chapter seven - miscellaneous personal lines coverage Flashcards
Which of the following types of property are covered by the Personal Effects Floater?
Coin collections
Paintings, etchings, and pictures
Personal property carried by travelers
Golfer’s equipment
Personal property carried by travelers.
(This floater covers a traveler’s personal property on an open perils basis anywhere in the world EXCEPT at the insured’s house. The other answer choices would require the Personal Articles Floater)
Section I of the Boatowners policy provides what type of coverage for the hull?
Actual cash value
Replacement cost
Open perils
Stated value
Open Perils.
The hull, motor, trailer, equipment, and marine accessories are covered on an open peril basis
Which of the following is correct about Difference in Conditions (DIC) Insurance?
The Coinsurance Clause is included on all policies
It is written on a standard form similar to the property form
Fire and lightning are typical covered perils
Flood is a peril that can be covered by this policy
Flood is a peril that can be covered by this policy.
(This policy fills in insurance gaps and covers perils that are excluded under standard policy property policies, such as flood, and excludes perils that are covered under standard property policies)
What Policy …
Insures large vessels and includes Hull insurance, Protection and Indemnity and Medical Payments coverage and a Lay Up Warranty
Yacht Policy
What Floater …
Provides open perils coverage for personal property worn or carried by tourists and travelers anywhere in the world except the insured’s home.
Personal Effects Floater
What Floater …
Insures individual personal property on a scheduled basis with open perils coverage worldwide.
Personal Articles Floater.
What Policy …
Packaged policy for boats that can be towed by a car and provides open perils coverage for the hull, motor, trailer, and equipment as well as watercraft liability, medical payments, and uninsured boaters coverage.
Boatowners Policy
What Insurance …
An open perils policy with a high deductible used to fill coverage gaps in a property policy for certain perils such as earthquakes, flood, collapse, and subsidence.
Difference in Conditions Insurance.
In order to be considered a single occurrence, the Earthquake endorsement covers all earth movement that occurs within what time period?
36 Hours
72 Hours
12 Hours
48 Hours
72 hours.
(Earth movement includes earthquakes, land shock waves or tremors, landslides, mudslides, mudflows, sinkhole, and the rising, sinking, or shifting of the earth, and must occur within 72 hours)
The National Flood Insurance Program (NFIP) sells flood insurance in which of the following types of communities?
Communities with a population less than 300,000
Farm communities
Participating communities
Communities that border a large body of water
Participating communities.
Communities in flood-prone areas must have an approved flood control program in order to benefit from the NFIP
A single-family dwelling may purchase up to what amount of flood insurance in the NFIP’s Emergency program?
$250,000
$50,000
$35,000
$100,000
$35,000.
The Emergency NFIP program covers up to $35,000 on a single-family dwelling.
What Program …
A federal program administered under FEMA that enables certain property owners to purchase flood insurance that is subsidized by the federal government.
National Flood Insurance Program
What Program …
Insurance available from private insurers that write, issue, and service flood insurance under their own names.
Write Your Own Program
What Program …
Protection for communities that have established an approved flood control program.
Regular program.
What Program …
Protection for communities in the early stages of participation in the NFIP.
Emergency Program
Which of the following is not eligible for coverage under a Fair Access to Insurance Requirements program?
Uninsured dwelling property
Rental dwelling
Homeowner
Farm property
Farm Property.
While farm property is not eligible, some incidental business use on the farm property is allowed
All of the following are true regarding the Personal Umbrella Policy, except:
The policy requires underlying coverage for automobiles and homes
The Umbrella can provide broader coverage than the primary policy
The Umbrella acts as a contributory liability policy
The policy is written for higher liability limits
The Umbrella acts as a contributory liability policy.
The Umbrella acts as an excess liability policy over the limits of the underlying policies
Which of the following perils is covered under the Personal Umbrella?
Aircraft
Intentional injury
Personal injury
Bailee
Personal Injury.
(Personal injury perils are covered under the Umbrella policy, and will drop down to cover from the first dollar if personal injury coverage is not covered on the primary policy)
The self-insured retention in the Umbrella policy is described as which of the following?
A method of cost-sharing
An Endorsement
Excess coverage
Primary coverage
A method of cost-sharing
(Like a deductible, the insured pays the self-insured retention unless there is a primary policy available to pay its limit of insurance)
All of the following are true of the Personal Jewelry Floater, except:
It can be written on a valued basis
Appraisal is usually mandatory
It has a 60-day automatic coverage for newly acquired items
It has a Pair and Sets Clause
It has 60 day automatic coverage for newly acquired items.
