage will pay for injuries to all of the following persons, EXCEPT:

A. your passenger without PIP.
B. you, when riding in another person’s automobile.
C. your family member.
D. the driver you struck.

D. the driver you struck.

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A lightning strike sparks a fire on the ground of Blake’s property, causing damage to several trees and shrubs in the process. Assuming Blake carries a $120,000 DP-2 on his home with a Trees, Shrubs, and Other Plants endorsement, what is the maximum Blake can receive for his 15 damaged plants?

A. $0 - Lightning is not a covered peril with the Trees and Shrubs Additional Coverage
B. $7,500- all perils are covered and all damaged plants are covered at $500 per plan
C. $6,000- Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of Coverage A limit
D. $500 - only one occurrence is paid

C. $6,000- Lightning is a covered peril and damaged plants are covered at $500 per plant up to 5% of Coverage A limit

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Bonnie’s PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for?

A. Bonnie’s car breaks down due to an engine malfunction.
B. Bonnie’s car catches fire.
C. Bonnie rolls her vehicle in a one-car accident.
D. Bonnie rear-ends another vehicle.

B. Bonnie’s car catches fire.

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Jake’s house is covered under a DP-2 policy with a $100,000 Coverage A limit of liability. A fire destroys the dwelling and a $30,000 detached guest house. Assuming he has not endorsed or otherwise modified the coverage amounts of the policy, how much can Jake expect to receive from his insurer?

A. $100,000
B. Nothing – fire is not a covered peril under a DP-2 policy
C. $110,000
D. $130,000

C. $110,000

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An out-of-control motorist careens off the road and smashes through Sally’s front yard and into her attached garage, taking out several lamp posts, her mailbox, and a small gazebo along the way. Under Sally’s homeowners policy, which items might be covered under Coverage B - Other Structures?

A. The garage only
B. The lamp posts, mailbox, and gazebo
C. The lamp posts, mailbox, gazebo and garage
D. The gazebo and garage

B. The lamp posts, mailbox, and gazebo

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Chad borrows Ella’s car so he can run to the grocery store. While out, he rear-ends an SUV, injuring the driver and one passenger. The passenger suffers $40,000 in injuries, while the driver suffers $60,000. Assuming Ella has a liability policy with limits of 30/60/30, while Chad carries minimum coverage for Louisiana, how much will Chad’s policy cover?

A. $25,000
B. $60,000
C. $40,000
D. $35,000

A. $25,000

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A. $25,000
B. $60,000
C. $40,000
D. $35,000

A. $25,000

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In which section of a Standard Fire Policy would you find information on rules of conduct and obligations the policyholder must follow in order for insurance coverage to apply?

A. Conditions
B. Declarations
C. Exclusions
D. Insuring Agreement

A. Conditions

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Which of the following would definitely NOT qualify for a homeowners policy?

A. A six-unit apartment building
B. A home under construction
C. A four-family home
D. A mobile home

A. A six-unit apartment building

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Which of the following statements about the Identity Theft endorsement is FALSE?

A. It pays for bodily injuries the insured suffers as a result of being victimized.
B. It covers expenses the insured incurs as a direct result of identity theft.
C. It does not pay for the pain and suffering associated with being victimized.
D. The identity theft must be discovered during the policy period to be covered.

A. It pays for bodily injuries the insured suffers as a result of being victimized.

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Ron works from home. After a kitchen fire renders his home uninhabitable, he is forced to rent an apartment in town while the repairs are made. Not knowing how long the repairs will take, Ron signs a 6 month lease at $1,500/month. The repairs are completed in just four months time. Assuming Ron holds a $200,000 standard HO-3 policy, how much will he be covered under Coverage D - Loss of Use?

A. $2,000
B. $9,000
C. $6,000
D. $3,000

C. $6,000

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Which of the following is required in order for coverage to apply under the Business Pursuits endorsement in a homeowners policy?

A. The business owner must sign a waiver.
B. The business must be audited annually.
C. The insured must not be an owner or partner in the business.
D. The insured must be an owner or partner in the business.

C. The insured must not be an owner or partner in the business.

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James has just purchased a single-family home and wants to purchase an open-peril homeowner’s policy to protect his financial interest in the property. From which policies should James choose to get the amount of coverage he’s looking for?

