CPCU 553 - Chapter 8 Exam Questions with 100% Correct Answers

CPCU 553 - Chapter 8 Exam Questions with 100% Correct Answers Explain why some insureds might need personal IM insurance. - Answer ️️ -Because of the restrictive nature of some personal property coverages under a HO policy. Personal IM policies can provide higher limits of insurance for losses of a particular type or that occur at a particular location. Identify the general characteristics (4) shared by personal IM policies. - Answer ️️ -1. The coverage is tailored to the specific type of property to be insured, such as jewelry, cameras, or musical instruments. 2. The insured may select the appropriate policy limits. 3. Policies are often written without deductible. 4. Most policies insure property worldwide with special form coverage (open perils), subject to exclusions. Describe the types of coverage (2) listed in the Conditions section of ISO common policy provisions of a personal IM policy. - Answer ️️ -The insured property may have scheduled coverage by which articles or items are specifically listed. The insured property may have unscheduled coverage by which articles are covered on a blanket basis, such as stamps or coins in a collection. How is the amount payable for a covered loss determined according to the common policy conditions applying to scheduled coverage? - Answer ️️ -With certain exceptions the amount paid for a covered loss is the least of four amounts: 1. The ACV of the insured property at the time of loss or damage 2. Cost of reasonable repair 3. Cost of replacement with property substantially identical 4. Amount of insurance stated in the policy What are the two types of coverage forms (1+3) available in the ISO personal IM program? - Answer ️️ -1. Specialized forms: used to cover a single category of personal property, such as outboard motors, fine arts, cameras, or motorized golf carts. 2. General forms: broader and generic in nature. There are three types: personal articles standard loss settlement form, personal property form, and personal effects form). Commonly used to provide coverage on a single form for many kinds of personal property. Describe the type of coverage provided by the personal articles standard loss settlement form of the ISO personal IM program. - Answer ️️ -It provides special form coverage for any of several classes of personal property, including jewelry, furs, cameras, musical instruments, silverware, fine arts, stamps and coin collections. A specific amount of insurance is shown in the policy for each class of property or for each specific article. Describe the type of coverage provided by the personal property form of the ISO personal IM program. - Answer ️️ -It provides special form coverage on unscheduled personal property owned or used by the insured and normally kept at the insured's residence. It provides worldwide coverage when the property is temporarily away from the residence. It can be used to insure 13 classes of unscheduled personal property, such as silverware, cameras, and major appliances. Explain why the Personal Effects Form of the ISO personal IM program is designed for frequent travelers. - Answer ️️ -Because it provides special form coverage on personal property such as luggage, clothes, cameras, and sports equipment normally worn or carried by tourists and travelers. The form covers property worldwide, but only while the property is away from the insured's permanent residence. Why do certain personal insurance policies limit or restrict coverage for watercraft or watercraft- related coverage? - Answer ️️ -Because they are used on bodies of water for recreational purpose and few restrictions apply to their op