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LICENSING EXAM - Property and Casualty > chapter four - dwelling policy > Flashcards

chapter four - dwelling policy Flashcards

1
Q

DP-1 is what kind of form?

A

Basic Form

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2
Q

DP-1 Basic Form pays for losses on what basis?

A

Actual cash value.

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3
Q

DP-2 Broad Form pays for losses on what basis?

A

Replacement Cost Basis.

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4
Q

DP-3 Special Form pays for losses on what basis?

A

Replacement Cost.

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5
Q

DP-2 is what type of form?

A

Broad Form.

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6
Q

The perils insured against the DP-1 perils, the EC perils, VMM and Damage by Burglars, Falling objects, weight of ice snow or sleet, accidental discharge or overflow of water or steam, freezing … etc., is covered on what form?

A

DP-2 Broad Form

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7
Q

DP-3 is what type of form?

A

Special Form.

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8
Q

Which dwelling program form covers the building on an open peril basis?

A

DP-3 Special Form.

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9
Q

A fire breaks out in the kitchen of the insured property. After proof of loss, the insurer pays the actual cash value for damages to the dwelling.

A

DP-1 Basic Form

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10
Q

The insured property was damaged when someone drove into the garage. After proof of loss, the insurer pays the actual cash value for damages to the dwelling.

A

DP-1 Basic Form with Extended Coverage

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11
Q

While the insured property was unoccupied, it was burglarized. The insurer pays to replace the broken window the burglar used for entry, but not for the personal property stolen.

A

DP-2 Broad form.

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12
Q

After an ice storm, the pool on the insured property was damaged. The insurer pays the claim on a replacement cost basis.

A

DP-3 Special Form

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13
Q

Coverage A (DP)

A

Dwelling

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14
Q

Coverage B (DP)

A

Other Structures

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15
Q

Coverage C (DP)

A

Personal Property

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16
Q

Coverage D (DP)

A

Fair Rental Value

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17
Q

Coverage E (DP)

A

Additional Living Expenses

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18
Q

Insures the dwelling and attached structures
Materials and supplies to construct or repair
Building and outdoor equipment
NO coverage for land

A

Coverage A

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19
Q

An attached carport is covered under which of the following coverages?

A

Coverage A

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20
Q

Which coverage insures …
Other structures NOT attached to the dwelling
NO coverage for structures rented to others
NO coverage for land

A

Coverage B

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21
Q

Construction materials used for repairs or renovation of the dwelling or other structures are covered under what Coverage?

A

Coverage A

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22
Q

Coverage insures …
Personal property usual to a dwelling occupancy AND owned or used by the insured or resident relative AND while on the premises.
At insured’s request, personal property owned by a guest or servant while on the premises.

A

Coverage C

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23
Q

Credit cards or fund transfer cards; motor vehicles, a dog would all be covered under which Coverage?

A

Coverage C

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24
Q

Canoes, accounts, bank notes, coins and currency, animals, birds, or fish, and electronic data processing tapes, wires, and records are ….

A

Excluded under Coverage C, Personal Property.

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25
Q

Which coverage pays for the loss of rents due to direct loss to the dwelling from a covered peril?

A

Coverage D - Fair Rental Value.

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26
Q

The Coverage D - Fair Rental Value limit of insurance is up to what percentage of the Coverage A limit?

A

20%

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27
Q

Coverage insures …
Loss in rental value sustained by insured if covered loss under Coverage A, B, or C makes dwelling not fit for normal use.
Does not include continuing expenses

A

Coverage D - Fair Rental Value

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28
Q

Coverage applies under the DP-3 and DP-2 form for how many days while the property is removed?

A

30 days

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29
Q

Coverage applies under the DP-1 form for how many days while property is removed?

A

5 days.

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30
Q

Coverage is provided for trees, shrubs, plants, or lawns on the described location for loss caused by perils under what forms?

A

DP-2 and DP-3 forms.

