Personal Lines Insurance

Question 1

Dwelling policy form DP 1 Basic Form covers the dwelling on what valuation basis?

Answer 1

actual cash value basis

Question 2

Dwelling policy form DP 1 Basic Form covers “other structures” on what valuation basis?

Answer 2

actual cash value basis

Question 3

Which of the following statements correctly describes the difference between an HO 2 Broad Form homeowners policy and an HO 3 Special Form policy?

Answer 3

The HO 2 insures all property on a named perils basis while the HO 3 insures real property on an open perils basis and personal property on a named perils basis.

Question 4

Under the DP 3 Special Form of the dwelling policy, all of the following property are covered on an actual cash value basis EXCEPT:

Answer 4

living room interior walls

Question 5

As an open perils policy, the HO 3 Special Form covers all the following causes of loss EXCEPT:

Answer 5

water damage

Question 6

Property coverage under a dwelling policy is excluded for all the following causes of loss EXCEPT:

Answer 6

internal explosion

Question 7

Mrs. Delaney hired a contractor to build a deck on the back of her house. She purchased the necessary lumber and it’s piled in her backyard. Under what coverage part of her homeowners policy is the lumber insured?

Answer 7

Coverage A - Dwelling

Question 8

Joe and Sandy have a homeowners policy. Their agent tells them that the liability section of the policy provides broad coverage if someone files a claim or lawsuit against them. However, which of the following situations would NOT be covered?

Answer 8

Joe gets into a fistfight with their neighbor Tom, who is injured.

Question 9

Ed is injured in a fall on Mona’s property. Which homeowners coverage, if any, is most appropriate to cover his claim against Mona?

Answer 9

medical payments to others

Question 10

With the dwelling policy, which of the following coverages receives loss settlement on a replacement cost basis on the DP 2 and DP 3 forms?

Answer 10

Coverage A - Dwelling

Question 11

Victor wants to purchase flood insurance, but you tell him he’s not eligible based on his community. Why isn’t Victor eligible for flood insurance?

Answer 11

His community doesn’t participate in the NFIP.

Question 12

In a dwelling policy, the provision that addresses how the value of a property loss is determined is found in:

Answer 12

the valuation provision

Question 13

Tim rents a dwelling and buys standard flood insurance on his personal property with a coverage limit of $50,000. He improves the dwelling by installing new cabinets and flooring in the kitchen at a cost of $11,000. How much coverage would he have if the improvements were damaged by a flood?

Answer 13

$5,000

Question 14

Of the three dwelling policies, which would cover loss by falling objects; weight of ice, snow, or sleet; and accidental discharge from a plumbing system?

Answer 14

DP 2 and DP 3

Question 15

The dwelling policy DP 3 Special Form excludes coverage for loss due to water damage by all the following means EXCEPT:

Answer 15

fire that results from water damage

Question 16

The liability coverage section of a homeowners policy excludes coverage for watercraft-related losses to all the following EXCEPT:

Answer 16

25-foot sailboat the insured borrows from a friend

Question 17

Which of the following correctly describes “residence premises” under a homeowners policy?

Answer 17

It is where the insured lives full- or part-time and may be either a single-unit dwelling or a multi-unit building.

Question 18

Which of the following items owned by the insured would NOT be covered under a HO-3 Special Form homeowners policy?

Answer 18

a greenhouse that is rented to a local farm for business purposes

Question 19

If a homeowners policy provision is NOT modified in the Arizona Special Provisions form, the provision in the policy

Answer 19

applies as written in the policy.