Chapter 7 - Miscellaneous Personal Lines Flashcards
Personal Inland Marine Insured is also known as a ________ policy.
a. Liability
b. Waterworks
c. Floater
d. Endorsing
c. Floater
What does a Personal Inland Marine insured policy mainly cover?
Property in Transit
What is the Policy Territory for a Personal Inland Marine Insured policy?
usually Worldwide
Can a Personal Inland Marine Insured policy be added to another policy as endorsement or issued as a separate policy?
Both.
What payment basis are claims on a Personal Inland Marine Insured policy?
a. Replacement Cost
b. Actual Cost Value or Valued
c. 80% of Replacement Cost
d. Cost to Repair or Replace
b. ACV or Valued
What is the “Pairs and Sets” clause?
If a covered loss occurs to an item that is part of a set, the value of the remaining item(s) is reduced based on the difference between the value of the total set and the value of each item individually. This is because each item is worth more as a “set” than on its own.
***For example, if a pair of diamond earrings is valued at $2,000, and a loss occurs to one earring, the value of the pair drops by more than 50%. If one earring by itself is valued at $800, the total loss is $1,200.
How long is automatic coverage for newly acquired jewelry?
30 days
What types of peril coverage is the Personal Effects Floater?
Open Peril coverage
***mainly used for tourists or travelers
How long is the automatic newly acquired coverage for fine arts?
90 days
What is the automatic newly acquired coverage for the cameras floater?
30 days
What is the automatic newly acquired coverage for the Musical Instrument Floater?
30 days
What type of boat does the Boatowners policy insure?
A boat that can be towed by a car.
What type of peril coverage does Section I of the boatowners policy provide?
Open Peril coverage for the hull, motor, trailer, equipment and accessories manufactured for marine use.
What payment basis are losses settled on in Section I of the boatowners policy?
ACV
What coverages does Section II of the Boatowners Policy provide?
Watercraft Liability, medical Payments for passengers and uninsured boaters coverages (does NOT include Personal Injury Liability).
What type of vessel is the Yacht policy designed for?
It is designed for larger vessels, many of which have crew members.
What is a “Lay Up Warranty”?
applies when the insured boat is in storage and allows for a return of premium due to the reduced risk of the boat not being used when laid up. If the insured operates the yacht during the lay-up period (or lives on it), no coverage is provided.
***this is similar to when a car is put into ‘storage’
Are Yachts covered anywhere in the world?
No, Yachts must remain within the navigation territory listed in the policy.
What coverages do Yachts have?
Property & Liability, Personal Property (on the Yacht), Fuel Spills, Commercial Towing, Dinghies, Indemnity Coverage for the insured’s legal liability for BI & PD to others.
What does DIC insurance require?
DIC insurance requires the use of a special form designed to fill in the coverage gaps contained in a property policy.
Does DIC carry a normal deductible?
No, DIC typically carries a high deductible of $10,000 or more.
What is DIC most often written to provide coverage for? a. Earthquake b. Flood c. Collapse D. Subsidence
All of them!
Can an Earthquake Endorsement be added to a homeowners policy? Or must is be a separate policy?
It is normally an endorsement added to a homeowners but can be bought as a separate policy in California.
What are the covered perils in an earthquake policy?
Earth movement, land shock waves or tremors, landslide, mudslide, mudflow, sinkhole, and the rising, sinking, or shifting of the earth.
How long can perils from an earthquake happen and still be considered one occurrence?
All earth movements occurring within a 72-hour period are considered a single occurrence of earth movement.
What is the NFIP?
National Flood Insurance Program
Who runs the NFIP?
FEMA
What communities can participate with the NFIP?
Participating Communities
***Communities in flood-prone areas must have established an approved flood control program in order to participate in the NFIP
If a property owner lives in a community that is not a participating community, can the property owner purchase flood insurance?
No, regardless of the degree of flood risk.
What does the NFIP cover?
Dwelling and Contents damage or Loss due to covered Flood.
What is the WYO Program?
The WYO Program is a cooperative effort involving FEMA and the private sector that allows existing property and casualty insurance companies to write, issue, and service flood insurance under their own names.
***It is estimated that over 90% of the flood insurance policies in force are maintained by WYO companies.
How high is the deductible for Umbrella Policies?
a. $10,000
b. $100,000
c. $1,000
d. $0
d. $0
The umbrella begins paying out as soon as the primary policies are exhausted.
Earthquake Endorsement
The Earthquake Endorsement covers earth movement that is excluded on virtually all property policies, and in some jurisdictions may also be purchased as a separate policy.
What Perils does the Earthquake Endorsement cover?
The Earthquake Endorsement covers the perils of earthquake, earth movement, land shock waves or tremors, landslide, mudslide, mudflow, sinkhole, and the rising, sinking, or shifting of the earth.
Flood policies are available from participating private insurers under the _______________ Program, as well as directly from the NFIP.
Write Your Own (WYO)
The policy territory under a personal umbrella is worldwide and coverage is written at a base limit of $___.
$1,000,000
The insured pays a ______________, a form of cost-sharing, if the personal umbrella policy drops down to cover a loss not insured by an underlying primary policy.
self-insured retention
All of the following are true regarding the Personal Umbrella Policy, except:
a. The Umbrella acts as a contributory liability policy
b. The policy requires underlying coverage for automobiles and homes
c. The Umbrella can provide broader coverage than the primary policy
d. The policy is written for higher liability limits
a. The Umbrella acts as a contributory liability policy
Which of the following perils is covered under the Personal Umbrella?
a. Aircraft
b. Personal injury
c. Bailee
d. Intentional injury
b. Personal injury
The self-insured retention in the Umbrella is described as which of the following?
a. Excess coverage
b. An Endorsement
c. A method of cost-sharing
d. Primary coverage
c. A method of cost-sharing