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31
Q

The limit of insurance for damage to trees, shrubs, plans, or lawns is up to what percentage of Coverage A limit, with a maximum of how many dollars to any one tree, shrub, or plant?

A

5% ; $500.

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32
Q

Under each of the dwelling forms, the policy will pay up to how many dollars for the named insured’s liability assumed by contract or agreement for fire department charges incurred when the fire department is called to save or protect covered property from an insured peril. And what is this called?

A

$500 ; Fire Department Service Charge

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33
Q

The abrupt falling down or caving in of a building, or any portion of a building, but only if it cannot be occupied for its current intended purpose.

A

Collapse.

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34
Q

Which two forms provide coverage for abrupt falling down or caving in of a building or part of a building (collapse)

A

DP-2 and DP-3.

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35
Q

Under what two forms is coverage provided for the breakage of glass or safety glazing material if it is part of a covered building, storm door, or storm window?

A

DP-2 and DP-3 forms.

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36
Q

No coverage applies for the Other Coverage Glass or Safety Glazing Material if a dwelling is vacant for ____ consecutive days before the loss.

A

60 days.

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37
Q

Under what forms is Ordinance or Law an additional coverage?

A

DP-2 and DP-3.

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38
Q

If a direct loss by fire, explosion, or glass breakage occurs as a result of earth movement, the policy will or will not cover the ensuing damage?

A

Will.

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39
Q

Landslide, Mudflow, Earthquake are considered what?

A

Part of the Earth Movement exclusion.

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40
Q

What type of power failure is excluded under all of the Dwelling forms?

A

Power failure that occurs off the insured premises.

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41
Q

Covered or Excluded?

Lightning
Falling Objects
Fire
Burglar damage
Explosion
A

Covered.

42
Q

Covered or Excluded?

Intentional Loss
War
Earth Movement
Flood
Nuclear Hazard
A

Excluded.

43
Q

The Automatic Increase in Insurance endorsement typically increases Coverages A and B by what?

A

A percentage designated on the endorsement.

44
Q

The Theft Coverage endorsement can be added to any form, true or false?

A

True.

45
Q

What endorsement includes claims expenses, first aid expenses, and damage to the property of others?

A

The Personal Liability endorsement.

46
Q

Other Coverages or Endorsements? …

Fire department service charge
Collapse
Glass or safety glazing material
Improvements, alterations, and additions
Worldwide coverage
A

Other coverages.

47
Q

Other coverages or endorsements? …

Automatic increase in insurance
Dwelling under construction
Broad theft
Personal Liability supplement
Limited theft
A

Endorsements.

48
Q

The insured’s television was stolen while the tenant who rents the dwelling was away. What covers this?

A

Limited Theft.

49
Q

The insured was away from their home, and their laptop was stolen. What covers this?

A

Broad theft coverage.

50
Q

The dwelling is being remodeled and is unoccupied for over 60 days. After major storm damage, the insurer pays the claim based on the value it would have had after completion.

A

Dwelling Under Construction

51
Q

The insured selected this endorsement to help with inflation protection, which is applied annually based on a percentage shown on the endorsement.

A

Automatic Increase in Insurance

52
Q

A visitor slips and falls on the insured property. The insurer provides reasonable medical expenses for the injury.

A

Personal Liability Supplement.

53
Q

Fire damage to building materials and supplies that are located on the insured premises would be covered under which Dwelling forms?

A

All..

54
Q

Access prevented by a civil authority because of a neighboring location’s direct loss by a peril covered under the insured’s policy would be under which Coverage?

A

Coverage D - Fair Rental Value

55
Q

Under the Basic Dwelling Form, losses are paid on which basis?

A

Actual Cash Value.

56
Q

Under the Dwelling Broad Form, losses to an unattached garage are paid on which basis?

A

Replacement cost.

57
Q

Under a dwelling policy, an insured tenant may use up to what percentage of the Coverage C limit of insurance for a covered loss to improvement, alterations, and additions made at the insured’s expense to that part of the described location occupied by the named insured?

