Question 1

Jerry built a home in a flood plain.He did not purchase flood insurance.Recently,a noted meteorologist predicted torrential rains for the area for the next 7 days.Jerry attempted to purchase flood insurance through the National Flood Insurance Program.Which flood insurance provision is likely to block Jerry's efforts to obtain coverage for protection against the predicted torrential rain?

Accepted Answer

The waiting period provision in the National Flood Insurance Program requires a 30-day waiting period before flood coverage takes effect. Therefore, even if Jerry were to successfully purchase flood insurance, he would not be covered for the predicted torrential rains in the next 7 days.

Question 2

Which statement is true about medical expense coverage under the boatowners package policy?

Accepted Answer

Medical expense coverage under the boatowners package policy pays the medical expenses of a covered person who is injured while in the boat.

Question 3

Steve and Mary are art collectors.They own lithographs,etchings,and vintage photographs valued at over $250,000.Steve and Mary display their art collection at their home.They can insure this valuable personal property through a

Accepted Answer

The best way to insure Steve and Mary's valuable art collection is through a personal articles floater form. This type of insurance specifically covers high-value items such as artwork, jewelry, and valuable collections. It provides broader coverage than a standard homeowners policy and typically includes coverage for accidental loss or damage. It is specifically designed to insure items that are not included in a regular homeowners policy.

Question 4

William would like to insure his home.He does not want theft or personal liability coverage; however,he would like "open perils" (all-risks)coverage on the dwelling.William should purchase a

Accepted Answer

The Dwelling Property 3 Form is the correct choice for William because it offers "open perils" coverage for the dwelling, which means it covers all risks except those specifically excluded in the policy. This aligns with William's desire for comprehensive coverage on his home without the need for theft or personal liability coverage.

Question 5

Martin would like to insure valuable personal property limited in coverage by his homeowners policy.Martin has two options.He can purchase the coverage through a separate personal articles floater policy or he can add an endorsement to his homeowners policy.The endorsement is called the

Accepted Answer

The best choice for Martin would be to add a scheduled personal property endorsement to his homeowners policy. This endorsement specifically covers valuable personal property, such as jewelry or fine art, and provides additional coverage beyond what is typically included in a homeowners policy. A separate personal articles floater policy may be more expensive and redundant if Martin already has a homeowners policy in place.

Question 6

All of the following are commonly excluded by personal umbrella policies EXCEPT

Accepted Answer

Personal umbrella policies typically provide additional liability coverage beyond what is offered by standard insurance policies, including coverage for libel, slander, and other types of personal injury. These are not commonly excluded, unlike intentional acts, professional liability, and aircraft liability, which are typically not covered.

Question 7

Tina purchased a personal umbrella policy with a $1 million limit and a $1,000 self-insured retention.Her insurer required her to carry a $300,000 liability limit under her homeowners policy.Tina was held responsible for slandering a public official.The public official won a $100,000 judgment against Tina.The insurer that wrote Tina's homeowners policy denied coverage.How much will the insurer pay under Tina's personal umbrella policy?

Accepted Answer

Since Tina's homeowners policy denied coverage for the slander claim, her personal umbrella policy will kick in. The $1,000 self-insured retention will apply first, which means Tina is responsible for paying the first $1,000 of the judgment. Then, the personal umbrella policy will cover the remainder, up to its limit of $1 million, less the $300,000 liability limit required under her homeowners policy. Therefore, the insurer will pay $99,000 ($100,000 judgment - $1,000 self-insured retention - $300,000 liability limit).

Question 8

Which of the following statements is (are)true with regard to an unendorsed ISO Dwelling Form?
I.Each form provides $100,000 in personal liability coverage.
II.The Dwelling 3 form provides broader property coverage than the Dwelling 1 form.

Accepted Answer

Statement I is false because the amount of personal liability coverage is not fixed and can vary depending on the insured's needs and requests. Statement II is true because the Dwelling 3 form provides more comprehensive coverage than the Dwelling 1 form.