Automatic Coverage under the Personal Jewelry Floater is 30 days
Choose the best answer regarding the details of the Yacht Policy.
The policy contains no navigational limits
The policy provides coverage only for damage to the yacht itself
It is an Ocean Marine Form and provides both property and liability coverage
Liability related exposure must be covered under a separate policy
It is an Ocean Marine Form and provides both property and liability coverage.
(As an Ocean Marine Form designed for large, ocean-going vessels within a specific territory, a Yacht Policy includes Hull, Protection and Indemnity, Medical Payments, and Jones Act coverages)
Which of the following statements regarding flood insurance is not true?
No deductible applies to loss of contents
The Federal government is the reinsurer
In order to qualify for a federal loan, a property owner located in a recognized flood area must purchase flood Insurance
Under a Flood Policy, protection is provided to property that normally is on dry land
No deductibles applies to loss of contents.
A separate deductible applies to contents and building losses
The Difference in Conditions Policy is a special form used to fill in gaps of a property policy. Which of the following is true regarding this policy?
It is written with a minimum of 80% co-insurance
It is generally written on an open perils basis, excluding losses by perils that are covered under standard property forms
It is written with a Standard Deductible of $1,000
The Standard DIC form is developed and filed by the NAIC
It is generally written on an open perils basis, excluding losses by perils that are covered under standard property forms.
(The Difference in Conditions Policy is designed to provide coverage for all perils not covered under standard property forms. Because of the very broad coverage at the DIC, each insurer writing this form develops its own policy form).
Which statement about the Personal Effects/Personal Articles Floater is TRUE?
There is no difference between the PEF and the PAF
Both floaters offer open-peril coverage worldwide with no exceptions
The Personal Effects Floater covers personal items carried by travelers, and the Personal Articles Floater covers high-value items of personal property
The Personal Effects Floater covers high-value items of personal property, and the Personal Articles Floater covers personal items carried by tourists
The Personal Effects Floater covers personal items carried by travelers, and the Personal Articles Floater covers high-value items of personal property.
The Personal Articles Floater is similar to which of the following endorsements?
The Personal Property - Replacement Cost Endorsement
The Guaranteed Replacement Cost Endorsement
The Scheduled Personal Property Endorsement
The Special Personal Property Endorsement
The Scheduled Personal Property Endorsement.
The PAF and the Scheduled Personal Property Endorsement to the Homeowners Policy are nearly identical
Choose the false statement about an Umbrella Liability Policy.
Certain losses excluded by the primary policy may be covered
Specific minimum limits for underlying coverage are required
Property in the care and custody of the insured is covered
After underlying coverage is exhausted, coverage is excess
Property in the care and custody of the insured is covered.
Umbrella policies exclude property in the care, custody, and control of the insured
Which statement is true about Crop/Hail Insurance?
It is not subject to any deductible
It only covers the peril of hail
It is reinsured by federal government
It covers only one growing season
It covers only one growing season.
Crop/Hail Insurance coverage ceases when the crop is harvested.
Which of the following is true regarding the Fine Arts Floater?
It covers such items as paintings, rare manuscripts and antiques
Coverage is limited to the United States, Canada, and Mexico
It has automatic coverage for only 30 days on newly acquired articles
Loss is paid on an actual cash value basis
It covers such items as paintings, rare manuscripts, and antiques.
All of the following statements about the Musical Instrument Floater are true, except:
Claims are settled on an actual cash value
It may not be included in the scheduled personal property endorsement
Newly acquired items must be reported within 30 days
No additional premium is required if instruments are played for hire
No additional premium is required if instruments are played for hire.
(Playing for pay requires an endorsement and additional premium)
After being rejected by an insurer due to underwriting guidelines an applicant may request homeowners coverage under which of the following?
An Umbrella policy
FAIR Plan
A DP-3 Special Dwelling Plan
Write Your Own Homeowners Program
FAIR Plan
(The Fair Access to Insurance requirements program writes homeowners who are uninsured or have been terminated in the voluntary market)
For an antique insured under a Personal Articles Floater, coverage would not be provided for damage caused by:
Flood
Vandalism caused by a guest
Theft
Damage caused by the insured during a heated argument
Damage caused by the insured during a heated argument.
