Question 1

Which of the following statements is true about homeowners policy?
A)They differ from automobile policies because they combine several types of coverage into one policy.
B)They do not provide health insurance for guests and residence employees.
C)The persons insured are similar from coverage to coverage and place to place.
D)They are a combination of property and liability insurance.
E)They provide narrower coverage in comparison to policies bought individually.

Accepted Answer

The answer of Which of the following statements is true...

Question 2

According to this doctrine, when a loss is caused simultaneously by two or more perils, and at least one is not excluded, the loss is covered.Identify this doctrine.
A)Doctrine of stare decisis
B)Privity doctrine
C)Doctrine of ratio decidendi
D)Concurrent causation doctrine
E)Doctrine of uberrimae fidei

Accepted Answer

The Concurrent Causation Doctrine applies when a loss is caused by multiple perils simultaneously, and at least one of those perils is covered by the insurance policy. This doctrine allows for coverage of the loss even if other contributing perils are excluded from the policy.

Question 3

Suppose that at the time of a $40,000 loss, your home has a replacement value of $200,000.And suppose you have $140,000 worth of insurance on it.Calculate the amount that you would receive from the insurer.
A)$35,000
B)$40,000
C)$20,000
D)$17,500
E)$30,000

Accepted Answer

The amount received from the insurer is calculated using the formula for coinsurance: (Amount of Insurance / (Insurance to Value Ratio * Replacement Value)) * Loss = Claim Payment. Here, it's ($140,000 / ($200,000 * 0.8)) * $40,000 = $35,000.

Question 4

Which of the following is covered under 'Coverage C-Personal Property' of the homeowners policy?
A)Structures used for business purposes
B)Attached garage
C)Homes plagued with toxic mold which needs lengthy remediation
D)Detached garage
E)The neighbor's lawnmower that you have borrowed

Accepted Answer

Coverage C-Personal Property under a homeowners policy typically covers personal property owned or used by the policyholder on or off the premises. This includes items borrowed by the policyholder, such as a neighbor's lawnmower. Structures used for business purposes (A) and homes with toxic mold (C) are not covered under Coverage C. Attached garages (B) are covered under the dwelling protection part of the policy, not personal property. Detached garages (D) can be covered under other structures protection, not under personal property.

Question 5

This part of the homeowners policy is the substance of the contract, spelling out the specific coverage provisions.Identify it.
A)Endorsements
B)Estoppel
C)Declarations page
D)Policy form
E)Homeowners policy jacket

Accepted Answer

The policy form is the part of the homeowners policy that contains the substance of the contract, detailing the specific coverage provisions.

Question 6

Which of the following is covered under 'Additional Coverages' of a homeowners policy?
A)Loss caused to or by glass or safety glazing material
B)Detached garage
C)The neighbor's lawnmower that you have borrowed
D)Attached garage
E)Homes plagued with toxic mold which needs lengthy remediation

Accepted Answer

Loss caused to or by glass or safety glazing material is typically covered under 'Additional Coverages' of a homeowners policy, providing extra protection beyond the standard coverage.

Question 7

Which of the following is covered under 'Coverage B-Other Structures' of the homeowners policy?
A)Structures used for business purposes
B)Attached garage
C)Homes plagued with toxic mold which needs lengthy remediation
D)Detached garage
E)The neighbor's lawnmower that you have borrowed

Accepted Answer

Coverage B, often referred to as "Other Structures" in a homeowners insurance policy, typically covers structures on the property that are not attached to the main dwelling. This includes structures like detached garages, sheds, and fences. Attached garages are considered part of the main dwelling and are covered under Coverage A, not Coverage B. Structures used for business purposes, homes with toxic mold, and borrowed personal property like a neighbor's lawnmower are not covered under Coverage B.

Question 8

Anything permanently attached to a building is considered to be part of the building.But the phrase "whether or not attached to buildings" makes carpeting, domestic appliances, awnings, outdoor antennas, and outdoor equipment _____ losses.
A)Coverage A-Dwelling
B)Coverage B-Other Structures
C)Coverage C-Personal Property
D)Coverage D-Loss of Use
E)Coverage E-Additional Coverages

Accepted Answer

The phrase "whether or not attached to buildings" indicates that items like carpeting, domestic appliances, awnings, outdoor antennas, and outdoor equipment are considered personal property, even if they are attached to the building, thus falling under Coverage C-Personal Property for insurance purposes.

