Capturing The Details Of A Home! Capstone Test Trivia Quiz
This brief exam will test your retention of knowledge from Home Insurance Self Study Chapter 3: Capturing the details of a Home
- 1.
Which of the following is not included in the calculation of a home's replacement cost?
- A.
Cost of labor
- B.
Estimated costs of permits and surveys needed for construction
- C.
Removal of debris prior to construction
- D.
Fair market value of the home at the time of loss
Correct Answer
D. Fair market value of the home at the time of lossExplanation
Introduction to replacement cost Market costs can change rapidly and unexpectedly, meaning that the policy could be substantially over or undervalued in the event of a loss. Replacement cost includes the anticipated costs of labor, materials, permits, debris removal, and architectural costs of rebuilding a home to its original state. The market or real-estate value of the home is not included in this calculation.Rate this question:
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- 2.
It is very common for the replacement cost estimate provided by our carriers to be substantially higher than the coverage currently carried by the insured. Which of the following could be a valid reason for this discrepancy in coverage?
- A.
Carriers apply different philosophies when creating a proprietary replacement cost calculation formula
- B.
Many customers have not had their reconstruction cost adjusted to reflect inflation in the home
- C.
Our carriers are more preferred than the competition, so they offer higher coverage as an added policy benefit
- D.
Many customer hold policies written in the mid-2000's that reflect lower replacement costs due to the crash of the housing and mortgage market
- E.
The customer is likely to have made improvements to the home (either through general maintenance or due to a claim) that are not reflected on the current policy
Correct Answer(s)
A. Carriers apply different philosophies when creating a proprietary replacement cost calculation formula
B. Many customers have not had their reconstruction cost adjusted to reflect inflation in the home
E. The customer is likely to have made improvements to the home (either through general maintenance or due to a claim) that are not reflected on the current policyExplanation
Introduction to reconstruction cost It is extremely common that our policies value the customer's home at a higher amount than the customer's current policy. As a result, it is extremely important that you can speak convincingly and accurately as to the reasons for this change. The most common reasons that our replacement cost estimation would be substantially higher than the competition are: + Carriers apply different philosophies when creating a proprietary replacement cost calculation formula + Many customers have not had their reconstruction cost adjusted to reflect inflation in the home + The customer is likely to have made improvements to the home (either through general maintenance or due to a claim) that are not reflected on the current policy + Inflation in labor costs + Agent input The value of the housing market, the sell-able (market) value of the insured's home, and the carrier tier (preferred, standard, non-standard) are not material factors to this difference in coverageRate this question:
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- 3.
You are speaking to a customer who lives in the pictured home. The customer indicates that this a one-story home with a fully finished basement and an attic used for storage. For the purposes of calculating square footage and assessing the replacement cost of the home, how many sites should you indicate in the carrier's replacement cost estimation software?
- A.
1
- B.
1.5
- C.
2
- D.
1.75
Correct Answer
A. 1Explanation
Home Styles This is a single story (1 story) home. For all home styles EXCEPT BI-LEVEL/SPLIT-LEVEL/RAISED RANCH, finished basements should be indicated in the replacement cost estimation software, but not as a story or in square footage. Unfinished attics are not included as stories or square footage.Rate this question:
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- 4.
How would you indicate the style and number of stories for the pictured home?
- A.
Ranch home, 1 story
- B.
Raised ranch home, 2 stories, half or partial basement
- C.
Split-level home, 1.5 stories, slab foundation
- D.
Bi-level home, 2.5 stories, slab or partial slab foundation
Correct Answer
C. Split-level home, 1.5 stories, slab foundationExplanation
Home Styles This is a very standard split-level home. Split levels are defined by 3 distinct layers of height, with the middle layer offset as halfway between layers 1 and 3, and layer 1 is partially below grade. For these types of homes, we indicate split-level construction type, 2.5 stories, all 3 levers count for the purposes of calculating square footage, and this home has a slab foundation under half of all of the home, dependent on what the middle height level is built upon.Rate this question:
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- 5.
The customer states that she owns a single story, 1200 sq foot home. Additionally she states that the home sits on a full basement foundation. Looking at the house through 3rd party software leads you to believe that the basement is fully below-grade. That basement is 100% finished up to the standard of the rest of the home. Which best indicates the correct way to assess the foundation and square footage of the home?
- A.
1200 Sq Ft, Daylight basement foundation
- B.
2400 Sq Ft, Slab foundation
- C.
1200 Sq Ft, Basement foundation - 100% Finished
- D.
Not enough information is provided to accurately answer the question
Correct Answer
C. 1200 Sq Ft, Basement foundation - 100% FinishedExplanation
Home foundation details A fully below-grade basement is not included in the square footage of the home. In all home styles except BI-LEVEL/SPLIT-LEVEL/RAISED RANCH, we only indicate the finished, above grade living space in the square footage amount. When a basement is finished we indicated it under the finished basement option but leave that space out of the square footage value.Rate this question:
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- 6.
Which of the following situations would be included in the square footage estimate of the home?
- A.
The insured has finished his attic with pluming, heating, and electric
- B.
The insured has converted her detached garage into living space for an elderly family member
- C.
The home has an attached garage through which the insured may enter the home
- D.