A. HO-2 & HO-4
B. HO-6 & HO-8
C. HO-3 & HO-8
D. HO-3 & HO-5

D. HO-3 & HO-5

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Jean operates a home-based business. She also leases her basement out to a friend, Rita, who also works from home. When a kitchen fire causes extensive smoke damage to her home, she and her tenant must find another place to live and work while repairs are being made. Which of the following expenses might Coverage D - Loss of Use help pay for?

A. Only Jean’s lost income.
B. The cost of lodging for both Jean and Rita.
C. The cost of lodging and lost income for both Jean and Rita.
D. The cost of lodging for Jean, and the lost rental income from Rita.

D. The cost of lodging for Jean, and the lost rental income from Rita.

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Which of the following statements about UM/UIM coverage in Louisiana is TRUE? A. UM/UIM coverage of at least 15/30/25 is required on all Louisiana auto policies. B. UM/UIM property damage coverage has no deductible. C. Louisiana insurers may choose whether to offer UM/UIM coverage or PIP to their policyholders. D. A policyholder may choose to buy "Economic Only" UM/UIM coverage for a lower premium.

D. A policyholder may choose to buy "Economic Only" UM/UIM coverage for a lower premium.

Which homeowners policy form is intended for renters? A. Homeowners 8 B. Homeowners 3 C. Homeowners 4 D. Homeowners 5

C. Homeowners 4

Lanny was unloading his steers from the transport when the ramp slipped off the back of the trailer and two steers fell and broke their legs. As a result of this accident, Lanny had to put down the injured steers. Which farm policy cause of loss form would indemnify Lanny for this loss? A. Basic, Broad, and Special Forms B. Broad Form and Special Form C. Broad Form only D. Special Form only

B. Broad Form and Special Form

Just two days before a hurricane hits New Orleans, Jim brings most of his valuable items (TV, stereo, jewelry, firearms, etc.) to his parents’ house in Hammond, to keep them safe from the storm. Two weeks later, Jim's valuables are destroyed when a flood sweeps through Hammond, severely damaging his parents' house. Under which peril are the valuables covered? A. Flood B. Water C. Accidental Discharge or Overflow of Water D. Windstorm

D. Windstorm

Which of the following statements is NOT true of endorsements? A. An endorsed policy will always provide more coverage than an unendorsed policy. B. An endorsed policy has been changed from the original version. C. Endorsements may be added to a policy at any time during the policy period. D. Endorsements may be added to a policy at the time of purchase and at renewal.

A. An endorsed policy will always provide more coverage than an unendorsed policy.

Following a covered loss, which of these expenses would NOT be covered under Coverage F - Medical Payments in a homeowners policy? A. Funeral services B. Dental costs C. Hospital stays D. Weight loss surgery

D. Weight loss surgery

While backing out of his driveway, Gary accidentally puts the car into drive and plows through several yards of his privacy fence. The total damage to the fence comes to $3,500. Assuming Gary has an HO-2 Broad Form policy, how much of the damages will be covered? A. None B. $2,500 C. $1,500 D. $3,500

A. None

Anton is purchasing a homeowners policy for his house in the woods. He wants to make sure he is covered for damage done to his home by wild animals. Which of the following would be his LEAST expensive option? A. HO-8 B. HO-2 C. HO-3 D. HO-5

C. HO-3

Which of the following sections of a homeowners policy lists the facts that are particular to the homeowner and the insured property? A. Definitions page B. Insuring agreement C. Declarations page D. Insured conditions page

C. Declarations page

An unendorsed DP-1 Basic Form covers what three perils? A. Fire, lightning, internal explosion B. Windstorm, fire, lightning C. Vandalism, malicious mischief, windstorm D. Fire, lightning, external explosion

A. Fire, lightning, internal explosion

Fred lives near a business that is currently the object of a protest. As police try to break up the protesters, a riot ensues and spills onto Fred’s property, where protesters set fire to four of his trees. How much can Fred be indemnified for the loss of all four trees (ignoring any deductible)? A. Up to $400 B. Up to $500 C. Up to $1,000 D. Up to $2,000

