Exam 3 ACTUAL UPDATED QUESTIONS AND CORRECT ANSWERS
Homeowner's policies usually insure property for which Fire, lightning, windstorm, and explosion
of the following:
Florida's Valued Policy Law applies to: Total loss of any building, structure, mobile or manufactured home resulting from
any covered peril
Replacement Cost Value means: The cost to replace a damaged or destroyed item of property (with one of like
kind and quality at today's prices).
Actual Cash Value means: Replacement cost less depreciation.
A fire starts in your home. Fortunately, the fire There was an unbroken connection between the fire and damage caused by the
department quickly arrives and puts out the fire. water, therefore fire is the "proximate cause" and resulting damage is covered.
Unfortunately, the water from their hoses damaged the
wood floors, walls and furniture. This water damage
would be covered because:
, Referencing the previous question, one month after the Yes. It is called Fire Department Service Charge and is an Additional Coverage
fire you receive a bill from the fire department for provided under the policy, limited to $500.
$450.00 for responding to the fire. Would this be paid
under your homeowner's policy?
A homeowner had his house insured for $240,000. It was The Valued Policy Law
totally destroyed by a hurricane. His insurance company
paid him the full $240,000, even though the replacement
cost of the house was only $195,000. The reason for this
decision was based on:
Jane and her husband return home after a weekend trip The theft loss would be covered within the Coverage C limits of the HO-3.
to find their house was broken into. Their large screen
television, computer equipment, some jewelry, a valuable
gun collection and some fishing equipment were stolen.
How would their HO-3 policy respond to this loss?
Which of the following would NOT be covered under The dead fish when the insured accidentally overturns his tropical fish tank and all
Coverage C, Personal Property? the fish die from lack of oxygen.
Which of the following would NOT be covered under a During a storm a transformer two miles from the Insured's residence explodes,
standard homeowner's policy? causing widespread power loss. The insured suffers no damage but loses $275
worth of food in their refrigerator due to the loss of power.
If a lender has an insurable interest in a home, where Mortgage or Mortgagee clause
would its interests be protected?
A detached 10' x 20' work shed, within which a Coverage B - Other Structures
homeowner stores his tools, his lawnmower, his wood-
working equipment and fishing rods, is damaged by fire
after a gas can explodes. Under what part of his
homeowner's HO-3 policy is this damage covered?
A homeowner has an HO-3 policy with $120,000 of $12,000
Coverage A, $12,000 of Coverage B, $60,000 of
Coverage C, and a $500 deductible. If a tree falls on the
homeowner's detached work shed and the cost to repair
the work shed is $14,330. How much would you pay the
homeowner under his HO-3 policy?
Homeowner's policies usually insure property for which Fire, lightning, windstorm, and explosion
of the following:
Florida's Valued Policy Law applies to: Total loss of any building, structure, mobile or manufactured home resulting from
any covered peril
Replacement Cost Value means: The cost to replace a damaged or destroyed item of property (with one of like
kind and quality at today's prices).
Actual Cash Value means: Replacement cost less depreciation.
A fire starts in your home. Fortunately, the fire There was an unbroken connection between the fire and damage caused by the
department quickly arrives and puts out the fire. water, therefore fire is the "proximate cause" and resulting damage is covered.
Unfortunately, the water from their hoses damaged the
wood floors, walls and furniture. This water damage
would be covered because:
, Referencing the previous question, one month after the Yes. It is called Fire Department Service Charge and is an Additional Coverage
fire you receive a bill from the fire department for provided under the policy, limited to $500.
$450.00 for responding to the fire. Would this be paid
under your homeowner's policy?
A homeowner had his house insured for $240,000. It was The Valued Policy Law
totally destroyed by a hurricane. His insurance company
paid him the full $240,000, even though the replacement
cost of the house was only $195,000. The reason for this
decision was based on:
Jane and her husband return home after a weekend trip The theft loss would be covered within the Coverage C limits of the HO-3.
to find their house was broken into. Their large screen
television, computer equipment, some jewelry, a valuable
gun collection and some fishing equipment were stolen.
How would their HO-3 policy respond to this loss?
Which of the following would NOT be covered under The dead fish when the insured accidentally overturns his tropical fish tank and all
Coverage C, Personal Property? the fish die from lack of oxygen.
Which of the following would NOT be covered under a During a storm a transformer two miles from the Insured's residence explodes,
standard homeowner's policy? causing widespread power loss. The insured suffers no damage but loses $275
worth of food in their refrigerator due to the loss of power.
If a lender has an insurable interest in a home, where Mortgage or Mortgagee clause
would its interests be protected?
A detached 10' x 20' work shed, within which a Coverage B - Other Structures
homeowner stores his tools, his lawnmower, his wood-
working equipment and fishing rods, is damaged by fire
after a gas can explodes. Under what part of his
homeowner's HO-3 policy is this damage covered?
A homeowner has an HO-3 policy with $120,000 of $12,000
Coverage A, $12,000 of Coverage B, $60,000 of
Coverage C, and a $500 deductible. If a tree falls on the
homeowner's detached work shed and the cost to repair
the work shed is $14,330. How much would you pay the
homeowner under his HO-3 policy?
