AINS 22 QUIZ –(Quizlet)

Which one of the following reduced intensive development in repeatedly flooded areas to help restore the natural functions of floodplains, such as wildlife
biodiversity and wetlands that absorb flood waters?
A. Emergency Program
B. National Flood Insurance Act of 1968
C. Regular Program
D. Flood Insurance Reform Act of 2004 D. Flood Insurance Reform Act of 2004

The HO-5 policy is designed to meet the risk management needs of

A. Owner-occupants of dwellings who may not meet insurer underwriting standards required for other policy forms.
B. Owner-occupants of dwellings who would like the broadest coverage available among ISO's forms for their property.
C. Tenants of apartments or dwellings.
D. Owners of condominium units.

The HO-8 policy contains a special building valuation clause that specifies that damage will be covered on a
A. Functional replacement cost basis.
B. Historical cost basis.
C. Actual cash value basis.
D. Replacement cost basis.

A young working couple is purchasing their first home. Facing budget pressures, they are content to accept named perils coverage on the dwelling in
exchange for a lower premium. Assuming there are no mortgage restrictions, which one of the following ISO policy forms would be most appropriate for this
couple?
A. HO-5—Comprehensive Form
B. HO-6—Unit-Owners Form
C. HO-2—Broad Form
D. HO-4—Contents Broad Form

The HO-3 policy provides

A. Open perils coverage on personal property.
B. Named perils coverage on other structures.
C. Named perils coverage on dwellings.
D. Open perils coverage on dwellings.

Jim and Sue, a young married couple, are under contract to purchase a condominium unit. Which one of the following ISO policy forms is best designed to
meet their homeowners insurance needs?
A. HO-2—Broad Form
B. HO-4—Contents Broad Form
C. HO-6—Unit-Owners Form
D. HO-8—Modified Coverage Form

In an HO-3 policy, the definitions

A. Might be different from dictionary definitions.
B. Are the same as dictionary definitions.
C. Must comply with applicable provisions.
D. Have no effect on the coverage provided.

The insuring agreement of a homeowners policy specifies that

A. Five property coverages are provided by the policy.
B. Endorsements are available to modify the contract.
C. Defined words have special meanings when they are used within the policy.
D. The insurer will provide coverage and the insured will pay the premium and comply with the policy conditions.

In homeowners policy rating, the base premium is based on several factors. Which one of the following is one of these factors?
A. Public protection class
B. Claim history
C. Insurance score
D. Package policy credits

The Millers insure their dwelling under an HO-3 policy. They recently purchased a shed for their back yard where they will store tools, bicycles, and other
sporting equipment. Which one of the following property coverages under Section I of the HO-3 policy would apply to the shed?
A. Coverage A—Dwelling
B. Additional Coverage
C. Coverage B—Other Structures
D. Coverage C—Personal Property

An insurer typically charges a premium for coverage that is based on a base premium and base premium adjustments. Which one of the following correctly
describes a factor that assists in setting the base premium?
A. Construction factors affect base premium adjustments, but not the actual base premium.
B. An individual's insurance score may affect the package policy credits available to the insured.
C. Different geographic divisions may have different basic premiums.
D. The coverage amount affects base premium adjustments, but not the actual base premium. C. Different geographic divisions may have different basic
premiums.

The Property Removed coverage of Section I of the HO-3 policy encourages the insured to save, by removing as much property as possible when it is
endangered, due to a covered peril such as a forest fire. This Additional Coverage provides
A. A separate deductible for the removed property while it is at a temporary location.
B. An extended limit for the personal property after it has been removed
C. Coverage limited to the peril threatening loss during and while removed for protection.
AINS 22 QUIZ –(Quizlet)
D. Coverage for all risk of direct loss while removed or being removed.

Which one of the following Additional Coverages under the HO-3 policy provides defense coverage for the insured if needed?
A. Ordinance or Law
B. Credit Card, Electronic Fund Transfer Card or Access Device, Forgery, and Counterfeit Money
C. Loss Assessment
D. Fire Department Service Charge

Some types of personal property are excluded under Coverage C of the HO-3 policy. Which one of the following is excluded from this personal property
coverage?
Select one:
A. The insured's clothing while on a cruise ship
B. Birds owned by the named insured
C. A laptop borrowed from a neighbor
D. A daughter's property in a college dormitory

Under Section I—Additional Coverages of an HO-3 policy, which one of the following statements is true when an insurer reimburses an insured for
reasonable costs to protect a property from further damage when it is damaged by a covered cause of loss?
A. The coverage for expenses incurred does not increase the limit of coverage that applies to the covered property.
B. The deductible stated on the declarations page does not apply.
C. The costs of materials would be paid as part of the loss under Coverage C.
D. The coverage for expenses incurred increases the limit of coverage that applies to the covered property.

Personal property that is owned or used by persons who qualify as insureds is covered property under Coverage C of the HO-3 policy. The standard Coverage
C limit for personal property
A. At a secondary residence rented at the shore is 50% of the Coverage C limit.
B. Usually located at the insured premises can be reduced down to 10% of the Coverage A—Dwelling limit.
C. Located elsewhere while home renovations are being done is 10% of the Coverage C limit.
D. Usually located at the insured premises is 50% of the Coverage A—Dwelling limit.

A windstorm causes a tree on the insured's premises to fall, breaking the electrical lines that enter the house. The loss of electrical power causes the food in
the freezer to thaw and spoil. This loss is:
A. Covered because damage resulting from loss of electrical power is covered.
B. Covered because it was caused by a covered peril on the residence premises.
C. Not covered because damage resulting from loss of electrical power is excluded.
D. Not covered because food is not considered personal property.

Coverages A and B of the unendorsed HO-3 policy insure against direct physical loss to property described followed by a list of excluded perils. Which one of
the following is true regarding the excluded perils that apply to Coverage A and B?
A. Freezing damage to external property is excluded unless reasonable precautions are taken.
B. Freezing of plumbing and heating systems is excluded at all times unless endorsed.
C. Vandalism damage is excluded if it occurs anytime the property is not occupied.
D. Collapse is excluded as a cause of loss but is covered if it results from other causes.

The HO-3 policy Section I ordinance or law exclusion

A. Applies to insured other structures but not dwellings.
B. Applies to insured dwellings but not other structures.
C. Eliminates coverage for losses resulting from any ordinance or law that reduces the value of the property or that requires testing for or cleaning up of
pollutants.
D. Eliminates coverage for the destruction, confiscation, or seizure by order of any governmental or public authority.

Which one of the following is an excluded peril under Section I—Coverages A and B of the HO-3 policy?
A. Volcanic eruption
B. Theft of construction materials
C. Aircraft
D. Accidental leak of water from plumbing

Under the HO-3 policy, which one of the following excludes coverage for property seized by law enforcement officials investigating a crime?
A. Ordinance or law
B. Intentional loss
C. Governmental action
D. Acts or decisions

Under the HO-3 policy Section I—Conditions, the Abandonment of Property Condition
A. Outlines a method for resolving disagreements between the insured and the insurer.
B. Provides that if the insured abandons the property after it is damaged, the insurer need not take over responsibility for it.
C. Establishes how the amount to be paid for a property loss will be determined.
D. States that the insurer will adjust all losses with the insured or the insured's spouse, if a resident in same household.

Adam and his insurer disagree on the amount of a loss covered by his homeowners policy. Adam wants the insurer to pay $10,000 toward the loss. The
insurer's representative feels that the loss should be valued at $5,000. How could the appraisal process resolve this situation?
A. Adam's loss will be valued at $7,500 which is an equitable compromise.
B. Both Adam and the insurer will jointly select an acceptable appraiser to set the value.
C. Adam is forced to litigate the loss since agreement cannot be reached.
D. Adam and the insurer will each select an appraiser, and the two appraisers will submit their differences to an impartial umpire who will reach a resolution.
AINS 22 QUIZ –(Quizlet)
Under the HO-3 policy Section I—Conditions, the Loss Payment condition
A. Establishes how the amount to be paid for a property loss will be determined.
B. Outlines a method for resolving disagreements between the insured and the insurer.
C. Provides that if the insured abandons the property after it is damaged, the insurer need not take over responsibility for it.
D. States that the insurer will adjust all losses with the insured or the insured's spouse (unless another person is named in the policy or is legally entitled to
receive payment).

Under the HO-3 policy Section I—Conditions, the Loss Settlement condition:
A. Establishes the process for determining the amount to be paid for a property loss.
B. Outlines a method for resolving disagreements between the insured and the insurer.
C. Provides that if the insured abandons the property after it is damaged, the insurer need not take over responsibility for it.
D. States that the insurer will adjust all losses with the insured or the insured's spouse, if a resident in the same household.

