TN Personal Lines || QUESTIONS WITH COMPLETE
SOLUTIONS.
when the amount of insurance written in a property policy is not subject to any coinsurance
provision and that amount is paid in the event of a covered loss, the coverage is said to be written
as correct answers stated amount
insurance is the transfer of correct answers risk
insurance is a contract by which one seeks to protect another from correct answers loss
for the purpose of insurance, risk is defined as correct answers the uncertainty or chance of loss
an insured's building has an actual cash value of $200,000, and he has insured the property for
$120,000 with an 80% coinsurance clause. a $40,000 loss occurs. how much will the policy pay
correct answers $30,000
insured only carried 75% of the amount of insurance he had agreed to carry (120,000/160,000)
if the full amount is not carried, divide the actual amount carried by the amount that should be
carried (coinsurance amount), and multiply it by the loss.
what are the four essential elements of all legal contracts correct answers 1. offer and acceptance
2. consideration
3. competent parties
4. legal purpose
in forming an insurance contract, when does acceptance usually occur correct answers when an
insurer's underwriter approves coverage
which of the following would be covered under the broad form (DP-2) policy's falling object
peril correct answers interior building damage if the exterior was damaged first
a dwelling policy has a standard deductible that applies to all property coverage, except fair
rental value, additional living expense, and the fire department service charge. how much is this
deductible correct answers $250
which of the following is NOT true concerning the fair rental value coverage provided in a
dwelling policy
A) the period of time to repair or replace is not limited by the expiration date of the policy
B) loss or expense caused by the cancellation of a lease is covered
C) it pays for the loss of rent you would have collected less any expenses that would not have
continued
, D) coverage continues until repairs are completed correct answers loss or expense caused by the
cancellation of a lease is covered
under a dwelling policy, which of the following is NOT a factor in determining a loss correct
answers the amount negotiated by the insured
(value of a loss is decided according to the actual cash value of the property, the policy limit, the
amount needed to repair or replace the property, or the amount reflective of the insured's interest
in the property)
if an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the
changes will apply correct answers automatically
if more than one person has an insurable interest in the property covered under a dwelling policy
correct answers the insurer will be liable for only the insured's interest in the damaged property
which of the following is NOT covered by the condominium unit owners endorsement
A) alterations to the building
B) appliances in the building
C) fixtures in the building
D) furniture in the building correct answers furniture in the building
the HO-3 homeowners policy provides correct answers open peril coverage on the dwelling and
broad form coverage on personal property
the insured's home is covered by an HO-3. two years ago, the insured bought the home for
$58,000. today, its replacement value is $60,000. how much coverage A does the insured need to
qualify for replacement cost coverage correct answers $48,000
(a house must be insured for at least 80% of its value on the date of loss to qualify for
replacement coverage. -80% of 60,000 = $48,000)
elaborate homes and those with detailed or decorative architecture with replacement costs greater
than ACV or market value are insured on correct answers HO-8
(HO-8 is used to insure houses with replacement cost more than market value and those built
with irreplaceable materials. it is a modified HO-1 and provides ACV coverage for coverage A)
the homeowners policy form that covers condominium unit owners is correct answers HO-6
theft coverage under an HO-8 is restricted to correct answers the actual cash value of what was
stolen, with limits for certain classes of property
SOLUTIONS.
when the amount of insurance written in a property policy is not subject to any coinsurance
provision and that amount is paid in the event of a covered loss, the coverage is said to be written
as correct answers stated amount
insurance is the transfer of correct answers risk
insurance is a contract by which one seeks to protect another from correct answers loss
for the purpose of insurance, risk is defined as correct answers the uncertainty or chance of loss
an insured's building has an actual cash value of $200,000, and he has insured the property for
$120,000 with an 80% coinsurance clause. a $40,000 loss occurs. how much will the policy pay
correct answers $30,000
insured only carried 75% of the amount of insurance he had agreed to carry (120,000/160,000)
if the full amount is not carried, divide the actual amount carried by the amount that should be
carried (coinsurance amount), and multiply it by the loss.
what are the four essential elements of all legal contracts correct answers 1. offer and acceptance
2. consideration
3. competent parties
4. legal purpose
in forming an insurance contract, when does acceptance usually occur correct answers when an
insurer's underwriter approves coverage
which of the following would be covered under the broad form (DP-2) policy's falling object
peril correct answers interior building damage if the exterior was damaged first
a dwelling policy has a standard deductible that applies to all property coverage, except fair
rental value, additional living expense, and the fire department service charge. how much is this
deductible correct answers $250
which of the following is NOT true concerning the fair rental value coverage provided in a
dwelling policy
A) the period of time to repair or replace is not limited by the expiration date of the policy
B) loss or expense caused by the cancellation of a lease is covered
C) it pays for the loss of rent you would have collected less any expenses that would not have
continued
, D) coverage continues until repairs are completed correct answers loss or expense caused by the
cancellation of a lease is covered
under a dwelling policy, which of the following is NOT a factor in determining a loss correct
answers the amount negotiated by the insured
(value of a loss is decided according to the actual cash value of the property, the policy limit, the
amount needed to repair or replace the property, or the amount reflective of the insured's interest
in the property)
if an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the
changes will apply correct answers automatically
if more than one person has an insurable interest in the property covered under a dwelling policy
correct answers the insurer will be liable for only the insured's interest in the damaged property
which of the following is NOT covered by the condominium unit owners endorsement
A) alterations to the building
B) appliances in the building
C) fixtures in the building
D) furniture in the building correct answers furniture in the building
the HO-3 homeowners policy provides correct answers open peril coverage on the dwelling and
broad form coverage on personal property
the insured's home is covered by an HO-3. two years ago, the insured bought the home for
$58,000. today, its replacement value is $60,000. how much coverage A does the insured need to
qualify for replacement cost coverage correct answers $48,000
(a house must be insured for at least 80% of its value on the date of loss to qualify for
replacement coverage. -80% of 60,000 = $48,000)
elaborate homes and those with detailed or decorative architecture with replacement costs greater
than ACV or market value are insured on correct answers HO-8
(HO-8 is used to insure houses with replacement cost more than market value and those built
with irreplaceable materials. it is a modified HO-1 and provides ACV coverage for coverage A)
the homeowners policy form that covers condominium unit owners is correct answers HO-6
theft coverage under an HO-8 is restricted to correct answers the actual cash value of what was
stolen, with limits for certain classes of property