Question 9

Carolyn is considering the purchase of a large (60-foot)boat.She called her insurance agent to see if she needs a separate policy for the boat.The agent said that a special category of insurance policies was designed to insure large watercraft.These policies are called

Accepted Answer

The agent specifically mentioned that a special category of insurance policies is designed to insure large watercraft. These policies are called yacht insurance policies. Therefore, option A is the best choice. The other options are not relevant to insuring a large boat.

Question 10

Frank purchased a building in a run-down area of a city.When Frank was unable to obtain property insurance in the voluntary insurance market,an agent suggested that he contact a state pool created in the 1960s that makes property insurance available in riot-prone areas.The state pool the agent referred to is called a(n)

Accepted Answer

The FAIR (Fair Access to Insurance Requirements) plan is a state-run insurance pool that provides property insurance to property owners who are unable to obtain it in the voluntary insurance market due to high risk factors like riots, crime, and natural disasters. The other options, unsatisfied judgment fund, guaranty fund plan, and assigned risk plan, do not specifically deal with providing property insurance in high-risk areas.

Question 11

The personal umbrella policy covers some personal injuries.Which of the following is considered a personal injury?

Accepted Answer

Defamation of character is considered a personal injury under the context of personal umbrella policies, as it involves harm to a person's reputation rather than physical harm or property damage.

Question 12

Which of the following statements is (are)true about the National Flood Insurance Program?
I.You can't purchase flood insurance through this program if your property is located in a high-flood-risk area.
II.Coverage is not available for any property which has been flooded previously.

Accepted Answer

Both statements I and II are false. The National Flood Insurance Program provides flood insurance to all property owners, regardless of whether they are located in high-flood-risk areas, and also provides coverage for properties that have been flooded previously.

Question 13

George has a personal auto policy with a per-person liability limit of $300,000.He also has a personal umbrella policy with a limit of $2,000,000 and a self-insured retention of $1,000.How much will be paid by each policy if a person wins a judgment of $500,000 against George as a result of bodily injury arising from the auto accident?

Accepted Answer

The per-person liability limit of George's auto policy is $300,000, therefore, the auto policy will pay $300,000. The total judgment is $500,000, so the umbrella policy will pay the difference between the judgment amount and the auto policy limit, which is $200,000. However, since the self-insured retention of the umbrella policy is $1,000, it will not be applicable in this case. Therefore, the auto policy will pay $300,000, and the umbrella policy will pay $200,000.

Question 14

Congressional action in 2012 extended the National Flood Insurance Program (NFIP)until 2017.Which of the following is a key provision of the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012?

Accepted Answer

The Biggert-Waters Flood Insurance Reform and Modernization Act of 2012 eliminated and phased out several rate subsidies, which had previously kept premiums artificially low for certain properties that were at high risk for floods. This was a major overhaul of the NFIP and aimed to make the program more financially sustainable. The other options (A, C, and D) are not key provisions of the act.

Question 15

Tina purchased a personal umbrella policy with a $1 million limit.Her insurer required her to carry liability limits of 250/500/50 under her auto insurance policy.The personal umbrella policy was written with a $1,000 self-insured retention.Tina was responsible for an auto accident in which the other driver was severely injured.The other driver's bodily injuries were $400,000 and the property damage was $20,000.How much will the insurer pay under Tina's umbrella policy?

Accepted Answer

The answer of Tina purchased a personal umbrella policy with...

Question 16

Which of the following statements about a typical personal umbrella policy is (are)true?
I.Losses covered under an underlying policy and the umbrella policy are settled on a pro rata basis.
II.Losses not covered by the basic underlying contracts are subject to a self-insured retention which typically is at least $25,000.

Accepted Answer

The answer of Which of the following statements about a...

