AD Banker Homeowners Policy Flashcards by Kerri Burriss

When using a neighbor’s lawnmower, the insured strikes a large rock and causes $2,000 in damage to the neighbor’s automobile. Which policy section of the insured’s Homeowners policy may pay for part of the damage?

A
Personal liability

B
Personal property

C
Dwelling, since the lawnmower is equipment used to service the residence

D
Loss of use

A (Section II Coverage E provides personal liability coverage for property damage to others due to actions of the insured. Under the additional coverage Damage to Property of Others, the limit is $1,000 of coverage.)

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Under a Homeowners Policy, Coverage A includes coverage for:

A
Detached private structures on the Residence Premises

B
Structures owned by the insured at other locations

C
The dwelling on the premises plus structures that are attached to the dwelling

D
Theft from the site of a dwelling under construction

C (The policy does not cover theft in, to, or from a dwelling under construction, including materials used in the construction.)

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Select the person who is not considered an insured under an HO-3 policy?

A
A friend’s 16-year-old daughter who is staying with the insured’s family while going to school

B
The insured’s daughter away at college in another state

C
A friend who is renting a bedroom in the insured’s house since it is only three blocks away from work

D
The insured’s resident uncle

C (Since the friend is a tenant, not a relative or a person in the care of the insured, he/she would not be an insured under the policy.)

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Choose the answer that is true regarding the Homeowner HO-4 and HO-6 Forms.

A
Losses are paid on a Replacement Cost basis

B
The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself

C
The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance

D
Both provide Open Perils Coverage on the personal property

B (Since the insured under the HO-4 Form does not own the structure, there is no Coverage on the building.)

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Which of the following residents in the insured’s dwelling is eligible to receive medical payments under Section II of a Homeowners Policy?

A
A residence employee

B
The named insured’s spouse

C
A tenant who lives in a portion of the insured’s residence

D
The named insured

A (A residence employee injured in the course of employment would be eligible for Medical Payments under the insured’s policy.)

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All of the following are true, except:

A
Coverage D of a Homeowners Policy covers additional living expenses

B
A Homeowners Policy will not cover theft of a boat away from premises

C
Home schooling is permitted under a Homeowners Policy

D
Coverage D of a Homeowners Policy includes loss of income from an incidental business

D (Coverage D does not cover loss of income from an incidental business.)

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Up to what amount of coverage is provided for a $1,000 shed if the insured doesn’t use an available fire extinguisher to put out a shed fire?

A
$900

B
$1,000

C
Nothing

D
$500

C (The Neglect Exclusion prevents coverage since the insured failed to use all reasonable means to save covered property.)

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The Homeowners policy covers all of the following losses to trees, shrubs and plants, except:

A
Loss due to vehicles not owned or operated by a resident

B
Loss due to fire

C
Loss due to lightning

D
A loss resulting from a windstorm

D (Damage to plants by windstorm or the weight of ice, snow, or sleet is considered so common as to be an uninsurable peril.)

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The Homeowners Policy provides coverage for all of the following, except:

A
A riding lawn mower pulling a two-wheel garden trailer

B
An ATV on the insured’s premises

C
A motorized wheelchair

D
A motorized golf car being driven on a public beach

D (In order for coverage to apply, a motorized golf car must be used on a golfing facility or within a private residential community for approved purposes.)

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Which statement is true concerning Coverage D of the Homeowners Policy?

A
The coverage will pay for any increase in living expenses required to maintain the insured’s normal standard of living

B
The coverage will pay until the property is restored, plus 30 days relocation expense

C
If the insured must relocate permanently, payment will be made for 365 days, regardless of the time it takes the insured to settle at the new location

D
The coverage will pay for all the insured’s living expenses until the property is restored

A (Coverage D is intended to pay only the increase in the insured’s normal living expenses occasioned by the loss. Costs the insured was already paying before incurring the loss are not covered.)

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Coverage C of a Homeowners Policy includes:

A
The insured’s pet animals

B
The insured’s personal automobiles, while on the residence premises

C
An owned camera used by the insured while on vacation in another country

D
Aircraft stored on the Residence Premises

C (Property not covered under Coverage C includes animals, aircraft, and vehicles registered for road use. Personal property is covered worldwide.)

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All of the following are true of a Homeowners Policy, Coverage F, except:

A
Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured’s household

B
Under Coverage F, coverage applies to persons that are on the insured location with permission

C
Under Coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year

D
Under Coverage F, a covered accident may occur during the policy period

C (Coverage F will pay for expenses incurred up to three years after the accident.)

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An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a flood destroying the wood flooring. The policy will pay:

A
$1,500

B
Zero

C
$1,000

D
$1,250

B (Flood is a Section I exclusion and is not covered.)

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Which statement is false under a Homeowners Policy?

A
Money is covered up to $500 per occurrence

B
Theft of silverware is covered up to $2,500

C
An endorsement may be added to cover the contents on a replacement cost basis

D
The scheduled personal property endorsement provides open perils coverage

A (The limit on money is $200.)

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Including debris removal, what is the maximum an HO-3 policy with a Coverage A amount of $250,000 will pay if a detached garage burns down?

A
$26,250

B
$250,000

C
$25,000

D
$1,250

A (Coverage B, which covers structures that are not attached, is automatically issued for 10% of Coverage A. This means the Coverage B total is $25,000, and the policy allows for an additional 5% for debris removal: $25,000 + 5% or $1,250 = $26,250.)

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Which of the following is not true of the HO-2?

A
The HO-2 insures against the broad form perils

B
The HO-2 covers owner-occupied dwellings

C
The HO-2 pays for losses on an open perils basis

D
The HO-2 pays for losses to the dwelling on a Replacement Cost basis

C (The HO-2 insures the dwelling and contents against the broad form perils.)

