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CFP > Insurance Ch 3 > Flashcards

Insurance Ch 3 Flashcards

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1
Q

_______ insurance policies cover dwelling, contents, and personal liability under one policy.

A

Homeowners

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2
Q

The ______ is the part of an insurance policy containing representations of the applicant ( name, address, etc.).

A

Declaration page

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3
Q

Section 1 Coverage

A:
B:
C:
D:

A

A = dwelling
B = other structures
C = personal property
D = loss of use

Abode
Buildings
Crap
Damn! I can’t stay here

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4
Q

_______ insures the dwelling and any structures attached to the dwelling, such as a garage decks or fences. It also covers materials and supplies located on or next to the residence premises for construction, repair, or alteration of the dwelling or other structures on the residence premises. Land is specifically excluded from coverage.

A

Coverage A

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5
Q

_______ : other structures are set apart from the dwelling by a clear space examples include outdoor swimming pools, detached, garages, fences, patios, or detached living spaces.

A

Coverage B

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6
Q

Renters policies generally provide no Coverage ________

A

A or B

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7
Q

_________ covered anywhere in the world, not just when inside the insured home.

A
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8
Q

Homeowners policies generally ______ cover exposures related to being a landlord.

A

Will not.

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9
Q

Coverage applies for additional living expenses arising from damage to insured property. Coverage only pays for the necessary increase in living expense incurred by the insured to continue as nearly practical the normal normal standard of living.

A

Coverage D: loss of use

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10
Q

Coverage provides protection for damages for which an insured is legally liable arising out of bodily injury or property damage. The insurance company also agrees to defend the insured and has the right to settle any suit.

A

Coverage E: personal liability

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11
Q

Provides very limited amounts (1000/5000 typically) per person of coverage for necessary medical expenses of persons, other than the insured who are injured while on the insured location. This is not liability coverage.

A

Coverage F: medical payments

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12
Q

Perils

Basic form: remember WHARVVES/FLT

A

Windstorm, hail, aircraft, riot, vandalism, vehicles, explosion, smoke, fire, lightning, and theft

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13
Q

Perils

Broad form: everything in basic form plus RAFF

A

Rupture of a system
Artificially generated, electricity
Falling objects
Freezing of plumbing

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14
Q

The insurer agrees to pay for damage by any peril, except those specifically excluded

A

Open perils

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15
Q

________ is generally the appropriate choice for the CFP exam because it covers unusual risks that are not named under the basic and broad forms

A

Open peril coverage

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16
Q

Coverage for a mobile home

A

HO – 7

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17
Q

________ is broad form for all coverages whereas _______ his open perils for coverages A, B & D.

______ is much more comprehensive.

A

HO-2 / HO-3 / HO-3

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18
Q

This is a renters policy. It provides no coverage for the dwelling since the property is owned by others. It offers coverage for contents, loss, abuse, and comprehensive personal liability.

A

HO-4

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19
Q

This is a condominium policy. Normally, the condo association covers the structure. the condominium policy provides coverage for the interior. Loss assessment coverage provides protection against assessments made by a condo association because of losses to collectively owned property.

A

HO-6

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20
Q

Form HO-3 only provides _______ coverage on personal property

A

Broad form.

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21
Q

Form HO-6 loss of use limit is ______ of the policy limit on personal property

A

50%

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22
Q

Exclusions

Remember OPENN WIF

Eight general exclusions that apply to all of the homeowner forms

A

Ordinance of law
Power failure
Earth movement or earthquake
Neglect
Nuclear hazard

War
Intentional loss
Flood

23
Q

Riot and civil commotion and explosion are _______ perils.

A

Covered

24
Q

CLIENTs should cover valuable property like jewelry, golfers, equipment, stamps, coins, etc., by adding a _________ to their basic HO policy.

A

Scheduled personal property endorsement (Floater)

25
Q

When losses are settled on a _______ basis, no deduction in benefits is made for depreciation. Under ________ , losses are settled under replacement cost less depreciation.

A

Replacement cost basis / actual cash value

The original cost is inmaterial in the calculation of actual Cash value.

26
Q

When the amount of required insurance on the dwelling is less than 80%, the insurance company pays ___________ .

A

The greater of ACV or REPLACEMENT COST (less the deductible)

27
Q

The ________ can be written on eligible vehicles, owned or leased by an individual or by spouses, living in the same household

A

Personal auto policy

28
Q

A vehicle rented to others as a public or livery conveyance must be insured under a
———— policy.

A

Commercial

29
Q

A _______ is any vehicle listed in the policy declarations.

