Question 1

Darla purchased an unendorsed Homeowners 3 policy.While the policy was in force,a fire occurred that destroyed a living room set.The living room set cost $4,000 new,but was 25 percent depreciated when the loss occurred.Replacement furniture will cost $4,400.Assuming no deductible,how much will Darla receive from her insurer?

Accepted Answer

A)  $3,000
B)  $3,300
C)  $3,400
D)  $4,400E) A) and B)
F) C) and D)

Question 2

A fire destroyed the home next door to Brad's home.The fire department chief was concerned that the damaged home would collapse on to Brad's home,so he ordered Brad to evacuate his home.Which of the following statements is true concerning the cost of Brad's hotel room while he is complying with the fire chief's order?

Accepted Answer

A)  The cost of the hotel room is not covered,as Brad's home was not directly damaged.
B)  The cost of the hotel room is covered under the "fair rental value" coverage of Part D.
C)  The cost of the hotel room is covered under the "prohibited use" coverage of Part D.
D)  The cost of the hotel room is covered under the dwelling coverage of Part A.E) None of the above
F) All of the above

Question 3

All of the following are duties of the mortgagee under the standard mortgage clause EXCEPT

Accepted Answer

A)  to reimburse the insurer for any loss payments.
B)  to notify the insurer of any change in ownership of the property of which the mortgagee is aware.
C)  to provide a proof of loss form if the insured fails to do so.
D)  to pay the premium if the insured fails to do so.E) A) and C)
F) C) and D)

Question 4

Michelle had four matching end tables in her home.A fire damaged the home,destroying two of the end tables.Michelle's home was covered by an unendorsed Homeowners 3 policy.Which of the following is true with regard to the settlement for the end tables in this case?

Accepted Answer

A)  Loss to a pair or set is excluded under the policy.
B)  The insurer will pay the difference in actual cash value of the property before and after the loss.
C)  The insurer will pay the replacement cost of the loss.
D)  If a partial loss to a pair or set occurs,the insurer is liable for replacement of the entire pair or set.E) None of the above
F) A) and B)

Question 5

All of the following are covered under the dwelling coverage (Coverage A.any structure attached to the dwelling.

Accepted Answer

A)  of the Homeowners 3 policy EXCEPT
B)  the land on which the insured dwelling is located.
C)  materials and supplies intended for alteration or repair of the dwelling.
D)  materials and supplies intended for construction of a detached garage.E) A) and B)
F) A) and C)

Question 6

Which of the following statements about coverage for loss of use (Coverage D.under the Homeowners 3 policy is true?

Accepted Answer

A)  If a covered loss makes the home unfit for living,the insurer pays additional living expenses the insured may incur as a result of the loss.
B)  The duration of payments for additional living expenses is limited to a maximum of 30 days.
C)  There is no coverage for loss of rent if an insured peril makes the part of the premises rented to others uninhabitable.
D)  There is coverage for loss of business income if an insured peril forces a home business to be terminated.E) C) and D)
F) A) and B)

Question 7

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a kitchen with a replacement value of $24,000 but an actual cash value of $18,000 is destroyed in a fire?

Accepted Answer

A)  $18,000
B)  $20,000
C)  $21,000
D)  $24,000E) A) and B)
F) A) and C)

Question 8

Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true?

Accepted Answer

A)  It applies to personal property losses only.
B)  Except for small losses,the insured must repair or replace the damaged property in order to receive full replacement cost.
C)  The insured is required to carry an amount of insurance equal to 100 percent of the replacement value of the insured property.
D)  Loss settlements are equal to 50 percent of the value of the loss if the insured is carrying less than the required amount of insurance.E) A) and D)
F) None of the above

Question 9

Which of the following property is covered under the personal property coverage (Coverage C.of the Homeowners 3 policy?

Accepted Answer

A)  a pet iguana owned by the named insured's spouse
B)  a bicycle owned by a foster child living with the named insured
C)  a motor vehicle owned by the named insured
D)  a stamp collection insured under a separate policyE) None of the above
F) B) and D)

Question 10

Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy?

