CIC PERSONAL LINES – RESIDENTIAL
EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
Section I Property Exclusions - Answer-- Ordinance/Law
- Earth Movement (Earthquake, sinkhole)
- Water (flood, sewers/drains, dam, etc)
- Power Failure
- Neglect
- War
- Nuclear
- Intentional Loss
- Government Action
Loss Settlement: ACV or RC? - Answer-Actual Cash Value
- Personal Property
- Awnings, carpeting, appliances, outdoor equipment
- Structures that are not buildings
- Grave markers
Replacement Cost:
- Buildings under coverage A or B if
- Policy has > 80% of replacement cost in coverage
Loss Amount: Was building insured for > 80% R.C. at time of loss? - Answer-YES:
Smallest of:
- Limit of Liability
- R.C. of Damage
- Amount Actually Spent
NO:
Larger of:
- ACV
- Formula ($Coverage/80% RC x Loss)
- Cannot exceed limit of liability
Coverage E - What's Covered? - Answer-Personal Liability
- Bodily Injury and Property Damage caused by "occurrence"
- Doesn't include Personal Injury
- Defense Costs in addition to Limits
Coverage F - What's Covered? - Answer-Medical Payments
, - Necessary/Reasonable expenses incurred within 3 years
- Medical, surgical, x-ray, dental, ambulance, etc
- Doesn't apply to Insured or Regular Resident
Section II Additional Coverages - Answer-1. Defense Costs
2. Bond Premiums
3. Reasonable Expenses
4. Post Judgment Interest
5. First Aid Expenses
6. Damage to Property of Others
- Up to $1000
- Excludes intentional damage if > 13
- Gives back for Recreational Vehicle if non-owned
Homeowners "Insured" - Answer-- You
- Residents who are:
a) Relatives
b) <21 and in your care
-Full time student:
a) <24 and relative
b) <21 and in your care
Coverage B - What's Covered? - Answer-Other Structures
- Things on residence premises not attached to building, or connected only by fence,
wire, wall
- Not for business use
- Not rented, unless only as a garage
Perils Not Insured by HO-3 for A and B - Answer-- Collapse
- Freezing of plumbing, due to neglect
- Freezing/weight of water on pool, fences, patio
- Theft in residence under construction
- Vandalism if vacant > 60 days
- Mold unless hidden and resulting from accidental overflow of water
- Wear and tear
- Smoke from industry
- Pollution
- Settling, cracking, bulging of floors
- Birds, rodents, insects
- Nesting/infestation/waste of animals
- Animals owned/kept by insured
* BUT all ensuing water damage is covered
Homeowners "Business" Exceptions - Answer-1. Make < $2000/year
2. Volunteer Activities
3. Home day care, but no $ earned
EXAM QUESTIONS WITH COMPLETE
SOLUTIONS
Section I Property Exclusions - Answer-- Ordinance/Law
- Earth Movement (Earthquake, sinkhole)
- Water (flood, sewers/drains, dam, etc)
- Power Failure
- Neglect
- War
- Nuclear
- Intentional Loss
- Government Action
Loss Settlement: ACV or RC? - Answer-Actual Cash Value
- Personal Property
- Awnings, carpeting, appliances, outdoor equipment
- Structures that are not buildings
- Grave markers
Replacement Cost:
- Buildings under coverage A or B if
- Policy has > 80% of replacement cost in coverage
Loss Amount: Was building insured for > 80% R.C. at time of loss? - Answer-YES:
Smallest of:
- Limit of Liability
- R.C. of Damage
- Amount Actually Spent
NO:
Larger of:
- ACV
- Formula ($Coverage/80% RC x Loss)
- Cannot exceed limit of liability
Coverage E - What's Covered? - Answer-Personal Liability
- Bodily Injury and Property Damage caused by "occurrence"
- Doesn't include Personal Injury
- Defense Costs in addition to Limits
Coverage F - What's Covered? - Answer-Medical Payments
, - Necessary/Reasonable expenses incurred within 3 years
- Medical, surgical, x-ray, dental, ambulance, etc
- Doesn't apply to Insured or Regular Resident
Section II Additional Coverages - Answer-1. Defense Costs
2. Bond Premiums
3. Reasonable Expenses
4. Post Judgment Interest
5. First Aid Expenses
6. Damage to Property of Others
- Up to $1000
- Excludes intentional damage if > 13
- Gives back for Recreational Vehicle if non-owned
Homeowners "Insured" - Answer-- You
- Residents who are:
a) Relatives
b) <21 and in your care
-Full time student:
a) <24 and relative
b) <21 and in your care
Coverage B - What's Covered? - Answer-Other Structures
- Things on residence premises not attached to building, or connected only by fence,
wire, wall
- Not for business use
- Not rented, unless only as a garage
Perils Not Insured by HO-3 for A and B - Answer-- Collapse
- Freezing of plumbing, due to neglect
- Freezing/weight of water on pool, fences, patio
- Theft in residence under construction
- Vandalism if vacant > 60 days
- Mold unless hidden and resulting from accidental overflow of water
- Wear and tear
- Smoke from industry
- Pollution
- Settling, cracking, bulging of floors
- Birds, rodents, insects
- Nesting/infestation/waste of animals
- Animals owned/kept by insured
* BUT all ensuing water damage is covered
Homeowners "Business" Exceptions - Answer-1. Make < $2000/year
2. Volunteer Activities
3. Home day care, but no $ earned
