Unit 9

Question 1

National Flood Insurance Program (NFIP)

Answer 1

Federal Government started it in 1968
managed by Federal Emergency Management Agency (FEMA) 
two programs
emergency
regular

Question 2

regular program

Answer 2

after community has been rate mapped
- maximum dwelling coverage $250,000
- maximum contents $100,00
- maximum commercial building $500,00
- maximum commercial contents $500,00
minimum deductibles: building $1,000/contents $1,000

Question 3

emergency program

Answer 3

community applies to participate
- maximum dwelling coverage $35,000
- maximum contents coverage $10,000
- maximum commercial building $100,00
- maximum commercial contents $100,000
minimum deductibles: building $1,000/contents $1,000

Question 4

flood

Answer 4

temporary water from a natural source
covers 2 or more acres that are usually dry
mudflow

Question 5

flood exclusions

Answer 5

• accounts, bills, currency, deeds, evidences of debt, money, securities, bullion & manuscripts
• lawns, trees, shrubs, plants, growing crops, livestock
• aircraft, self-propelled vehicles, motor vehicles
• fences, retaining walls, outdoor swimming pools, wharfs, piers, bridges, docks
• underground structures & equipment, well/septic
• newly constructed buildings that are in, on or over water

Question 6

value of losses

Answer 6

- replacement cost available 
must be single family dwelling
insured to 80%
primary residence (other than mobile home)
- everything else is cash value AVC

Question 7

write your own program

Answer 7

• insurance company writes the policies using its name
• NFIP sets the rates and underwriting rules
• insurance company is paid a fee for its expeses

Question 8

applications

Answer 8

• agent does not have binding authority
• initial premium paid in full
• 30 day waiting period
  waived if bought when house has mortgage- in conjunction with a loan
  applies to requests to increase coverage on an existing policy

Question 9

mobile home insurance

Answer 9

• endorsement to a dwelling or homeowners policy
• can be a separate policy
• insures the home, other structures (10%) and contents
• personal property 40% of dwelling coverage
• loss of use 20%
• permanent foundation

Question 10

personal inland marine insurance

Answer 10

personal articles floater
provides coverage for nine specific categories
standard loss settlement and agreed value loss settlement

Question 11

personal watercraft

Answer 11

boat - less than 26 feet, covers boat, motor and trailer, accessories can be added ( skis, fishing rods)

yacht - 26 feet or more in length, includes coverage for boat (hull), trailer and protection and indemnity/liability

Question 12

umbrella insurance

Answer 12

large dollar amount of excess liability - $1 million and higher
requires primary underlying policies to be in force (auto, homeowners and boat)
excess coverage- pays over and above base policy limits if they cover the loss
if primary policy is not in effect, umbrella only pays the excess as if it was primary coverage, covers losses excluded by underlying policies - self insured retention