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Under a Homeowners Policy, Coverage A includes coverage for:

A
Detached private structures on the Residence Premises

B
Structures owned by the insured at other locations

C
The dwelling on the premises plus structures that are attached to the dwelling

D
Theft from the site of a dwelling under construction

C (The policy does not cover theft in, to, or from a dwelling under construction, including materials used in the construction.)

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Which of the following is not covered under Section II of the Homeowners Policy?

A
The insured’s liability for damages to property of others

B
The insured’s liability for bodily injury to others

C
Property of the insured

D
Medical expenses for an accident arising out of the premises or non-business activities of an insured

C (Section II provides liability coverage. Section I would cover property of the insured.)

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Which coverage is not provided under Section II of a Homeowners Policy?

A
Medical expense of a guest

B
Damage to property of others

C
Medical expense of a boarder

D
Personal injury liability

C (Medical expense coverage for a boarder or regular resident is excluded.)

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The HO-5 personal property coverages are insured on which basis?

A
Modified Perils

B
Open Perils

C
Basic Perils

D
Broad Perils

B (The HO-5 is the broadest policy providing open perils coverage on Coverages A, B, and C.)

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Of the following statements concerning Homeowners policies, which is correct?

A
Coverage is not provided to a garage rented for private garage purposes

B
Dwellings under construction are covered for theft

C
Coverage is provided to property of boarders not related to the insured

D
Borrowed property meets the definition of contents

D (Coverage C covers property owned or used by the insured, including property owned by others.)

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Which of the following homeowners coverages does not have a deductible?

A
Damage to Property of Others

B
Dwelling

C
Other Structures

D
Personal Property

A (Damage to Property of Others is an Additional Coverage under Section II, which is not subject to a deductible.)

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An HO-3 Policy will pay how much for a tree damaged in a hail storm?

A
$500

B
0%

C
$1,000

D
$250

B (The most paid for a covered tree is $500, but coverage is not provided for windstorm or hail losses.)

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Which of the following coverages is provided under the Additional Coverage of Property Removed?

A
Named peril coverage for 15 days

B
Open peril coverage for 10 days

C
Named peril coverage for 30 days

D
Open peril coverage for 30 days

D (When property is removed because it is endangered by a covered peril, the coverage is open peril for 30 days.)

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Which of the following coverages is not included in a standard Homeowners policy? A Bodily Injury liability B Medical Payments C Property Damage liability D Personal Injury liability

D (Coverage for Personal Injury (such as libel or slander) is not automatically provided in a Homeowners policy. It is available by endorsement.)

Coverage for injury resulting from invasion of privacy is covered under which Endorsement? A Permitted Incidental Occupancies B Business Pursuits C Personal Injury D Additional Residence Rented to Others

C (The Personal Injury endorsement provides coverage for non-physical injuries to others, such as libel, slander, false arrest, defamation, invasion of privacy and other such offenses.)

Policyholder C's debit card is stolen, and $1,000 is subsequently stolen from his account. How much will his HO-3 pay for the loss? A $500 B $1,000 C 0% D $250

A (Coverage up to $500 is paid for theft or unauthorized use of a credit card or electronic fund transfer card (debit card).)

The following coverages are all found under Section I of the Homeowners Policy, except: A Personal Property B Personal Injury Liability C Other Structures D Dwelling

B (Section I of the Homeowners Policy contains Property coverages. Liability coverages are set forth in Section II of the Policy.)

In the event an apartment attached to the insured's home is damaged and unlivable, what percentage of Coverage A does the HO-3 provide for the rental value? A 30% B 10% C 20% D 5%

A (Coverage D will pay up to 30% of Coverage A on the HO-3 for the fair rental value, less continuing expenses, of the apartment.)

Which statement about the Homeowners Policy is false? A Under Section II, coverage includes defense costs, at the insurer's expense, even if the suit is groundless B First Aid Expenses include first aid to an insured in the event of an injury C Under Section II, coverage applies only to bodily injury or property damage that occurs during the policy period D The policy will not provide coverage for an insured that has intentionally concealed or misrepresented any material fact or circumstance

B (First Aid Expenses do not apply to the insured or resident of the household.)

All of the following would be included in the definition of 'insured location', except: A A boat slip used by the named insured B A 5-family dwelling in which the insured lives in one of the units, including the structures and grounds C Land upon which a 4-family dwelling is being built as a residence for the named insured D A summer vacation home rented by the insured

B (Eligible residential dwellings are those containing one to four residential units and no more than 2 roomers or boarders per family.)

Which of the following is true regarding eligibility of a Homeowners Policy? A The dwelling must be the principal residence of the insured B There may be no business occupancies in the dwelling C The dwelling must be less than 30 years old D The dwelling may be multi-family with up to 5 families

A (The underlying concept of the Homeowners Policy is that owner-occupied property has, in most cases, better care and maintenance than tenant-occupied property and is therefore eligible for package insurance and discounted rates.)

Under Section II of the Homeowners Policy, an employee whose duties are related to the maintenance or use of the residence premises, is defined as: A A contract employee B An incidental business C A boarder D A residence employee

D ('Residence employee' means any employee of an insured, whose duties are related to the maintenance or use of the residence premises. These duties include household and domestic services, such as those of a gardener or nanny. The definition also includes a person who performs similar duties elsewhere that are not related to any business of the insured, such as a person hired to paint the insured's house, as so long as the insured doesn't own a business that paints houses.)

