FIN 428 Week 5 Quiz

FIN 428 Week 5 Quiz

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 FIN 428 Week 5 Quiz




Correct answerquestion1


The definition of personal property in the Homeowners forms excludes

money and securities.

all motorized vehicles.


watercraft while away from the premises.




Correct answerquestion2


The medical payments coverage of the Homeowners policy agrees to pay medical expenses resulting from bodily injury to

residents of the household.

only the policy holder.

guests, regardless of the insured’s liability or lack thereof.

persons other than members of the insured’s household who reside on the premises.




Correct answerquestion3


The Homeowners Special Form (HO-3) provides

open-peril coverage on both the dwelling and personal property.

named peril coverage on both the dwelling and personal property.

open-peril coverage on the dwelling and named peril coverage on personal property.

open-peril coverage on personal property, and named peril coverage on the dwelling.




Correct answerquestion4


In most states, Uninsured Motorists coverage provides coverage

for both bodily injury and property damage caused by an uninsured motorist.

is automatically included as a part of Medical Payments coverage.

only for bodily injury caused by an uninsured motorist.

only for property damage caused by an uninsured motorist.




Correct answerquestion5


Mrs. Jones has a Homeowners policy.  Her dog bites the mailman while he is still about three blocks away from the premises.

Medical payments coverage applies, but not the liability coverage.

The policy will pay only if Jones is found legally liable.

The policy will pay medical costs under the medical payments coverage and will also pay under liability coverage if Jones is held legally liable.

There is no coverage under the policy.




Correct answerquestion6


The basic purpose of the coinsurance provision is

to reduce total losses by requiring the insured to bear a part of every loss.

to induce the insured to insure a high percentage of the value of his property.

to require the insured to purchase all of his insurance from one company.

to reduce the cost of insurance by permitting insurers to collect from the negligent party causing the loss.




Correct answerquestion7


Which of the following losses would be paid under the collision coverage of the Personal Auto Policy?

The car collides with a deer

Bricks fall from a truck the insured is following and hit the car

The insured misjudges a curve and rolls the car

The car is stolen and the thief collides with a bridge




Correct answerquestion8


The Damage to Property of Others coverage under Section II of the Homeowners policies provides limited coverage for

damage to the insureds own property.

damage to property that is owned by members of the insureds household.

intentional damage by some insureds.

damage arising out of motor vehicles.




Correct answerquestion9


One coverage automatically included in the Tenants Homeowners form (HO-4) that is excluded from the other forms is

the Other Structures extension.

loss assessment coverage.

coverage for credit card forgery.

building additions and alterations additional coverage.




Correct answerquestion10


The definition of personal property in the Homeowners forms includes

pets belonging to the insured.

motorized vehicles as long as they are not licensed.

borrowed property which is being used by an insured.

property belonging to roomers and boarders.




Correct answerquestion11


The type of property insurance coverage which provides a definite amount for each item insured is

unscheduled coverage.

specific or scheduled coverage.

blanket coverage.

reporting coverage.




Correct answerquestion12


The definition of dwelling in the Homeowners forms includes

carpets and drapes.

additions in contact with the dwelling.

window air-conditioning units.

any real property fixtures attached to the property.




Correct answerquestion13


Under the Personal Auto Policy, if the insured has two autos insured, one with collision and one without collision, an additionally acquired auto

is not covered for collision until it is reported to the insurer.

is covered for collision until the end of the policy period.

is covered for collision for 4 days, with a $500 deductible.

is covered for collision for 14 days.




Correct answerquestion14


Coverage on money under the Homeowners forms

is covered on the same basis as any other personal property.

applies only while on the insured premises.

is provided for the same perils as other property, but subject to a $200 limit which may be increased.

is limited to $100 and excludes loss by theft.




Correct answerquestion15


The Personal Auto Policy provides coverage under the liability section for

pleasure use of nonowned motorcycles by the named insured.

the owner of a nonowned auto being used by the named insured.

nonresidents operating the owned auto with permission.

any automobile being operated by the named insured.




Correct answerquestion16


An individual might purchase a monoline fire dwelling policy rather than a Homeowners form on a dwelling because

the dwelling is not owner occupied.

the monoline dwelling form will be substantially cheaper.

he or she does not need the liability coverage of the Homeowners.

the Homeowners form is not available in the state in question.




