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CFP - Finley > CFP - 2.3 Insurance > Flashcards

CFP - 2.3 Insurance Flashcards

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1
Q

What are the 8 general exclusions for all homeowner policies?

A
  1. Law (condemned or not up to code)
  2. Neglect
  3. Earth movement (earthquakes, landslides)
  4. War
  5. Water damage
  6. Nuclear hazard
  7. Power failure
  8. Intentional loss
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2
Q

What is the only type of water damage that is not excluded by the water damage exclusion?

A

Burst pipes

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3
Q

What are the 12 basic named perils (HO-1)

A
  1. Fire
  2. Lightning
  3. Windstorm
    4 Hail
  4. Riot/civil commotion
  5. Aircraft
  6. Vehicles
  7. Smoke
  8. Vandalism/malicious mischief
  9. Explosion
  10. Theft
  11. Volcanic eruption
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4
Q

What are the 6 broad named perils (added to HO-1 to make HO-2)

A
  1. Falling objects
  2. Weight of ice/snow/sleet
  3. Accidental discharge or overflow of water or steam from…
  4. Sudden and accidental tearing apart/cracking/burning/or bulging of…
  5. Freezing of…

Heating systems, AC, plumbing, automatic sprinkler systems

  1. Sudden and accidental damage from artificially generated electrical current
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5
Q

What amount of personal property is covered by HO-3?

A

50% of the coverage on the dwelling

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6
Q

HO-4 is designed for…

A

Renters

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7
Q

Loss of use coverage for HO-4 is limited to…

A

30% of the amount of Coverage C

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8
Q

HO-4 Tenant’s improvements and betterments coverage protects the insured for the value of additions/installations/etc, limited to…

A

10% of the amount of personal property coverage (30%)

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9
Q

What is the difference between HO-3 and HO-5

A

HO-3 covers personal property on a broad perils basis

HO-5 covers personal property on an open perils basis

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10
Q

What can you add to HO-3 to make it like HO-5?

A

HO-15 endorsement

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11
Q

What is HO-6 designed for?

A

Condo unit owners

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12
Q

Who splits the responsibilities for HO-6?

A

Condo owner and condo association

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13
Q

What is the condo association responsible for insurance wise?

A

Insurance to cover common areas and the building

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14
Q

What is the condo unit owner responsible for insurance wise?

A

Insurance to cover the additions to their units and contents inside the condo

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15
Q

What type of personal property coverage is in HO-6?

A

HO-2 named perils

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16
Q

What is the limit of HO-6 insurance on alterations/additions/etc?

A

$1,000

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17
Q

HO-6 Coverage D equals ____% of the coverage for personal property

A

40%

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18
Q

What does an HO-8 policy cover?

A

Homes (usually older ones) with FMV below replacement cost.

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19
Q

What type of replacement cost does HO-8 use?

A

Functional replacement-cost provision: insurance company pays the amount necessary to repair damage up to the materials and labor functionally equivalent to the original style of the dwelling

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20
Q

HO-8 theft coverage applies only to _____ and is limited to $______ per occurrence.

A

Theft on the premises limited to $1,000

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21
Q

What is covered by Homeowners Section I?

A

Property and loss of use of property (A, B, C, D, additional coverage)

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22
Q

What is covered by Homeowners Section II?

A

Liability and medical expenses to others (E and F)

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23
Q

What losses are not subject to homeowners deductible? (3)

A
  1. Liability losses
  2. Medical payments
  3. Losses involving credit cards, counterfeit money, check forgery, or ATM cards
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24
Q

Homeowners Section I A covers…

A

Dwelling

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25
Q

Homeowners Section I B covers…

A

Other structures

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26
Q

Homeowners Section I C covers…

A

Personal property

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27
Q

Homeowners Section I D covers…

A

Loss of use

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28
Q

Homeowners Section I Additional Coverage covers…(3 things)

A
  1. Debris removal
  2. Damage to trees
  3. Credit card loss
29
Q

Section I A dwelling coverage includes:

1.
2.

And excludes:

1.

A

Includes:

  1. Structures attached to the dwelling
  2. Materials and supplies intended for use in construction

Excludes:
1. Land

30
Q

Section I A partial loss coverage is on a _____ cost basis

A

Replacement

31
Q

Coverage A replacement cost coverage needs to be ____% for residential and _____% for commercial to meet the coinsurance clause.

A

80%

90%

32
Q

Coverage B insures what 2 things?

A
  1. Garage

2. Detached structures

33
Q

What amount is covered by Coverage B?

A

10% of the amount of insurance on the dwelling

34
Q

A home is insured for $150,000. How much are the detached structures insured for?

A

10% = $15,000

35
Q

What 3 things are excluded from Coverage B?

A
  1. Land
  2. Structures used for business purposes
  3. A structure rented to someone who is not a tenant of the dwelling
36
Q

Coverage C generally covers personal property up to ____% of the insurance on the dwelling.

