Insurance MCQ

The RWE Safe Condominium Association is sued for liability damages when a visitor drowns in the association's pool. The amount of damages awarded is above the liability limits of the association's policy. Which of the following would give the individual association owners coverage for their share of the amount in excess of the association's policy? a. Liability coverage b. Replacement cost c. Additional living expense d. Loss assessment Answer: D

Which of the following perils is NOT covered by an Special Peril/Open Peril policy? a. Artificially generated currents b. Weight of ice, snow, and sleet c. Any specifically excluded in the policy d. Glass breakage Answer: C

Under what basis is personal property covered under an HO-3 policy? a. Open Peril b. Special Peril c. Named Peril d. Contingency Peril Answer: C

Ray has an HO-5 all-risk policy. He came home one day to find his house burglarized with $800 stolen. If Ray had a $500 deductible, how much would the insurer pay to indemnify him? a. $550 b. $0 c. $800 d. $300 Answer: B

Gene and Dee have an HO-3 policy with the building insured for $100,000. How much coverage of personal property do Dee and Gene have for property they keep stored at a second residence they own? a. $250 b. $0 c. $10,000 d. $1,000 Answer: B

Which of the following perils would NOT be covered under an HO-2? a. Eight (8) extended coverage perils b. Burglary c. Three (3) standard fire perils d. All are covered. Answer: D

In which of the following situations would a condo owner be best suited for a renters' policy rather than a condo policy? a. The condo's association covers just the common areas. b. The condo's association covers all parts of or attachments to the building. c. The condo's association covers just the exterior walls. d. A condo owner would never want a renter's policy. Answer: B

How long will Coverage D- Loss of Use be available to the insured? a. Payment will last 30 days, regardless of the actual time to repair or replace. b. Payment will be for the shortest time required to repair, replace, or for the household to settle elsewhere. c. Payment will last 15 days, regardless of the actual time to repair or replace. d. Payment will last 60 days, regardless of the actual time to repair or replace. Answer: B

Pritika and Allan bought a home built in the 1880's in a small town for $85,000 that would cost $235,000 to rebuild if destroyed because of the ornate molding and windows. What type of Homeowners policy would BEST cover their needs if Pritika and Allan would be willing to rebuild the home with functionally equivalent materials and modern techniques? a. HO-3 b. HO-5 c. HO-2 d. HO-8 Answer: D

The Controlled Substance exclusion is best described as which of the following? a. Bodily injury or property damage arising out of the transmission of a communicable disease by the insured b. Liability to an insured's employee, which should be covered by Workers' Comp c. Bodily injury or property damage arising out of the sale, manufacture, delivery, transfer, or possession of any person legitimately using prescription drugs under the care of a licensed physician d. Bodily injury or property damage arising out of the sale, manufacture, delivery, transfer, or possession of any person of a controlled substance Answer: D

The amount of personal property coverage in an HO-6 policy form is: a. 50% of the Coverage A amount. b. a stated amount. c. Personal Property is not covered on an HO-6 policy. d. 10% of the Coverage A amount. Answer: B

What is the standard amount of coverage for Separate Structures on a Homeowners Policy? a. 20% of Coverage B b. 10% of Coverage B c. 10% of Coverage A d. 20% of Coverage A Answer: C

If a single item in a pair or set is lost or destroyed, how will the insurer handle this loss? a. Pay 25% because it is part of their personal property b. Pay 10% because it is part of their personal property c. Pay the value of the lost part, or pay the difference between the ACV of the set before and after the loss d. Pay the total loss of the pair or set Answer: C

Earthquake endorsements usually have a separate deductible that is often set at: a. $75,000. b. A percentage of the total loss. c. $25,000. d. $50,000. Answer: B

Which coverage will provide coverage for damage due to soot, vapor, and fumes from a boiler, furnace, or similar equipment? a. Smoke coverage b. Ordinance or law c. Grave markers d. Debris removal Answer: A

Sally's $5,000 ring was destroyed in a house fire. If she has the standard deductible, how much will her insurer reimburse for the ring? a. $5,000 b. $0 c. $1,500 d. $750 Answer: A

Coverage C of a homeowners policy includes which of the following items? a. Furniture b. The dwelling c. Detached garage d. Above ground removable swimming pool Answer: A

Debra's Victorian home has ornate wood banisters along a winding staircase, as well as intricate moldings around the windows. If a fire destroys the house and the insurance company replaces the woodwork with standard material and work, which of the following types of coverage does Debra have? a. Stated value b. Replacement cost c. Functional replacement cost d. Guaranteed replacement cost Answer: C

Which of the Homeowners forms would offer the least coverage, but still cover damage caused by a deer breaking the front window of the insured building? a. HO-2 b. HO-1 c. HO-5 d. HO-3 Answer: D

Which of the following must be true for damage to be covered by the Limited Fungi, Wet or Dry Rot, or Bacteria Coverage? a. Damage was caused by flooding. b. Damage must be hidden in the walls, ceilings, or beneath the floors, or above the ceilings of a covered structure. c. Damage must be on the seen drywall of the inside of the building. d. Damage was not caused by the accidental discharge or overflow of water or steam. Answer: B