Correct answerquestion17


The definition of flood in the Federal Flood Insurance policy

specifically excludes mudslides.

includes overflow of inland or tidal waters and rapid accumulation of surface water from other sources.

limits the peril to the overflow of bodies of water.

includes water from sources on the insured’s own property.




Correct answerquestion18


The replacement cost coverage provision of the Homeowners forms applies

to the dwelling, other structures, and personal property.

to the dwelling and personal property only.

to the dwelling and other structures only.

only to the dwelling.




Correct answerquestion19


When a motorcycle is insured under the Miscellaneous Type Vehicles Endorsement

coverage applies to the named insured for the use of any motorcycle.

coverage applies to the named insured, resident relatives and permissive users for the insured vehicle only.

coverage applies to the named insured only and only for the insured vehicle.

coverage applies to the named insured and resident relatives for the use of any motorcycle.




Correct answerquestion20


In purchasing automobile insurance, which of the following coverages should be considered essential?

Uninsured motorist coverage

Liability coverage

Medical payments coverage

They are all essential coverages




Correct answerquestion21


The definition of uninsured motorist under the Uninsured Motorist coverage of the Personal Auto Policy excludes

an automobile being operated without liability insurance.

a hit-and-run driver.


an automobile insured by a company that becomes insolvent.




Correct answerquestion22


Mrs. Jones has a Homeowners Broad Form (HO-2).  The bathtub overflows and causes $800 in damage to the kitchen ceiling.

The loss is covered under this form, but would not have been covered under the Homeowners Modified Form (HO-8).

Loss of this nature are inevitable and are therefore excluded.

The loss is covered under this form and would also have been covered under the Homeowners Basic Form (HO-8).

The loss is not covered under this form but would have been covered under the Homeowners Special Form (HO-3).




Correct answerquestion23


Mr. Jones owns a restaurant building valued at $100,000.  He carries $50,000 coverage with an 80% coinsurance clause.  He has a fire with damage to the building of $40,000.  How much will he collect for the loss?


Nothing, since he has violated the coinsurance clause






Correct answerquestion24


Under business interruption coverage, payment is made for the period

the period in which operations could be reasonably be resumed.

specified in the policy declarations.

the period from the date of loss to expiration of the policy.

that the business is actually interrupted.




Correct answerquestion25


Coverage A of the Homeowners Policy would apply to

the insured’s summer home not listed in the declarations.

a shed used to store tools and equipment.

lumber to be used to in remodeling the insured’s basement.

an unattached garage rented for private garage purposes.




Correct answerquestion26


The liability coverage of the Homeowners policy coverage excludes

liability assumed under contract.

business liability exposures of the insured.

a child’s vicarious liability.

a parent’s vicarious liability.




Correct answerquestion27


Mr. Jones is insured under a Homeowners Broad Form (HO-2).  A sudden surge of power from the city’s power plant burns out the motor on his freezer and the meat in the freezer spoils before the loss is discovered.

Loss of the meat is covered, but not the damage to the motor.

Neither the meat nor the motor is covered.

Both the meat and the motor are covered.

Damage to the motor is covered, but not the loss of the meat.




Correct answerquestion28


When purchasing insurance on a dwelling

Homeowners Form 8 is preferable to Homeowners Form 5.

Homeowners Form 3 is preferable to Homeowners Form 2.

Homeowners Form 6 is preferable to Homeowners Form 4.

Homeowners Forms are equally preferable to one another.




Correct answerquestion29


The Personal Auto Policy provides coverage under the liability section for

the employer of the named insured if such employer is sued because of the operation of the covered auto by an insured person.

nonowned snowmobiles, all-terrain vehicles, and motorcycles.

all automobiles owned by the named insured.

anyone operating the owned automobile.




Correct answerquestion30


To which of the following persons are medical payments excluded from coverage in a Personal Auto Policy?

