RIBO Insurance Course Practice Questions Week 4 Graded A+

Mary lives in a townhouse unit that she rents. A fire in the unit next door also damages Mary's unit. The damage is significant and Mary will have to move out while it is being repaired. Which tenants policy section will cover the cost of providing her with a temporary place to live? Select one: a. Property contents b. Additional living expenses c. Accident benefits d. Liability insurance - Answer-b. Additional living expenses. Similar to homeowners' insurance, a tenants policy carries some coverage for ALE (Additional Living Expenses) if the home is damaged and the tenant has to temporarily live elsewhere during the repairs. Which information is requested on the application for tenants insurance policy? Select one: a. The coverage limit of the dwelling building b. The number of rental units are in the building c. The name of the original contractor d. An inventory of all personal property - Answer-b. The number of rental units are in the building. The application for a tenants policy asks for similar information as an application for a Homeowners policy. The same underwriting factors will affect the desirability and rate charged for the risk, including the number of rentail units in the building. Which tenants policy extensions of coverage is defined as indirect damage resulting from physical damage to dwelling by an insured peril causing a change in temperature? Select one: a. Loss due to temperature change b. Property temporarily removed c. Additional living expensesd. Vandalism and malicious mischief - Answer-a. Loss due to temperature change. Under a tenants policy, extensions of coverage include property temporarily removed, loss due to temperature change, and coverage on watercraft. In a tenants policy where will you find coverage for property temporarily removed? Select one: a. Amount of Insurance b. Exclusions c. Additional Living Expenses d. Extensions of Coverage - Answer-d. Extensions of Coverage Under a tenants policy, extensions of coverage include property temporarily removed, loss due to temperature change, and coverage on watercraft. How is the limit for additional living expense established in a tenants policy? Select one: a. Aa a dollar amount requested by the insured b. As a percentage of the personal property insurance limit c. As a dollar amount requested by the insurer d. As apercentage of the value of the dwelling building - Answer-b. As a percentage of the personal property insurance limit. An additional living expense insurance limit under a tenants policy is equal to a percentage of the personal property insurance limit, usually 20%. For the homeowner's policy, it is a percentage of the dwelling building insurance limit. What is one reason tenants need insurance when they do not own the dwelling building? Select one: a. To add additional living expenses b. They might decide to buy the building later c. For the cost of repairing and replacing damage d. Lease agreements require the tenant to carry insurance - Answer-d. Lease agreements require the tenant to carry insurance. Although renters do not need insurance for dwelling building, they doneed insurance for their personal property and personal liability. Frequently landlords require proof of insurance as part of their lease agreements. What do condominium unit purchasers own? Select one: a. Clear and full ownership of a specific unit within a building and a shared interest in the common elements b. Clear and full ownership of a specific unit within a building and full ownership of the common elements c. Shared interest in a specific unit within a building and a shared interest in the common elements d. Shares in a corporation that owns the condominium building - Answer-a. Clear and full ownership of a specific unit within a building and a shared interest in the common elements. A purchaser of a condominium acquires clear and full ownership of a specific unit within a building and a shared interest in the common elements, such as structural columns, beams, floors, walls, elevators, hallways, utilities, recreational facilities, parking areas, gardens, and land. In which situation would a condominium unit owner's loss assessment coverage apply? Select one: a. If the condominium corporation sues the unit holder as he caused the loss b. If the amount available under the condominium corporation's policy is insufficient to provide complete coverage in the event of a loss c. If the condominium corporation does not approve the unit owner's improvements or betterments d. If the amount available under the unit owner's liability coverage is insufficient to provide complete coverage in the event of a loss - Answer-b. If the amount available under the condominium corporation's policy is insufficient to provide complete coverage in the event of a loss. Loss assessment coverage provides protection for condominium unit holders if their condominium corporation's insurance policy is insufficient to cover a loss and the corporation levies special assessments against each unit holder.