Under the HO-3 policy Section I—Conditions, the Appraisal condition:

A. Provides that if the insured abandons the property after it is damaged, the insurer need not take over responsibility for it.
B. States that the insurer will adjust all losses with the insured or the insured's spouse, if a resident in same household.
C. Outlines a method for resolving disagreements between the insured and the insurer.
D. Bars an insured from bringing legal action against the insurer unless the insured has complied with all policy provisions.

Sally insures her house with an unendorsed HO-3 policy with a Coverage A—Dwelling limit of $275,000, which is the replacement cost of the house. A fire
destroys the house including a collection of blueprints belonging to Sally's employer, valued at $10,000. Sally was storing the blueprints at her home while
her office was changing locations. Assuming no deductible applies, how much, if any, will Sally's HO-3 insurer pay to replace the blueprints?
A. $0
B. $1,500
C. $2,500
D. $10,000

Jim and Elana own a single-family home insured to value under an unendorsed HO-3 policy with a limit of $350,000 for the Coverage A—Dwelling. Jim has an
extensive gun collection valued at $15,000. A thief breaks into their home while they are away on vacation and steals the complete gun collection. Ignoring
any deductible that may apply, the HO-3 insurer will pay
A. $0.
B. $1,000.
C. $2,500.
D. $15,000.

Jack insures his house with an unendorsed HO-3 policy with a Coverage A—Dwelling limit of $250,000, which is the replacement cost of the house. A thief
breaks into the house while Jack is on vacation and steals his gun collection valued at $7,500. Ignoring any deductible that may apply, how much, if any, will
Jack's HO-3 insurer pay for the loss to the guns?
A. $0
B. $1,500
C. $2,500
D. $7,500

Sam and Sophia insure their house with an unendorsed HO-3 policy. Sam stores a small fishing boat and trailer behind the house. While they are out for the
evening, a fire destroys most of their kitchen and completely destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000 and ignoring
any deductible that may apply, what amount will their HO-3 insurer pay for the loss of the boat and trailer?
A. $0
B. $1,000
C. $1,500
D. $4,000

Tom and Martha insure their house with an unendorsed HO-3 policy with a Coverage A—Dwelling limit of $300,000, which is the replacement cost of the
house. A thief breaks into the house while Tom and Martha are on vacation and steals the following items:

$500 cash
$50,000 stock certificates
Ignoring any deductible that may apply, how much, if any, will Tom and Martha's insurer pay for the loss of the items?

Select one:
A. $0
B. $200
C. $1,700
D. $50,500 C. $1,700

The Claim Expenses additional coverage under Section II of a homeowners policy covers
A. Medical payments incurred by others.
B. The insured's personal liability.
C. Premiums on bonds exceeding the personal liability limit.
D. The insured's reasonable expenses at the insurer's request.

Defense costs coverage is included under Section II—Liability Coverages in the HO-3 policy. This coverage:
A. Is supplemental to the liability limit.
B. Has a liability limit separate from the personal liability limit.
C. Is excluded if the suit against the insured is groundless.
D. Is included in the personal liability limit.
AINS 22 QUIZ –(Quizlet)
Sammy is the named insured on an HO-3 policy covering his family's home. Sammy and his wife, Sally, have a young daughter, Suzie, and a grown-up son,
Steve, who lives with them, and they own a cocker spaniel puppy. While a neighboring couple and their five-year-old son, Jay, were visiting, the puppy bit
Jay. Jay suffered a serious wound and his parents sued Sammy and Sally. All of the following are insureds under the HO-3, EXCEPT:
A. Sally
B. Suzie
C. Steve
D. Jay

All of the following are included as insureds for the Section II—Liability Coverages of a homeowners policy, EXCEPT:
A. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care
B. The named insured's spouse who lives with the named insured but is away on business most Mondays through Fridays
C. The 19-year-old exchange student who temporarily lives with and under the care of the named insured and his spouse
D. The named insured's 30-year-old best friend who is not related but becomes a temporary resident of the named insured's household

Which one of the following terms contained in the HO-3 policy is defined as an accident, including continuous or repeated exposure to the same general
harmful conditions?
A. Claim
B. Exposure
C. Loss
D. Occurrence

Which one of the following would be an exception to the Coverages E and F Business exclusion to the liability coverage provided by the HO-3 policy?
A. Teenage son of named insured painting neighbor's fence in exchange for a few dollars
B. Charging neighborhood families for home daycare services
C. Full-time beauty salon in the home
D. Full-time landscaping business

The HO-3 policy excludes liability coverage for

A. Any motor vehicle that is rented to others.
B. A motorized golf cart owned by an insured and used on a golf course.
C. A motorized vehicle not requiring registration that is designed for recreational use off public roads and owned by an insured, and used on an insured location.
D. A motor vehicle in dead storage on an insured location.

All of the following motor vehicle exposures are covered by Section II—Liability Coverages of the HO-3 policy, EXCEPT:
A. Motor vehicles used solely to service an insured's residence
B. Motor vehicles used to carry persons or cargo for a charge
C. Motor vehicles designed for assisting people who are handicapped
D. Trailers not towed by, hitched to, or carried on a motor vehicle

Which one of the following is an exception to the Coverage E and F Business exclusion to the HO-3 policy?
A. Volunteer activities
B. Activities generating income of $10,000 or less during the year preceding the policy period
C. A plumbing business operated from the home
D. Home daycare services performed for neighbors for a fee

Coverage F—Medical Payments to Others in the homeowners policy applies to bodily injury to a residence employee in all of the following situations,
EXCEPT:
A. The residence employee is away from the insured location and is not working
B. The residence employee is away from the insured location but is working
C. The residence employee is on the insured location and is working
D. The residence employee is on the insured location but is not working A.

All of the following are policy conditions that apply to both Sections I and II of the HO-3 policy, EXCEPT:
A. Liberalization
B. Severability of Insurance
C. Nonrenewal
D. Death

The Section II Limit of Liability provision of the HO-3 policy stipulates that the limit of Coverage E—Personal Liability appearing on the declarations page is
the total limit of coverage for
A. Each insured separately.
B. Each person injured in a claim.
C. Each claim made relative to an occurrence.
D. Any one occurrence.

Under the Severability of Insurance condition in the HO-3 policy,

A. The insurer's limit of liability is increased for any one occurrence if more than one insured is involved.
B. The insurer and the insured are subject to separate sets of conditions.
C. Each insured seeking protection is treated as if that insured has separate coverage under the policy, but the limit of insurance is not increased for any one
occurrence.
D. Separate limits of liability exist for bodily injury and property damage.

The HO-3 policy

A. Cannot be assigned to another party.
B. Is fully assignable without the insurer's consent.
C. Is assignable only with the insurer's written consent.
D. May be assigned when the insured makes a written request within 60 days of the assignment.
AINS 22 QUIZ –(Quizlet)

The Suit Against Us condition in Section II of the HO-3 policy provides for all of the following, EXCEPT:
A. No one can join the insurer as a party to any action against an insured.
B. No action with respect to Coverage E can be brought against the insurer until the obligation of the insured has been determined by a final judgment or
agreement signed by the insurer.
C. The insurer must first meet all of its obligations under Section II before the insurer can bring a legal action against the insured.
D. The insured must first meet all of its obligations under Section II before the insured can bring a legal action against the insurer.

Bob and Diane Rothwell's rural home is insured with an HO-3 policy. During spring clean up, the Rothwells hired a college student to help clean up and burn
the brush that had accumulated over the prior season. As the brush pile was burning, an unexpected wind carried the fire across the Rothwells' pasture. Bob
and Diane, their 15-year-old son Jeff, Diane's father who was visiting, the college student, and a neighbor all worked together to put out the fire before it
spread to the neighbor's yard. They all suffered some burns. All of the parties involved in fighting the fire will be able to collect compensation for their
medical bills to treat their burns from the Medical Payments to Others coverage from the Rothwells' HO-3, EXCEPT:
A. Jeff
B. The neighbor
C. The college student
D. Diane's father

Josef left the garage door of his home open one night and a homeless person sneaked in and fell asleep. During the night, a shovel that was hanging on the
wall fell down, hitting the person in the head, causing him to seek emergency medical treatment at a nearby hospital. Which one of the following statements
is true about Josef's coverage under his HO-3 policy?
A. The injured person is entitled to benefits under Coverage F—Medical Payments to Others.
B. Coverage F—Medical Payments to Others is not available for persons on the insured location without permission.
C. The injured person is entitled to benefits under Coverage F—Medical Payments to Others because there is no evidence that he caused the shovel to fall.
D. Only Josef and his relatives are entitled to benefits under Coverage F—Medical Payments to Others.