Resident relatives struck by an automobile while pedestrians

The named insured while occupying a nonowned automobile

Persons struck by the owned automobile

Nonresidents while occupying the owned automobile




Correct answerquestion31


John Jones and his son Junior are insured under separate Personal Auto Policies, covering their respective autos, each as named insured.  Jones is using Junior’s car while his own auto is in the garage for repairs.  In case of accident

only Junior’s policy will apply.

both policies will apply on a pro-rata basis.

Junior’s policy will be primary and the father’s policy will apply on an excess basis.

only the father’s policy will apply.




Correct answerquestion32


The ISO Commercial Property Coverage Forms

cover neither property and liability exposures.

cover both property and liability exposures.

automatically include coverage for business interruption losses.

are designed for different property types and to provide protection against different types of loss.




Correct answerquestion33


In which of the following situations would the Personal Auto Policy exclude coverage under the liability section?

a resident relative borrows a truck for pleasure use.

the named insured borrows a motorhome for a vacation.

the named insured borrows a truck for business use.

a nonresident borrows the covered auto for business use.




Correct answerquestion34


Jones built a home in 1955, which now has a replacement cost value of $100,000 and an actual cash value of $60,000.  He has it insured for $60,000 under a Homeowners Broad Form (HO-2).  The dwelling’s roof is damaged by a windstorm.  It is determined that the roof is 50% depreciated and that the cost of replacing the roof will be $8,000.  He will collect

$4,000 minus the deductible.

$6,000 minus the deductible.

nothing, since he has violated the replacement cost provision.

$8,000 minus the deductible.




Correct answerquestion35


Under the Personal Auto Policy, coverage for liability arising out of the use of a nonowned auto

is not provided because of the care, custody, and control exclusion.

is primary with respect to coverage on the nonowned auto.

is excess with respect to coverage on the nonowned auto.

prorates with the coverage on the nonowned auto.




Correct answerquestion36


Mr. Jones is insured under a Homeowners Tenants Form (HO-4).  While he is on vacation, burglars steal his television, $300 in cash, and a $12,000 Rolex watch.

A significant part of the loss will not be covered.

The entire loss is covered, subject to the deductible.

Only the television and the wristwatch are covered.

Only the television is covered.




Correct answerquestion37


Personal Injury liability coverage

is available to business firms but not to individuals.

includes certain intentional torts such as libel, slander, and defamation and is available by endorsement to the Homeowners.

is essentially the same thing as bodily injury coverage.

is automatically included in the Homeowners policy.




Correct answerquestion38


In most states, Underinsured Motorists coverage

is usually written with limits equal to the state???s minimum financial responsibility.

is mutually exclusive with Uninsured Motorists coverage.

essentially duplicates coverage of Uninsured Motorists coverage.

is a statutory coverage required of all drivers.




Correct answerquestion39


Which of the following losses would be payable under the comprehensive coverage of the Personal Auto Policy?

Flood damage


Losses to vehicles with less than four wheels

Reimbursement to individuals not included in the named driver exclusion provision




Correct answerquestion40


The Comprehensive Homeowners Form (HO-5) provides

a higher limit on money and securities than other forms.

open-peril coverage on personal property.

a broader definition of personal property than other forms.

open-peril coverage on both the dwelling and contents.




Correct answerquestion41


The principal difference among the various Homeowners forms is

the definition of personal property in each form.

the property covered and perils insured against in Section I.

with respect to the liability coverage under Section II.

the definition of the dwelling in each form.




Correct answerquestion42


Under a surety bond, the third party to whom the bonding company is answerable for the acts of the person bonded is called the








Correct answerquestion43


The Modified Homeowners Form (HO-8) differs from the other forms with respect to

the Other Structures extension.

the requirements for the notarization of the form.

the fair market value condition.

the underwriting requirements for eligibility.




Correct answerquestion44


Business interruption insurance provides coverage for

loss of profits resulting from an interruption at another business.

the loss of net profit and expenses that continue during a period of interruption.

damage to stock or merchandise.

loss of profits on finished goods that are damaged or destroyed.




Correct answerquestion45


When the Homeowners policy is used to insure a mobile home

contents coverage does not apply.

the scope of the perils is greatly reduced.

Coverage A is combined with Coverage C.

the definition of Coverage A, Buildings, is modified to include attached fuel tanks and built in furnishings.

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