Deck 15: Risk Management for Homeowners

Question 1

The package of coverages in the homeowners' program cost consumers approximately the same as if each coverage was purchased separately.

Answer 1

False

Question 2

The HO-3 covers wall-to-wall carpeting on a replacement cost basis.

Answer 2

False

Question 3

The earthquake endorsement covers loss due to tidal wave.

Answer 3

False

Question 4

While a student is home for Christmas, his stereo, left at school, is stolen; it is not covered by his mother's HO-3.

Question 5

The HO-6 is used to provide insurance to renters.

Question 6

Most persons insure their watercraft liability under an endorsement to the homeowners' policy.

Question 7

A named-perils policy would not cover acid damage to a tile door.

Question 8

The insured in HO-3 Coverage E refers to the insured and spouse only.

Question 9

HO-3 Coverage E covers the insured's liability arising out of the use of small pleasure boats.

Question 10

Grave markers are insured under the homeowners' program.

Question 11

Defense costs are included in the policy limit of the HO-3 Coverage E.

Question 12

After a real property loss, an insured may choose between ACV and replacement cost coverage.

Question 13

There is a $10,000 limit on personal property away from premises in an HO-2 policy.

Question 14

The earthquake endorsement usually has a 5 or 10 percent deductible.

Question 15

The HO-3 provides $1,000 of coverage for damage to the personal property of others in the insured's care, custody, or control.

Question 16

Most insureds do not need an inflation guard endorsement.

Question 17

Smoke detectors have little value in a home.

Question 18

Trees, shrubs, and other plants may be covered up to 10 percent of Coverage A.

Question 19

A daughter away at college is a resident relative in the HO-3 Coverage E.

Question 20

Homeowners' policies cover most watercraft.

Question 21

A good personal risk management policy is to make a video recording of your personal property.

Question 22

Individuals should self-insure most ten-year-old automobiles for physical damage.

Question 23

Most homeowners' policies provide broad coverage for loss of currency.

Question 24

With two persons working, a family needs little life insurance.

Question 25

Homeowners should always pick a large deductible.

Question 26

Homeowners' policies provide liability coverage for small businesses owned by the insured.

Question 27

Matching :

-When an insured peril damages an individual's house, any increase in living costs is covered by _________________ insurance.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 28

Matching :

-A person's piano is covered under the _________________ section of the homeowners' policy.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 29

Matching :

-Coverage in the HO-6 may be under the _________________.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 30

Matching :

-In the HO-2 policy both contents and the building are insured against loss from _________________.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 31

Matching :

-The _________________ states that if one loses one earring of a pair, the loss is not considered a total loss.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 32

Matching :

-_________________ coverage protects an insured against loss to a detached garage.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 33

Matching :

-The HO-1 policy provides protection on a/an _________________ basis.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 34

Matching :

-The residence premises is called the _________________ in the homeowners' policy.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 35

Matching :

-Damage by mudslides is insurable under _________________ insurance.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 36

Matching :

-The _________________ determines how items will be valued for adjustment purposes.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 37

Matching :

-The _________________ provides liability coverage in the homeowners' policy.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 38

Matching :

-_________________ covers persons injured on the insured's premises on a no-fault basis.

A) additional living expenses
B) bare wall doctrine
C) broad named perils
D) comprehensive personal liability
E) dwelling
F) flood
G) limited named perils
H) loss settlement clause
I) Medical payments to others
J) Other structures
K) pair-and-set clause
L) unscheduled personal property

Question 39

The HO-2 policy does not cover

A) a kitchen stove fire,
B) paint spilled on wall-to-wall carpeting,
C) water damage caused by the roof being destroyed during a rainstorm,
D) theft of $75 from the dwelling,
E) none of these.

Question 40

The HO-8 policy

A) has replacement cost coverage,
B) has $10,000 of theft coverage,
C) covers personal property on a worldwide basis,
D) has lower rates than the HO-3,
E) covers property on cost-to-repair basis.

Question 41

The HO-3 policy will not cover which of the following losses?

A) personal property damage due to flood,
B) a $400 trailer parked in the insured's driveway,
C) a $300 fur jacket left in a locked auto (the window is broken out),
D) $5,000 of silverware destroyed in a fire,
E) a riding mower used to cut the yard.

Question 42

The minimum policy limit for an HO-4 policy is

A) $2,000,
B) $3,000,
C) $4,000,
D) $5,000,
E) $6,000.

Question 43

Coverage in the homeowners' policy for money and bank notes is limited to

A) $200,
B) $500,
C) $0.

Question 44

Which of the following would not be covered by an HO-2 but would be covered by an HO-3 policy?

A) Smoke from the kitchen stove damages the wall,
B) A woman, while lifting weights, drops them through the floor,
C) A truck runs into the dwelling.

Question 45

Which of the following is not an endorsement to the HO-3?

A) personal injury,
B) watercraft liability,
C) aircraft liability.

Question 46

The limit for theft of jewelry and furs in the HO-3 is

A) $500,
B) $100,
C) $1,500.

Question 47

The medical payments limit in the homeowners' policy is

A) $100,
B) $500,
C) $1,000.

Question 48

The HO-8 form is used to insure

A) rental property,
B) special urban properties,
C) a house.

Question 49

The minimum size policy for an HO-3 is

A) $6,000,
B) $20,000,
C) $30,000.

Question 50

Which of the following exclusions is found in the HO-3 Coverage E?

A) babysitting liability,
B) liability from the operation of a power mower,
C) professional services.

Question 51

The basic liability limit for HO-3 Coverage E is

A) $100,000,
B) $50,000,
C) $1,000,000.

Question 52

The first action that should be taken in establishing a personal risk management program is

A) call your insurance agent,
B) purchase a homeowners' policy,
C) take an inventory of your personal property,
D) have a will made.

Question 53

Persons with children attending college away from home should

A) purchase an HO-2 for their children,
B) retain their losses,
C) purchase a personal articles floater for their children's property,
D) use their homeowners' policy with a $250 deductible.