Nick's five-year-old nephew from another state was visiting for the day. Nick was mowing the grass at his home when he accidentally ran over his nephew's
toe, causing injury. Nick has an HO-3 policy. Which of the following coverages would apply to this loss?
A. Coverage F—Medical Payments to Others only
B. Coverage E—Personal Liability only
C. None
D. Coverage E—Personal Liability and Coverage F—Medical Payments to Others

An insured has an HO-3 policy covering his home. While he was away during a special athletic tournament in his town, he rented his home for a week to one
of the athletes. During that week, the mail carrier was injured on a loose floorboard on the porch of the home. A claim was made against the insured. Does
the Coverage E business exclusion apply?
A. It depends on whether a dollar threshold for the amount of rent charged is met.
B. No, because rental of an insured location on an occasional basis is a covered loss exposure if the location is used only as a residence.
C. No, because home rental is not considered a business activity.
D. Yes, because renting property to others qualifies as a business as defined by the policy.

Garth insures his home with an HO-3 policy. Garth was invited to a party at the apartment of his friend, Julie. Garth was having trouble closing the front door
behind him as he entered the apartment. He pulled the door hard, which shook the walls and caused a vase to fall off of a shelf and break into pieces. Julie
made a claim against Garth for the replacement cost of the vase, which was $1,108. Garth's insurer did not believe that the accident was Garth's fault in any
way. How much did the insurer pay to Julie?
A. $0
B. $554
C. $1,000
D. $1,108

Dominic and Amy are a married couple who insure their home, which sits on a large property, with an HO-3 policy. It has a Coverage E—Personal Liability
limit of $300,000. They were riding their snowmobiles on their own property when they saw a man crouching behind the shrubs, so they assumed he was a
burglar. They drove their snowmobiles directly at the man, seriously injuring him. Then they discovered the man was a technician installing cable for their
television. The cable technician sued Dominic and Amy and was awarded $300,000 against Dominic and $100,000 against Amy. The defense costs were
$30,000. The court ruled that the insurer could not deny coverage for an intentional or expected injury because the couple was using force reasonably
believed necessary to protect their home. As a result of the lawsuit, Dominic and Amy's insurer will pay

A. $0.
B. $300,000.
C. $330,000.
D. $400,000.

An insured has a Personal Auto Policy (PAP) to cover his automobile and travel trailer and an HO-3 policy for his home. While on vacation, he unhitched the
trailer at a campground for a one-week stay. During the middle of the week, a visitor was injured when an awning on the trailer fell on his head. The visitor
made a claim against the insured. Is this a covered claim under the HO-3?
A. No, because the trailer is a defined motor vehicle under the HO-3 policy and therefore subject to a liability exclusion.
B. Yes, because a trailer that is not being carried on, towed by, or hitched for towing by a motor vehicle is not subject to the motor vehicle exclusion.
C. No, because the awning is not a part of the trailer.
D. Yes, because a trailer cannot be a motor vehicle under the motor vehicle exclusion.

Juan lives on a large property insured with an HO-3 policy. His home is heated by fuel oil that is stored in an underground tank in his backyard. Juan did not
realize that there has been a small leak in the tank and that for several years fuel has slowly trickled out of it, making its way into a neighbor's well. The
neighbor has made a claim against Juan, who turned the claim over to his insurer. Under Juan's HO-3 policy, this is
A. Not considered an occurrence because it was not sudden.
B. Considered an occurrence because it was a continuous condition and it was fortuitous.
C. Not considered an occurrence because it did not cause bodily injury.
D. Considered an occurrence because it destroyed tangible property.
AINS 22 QUIZ –(Quizlet)

Sammy and Sally Oshua insure their home with an HO-3 policy. They own a cocker spaniel puppy. While a neighboring couple and their five-year-old
daughter were visiting, the puppy bit the girl as she was playing with it. The child suffered a serious wound and the neighbors sued the Oshuas. Which one of
the following statements is true?
A. Because the dog was on the Oshuas' property, they are not covered for injury to the child.
B. Defense costs are not covered for the Oshuas if the lawsuit is found to be groundless.
C. Because the child is a minor, the insurer will pay the damages regardless of legal liability.
D. In addition to paying up to the limit of liability, the insurer will pay defense costs associated with the lawsuit.

Ralph is a homeowner living in a subdivision that has a formal homeowners association. Collectively the members of the association own the subdivision's
clubhouse and tennis courts. The Loss Assessment additional coverage under Section II—Liability Coverages of Ralph's homeowners policy will provide
coverage to Ralph for an assessment up to $1,000 arising from which one of the following losses?
A. Ralph's daughter injured another player on the court when she accidentally released her racquet following a serve, and that injured player made a claim
against Ralph and his daughter.
B. A tennis player tripped over a torn chain link fence surrounding the court. The tennis player sued the association for her injuries and recovered a judgment.
C. A tennis player accidentally dropped a cigarette in the trash next to the clubhouse. The resulting fire totally destroyed the clubhouse.
D. Ralph's dog bit a tennis player on one of the courts and that tennis player made a claim against Ralph. B. A tennis player tripped over a torn chain link fence
surrounding the court. The tennis player sued the association for her injuries and recovered a judgment.

All of the following are true statements concerning the HO-6 policy, EXCEPT:
A. Section I—Perils Insured Against provides named perils coverage for Coverages A and C.
B. The HO-6 defines residence premises as a one- to four-family dwelling where the insured resides.
C. Coverage A includes other structures owned solely by the insured.
D. The insured selects the limit for Coverage C—Personal Property.

Which one of the following describes the difference between the HO-3 policy and the HO-2 policy?
A. The HO-3 provides coverage for all causes of loss, unless specifically excluded, for Coverages A and B. The HO-2 provides coverage for named perils for
Coverages A and B.
B. The HO-3 is the preferred homeowners policy for homeowners who have had no prior losses. The HO-2 is designed for homeowners who have experienced
some losses.
C. The HO-3 provides Coverage C limits that are 50% of Coverage A. The HO-2 provides Coverage C limits that are 40% of Coverage A.
D. The HO-3 is designed for an owner-occupant of a house. The HO-2 is designed for a tenant-homeowner of an apartment.

Which one of the following best explains why an HO-2 policy has a slightly lower premium than an HO-3 policy with similar limits?
A. The HO-2 covers only the named insured and resident relatives for specific causes of loss.
B. Recovery under the HO-2 is on an actual cash value basis rather than on replacement cost basis for buildings.
C. The HO-2 covers the dwelling building and other structures against fewer causes of loss.
D. There is no coverage for other structures under the HO-2.

An HO-4 policy includes building additions and alterations coverage up to 10% of the limit of Coverage C—Personal Property. Which one of the following
individuals would typically benefit from this coverage?
A. A condominium unit owner who renovates the kitchen and installs more expensive cabinets than were originally in the unit
B. An apartment dweller who has installed a power-lift chair at the stairway inside his two-story unit
C. An owner of a single family home who has installed wheelchair ramps at the doors of her home to accommodate her wheelchair
D. An owner of an older house with obsolete construction

Which one of the following statements about the HO-2 policy and HO-3 policy is correct?
A. Both the HO-2 and HO-3 provide special form coverage for Coverages A, B, and C.
B. The HO-2's Section I—Perils Insured Against is the same as that in the HO-3.
C. Both the HO-2 and HO-3 provide named perils coverage for Coverages A, B, and C.
D. The HO-2's Section I—Perils Insured Against is different from the HO-3.

After a loss covered by a homeowners policy, an insured may find that repairs must be made under a newer, stricter building code. An endorsement that
provides increased coverage for such a situation is the
A. Supplemental Loss Assessment Coverage endorsement.
B. Ordinance or Law—Increased Amount of Coverage endorsement.
C. Change in Code endorsement.
D. Loss Contingency endorsement.

Doris owns jewelry appraised at $10,000. She would like insurance coverage that will protect her jewelry for its appraised value. Doris also would like broad
coverage for her jewelry in case she accidentally loses a piece or a stone falls out of a ring. Assuming that she purchased an HO-3 policy, which one of the
following will provide the coverage she wants?
A. An HO-3 with a Supplemental Loss Assessment Coverage endorsement with a $10,000 limit
B. An HO-3 with a Scheduled Personal Property endorsement scheduling all of the jewelry
C. An HO-3 with a Scheduled Personal Property endorsement scheduling $9,000 of the jewelry, on top of the $1,000 coverage limit provided by the HO-3
D. The unendorsed HO-3

Grayson runs a business from his home. His loss exposures include personal property used in the business and liability for his business activities. Grayson has
an HO-3 policy for his home. Which one of the following endorsements will provide coverage for Grayson's business loss exposures?
A. Supplemental Loss Assessment Coverage endorsement
B. Home Business Insurance Coverage endorsement
C. Personal Property Replacement Cost Loss Settlement endorsement
D. Scheduled Personal Property endorsement
AINS 22 QUIZ –(Quizlet)

One of the effects of the Personal Injury Coverage endorsement on an HO-3 policy is to
A. Add liability coverage for medical payments.
B. Add the definition of personal injury.
C. Add definitions for bodily injury and property damage.
D. Add liability coverage for bodily injury. .