Question 9

In a homeowners policy, this coverage applies to personal property owned by others while it is "on the part of the residence premises occupied by an insured" and to property of guests and residence employees while at any residence occupied by an insured.Identify this coverage.
A)Coverage A
B)Coverage B
C)Coverage C
D)Coverage D
E)Coverage E

Accepted Answer

Coverage C in a homeowners policy is designed to cover personal property. This includes personal property owned by others while it is on the part of the residence premises occupied by an insured, as well as property of guests and residence employees while at any residence occupied by an insured.

Question 10

Assume that the law in your city provides that a building that does not comply with the building code is permitted to stand, but if it is damaged by fire or other peril to the extent of 50 percent of its value, it must be demolished.Now, your garage does not meet building code requirements and is damaged by fire to such an extent that it must be razed.Identify the situation that follows.
A)The insurer will cover either the fire damage or the loss caused by the demolition of the garage, but not both.
B)The insurer will cover both losses-the fire damage loss and the loss by demolition.
C)The insurer will not cover any loss-the fire damage loss or the loss by demolition.
D)The insurer will not cover the loss caused by the fire, but will cover the loss caused by demolition.
E)The insurer will cover the loss caused by the fire, but will not cover the loss caused by demolition.

Accepted Answer

Insurance typically covers damage caused by fire but may not cover losses due to demolition if the building was non-compliant with building codes.

Question 11

Business pursuits and professional services are excluded in umbrella policies unless there is underlying coverage.

Accepted Answer

Umbrella policies typically exclude business pursuits and professional services unless there is underlying coverage for these activities, as they are designed to provide additional liability coverage beyond what is offered in standard personal or commercial policies.

Question 12

Which of the following is covered under 'Coverage A-Dwelling' of the homeowners policy?
A)A friend's property that you have stored in your residence premises
B)Attached garage
C)The neighbor's lawnmower that you have borrowed
D)Detached garage
E)Homes plagued with toxic mold which needs lengthy remediation

Accepted Answer

Coverage A-Dwelling typically covers the physical structure of the home, including attached structures like an attached garage.

Question 13

Which of the following situations is covered under a homeowners policy?
A)Earth movement damages your house.
B)Loss caused by backup of sewers or drains, water seepage below the ground, and overflow of a sump.
C)Direct loss by fire, explosion, or theft resulting from water damage.
D)Loss caused by power failure off the residence premises.
E)Loss caused by frost to your plants, if lightning strikes a power station, cutting off electricity that heats your greenhouse.

Accepted Answer

Direct loss by fire, explosion, or theft resulting from water damage is typically covered under a standard homeowners policy, as these are considered sudden and accidental damages.

Question 14

Which of the following is an alleged practice of insurers charging higher premiums and providing less coverage for homeowners insurance in inner cities?
A)Gentrification
B)Redlining
C)Demutualization
D)Blockbusting
E)Affirmative action

Accepted Answer

Redlining is the practice where insurers (and other financial services) discriminate against residents of certain areas, often inner cities, by charging higher premiums or offering less coverage, based on the geographic location rather than the individual risk profile.

Question 15

Identify the condition in a homeowners policy that provides that you cannot bring legal action against the insurer unless you have complied with the policy provisions and the action is started within one year after the occurrence causing loss or damage.
A)Condition A
B)Condition G
C)Condition K
D)Condition O
E)Condition R

Accepted Answer

The answer of Identify the condition in a homeowners policy...

Question 16

This part identifies the specifics that are unique to the insured, such as the covered location, and also lists policy limits, period of coverage, the name of the insurer, and similar information.Identify this part of the homeowners policy.
A)Declarations page
B)Homeowners policy jacket
C)Endorsements
D)Policy form
E)Estoppel

Accepted Answer

The Declarations page of a homeowners policy contains all the specifics unique to the insured, including the covered location, policy limits, period of coverage, the name of the insurer, and similar information. It essentially summarizes the key details of the insurance coverage.

