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CFP EXAM - Giauque Flashcards > Property and Liability Insurance > Flashcards

Property and Liability Insurance Flashcards

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1
Q

Policy is an excess liability policy that provides a layer of personal liability protection above the liability coverages provided in other policies.

A

Personal Liability Umbrella

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2
Q

Three types of perils that may be covered in a homeowners policy.

A

Basic, Broad, Open

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3
Q

Policy that provides the homeowner with additional protections from perils causing loss that are not among those in the broad form and may not be known or anticipated.

A

Open Perils Policy

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4
Q

Supplement to a policy that provides additional coverage.

A

Endorsement

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5
Q

Insurance coverage that is equal to the replacement cost of his dwelling which is referred to as ____________.

A

Coverage A

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6
Q

If a residence is mortgaged the bank or financing company typically requires the home to be insured at an amount _________________ .

A

At least equal to the outstanding mortgage balance on the property

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7
Q

Formula for determining amount of insurance that company will pay?

A

((Insurance Purchased/Coinsurance) X Amount of Loss) - Deductible

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8
Q

Small, detached structures on property like detached garage, small green houses, and storage buildings are often covered by ?

A

Coverage B

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9
Q

What is the limit of insurance of Coverage B?

A

10% of Coverage A limit

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10
Q

Depreciated cost of an item

A

Actual Cash Value

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11
Q

Personal property that is tangible, movable property owned by the homeowner such as furniture, entertainment, equipment, books, paintings, etc are covered under?

A

Coverage C

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12
Q

What is the difference between replacement cost coverage and actual cash value?

A

Replacement cost - covers full replacement of item

ACV - covers depreciation adjusted value of item

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13
Q

Additional insurance protection for items in the home

A

Scheduled personal property endorsement

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14
Q

This coverage will pay for additional living expenses incurred for part of the premises occupied by the insured, and for loss of rental income by the insured.

A

Loss of Use Coverage (Coverage D)

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15
Q

Coverage D limit?

A

30% of Coverage A limit

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16
Q

Policies covering condominiums limit?

A

50% of coverage C

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17
Q

Modified homeowners insurance policies provide for a limit of …

A

10% of Coverage A

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18
Q

This coverage protects the named insured and all resident family members in the case of bodily injuries and property damages to others caused by them or their resident premises.

A

Personal Liability Coverage - Coverage E

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19
Q

Covers medical payments to others

A

Coverage F

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20
Q

Coverage E covers intentional acts of insureds under age _____ but excludes intentional acts by an insured who is age ________ or over.

A

13

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21
Q

List the sections of homeowners insurance:

A

Section 1: Property Coverage
Section 2: Liability Coverage
Section 3: Additional Coverage Options

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22
Q

List the Coverages under Section I: Property Coverage

A

Coverage A: Dwelling
Coverage B: Other Structures
Coverage C: Personal Property
Coverage D: Loss of Use & Additional Living Expenses

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23
Q

List the Coverages under Section II: Liability Coverage

A

Coverage E: Personal Liability

Coverage F: Medical Payments

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24
Q

List the Coverages under Section III: Additional Coverage Options

A

Flood Insurance
Earthquake Insurance
Additional Coverages

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25
Q

What is the typical Coverage A coverage amount?

A

Amount is based on home value

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26
Q

What is the typical Coverage B coverage limit amount?

A

10% of dwelling limit

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27
Q

What is the typical Coverage C Personal Property coverage limit?

A

50% of dwelling limit

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28
Q

What is the typical Coverage D coverage amount limit?

A

20% of dwelling limit

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29
Q

What is the typical Coverage E coverage amount?

A

$100,000 unless increased by policy holder

30
Q

What is the typical Coverage F coverage amount?

A

$1,000 unless increased by policy holder

31
Q

This broad form of Home Owners insurance provides for basic perils plus additional perils.

A

HO-2

32
Q

This special form of homeowners insurance provides greater protection for the dwelling by using an “open perils” or “all risks” definition instead of specifically listing policies covered.

A

HO-3

33
Q

A contents broad form homeowners policy that provides personal liability coverage plus coverage for personal contents on a broad perils basis and loss of use of premises.

A

HO-4

34
Q

What is the minimum amount of personal property Coverage C sold is ?

A

$6,000

35
Q

Comprehensive homeowners insurance and provides personal property protection on an open perils instead of a broad perils basis.

A

HO-5

36
Q

Condominium owners need this type of coverage since they own inside a structure, but not outside. This form of coverage does not provide building coverage other than additions and alterations.

A

HO-6

37
Q

This type of homeowners coverage is referred to as a modified form policy - this policy provides repair cost coverage.