D. Up to $2,000

A dryer fire scorches the interior of Bill’s home, and he is billed $627 by the fire department. Assuming Bill has the Fire Department Service Charge additional coverage, how much will Bill have to pay out-of-pocket? A. $0 B. $377 C. $127 D. $427

C. $127

Sonia maintains collision coverage with a $1,000 deductible on her 2015 sedan. While returning home from work, Sonia swerves to miss a raccoon and ends up crashing into a telephone pole. Sonia's car sustains $25,000 in damages, yet the actual cash value of the vehicle is only $15,000. Which of the following statements is TRUE? A. Sonia will be indemnified by her insurer for $24,000. B. Sonia will be indemnified by her insurer for $14,000. C. Sonia will be indemnified by her insurer for $11,000. D. Collision coverage will not pay for Sonia's accident.

B. Sonia will be indemnified by her insurer for $14,000.

Without endorsements, a Louisiana standard fire policy will NOT cover damages due to: A. Internal explosion B. Removal from the premises in order to avoid a covered peril. C. Lightning D. Fire

A. Internal explosion

Which of the following could be covered under a Watercraft Liability endorsement in a homeowners policy? A. Tim's sailboat that he purchased two months ago, but has not yet reported to his insurer B. Christina's watercraft that she rents to tourists on the weekends C. Bill's motorboat that he uses to race other boats D. Jerry's 50 horsepower motorboat driven by his adult daughter with Jerry on board

D. Jerry's 50 horsepower motorboat driven by his adult daughter with Jerry on board

Theft is a covered peril under a homeowner's policy, but not all theft losses are covered. Which of the following theft losses IS covered? A. Theft of the insured's property while the insured is on vacation B. Theft of the insured's tenant's property C. Theft from the insured's under-construction dwelling D. Theft by the insured's husband who lives with the insured

A. Theft of the insured's property while the insured is on vacation

Which of the following can NOT cover the death of the insured’s cow due to a lightning strike? A. Unscheduled Farm Personal Property coverage B. Scheduled Farm Personal Property coverage C. Property Damage Liability D. Livestock Floater

C. Property Damage Liability

Frances is visiting her mom’s grave and notices that several headstones in the cemetery have been defaced with spray-paint, including her mother’s. Frances hires a professional cleaning service to remove the spray-paint from her mother's headstone. Which type of additional coverage in her homeowners policy could help Frances with the cost of removing the paint? A. None B. Grave Markers coverage C. Reasonable repairs coverage D. Debris Removal coverage

B. Grave Markers coverage

Sam's house is underinsured. It has a replacement cost of $200,000, but Sam’s policy only covers losses up to $80,000. During a violent hailstorm, Sam’s $20,000 roof is completely destroyed. Assuming his insurer requires the standard 80% level of coverage, how much will Sam receive as a settlement for the roof (ignore the deductible)? A. $20,000 B. $10,000 C. $15,000 D. $5,000

B. $10,000

Which of the following losses might qualify for coverage under Coverage F - Medical Payments? A. The insured is teaching his daughter to fly a kite in the front yard. She runs into a tree and breaks her nose. B. The insured invites Mr. and Mrs. Saxon over for tea. Mrs. Saxon spills her hot tea and severely burns herself. C. The insured cuts himself with his newly sharpened knives while preparing dinner. D. The insured's tenant, Jenny, slips and falls while she's dancing to music in her room.

B. The insured invites Mr. and Mrs. Saxon over for tea. Mrs. Saxon spills her hot tea and severely burns herself.

Coverage C - Personal Property can apply to losses that occur: A. anywhere in the world. B. outside of the insured’s dwelling only. C. in the U.S. or Canada only. D. in the insured’s dwelling only.

A. anywhere in the world.

Mary Jane's house is damaged by a kitchen fire, and the tenant that has been renting her upstairs bedroom has to move out. It takes Mary Jane two months to repair the damage, plus an additional four months to find a new tenant. How many months of lost rental income can Mary Jane expect to receive from her insurer? A. None - loss of rental income is not covered under a homeowner's policy B. 4 months C. 2 months D. 6 months

C. 2 months

The Homeowners 6 policy would likely NOT cover which of the following? A. Furniture inside the unit B. Light fixtures on the building's exterior C. Paint on the walls of the insured's unit D. Carpet inside the insured's the unit

