Chapter 10 Flashcards
The purpose of the National Flood Insurance Program is to:
Select one:
a. require all Americans to have flood insurance.
b. provide flood insurance at subsidized rates.
The correct answer is: provide flood insurance at subsidized rates.
Most flood claims are paid on:
Select one:
a. an ACV basis
b. a Replacement Cost basis.
Almost all flood claims are paid on an ACV basis. The only exception is the single family home which is covered on a Replacement Cost basis if the home is insured for 80% of value. Even then the detached garage is covered on an ACV basis.
The correct answer is: an ACV basis
Flood insurance covers each of these EXCEPT:
Select one:
a. runoff from broken sewer mains
b. mudslides
c. beach erosion
d. tidal surge
The correct answer is: runoff from broken sewer mains
Which of the following is eligible for flood insurance?
Select one:
a. a retail store and its inventory
b. a retail store only
Watch out for “only” at the end of a question. Flood insurance covers both buildings and contents.
The correct answer is: a retail store and its inventory
The minimum flood insurance deductible is:
Select one:
a. $100
b. $250
c. $500
d. $1000
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The correct answer is: $1000
Which federal agency runs the flood insurance program?
Select one:
a. EPA
b. IRS
c. FEMA
d. FTC
The number of days to wait for flood coverage is now 30. The number has recently changed. However, there is no waiting period when applying for flood coverage for a newly purchased property.
The correct answer is: FEMA
Flood insurance covers:
Select one:
a. decks
b. automobiles
c. awnings
d. outdoor swimming pools
The correct answer is: awnings
Under the Regular Flood Program, the maximum amount of building coverage available for a single-family residence is:
Select one:
a. $50,000
b. $150,000
c. $250,000
d. $500,000
The correct answer is: $250,000
Each of these is true regarding flood insurance EXCEPT:
Select one:
a. Flood insurance is sponsored by the federal government because private insurance companies did not meet the need.
b. Flood policies contain a coinsurance requirement.
c. One to four family dwellings are covered.
d. There are both regular and emergency programs.
There is no coinsurance clause in a flood policy. The result is that, if I choose, I can fully insure only the lower stories of my building. Although one to four family dwellings are covered, actually it can be used to cover all residential structures.
The correct answer is: Flood policies contain a coinsurance requirement.
To be eligible for flood insurance, a community must have:
Select one:
a. a flood control program
b. at least 20,000 inhabitants
The correct answer is: a flood control program
When there is no transfer of title, flood insurance is effective how many days after application?
Select one:
a. 1
b. 5
c. 10
d. 30
The correct answer is: 30
The National Flood Insurance Program is operated by the:
Select one:
a. state government
b. federal government
The correct answer is: federal government
Flood insurance covers:
Select one:
a. buildings only
b. buildings and contents
The correct answer is: buildings and contents
Flood insurance policies cover:
Select one:
a. mudslides
b. foundation seepage
c. leaky roofs
d. broken water pipes
The correct answer is: mudslides