A

10%

58
Q

All of the following are covered perils under the Extended Coverage Endorsement to the DP-1, except:

Weight of ice, snow, or sleet
Windstorm
Vehicles
Volcanic eruption

A

Weight of ice, snow, or sleet.

59
Q

What form insures the dwelling on an open perils basis, and insures the contents against the broad form perils?

A

The Special Form.

60
Q

Policyholder M insures an owner-occupied, single-family residence under a Special Form Dwelling Policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what policy coverage will pay for M’s extra costs to stay in a motel and board M’s pets while the fire damage is being repaired?

A

Coverage E.

61
Q

The DP-3 provides what coverage for damage to the insured’s dwelling due to a power failure when lightning strikes a power transformer 2 miles away?

A

No coverage.

62
Q

Damage from power failure that takes place away from the insured premises is excluded under what forms?

A

All.

63
Q

Damaged household and personal property in transit between the insured’s old and new residences is covered by the Dwelling Policy under

A

Coverage C. Personal Property.

64
Q

Where in the Dwelling policy is it stated that earth movement, landslide, mine subsidence, and mudflow are not covered unless resulting from direct loss by fire or explosion?

A

General Exclusions.

65
Q

Which is true of the Dwelling Policy Special Form?

The form will cover the cracking of walls

The form will cover the theft of contents

Contents are covered on an actual cash value basis

Losses to the dwelling are paid on an actual cash value basis

A

Contents are covered on an actual cash value basis.

66
Q

Losses to the dwelling are paid on what basis?

A

Replacement cost.

67
Q

Losses to contents are paid on what basis?

A

Actual cash value.

68
Q

Cracking of walls and theft are ____ from the Dwelling Policy Special Form.

A

Excluded.

69
Q

Of the Dwelling Policy forms, which one does not cover damage by burglars?

Broad Form (DP-2)

None of the Dwelling policies cover damage done by burglars

Special Form (DP-3)

Basic Form (DP-1)

A

Basic form.

70
Q

Damage by burglars is covered by what form(s)?

A

DP-2 and DP-3.

71
Q

All of the following statements are correct regarding Coverage E, except:

Additional living expense coverage is available if the dwelling is uninhabitable

Coverage E is available under all Dwelling policy forms

Coverage applies to the extent of the insured’s normal standard of living

Additional living expenses include the boarding of pets

A

Coverage E is available under all Dwelling policy forms.

72
Q

Coverage E - Additional Living Expense is NOT included on what form?

A

DP-1.

73
Q

Dwelling Coverage D covers which of the following losses?

Access prevented by a civil authority because of a neighboring location’s direct loss by a peril covered under the insured’s policy

Additional Living Expense

Loss of rental income due to the cancellation of a lease

Damage to a swimming pool

A

Access prevented by a civil authority because of a neighboring location’s direct loss by a peril covered under the insured’s policy.

74
Q

Which of the following perils is not covered under the Dwelling Broad Form?

Smoke damage from industrial operations

Weight of ice and snow

Vehicle damage to the dwelling

Burglary damage

A

Smoke damage from industrial operations

75
Q

Which coverage applies to the building described in the Dwelling policy Declarations?

Coverage C

Coverage B

Coverage A

Coverage E

A

Coverage A

76
Q

All of the following are true about liability, except:

Breach of contract is not considered an act of negligence

Liability policies pay costs incurred by an insured to sue negligent third parties

A loss may take place over a period of time rather than all at once

The burden of proof is on the injured party to prove that the other party was negligent

A

Liability policies pay costs incurred by an insured to sue negligent third parties.

(Liability policies pay the cost to DEFEND the insured against suits by third parties. They do not cover the costs of lawsuits initiated by the insured against negligent third parties)

77
Q

Which of the following statements about Fire Department Service Charge coverage is not correct?