The Credit Card, Electronic Fund Transfer Card or Access Device, Forgery and Counterfeit Money Coverage—Increased Limit endorsement may be appropriate
for
A. Insureds who tend to overspend because of credit availability.
B. Insureds who pay their bills online.
C. Insureds who hold credit cards.
D. Insureds who use automated teller machines.

Steve and Julie purchased a HO-3 policy with a Coverage A limit of $200,000 and a Coverage C limit of $100,000. Steve and Julie added the Earthquake
endorsement to their policy, which has the standard deductible. A landslide occurs and causes significant damage to their dwelling and property. If Steve and
Julie suffered a $75,000 loss as a result of the landslide, how much coverage will their policy provide?
A. $0
B. $65,000
C. $70,000
D. $74,500

Marta insured her home with an HO-3 policy that includes a Personal Property Replacement Cost Loss Settlement endorsement. Her large screen television
fell off the wall and was damaged beyond repair. She had paid $2,000 for it. At the time of loss it had an actual cash value of $800 and a replacement cost of
$1,500. Because she found that she had little time to watch television, she decided not to replace the TV. How much did her insurer pay on the claim?
A. $0
B. $800
C. $1,500
D. $2,000

Jackie insures her home with an HO-3 policy. She operates a seamstress service from her home. A customer was picking up some altered pants, tripped on a
loose floorboard on her porch, and was injured. Is there coverage for this claim?
A. Yes, if Jackie's policy was endorsed with the Home Business Insurance Coverage endorsement
B. Yes, if Jackie's policy was endorsed with the Personal Injury Coverage endorsement
C. No, because of the Business Liability Exclusion in the HO-3
D. No, because of the Home Business Exclusion in the HO-3

Ben lost in his lawsuit against his neighbor, Jim, alleging that Jim had created a nuisance on his property. Jim has now filed a malicious prosecution claim
against Ben. Under which endorsement to Ben's homeowners policy can coverage for this claim be found?
A. Personal Liability endorsement
B. Personal Injury Coverage endorsement
C. Additional Liability Coverages endorsement
D. Ordinance or Law—Increased Amount of Coverage endorsement

Bill carves duck hunting decoys for sale in the basement of his home, which is insured with an HO-3 policy. This is his full-time job. One day, a customer
picked up a sharp chisel after Bill told him not to touch it because it was dangerous. The customer mishandled it and severely cut his hand, requiring several
stitches at the local emergency room. Would the Medical Payment to Others coverage in the HO-3 apply in this situation?
A. Yes, if Bill's policy was endorsed with the Home Business Insurance Coverage endorsement
B. Yes, if Bill's policy was endorsed with the Personal Injury Coverage endorsement
C. No, because of the Home Crafter exclusion in the HO-3
D. No, because of the Personal Injury Liability exclusion in the HO-3

Debris removal coverage differs between the HO-3 policy and the DP-3 policy in which one of the following ways?
A. The HO-3 provides an additional 5% coverage over the applicable limit.
C. The DP-3 provides an additional 5% coverage over the applicable limit.
D. The HO-3 includes coverage for removal of trees and shrubs, up to the limits of the applicable coverage.

Hank has purchased a home in a desirable urban neighborhood. The house has a rental unit on the second floor, as well as the first-floor unit in which Hank
plans to live. Hank spent all of his savings on the down payment, and now is considering insuring the property under a DP-3 policy rather than an HO-3 policy
to save money. Is Hank's new residence eligible for a DP-3 policy?
A. No, because the residence qualifies for HO-3 coverage.
B. No, because dwelling policies are designed for tenant-occupied dwellings.
C. Yes, as long as it meets an insurer's underwriting guidelines.
D. Yes, as long as part of the dwelling is rented to others.

Personal property coverage for watercraft is

A. Excluded by the DP-3 policy but covered on a limited basis under the homeowners policy.
B. Provided by the homeowners policy and the DP-3 policy for watercraft under 25 horsepower.
C. Provided on a limited basis for rowboats and canoes under both the homeowners policy and the DP-3 policy.
D. Excluded by the homeowners and DP-3 policies.

A homeowners policy differs significantly from the DP-3 policy in that the unendorsed DP-3 policy:
A. Provides liability coverage only for owner-occupied dwellings.
B. Does not provide liability coverage.
C. Provides liability coverage only for on-premises occurrences.
D. Does not provide liability coverage for "intentional acts."
AINS 22 QUIZ –(Quizlet)
A sinkhole causes the partial collapse of a wall of Ryan's residence. The home is insured under an unendorsed DP-3 policy. Where would the question of
whether this loss is covered be answered?
A. Other coverages
B. Perils insured against
C. General exclusions
D. Conditions

Personal liability coverage under the DP-3 policy

A. Is not available.
B. Is provided under Section II.
C. Is only provided if a limit for Coverage E is shown on the declarations page.
D. Is available using the personal liability supplement.

One of the most important differences between homeowners policies and the DP-3 policy is that the unendorsed DP-3 policy
A. Does not cover theft of personal property
B. Only covers theft of personal property up to 10% of the coverage A limit.
C. Does not cover property damage by burglars during theft of personal property.
D. Only covers theft of endangered personal property removed from the premises for up to 30 days.

All of the following can be covered by a dwelling policy, EXCEPT:

A. A two-family dwelling where the owner lives in one of the units and rents the other unit
B. A one family dwelling rented by the owner to others
C. A mobile home located at a permanent location
D. A small apartment complex with six units, which the owner rents to others

The DP-3 policy provides Coverage A protection under which one of the following approaches?
A. Named perils
B. Risk of direct loss to property
C. Universal coverage
D. Domestic coverage

Detached structures are covered under

A. Coverage B of the DP-3 policy.
B. Homeowners policies, but not under dwelling policies.
C. Coverage A of the DP-3 policy.
D. Coverage C of the DP-3 policy.

Ben insures his home under a DP-3 policy with the following limits:

Coverage A
$200,000
Coverage B Included
Coverage C $20,000
Coverage D Included
Coverage E Included
Coverage L $100,000
Coverage M $1,000
While visiting Ben's home, Laura tried to perform a cartwheel on the lawn, lost her balance, and fell, breaking her arm. Ben paid $500 in emergency room
charges to set and cast Laura's broken arm. Which one of the coverages in Ben's DP-3 policy is most likely to respond to his request for payment of the
emergency room charges?

A. None
B. Coverage M
C. Coverage L
D. Coverage D B. Coverage M

John's house is insured under a DP-3 policy with a Coverage A limit of $100,000. John temporarily repairs a roof that is damaged in a hurricane until he can
have the roof replaced. How much, if any, is available in addition to the $100,000 Coverage A limit under the policy to pay for the temporary repairs?
A. $0
B. $1,000
C. $5,000
D. $10,000

Jacob lives in a rural farmhouse which he insures under an unendorsed DP-3 policy because the lack of public fire protection makes it ineligible for
homeowners coverage from his insurer. The dwelling policy includes the following limits and coverages:

Limit
Coverage A $125,000
Coverage C $10,000

Jacob recently took an extended tour of Europe, and while he was traveling on a train, luggage with all his clothing, personal effects, and souvenirs was
destroyed in a baggage car fire. Jacob values the lost property at $2,000. Ignoring any deductible that may apply, how much of Jacob's loss will be covered by
his DP-3 policy?

A. $0
B. $200
C. $1,000
D. $2,000
AINS 22 QUIZ –(Quizlet)
Edward suffered a fire loss to his home, which he insures under a DP-3 policy. The loss is fully covered under the policy. When Edward purchased the home,
he acquired a mortgage, which is still in effect. Edward hired a contractor to repair the fire damage. Who is payable under the conditions of the DP-3?
A. The contractor
B. Edward
C. The mortgagee
D. Edward and the mortgagee

The Jordans own a small ranch, and keep several ponies on the property for their personal use. Mr. and Mrs. Jordan are concerned that their children's
friends and visiting relatives could be injured when riding the family's ponies. What coverage would the unendorsed DP-3 policy provide for this loss
exposure?
A. No coverage
B. Full coverage, up to the policy limits
C. Medical expenses only, up to $2,000
D. 20% of the Coverage A limit

Brian owns a mobilehome at a permanent mobilehome park in Florida. He rents the residence to retirees during the winter months for $3,000 per month.
Brian insures the property under a DP-3 policy with limits of $40,000 for Coverage A, and $10,000 for Coverage B. A windstorm caused $10,000 in damage to
the structure and Brian was unable to rent it for three months during his normal rental season while making repairs. Ignoring any deductible, how much will
Brian recover from his insurer?
A. $10,000
B. $11,000
C. $18,000
D. $19,000

Clarise owns a vacation home on a lake, and has insured it under an unendorsed DP-3 policy with a Coverage A limit of $120,000 and a Coverage C limit of
$40,000. Clarise discovered that a rowboat she keeps tied to her dock on the lake has been stolen. She filed a claim under her dwelling policy for $700, the
actual cash value of the rowboat. Would theft of the rowboat be a covered loss?
A. No, watercraft is excluded property.
B. No, theft is not a covered peril.
C. No, theft of watercraft is covered only if the boat is within a fully enclosed building.
D. No, 10% of the Coverage C limit is provided for rowboats and canoes while the property is away from the premises.