B. Light fixtures on the building's exterior

Peggy is visiting her friend Laura at Laura's home. During the visit, Peggy trips over Laura's dog and takes a nasty fall down the stairs. Which homeowners coverage would pay for Peggy's injuries? A. Peggy’s liability coverage B. Dwelling coverage C. Personal property coverage D. Laura’s liability coverage

D. Laura’s liability coverage

Terry is fully insured by his farm policy. When a tornado rips through Terry’s farm, it destroys a barn worth $15,600, a corral and two livestock chutes worth $6,200, and a light pole worth $400. How much indemnification can Terry expect to receive for this claim? A. $22,050 B. $22,750 C. $21,800 D. $22,200

A. $22,050

Under Coverage F – Medical Payments to Others, the Payment of Claim provision states: A. all payments made under Coverage F will be paid at actual cash value. B. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer’s liability. C. no payments will be made until the insurer’s liability has been determined. D. the insurer reserves the right to demand a proof of loss before paying an indemnity under Coverage F.

B. Coverage F is voluntary coverage: even if a claim is paid, it is not an admission of the insurer’s liability.

John’s home is totally destroyed by a fire, and along with it most of his personal property. A few of the items were scheduled in his homeowners policy, such as his Rolex watch and a few antiques, but everything else was left as “unscheduled property.” These “unscheduled” items, A. will not be covered. B. will have to be scheduled before they can be covered. C. will take twice as long for indemnification since their times weren’t scheduled. D. will be covered under the normal policy limits.

D. will be covered under the normal policy limits.

Jerry's home lies in the path of an oncoming hurricane, so he decides to load his big screen television into his truck to get it out of harm’s way. However, as he is driving the television to a more secure location, he hits a big pothole that sends the TV flying across the truck and destroys it. Which extended coverage of a homeowner’s policy would indemnify Jerry for the loss of his television? A. Reasonable Repairs coverage B. Removal of Debris coverage C. Consequential Loss coverage D. Property Removal coverage

D. Property Removal coverage

Kelly took her eyes off the road and ended up smashing into the back of a passenger van. All five passengers were injured, and each one ended up with $25,000 in medical costs. Assuming Kelly has liability coverage with limits of 50/100/50, how much will she have to pay out of pocket? A. $10,000 B. $25,000 C. $50,000 D. $15,000

B. $25,000

To meet the 80% level of co-insurance required by his lender, Tom discovers he must insure his home for at least $320,000. What is the value of Tom's home? A. $440,000 B. $256,000 C. $400,000 D. $320,000

C. $400,000

Which of the following expenses would NOT be covered under a homeowners policy additional coverage called Claims Expenses? A. Interest accrual on judgements B. Administrative costs related to renewing the insured’s policy C. Premiums for bonds required in a lawsuit defended by the insurer D. Up to $250 per day for the insured’s lost wages while the insured is helping with the claim investigation

B. Administrative costs related to renewing the insured’s policy

After Tom and his neighbor get into a heated argument, Tom destroys his neighbor’s A/C compressor with a baseball bat, causing $2,500 in damages. The next day, Tom realizes his poor behavior and files a claim with his insurer for his liability in the damages to his neighbor’s A/C unit. Why might Tom's insurer deny his claim? A. Tom’s neighbor must be the one to file a claim with Tom’s insurer. B. Tom’s vandalism was intentional, and therefore excluded under his liability policy. C. Homeowner’s coverage does not include vandalism. D. Tom’s neighbor was partially responsible for the damage, since he made Tom angry.

B. Tom’s vandalism was intentional, and therefore excluded under his liability policy.

A homeowner's policy is called a "package" policy because: A. it bundles property and liability insurance into one policy. B. it bundles dwelling and auto insurance into one policy. C. another name for a "dwelling" is a "package." D. it bundles residential and commercial insurance into one policy.