The policy deductible does not apply to this coverage

Coverage does not apply if the property is located within the limits of the jurisdiction furnishing the fire department response

Fire Department Service Charge coverage is included under all Dwelling policy forms

The policy will pay up to $1,000 for Fire Department Service Charge coverage

A

The policy will pay up to $1,000 for Fire Department Service Charge coverage.

(A typical dwelling policy will pay up to $500 for liability assumed for fire department charges when the fire department is called to save or protect covered property from an insured peril)

78
Q

Which of the following is correct regarding damage caused by vandalism under the Basic Dwelling Form?

It is covered as an Extended Coverage peril

It is covered as a basic peril

Vandalism of vacant buildings is automatically covered

Vandalism coverage must be added by the VMM Endorsement

A

Vandalism coverage must be added by the VMM Endorsement

79
Q

Under the Basic Dwelling Form, if the insured desires vandalism coverage, an endorsement and additional ____ is required.

A

Premium.

80
Q

Under all the Dwelling Forms, the dwelling described in the Declarations is covered under:

Coverage B

Coverage E

Coverage C

Coverage A

A

Coverage A.

81
Q

Which of the following losses would be covered under the Dwelling Policy DP-1?

Collapse caused by insect damage

Damage caused by a backup of the sewer pipes

Fire damage to building materials on the insured premises

Land subsidence of the insured’s land

A

Fire Damage to building materials on the insured premises.

(Coverage A includes materials and supplies located on or next to the Described Location used to construct, alter, or repair the dwelling on the Location)

82
Q

Which of the following is true regarding coverage of trees, shrubs or plants under Dwelling policies?

Theft of shrubs and plants is covered

Damage to plants by wind, hail, weight of ice, snow, or sleet is not covered

All vehicle damage to trees, shrubs, or plants is covered

The limit of liability is $1,000 for any tree, shrub, or plant

A

Damage to plants by wind, hail, weight of ice, snow, or sleet is NOT covered.

83
Q

Which of the following coverages is not included in the Basic Dwelling Form?

Fair Rental Value

Additional Living Expenses

Property moved to a Newly Acquired Residence

Personal Property Coverage on a World-Wide basis

A

Additional Living Expenses

Unless added by endorsement

84
Q

All of the following are true of the Dwelling Policy Broad Form, except:

The dwelling and contents are covered for the Broad Form perils

The Broad Form covers dwellings located on farms

The Broad Form automatically covers incidental business occupancies

Losses to the dwelling are paid on a replacement cost basis

A

The Broad Form covers dwellings located on farms.

85
Q

Which is true regarding Dwelling policies?

Coverage C includes coverage for personal property of tenants and boarders

Coverage B would cover an attached garage

Coverage C applies while insured property is located at the described location

Coverage D is considered a direct loss coverage

A

Coverage C applies while the insured property is located at the described location.

86
Q

Which of the following is true regarding Coverage A under the Dwelling Policy?

Coverage for land is restricted to the land upon which the dwelling is sitting

Coverage A includes a detached carport

Outdoor equipment is not covered

The policy does not include coverage for wind loss of television antennas

A

The policy does not include coverage for wind loss of television antennas.

87
Q

Under which of the following circumstances would the Limited Theft Coverage Endorsement be used?

The insured dwelling is owner-occupied

The insured dwelling is tenant-occupied

Coverage against vandalism is needed for a dwelling vacant more than 60 days

Coverage is desired for off-premises property

A

The insured dwelling is tenant-occupied.

(The Limited Theft Coverage Endorsement must be used if the dwelling is tenant-occupied. There is no off-premises coverage under this endorsement.)

88
Q

Under the Dwelling Broad Form, losses to an unattached garage are paid on which basis?

Agreed Value

Replacement Cost

Actual Cash Value

Functional Replacement Cost

A

Replacement cost.

