Chapter 24

Question 1

provides broad coverage on property frequently moved from one location to another and on property used in transportation and communications.

Answer 1

inland marine floater

Question 2

Basic characteristics of inland marine floaters:

• coverages are tailored to the specific type of personal property to be insured.
• desired amounts of insurance can be selected
• ___ coverage can be obtained
• most floaters cover insured property anywhere in the world
• inland marine floaters are often written without a ____

Answer 2

broad, deductible

Question 3

an inland marine floater that provides broad protection on valuable personal property.

Answer 3

personal articles floater (PAF)

Question 4

when written as a separate contract, the PAF insures certain optional classes of personal property on a ___ physical loss or an __ ___ basis. Direct physical losses are covered except certain losses specifically excluded.

Answer 4

direct, open perils

Question 5

the classes of personal property that can be covered include the following:
-jewelry
-furs and garments trimmed with fur
-cameras
-musical instruments
\_\_\_\_\_
-golfers equipment
-fine arts
-\_\_ and \_\_\_ collections

Answer 5

silverware, stamp and coin

Question 6

endorsement that provides essentially the same coverages provided by the freestanding personal articles floater for valuable personal property.

Answer 6

scheduled personal property endorsement

Question 7

the purposes of this legislation are to reduce flood damage in communities by floodplain management ordinances and to provide flood insurance to property owners. the federal emergency management agency (FEMA) administers this.

Answer 7

national flood insurance program (NFIP)

Question 8

under this program enacted in 1983, private insurers sell federal flood insurance under their own names, collect the premiums, and receive an expense allowance for policies written and claims paid. The federal government is responsible for all underwriting losses.

Answer 8

write your own program

Question 9

federal law requires individuals to purchase flood insurance if they have ___ ___ financing to build, buy, refinance, or repair structures located in special hazard flood areas in the participating community. this financing requirement includes federal FHA and VA loans as well as most conventional mortgage loans.

Answer 9

federal guaranteed

Question 10

most buildings and their contents can be covered by flood insurance if the community agrees to adopt and enforce sound __ ___ and ___ ___ measures.

Answer 10

flood control and land use

Question 11

communities that meet the eligibility requirements are initially covered under the __ __. when a community joins the program, it is provided with a flood hazard boundary map that shows the general area especially susceptible to flood losses, and residents can purchase limited amounts of insurance at ___ rates under the emergency portion of the program.

Answer 11

emergency program. subsidized

Question 12

when the flood insurance rate map is prepared, and the community agrees to adopt more stringent flood control and land use measures, the community enters the ___ ____. higher amounts of flood insurance can then be purchased.

Answer 12

regular program

Question 13

defined as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties from overflow of inland or tidal waters, from unusual rapid accumulation or runoff or surface waters from any source, or from mudflow.

Answer 13

flood

Question 14

under the emergency program, maximum coverage on single family and two to four family dwellings is limited to ___ on the building and ___ on the contents. for other residential and nonresidential buildings, maximum coverage is limited to ____ on the building and ___ on the contents for residential coverage and ___ on the contents for nonresidential coverage.

Answer 14

35,000, 10,000; 100,000, 10,000, 100,000

Question 15

under the regular program, maximum coverage on single family and two to four family dwellings is limited to ____ on the building and ___ on the contents. commercial structures can be insured up to a limit of 500,000 on the building and 500,000 on the contents.

Answer 15

250,000 and 100,000

Question 16

losses to single family dwellings and residential condominium buildings can be indemnified on a ___ ___ basis if certain conditions are met.

Answer 16

replacement cost

Question 17

losses to contents are always settled on an ___ ___ ___ basis (replacement cost less depreciation)

Answer 17

actual cash value

Question 18

protects the owner of property and/or the lender of money for the purchase of property against any unknown defects in the title to the property under consideration.

Answer 18

title insurance

Question 19

a history of ownership and title to the property is called an

Answer 19

abstract

Question 20

characteristics of a title insurance policy:

• the policy provides protection against title defects that have occurred in the past, prior to the effective date of the policy.
• the policy is written by the insurer based on the assumption that _______
• the premium is paid only once when the policy is issued.
• if a loss occurs, the insured is _____ in dollar amounts up to the policy limits.

Answer 20

no losses will occur, indemnified

Question 21

provides protection against a catastrophic lawsuit or judgement.

Answer 21

personal umbrella policy

Question 22

although personal umbrella policies differ among insurers, they share several common characteristics, including the following:

• excess liability insurance
• __ ___
• self insured retention or deductible
• ___ ____

Answer 22

broad coverage, reasonable cost

Question 23

the personal umbrella policy provides ____ ____ ____ over underlying insurance contracts that apply.

Answer 23

excess liability insurance

Question 24

the umbrella policy provides ___ ___ of personal liability loss exposures.

Answer 24

broad coverage

Question 25

typically includes false arrest, wrongful detention or imprisonment, malicious prosecution, wrongful eviction, oral or written publication of material that violates a persons right to privacy.

Answer 25

personal injury

Question 26

applies only to losses covered by the umbrella policy but not by any underlying contract.

Answer 26

self insured retention

Question 27

the actual cost of an umbrella policy depends on several variables, but for most families, a $1 million umbrella policy is less than ___

Answer 27

350

Question 28

the ISO umbrella policy covers the following people:

• named insured and spouse if a resident of the same household
• resident relatives
• household residents younger than 21 in the care of the named insured or an insured age 21 or older.
• any other person ____ ____ for acts or omissions of the named insured or family member while using an auto or rec vehicle covered under the policy.
• any other person or organization legally responsible for __ owned by the named insured or a family member.

Answer 28

legally responsible, animals

Question 29

the ___ ____ is the total limits of the underlying insurance and any other insurance available to an insured or the deductible stated in the declaration if the loss is covered by the umbrella policy but not by any underlying insurance or other insurance.

Answer 29

retained limit

Question 30

exclusions under the ISO umbrella policy include the following:

1. expected or intentional injury
2. certain personal injury losses
3. rental of the premises with certain exceptions
4. __ ___
5. professional services
6. aircraft, watercraft, and recreational vehicles unless coverage is provided by underlying insurance
7. using an auto, rec vehicle, or watercraft without ___ ___ of permission to do so
8. vehicle used in ___
9. communicable disease, sexual molestation, or use of a controlled substance
10. serving on a _______, except for nonprofit organizations.
11. property in the insured’s care, custody, or control to the extent the insured is required by contract to provide insurance for such property, fire legal liability is an exception

Answer 30

business liability, reasonable belief, board of directors.