A. it bundles property and liability insurance into one policy.

John is doing some lawn maintenance using a steel blade on his weed-whacker. He fails to properly tighten the blade and it comes loose while he is trimming some tall grass at the edge of his property. The blade flies off towards his neighbor’s house and crashes into the HVAC unit, severing the lines and effectively destroying the unit. Which coverage in John's homeowners policy might pay for the damage he caused to his neighbor’s HVAC system? A. Coverage E - Personal Liability B. Coverage B - Other Structures C. None D. Coverage A - Dwelling

A. Coverage E - Personal Liability

In which section of the policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence." A. Exclusions B. Conditions C. Definitions D. Declarations page

B. Conditions

Harold has owned his condo for five months, and he is insured with an HO-6 policy. One night, lightning strikes a tree next to the building, causing it to fall on the roof of his condo. Harold files a claim with his insurer for the cost of repairs; however, the claim comes back denied because: A. Harold did not take reasonable measures to prevent the damage. B. Harold has only had the policy for less than 6 months. C. the HO-6 form only covers the owner’s belongings and finished surfaces, not the unit’s structure. D. HO-6 forms cover fallen trees, but only if felled by the insured.

C. the HO-6 form only covers the owner’s belongings and finished surfaces, not the unit’s structure.

Jennifer bought a foreclosed home at a great bargain of $25,000. The home needs a lot of work; so, for now, Jennifer only wants to protect her initial investment in her new home with a very basic homeowner’s policy. Which policy would best fit Jennifer’s needs? A. Homeowners 8 B. Homeowners 3 C. Homeowners 6 D. Homeowners 5

A. Homeowners 8

All of the following may be covered under a Personal Injury endorsement in a homeowners policy, EXCEPT: A. wrongful eviction. B. invasion of privacy. C. slander. D. bodily injury.

D. bodily injury.

Which of the following statements does NOT apply to the Standard Fire Policy? A. It automatically covers wind and vandalism. B. It is a named peril policy. C. It pays actual cash value. D. It is the basis for all homeowners policies.

A. It automatically covers wind and vandalism.

Abby owns a condo and has a $200,000 HO-6 policy. One afternoon, she finds little bugs running all over her kitchen. After calling a pest control service, she learns that there is a termite infestation in the building. How much of the structural damage caused by the termites will be covered under the policy? A. Up to $20,000 B. Up to $80,000 C. None D. Up to $160,000

C. None

Which of the following would NOT be covered under a Personal Auto Policy? A. A passenger car loaned to a friend B. A passenger car used by a son or daughter who is home from college C. An 18-wheeler with a driver and a passenger D. A 15-passenger van weighing 7,200 lbs

C. An 18-wheeler with a driver and a passenger

Strong winds have blown many shingles off of Mark’s roof, and the weather forecast is predicting an 80% chance of thunderstorms tomorrow. Mark heads to his local hardware store and purchases a ladder and tarp so he can temporarily keep water out of his home until the roof can be repaired. Which type of additional coverage might reimburse Mark for the cost of the materials purchased? A. Property Removal B. Reasonable Repairs C. Loss Assessment D. Debris Removal

B. Reasonable Repairs

To make some extra money, Denise turns her storage shed into a small dwelling and rents it out to a tenant. Shortly after the tenant moves in, a drunk driver crashes into the storage shed apartment, demolishing it. Would Coverage B - Other Structures of Denise's homeowners policy cover the repairs to the shed-apartment? Why or why not? A. No, because it was wired to the home and therefore an attached structure. B. Yes, up to 10% of Denise’s homeowner’s policy. C. Yes, because Coverage B insures unattached structures. D. No, because the shed-apartment was wholly rented out.

D. No, because the shed-apartment was wholly rented out.

Which of the following statements is TRUE about Coverage C under a DP-2 or DP-3? A. Boats of any kind are covered, but only while on the premises. B. Coverage for rowboats and canoes is excluded; other boats are covered. C. Coverage for boats of any kind is excluded under "general exclusions." D. Rowboats and canoes are covered, but only while on the premises.

D. Rowboats and canoes are covered, but only while on the premises

Mike is wanting to upgrade his homeowner’s insurance so he will have the best coverage possible. “You get what you pay for;” says Mike, “and, I’m purchasing total peace of mind.” Which policy is Mike referring to? A. HO-3 B. HO-8 C. HO-5 D. HO-2

C. HO-5

Greg’s neighbor Sam is trimming his trees in his backyard. In the process, a big limb from one of Sam's trees crashes down onto Greg’s fence. Assuming Greg has a DP-1 policy with the Extended Coverage endorsement, which of the following could help indemnify Greg for the repairs to his fence? A. Reasonable Repairs B. Trees, Shrubs, Other Plants C. None D. Debris Removal

C. None

The Hurricane endorsement: A. provides coverage for all named storms. B. causes increased premiums in hurricane-prone areas. C. raises the deductible for hurricane damage. D. increases coverage to include all hurricane-related damage.