Accepted Answer

A)  medical payments to others
B)  debris removal
C)  personal liability
D)  intentional property damage caused by an insuredE) None of the above
F) A) and B)

Question 11

Persons insured under Section I of the Homeowners 3 policy include which of the following?
I.A spouse of the named insured if living in the same household
II.The named insured's children who are under age 24 and who are full-time college students

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) A) and B)
F) All of the above

Question 12

Which of the following statements about the appraisal clause in the Homeowners 3 policy is (are) true?
I.It is used to determine a value for personal property when the policy is issued.
II.It is used to help settle disputes over the amount of a loss after a loss has occurred.

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) A) and C)
F) A) and D)

Question 13

Brian purchased an unendorsed Homeowners 3 policy.Under the policy,Brian's detached garage is also covered.Which of the following statements regarding coverage on the garage is true?

Accepted Answer

A)  The garage is covered on a named-perils basis.
B)  Any losses to the garage are settled on an actual cash value basis.
C)  The cost of removing debris is included in the policy limit on the garage,but if the damage and cost of removing debris exceed the limit,an additional five percent of the policy limit is available.
D)  The garage is covered under the dwelling coverage,Part A.E) None of the above
F) A) and C)

Question 14

Which of the following statements is (are) true regarding renters insurance?
I.Renters insurance is needed if you rent a house,but is not needed if you rent an apartment.
II.The ISO renter's policy provides open perils ("all-risks") coverage on the insured's personal property.

Accepted Answer

A)  I only
B)  II only
C)  both I and II
D)  neither I nor IIE) B) and D)
F) B) and C)

Question 15

Mike and Susan built their "dream home." They insured their home for its full replacement cost.They also added an endorsement that will pay up to an additional 20 percent of the policy limit in case the cost of rebuilding the home after a loss is greater than the policy limit.The basis under which Mike and Susan insured their home is called

Accepted Answer

A)  actual cash value.
B)  valued policy coverage.
C)  extended replacement cost.
D)  guaranteed replacement cost.E) All of the above
F) B) and C)

Question 16

Under the Homeowners 3 policy,all of the following are options of the insurer for settling claims EXCEPT

Accepted Answer

A)  paying the claim in cash.
B)  replacing the property.
C)  repairing the property.
D)  paying the claim with insurance company stock.E) A) and D)
F) C) and D)

Question 17

Which of the following statements about covered perils under the personal property coverage (Coverage C.of the Homeowners 3 policy is true?

Accepted Answer

A)  Theft losses to boats and watercraft are covered only if they occur at the insured's residence.
B)  Damage from an explosion is covered only if the explosion is the result of fire or lightning.
C)  Property damage from vehicles is covered only if it is caused by the insured.
D)  Smoke damage is covered only if it arises from agricultural or industrial operations.E) None of the above
F) All of the above

Question 18

Shauna purchased a condominium unit.Which homeowners policy is specially designed for condominium unit owners?

Accepted Answer

A)  HO-2
B)  HO-3
C)  HO-4
D)  HO-6E) C) and D)
F) All of the above

Question 19

Which of the following types of water damage is covered under an unendorsed Homeowners 3 policy?

Accepted Answer

A)  damage from flood
B)  damage from water backing up through a drain
C)  damage from water below the surface of the ground that seeps into a basement
D)  damage from water that overflows from a malfunctioning washing machineE) B) and C)
F) A) and D)

Question 20

Which of the following is a covered peril under the personal property coverage (Coverage C.of an unendorsed Homeowners 3 policy?

Accepted Answer

A)  earthquake
B)  nuclear radiation
C)  windstorm
D)  floodE) A) and D)
F) B) and C)

Exam 20: Homeowners Insurance,section I

Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy?

Correct Answer
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Which of the following types of water damage is covered under an unendorsed Homeowners 3 policy?

Correct Answer
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Michelle had four matching end tables in her home.A fire damaged the home,destroying two of the end tables.Michelle's home was covered by an unendorsed Homeowners 3 policy.Which of the following is true with regard to the settlement for the end tables in this case?

Correct Answer
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Which of the following statements is (are) true regarding renters insurance? I.Renters insurance is needed if you rent a house,but is not needed if you rent an apartment. II.The ISO renter's policy provides open perils ("all-risks") coverage on the insured's personal property.

Correct Answer
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Which of the following statements about coverage for loss of use (Coverage D.under the Homeowners 3 policy is true?

Correct Answer
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Persons insured under Section I of the Homeowners 3 policy include which of the following? I.A spouse of the named insured if living in the same household II.The named insured's children who are under age 24 and who are full-time college students

Correct Answer
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All of the following are covered under the dwelling coverage (Coverage A.any structure attached to the dwelling.