A

HO-8

38
Q

What is one of the major gaps in basic homeowners coverage that applies to many people?

A

The standard for property loss is actual cash value.

39
Q

What are the (4) duties of an insured after a loss?

A

1) Give notice immediately
2) Protect property from further damage
3) Prepare an inventory loss to the building and personal property
4) File written proof of the loss with the insurance company within the time constraints set forth in the policy.

40
Q

Once an agreement is reached concerning the amount of the loss, an insurer has _____ days to make the payment to the insured.

A

60

41
Q

What do the following numbers represent?

100/300/50

A

$100k medical bodily injury coverage per person
$300k bodily injury coverage for entire accident
$50k total property damage limits

42
Q

If an insured motorist is driving through another state with higher limits than their required home state and they get in an accident, what will be their coverage limits?

A

The minimum in which the state they are in up to required coverage will have to be covered by the drivers current policy even if limits are less

43
Q

What are all of the parts covered in a personal automobile policy?

A

Part A - Liability Coverage
Part B - Medical Payments Coverage
Part C - Uninsured and under-insured motorist coverage
Part D - Coverage for damage to the insured’s automobile
Part E - Duties after an accident or loss
Part F - General Provisions

44
Q

This type of coverage provides protection to consumers due to the sharp decline in value immediately following the purchase or lease of an automobile. (Provides protection between the actual value, and value of a loan).

A

GAP Coverage

45
Q

What are the two states that do not require automobile liability insurance?

A

New Hampshire and Virginia

46
Q

What is the typical minimum recommendation for automobile liability coverage limits?

A

100/300/50

47
Q

Replacement vehicles automatically receive the same coverage as the vehicle being replaced, notice of the replacement to the insurance must be made within ______ days.

A

30 days

48
Q

An intentional act committed against another that causes injury.

A

Intentional Interference

49
Q

Defamation or harm caused by a verbal statement

A

Slander

50
Q

Defamation caused by a written statement

A

Libel

51
Q

Occurs as a result of legislation in which one party is held legally liable regardless of who is responsible for the injury.

A

Strict and Absolute Liability

52
Q

Extends to employers liable for the acts of the employees where one person may become liable for the torts of another.

A

Vicarios Liability

53
Q

Liability without regard to negligence or fault.

A

Strict (Absolute) Liability

54
Q

Res ispa loquitur

A

“the act speaks for itself”

55
Q

Holds that damages assessed against a negligent party should not be reduced simply because the injured party has other sources of recovery available.

A

Collateral Source Rule

56
Q

The injured party fully understood and recognized the dangers that were involved in an activity and voluntarily chose to proceed.

A

Assumption of the risk

57
Q

What are the 4 defenses to negligence?

A

1) Assumption of Risk
2) Contributory Negligence
3) Comparative Negligence
4) Last clear chance rule

58
Q

Evidence that the injured party did not look out for his own safety

A

Contributory Negligence

59
Q

The amount of damage is adjusted to reflect the injured party’s proportion of contribution to the cause of the injury

A

Comparative Negligence

60
Q

Rule states that a claimant who is endangered by his own negligence may recover if the defendant has a last clear chance to avoid the accident and failed to do so.

A

“Last clear chance” Rule

61
Q

An excess liability policy that covers liability in excess of the underlying liability coverage for auto and home policies.

A

PLUP - Personal Liability Umbrella Policy

62
Q

Two types of insurance common among professionals:

A

1) Malpractice Insurance

2) Errors and Omissions Insurance

63
Q

How can you determine the amount of insurance required?

A

Copay % X Home Value

64
Q

Coverages for home insurance?

A 
A) Dwelling
B) Other Structures
C) Personal property
D) Loss of use
E) Personal Liability 
F) Medical coverage
65
Q

This type of coverage will pay for the medical expenses of any insured or family member injured in an accident while occupying an auto. (Will not pay medical expenses for those other than the insured because liability coverage will pay for that.)

A

Medical Payments Coverage

66
Q

What else is covered in a 100/300/50 policy?

A

Legal Defense

67
Q

If in an accident in your sisters car which policies will pay out?

A

Your sisters .. up to her insurance limit, then your policy up to its limit.

68
Q

Damages awarded to punish the defendant

A

Punitive Damages

69
Q

This type of coverage helps to repair or replace a vehicle that is stolen or damaged in an incident

A

Comprehensive Coverage

70
Q

What is comprehensive coverage also known as?

A

“Other than collision insurance”

71
Q

What does comprehensive insurance include that collision insurance doesn’t?

A

1) Fire
2) Theft
3) Vandalism
4) Weather
5) Running into Animals
6) Riots
7) Falling Objects

CFP EXAM - Giauque Flashcards (21 decks)

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