A

Covered auto

30
Q

If the new automobile replaces an existing vehicle, it is automatically insured for Parts A, B, and C. With part D, there is no automatic coverage, unless the insurance company is notified within ______ days of acquisition of the new vehicle.

A

14

31
Q

If the spouse ceases to be a resident of the same household, he or she is still covered under the personal auto policy until the ________ of the following:

-The end of the 90 days following the spouse’s change of residency
-The effective date for the spouse’s own new policy
-The end of the policy period

A

Earliest

32
Q

Name the four types of drivers covered by a personal auto policy

A
  1. The named insured.
  2. A family member who is living in the same household.
  3. Any person using your auto with your permission
  4. The spouse of the named insured living in the same household.
33
Q

Under a personal auto policy,_______ provides protection against judgments and covered exposures, resulting from bodily injury and property damage liability deemed to have been caused by the insured.

A

Part a – liability coverage

34
Q

Under a personal auto policy, with ________ liability coverage, one amount applies in the aggregate to all bodily injury and liability claims arising from one incident.

A

Single limit

35
Q

Under a personal auto policy with______ There are separate limits that apply to each accident.

A

Split limits

Maximum amount payable to one person for bodily injury / aggregate that will be paid for all bodily injury claims / aggregate property damage claim

36
Q

With a personal auto policy, _______ provides payment for the reasonable and necessary medical expenses of an insured as a result of an automobile accident. Only those expenses for medical services rendered within three years of the date of an accident are covered.

A

Part B – medical payments

37
Q

True or false

The following are covered for medical payments under part, B of a personal auto policy:

The named insured, spouse, and any family member, while occupying a motor vehicle, or when struck as a pedestrian by a vehicle

Any other person who is injured while occupying a covered vehicle

A

True

38
Q

With this part coverage of a personal auto policy, The insurer agrees to pay compensatory damages that an insured is entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury. The coverage applies to claims for medical expenses, lost, wages, and pain and suffering, but does not include punitive or exemplary damages.

A

Parts C uninsured motorist coverage

39
Q

Part ___ a personal auto policy is coverage for damage to your own auto; the upset of your covered auto, or its impact with another vehicle or object.

A

D

40
Q

The following sequence must be followed as the insured pursues a property insurance claim:

  1. Furnish a ________ to the insurer promptly.
  2. __________ the claim.
  3. File a ________ to the insurer.
  4. _______ claim.
A
  1. Notice.
  2. Investigate.
  3. Proof of loss.
  4. Pay or deny.
41
Q

The insurer may repair or replace damaged property with that of like kind or quality, rather than pay the actual cash value or replacement cost of the loss.

A

Replacement option

42
Q

The insured must surrender ownership of lost or damaged property to the insurance company, so that a total loss can be claimed.

A

Abandonment or salvage

43
Q

The insurer may repair or replace any part to restore a pair, or set to its value before the loss, or to pay the difference between the actual cash value of the property before and after the loss

A

Pair or set

44
Q

The _________ is for small to medium size businesses. The normal policy is a package that provides real property, contents, and liability, protection. Professional liability is specifically excluded.

A

Business owners policy

45
Q

________ is generally appropriate where the substandard conduct may result in bodily injury - for example, for physicians or dentists.

A

Malpractice insurance

46
Q

Generally appropriate, where the substandard conduct may result in property damage. Such situations include damage to intangible property, such as loss of money. Should be carried by lawyers, insurance agents, stockbrokers, and financial planners.

A

Errors and omissions insurance

47
Q

Worker’s Compensation is an example of ________.

A

Absolute liability

48
Q

Group disability payments are ______ because group disability insurance premiums are generally paid by the employer.

A

Taxable

49
Q

Unemployment compensation is ________.

A

Taxable

50
Q

Premiums for the following business policies are __________ :
Worker’s Compensation
Unemployment insurance
Commercial umbrella insurance
BOP Policy

A

Tax deductible

All the policy premiums create a tax deduction to the business. They represent necessary business expenses.

51
Q

FUTA is the unemployment tax the business pays to the federal government.

Employer paid FUTA is______.

A

Tax-Deductible

52
Q

______ is a renters policy. Renters do not need coverage on the structure. It has broad form coverage on personal property. The policy includes medical payments. The policy is for renters, not condo owners.

A

HO-4

53
Q

Under the auto policy, earthquakes, floods, and falling objects are ________.

A

Covered

Normal wear and tear is not covered.

54
Q

To collect under the uninsured motorist provision of the personal auto policy, the policyholder must file a claim against ______.

A

His own insurer.

CFP (26 decks)

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