Correct Answer
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Which of the following property is covered under the personal property coverage (Coverage C.of the Homeowners 3 policy?

Correct Answer
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Which of the following statements about the appraisal clause in the Homeowners 3 policy is (are) true? I.It is used to determine a value for personal property when the policy is issued. II.It is used to help settle disputes over the amount of a loss after a loss has occurred.

Correct Answer
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Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true?

Correct Answer
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Correct Answer
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Brian purchased an unendorsed Homeowners 3 policy.Under the policy,Brian's detached garage is also covered.Which of the following statements regarding coverage on the garage is true?

Correct Answer
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Which of the following is a covered peril under the personal property coverage (Coverage C.of an unendorsed Homeowners 3 policy?

Correct Answer
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All of the following are duties of the mortgagee under the standard mortgage clause EXCEPT

Correct Answer
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Under the Homeowners 3 policy,all of the following are options of the insurer for settling claims EXCEPT

Correct Answer
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Which of the following statements about covered perils under the personal property coverage (Coverage C.of the Homeowners 3 policy is true?

Correct Answer
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Shauna purchased a condominium unit.Which homeowners policy is specially designed for condominium unit owners?

Correct Answer
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David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a kitchen with a replacement value of $24,000 but an actual cash value of $18,000 is destroyed in a fire?

Correct Answer
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Exam 20: Homeowners Insurance,section I

Which of the following is an additional coverage provided under Section I of the Homeowners 3 policy?

Correct AnswerverifiedShow Answer

Which of the following types of water damage is covered under an unendorsed Homeowners 3 policy?

Correct AnswerverifiedShow Answer

Michelle had four matching end tables in her home.A fire damaged the home,destroying two of the end tables.Michelle's home was covered by an unendorsed Homeowners 3 policy.Which of the following is true with regard to the settlement for the end tables in this case?

Correct AnswerverifiedShow Answer

Which of the following statements is (are) true regarding renters insurance? I.Renters insurance is needed if you rent a house,but is not needed if you rent an apartment. II.The ISO renter's policy provides open perils ("all-risks") coverage on the insured's personal property.

Correct AnswerverifiedShow Answer

Which of the following statements about coverage for loss of use (Coverage D.under the Homeowners 3 policy is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Persons insured under Section I of the Homeowners 3 policy include which of the following? I.A spouse of the named insured if living in the same household II.The named insured's children who are under age 24 and who are full-time college students

Correct AnswerverifiedShow Answer

All of the following are covered under the dwelling coverage (Coverage A.any structure attached to the dwelling.

Correct AnswerverifiedShow Answer

Which of the following property is covered under the personal property coverage (Coverage C.of the Homeowners 3 policy?

Correct AnswerverifiedShow Answer

Which of the following statements about the appraisal clause in the Homeowners 3 policy is (are) true? I.It is used to determine a value for personal property when the policy is issued. II.It is used to help settle disputes over the amount of a loss after a loss has occurred.

Correct AnswerverifiedShow Answer

Which of the following statements about the replacement cost provision of the Homeowners 3 policy is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Brian purchased an unendorsed Homeowners 3 policy.Under the policy,Brian's detached garage is also covered.Which of the following statements regarding coverage on the garage is true?

Correct AnswerverifiedShow Answer

Which of the following is a covered peril under the personal property coverage (Coverage C.of an unendorsed Homeowners 3 policy?

Correct AnswerverifiedShow Answer

All of the following are duties of the mortgagee under the standard mortgage clause EXCEPT

Correct AnswerverifiedShow Answer

Under the Homeowners 3 policy,all of the following are options of the insurer for settling claims EXCEPT

Correct AnswerverifiedShow Answer

Which of the following statements about covered perils under the personal property coverage (Coverage C.of the Homeowners 3 policy is true?

Correct AnswerverifiedShow Answer

Shauna purchased a condominium unit.Which homeowners policy is specially designed for condominium unit owners?

Correct AnswerverifiedShow Answer

David has a Homeowners 3 policy that provides $280,000 of insurance on his dwelling,which has a current replacement value of $400,000.Ignoring any deductible,how much will David collect if a kitchen with a replacement value of $24,000 but an actual cash value of $18,000 is destroyed in a fire?

Correct AnswerverifiedShow Answer

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