P&C License UPDATED FINAL EXAM
QUESTIONS AND CORRECT ANSWERS
On an HO policy, an endorsement may be added to cover personal injury liability, which covers
all of the following EXCEPT: - CORRECT ANSWERS Answer: Bodily injury
Explanation: Although all HO policies automatically provide coverage for bodily injury liability to
others, the definition of bodily injury does not include personal injury liability. However,
personal injury liability, which includes coverage for defamation, libel and slander, may be
covered on an HO by purchasing an optional endorsement.
Coverage F, medical payments, on an HO policy pays the injured party's expenses: - CORRECT
ANSWERS Three years is the maximum time allowed according to the policy.
All of the following distinguish the homeowners policy from the dwelling policy EXCEPT: -
CORRECT ANSWERS Answer: Homeowners Coverages A and C must be declared
separately on the declarations page, and an extra premium paid
Explanation: HO policies have stacking coverages, so the coverage for personal property is in
addition to the dwelling coverage. It is usually 50% of the amount of coverage for the dwelling.
This is not true on a DP policy. Contents must be declared separately and an additional premium
must be paid to cover personal property on a dwelling fire policy.
On an HO-3 ('00) policy, an insured location includes all EXCEPT: - CORRECT
ANSWERS Answer: Vacant farm land owned by an insured
Explanation: Although the personal liability provided by an HO policy automatically extends to
vacant land owned by the insured, family cemetery plots and land owned by the insured where
a new residence is being built, the insured's liability relating to farm land would not be covered.
A farm is considered to be a business.
,On an HO-3 ('00), replacement cost coverage applies to: - CORRECT ANSWERS Answer:
Coverages A and B only
Explanation:
On an HO-3, the dwelling (Coverage A) and the outbuildings (Coverage B) are both covered on
an all-risk basis for their replacement cost, subject to an 80% coinsurance requirement.
However, contents (Coverage C) are covered on a named-peril basis for their actual cash (or
depreciated) value.
An HO-6 provides which type of coverage for contents? - CORRECT ANSWERS Answer:
Named peril
Explanation:
On an HO-6, contents coverage is named (or specified) perils. These specified perils are
essentially the same as those specified on an HO-4, which are the broad form perils. All
unendorsed HO policies provide named peril coverage for contents, except the HO-5, which is
all-risk on both the dwelling and the contents.
Which owned boat is automatically covered under Part II of a homeowners policy? - CORRECT
ANSWERS Answer: 12' kayak
Explanation:
Part II of an HO is the liability section. Sailboats less than 26 feet and outboards with 25 total
horsepower or less are covered automatically for liability to others. Kayaks, rowboats, and
canoes are also covered for liability, since they are not excluded.
The HO-4 (tenant HO) and the HO-6 (condo HO) are alike EXCEPT: - CORRECT
ANSWERS Answer: Both have replacement cost coverage
, Explanation:
Both the HO-4 and the HO-6 are designed to primarily cover personal property (contents).
Contents coverage on an HO policy is named perils and ACV, although replacement cost
coverage may be added by endorsement for an additional premium.
All of the following are true about personal articles floaters EXCEPT: - CORRECT
ANSWERS Answer: Coverage is provided on a blanket basis
Explanation:
PAFs require each insurance article to be specified along with the limit of coverage. All-risk
coverage is provided, but claims are settled on an ACV basis, although the required appraisals
go a long way in determining how much insured items are worth. However, there is a floater
called a PPF (personal property floater) which does insure personal property on a blanket or
unscheduled basis. For example, if you sell your house and buy a motor home, you might buy a
PPF to insure all your personal property in the motor home on an all-risk basis, anywhere in the
world. Another type of floater, called a fine arts floater, insures items on a valued or stated
amount basis, rather than ACV. This is used for paintings, sculpture, etc.
A fire totally destroys your home. Your HO-3 ('00) policy would cover all of the following EXCEPT:
- CORRECT ANSWERS Answer: Your motor vehicle in the garage
Explanation: The $1,500 limit on jewelry, watches, and furs applies to theft only. The peril of fire
is not affected by this limit, thus the $2,500 Rolex watch destroyed by the peril of fire would be
covered. Although an HO will not cover automobiles, motorized vehicles used to service the
premises are covered. There is no special limit on antiques, although they may be better
covered on an all-risk PAF.