Question 17

This part of the homeowners policy includes general, universal provisions, such as the title of the coverage, and acts to bind together the remaining policy parts.Identify it.
A)Endorsements
B)Estoppel
C)Declarations page
D)Policy form
E)Homeowners policy jacket

Accepted Answer

The homeowners policy jacket includes general, universal provisions and acts to bind together the remaining parts of the policy.

Question 18

In a homeowners policy, identify the coverage that covers only additional expenses.
A)Coverage A-Dwelling
B)Coverage B-Other Structures
C)Coverage C-Personal Property
D)Coverage D-Loss of Use
E)Coverage E-Additional Coverages

Accepted Answer

Coverage D-Loss of Use specifically covers additional living expenses that arise when a home is uninhabitable due to a covered loss, providing financial support for costs beyond normal living expenses.

Question 19

Identify the situation that is covered under 'Coverage C-Personal Property' of a homeowners policy.
A)Hail damaged property inside the premises because the window was kept open.
B)The oil furnace malfunctions and spreads smoke throughout the house.
C)Curtains are damaged by a windstorm while the window is left open.
D)Clothing hung outside on the clothesline needs cleaning because of exposure to emissions from a coal-burning power plant.
E)Loss caused by theft committed by any resident relative and anyone under age twenty-one in the care of one of these resident relations.

Accepted Answer

Coverage C-Personal Property typically covers personal belongings against risks like smoke damage from a malfunctioning furnace, as it is a covered peril under most standard homeowners policies.

Question 20

Identify the correct statement about 'Coverage D-Loss of Use' in a homeowners policy.
A)It covers dwelling on the residence premises plus structures attached to the dwelling.
B)It covers structures on the residence premises that are separated from the dwelling.
C)It covers losses sustained if the premises cannot be lived in as a result of a direct loss to either the premises or neighboring premises.
D)It covers personal property owned by others while it is "on the part of the residence premises occupied by an insured."
E)It covers property of guests and residence employees while at any residence occupied by an insured.

Accepted Answer

Coverage D-Loss of Use specifically pertains to the financial losses incurred when the insured premises cannot be used due to a covered loss. This can include additional living expenses or lost rental income, not the physical structures themselves or personal property.

Quiz 13: Multirisk Management Contracts: Homeowners

Which of the following statements is true about homeowners policy?

According to this doctrine, when a loss is caused simultaneously by two or more perils, and at least one is not excluded, the loss is covered.Identify this doctrine.

Suppose that at the time of a $40,000 loss, your home has a replacement value of $200,000.And suppose you have $140,000 worth of insurance on it.Calculate the amount that you would receive from the insurer.

Which of the following is covered under 'Coverage C-Personal Property' of the homeowners policy?

This part of the homeowners policy is the substance of the contract, spelling out the specific coverage provisions.Identify it.

Which of the following is covered under 'Additional Coverages' of a homeowners policy?

Which of the following is covered under 'Coverage B-Other Structures' of the homeowners policy?

Anything permanently attached to a building is considered to be part of the building.But the phrase "whether or not attached to buildings" makes carpeting, domestic appliances, awnings, outdoor antennas, and outdoor equipment _____ losses.

In a homeowners policy, this coverage applies to personal property owned by others while it is "on the part of the residence premises occupied by an insured" and to property of guests and residence employees while at any residence occupied by an insured.Identify this coverage.

Business pursuits and professional services are excluded in umbrella policies unless there is underlying coverage.

Which of the following is covered under 'Coverage A-Dwelling' of the homeowners policy?

Which of the following situations is covered under a homeowners policy?

Which of the following is an alleged practice of insurers charging higher premiums and providing less coverage for homeowners insurance in inner cities?

Identify the condition in a homeowners policy that provides that you cannot bring legal action against the insurer unless you have complied with the policy provisions and the action is started within one year after the occurrence causing loss or damage.

This part identifies the specifics that are unique to the insured, such as the covered location, and also lists policy limits, period of coverage, the name of the insurer, and similar information.Identify this part of the homeowners policy.

This part of the homeowners policy includes general, universal provisions, such as the title of the coverage, and acts to bind together the remaining policy parts.Identify it.

In a homeowners policy, identify the coverage that covers only additional expenses.

Identify the situation that is covered under 'Coverage C-Personal Property' of a homeowners policy.

Identify the correct statement about 'Coverage D-Loss of Use' in a homeowners policy.