Common Homeowners Insurance Questions And Answers
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A devise which is used to minimize small nuisance claims, keep insurance premiums down and may reduce morale hazards is called
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Arbitration
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Deductible
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Coinsurance
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Appraisal
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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.
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- 2.
The failure to act or not as a reasonable person would under similar circumstance is known as
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Accident
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Negligence
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Proximate Cause
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Occurrence
Correct Answer
A. NegligenceExplanation
Chapter 4Rate this question:
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- 3.
Changes or additions to a policy contract are referred to as:
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Exclusions
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Additional payments
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Supplemental payments
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Endorsements
Correct Answer
A. EndorsementsExplanation
Chapter 3Rate this question:
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- 4.
Installing an ADT alarm system is an example of which risk management technique?
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Transfer
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Share
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Retain
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Reduce
Correct Answer
A. ReduceExplanation
Chapter 2Rate this question:
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- 5.
Which one of the following is NOT an eligible vehicle for coverage under a Personal Auto Policy?
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A sedan
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An SUV
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A van
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A motorcycle
Correct Answer
A. A motorcycleExplanation
A motorcycle is not an eligible vehicle for coverage under a Personal Auto Policy because motorcycles are typically covered under a separate insurance policy called a Motorcycle Insurance Policy. Personal Auto Policies are designed to provide coverage for cars, sedans, SUVs, and vans, but not for motorcycles. Motorcycles have different risks and require specialized coverage, which is why they are excluded from Personal Auto Policies.Rate this question:
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- 6.
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?
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Declarations
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Insuring Agreement
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Conditions
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Exclusions
Correct Answer
A. DeclarationsExplanation
Chapter 3Rate this question:
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- 7.
Fire, lightning and hail are best used for which of the following terms?
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Loss
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Hazard
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Risk
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Peril
Correct Answer
A. PerilExplanation
Chapter 2Rate this question:
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- 8.
Perils that are not covered by the policy contract are called
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Open perils
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Special perils
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Inclusions
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Exclusions
Correct Answer
A. ExclusionsExplanation
Chapter 4Rate this question:
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- 9.
Something that may increase the seriousness of a loss or the likelihood that a loss will occur is called a
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Loss
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Hazard
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Peril
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Risk
Correct Answer
A. HazardExplanation
Chapter 2Rate this question:
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- 10.
Which loss valuation will provide a new item for an old item if damaged by a covered claim?
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Fair Market Value
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Repair Cost
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Replacement Cost
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Actual Cash Value
Correct Answer
A. Replacement CostExplanation
Chapter 4Rate this question:
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- 11.
Physical harm to a person is a definition of
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Property Damage
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Bodily Injury
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Personal Injury
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Physical Damage
Correct Answer
A. Bodily InjuryExplanation
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.Rate this question:
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- 12.
If the Commissioner finds the person has violated insurance laws, it may issue a _______ requiring the offending party to stop the illegal activity
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Suspension
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Cease and Desist Order
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Warrant for arrest
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Complaint with their employer
Correct Answer
A. Cease and Desist OrderExplanation
Chapter 1Rate this question:
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- 13.
Returning an insured back to the same financial condition prior to the loss is
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Insurable interest
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Indemnity
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Exposure
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Subrogation
Correct Answer
A. IndemnityExplanation
Chapter 2Rate this question:
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- 14.
In order to collect on an insurance claim
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I must have an insurable interest when I purchase the policy
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I need no insurable interest to collect
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I needed to have an insurable interest at one time
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I must have insurable interest at the time of loss
Correct Answer
A. I must have insurable interest at the time of lossExplanation
Chapter 2Rate this question:
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- 15.
When can the Commissioner examine an insurer's records?
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Every Year
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At least once every three years
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At any time
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At least once every four years
Correct Answer
A. At any timeExplanation
Chapter 1Rate this question:
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- 16.
Which one of the following would NOT be considered an insured on a policy contract?
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14 year old son living with the Named Insured
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10 year old son of the neighbor living next to the Named Insured
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20 year old foster child living with the Named Insured
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Named Insured's 22 year old daughter away at school full time
Correct Answer
A. 10 year old son of the neighbor living next to the Named InsuredExplanation
Chapter 2Rate this question:
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- 17.
Which one of the following locations will NOT be covered on a personal auto policy?
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Puerto Rico
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Canada
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United States
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Mexico
Correct Answer
A. MexicoExplanation
Chapter 5Rate this question:
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- 18.
Giving someone sporting tickets in exchange for purchasing a policy is called
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Rebating
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Defamation
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Twisting
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Misrepresentation
Correct Answer
A. RebatingExplanation
Chapter 1Rate this question:
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- 19.
If the insurance company cancels the policy, how will the unearned premium be returned to the policyholder?
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Short Rate
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Pro-Rata
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Flat Rate
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Cancellation Rate
Correct Answer
A. Pro-RataExplanation
Chapter 3Rate this question:
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- 20.
Additional living expenses would be paid by which homeowner policy coverage?
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Coverage A
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Coverage B
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Coverage C
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Coverage D
Correct Answer
A. Coverage DExplanation
Chapter 6Rate this question:
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- 21.
Which policy would be used to insure a condo?
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HO-4
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HO-6
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HO-5
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HO-3
Correct Answer
A. HO-6Explanation
Chapter 6Rate this question:
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- 22.
An insured responding to a question to the best of their knowledge would be
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Material Fact
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Concealment
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Representation
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Misrepresentation
Correct Answer
A. RepresentationExplanation
Chapter 3Rate this question:
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- 23.
Which term best describes the insurance company's assumption of the insured's legal rights to sue the at-fault party?