Alita owns a single-family home which she insures under a DP-3 policy with a Coverage A limit of $150,000, a Coverage C limit of $10,000, no other limits or
endorsements, and a $1,000 deductible. Alita had rented the partially-furnished property under a long-term lease, and her tenant added an attached
screened-in porch at a cost of $8,000. Recently, the home suffered a loss by fire valued at $148,000. Contents belonging to Alita with an ACV of $15,000 were
also destroyed. How much will Alita's insurer pay for the loss?

A. $147,000
B. $148,000
C. $158,000
D. $159,000

Vanessa insures her lakefront vacation cottage under a DP-3 policy with a Coverage A limit of $85,000, a Coverage C limit of $8,000, and no other limits or
endorsements. Following a rash of burglaries at the lakefront, Vanessa removed a widescreen plasma TV worth $2,500 to protect it from the burglars. While
being stored in her car the next day, the TV was stolen. Will Vanessa's DP-3 policy cover this loss?
A. No. It was not endangered by a covered loss.
B. Yes. Property removed is covered for any cause of loss.
C. No. Personal property away from the premises is not covered.
D. Yes. Personal property away from the premises is covered up to 10% worldwide.

Under an ISO Mobilehome Endorsement, Section I, Coverage B—Other Structures is no less than
A. 2% of Coverage A.
B. $2,000.
C. 10% of Coverage A.
D. $1,000.

From what risk would a lienholder be seeking protection in requiring a mobile home owner to purchase the Mobilehome Lienholder's Single Interest
endorsement?
A. The mobile home may be destroyed by fire.
B. The mobile home owner may default on a mortgage.
C. A mobile home is exposed to transportation risks.
D. The mobile home owner's loss of a site lease.

Policy provisions of the mobilehome policy

A. Are the same as those of the homeowners form.
B. Differ widely from those of the homeowners form.
C. Revise those of the homeowners form.
D. Form the basis for those of the homeowners form.

Under an ISO Mobilehome Endorsement, accidental damage to permanently installed furniture is

A. Covered under Section I, Coverage A—Dwelling.
B. Covered under Section I, Coverage B—Other Structures.
C. Covered under Section I, Coverage C—Personal Property.
D. Covered under Section I, Coverage D—Loss of Use.
AINS 22 QUIZ –(Quizlet)

Which one of the following accurately describes the coverage modification created by the Mobilehome Endorsement (MH 04 01) when it is attached to the
HO-3 policy?
A. Section I loss settlement condition is changed to actual cash value (ACV) for all Coverage A items.
B. Section II—Liability Coverages are limited to exclude coverage for all watercraft and motor vehicles.
C. Coverage B—Other Structures is 50% of the limit that applies to Coverage A.
D. It provides up to $500 for reasonable expenses incurred for the removal and return of the mobile home if it is endangered by an insured peril.

Which one of the following is a primary way a community's residents can become eligible for flood insurance?
A. Petitioning the Governor to declare their community a flood disaster area
B. Adding a special flood endorsement to their homeowners policy
C. Applying to the Federal Insurance Adminstration to be included in the National Flood Insurance Program
D. Applying to the National Disaster Recovery Agency to be included in the National Flood Insurance Program

When is community participation in the National Flood Insurance Program (NFIP) required?
A. When FEMA has determined that a community is flood-prone.
B. When a community has unsuccessfully contested a flood-prone designation.
C. When accepting a federal-related construction project.
D. When required as part of a state's floodplain management program.

Adverse selection occurs because

A. The underwriting guidelines are inadequate to detect applicants who will have losses.
B. An underwriter unfairly discriminates in the underwriting process.
C. People with the highest probability of loss are the ones most likely to purchase insurance.
D. People who intend to commit insurance fraud purchase coverage.

Under the Write-Your-Own (WYO) program of the National Flood Insurance Program (NFIP), which one of the following determines the rates?
A. Federal Insurance Administration (FIA)
B. Private insurers
C. Federal Emergency Management Agency (FEMA)
D. Flood Insurance Reform Act of 2004

Coverage for the peril of fire

A. Is provided by most Fair Access to Insurance Requirements (FAIR) plans.
B. Is only available when difference in conditions (DIC) coverage is added to FAIR plans.
C. Is excluded by most FAIR plans.
D. Can be denied to FAIR plan applicants for hazardous environmental conditions beyond the control of the owner.

In which one of the following ways do Fair Access to Insurance Requirements (FAIR) plans provide needed support for credit?
A. Provide adequate property insurance coverage.
B. Enact legislation in response to local market needs
C. Provide loans at affordable rates.
D. Define urban areas that pose greater-than average risk of loss.

Which one of the following statements is true regarding most beachfront and windstorm plans?
A. Coverage is limited to real property (real estate).
B. Homeowners may choose between private insurance and the beachfront and windstorm plan.
C. Buildings rebuilt after a specific date must conform to applicable building codes.
D. Coverage is available on a statewide basis.

Phil was unable to obtain homeowners insurance for his desert canyon home through his private insurer because the area is subject to brush fires, so he was
forced to obtain it through the local FAIR plan. Will Phil's private insurer likely be willing to provide theft coverage for this property?
A. Yes, most FAIR plans provide theft coverage, so any private coverage would be excess.
B. No, If FAIR plan coverage is provided, private insurance is not available.
C. Yes, because fire is the primary loss exposure, and fire coverage is provided by the FAIR plan.
D. No, because the private insurer would be forced to provide fire coverage as well, which is unacceptable to the insurer.

Which one of the following make a property ineligible for both FAIR plans and windstorm and beachfront plans?
A. Vacancy
B. Hazardous environmental conditions
C. Difference in conditions coverage
D. Unrepaired damage

Which one of the following types of personal inland marine forms is designed for frequent travelers?
A. Personal Articles Standard Loss Settlement Form
B. Personal Effects Form
C. Tenant Homeowners Form
D. Personal Property Form

The Personal Effects Form is specifically designed for

A. Frequent travelers.
B. Homeowners.
C. Salespersons.
D. Financial institutions.
AINS 22 QUIZ –(Quizlet)

The Personal Articles Standard Loss Settlement Form provides special form coverage for:
A. Personal property, such as luggage, normally carried by tourists and travelers.
B. Unscheduled personal property owned or used by the insured and normally kept at the insured's residence. Examples include clothing and household
furniture.
C. Property normally kept in personally owned watercraft but not attached to the watercraft.
D. Several classes of personal property with a specific amount of insurance shown for each class of property or for each specific article. Examples include jewelry
and silverware.

Jennifer owns a valuable stamp collection, and her insurer refuses to provide the required amount of coverage by endorsement to her homeowners policy.
Which one of the following types of personal inland marine coverage forms should Jennifer use to cover her stamp collection for its full value on a scheduled
basis?
A. Personal Effects Form
B. Personal Property Form
C. Personal Articles Standard Loss Settlement Form
D. Floating Property Form

Inland marine floaters typically share which one of the following characteristics?
A. They are written for docks, watercraft, and related marine structures.
B. They usually cover unique perils not addressed by "traditional" insurance policies. Examples include wear and tear, insect damage, and mechanical
breakdown.
C. They generally provide special form (open perils) coverage on a worldwide basis.
D. They are always written with a deductible.