Which of the following claims would be covered by the First Aid Expenses under the Homeowners Policy? A The named insured is injured while off the premises B Nonfamily residents of the household are injured while on the premises C A neighbor is injured while helping the insured install a carpet D A member of the insured's family is injured while on the premises

C (First Aid Expenses Coverage applies to first aid to others caused by Bodily Injury covered under the policy, but does not pay for first aid to an insured.)

All of the following are covered under Section II of the Homeowners Policy, except: A The insured's liability for bodily injury to others B Property of the insured C The insured's liability for damages to property of others D Medical expenses for an accident arising out of the premises or non-business activities of an insured

B (Loss or damage to the insured's property would be covered under Section I, Property.)

Which of the following is not true about the Home Business endorsement? A Professional services are excluded B The business must be owned by the insured C Only property damage is covered D Advertising injury is covered

C (The endorsement provides both business property and liability coverages for an eligible home business.)

Which of the following coverages is provided under the Additional Coverage of Property Removed? A Open peril coverage for 30 days B Open peril coverage for 10 days C Named peril coverage for 15 days D Named peril coverage for 30 days

A (When property is removed because it is endangered by a covered peril, the coverage is open peril for 30 days.)

First Aid Expenses under the Homeowners Policy would cover: A The Named Insured while on or off the premises B Members of the insured's family while on or off the premises C Nonfamily residents of the household while on the premises D A neighbor who gets injured while helping the insured install a carpet

D (First Aid Expenses coverage applies to first aid to others caused by Bodily Injury covered under the policy, but does not pay for first aid to an insured.)

Which of the following coverages is not included in a standard Homeowners policy? A Personal Injury liability B Medical Payments C Property Damage liability D Bodily Injury liability

A (Coverage for Personal Injury (such as libel or slander) is not automatically provided in a Homeowners policy. It is available by endorsement.)

Which of the following homeowners coverages does not have a deductible? A Personal Property B Other Structures C Damage to Property of Others D Dwelling

C (Damage to Property of Others is an Additional Coverage under Section II, which is not subject to a deductible.)

# Choose the false statement regarding the coverage of property under a Homeowners Policy. A The Scheduled Personal Property Endorsement provides open perils coverage B The Personal Property Replacement Cost Endorsement may be added to cover the contents on a replacement cost basis C Theft of silverware is covered up to $2,500 D Money is covered up to $500 per occurrence

D (The limit on money is $200.)

Which of the following would not be covered under Section II of the Homeowners Policy? A First aid expenses B The family dog bites someone three blocks from the residence premises C Injuries to guests visiting the insured's home D Property damage to property owned by an insured

D (Section II provides liability insurance for the loss of a third party. Property owned by the insured is not covered.)

Section II of a Homeowners policy may cover which of the following incidents? A Bodily injury caused by an insured's activities while picnicking at a city park B The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat C An insured's guest damages the stair railing during a visit D The homeowner's family dog bites their 2 year old son

A (Bodily injury to others caused by the insured's activities is covered under the Homeowners liability section. Damages to the insured's property are not covered and damages caused by an owned inboard motorboat are excluded from coverage.)

All of the following are true of a Homeowners Policy, except: A The HO-2 provides open perils coverage on the dwelling B The HO-4 form is also called the Tenants Form C Dwellings under construction are eligible D Personal property of an insured's daughter while at college would be covered

A (The HO-2 covers the dwelling and contents against the Broad Form Perils.)

# Choose the claim that would be covered under Coverage E of a Homeowners Policy. A The transmission of a communicable disease by an insured B Bodily injury to an insured C Bodily injury to a guest caused by the insured's pet dog D Bodily Injury arising out of the application of corporal punishment by an insured

C (Liability coverage does not apply to BI or PD suffered by the insured. Communicable diseases and corporal punishment are excluded under the policy.)

Which of the following best describes the Debris Removal coverage under the Homeowners policy? A Debris Removal applies only to loss by fire, lightning, and windstorm B The policy will pay the insured for removing debris from a covered loss C Coverage is limited to 10% of the Coverage A Limit D The debris must be removed within 30 days of the loss

B (Debris removal provides payment of the named insured's reasonable expenses for the removal of debris of covered property if a covered loss occurs.)

Which of the following Coverages is not found under Section I of the Homeowners Policy? A Other Structures B Liability C Additional Living Expense D Loss of Use

B (Section I of the Homeowners Policy contains the Property Coverages. Liability Coverages are set forth in Section II of the Policy.)

The Home Day Care endorsement does not provide which of the following? A Medical payments B Coverage on the residence premises C Coverage for a day care employee D A policy year aggregate limit for personal liability and medical payments

C (Injury to any employee arising out of the day care business is not covered.)

Which of the following is NOT a 'residence premises' in the homeowners policy? A Other structures on the Declarations if shown as the 'residence premises' B A three-family dwelling where the named insured resides C A one-family residence where the named insured resides D Premises rented occasionally to the named insured for non-business purposes

D (A location rented occasionally to the named insured for non-business purposes is an 'insured location.')

The HO-3 dwelling and other structures coverages are insured against which perils? A Broad Perils B Open perils C Basic Perils D Modified Perils

B (Coverages A and B of the HO-3 are insured on an open perils basis in which all perils are insured unless specifically excluded.)

Which of the following statements about Coverage C under the Homeowners Policy is false? A Coverage C provides coverage for machinery used in maintenance of the premises B Coverage C has a base amount equal to 50% of Coverage A C Coverage C provides coverage for the property of roomers and boarders D Coverage C has a $1,500 limit on trailers not used with watercraft

C (The Homeowners Policy specifically excludes property of roomers and boarders from coverage.)

All of the following are covered under a Homeowners Policy, except: A Property of guests and servants B Equipment that is used to maintain the property C All living expenses incurred when a dwelling becomes uninhabitable after a covered loss D Vandalism to a dwelling that was vacant for less than 60 days

C (The policy does not cover all living expenses, only necessary additional living expenses.)

All of the following are true of a Homeowners Policy, Coverage F, except: A Under Coverage F, a covered accident may occur during the policy period B Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured's household C Under Coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year D Under Coverage F, coverage applies to persons that are on the insured location with permission

C (Coverage F will pay for expenses incurred up to three years after the accident.)

Which of the following property is covered under the Homeowners Policy? A A hovercraft B A show dog C A model airplane D A speaker system installed in the insured's car

C (A model or hobby aircraft is covered unless it is designed to carry people or cargo.)

Under the HO-8 policy, the dwelling is valued on which basis? A Replacement Cost B Actual Cash Value C Market Value D Agreed Value

B (HO-8 policies value the dwelling on an actual cash value basis.)

When using a neighbor's lawnmower, the insured strikes a large rock and causes $2,000 in damage to the neighbor's automobile. Which policy section of the insured's Homeowners policy may pay for part of the damage? A Personal property B Dwelling, since the lawnmower is equipment used to service the residence C Loss of use D Personal liability

D (Section II Coverage E provides personal liability coverage for property damage to others due to actions of the insured. Under the additional coverage Damage to Property of Others, the limit is $1,000 of coverage.)

Which of the following is true regarding the HO-3 (Special Form)? A Coverages A, B, and C are all written on a replacement cost basis B The dwelling and other structures (Coverages A and B) are written on an open perils basis C The dwelling and other structures (Coverages A and B) are written on a named perils basis ``` D The contents (Coverage C) are written on an open perils basis ```

B (The HO-3 (Special Form) provides the broadest coverage available on structures: open perils (or all-risk) coverage.)

Homeowners policies cover: A Money up to $500 B Theft of guns up to $3,000 C Water damage caused by flood, sewer backup and underground seepage D Theft of furs and jewelry up to $1,500

D (The limit for loss by theft of jewelry and furs is $1,500.)

All of the following statements are correct about a Homeowners Policy, except: A Coverage D of a Homeowners Policy covers additional living expenses B A Homeowners Policy will not cover theft of a boat away from premises C Coverage D of a Homeowners Policy includes loss of income from an incidental business D Home schooling is covered under a Homeowners Policy

C (Coverage D does not cover loss of income from an incidental business.)

Which of the following is covered under Section II of a Homeowners Policy? A Liability arising from a business pursuit B An injury to the insured's 10-year-old son C An injury to the insured's employee D An injury to a guest of the insured

D (An injury to a guest would be covered under Section II. Business pursuits, and injuries to insureds and their employees are excluded.)

Which of the following is true regarding Section II of the Homeowners Policy? A Section II of the HO-6 is modified to adapt to the exposures of the Condominium unit owner B Section II of the HO-3 (Special Form) has broader coverage than Section II of the HO-2 (Broad Form) C Section II of the HO-4 (Tenants Form) is modified to adapt to the Tenant's exposures D Section II is the same in all Homeowners Forms

D (Since the liability exposures of individuals and families have little to do with their mode of residence, Section II is the same in all Homeowners Policy forms.)

Coverage for injury resulting from invasion of privacy is covered under which Endorsement? A Personal Injury B Permitted Incidental Occupancies C Additional Residence Rented to Others D Business Pursuits

A (The Personal Injury endorsement provides coverage for non-physical injuries to others, such as libel, slander, false arrest, defamation, invasion of privacy and other such offenses.)

Under a Homeowners policy, Coverage B is what percentage of Coverage A? A 25% B 50% C 10% D 5%

C (As with the Dwelling Policy, Coverage B is provided at 10% of the Coverage A limit.)

Which of the following is not true about the Home Business endorsement? A Professional services are excluded B Advertising injury is covered C The business must be owned by the insured D Only property damage is covered

D (The endorsement provides both business property and liability coverages for an eligible home business.)

Which of the following is not covered under Section II of the Homeowners Policy? A Medical expenses for an accident arising out of the premises or non-business activities of an insured B The insured's liability for damages to property of others C The insured's liability for bodily injury to others D Property of the insured

D (Section II provides liability coverage. Section I would cover property of the insured.)

Under the Watercraft Liability endorsement, an injury to which of the following people WOULD be covered under Coverages E and F? A The insured B A guest of the insured C An employee hired to operate the watercraft D A person who was renting the watercraft from the insured

B (Coverages E and F do not apply if the watercraft is being rented to others, or to any employee in the course of employment. Liability covers damages to others, not damages sustained by the insured themselves.)

Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? A The named insured B The named insured's spouse C A residence employee D A tenant who lives in a portion of the insured's residence

C (The residence employee is eligible, if injured in the course of employment.)

All of the following are true of the HO-2, except: A The HO-2 covers the broad form perils B The HO-2 covers owner-occupied dwellings C The HO-2 pays for losses to the dwelling on a replacement cost basis D The HO-2 pays for losses on an open peril basis

D (The HO-2 pays all losses on a broad form (Named Perils) basis.)

Which of the following is true concerning the Home Day Care Coverage Endorsement to the Homeowners Policy? A It extends Section II coverages to the insured's home day care business B It covers injury to an employee, as well as attendees, arising out of day care operations C It provides Commercial General Liability coverage for the day care operation D It covers injury to attendees while loading or unloading them from draft or saddle animals

A (The Home Day Care Coverage Endorsement extends the coverage of the Homeowners Section II to the Day Care Business.)

Which statement is true concerning Homeowners policies? A Section I limits coverage on utility trailers up to $500 B Section I limits coverage on fire department service charge to $100 C The HO-4 provides open peril coverage on both the dwelling and contents D The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement

D (The Section I deductible does not apply to this endorsement.)

Which of the following would be covered under the Damage to Property of Others additional coverage of the Homeowners Policy? A Damage to property owned by the insured's tenant B Damage to property owned by the insured C Damage arising out of the insured's business pursuits D Damage caused intentionally by the insured's 10-year-old son

D (Intentional damage by a child under age 13 is covered.)

Including debris removal, what is the maximum an HO-3 policy with a Coverage A amount of $250,000 will pay if a detached garage burns down? A $25,000 B $250,000 C $26,250 D $1,250

C (Coverage B, which covers structures that are not attached, is automatically issued for 10% of Coverage A. This means the Coverage B total is $25,000, and the policy allows for an additional 5% for debris removal: $25,000 + 5% or $1,250 = $26,250.)

Which of the following is covered under Section II of a Homeowners Policy? A An injury to the insured's employee B An injury to the insured's 10-year-old son C Liability arising from a business pursuit D An injury to a guest of the insured

D (An injury to a guest would be covered under Section II. Business pursuits, and injuries to insureds and their employees are excluded.)

Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? A The named insured B A tenant who lives in a portion of the insured's residence C A residence employee D The named insured's spouse

C (The residence employee is eligible, if injured in the course of employment.)

Which type of liability limit applies to Medical Payments coverage? A Combined B Aggregate C Per person D Per occurrence

C (Medical payments coverage for all types of policies pays on a 'per person' limit.)

L owns a home covered under an HO-3 for $200,000. Under Coverage D, how much coverage does L have for lost income if his basement apartment becomes uninhabitable due to a fire loss? A $60,000 B $30,000 C $150,000 D $300,000

A (For a covered loss, the Coverage D limit for additional living expense, fair rental value, and civil authority prohibited use is 30% of Coverage A. 30% of $200,000 is $60,000.)

All of the following statements are correct about a Homeowners Policy, except: A Coverage D of a Homeowners Policy includes loss of income from an incidental business B A Homeowners Policy will not cover theft of a boat away from premises C Home schooling is covered under a Homeowners Policy D Coverage D of a Homeowners Policy covers additional living expenses

A (Coverage D does not cover loss of income from an incidental business.)

Which of the following statements about Coverage C under the Homeowners Policy is false? A Coverage C has a base amount equal to 50% of Coverage A B Coverage C has a $1,500 limit on trailers not used with watercraft C Coverage C provides coverage for machinery used in maintenance of the premises D Coverage C provides coverage for the property of roomers and boarders

D (The Homeowners Policy specifically excludes property of roomers and boarders from coverage.)

Which of the following is NOT a 'residence premises' in the homeowners policy? A Other structures on the Declarations if shown as the 'residence premises' B A three-family dwelling where the named insured resides C Premises rented occasionally to the named insured for non-business purposes D A one-family residence where the named insured resides

C (A location rented occasionally to the named insured for non-business purposes is an 'insured location.')

Section II of a Homeowners Policy covers which of the following for medical payments? A The named insured B A residence employee who is injured on the way home from work C A guest of the insured on the residence premises D A tenant who lives in a portion of the insured's residence

C (A guest would be eligible for medical payments. The residence employee would not be covered unless working in the course of employment by the insured.)

# Choose the false statement about the Homeowners Policy. A Coverage C extends to animals, birds, or fish owned by the insured B Coverage D provides coverage for additional living expense C Motor vehicles do not meet the definition of contents D Personal property owned and used by the insured in a vacation home would be covered

A (There is no coverage for pets under an unendorsed Homeowners Policy.)

Which statement is true concerning Section II of a Homeowners Policy? A Medical payments will pay for a maximum of 1 year from the date of the accident B Medical payments coverage is available for the insured and resident relatives C Damage to Property of Others coverage is provided up to a specified limit regardless of negligence D Medical payments coverage is not available for a residence employee

C (Damage to Property of Others pays up to $1,000 regardless of whether the insured is liable or not.)

Which of the following is true regarding an unendorsed HO-4? A It includes Open Perils coverage on a replacement cost basis B It includes the Broad Form named perils on an actual cash value basis C It includes Open Perils coverage on an actual cash value basis D It includes the Broad Form named perils on a replacement cost basis

B (The HO-4 provides Broad Form named perils coverage on an actual cash value basis. Replacement cost coverage is available by endorsement, for an additional premium.)

Which statement is true concerning Homeowners policies? A Animals, birds, and fish are considered covered personal property under Coverage C B Dwellings under construction are covered for theft C Property usually located in a student dormitory is limited to 10% of Coverage C or $1,000, whichever is greater D Coverage is provided for Other Structures used to store business property owned by someone other than the insured or a tenant

C (Property usually located at another location is limited to 10% or $1,000, whichever is greater.)

Which statement is false? A Total liability coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy B Coverage F limits are subject to a deductible C Obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence D Insurer investigation expenses are in addition to the limits stated in Coverage E

B (Section II coverages are not subject to a deductible.)

Which of the following is not true about the Home Business endorsement? A Advertising injury is covered B The business must be owned by the insured C Professional services are excluded D Only property damage is covered

D (The endorsement provides both business property and liability coverages for an eligible home business.)

Of the following statements concerning Homeowners policies, which is correct? A Dwellings under construction are covered for theft B Borrowed property meets the definition of contents C Coverage is not provided to a garage rented for private garage purposes D Coverage is provided to property of boarders not related to the insured

B (Coverage C covers property owned or used by the insured, including property owned by others.)

Which of the following best describes the Debris Removal coverage under the Homeowners policy? A The policy will pay the insured for removing debris from a covered loss B Debris Removal applies only to loss by fire, lightning, and windstorm C Coverage is limited to 10% of the Coverage A Limit D The debris must be removed within 30 days of the loss

A (Debris removal provides payment of the named insured's reasonable expenses for the removal of debris of covered property if a covered loss occurs.)

The HO-3 dwelling and other structures coverages are insured on which basis? A Broad perils B Open perils C Extended perils D Basic perils

B (Coverages A and B are insured on an open perils basis, under which all perils are insured against unless specifically excluded.)

Under the HO-4 and HO-6, personal property is covered on which basis? A Open perils coverage B Broad perils coverage C Replacement cost coverage D Basic perils coverage

B (These two Forms provide Broad Form Perils Coverage. Open perils coverage is available by Endorsement for scheduled items at an additional premium.)

Insured locations under a Homeowners Policy might include all of the following, except: A Individual and family cemetery plots B A hotel room used by the insured while on vacation C Vacant farm land D A banquet hall the insured rented for the insured's daughter's wedding

C (The definition of 'insured location' includes locations where the insured temporarily resides, is rented to the insured, and cemetery plots. However, farm properties are not eligible for coverage.)

Coverage E of a Homeowners Policy would cover which of the following? A Bodily Injury to an insured B The transmission of a communicable disease by an insured C Bodily Injury arising out of the sale of a controlled substance D Bodily Injury to a guest caused by the insured's pet dog

D (Coverage E of the Homeowners Policy provides Personal Liability coverage for bodily injury or property damage arising out of an occurrence, with certain limitations and exclusions. Injury caused by communicable disease and the sale of a controlled substance are both excluded under the policy.)

All of the following are true, except: A Coverage D of a Homeowners Policy covers additional living expenses B Coverage D of a Homeowners Policy includes loss of income from an incidental business C Home schooling is permitted under a Homeowners Policy D A Homeowners Policy will not cover theft of a boat away from premises

B (Coverage D does not cover loss of income from an incidental business.)

Which person is not a covered resident under the Homeowners Policy? A A 20-year-old exchange student who is a resident of the household B The insured's spouse C A 22-year-old son enrolled in school full time away from home D The insured's tenant

D (Tenants must acquire their own insurance to cover their personal property and liability.)

Which of the following would be covered under the Damage to Property of Others additional coverage of the Homeowners Policy? A Damage caused intentionally by the insured's 10-year-old son B Damage to property owned by the insured's tenant C Damage arising out of the insured's business pursuits D Damage to property owned by the insured

A (Intentional damage by a child under age 13 is covered.)

Residential dwellings with no more than _____ residential units and _____ roomers or boarders per family are eligible under a Homeowners Policy. A 1 residential unit and 2 roomers or boarders B 4 residential units and 5 roomers or boarders C 2 residential units and 4 roomers or boarders D 4 residential units and 2 roomers or boarders

D (Residential dwellings eligible for the homeowners policy may contain one to four residential units and no more than 2 roomers or boarders per family.)

Homeowners policies cover: A Theft of guns up to $3,000 B Theft of furs and jewelry up to $1,500 C Water damage caused by flood, sewer backup and underground seepage D Money up to $500

B (The limit for loss by theft of jewelry and furs is $1,500.)

Which of the following statements about Section II of the Homeowners Policy is false? A The obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence B Insurer investigation expenses are paid in addition to the limits stated in Coverage E C Coverage F limits are subject to a deductible D Total liability Coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy

C (Section II coverages are not subject to a deductible.)

An insured has a homeowners broad form with a $200,000 limit on the dwelling and the standard deductible. If the insured's $2,500 boat and trailer are stolen from his driveway, what is the most the insured will collect from the policy? A $2,250 B $1,250 C $2,500 D $1,500

B (The limit for watercraft including trailers is $1,500. The policy will pay the limit less the standard deductible of $250.)

Which statement is true of Section I of a Homeowners Policy? A A special limit of $1,500 limit applies to watercraft B Theft of a boat while away from the premises is covered C Coverage on utility trailers is limited to $2,000 D Coverage is provided on owned golf carts and owned snowmobiles off premises

A (A limit of $1,500 applies to watercraft of all types, including their trailers, furnishings, equipment, engines, and outboard motors. Loss resulting from wind or hail is excluded unless in a fully enclosed building.)

Under the Watercraft Liability endorsement, an injury to which of the following people WOULD be covered under Coverages E and F? A An employee hired to operate the watercraft B The insured C A person who was renting the watercraft from the insured D A guest of the insured

D (Coverages E and F do not apply if the watercraft is being rented to others, or to any employee in the course of employment. Liability covers damages to others, not damages sustained by the insured themselves.)

Which of the following is true regarding eligibility of a Homeowners Policy? A The dwelling may be multi-family with up to 5 families B The dwelling must be less than 30 years old C The dwelling must be the principal residence of the insured D There may be no business occupancies in the dwelling

C (The underlying concept of the Homeowners Policy is that owner-occupied property has, in most cases, better care and maintenance than tenant-occupied property and is therefore eligible for package insurance and discounted rates.)

Most of H's jewelry is covered under the Coverage C special limits except for her $10,000 necklace inherited from her mother. Which of the following endorsements might H's agent recommend? A Open Peril Personal Property B Personal Property Replacement Cost C Scheduled Personal Property D Increased Limits - Coverage C

C (The Scheduled Personal Property is used to increase limits of liability for certain categories of personal property and to broaden the perils insured against that apply to that property.)

Which of the following homeowners coverages does not have a deductible? A Dwelling B Other Structures C Personal Property D Damage to Property of Others

D (Damage to Property of Others is an Additional Coverage under Section II, which is not subject to a deductible.)