Medical payments under a homeowners policy cover expenses resulting from an injury to: -
CORRECT ANSWERS Answer: A residence employee
QUESTIONS AND CORRECT ANSWERS
On an HO policy, an endorsement may be added to cover personal injury liability, which covers
all of the following EXCEPT: - CORRECT ANSWERS Answer: Bodily injury
Explanation: Although all HO policies automatically provide coverage for bodily injury liability to
others, the definition of bodily injury does not include personal injury liability. However,
personal injury liability, which includes coverage for defamation, libel and slander, may be
covered on an HO by purchasing an optional endorsement.
Coverage F, medical payments, on an HO policy pays the injured party's expenses: - CORRECT
ANSWERS Three years is the maximum time allowed according to the policy.
All of the following distinguish the homeowners policy from the dwelling policy EXCEPT: -
CORRECT ANSWERS Answer: Homeowners Coverages A and C must be declared
separately on the declarations page, and an extra premium paid
Explanation: HO policies have stacking coverages, so the coverage for personal property is in
addition to the dwelling coverage. It is usually 50% of the amount of coverage for the dwelling.
This is not true on a DP policy. Contents must be declared separately and an additional premium
must be paid to cover personal property on a dwelling fire policy.
On an HO-3 ('00) policy, an insured location includes all EXCEPT: - CORRECT
ANSWERS Answer: Vacant farm land owned by an insured
Explanation: Although the personal liability provided by an HO policy automatically extends to
vacant land owned by the insured, family cemetery plots and land owned by the insured where
a new residence is being built, the insured's liability relating to farm land would not be covered.
A farm is considered to be a business.
,On an HO-3 ('00), replacement cost coverage applies to: - CORRECT ANSWERS Answer:
Coverages A and B only
Explanation:
On an HO-3, the dwelling (Coverage A) and the outbuildings (Coverage B) are both covered on
an all-risk basis for their replacement cost, subject to an 80% coinsurance requirement.
However, contents (Coverage C) are covered on a named-peril basis for their actual cash (or
depreciated) value.
An HO-6 provides which type of coverage for contents? - CORRECT ANSWERS Answer:
Named peril
Explanation:
On an HO-6, contents coverage is named (or specified) perils. These specified perils are
essentially the same as those specified on an HO-4, which are the broad form perils. All
unendorsed HO policies provide named peril coverage for contents, except the HO-5, which is
all-risk on both the dwelling and the contents.
Which owned boat is automatically covered under Part II of a homeowners policy? - CORRECT
ANSWERS Answer: 12' kayak
Explanation:
Part II of an HO is the liability section. Sailboats less than 26 feet and outboards with 25 total
horsepower or less are covered automatically for liability to others. Kayaks, rowboats, and
canoes are also covered for liability, since they are not excluded.
The HO-4 (tenant HO) and the HO-6 (condo HO) are alike EXCEPT: - CORRECT
ANSWERS Answer: Both have replacement cost coverage
, Explanation:
Both the HO-4 and the HO-6 are designed to primarily cover personal property (contents).
Contents coverage on an HO policy is named perils and ACV, although replacement cost
coverage may be added by endorsement for an additional premium.
All of the following are true about personal articles floaters EXCEPT: - CORRECT
ANSWERS Answer: Coverage is provided on a blanket basis
Explanation:
PAFs require each insurance article to be specified along with the limit of coverage. All-risk
coverage is provided, but claims are settled on an ACV basis, although the required appraisals
go a long way in determining how much insured items are worth. However, there is a floater
called a PPF (personal property floater) which does insure personal property on a blanket or
unscheduled basis. For example, if you sell your house and buy a motor home, you might buy a
PPF to insure all your personal property in the motor home on an all-risk basis, anywhere in the
world. Another type of floater, called a fine arts floater, insures items on a valued or stated
amount basis, rather than ACV. This is used for paintings, sculpture, etc.
A fire totally destroys your home. Your HO-3 ('00) policy would cover all of the following EXCEPT:
- CORRECT ANSWERS Answer: Your motor vehicle in the garage
Explanation: The $1,500 limit on jewelry, watches, and furs applies to theft only. The peril of fire
is not affected by this limit, thus the $2,500 Rolex watch destroyed by the peril of fire would be
covered. Although an HO will not cover automobiles, motorized vehicles used to service the
premises are covered. There is no special limit on antiques, although they may be better
covered on an all-risk PAF.
Medical payments under a homeowners policy cover expenses resulting from an injury to: -
CORRECT ANSWERS Answer: A residence employee