Which one of the following is covered for watercraft liability under an HO-3 policy?
A. A 48-foot sailing vessel owned by an insured
B. A 60-horsepower inboard boat rented by an insured
C. A 48-foot sailing vessel not owned or rented by an insured
D. A 60-horsepower inboard boat owned by an insured at policy inception

Which one of the following types of policies can be used to provide special form ("all risks") coverage for small watercraft?
A. Homeowners
B. Personal auto
C. Small boat
D. Protection and indemnity

Brad purchased a 16-foot boat with a 15-horsepower motor for $4,500. He also purchased a boat trailer for $1,000. After a fishing trip, Brad parked his truck
and the trailer carrying the boat at a restaurant. After leaving the restaurant, he discovered that the trailer, boat, and motor were missing. Disregarding any
deductibles, what amount will Brad's unendorsed HO-3 policy pay for the loss?
A. $0
B. $1,000
C. $4,500
D. $5,500

Which one of the following is a warranty commonly applied to personal watercraft insurance?
A. Mechanical breakdown
B. Uninsured boaters
C. Lay-up period
D. Escape of pollutants

Which one of the following causes of damage to a boat hull is covered by a boatowners policy written on a special form ("all-risks") basis?
A. Explosion
B. Wear and tear
C. Freezing of ice
D. War

When endorsed to a boatowners policy, hurricane protection coverage reimburses boatowners for the cost of
A. Repairing hull damage from a hurricane.
B. Repairing damage to the property of others resulting from a hurricane.
C. Compensating crew members for hurricane-related bodily-injury, including any expenses for first aid rendered at the time of a hurricane-related accident.
D. Removing watercraft from the water if a hurricane is approaching.

Nikos purchases a small boat for $1,200 and a boat motor for $700. A fire destroys the boat and motor while they are parked in Nikos' garage. Disregarding
any deductibles, what amount will Nikos' unendorsed HO-3 policy pay for the loss?
A. $0
B. $1,200
C. $1,500
D. $1,900

Which one of the following is a warranty that is likely to be required by an insurer that underwrites a boatowners or yacht policy?
A. Uninsured boaters
B. Contractual liability
C. Seaworthiness
D. Transportation
AINS 22 QUIZ –(Quizlet)

Which one of the following causes of damage to a boat hull is covered by a boatowners policy written on a special form ("all-risks") basis?
A. Lightning
B. Weathering
C. Freezing of ice
D. War

Ming purchased a 24-foot inboard motorboat and would like to cover it using special form ("all-risks") coverage. Which one of the following types of policies
is Ming most likely to purchase?
A. HO-3 policy
B. Yacht policy
C. Personal Auto Policy (PAP)
D. Small boat policy

Which one of the following is true with regard to coverage for acts of directors or officers under a personal umbrella policy?
A. They are always excluded.
B. They are always covered.
C. Directors or officers of a not-for-profit organization are covered.
D. Directors or officers of a for-profit organization are covered.

Which one of the following is a characteristic of most personal umbrella policies?

A. $10,000 retained limit
B. $500,000 required underlying limits
C. Same insurer required for all underlying policies
D. Worldwide coverage

Which one of the following is usually excluded under a personal umbrella policy?
A. Slander
B. Defense costs
C. False arrest
D. Professional liability

Personal umbrella policies usually cover the insured's liability for personal injury. Under the ISO Personal Umbrella Liability Policy, which one of the following
is included under the definition of personal injury?
A. Assault and battery intentionally committed
B. Libel
C. Property damage to property of others
D. Bodily harm

Jack and Linda are meeting with their insurance agent to review their homeowners and auto policies. The agent has suggested that they add an umbrella
policy. Which one of the following is the best reason the agent will likely provide for purchasing this coverage?
A. To provide an increased limits policy with no exclusions
B. To offset the deductibles on their other policies
C. To avoid any retained limits for the broader coverage
D. To provide increased limits for large jury awards

Mario has an unendorsed HO-3 policy with a $500,000 limit for liability coverage. He also has a personal umbrella with a $2,000,000 limit of liability and a
$10,000 self-insured retention.

Mario is sued for invasion of privacy and the court awards $1,600,000 to the plaintiff. What amount of the loss is paid by the umbrella policy?
A. $1,090,000
B. $1,100,000
C. $1,590,000
D. $1,600,000

Mira has an unendorsed HO-3 policy with a $500,000 limit for liability coverage. She also has a personal umbrella with a $2,000,000 limit and a $10,000 self-
insured retention.

Mira is sued for defamation of character and the court awards $1,300,000 to the plaintiff. What amount will Mira's personal umbrella insurer pay for this
award?
A. $790,000
B. $800,000
C. $1,290,000
D. $1,300,000

Ian owns a sailboat and insures it under a small boat policy with a $300,000 limit for liability coverage. Ian also has a personal umbrella policy with a
$2,000,000 limit of liability. The umbrella policy requires that any underlying watercraft liability policies have a minimum liability limit of $500,000.

Ian's sailboat collides with another vessel, damaging its hull and injuring its passengers. The loss totals $1,100,000. How much will Ian's personal umbrella
insurer pay for the loss?
A. $0
B. $600,000
C. $800,000
D. $1,100,000
AINS 22 QUIZ –(Quizlet)
Patrick causes an accident while driving his car. The driver of the other car is injured and is awarded damages of $750,000. Patrick has a Personal Auto Policy
(PAP) with a bodily injury liability limit of $300,000 per person. However, it is later discovered that the amount due from Patrick's PAP insurer is
uncollectible. Patrick also has an umbrella policy with a $1,000,000 limit of liability and a $1,000 self-insured retention (SIR). What amount will the umbrella
insurer pay for this accident?

A. $449,000
B. $450,000
C. $749,000
D. $750,000

Chris causes an accident while driving her car. The driver of the other car is injured and is awarded damages of $650,000. Chris has a Personal Auto Policy
(PAP) with a bodily injury liability limit of $250,000 per person. She also has an umbrella policy with a $1,000,000 limit of liability and a $1,000 self-insured
retention (SIR). What amount will the umbrella insurer pay for bodily injury for this accident?

A. $399,000
B. $400,000
C. $649,000
D. $650,000

Felipe has an unendorsed HO-3 policy with a $300,000 limit for liability coverage. He also has an umbrella policy with a $1,000,000 limit of liability and a
$2,000 self-insured retention (SIR).

While playing golf, Felipe accidentally injures his golfing partner while swinging a golf club. His partner is partially disabled, and Felipe is found liable for
$450,000. How much will Felipe's umbrella policy pay for this loss?

A. $0
B. $148,000
C. $150,000
D. $448,000

Samantha has a personal umbrella policy with a limit of liability of $1 million. The underlying limit requirements for both homeowners Section II and personal
auto are $500,000. The self-insured retention (SIR) is $1,000. Samantha has the following coverages for her house and auto:

Unendorsed homeowners policy with a $500,000 Section II limit

Unendorsed auto policy with a $100,000 combined single limit (equal to the states financial responsibility limit)
Samantha is negligent and causes an accident while driving her car. The injured party is awarded damages that total $750,000. Assuming the full umbrella
limit is available, what amount, if any, will be paid by the umbrella insurer?
A. $649,000
B. $0
C. $250,000
D. $650,000

Marty renewed his Personal Auto Policy (PAP), decreasing his coverage from a $500,000 to a $300,000 combined single limit. Marty's umbrella insurer
requires an underlying combined single limit for auto liability of at least $500,000. Marty is involved in an auto accident and is found negligent. The injured
party is awarded $735,000 in damages. What amount will the umbrella insurer pay for this accident?

A. $0
B. $225,000
C. $235,000
D. $435,000

Renee owns a sailboat and insures it under a small boat policy with a $500,000 limit for liability coverage. She also has a personal umbrella policy with a
$2,000,000 limit of liability.

Renee's sailboat collides with another vessel, damaging its hull and injuring its passengers. Renee is found liable for $900,000. Subsequently, it is discovered
that the amount payable by the insurer providing Renee's small boat policy is uncollectible. How much will Renee's personal umbrella insurer pay for the
loss?
A. $0
B. $400,000
C. $500,000
D. $900,000

A homeowner wishes the broadest possible coverage for his home and contents, which of the six ISO Homeowners program forms would be the most
appropriate for his coverage needs? The HO-5

Which one of the following ISO 2011 HO forms would be most appropriate for an apartment tenant who does not require coverage on the dwelling itself?
A. HO-2
B. HO-4
C. HO-8
D. HO-5

Provisions that increase or decrease limits, add or remove coverages, change definitions, clarify policy intent, or recognize specific characteristics that require
a premium increase or decrease are found in which section of the HO-3?
A. Agreement & Definitions
B. Endorsements
C. Declarations
D. Section I
AINS 22 QUIZ –(Quizlet)
A garage attached to a dwelling would be covered under which one of the following HO-3 Section I coverages?
A. Coverage A - Dwelling
B. Coverage B - Other Structures
C. Coverage C - Personal Property
D. Additional coverages

True or False: A nondwelling structure from which a business is conducted would be covered under the HO-3 policy. False

All of the following are duties the insured must fulfill after a loss under the HO-3, EXCEPT:
A. Verify the loss
B. Obtain estimates of the damage
C. Protect the property from further damage
D. Prepare an inventory B. Obtain estimates of the damage

Liability coverage applies only to bodily injury and property damage that result from an occurrence. An occurrence can be any of the following, EXCEPT:
A. A sudden event
B. A gradual series of incidents
C. A continuous condition
D. A non-fortuitous event