89
Q

Under the Dwelling Policy, household and personal property, including property in transit between the insured’s old and new residences, are covered under:

Coverage D

Coverage C

Coverage A

Coverage B

A

Coverage C

90
Q

Under Coverage C of the Dwelling Special Form, all of the following are included, except:

Household and personal property

At the insured’s option, property of guests and domestic employees

Rowboats and canoes

Pets belonging to the insured

A

Pets belonging to the insured

The policy does not cover animals or pets

91
Q

Which of the following property is not covered under Coverage A of a Dwelling Policy?

Fire or lightning damage to outdoor television antennas

Materials for repairing the dwelling, located on the described location

Outdoor equipment on the location used to service the dwelling

The land on which the dwelling is located

A

The land on which the dwelling is located.

92
Q

Choose the claim that is not covered under the Dwelling Broad Form (DP-2).

Damage caused by burglars

Glass that is a part of a storm door

Accidental discharge or overflow of water from a household appliance

Theft of personal property at the insured premises

A

Theft of personal property at the insured premises.

There is no theft coverage in a dwelling policy

93
Q

Which is true of the Dwelling Policy Special Form?

Losses to the dwelling are paid on an actual cash value basis

The form will cover the theft of contents

Contents are covered on an actual cash value basis

The form will cover the cracking of walls

A

Contents are covered on an actual cash value basis.

94
Q

Which of the following statements about the DP-3 Policy is false?

Mobile homes are not eligible

Losses to the dwelling are paid on a replacement cost basis

The dwelling and contents are both covered on an open perils basis

The insured dwelling must be used principally for dwelling purposes

A

The dwelling and contents are both covered on an open perils basis.

(Only the dwelling is covered on an open perils basis)

95
Q

Water damage caused by which of the following is a covered loss under the Dwelling policy?

Water below the surface of the ground

Leaks through a driveway

Discharge caused by a plumbing failure

Overflow of water from a sump pump

A

Discharge caused by a plumbing failure.

(Water damage is excluded if caused by surface water, tidal water, and leakage through a building, foundation, or other structure)

96
Q

Which is true of Coverage C of the Dwelling Policy?

Coverage C provides coverage for pets

Coverage C provides coverage for a car stereo owned by the insured

Coverage C provides coverage for the personal property of a guest

Coverage C provides coverage for grave markers

A

Coverage C provides coverage for the personal property of a guest

(At the insured’s request, Coverage C will apply to personal property of a guest or domestic employee while located at the described location. Personal Property of a tenant or boarder is not covered)

97
Q

The DP-3 insures personal property against the same perils as:

The DP-2 Personal Property Coverage

The DP-1 Personal Property Coverage

The DP-1 Dwelling Coverage

The DP-3 Dwelling coverage

A

The DP-2 Personal Property Coverage

98
Q

Which of the following are eligible to be insured under a Dwelling Policy?

Farms

Dwellings with any type of business in them

Mobile homes on wheels

Dwellings used for incidental business

A

Dwellings used for incidental business

(Mobile homes must be permanently attached to the foundation – incidental business are covered if dwelling is primarily residential)

99
Q

Choose the true statement about the Basic Dwelling Form.

The Basic Form covers internal explosion

The Basic Form automatically covers contents for theft

The Basic Form covers contents on an open perils basis

The Basic Form covers loss to trees, shrubs, and plants

A

The Basic Form covers internal explosion.

The Basic Form is written on a named perils basis and does not cover theft, or loss to tree, shrubs, and plants

100
Q

Under a Dwelling Policy, the coverage extension of Debris Removal will pay for:

The removal of the debris caused by an insured peril

The removal of the debris from an automobile accident on the insured location

The removal of debris resulting from the action of a civil authority

The removal of debris resulting from demolition required by an ordinance or law

A

The removal of the debris caused by an insured peril.

101
Q

Which is true of the Dwelling Policy Special Form?

The form will cover the cracking of walls

The form will cover the theft of contents

Contents are covered on an actual cash value basis

Losses to the dwelling are paid on an actual cash value basis

A

LICENSING EXAM - Property and Casualty (16 decks)

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