C. raises the deductible for hurricane damage.

Mr. Dewitt's homeowners policy has a $200,000 limit of liability for Coverage A - Dwelling. How much coverage will his policy automatically provide for Other Structures (assuming he has a typical policy with no endorsements)? A. $100,000 B. $50,000 C. $10,000 D. $20,000

D. $20,000

Dan has a DP-3 policy on his home. During a storm, a tree falls onto his attached garage. The tree crashes through the garage roof and lands on Dan’s water softener tank, destroying it completely. Which of these damages would be covered under Coverage A? A. The water softener only B. None C. The roof only D. The roof AND the water softener

D. The roof AND the water softener

The Liberalization clause in a homeowners policy: A. states that the insurer is obligated to pay out only up to the limit set by the policy, but must do so within 60 days of receiving proof of loss. B. states that only losses occurring during the policy period will be paid. C. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect. D. voids the policy if the insured deliberately conceals or misstates pertinent info.

C. applies not only to changes made during the policy period, but also to any changes made up to 60 days before the policy went into effect.

Greg is sitting in his home when he feels the ground shake and give way beneath him. He is just able to escape before a large portion of his house falls into an enormous hole. Which endorsement would help Greg cover the losses caused by the ground falling out from underneath his home? A. Sewer Backup endorsement B. Sinkhole Collapse endorsement C. Hurricane Damage endorsement D. Earthquake endorsement

B. Sinkhole Collapse endorsement

A neighbor stepped on a rusty rake while walking through Jake’s backyard, unannounced. He ends up with a bad case of tetanus and has to stay in the hospital for three days. He files a claim against Jake, who protests any wrongdoing because he believes his neighbor was trespassing and should be responsible for his own injury. Jake wants a court of law to settle the dispute. How can the insurer settle the claim put forth by Jake’s neighbor? A. The insurer can settle anyway it finds advantageous to its interests. B. The insurer must use arbitration since Jake feels he is not at fault. C. The insurer can only settle in court if Jake demands a lawsuit. D. The insurer must settle however Jake’s neighbor wishes.

A. The insurer can settle anyway it finds advantageous to its interests.

Dwelling policies and homeowners policies provide a variety of insurance protections for consumers. What is the primary difference between a typical homeowners policy and a dwelling policy? A. Dwelling policies do not provide coverage for personal possessions. B. Dwelling policies do not offer "loss of use" coverage. C. Dwelling policies do not provide liability insurance. D. Dwelling policies do not cover owner-occupied properties.

C. Dwelling policies do not provide liability insurance.

The Smiths have decided to hold a New Year's Eve party. Over 80 people attend, 40 of which end up on the balcony for some fresh air. Under the weight of so many people, the wooden frame of the balcony gives way. Which type of coverage in their HO-2 policy would help pay to rebuild the Smiths' balcony? A. Product Liability B. Negligent Construction C. Coverage A - Dwelling D. Collapse

D. Collapse

During a terrible storm, a tree falls right next to Jill’s home, nearly taking out her roof. Fortunately the tree missed her house, but it landed on her air conditioning compressor, destroying it completely. Which coverage form might cover the loss of Jill’s air conditioning compressor? A. Coverage C - Personal Property B. Coverage A - Dwelling C. Coverage D - Loss of Use D. Coverage B - Other Structures

B. Coverage A - Dwelling

Which ISO homeowners form is designed for renters and covers personal property only? A. HO-4 Contents Broad Form B. HO-2 Broad Form C. HO-1 Form D. HO-3 Special Form

A. HO-4 Contents Broad Form

In a homeowner's policy, Coverage D provides coverage for: A. other structures. B. dwelling. C. loss of use. D. personal property.

