Property & Casualty InsuranceCHAPTER 5-Homeowners

PREPARED BY THE FOLLOWING TECHNOLOGY CENTER CSR ACADEMIES:

CADDO-KIOWA

CANADIAN VALLEY

GORDON COOPER

INDIAN CAPITAL-TAHLEQUAH

SOUTHWEST

WES WATKINS

2

SWTC

Homeowners policies may only be issued to cover private residential purpose, and which contains no more than three family living units and no more than three boarders or roomers per family.

A) TRUE

B) FALSE

3

Caddo-Kiowa Tech

The declarations page of a homeowners policy contains information about the risk included:

a) Identity of the named insured

b) Location of the dwelling

c) The policy deductible

d) All the above.

4

Wes Watkins Tech

If firefighters are called to save or protect covered property from a peril insured against, all forms provided up to $500 of coverage for fire department service charges.

a) True

b) False

5

Gordon Cooper

Not at anytime is coverage for specific items subject to special limitations.

A) True

B) False

Gordon Cooper

6

Canadian Valley

Personal Property replacement cost is provided by:

A) An endorsement on all HO policies

B) Is included as a standard provision in all HO policies

C) Is an endorsement on HO-2 and HO-3

D) All of the above.

7

SWTC

A homeowners policy may not be issued to cover any property to which farm forms or farm rates apply, or property situated on any premises used for farming purposes.

a) True

b) False

8

Caddo-Kiowa

Maximum coverage for any one tree, plant, or shrub is $250 on what form?

a) HO-3

b) HO-6

c) HO-8

d) HO-3 + HO-8

9

Wes Watkins Tech

Earthquake coverage is an added endorsement and an additional charge.

A) True

B) False

10

Gordon Cooper

Property damage means physical injury to or loss of use of intangible property.

A) True

B) False

11

Indian Capital

The fewer number of categories of property subject to sub-limits does not mean that limited coverage is more restrictive than broad theft coverage.

A) True

B) False

12

SWTC

The liberalization clause follows dwelling forms during the policy period or within 30 days prior to inception are automatically applied.

A) True

B) False

13

Canadian Valley

What is the age of a covered family member in the same household as the insured for liability insurance?

A) Under 21 C) Over 21

B) Under 16 D) Under 18

14

Caddo-Kiowa Tech

Homeowners policies provide _______ major property coverages?

A) 6

B) 2

C) 4

D) 5

15

Wes Watkins Tech

In recent years, homeowners policies have been subject to a number of revisions. In most of the states in this country we use “Homeowner” 1984 policies.

A) True

B) False

16

Gordon Cooper The following types of property & losses are

not covered by any homeowners policy: land, structures used for business, loss caused by the neglect of the insured, & losses caused by off-premises power failure.

A) TrueB) False

17

Indian Capital

Vehicle damage to a fence, driveway, or walk caused by a resident is excluded under the HO-2 policy form.

A) True

B) False

18

SWTC

Homeowners forms exclude loss caused by earthquake, but earthquake coverage may not be added to the endorsement.

A) True

B) False

19

Caddo- Kiowa Tech

HO-1 covers ______ perils.

A) 10

B) 9

C) 7

D) 6

20

Canadian Valley

Medical payments to others cover necessary medical expenses incurred within how many years of an accident causing bodily injury?

A) 2 years C) 1 year

B) 5 years D) 3 years

21

Wes Watkins Tech

Claim expense coverage includes the costs of defending a claim and court costs charged against an insured in any suit the insurer defends.

A) True

B) False

22

Caddo-Kiowa Tech

If Roy rented his home, what kind of homeowners insurance can he get?

Short Answer

23

Gordon Cooper

All homeowners policies provide identical liability coverage including coverage E & coverage F.

A) True

B) False

24

Indian Capital

An insured can purchase an inflation guard endorsement which will automatically raise the limits for which coverages at periodic intervals?

A) Coverage B

B) Coverage C & D

C) Coverage A

D) All of the above

25

SWTC

Which of the following is not one of the 4 major property coverages which are called “additional coverages” on the forms?

A) Coverage A-DwellingB) Coverage B-other structuresC) Coverage C-personal liabilityD) Coverage D-Loss of use

26

Caddo-Kiowa Tech

_______ is the only homeowners form insuring personal property items against loss by what is known as “mysterious” disappearance.

A) HO-3 C) HO-6B) HO-4 D) HO-15

27

Wes Watkins Tech

If the named insured or the spouse dies, coverage does not continue for the legal representative.

A) True

B) False

28

Gordon CooperWhen a peril insured against causes a loss, all

forms cover cost for _____ made to protect covered property for further damage.

A) debris removalB) reasonable repairsC) property of othersD) none of the above

29

Canadian Valley

The liberalization clause follows dwelling forms-changes during the policy period or within how many days prior to the inception are automatically applied?

A) 45 days C) 60 days

B) 30 days D) 10 days

30

Indian Capital

Maximum coverage for anyone tree, plant or shrub is:

A) $100

B) $250

C) $500

D) None of the above

31

SWTC

Which homeowners edition was introduced in six states on a trial basis to determine both public and industry reaction to a significant modernization of the 1976 policies?

A) 1981 C) 1982B) 1984 D) 1983

32

Caddo-Kiowa Tech

How does HO-8 differ from basic coverage?

A) ACV settlement on the dwelling

B) Miscellaneous coverage restrictions

C) Elimination of optional property coverages

D) All of the above

33

Wes Watkins Tech

A homeowners policy has two major coverage sections, a property section and a liability section.

A) True

B) False

34

Gordon Cooper

Unlike dwelling forms, all homeowners forms include coverage for _________.

A) loss caused by aggravated earth movement

B) theft of person property

C) property in an apartment rented by others

D) none of the above

35

Indian Capital

Which policy form does not give the insured the option of having the personal property of guests or residence employees covered by the policy?

A) HO-8 C) HO-6

B) HO-4 D) HO-1

36

SWTC

How many days of notice must the insurer give the insured if the policy is to be cancelled during the first 60 days of coverage, or if it is cancelled at any time for non-payment of premium?

A) 5 days C) 7 daysB) 10 days D) 14 days

37

Canadian Valley

Liability insurance is provided for the insured’s resident only. It excludes any person or organization legally responsible.

A) True

B) False

38

Caddo-Kiowa Tech

How many liability coverages are on homeowners policies?

A) 2 C) 4

B) 3 D) 5

39

Wes Watkins Tech

Residence premises means:

A) Insured location

B) Dwelling

C) Unit owners

D) Landlord’s furnishings

40

Gordon Cooper_________ covered by homeowners policies are

similar to those covered by dwelling forms, and the terms “basic,” “broad,” and “special” forms have a similar meaning.

A) Falling objects of a buildings interior

B) Perils

C) Both A & B

D) None of the above

41

Indian Capital

Which of the following articles of personal property does not have a special limit under Coverage C of the homeowner’s policy?

A) Guns C) Golfer’s Equipment

B) Furs D) Water Craft

42

SWTC Sam asks Thomason Pools to put a

swimming pool in his well manicured backyard. Are the trees and shrubs covered under the Homeowners Policy? (there are 6 dozen trees and 4 dozen bushes and shrubs) Does debris removal coverage apply?

A) Yes B) No

43

Caddo-Kiowa Tech

Stamps have $1,000 of coverage on broad forms.

A) True

B) False

44

Wes Watkins Tech

Perils covered—Basic form does not cover

A) Explosion

B) Smoke damage

C) Aircraft

D) Collapse

45

Canadian Valley

Personal Property coverage is included on all forms.

A) True

B) False

46

Gordon Cooper

All of the following are per occurrence limits for coverage C limits except:

A) $250 C) $2,500

B) $1,000 D) $1,500

47

Indian Capital

The full limit applies to personal property owned or used by any insured while it is anywhere in the world.

A) True

B) False

48

SWTC

What 2 types of construction apply to earthquake rates?

A) Masonry, frame

B) Stucco, shingles

C) Wood, adobe

D) Toothpicks, splinters

49

Caddo-Kiowa Tech

On homeowners forms the full amount of Coverage C applies to property owned or used by any insured while it is anywhere in the world.

A) True

B) False

50

Wes Watkins Tech

Perils covered—HO3 is what type of form?

A) Special

B) Broad

C) Basic

D) None of the above

51

Gordon Cooper

If damage to the property of other is caused by an insured, the policies provide replacement cost coverage of up to?

A) $1,000 per occurrence B) $500 per occurrenceC) $1,500 per occurrenceD) $1,200 per occurrence

52

Indian Capital

HO-4 does not provide dwelling coverage because the form was designed for tenants.

A) True

B) False

53

Canadian Valley

Up to $1,000 of coverage is provided by all forms for the named insureds share by any loss assessment charged by a corporation or association of property owners.

A) True

B) False

54

SWTC

A personal property floater covers property:

A) Worldwide

B) Nationwide

C) Statewide

D) Locally

55

Wes Watkins Tech

John and Sue take a two-week vacation on November 1. The weather was 85 degrees when they left. When they returned an early winter storm had caused the water pipes in their home to freeze and burst. Water had ruined their carpet, furnishings, woodwork, and plaster walls. What actions determine whether John and Sue are covered under their HO-3?

Short answer

56

Caddo-Kiowa Tech

HO-2 covers the same perils as HO-1, but adds 10 additional perils.

A) True

B) False

57

Caddo-Kiowa Tech

HO-8 is a modified version of HO-1.

A) True

B) False

58

Canadian Valley

Coverage is not provided for breakage of glass or safety glazing material which is part of a building, storm door, or storm window.

A) True

B) False

59

Wes Watkins Tech

In what year did ISO introduce new homeowners policies once again?

A) 1995

B) 1991

C) 1998

D) 2000

60

Caddo-Kiowa Tech

The definition of insured location is identical on all homeowners forms.

A) True

B) False

61

Indian Capital

Which homeowners form does not provide any major forms of property insurance for the residence?

A) HO-1 HO-3

B) HO-2

C) HO-5 HO-15

D) HO-4 HO-6

62

Gordon Cooper

Lisa runs a day care in her name and in her home. She has an assistant named Peggy. They have seven children they take care of. Lisa found a handprint on one of the children’s leg, and finds out Peggy has been spanking the child. Would it be covered under her policy?

Short Answer

63

Wes Watkins TechMobile homes may be covered when the MH-200 is

attached to the policy. To be eligible a mobile home must meet what requirements?

A) Occupied 3 months/year, and measure 12’ by 30’.

B) Occupied 6 months /year, and measure 15’ by 40’.

C) Occupied 12 months/year, and measure 13’ by 25’.

D) Occupied 12 months/year, and measure at least 10’ by 40’.

64

Canadian Valley

Which homeowners policies covers mobile homes when the endorsement MH-2000 is attached?

A) HO-3 or HO-15 C) HO-2 or HO-3

B) HO-4 or HO-6 D) HO-1 or HO-2

65

Indian CapitalFor condominium unit owners, an HO-6

provides $1,000 of coverage, at no charge, for owned structures at the residence premises which are not part of the residence.

A) True

B) False

66

Wes Watkins Tech

Coverage for building additions and alterations is found only on what form?

A) HO-4

B) HO-1

C) HO-6

D) Basic form