Deck 23: Property Insurance

Question 1

The money paid for insurance is called the insurance

A) rider.
B) endorsement.
C) peril.
D) premium.

Answer 1

D
The money paid for insurance is called the insurance premium.

Question 2

The financial responsibility which one has to others as a result of one's actions or negligence is known as

A) personal liability.
B) public liability.
C) both a and b.
D) neither a nor b.

Answer 2

C
The financial responsibility which one has to others as a result of one's actions or negligence is known as either personal liability or public liability.

Question 3

The New York fire insurance form

A) was originally enacted by the legislature of New York state.
B) provides the foundation for most property damage insurance policies in this country.
C) both a and b.
D) neither a nor b.

Answer 3

C
The New York fire insurance form was originally enacted by the legislature of New York and provides the foundation for most property damage insurance policies in this country.

Question 4

A property damage or public liability policy

A) can be cancelled at any time by the insured.
B) cannot be cancelled by the insured.
C) can be cancelled at any time by the insurer.
D) can be cancelled only after 30 day's notice by either party.

Question 5

A homeowner's insurance policy will NOT protect against which of the following?

A) Public liability directly connected with the insured property.
B) Damage to household goods contained in the insured premises.
C) Flood damage to the insured premises.
D) Theft of personal property.

Question 6

Coverage for additional perils can be obtained by

A) purchasing a separate policy.
B) adding an endorsement to a regular fire insurance policy.
C) both a and b.
D) neither a nor b.

Question 7

The concept of insurance is to

A) reimburse the insured for financial losses.
B) insure that a loss-causing event will not occur.
C) both a and b.
D) neither a nor b.

Question 8

An insurance policy which fixes the insurance company's liability to the insured to the actual cash value of the insured property is said to provide

A) "old for new" coverage.
B) "new for old" coverage.
C) "old for old" coverage.
D) "new for new" coverage.

Question 9

If a property is rented, the landlord should make certain that he has

A) adequate liability coverage.
B) adequate property damage coverage.
C) adequate property damage and liability coverage.
D) the renter purchases all insurance.

Question 10

Coverage under any homeowner policy can be extended by adding endorsements covering

A) appreciation on the value of the property.
B) worker's compensation.
C) both a and b.
D) neither a nor b.

Question 11

Medical payments provided under a homeowner policy can be paid to

A) the named insured and family members.
B) guests of the insured on the premises.
C) claims arising from business pursuits.
D) none of the above.

Question 12

The New York fire insurance form does not provide coverage for losses

A) by fire.
B) by lightning.
C) sustained while removing property from damaged premises.
D) by flood.

Question 13

An insurance endorsement is also known as

A) a rider.
B) an attachment.
C) an assignment.
D) both a and b.

Question 14

A typical HO-A homeowner's policy covers damage caused by

A) mudflow.
B) civil war.
C) freezing water pipes.
D) earthquakes.

Question 15

The inflation guard endorsements are available and automatically increase property damage coverage by

A) 1.5%
B) 2%
C) 2.5%
D) all of the above.

Question 16

As an owner of real estate, one is exposed to losses by

A) damage to the property.
B) other persons being injured on the property.
C) both a and b.
D) neither a nor b.

Question 17

When a property is mortgaged to a lending institution, the lender will usually require the owner to provide

A) fire and extended coverage on structures.
B) personal property coverage.
C) medical payment coverage.
D) liability coverage.

Question 18

The liability coverage of a homeowner policy

A) applies to the insured premises.
B) provides protection away from the premises.
C) both a and b.
D) neither a nor b.

Question 19

The war clause exemption in property insurance policies includes losses or damage caused by

A) insurrection.
B) enemy attack.
C) usurped power.
D) all of the above.

Question 20

A typical homeowner insurance policy does not cover

A) the dwelling.
B) living expenses while damage to the residence is being repaired.
C) personal property within the dwelling.
D) automobiles in the garage on the property.

Question 21

An insurer may suspend an insurance policy if the insured allows the hazard exposure to the insurer to increase beyond the risks contemplated when the policy was issued.

Question 22

Lenders on real estate mortgages may require that the borrower provide

A) a replacement cost policy on the full amount of the loan.
B) insurance in an amount equal to the purchase price of the property.
C) inflation guard coverage.
D) content coverage.

Question 23

Fire insurance is the foundation of property damage policies.

Question 24

If the insured wishes to cancel his New York fire form policy,

A) he must give a 5-day notice.
B) he will receive a prorated refund.
C) his refund will be based on short-rate premiums.
D) he will receive no refund.

Question 25

The lender on a condominium unit will require proof that the

A) unit owner carries liability insurance.
B) unit owner carries contents insurance.
C) condominium association carries insurance on the common elements.
D) condominium association carries insurance on the individual owner's contents.

Question 26

Typically, an owner of real estate is not exposed to losses by other persons being injured on his property.

Question 27

An "all-risk" homeowner policy (HO-C)does not include coverage for damage resulting from war or nuclear accident.

Question 28

If a liability claim arises under Section II of a homeowner's policy, the insurance company will pay for

A) damages up to the policy limits.
B) damages up to the policy limits plus the legal costs of defense.
C) damages and legal costs up to the policy limit.
D) damages beyond policy limits in certain cases.