C. loss of use.

Paul lives in an area where property values are appreciating rapidly. He would like his homeowner’s policy to reflect the increase in the value of his home. Which endorsement might Paul purchase to accomplish this? A. Inflation Guard B. Increased Limits on Personal Property C. Additional Structures D. Valuation Endorsement

A. Inflation Guard

Which homeowners policy is the most basic, only providing coverage on a named-peril basis and only paying actual cash value for all covered damages? A. HO-2 B. HO-5 C. HO-8 D. HO-4

C. HO-8

The insuring agreement for Part A-Liability in a personal auto policy states that: A. the insurer has the right to settle liability cases out of court. B. the insurer will cover the costs to defend the insured in court in subsequent lawsuits related to the same occurrence, even after the policy limit is reached. C. the insurer will pay for "bodily injury" or "property damage" to any "insured" because of an auto accident. D. the insurer will cover the costs to defend the insured in court, up to the policy limit.

A. the insurer has the right to settle liability cases out of court.

Zane’s farmhouse was burglarized. The thieves stole his $4,000 sofa, his $3,000 silverware collection, and his $5,000 watch. Under Zane’s farm insurance policy, which has a Coverage A limit of $150,000, how much can he expect to receive in indemnification for this loss, assuming there are no endorsements and ignoring any deductibles? A. $8,000 B. $9,000 C. $12,000 D. $7,500

B. $9,000

Which of the following ISO forms is most commonly used? A. Homeowners 6 B. Homeowners 3 C. Homeowners 4 D. Homeowners 5

B. Homeowners 3

Greg owns a four-unit townhouse, in which he and three other families reside. Greg decides to finish the basement and leases it out as a garden apartment to another family, generating more income. After an intense blizzard causes the roof to collapse under the weight of the snow, Greg files a claim against his HO-3 policy. The claim comes back denied because: A. there are now five families living in the building. B. collapse is not a standard covered peril. C. the temperature outside had fallen below ten degrees fahrenheit, weakening the roof. D. natural disasters are not covered under homeowner’s policies since they are an “act of God.”

A. there are now five families living in the building.

In a farm policy, which form provides blanket coverage to all farm personal property? A. Scheduled Farm personal property B. Barns, Outbuildings, and Other Farm Structures C. Mobile Agricultural Machinery and Equipment D. Unscheduled Farm personal property

D. Unscheduled Farm personal property

Lewis has a guest house on his property which he rents to a tenant. As part of the rental agreement, Lewis requires the tenant to purchase “renter’s insurance.” Which policy would best fulfill this requirement? A. HO-2 B. HO-6 C. HO-8 D. HO-4

D. HO-4

Why is it important to define terms in an insurance policy? A. Because any ambiguity in the language of the policy means that the insured must file a lawsuit when a claim arises. B. Because any ambiguity in the language of the policy will favor the insurer. C. Because any ambiguity in the language of the policy will void the contract. D. Because any ambiguity in the language of the policy will favor the insured.

D. Because any ambiguity in the language of the policy will favor the insured.

George has an HO-2 policy on his home. One day, a plane flying overhead loses a tire which smashes through George’s roof, causing extensive damage to his home and its contents. George files a claim with his insurer for the damages to his property. Select the two perils under which George’s insurer may cover the claim. A. Vehicle B. Falling objects C. Sudden collapse D. Aircraft

B. Falling objects | D. Aircraft

Which of the following applicants would NOT be eligible for a homeowner's policy? A. An individual owner of a residential building under construction B. A small business that makes less than $70,000 per year C. A tenant of an apartment building D. An owner who occupies one unit of a tri-plex

B. A small business that makes less than $70,000 per year

Elizabeth has a laptop computer that she takes everywhere she goes. While she is at the grocery store, her car is broken into and the laptop is stolen. Assuming it is valued at $2,000, how much can Elizabeth expect to be indemnified by her insurer (ignoring any deductible)? A. $500 B. $1,500 C. $2,000 D. $1,000

B. $1,500

A typical mobile home policy: A. covers the mobile home while in transit and while located at the residence premises. B. only covers property damage to the mobile home itself. C. settles losses on an actual cash value basis. D. only provides liability coverage if it is added by endorsement.