What coverage is not included under the Yacht policy?
Protection and Indemnity
Towing
Personal Property coverage
Personal Injury Coverage
Personal Injury Coverage
All of the following statements about the Fine Arts Floater are true, except:
Coverage is written on a replacement cost basis
It covers such items as paintings, rare manuscripts and antiques
It has a 90-day automatic coverage for newly acquired items
Coverage applies only to scheduled items
Coverage is written on a replacement cost basis.
It’s written on a valued basis
Which of the following is not true about the FAIR plan?
Agents cannot bind FAIR plan coverage
It provides property coverage to both residential and farm dwellings
FAIR means Fair Access to Insurance Requirements
It provides basic property coverage to those who have been rejected in the standard market
It provides property coverage to both residential and farm dwellings.
(Farm property is not eligible for coverage under the FAIR plan)
Choose the true statement regarding the National Flood Insurance Program.
Flood policies are available only from the National Flood Insurance Program
Coverage includes trees, shrubs, and plants
Agents may bind flood insurance for up to 15 days prior to submitting the final application
The federal government oversees and reinsures all flood insurance
The federal government oversees and reinsures all flood insurance.
The Personal Umbrella Policy does not provide coverage for which of the following?
Homeowners liability
Personal automobile liability
Personal injury
Property damage liability to property in the insured’s care
Property damage liability to property in the insured’s care.
Which description of the Personal Articles Floater is incorrect?
It is used to insure individual personal property
It is written on a scheduled basis
It covers losses on an open perils basis
It covers claims on a replacement cost basis
It covers claims on a replacement cost basis
Losses are settled on an Actual Cash Value or Valued basis
The National Flood Policy would not cover which of the following losses?
Unusual and rapid accumulation or runoff of surface water
Leakage of underground water systems
Mudslide caused by accumulation of water
Overflow of inland or tidal waters
Leakage of underground water systems
Underground leakage is not considered a flood
All of the following are false concerning the National Flood Insurance Program, except:
Agents may bind flood insurance for up to 15 days prior to submitting the final application
Dwelling coverage includes trees, shrubs, and plants
Payment for losses are made by the federal government
Flood policies are available only from the National Flood Insurance Program
Payment for losses are made by the federal government.
(Although private insurers sell and service flood insurance in addition to that provided by the National Flood Insurance Program, the federal government reinsures all flood insurance.)
Which statement would not be included in a description of the National Flood Insurance Program?
For personal property to be covered, it must be inside a fully enclosed building
It will not provide coverage on buildings located on, or over water
It is administered by the Federal Emergency Management Agency (FEMA)
It provides unlimited coverage for qualified property owners
It provides unlimited coverage for qualified property owners.
(There are maximum limits for both the Regular and Emergency programs)
When an underlying policy doesn’t cover a particular loss, the umbrella will drop down and cover the entire loss, after payment by the insured of a:
Commission
Copayment
Premium
Retention
Retention.
(Similar to a deductible, a retention is an amount paid by the insured before the insurer’s obligation to pay takes effect)
Which of the following may be insured on a replacement cost basis under the National Flood Insurance Program?
Money and securities
Nonresidential or commercial buildings valued at less than $250,000
1- to 4-family residences and residential condominiums
Nonresidential or commercial buildings less than 3 stories high
1 to 4 family residences and residential condominiums
(Under the National Flood Insurance Program, property is insured on an actual cash value basis, except one- to four- family residences and residential condominiums may be insured on a replacement cost basis.)
Which is a true statement about the Boatowners Policy?
Losses are always settled on a ACV basis
It provides named perils coverage for the hull and motor only
It provides both property and liability coverage, similar to a PAP
It can be used to insure any owned marine vessel
It provides both property and liability coverage, similar to a PAP
(Similar to a PAP, the Boatowners policy provides both property and liability coverage. It is generally used to insure boats under 26 feet that can be towed by a car)
Which of the following is true regarding Personal Inland Marine Insurance?
Since moveable property is also known as floating property, the policies are sometimes known as floater policies
It provides replacement cost coverage on personal property
It covers direct and indirect loss arising from damage to, or loss of, personal property
It is written in lieu of Coverage C of the Homeowners Policy
Since moveable property is also known as floating property, the policies are sometimes known as floater policies.
(For the Inland Marine underwriter the term property simply means property that moves about)