A

50%

37
Q

Coverage C cannot go below ____% of the insurance on the dwelling.

A

40%

38
Q

What is the Coverage C dollar limit for:

Cash, currency, bank notes, bullion, coins, medals

A

$200

39
Q

Coverage C is limited to $200 for what?

A

Money (cash, currency, bank notes, bullion, coins, medals)

40
Q

What is the Coverage C dollar limit for:

Property away from the dwelling used for business purposes

A

$500

41
Q

What is the Coverage C dollar limit for:

Securities
Manuscripts
Personal records
Stamp collections
Watercraft
Trailers
JEWELRY
WATCHES
FURS
Electronic equipment
A

$1,500

42
Q

What is the Coverage C dollar limit for:

Firearms
Property at the dwelling used for business
Silverware/gold-plated ware/pewter ware

A

$2,500

43
Q

Coverage C covers $____ for business use property at the dwelling and $_____ for business use property away from the dwelling

A

$2,500

$500

44
Q

Coverage C is limited to $2,500 for what 3 things?

A
  1. Firearms
  2. Business use property at the dwelling
  3. Ware (silver, gold, pewter)
45
Q

Coverage D is limited to ____% of the amount of insurance on the dwelling for HO-1 and HO-8, and ____% for all others

A

10%

20%

46
Q

Coverage A must be ____% for coinsurance.

Coverage B is ____% of the dwelling.
Coverage C is ____% of the dwelling.
Coverage D is ____% of the dwelling.

A

80%

10%

50%

20% (10% for HO-1 and HO-8)

47
Q

Coverage D for loss of use covers 3 things:

A
  1. Living expenses
  2. Fair rental value
  3. Prohibited use (if the dwelling’s use is prohibited the insured can receive additional living/rental expenses)
48
Q

What is excluded from Coverage D?

A

Lease cancellation costs

49
Q

Coverage E protects the insured against claims from 3 things:

A
  1. Bodily injury
  2. Property damage
  3. Damage to reputation/character of another individual
50
Q

The minimum amount of coverage for Coverage E is $_______

A

$100,000 per occurence

51
Q

What persons are covered under Coverage E?

A
  1. Insured
  2. Family of the insured within the household
  3. Any person under 21 who is in the care of #1 or #2
52
Q

Does Section II liability cover occurrences off the property?

A

Yes

53
Q

Does Section II liability cover negligence?

A

Yes

54
Q

Who is excluded from Coverage F?

A
  1. Insured
  2. Members of the insured’s household
  3. Residence employees
55
Q

When can residence employees be covered by coverage F?

A

If the employee is off premise in the scope of employment when injured and not covered in the scope of worker’s comp

56
Q

Are Coverage F payments based on fault?

A

NO

57
Q

What are the 5 conditions for Coverage F payments to be made?

A
  1. Injured occurs while on property with permission
  2. injury occurs while the person is away from the insured location, but is caused by a condition at the insured location or property immediately adjoining the location
  3. Insured injures a person while away from the insured location
  4. Residence employee causes the injury
  5. Animal owned by or in the care of the insured causes an injury off the premises
58
Q

What is the usual dollar limit for Coverage F?

A

$1,000

59
Q

If the dwelling is insured for less than 80% of replacement value, how much will the insurer pay?

A

Face amount / 80% of replacement cost x loss - deductible

60
Q

A newly acquired auto is automatically covered for ____ days, however the insurance company must be notified within ____ days to extend coverage.

A

30

61
Q

Personal Auto Policies are 6 parts:

A 
A. Liability
B. Medical Payments
C. Uninsured Motorists
D. Damage to your auto
E. Duties after an accident or loss
F. General provisions
62
Q

In split-limit based auto insurance, what does this mean:

100/300/50

A

$100k coverage for bodily injury to one person

$300k coverage for all persons injured in a single accident

$50k coverage for property damage

63
Q

What are the 5 exceptions to the transfer for value rule?

A
  1. Transfers to the insured
  2. A partner of the insured
  3. A partnership in which the insured is a partner
  4. A corporation in which the insured is an officer or shareholder
  5. Gifting
64
Q

What is the transfer for value rule?

A

If an existing policy is transferred for valuable consideration, the insurance proceeds are taxable as gross income to the extend that they exceed the basis plus premiums

65
Q

What professions benefit from errors and omissions insurance?

A

Accountants, lawyers, financial planners

66
Q

What is the car weight limit for a PAP?

A

10,000 pounds

67
Q

What is excluded from a PAP?

A
  1. Partnerships/corporations
  2. 10,000 pounds + vehicles
  3. Vehicles used for delivery
68
Q

When personal property is located at another residence of the insured (e.g., a vacation home), the coverage on that property is limited to the greater of $_____ or _____% of the Coverage C insurance.

A

$1,000 or 10%

CFP - Finley (11 decks)

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