All of the following are examples of motor vehicles covered under Section II - Liability coverages of the HO-3, EXCEPT:
A. Motor vehicle designed as a toy vehicle for use by children under 7 years of age that is powered by one or more batteries and has not been modified after
being manufactured to exceed 5 mph on level ground
B. Motor vehicle in dead storage on an insured location
C. Motor vehicle used solely to service a nonresidential commercial building
D. Motor vehicle designed for assisting people who are handicapped

Each of the following types of business activities are exceptions to the HO-3 Coverage E & F Business Exclusion, EXCEPT:
A. Activities for which the insured received $2,000 or less during the year preceding the policy period
B. Volunteer activities
C. Home daycare services involving compensation and not an exchange of services
D. Home daycare services rendered to a relative

The Section II Duties of an Injured Person - Coverage F condition stipulates that if an individual makes a claim for an occurrence under Medical Payments to
Others coverage, the injured person must fulfill all of the following requirements, EXCEPT:
A. Forward legal documents promptly to the insurer
B. Give the insurer written proof of the claim as soon as possible
C. Authorize the insurer to obtain copies of medical reports and records
D. Submit (the injured person) to a physical exam by a doctor chosen by the insurer as often as the insurer requires such exams

Scheduled Personal Property Endorsement provides scheduled coverage for specific items, which include all of the following, EXCEPT:
A. Jewelry
B. Musical instruments
C. Rare coins
D. Vintage autos

Personal injuries are defined in the Personal Injury endorsement as injuries arising out of any of the following, EXCEPT:
A. False arrest, detention or imprisonment
B. Malicious prosecution
C. Invasion of privacy, wrongful eviction, or wrongful entry
D. Publication, in any manner, of material that violates a corporations right to services

If an insurer determines that a fire loss and a burglary loss that appear to have occurred at the same time to an insured's home are actually separate events,
how are deductibles handled under a DP-3 dwelling policy?
A. The insured would have to pay one deductible before the insurer pays both losses
B. The insured would have to pay two deductibles before the insurer pays both losses
C. The insured would pay one 20 percent of the total of the 2 deductibles before the insurer pays both losses
D. No deductible would apply

Which one of these additional loss exposures is unique to mobile home?

A. Loss of use of the mobile home following a loss
B. Increased fire hazard because debris can build up underneath a mobile home that is not protected by skirting material
C. Increased exposure to damage to or destruction of other structures

A property owner of a repeatedly flooded property who refuses a reasonable flood-hazard mitigation from the NFIP will experience a flood insurance
premium increase of what % of the chargeable rate for the property at the time of the mitigation offer?
A. 50%
B. 75%
C. 125%
D. 150%

Personal inland marine policies have a shared structure consisted of the Declarations page, Common Policy Provisions and
A. An insuring agreement
B. Definitions
C. A coverage form
D. Exclusions
AINS 22 QUIZ –(Quizlet)
Which one of the following is true regarding endorsements available only with a mobilehome policy?
A. The Transportation/Permission to Move endorsement provides its coverage for a period of 90 days from the effective date of the endorsement
B. The Ordinance or Law Coverage endorsement encourages the policyholder to remove a mobile home when necessary to avoid damage
C. The Mobilehome Lienholder's Single Interest endorsement provides coverage to the policyholder for collision and upset transportation exposures
D. The Actual Cash Value Mobilehome endorsement changes the loss settlement terms for the mobile home, structures, carpeting, and appliances.

The major exclusions commonly found in small boat policies include repair or service, business pursuits, and
A. General risks of direct loss
B. General risks of indirect loss
C. Specific risks of direct loss
D. Specific risks of indirect loss

A Self-insured retention (SIR) in a personal umbrella policy is similar to a

A. Coverage limit
B. Deductible
C. Policy premium
D. Exclusion

Sue and Rich are under contract to purchase a historic home in a city where local property values, including the value of the historic home, are far below
replacement cost. Which one of the following ISO homeowners policies would likely be most suitable for Sue and Rich?
A. HO-2—Broad Form
B. HO-4—Contents Broad Form
C. HO-6—Unit-Owners Form
D. HO-8—Modified Coverage Form

Which one of the following is used to calculate the base premium for a homeowners policy?
A. Dwelling location
B. Endorsements
C. Deductible changes
D. Claim history

The first step in determining the premium for an HO-3 policy is

A. Reviewing the claim history.
B. Developing the base rate.
C. Considering the endorsements added.
D. Determining the deductible.

Which one of the following Additional Coverages under the HO-3 policy is dependent on another covered loss occurring?
A. Ordinance or Law
B. Collapse
C. Tree, Shrubs, and Other Plants
D. Glass or Safety Glazing Material

Under the HO-3 policy, Coverage B—Other Structures applies to structures

A. On the residence premises that are not attached to the dwelling and are separated from the dwelling by clear space.
B. Not on the residence premises but owned by the insured.
C. On the residence premises and attached to the residence premises by permanent structures.
D. On the residence premises and more than 100 feet from the dwelling.

Which one of the following could fit the definition of a "residence premises" under an HO-3 policy if all other conditions are met?
A. An apartment building that the named insured owns and manages, but in which he does not reside
B. Another structure at a location different than that shown on the declarations page of the policy
C. A four-family dwelling where the named insured resides in one of the units
D. A two-family dwelling that the named insured owns and rents to others

There are 12 Additional Coverages under Section I of the HO-3 policy. Which one of the following statements is true regarding coverage for trees, shrubs, and
other plants?
A. The limit is $500 per tree, shrub, or plant, subject to a $1,000 maximum.
B. The additional coverage is dependent on another covered loss for it to apply.
C. The deductible stated on the declarations page applies to each tree, shrub, or plant.
D. The limit is $500 per tree, shrub, or plant with the total amount not to exceed 5% of the Coverage A limit.

Under an HO-3 policy, Section I—Exclusions contains an additional three exclusions that apply only to Coverage A—Dwelling and Coverage B—Other
Structures.
These exclusions include all of the following, EXCEPT:
A. Weather
B. Fraud
C. Acts or decisions
D. Damage that results from faulty construction, planning, or materials

There are three exclusions in the HO-3 policy that apply only to Coverages A and B in addition to the basic nine exclusions in Section I—Exclusions. These
three exclusions are weather,
A. Acts or decisions of any person, group, organization, or governmental body, and faulty workmanship.
B. Acts or decisions of any person, group, organization, or governmental body, and intentional loss.
C. Ordinance or law, and faulty workmanship.
D. Governmental actions, and faulty workmanship.
AINS 22 QUIZ –(Quizlet)
Bob and Martha have an unendorsed HO-3 policy. They purchased a new home and leased furniture for the living room and dining room. The furniture
leasing company asked to be added as an additional insured for the leased furniture. If they incur a covered loss to the leased property, a claim draft would
likely be payable to
A. The named insured only.
B. Both the named insured and the loss payee.
C. The loss payee only.
D. Neither the named insured nor the loss payee.

Mike and Leona own a single-family home insured to value under an HO-3 policy with a limit of $350,000 for the Coverage A—Dwelling. While they were out
to dinner one evening, an electrical fire started in the kitchen, destroying the kitchen and part of their bedroom on the second floor. The fire destroyed the
contents of the bedroom and the clothing in their closets, as well as Leona's jewelry valued at $5,000 and a fur coat valued at $2,000. Ignoring any deductible
that may apply, how much coverage is provided for the jewelry and fur coat?
A. $1,500
B. $2,000
C. $5,000
D. $7,000

Ralph has an unendorsed HO-3 policy. While coming home from a coin show, Ralph discovers that his automobile was broken into and a package containing
$2,000 in coins, some tools, and groceries was stolen. Disregarding any deductible that may apply, will Ralph's HO-3 insurer pay for the loss of the coins?
A. No, theft of money is an excluded peril.
B. No, leaving money in an unattended vehicle is negligent behavior, which is excluded.
C. Yes, the coins are covered up to a specified limit.
D. Yes, the coins are covered up to the limit of Coverage C as long as they are of a collectible nature.

Which one of the following statements is true regarding "aircraft liability" coverage under the HO-3 policy?
A. Hobby aircraft that do not carry people or cargo are considered to be "aircraft" in the HO-3 policy.
B. The homeowners policy excludes all aircraft liability.
C. If the insured flies her radio-controlled model airplane through a neighbor's picture window, the resulting liability claim would not be covered.
D. Model airplanes that do not carry people or cargo are considered to be "aircraft" in the HO-3 policy.

Which one of the following statements concerning the Scheduled Personal Property Endorsement is true?
A. The Section I deductible applies to scheduled items.
B. The Coverage C special limits do not apply to scheduled items.
C. Cameras cannot be scheduled under the endorsement.
D. The endorsement covers fewer causes of loss than does the HO-3 policy.