Under the HO-8 policy, the dwelling is valued on which basis? A Actual Cash Value B Market Value C Agreed Value D Replacement Cost

A (HO-8 policies value the dwelling on an actual cash value basis.)

Which statement about the Homeowners Policy is false? A First Aid Expenses include first aid to an insured in the event of an injury B Under Section II, coverage applies only to bodily injury or property damage that occurs during the policy period C The policy will not provide coverage for an insured that has intentionally concealed or misrepresented any material fact or circumstance D Under Section II, coverage includes defense costs, at the insurer's expense, even if the suit is groundless

A (First Aid Expenses do not apply to the insured or resident of the household.)

The HO-8 form settles losses to the building on what valuation method? A Replacement value B Aggregate value C Functional Replacement Value D Agreed value

C (The loss valuation method for HO-8 is typically Actual Cash Value (ACV). However, if exact materials are not available, they may be replaced with materials that will perform the same function and have the same efficiency, even if they aren’t of like kind and quality.)

Which of the following is not true of the HO-2? A The HO-2 insures against the broad form perils B The HO-2 covers owner-occupied dwellings C The HO-2 pays for losses on an open perils basis D The HO-2 pays for losses to the dwelling on a Replacement Cost basis

C (The HO-2 insures the dwelling and contents against the broad form perils.)

Which of the following is not true about the Home Business endorsement? A Advertising injury is covered B The business must be owned by the insured C Only property damage is covered D Professional services are excluded

C (The endorsement provides both business property and liability coverages for an eligible home business.)

# Choose the answer that is true regarding the Homeowner HO-4 and HO-6 Forms. A Losses are paid on a Replacement Cost basis B The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance C The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself D Both provide Open Perils Coverage on the personal property

C (Since the insured under the HO-4 Form does not own the structure, there is no Coverage on the building.)

Which of the following is true regarding an unendorsed HO-4? A It includes the Broad Form named perils on an actual cash value basis B It includes the Broad Form named perils on a replacement cost basis C It includes Open Perils coverage on a replacement cost basis D It includes Open Perils coverage on an actual cash value basis

A (The HO-4 provides Broad Form named perils coverage on an actual cash value basis. Replacement cost coverage is available by endorsement, for an additional premium.)

Under the Homeowners Forms, Coverage C includes which type of coverage? A Special Damages B Additional Living Expense C Contents and Personal Property D Other Structures

C (Coverage C provides coverage for losses to personal property.)

All of the following are considered to be insured under a Homeowners Policy, except: A A 25-year-old friend who is living with an insured B A 79-year-old father-in-law who is living with an insured C A friend's 14-year-old daughter who is living with an insured D A son or daughter while away at college, who is 23

A (The definition of insured does not include anyone over the age of 21 that is not a relative.)

All of the following would be included in the definition of 'insured location', except: A A summer vacation home rented by the insured B A boat slip used by the named insured C A 5-family dwelling in which the insured lives in one of the units, including the structures and grounds D Land upon which a 4-family dwelling is being built as a residence for the named insured

C (Eligible residential dwellings are those containing one to four residential units and no more than 2 roomers or boarders per family.)

All of the following are true of the HO-2, except: A The HO-2 pays for losses on an open peril basis B The HO-2 covers owner-occupied dwellings C The HO-2 pays for losses to the dwelling on a replacement cost basis D The HO-2 covers the broad form perils

A (The HO-2 pays all losses on a broad form (Named Perils) basis.)

Which of the following claims would not be covered under Section II of a Homeowners Policy? A Medical expenses of a guest B Third-party bodily injury for which the insured is legally liable C Damage to property of others D $500 a day for the insured's loss of earnings while defending a suit

D (Such claim-related expenses are covered, but only up to $250 a day.)

All of the following are true of a Homeowners Policy, except: A The HO-4 form is also called the Tenants Form B The HO-2 provides open perils coverage on the dwelling C Personal property of an insured's daughter while at college would be covered D Dwellings under construction are eligible

B (The HO-2 covers the dwelling and contents against the Broad Form Perils.)

Under the Homeowners Policy, Medical Payments coverage will apply to expenses that are incurred within what length of time following an accident? A 4 years B 3 years C 1 year D 2 years

B (Medical Payments Coverage will pay for necessary medical expenses that are incurred or medically ascertained within 3 years from the date of an accident causing bodily injury.)

# Choose the false statement about a Homeowners Policy. A Coverage C allows Coverage for loss due to theft of jewelry up to $1,500 B Theft from a dwelling under construction is not included C Trees, shrubs, and plants are covered up to $500 each D Earth movement is covered in all Homeowners policies

D (Earth movement is excluded from all Homeowners Policies.)

Which of the following is NOT a 'residence premises' in the homeowners policy? A A three-family dwelling where the named insured resides B Other structures on the Declarations if shown as the 'residence premises' C A one-family residence where the named insured resides D Premises rented occasionally to the named insured for non-business purposes

D (A location rented occasionally to the named insured for non-business purposes is an 'insured location.')

Under the Homeowners policy, which coverage provides indirect loss coverage? A Coverage B B Coverage A C Coverage C D Coverage D

D (Coverage D provides for the insured's additional living expenses necessitated by damage to the dwelling, an example of indirect loss.)

All of the following are defined as insured locations under the Homeowners Policy, except: A Any premises named in the Declarations B A non-owned premises where the insured is temporarily residing C Farmland owned by the insured D Cemetery plots

C (Farmland owned by the insured is not covered.)