Question 29

The owner of a rented property may insure that property by obtaining

A) an endorsement to an existing homeowner policy.
B) a landlord package policy.
C) both a and b.
D) neither a nor b.

Question 30

In a typical homeowner's policy, section I deals with losses to the insured's property and section II covers liability of the insured and family.

Question 31

A landlord package policy provides coverage for

A) property damage.
B) liability.
C) loss of rents.
D) all of the above.

Question 32

An endorsement, also called a rider or attachment, is an agreement by the insurer to modify a basic policy.

Question 33

Medical payments coverage provides payment regardless of who is at fault.

Question 34

All of the following mortgages require either flood insurance or a certificate that the mortgaged property is not in a flood zone EXCEPT

A) VA-guaranteed mortgages.
B) FHA-insured mortgages.
C) mortgages carried back by sellers.
D) conventional mortgages secured from federally chartered savings and loans associations.

Question 35

Flood insurance can be purchased for

A) structures and contents.
B) public liability.
C) medical expenses.
D) damages and legal costs.

Question 36

Among the following, who does NOT hold an insurable interest?

A) A property owner.
B) The listing broker.
C) A mortgage lender.
D) The tenant.

Question 37

The purchaser of a new home may protect himself against loss due to structural defects by

A) having the home inspected before purchase.
B) purchasing insurance under the Home Owners Warranty Program.
C) both a and b.
D) neither a nor b.

Question 38

Section II of a homeowner insurance policy provides liability protection for the named insured but not the members of the named insured's family who lives with the insured.

Question 39

To cover personal property and any additions or alterations to the unit not insured by the association's policy, a condominium unit owner's form (HO-6)is available.

Question 40

Forms HO-3 and HO-5 are typically not designed for single-family homes.

Question 41

Actual cash value is the new price minus accumulated depreciation and is, in effect, "new for old".

Question 42

Medical payments pay for the treatment of injuries without the need to determine fault.

Question 43

An agreement by the insurance company to extend coverage to perils not covered by the basic policy is called an insurable interest.

Question 44

A homeowner policy would typically cover the house and garage but not other structures on the property such as a guesthouse or garden shed.

Question 45

A homeowner policy is a policy that combines property and liability policies designed for residential owner-occupants.

Question 46

An endorsement that periodically increase insurance coverage is known as ____________________ guard.

Question 47

Actual ____________________ value s the new price minus accumulated depreciation and is, in effect, "old for old".

Question 48

A landlord policy combines property damage, liability, medical payments, and loss of ____________________.

Question 49

"Old for old" means that the policy pays only the depreciated cost.

Question 50

Generally, a property owner is liable when there exists a legal duty to exercise reasonable care and the property owner fails to do so.

Question 51

There are no exclusions in an all-risks policy.

Question 52

The insured is one who is ____________________ by insurance.

Question 53

If the face amount of the homeowner's policy is less than 80% of replacement cost, the ____________________ equals the insurance carried divided by 80% of today's replacement cost times today's cost to replace the damaged portion.

Question 54

____________________ liability, also called public liability, is the financial responsibility one has toward others as a result of one's actions or failure to take action.

Question 55

If one rents rather than owns, they would choose the ____________________ form (HO-4).

Question 56

____________________ insurance is the foundation of property damage policies.

Question 57

An insurer may suspend an insurance policy if the property is left vacant beyond a specified time.

Question 58

"New for old" means that the policy pays replacement cost.

Question 59

Policies that cover a large number of named perils are known as ____________________ form policies (HO-2).

Question 60

An agreement by the insurer to modify a basic policy, also called a rider or attachment, is known as a(n)____________________.

Question 61

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
the financial responsibility one has toward others

Question 62

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
insurance phrase for policies that cover a large number of named perils

Question 63

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
pays for the treatment of injuries without the need to determine fault

Question 64

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
this would pay for damage from the outflow of inland or title waters

Question 65

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
describes a policy that covers all perils, except those excluded in writing

Question 66

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
an agreement by the insurance company to extend coverage to perils not covered in the basic policy

Question 67

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
insurance coverage for injuries incurred by an employee on the job

Question 68

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
pays cost of replacing damaged property at current prices

Question 69

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
warrants against defects caused by faulty workmanship or materials and against major structural defects

Question 70

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
condominium owner's policy form

Question 71

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
describes combined property and liability policies designed for residential owner-occupants

Question 72

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
the new price minus accumulated depreciation and is, in effect, "old for old"

Question 73

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
a financial interest that can be insured

Question 74

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
provides broad form coverage for personal property and reimbursement of any loss of use of rental property

Question 75

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
an endorsement that periodically increases insurance coverage

Question 76

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
pays current cost of replacement less depreciation

Question 77

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
the amount of money paid for insurance coverage

Question 78

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
one who is covered by insurance

Question 79

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
tenant's policy form

Question 80

Choose the one most appropriate answer for each.
a.all-risks policy
k.insurable interest
b.actual cash value
l.insurance premium
c.broad form (HO-2)
m.insured
d.endorsement
n.medical payments
e.flood insurance
o.new for old
f.form HO-4
p.old for old
g.form HO-6
q.peril
h.homeowner policy
r.public liability
i.homeowner's warranty
s.tenant's policy
j.inflation guard
t.worker's compensation policy
also called hazards or risks