The insured has extended the living space of the 2nd floor of the home over the attached garage
- E.
The insured has a fully finished daylight basement
Correct Answer(s)
A. The insured has finished his attic with pluming, heating, and electric
D. The insured has extended the living space of the 2nd floor of the home over the attached garageExplanation
Square footage All above-grade living space attached to the home must be calculated into the square footage estimate of the home. Detached living space, attached or built-in unfinished space, and below-grade space are not included in square footage estimatesRate this question:
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- 7.
For homes with more than one exterior covering / finish (e.g. partial siding, partial masonry veneer)
- A.
Indicate each finish type by percentage
- B.
Homes with a mixed exterior finish type are ineligible for coverage through our agency
- C.
The presence of any masonry (full masonry, masonry veneer) constitutes a masonry home for the purposes of rating and replacement cost calculation
- D.
Indicate vinyl siding as it is the most finish type
Correct Answer
A. Indicate each finish type by percentageExplanation
Home construction details When a home has more than one finish type, simply indicate each material and percentage of the full home exterior covered by that material. For carriers that do not allow for fine differentiation of finishes (like Travelers or Stillwater), carefully read the carrier options to properly indicate the accurate finish type.Rate this question:
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- 8.
Which of the following roof types should typically be replaced once every 20 years?
- A.
Slate tile
- B.
Asphalt shingle
- C.
Composite shingle
- D.
Clay tile
- E.
Metal roofing
Correct Answer(s)
B. Asphalt shingle
C. Composite shingleExplanation
Major home systems Most shingle roofs (asphalt, composite, architectural, wood) should be replaced every 20 years or so. "Forever materiales" do not need to be fully replaced with anywhere near the same frequency, but should be inspected once a decade or so. Roofs of all materials should be free of signs of age including missing shingles/tiles, patches of substantial discoloration, warping, curling, or mold.Rate this question:
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- 9.
Which of the following heating systems would be acceptable as the primary system for coverage with all of our carriers?
- A.
Basement coal stoker
- B.
Oil, forced air
- C.
Electric space heaters
- D.
Professionally installed exterior pellet stove
Correct Answer
B. Oil, forced airExplanation
Major home systems While wood stoves, pellet stoves, and electric space heaters are all acceptable, they may not be the primary source of heat within the home. An insurable home must have a centralized heating system powered by oil, gas, or electricity. A home any heat provided by in-home coal is unacceptable through our agency.Rate this question:
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- 10.
Which of the following home utility items is typically covered by a homeowners insurance policy?
- A.
Modernized mechanical well system
- B.
Hot water heater in the insured's crawspace
- C.
Sewage line buried within the insured's front yard
- D.
None of the listed items are insured by our carriers
Correct Answer
B. Hot water heater in the insured's crawspaceExplanation
Major home systems With regard to utility lines, we only cover items within the home or above-ground. Buried utility features like well water systems, electrical or internet cable, fuel tanks, or pipes of any kind are not covered. Utility items within the home, the basement of the home, or the crawlspace of the home are covered. Hanging exterior items such as electrical lines are excluded from coverage.Rate this question:
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- 11.
The pictured kitchen has acrylic finish appliances, pre-fabricated wood cabinetry, and laminate counter-top surfaces. How would you best classify this kitchen for the purposes of creating an accurate replacement cost estimate?
- A.
Builder's grade
- B.
Semi-custom
- C.
Custom
- D.
Designer
Correct Answer
A. Builder's gradeExplanation
Interior home features The pictured kitchen has the most basic available tier for all possible categories. The appliances are basic economy finish, there is no custom cabinet work, no tile or granite surfaces, no custom back-splashes, no viable island, nor any other unique design features.Rate this question:
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- 12.
The customer describes her bathroom as having laminate counter-tops, linoleum flooring, a combo tub and shower, and a large mirror. With no picture to see the bathroom, how would you best classify this bathroom for the purposes of creating an accurate replacement cost estimate?
- A.
Builder's grade
- B.
Semi-custom
- C.
Custom
- D.
Designer
Correct Answer
A. Builder's gradeExplanation
Interior home features Based on the customer's description, the bathroom sounds to have mostly basic features. There is no mention of tile flooring or walls, high-end shower or sink fittings, a jet/jacuzzi tub, double sinks, or high-end counter finishes (stainless, marble, granite, etc.). This should make us think the bathroom is builder's grade, but the improved mirror (large with additional lighting) should give us pause to think this bathroom is slightly above average.Rate this question:
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- 13.
Your customer lives in the pictured home. How would you list the exterior sitting area seen in this photo to ensure an accurate replacement cost estimate?
- A.
Deck
- B.
Porch
- C.
Patio
- D.
Sun room
Correct Answer
B. PorchExplanation
Exterior Features & detached structures The image above pictures an open porch. Porches are typically built-in open areas under the roof-line of the house. They are not heated and occasionally have lighting/electric. Porches may also bee screened in if they meet all other criteria. Decks are attached to raised wooden or polymer structures. They are rarely under the roofline of the home Patios are often slabs of concrete (or other upgraded material such as brick or tile). They are attached to the back of the house but are commonly covered by Coverage B, while decks and porches are included in the Coverage A amount.Rate this question:
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