C. settles losses on an actual cash value basis.

Which of the following would be covered under the Earthquake endorsement in a homeowners policy? A. Flood damage caused by an earthquake B. Earth movements that are caused by volcanic activity C. Tidal waves caused by an earthquake D. Exterior masonry veneer

B. Earth movements that are caused by volcanic activity

Molly leaves town for a one-week vacation. When she returns, she finds that the back door to her house has been kicked in and damaged. Her laptop is gone, and—to her surprise—she finds that the copper piping in the basement has been torn out and stolen as well! She has a DP-3 with coverage for contents but no additional endorsements. What, if anything, is covered? A. The damage to the door and the copper piping B. Nothing; all theft is excluded under the DP-3 C. The damage to the door, the laptop, and the copper piping D. The copper piping only

A. The damage to the door and the copper piping

In the DP-2 and DP-3, what is the time-based limit for Coverage D - Fair Rental Value? A. The amount of time that it takes for the insured to start receiving rental income again after a loss B. 60 days C. 180 days, or the amount of time needed to repair or replace damaged property, whichever is shorter D. The shortest time required to make repairs or replacements needed to return the property to rentable condition

D. The shortest time required to make repairs or replacements needed to return the property to rentable condition

Michelle’s $300,000 home experiences $90,000 in damage from a lightning storm. The adjuster calculates depreciation at 25%, making the ACV loss $67,500. Although Michelle’s policy covers repairs at replacement cost, she receives an initial check for $67,500. Actual repairs to her home end up totaling $79,500. How much, if any, further indemnification may Michelle receive from the loss? A. $12,000 B. $0 C. $22,500 D. $10,500

A. $12,000

Tracy has an auto liability policy that covers two cars for up to 100/300/100. Which of the following statements is true? A. If Tracy gets severely injured in an accident with an Underinsured Motorist, she may stack her UM/UIM limits for total coverage of $400,000, if needed. B. Tracy's UM/UIM coverage may not exceed 50/150. C. Tracy’s policy must include Property Damage UM/UIM of at least $25,000. D. Tracy can buy UM/UIM coverage with bodily injury limits as low as 15/30.

D. Tracy can buy UM/UIM coverage with bodily injury limits as low as 15/30.

Which of the following personal property items does NOT have a special limit of liability in the Homeowners forms? A. Firearms B. Jewelry C. Cash D. Books

D. Books

Farm Insurance policies can include all of the following EXCEPT: A. Farm Insurance for raising show animals. B. Property Insurance for the main dwelling. C. Farm Liability Insurance. D. Mobile Agricultural Machinery and Livestock.

A. Farm Insurance for raising show animals.

Rosa’s barn burned down when it was struck by lightning during a storm. The barn was fully insured at replacement cost under Rosa’s Farm policy. At the time of the loss, the barn was valued at $45,000, but it will cost $60,000 to replace it. How will Rosa’s insurer respond to her claim? A. The insurer will pay Rosa $30,000 first, and then up to another $30,000 once repairs are complete. B. The insurer will give Rosa one check for $60,000. C. The insurer will give Rosa one check for $45,000. D. The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed.

D. The insurer will pay Rosa $45,000 first, and then up to another $15,000 once repairs are completed.

Which of the following properties would NOT qualify for a dwelling policy? A. A 5-family dwelling B. A permanently installed mobile home C. A single-family dwelling owned by a partnership D. A four-plex with 5 tenants

A. A 5-family dwelling

Ben built a small shed in the backyard of the house he's renting, to hold his lawn equipment and other tools. One afternoon, a strong storm brought a tree down on Ben's shed, practically destroying it. Which type of coverage in Ben's HO-4 policy could indemnify him for the cost of replacing the shed? A. Building Additions and Alterations coverage B. The shed would not be covered under an HO-4. C. Debris Removal coverage D. Reasonable Repairs coverage

A. Building Additions and Alterations coverage

In which case would the insured be indemnified by her auto liability coverage? A. She has to pay a fee to retrieve relevant court documents. B. Her dog causes extensive damage in her neighbor's yard. C. None; liability coverage never indemnifies the insured. D. She gets into an accident that leaves her car totaled.

A. She has to pay a fee to retrieve relevant court documents.

In Louisiana, if you are caught driving without the minimum amount of auto liability coverage for the first time, which of these penalties could you face? A. 90 days in jail B. $250 fine and 30 days in jail C. $1,500 fine D. $500 fine and suspension of vehicle registration

D. $500 fine and suspension of vehicle registration