Common Homeowners Insurance Questions And Answers

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Common Homeowners Insurance Questions And Answers - Quiz


Here are a few common homeowners insurance questions and answers that every homeowner planning to buy a home policy should know. Also, this quiz will help in solving some of your queries related to property insurance. Homeowners insurance is generally a form of property insurance that covers destruction and damages to an individual's house and assets in the home. So, if you want to know more about it in detail, don't skip this quiz. Take it up and increase your understanding regarding your property.


Questions and Answers
  • 1. 

    A building that does NOT contain enough personal property to be used for that purpose and no one was home at the time of the loss best describes which of the following terms?

    • A.

      Uninsurable

    • B.

      Unoccupied

    • C.

      Empty

    • D.

      Vacant

    Correct Answer
    D. Vacant
    Explanation
    Chapter 6

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  • 2. 

    A devise which is used to minimize small nuisance claims, keep insurance premiums down and may reduce morale hazards is called

    • A.

      Arbitration

    • B.

      Deductible

    • C.

      Coinsurance

    • D.

      Appraisal

    Correct Answer
    B. Deductible
    Explanation
    Chapter 3

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  • 3. 

    All of the following are elements necessary for a contract to be valid, EXCEPT:

    • A.

      Legal Competent Parties

    • B.

      Signature

    • C.

      Consideration

    • D.

      Agreement

    Correct Answer
    B. Signature
    Explanation
    Chapter 3

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  • 4. 

    All of the following are resident producer requirements EXCEPT:

    • A.

      Submit an application to the Commission and have it evaluated

    • B.

      Be over 21

    • C.

      Be honest and trustworthy

    • D.

      Pass the state licensing exam

    Correct Answer
    B. Be over 21
    Explanation
    Chapter 1

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  • 5. 

    All of the following will be listed on a written binder, EXCEPT:

    • A.

      Insurer's name

    • B.

      Policy limits

    • C.

      Premium

    • D.

      Effective dates

    Correct Answer
    C. Premium
    Explanation
    Chapter 3

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  • 6. 

    An insured responding to a question to the best of their knowledge would be

    • A.

      Material Fact

    • B.

      Concealment

    • C.

      Representation

    • D.

      Misrepresentation

    Correct Answer
    C. Representation
    Explanation
    Chapter 3

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  • 7. 

    An insured's indifference to a loss or attitude about safety can create a

    • A.

      Physical Hazard

    • B.

      Moral Hazard

    • C.

      Morale Hazard

    • D.

      Legal Hazard

    Correct Answer
    C. Morale Hazard
    Explanation
    Chapter 2

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  • 8. 

    An unendorsed homeowner policy will settle personal property for which valuation method?

    • A.

      Replacement Cost

    • B.

      Actual Cash Value

    • C.

      Agreed Value

    • D.

      Salvage Value

    Correct Answer
    B. Actual Cash Value
    Explanation
    Chapter 6

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  • 9. 

    Changes or additions to a policy contract are referred to as:

    • A.

      Exclusions

    • B.

      Additional payments

    • C.

      Supplemental payments

    • D.

      Endorsements

    Correct Answer
    D. Endorsements
    Explanation
    Chapter 3

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  • 10. 

    Coverage D on an Homeowner's policy will NOT cover for which of the following claims>

    • A.

      Loss of rental income following a covered loss

    • B.

      The cost to stay at a hotel after the insured's home was damaged in a forest fire

    • C.

      The cost of living in a camper on the insured's property due to a covered loss

    • D.

      The cost of buying new cloths after the home caught on fire

    Correct Answer
    D. The cost of buying new cloths after the home caught on fire
    Explanation
    Chapter 6

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  • 11. 

    Coverage D will cover which type of loss?

    • A.

      Indirect

    • B.

      Direct

    • C.

      Sequential

    • D.

      Optional

    Correct Answer
    A. Indirect
    Explanation
    Chapter 6

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  • 12. 

    Coverage E on a homeowner policy covers which of the following?

    • A.

      $100,000 per person

    • B.

      $1,000 per person

    • C.

      $100,000 per occurrence

    • D.

      $1,000 per occurrence 

    Correct Answer
    C. $100,000 per occurrence
    Explanation
    Chapter 6

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  • 13. 

    Damage to fishing equipment would be claimed under which homeowner policy coverage?

    • A.

      Coverage A

    • B.

      Coverage B

    • C.

      Coverage C

    • D.

      Coverage D

    Correct Answer
    C. Coverage C
    Explanation
    Chapter 6

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  • 14. 

    Each of the following must be present to establish negligent liability, EXCEPT

    • A.

      An intervening cause

    • B.

      A legal duty to act

    • C.

      A breach of duty

    • D.

      Resulting injury or damage

    Correct Answer
    A. An intervening cause
    Explanation
    Chapter 4

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  • 15. 

    Giving someone sporting tickets in exchange for purchasing a policy is called

    • A.

      Rebating

    • B.

      Defamation

    • C.

      Twisting

    • D.

      Misrepresentation

    Correct Answer
    A. Rebating
    Explanation
    Chapter 1

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  • 16. 

    Fire, lightning and hail are best used for which of the following terms?

    • A.

      Loss

    • B.

      Hazard

    • C.

      Risk 

    • D.

      Peril

    Correct Answer
    D. Peril
    Explanation
    Chapter 2

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  • 17. 

    How is the premium returned when the Named Insured cancels the policy?

    • A.

      Flat Rate

    • B.

      Pro-Rata

    • C.

      Short Rate

    • D.

      The Named Insured cannot cancel the policy because they are bound by the contract

    Correct Answer
    C. Short Rate
    Explanation
    Chapter 3

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  • 18. 

    The fire department service charge is how much?

    • A.

      $100

    • B.

      $500

    • C.

      $1000

    • D.

      $2500

    Correct Answer
    B. $500
    Explanation
    Chapter 6

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  • 19. 

    How will your homeowner policy cover the insured when their pet bites someone?

    • A.

      It is excluded

    • B.

      They are covered under Coverage C

    • C.

      They are covered under Coverage E and Coverage F

    • D.

      They are covered under both Section I and Section II

    Correct Answer
    C. They are covered under Coverage E and Coverage F
    Explanation
    Chapter 6

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  • 20. 

    If the insurance company cancels the policy, how will the unearned premium be returned to the policyholder?

    • A.

      Short Rate

    • B.

      Pro-Rata

    • C.

      Flat Rate

    • D.

      Cancellation Rate

    Correct Answer
    B. Pro-Rata
    Explanation
    Chapter 3

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  • 21. 

    If the Commissioner finds the person has violated insurance laws, it may issue a _______ requiring the offending party to stop the illegal activity

    • A.

      Suspension

    • B.

      Cease and Desist Order

    • C.

      Warrant for arrest

    • D.

      Complaint with their employer

    Correct Answer
    B. Cease and Desist Order
    Explanation
    Chapter 1

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  • 22. 

    In order to collect on an insurance claim

    • A.

      I must have an insurable interest when I purchase the policy

    • B.

      I need no insurable interest to collect

    • C.

      I needed to have an insurable interest at one time

    • D.

      I must have insurable interest at the time of loss

    Correct Answer
    D. I must have insurable interest at the time of loss
    Explanation
    Chapter 2

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  • 23. 

    In some states if the injured party can be proven even partially responsible for the accident, they are barred from recovery, this is called

    • A.

      Comparative Negligence

    • B.

      Assumption of Risk

    • C.

      Intervening Cause

    • D.

      Contributory Negligence

    Correct Answer
    D. Contributory Negligence
    Explanation
    Chapter 4

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  • 24. 

    Information about the premium and policy limits, the identity and address of the named insured, and the policy period is found in what part of an insurance policy?

    • A.

      Declarations

    • B.

      Insuring Agreement

    • C.

      Conditions

    • D.

      Exclusions

    Correct Answer
    A. Declarations
    Explanation
    Chapter 3

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  • 25. 

    Installing an ADT alarm system is an example of which risk management technique?

    • A.

      Transfer

    • B.

      Share

    • C.

      Retain

    • D.

      Reduce

    Correct Answer
    D. Reduce
    Explanation
    Chapter 2

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  • 26. 

    It is illegal for an agent to pay, allow, give, offer, or promise to a prospective insurance buyer any return of premiums, any special favor or advantage, or anything of value not specified in the insurance contract, as an inducement to buy insurance because this practice is known as

    • A.

      Defamation

    • B.

      Coercion

    • C.

      Rebating

    • D.

      Twisting

    Correct Answer
    C. Rebating
    Explanation
    Chapter 1

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  • 27. 

    Additional living expenses would be paid by which homeowner policy coverage?

    • A.

      Coverage A

    • B.

      Coverage B

    • C.

      Coverage C

    • D.

      Coverage D

    Correct Answer
    D. Coverage D
    Explanation
    Chapter 6

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  • 28. 

    Making a false statement intended to injure an insurer's reputation is an illegal practice known as:

    • A.

      Coercion

    • B.

      Misrepresentation

    • C.

      Defamation

    • D.

      Twisting

    Correct Answer
    C. Defamation
    Explanation
    Chapter 1

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  • 29. 

    Non-renewal refers to a termination of coverage anytime during the middle of the policy period

    • A.

      True

    • B.

      Sometimes true

    • C.

      False

    • D.

      Sometimes false

    Correct Answer
    C. False
    Explanation
    Chapter 3

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  • 30. 

    Perils that are not covered by the policy contract are called

    • A.

      Open perils

    • B.

      Special perils

    • C.

      Inclusions

    • D.

      Exclusions

    Correct Answer
    D. Exclusions
    Explanation
    Chapter 4

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  • 31. 

    Personal automobile medical payments cover

    • A.

      The insured as an occupant of a car only

    • B.

      An occupant of the insured vehicle only

    • C.

      The insured as a pedestrian only

    • D.

      The insured as an occupant of a car, an occupant of the insured vehicle and the insured as a pedestrian when hit by a car 

    Correct Answer
    D. The insured as an occupant of a car, an occupant of the insured vehicle and the insured as a pedestrian when hit by a car 
    Explanation
    Chapter 5

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  • 32. 

    Physical harm to a person is a definition of

    • A.

      Property Damage

    • B.

      Bodily Injury

    • C.

      Personal Injury

    • D.

      Physical Damage

    Correct Answer
    B. Bodily Injury
    Explanation
    Bodily injury refers to physical harm or damage caused to a person's body. It includes injuries such as cuts, bruises, fractures, or any other harm that affects a person's physical well-being. This term is commonly used in legal and insurance contexts to describe the physical harm suffered by an individual as a result of an accident or intentional act.

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  • 33. 

    Returning an insured back to the same financial condition prior to the loss is

    • A.

      Insurable interest

    • B.

      Indemnity

    • C.

      Exposure

    • D.

      Subrogation

    Correct Answer
    B. Indemnity
    Explanation
    Chapter 2

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  • 34. 

    Section II, Liability in a homeowner policy would NOT cover all of the following EXCEPT?

    • A.

      A lawsuit arising out of the insured's malpractice

    • B.

      Damage the insured caused by their own vehicle

    • C.

      The Named Insured starting a fight with the neighbor and punching them in the face

    • D.

      A boating accident the insured caused while operating their 20ft sailboat

    Correct Answer
    D. A boating accident the insured caused while operating their 20ft sailboat
    Explanation
    Chapter 6

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  • 35. 

    Something that may increase the seriousness of a loss or the likelihood that a loss will occur is called a

    • A.

      Loss

    • B.

      Hazard

    • C.

      Peril

    • D.

      Risk

    Correct Answer
    B. Hazard
    Explanation
    Chapter 2

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  • 36. 

    The failure to act or not as a reasonable person would under similar circumstance is known as

    • A.

      Accident

    • B.

      Negligence

    • C.

      Proximate Cause

    • D.

      Occurrence

    Correct Answer
    B. Negligence
    Explanation
    Chapter 4

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  • 37. 

    For an investigative consumer report the customer has to be advised in writing within

    • A.

      3 days

    • B.

      5 days

    • C.

      15 days

    • D.

      30 days

    Correct Answer
    A. 3 days
    Explanation
    Chapter 1

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  • 38. 

    The Insurance Commissioner is empowered to:

    • A.

      Pass state laws relating to insurance

    • B.

      Set rates for all insurance companies

    • C.

      Write policy forms for mandatory insurance coverage

    • D.

      Enforce state laws relating to insurance

    Correct Answer
    D. Enforce state laws relating to insurance
    Explanation
    Chapter 1

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  • 39. 

    Underinsured motorist coverage provides protection to an insured after an accident in which of the following situation

    • A.

      The other driver has insufficient insurance and is negligent

    • B.

      The other driver has no insurance and is negligent

    • C.

      The insured driver has insufficient limits and is negligent

    • D.

      The other driver has no insurance but is not negligent

    Correct Answer
    A. The other driver has insufficient insurance and is negligent
    Explanation
    Chapter 5

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  • 40. 

    Unequal transfer of value between the insurer and Named Insured is

    • A.

      Consideration

    • B.

      Adhesion

    • C.

      Indemnity

    • D.

      Aleatory

    Correct Answer
    D. Aleatory
    Explanation
    Chapter 3

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  • 41. 

    What are open perils?

    • A.

      Perils listed in the insuring agreement

    • B.

      Perils that are selected by the insured

    • C.

      All perils are covered with no exlusions

    • D.

      All perils are covered except those listed in the policy exclusions

    Correct Answer
    D. All perils are covered except those listed in the policy exclusions
    Explanation
    Chapter 4

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  • 42. 

    What are payments that are automatically included and do not affect the limit of liability?

    • A.

      Special payments

    • B.

      Supplementary Payments

    • C.

      Medical Payments

    • D.

      General Payments

    Correct Answer
    B. Supplementary Payments
    Explanation
    Chapter 4

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  • 43. 

    What coverage do the numbers 100/3000 represent in a 100/300/50 split limit?

    • A.

      Bodily Injury

    • B.

      Property Damage

    • C.

      Personal Injury

    • D.

       Loss of Use

    Correct Answer
    A. Bodily Injury
    Explanation
    Chapter 4

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  • 44. 

    What coverage on a homeowners policy will pay out regardless of fault

    • A.

      Coverage E and Coverage F

    • B.

      Coverage D

    • C.

      Coverage E

    • D.

      Coverage F

    Correct Answer
    D. Coverage F
    Explanation
    Chapter 6

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  • 45. 

    What is awarded for pain and suffering following an accident?

    • A.

      General Damages

    • B.

      Special Damages

    • C.

      Punitive Damages

    • D.

      Exemplary Damages

    Correct Answer
    A. General Damages
    Explanation
    General Damages are awarded for pain and suffering following an accident. These damages are meant to compensate the injured party for the physical and emotional pain, as well as any loss of enjoyment of life, that they have experienced as a result of the accident. General Damages are different from Special Damages, which are awarded to cover specific financial losses such as medical expenses and lost wages. Punitive Damages and Exemplary Damages, on the other hand, are awarded in cases where the defendant's conduct was particularly egregious or malicious, and are meant to punish the defendant rather than compensate the plaintiff.

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  • 46. 

    What is NOT covered by supplementary payments under Section II of a homeowner policy?

    • A.

      Court Cost

    • B.

      Damage to property of others

    • C.

      Funeral Expenses

    • D.

      First Aid

    Correct Answer
    C. Funeral Expenses
    Explanation
    Chapter 66

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  • 47. 

    What is proximate cause?

    • A.

      A reasonable explanation of an event

    • B.

      A peril which resulted in an accident

    • C.

      An uninterrupted chain of events from negligent act to accident

    • D.

      A hazard that exacerbated the situation

    Correct Answer
    C. An uninterrupted chain of events from negligent act to accident
    Explanation
    Chapter 4

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  • 48. 

    What is the limit called when you have more than one property at more than one location covered by one single limit on the policy?

    • A.

      Combined Single Limit

    • B.

      Blanket Limit

    • C.

      Specific Limit

    • D.

      Sub-Limit

    Correct Answer
    B. Blanket Limit
    Explanation
    Chapter 4

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  • 49. 

    What type of financial loss occurs as a consequence of direct loss?

    • A.

      Predictable loss

    • B.

      Occurrence

    • C.

      Indirect loss

    • D.

      Accident

    Correct Answer
    C. Indirect loss
    Explanation
    Chapter 2

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  • 50. 

    What will happen to your policy premium if you decrease your deductible?

    • A.

      Option 1

    • B.

      Option 2

    • C.

      Option 3

    • D.

      Option 4

    Correct Answer
    A. Option 1
    Explanation
    If you decrease your deductible, it means that you will have to pay less out of pocket before your insurance coverage kicks in. This will result in a lower policy premium because the insurance company will have to cover a larger portion of the costs in the event of a claim.

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  • May 12, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 20, 2022
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