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AINS 102 Ch 4 Questions & Answers
Marcus is buying insurance for his recent home purchase that will be covered by a DP-3 policy. In reading his policy, which one of the following will Marcus find is true?
Select one:
A. The DP-3 excludes coverage for theft of property that isn't part of the covered structure.
B. The DP-3 provides named perils coverage for the dwelling and personal property.
C. Marcus needs to add an endorsement to the DP-3 to cover personal property damage.
D. Marcus wants to add a theft endorsement to his DP-3 to cover personal property damage caused by burglars. - ANS-A. The DP-3 excludes coverage for theft of property that isn't part of the covered structure.
The Jordans own a small ranch, and keep several ponies on the property for their personal use. Mr. and Mrs. Jordan are concerned that their children's friends and visiting relatives could be injured when riding the family's ponies. What coverage would the unendorsed DP-3 policy provide for this loss exposure?
Select one:
A. No coverage
B. Full coverage, up to the policy limits
C. Medical expenses only, up to $2,
D. 20% of the Coverage A limit - ANS-A. No coverage
The "Write Your Own" (WYO) flood insurance program allows
Select one:
A. Participating Insurers write flood insurance using National Flood Insurance Program guidelines.
B. Insureds to tailor flood coverage to their own specific needs.
C. Insureds to carry flood coverage regardless of the property's location.
D. Insureds to purchase flood coverage without an agent or representative. - ANS-A. Participating Insurers write flood insurance using National Flood Insurance Program guidelines.
With respect to new flood insurance policies and endorsements that increase coverage on existing flood insurance policies, the National Flood Insurance Program (NFIP) generally requires a waiting period of
Select one:
A. 14 days.
B. 30 days.
C. 60 days.
D. 90 days. - ANS-B. 30 days.
The Personal Articles Standard Loss Settlement Form provides special form coverage for
Select one:
A. Personal property, such as luggage, normally carried by tourists and travelers.
B. Unscheduled personal property owned or used by the insured and normally kept at the insured's residence. Examples include clothing and household furniture.
C. Property normally kept in personally owned watercraft but not attached to the watercraft.
D. Several classes of personal property with a specific amount of insurance shown for each class of property or for each specific article. Examples include jewelry and fine arts. - ANS-D. Several classes of personal property with a specific amount of insurance shown for each class of property or for each specific article. Examples include jewelry and fine arts.
Which one of the following types of personal inland marine forms is designed for frequent travelers?
Select one:
A. Personal Articles Standard Loss Settlement Form
B. Personal Effects Form
C. Tenant Homeowners Form
D. Personal Property Form - ANS-B. Personal Effects Form
Which one of the following can be covered for physical damage and liability coverage by a Personal Auto Policy (PAP)?
C. Abandonment
D. False arrest - ANS-D. False arrest
Jack and Bobbie own several properties. Which one of the following would be their only property that could be insured by an HO-3 policy?
Select one:
A. They own another four-family dwelling and rent out all four units.
B. They have purchased a beach house that is currently under construction.
C. They own a mobile home that is permanently situated in a thriving community.
D. They live in one unit of a four-family dwelling and rent out the others. - ANS-D. They live in one unit of a four-family dwelling and rent out the others.
Sota owns and lives in a house insured under an unendorsed Dwelling Property 3—Special Form (DP-3) with a Coverage A—Dwelling limit of $200,000. Burglars caused $2,500 in damage to Sota's front door while breaking in, and stole $12,000 worth of personal property. Sota made a claim for $14,500. How much of this loss, if any, will be covered by Sota's DP-3 policy?
Select one:
A. Nothing
B. $2,500, less any applicable deductible
C. $12,000, less any applicable deductible
D. $14,500, less any applicable deductible - ANS-B. $2,500, less any applicable deductible
Westgrove is in the initial phase of its community's participation in the National Flood Insurance Program (NFIP), during which property owners are allowed to purchase limited amounts of insurance at subsidized rates. This is known as
Select one:
A. The regular program.
B. The emergency program.
C. The "Write-Your-Own" flood insurance program.
D. A beachfront or windstorm plan. - ANS-B. The emergency program.
Roger and Sarah sold their house and plan to travel around the world for one year. They placed their furniture and appliances in storage and will take luggage and cameras on their trip. Sarah will travel with her diamond engagement ring. Jeff, their insurance agent, canceled their homeowners policy soon after the house was sold.
Which one of the following types of personal inland marine forms should Jeff recommend to Roger and Sarah to protect their luggage on the trip?
Select one:
A. Personal Articles Standard Loss Settlement Form
B. Personal Property Form
C. Personal Effects Form
D. Tenant Homeowners Form - ANS-C. Personal Effects Form
Roger and Sarah sold their house and plan to travel around the world for one year. They placed their furniture and appliances in storage and will take luggage and cameras on their trip. Sarah will travel with her diamond engagement ring. Jeff, their insurance agent, canceled their homeowners policy soon after the house was sold.
Which one of the following types of personal inland marine forms should Jeff recommend to Roger and Sarah to protect the items they placed in the storage facility?
Select one:
A. A Personal Articles Standard Loss Settlement Form
B. A Personal Property Form
C. A Personal Effects Form
D. A Tenant Homeowners Form - ANS-B. A Personal Property Form
Which one of the following policies is designed to provide bodily injury, personal injury, and property damage liability coverage in case of a catastrophic claim, lawsuit or judgment?
Select one:
A. Personal auto policy
B. Watercraft policy
C. Personal umbrella policy
D. Homeowners policy - ANS-C. Personal umbrella policy
Which one of the following is true when comparing the DP-3 and the HO-3 policies?
Select one:
A. Coverage D and Coverage E in the DP-3 are similar to the HO-3's Loss of Use Coverage.
B. Like the HO-3, the DP-3's Coverage C—Personal Property includes coverage for money.
C. Like the HO-3, grave markers are covered by the DP-3's Coverage B—Other Structures.
D. Coverage A—Dwelling is provided to both the HO-3 and DP-3 at the residence premises. - ANS-A. Coverage D and Coverage E in the DP-3 are similar to the HO-3's Loss of Use Coverage.
The Personal Effects Form is specifically designed for
Select one:
A. Frequent travelers.
B. Homeowners.
C. Salespersons.
D. Financial institutions. - ANS-A. Frequent travelers.
Roger and Sarah sold their house and plan to travel around the world for one year. They placed their furniture and appliances in storage and will take luggage and cameras on their trip. Sarah will travel with her diamond engagement ring. Jeff, their insurance agent, canceled their homeowners policy soon after the house was sold.
Which one of the following types of personal inland marine forms should Jeff recommend to Roger and Sarah to best protect Sarah's diamond ring during the trip?
Select one:
A. Personal Articles Standard Loss Settlement Form
B. Personal Property Form
C. Personal Property Replacement Cost Loss Settlement Endorsement
D. Tenant Homeowners Form - ANS-A. Personal Articles Standard Loss Settlement Form
Lynne purchased a 52-foot motorboat and would like to cover it for physical damage and liability coverage. Lynne most likely will purchase a(n)
Select one:
A. HO-3 policy.
B. Personal auto policy.
C. Yacht policy.
D. Small boat policy. - ANS-C. Yacht policy.
Individuals with larger boats are usually insured by a yacht policy which contains several warranties. Which one of the following is one of these warranties?
Select one:
A. The boat is in seaworthy condition.
B. The boat has a paid captain and crew.
C. There will be no medical payments coverage.
D. The boat can only be used for specified business purposes. - ANS-A. The boat is in seaworthy condition.
All of the following usually are excluded by a personal umbrella policy, EXCEPT:
Select one:
