PERSONAL LINES INSURANCE - CHAPTER 4 EXAM

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PERSONAL LINES INSURANCE - CHAPTER 4 EXAM

QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -92 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: The additional coverage Reasonable Repairs pays:

Answer:

the reasonable costs incurred by the insured for necessary measures taken to protect covered property from further damage.

Question 2: Smoke Peril

Answer:

Does not include loss caused by smoke from agricultural smudging or industrial operations.

Question 3: DP-1 Basic Form

Answer:

The MOST BASIC coverage for dwellings.Perils insured against are FIRE, LIGHTNING, and INTERNAL EXPLOSION.

Question 4: Broad Theft Coverage Endorsement (DP 04 72)

Answer:

Because none of the dwelling forms include theft coverage, one of two endorsements must be used if the named insured wishes to have coverage for the peril of theft. The Broad Theft Coverage endorsement may be added to any of the dwelling forms IF the described location is owner occupied. If the dwelling is tenant occupied, the Limited Theft Coverage endorsement must be used.

• Broad Theft Coverage - Provides insurance for the perils of theft, attempted theft, and vandalism or

malicious mischief that results from theft or attempted theft.-No VMM coverage applies if the dwelling was vacant for more than 60 consecutive days immediately before the loss.-On-premises coverage is provided for covered property located at the described location occupied by an insured.-Off-premises coverage is provided when covered property is away from the described location; however, the property must be owned or used by an insured or residence employee.

• Limited Theft Coverage - Provides insurance for the perils of theft, attempted theft, and vandalism or

malicious mischief that results from theft or attempted theft.-No VMM coverage applies if the dwelling was vacant for more than 60 consecutive days immediately before the loss.-On-premises coverage applies when covered property is owned or used by the named insured or a residence employee and is at the described location.

Question 5: Mobile Homes

Answer:

Eligible for Basic Form of Dwelling Policy Coverage under DP-1.ONLY ELIGIBLE if they are permanently affixed to the foundation.

Question 6: Damage by Burglars (DP-2)

Answer:

This does not include theft coverage nor does it apply if the dwelling was vacant 60 or more consecutive days immediately before a loss.***Includes damage to the covered property caused by the burglar, but not theft of property.Question 7: To be eligible for the dwelling property program, dwellings must:

Answer:

be used principally for residential purposes, cannot contain more than 4 dwelling units, and can have no more than 5 roomers or boarders.Question 8: The Worldwide Coverage Other Coverage allows 10% of:

Answer:

the Coverage C limit of insurance to apply to personal property while it is away from the premises.Question 9: The DP-1 Basic Form perils are:

Answer:

fire or lightning and internal explosion.If an additional premium is paid for Extended Coverage (EC), the following perils are also included: windstorm or hail, explosion, riot or civil commotion, aircraft, vehicles, smoke, and volcanic eruption.

The peril of vandalism or malicious mischief (VMM) may also be included with the payment of an additional premium.Question 10: Earth Movement is excluded, including:

Answer:

land shock waves or tremors before, during or after a volcanic eruption; landslide; mudslide or mudflow; subsidence or sinkhole, earth sinking, rising, or shifting.

Question 11: Coverage C - Personal Property

Answer:

-Coverage applies to household and personal property usual to the occupancy as a dwelling if it is owned by the insured or by members of the insured's family who reside with the insured. Coverage only applies while insured property is located at the described location. After a loss and at the insured's request, Coverage C will also apply to personal property of a guest or servant while located on the described location. Personal property of a tenant or boarder is not covered.-Coverage also automatically applies to personal property the insured removes from the location to a newly acquired principal residence for 30 days or until policy expiration, whichever occurs sooner.Otherwise, coverage is not provided for personal property located off the described location.-Property not covered includes: accounts, bank notes, coins and currency; birds, animals, and fish; aircraft and watercraft other than rowboats or canoes; motor vehicles other than those used to service the described location or to assist the handicapped; hovercraft; data, including books of account, drawings, paper records, computers and their equipment; credit cards, funds transfer cards, and other access devices; water or steam; and grave markers.-As a coverage giveback, the insured may use up to 10% of the Coverage C limit of insurance for loss caused by an insured peril to covered property anywhere in the world.

Question 12: Earth Movement Exclusion

Answer:

Earthquake, including land shock waves or tremors before, during or after a volcanic eruption; landslide; mudslide or mudflow; subsidence or sinkhole, earth sinking, rising, or shifting. Coverage is excluded whether the earth movement is caused by human, animal, or natural forces. If a direct loss by fire or explosion ensues from earth movement, it is covered.

Question 13: Neglect Exclusion

Answer:

The insured's neglect to use all reasonable means to save and preserve property at and after the time of a loss.

Question 14: Coverage C applies to:

Answer:

household and personal property usual to the occupancy as a dwelling if it is owned by the insured or by members of the insured's family who reside with the insured.Question 15: The additional coverage Improvements, Alterations, and Additions pays a tenant:

Answer:

up to 10% of the Coverage C limit for improvements made or acquired at the insured's expense to that part of the described location he or she rents.Question 16: Coverage for the peril of collapse is only provided under:

Answer:

the DP-2 and DP-3 forms. Coverage is provided for direct physical loss to covered property involving collapse of a building or any part of a building.Question 17: Sudden and Accidental Tearing Apart, Cracking, Burning, or Bulging (DP-2)

Answer:

Must occur to a steam or hot water heating system, air conditioning system, or automatic fire protective system, or household appliance.

Question 18: Other Coverages

Answer:

-Debris Removal -Improvements, Alterations, and Additions -World-Wide Coverage -Reasonable Repairs -Property Removed -Trees, Shrubs, and Other Plants -Fire Department Service Charge -Collapse -Glass or Safety Glazing Material -Ordinance or Law Question 19: The Broad Theft Coverage endorsement provides:

Answer:

insurance for the perils of theft, attempted theft, and vandalism or malicious mischief that results from theft or attempted theft. It may only be added to policies insuring owner occupied dwellings.