Regarding the Other Insurance condition in Section II of the homeowners policy, the Coverage E limits applicable to any
A. Occurrence are paid as primary and any other collectible insurance provides excess coverage.
B. Occurrence are paid as excess over any other collectible insurance except for other insurance written specifically to provide excess coverage.
C. Loss are paid on a pro rata basis with other collectible insurance.
D. Loss are paid as excess over any other primary or umbrella coverages.

While mowing the lawn at his family's home, Jake accidentally ran over the foot of his three-year-old son, causing severe injury. What coverages for this loss,
if any, would be provided under Jake's HO-3 policy?
A. Coverage F—Medical Payment to Others only
B. Coverage E—Personal Liability only
C. None
D. Coverage E—Personal Liability and Coverage F—Medical Payment to Others C. None

When comparing Coverage D—Loss of Use as provided by the HO-3 policy and HO-4 policy,
A. The HO-4 policy automatically provides coverage at 30% of the Coverage C limit, rather than 30% of the Coverage A limit, as in the HO-3 policy.
B. The HO-4 policy automatically provides coverage at 30% of the Coverage A limit, rather than 30% of the Coverage C limit, as in the HO-3 policy.
C. Both policies automatically provide coverage at 30% of the Coverage C limit.
D. Both policies automatically provide coverage at 30% of the Coverage A limit.

The HO-5 policy special limits for jewelry and furs, firearms, and silverware apply to all of the following items, EXCEPT:
A. Intentionally lost items
B. Misplaced items
C. Accidentally lost items
D. Stolen items A. Intentionally lost items

The Dwelling Policy Form is issued to provide flood insurance for which one of the following properties?
A. Nursing home
B. Manufactured mobile homes
C. Apartment building
D. Residential cooperative building

Most Fair Access to Insurance Requirements (FAIR) plans will not cover
A. Properties which the voluntary market is unwilling to insure.
B. Properties that are vacant or open to trespass.
C. Properties that are susceptible to damage by riot or civil commotion.
D. Properties in need of credit support.

Which one of the following is true with regard to the personal property coverages provided under a homeowners policy?
A. Coverage is tailored for specific types of property, such as cameras and musical instruments.
B. Jewelry is covered for all perils except theft.
C. The Personal Articles Standard Loss Settlement Form is usually added by endorsement.
D. Some of the personal property coverages are restrictive, creating a need for personal inland marine policies.
AINS 22 QUIZ –(Quizlet)

Which one of the following is covered for liability by a Personal Auto Policy (PAP)?
A. A canoe
B. A boat trailer
C. A sail boat
D. Small boat equipment

The primary reason for selling a personal umbrella policy is to provide

A. High liability coverage limits.
B. Worldwide coverage.
C. High property coverage limits.
D. Broad coverage with no retained limit.

Marty has an umbrella policy with a $1,000,000 limit of liability and a $10,000 self-insured retention (SIR). Marty renewed his Personal Auto Policy (PAP),
decreasing his coverage from a $500,000 to a $300,000 combined single limit. Marty's umbrella insurer requires an underlying combined single limit for auto
liability of at least $500,000. Marty is involved in an auto accident and is found negligent. The injured party is awarded $735,000 in damages. What amount
will the umbrella insurer pay for this accident?
A. $0
B. $225,000
C. $235,000
D. $435,000

Off-premises theft coverage is available under the ISO Dwelling Policy program
A. On an ACV basis under Coverage C—Personal Property.
B. Only if on-premises coverage is purchased.
C. Up to the policy limits for money, jewelry, and firearms.
D. Only under the Limited Theft Coverage endorsement.

The Transportation/Permission to Move endorsement (MH 04 03) to a mobilehome policy provides coverage
A. For increased limits in removal expenses for a mobilehome endangered by an insured peril.
B. For transportation perils (such as collision) when the mobilehome is moved to a new location.
C. To a lienholder only for the transportation perils of collision and upset.
D. To a mobile home tenant who changes to a new mobilehome location seasonally.

Provisions of the Ordinance or Law Coverage endorsement available to a mobilehome policyholder

A. Are virtually identical to the Ordinance or Law provisions of the homeowners policy.
B. Provide 10% of Coverage A limits as additional coverage.
C. Allow for the flexibility of selecting a desired dollar-value limit.
D. Do not provide coverage for debris removal.

The maximum amount of insurance available for a residence under the regular program of the National Flood Insurance Program is
A. $35,000 for the dwelling and $10,000 for contents.
B. $100,000 for the dwelling and $10,000 for contents.
C. $250,000 for the dwelling and $35,000 for contents.
D. $250,000 for the dwelling and $100,000 for contents.

Which one of the following established the National Flood Insurance Program (NFIP)?
A. Federal Emergency Management Agency (FEMA)
B. Federal Insurance Administration (FIA)
C. National Flood Insurance Act of 1968
D. National Insurance Reform Act of 2004

For a building or contents to be eligible for coverage under the National Flood Insurance Program, the
A. Building must be located in a participating community
B. Owner must also purchase loss of use coverage.
C. Community must supplement the individual's costs.
D. Owner must always be part of the emergency program.

Beachfront and windstorm plans are state-sponsored insurance plans whose primary purpose is to
A. Provide flexible coverage to fill gaps in the National Flood Insurance Program's flood coverages.
B. Provide a state-based alternative to the federally operated flood insurance programs.
C. Restrict construction and limit land use in coastal areas exposed to heavy windstorm losses.
D. Provide property insurance in coastal areas exposed to heavy windstorm losses.

For an urban area subject to riot and civil commotion, the operators of a group that jointly underwrite and share the risks and profits of property insurance in
that area are known as
A. A FAIR plan.
B. A syndicate.
C. A citizens property insurance corporation.
D. A beachfront and windstorm plan.

Which one of the following statements is generally true about beachfront and windstorm plans?
A. Applications are only accepted when a hurricane has formed within a certain distance of where the property is located.
B. Only requests for increase in limits are accepted when a hurricane has formed within a certain distance of where the property is located.
C. No applications or requests for increase in limits are accepted when a hurricane has formed within a certain distance of where the property is located.
D. Eligible properties must apply for coverage when a hurricane has formed within a certain distance of where the property is located, or disaster relief will not
be available from the state.
AINS 22 QUIZ –(Quizlet)
Max has a personal inland marine policy on which he has scheduled his gold watch for a value of $2,500. While golfing, he damaged the watch. The actual
cash value of the watch at the time of the damage was $4,000. The cost to repair the watch to its prior condition is $1,500. The cost to replace the watch with
a substantially identical replacement is $5,000. Which one of the following amounts will Max's insurer pay for the covered loss?
A. $1,500
B. $2,500
C. $4,000
D. $5,000

Lynne purchased a 52-foot motorboat and would like to cover it for physical damage, liability, medical payments, and uninsured boaters coverage. Lynne
most likely will purchase a(n)
A. HO-3 policy.
B. Personal auto policy.
C. Yacht policy.
D. Small boat policy.

A personal umbrella policy provides coverage for a particular loss, but the underlying policies do not. This feature of an umbrella policy is called
A. Retention.
B. Laser coverage.
C. Drop-down coverage.
D. Self-insurance.

All of the following usually are excluded by a personal umbrella policy, EXCEPT:
A. Bodily injury
B. Intentional injury
C. Damage to the insured's property
D. Professional liability

Unlike in the HO-3 policy, the DP-3 policy conditions

A. Are contained in a single section.
B. Apply only to Coverage A.
C. Apply to both Section I and Section II.
D. Are added by endorsement.

Under the National Flood Insurance Program (NFIP), residential condominium building associations are
A. Eligible for coverage under the dwelling form.
B. Eligible for coverage under the residential condominium building association form.
C. Eligible for coverage under the general property form.
D. Not eligible for coverage.

Contents coverage for single family dwellings under the National Flood Insurance Program (NFIP) emergency program is generally limited to
A. 10% of dwelling coverage.
B. $10,000
C. $35,000
D. $100,000

The Flood Insurance Reform Act of 2004

A. Encourages filling in floodplains to mitigate future losses.
B. Provides FEMA grants to encourage people with repeated losses to participate in the NFIP.
C. Helps people with repeated flood losses restore their homes to pre-flood conditions.
D. Created incentives to mitigate repeated losses.

Most beachfront and windstorm plans provide coverage for which one of the following exposures in addition to windstorm?
A. Erosion
B. Fire
C. Flood
D. Hail

Coverage for the peril of fire

A. Is provided by most Fair Access to Insurance Requirements (FAIR) plans.
B. Is only available when difference in conditions (DIC) coverage is added to FAIR plans.
C. Is excluded by most FAIR plans.
D. Can be denied to FAIR plan applicants for hazardous environmental conditions beyond the control of the owner.