Question 17

Len is considering the purchase of a home.As a home is a large investment,Len wants to make sure that there are no liens,easements,or other encumbrances preventing him from an unchallenged right to possess and enjoy his property.Len can protect this right through the purchase of

Accepted Answer

Title insurance is specifically designed to protect homebuyers from any title defects or issues that may arise after the purchase of the property. It covers various risks, such as liens, unpaid taxes, and other encumbrances that affect clear title to the property. Therefore, it is the best choice for Len to ensure his right to possess and enjoy his property without any legal disputes or complications.

Question 18

Which of the following statements about title insurance is true?

Accepted Answer

Title insurance provides protection against title defects that occurred prior to the effective date of the policy. It is typically a one-time premium paid at closing, rather than an annual fee. The policy term typically extends as long as the owner or their heirs hold an interest in the property. The policy does not guarantee that the owner will keep possession of the property if a defect is discovered, but rather that the insurer will provide coverage and potentially pay for any losses resulting from the defect.

Question 19

All of the following are ISO personal umbrella liability policy exclusions EXCEPT

Accepted Answer

Liability arising out of uncompensated board service for a nonprofit organization is not typically excluded under ISO personal umbrella liability policies, whereas the other options listed are common exclusions.

Question 20

Jan purchased a boat owners package policy.While using his boat,he negligently hit a pier.A person standing on the pier fell and was severely injured.Which of the boat owners package policy coverages will respond to a lawsuit filed as a result of this negligent act?

Accepted Answer

Liability coverage is the coverage that responds to lawsuits arising from negligent acts causing bodily injury or property damage to other parties. Physical damage coverage applies to damage to the boat, while medical expense coverage covers medical expenses for injuries sustained by the insured or passengers on the insured's boat. Uninsured boaters coverage covers injuries to the insured or passengers caused by an uninsured boater.

Quiz 24: Other Property and Liability Insurance Coverages

Which statement is true about medical expense coverage under the boatowners package policy?

Steve and Mary are art collectors.They own lithographs,etchings,and vintage photographs valued at over $250,000.Steve and Mary display their art collection at their home.They can insure this valuable personal property through a

William would like to insure his home.He does not want theft or personal liability coverage; however,he would like "open perils" (all-risks) coverage on the dwelling.William should purchase a

Martin would like to insure valuable personal property limited in coverage by his homeowners policy.Martin has two options.He can purchase the coverage through a separate personal articles floater policy or he can add an endorsement to his homeowners policy.The endorsement is called the

All of the following are commonly excluded by personal umbrella policies EXCEPT

Which of the following statements is (are) true with regard to an unendorsed ISO Dwelling Form? I.Each form provides $100,000 in personal liability coverage. II.The Dwelling 3 form provides broader property coverage than the Dwelling 1 form.

Carolyn is considering the purchase of a large (60-foot) boat.She called her insurance agent to see if she needs a separate policy for the boat.The agent said that a special category of insurance policies was designed to insure large watercraft.These policies are called

The personal umbrella policy covers some personal injuries.Which of the following is considered a personal injury?

Which of the following statements is (are) true about the National Flood Insurance Program? I.You can't purchase flood insurance through this program if your property is located in a high-flood-risk area. II.Coverage is not available for any property which has been flooded previously.

Congressional action in 2012 extended the National Flood Insurance Program (NFIP) until 2017.Which of the following is a key provision of the Biggert-Waters Flood Insurance Reform and Modernization Act of 2012?

Len is considering the purchase of a home.As a home is a large investment,Len wants to make sure that there are no liens,easements,or other encumbrances preventing him from an unchallenged right to possess and enjoy his property.Len can protect this right through the purchase of

Which of the following statements about title insurance is true?

All of the following are ISO personal umbrella liability policy exclusions EXCEPT

Jan purchased a boat owners package policy.While using his boat,he negligently hit a pier.A person standing on the pier fell and was severely injured.Which of the boat owners package policy coverages will respond to a lawsuit filed as a result of this negligent act?