All of the following are true of Section II of a Homeowners Policy, except: A First aid expenses are automatically included B Medical payments coverage would apply if the family dog were to bite someone 3 blocks from home C Medical expense coverage is payable to guests D Loss assessment charges against the insured by a property owner's association are excluded

D (Loss assessment charges against the insured by a property owner's association are covered up to $1,000.)

All of the following are true, except: A Home schooling is permitted under a Homeowners Policy B Coverage D of a Homeowners Policy covers additional living expenses C A Homeowners Policy will not cover theft of a boat away from premises D Coverage D of a Homeowners Policy includes loss of income from an incidental business

D (Coverage D does not cover loss of income from an incidental business.)

The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is: A 20% of Coverage A B 50% of Coverage A C 60% of Coverage A D 40% of Coverage A

B (The basic amount of Coverage C insurance is 50% of the Coverage A Limit. This amount can be increased by payment of an additional premium.)

All of the following statements are correct about a Homeowners Policy, except: A Home schooling is covered under a Homeowners Policy B Coverage D of a Homeowners Policy covers additional living expenses C Coverage D of a Homeowners Policy includes loss of income from an incidental business D A Homeowners Policy will not cover theft of a boat away from premises

C (Coverage D does not cover loss of income from an incidental business.)

D (For a covered loss, the Coverage D limit for additional living expense, fair rental value, and civil authority prohibited use is 30% of Coverage A. 30% of $200,000 is $60,000.)

If an owner-occupied home is totally destroyed without fraud by a fire, the amount of the loss is based on: A The market value B The coinsurance value C The policy limit D The replacement value

C (In the event of a total loss, the home is insured up to the policy limit. Coinsurance only applies to partial losses.)

A deer chews a hole in an insured's shed sitting next to a pond. Which of the following forms could cover this damage? A DP-1 B HO-2 C HO-3 D HO-8

C (The HO-3 Special Form covers everything except what is excluded. A deer is not a listed exclusion as it is not considered a bird, vermin, rodent, or insect.)

Which of the following statements is false concerning Section II of a Homeowners Policy? A Section II provides no defense in the event of a groundless, false, or fraudulent claim B Payment of a medical payment is not an admission of legal liability C Section II protects the insured against third party claims D Bankruptcy of an insured does not relieve the insurer of its obligations

A (The policy provides for defense of any claim to which Coverage applies, even if groundless, false, or fraudulent.)

Which statement about the Homeowners Policy is false? A Under Section II, coverage includes defense costs, at the insurer's expense, even if the suit is groundless B First Aid Expenses include first aid to an insured in the event of an injury C The policy will not provide coverage for an insured that has intentionally concealed or misrepresented any material fact or circumstance D Under Section II, coverage applies only to bodily injury or property damage that occurs during the policy period

B (First Aid Expenses do not apply to the insured or resident of the household.)

A guest falls in K's house and is injured in an amount of $1,000. How much will K's Homeowners Policy pay regardless of fault, if the Coverage F limit is $1,500? A $1,500 B $500 C $1,000 D Nothing

C (K's policy will pay the actual amount of medical expenses up to the policy limit of Coverage F.)

In respect to Section II of a Homeowners Policy, all of the following are true, except: A Individual and family cemetery plots qualify as an insured location B Bodily injury or property damage arising from a vehicle used to assist the handicapped, such as a wheelchair, is covered C Damage to Property of Others pays up to $1,000 per occurrence D Section II losses are subject to a standard $250 deductible

D (Section II losses are not subject to a deductible.)

Under a Homeowners Policy, Coverage A includes coverage for: A Detached private structures on the Residence Premises B Theft from the site of a dwelling under construction C Structures owned by the insured at other locations D The dwelling on the premises plus structures that are attached to the dwelling

D (The policy does not cover theft in, to, or from a dwelling under construction, including materials used in the construction.)

The HO-3 dwelling and other structures coverages are insured on which basis? A Broad perils B Basic perils C Extended perils D Open perils

D (Coverages A and B are insured on an open perils basis, under which all perils are insured against unless specifically excluded.)

Which of the following is NOT a 'residence premises' in the homeowners policy? A A three-family dwelling where the named insured resides B Other structures on the Declarations if shown as the 'residence premises' C Premises rented occasionally to the named insured for non-business purposes D A one-family residence where the named insured resides

C (A location rented occasionally to the named insured for non-business purposes is an 'insured location.')

Under the Homeowners Policy, Medical Payments coverage will apply to expenses that are incurred within what length of time following an accident? A 3 years B 4 years C 2 years D 1 year

A (Medical Payments Coverage will pay for necessary medical expenses that are incurred or medically ascertained within 3 years from the date of an accident causing bodily injury.)

What is the limit of insurance available under an HO-3 policy for a tree totally damaged in a hail storm? A 0% B $1,000 C $500 D $250

A (The most paid for a covered tree is $500 but coverage is not provided for windstorm or hail losses.)

Which statement is true concerning Homeowners policies? A Property usually located in a student dormitory is limited to 10% of Coverage C or $1,000, whichever is greater B Coverage is provided for Other Structures used to store business property owned by someone other than the insured or a tenant C Dwellings under construction are covered for theft D Animals, birds, and fish are considered covered personal property under Coverage C

A (Property usually located at another location is limited to 10% or $1,000, whichever is greater.)

Under the HO-8 policy, the dwelling is valued on which basis? A Market Value B Replacement Cost C Actual Cash Value D Agreed Value

C (HO-8 policies value the dwelling on an actual cash value basis.)

The amount of insurance provided to cover personal property of a Homeowners Policy is what percentage of Coverage A? A 50% B 60% C 40% D 20%

A (The basic amount of Coverage C insurance is 50% of the Coverage A Limit.)