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Right to Salvage Clause
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Liberalization Clause
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Subrogation Clause
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Recovered Property Clause
Correct Answer
A. Subrogation ClauseExplanation
Chapter 3Rate this question:
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- 24.
An insured's indifference to a loss or attitude about safety can create a
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Physical Hazard
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Moral Hazard
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Morale Hazard
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Legal Hazard
Correct Answer
A. Morale HazardExplanation
Chapter 2Rate this question:
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- 25.
Damage to fishing equipment would be claimed under which homeowner policy coverage?
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Coverage A
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Coverage B
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Coverage C
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Coverage D
Correct Answer
A. Coverage CExplanation
Chapter 6Rate this question:
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- 26.
In some states if the injured party can be proven even partially responsible for the accident, they are barred from recovery, this is called
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Comparative Negligence
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Assumption of Risk
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Intervening Cause
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Contributory Negligence
Correct Answer
A. Contributory NegligenceExplanation
Chapter 4Rate this question:
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- 27.
What are open perils?
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Perils listed in the insuring agreement
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Perils that are selected by the insured
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All perils are covered with no exlusions
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All perils are covered except those listed in the policy exclusions
Correct Answer
A. All perils are covered except those listed in the policy exclusionsExplanation
Chapter 4Rate this question:
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- 28.
How long will personal property be covered at a new location?
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10 days
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30 days
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60 days
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90 days
Correct Answer
A. 30 daysExplanation
Chapter 6Rate this question:
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- 29.
Non-renewal refers to a termination of coverage anytime during the middle of the policy period
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True
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Sometimes true
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False
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Sometimes false
Correct Answer
A. FalseExplanation
Chapter 3Rate this question:
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- 30.
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?
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Combined Single Limit
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Blanket Limit
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Specific Limit
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Sub-Limit
Correct Answer
A. Blanket LimitExplanation
Chapter 4Rate this question:
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- 31.
How will your homeowner policy cover the insured when their pet bites someone?
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It is excluded
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They are covered under Coverage C
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They are covered under Coverage E and Coverage F
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They are covered under both Section I and Section II
Correct Answer
A. They are covered under Coverage E and Coverage FExplanation
Chapter 6Rate this question:
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- 32.
Making a false statement intended to injure an insurer's reputation is an illegal practice known as:
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Coercion
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Misrepresentation
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Defamation
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Twisting
Correct Answer
A. DefamationExplanation
Chapter 1Rate this question:
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- 33.
Personal automobile medical payments cover
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The insured as an occupant of a car only
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An occupant of the insured vehicle only
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The insured as a pedestrian only
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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
A. The insured as an occupant of a car, an occupant of the insured vehicle and the insured as a pedestrian when hit by a carExplanation
Chapter 5Rate this question:
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- 34.
The fire department service charge is how much?
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$100
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$500
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$1000
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$2500
Correct Answer
A. $500Explanation
Chapter 6Rate this question:
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- 35.
Unequal transfer of value between the insurer and Named Insured is
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Consideration
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Adhesion
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Indemnity
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Aleatory
Correct Answer
A. AleatoryExplanation
Chapter 3Rate this question:
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- 36.
What coverage do the numbers 100/3000 represent in a 100/300/50 split limit?
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Bodily Injury
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Property Damage
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Personal Injury
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Loss of Use
Correct Answer
A. Bodily InjuryExplanation
Chapter 4Rate this question:
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- 37.
Which one of the following is guaranty that all the information provided is correct?
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Representation
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Warranty
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Material Representation
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Response
Correct Answer
A. WarrantyExplanation
Chapter 3Rate this question:
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- 38.
All of the following are resident producer requirements EXCEPT:
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Submit an application to the Commission and have it evaluated
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Be over 21
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Be honest and trustworthy
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Pass the state licensing exam
Correct Answer
A. Be over 21Explanation
Chapter 1Rate this question:
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- 39.
Coverage D on an Homeowner's policy will NOT cover for which of the following claims>
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Loss of rental income following a covered loss
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The cost to stay at a hotel after the insured's home was damaged in a forest fire
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The cost of living in a camper on the insured's property due to a covered loss
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The cost of buying new cloths after the home caught on fire
Correct Answer
A. The cost of buying new cloths after the home caught on fireExplanation
Chapter 6Rate this question:
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- 40.
Coverage D will cover which type of loss?
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Indirect
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Direct
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Sequential
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Optional
Correct Answer
A. IndirectExplanation
Chapter 6Rate this question:
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- 41.
The Insurance Commissioner is empowered to:
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Pass state laws relating to insurance
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Set rates for all insurance companies
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Write policy forms for mandatory insurance coverage
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Enforce state laws relating to insurance
Correct Answer
A. Enforce state laws relating to insuranceExplanation
Chapter 1Rate this question:
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- 42.
What type of financial loss occurs as a consequence of direct loss?
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Predictable loss
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Occurrence
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Indirect loss
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Accident
Correct Answer
A. Indirect lossExplanation
Chapter 2Rate this question:
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- 43.
Which of the following damages will punish the responsible party?
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Special Damages
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Compensatory Damages
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General Damages
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Punitive Damages
Correct Answer
A. Punitive DamagesExplanation
Chapter 4Rate this question:
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- 44.
Which of the following is NOT considered unfair discrimination
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Charging a higher rate because of their geographical location due to a regulatory mandate
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Charging a higher rate becuase of color, creed, or religion
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Charging a higher rate because their house is 80 years old but still meets current building codes
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Charging a higher rate because the customer is blind
Correct Answer
A. Charging a higher rate because of their geographical location due to a regulatory mandateExplanation
Chapter 3Rate this question:
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- 45.
All of the following are elements necessary for a contract to be valid, EXCEPT:
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Legal Competent Parties
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Signature
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Consideration
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Agreement
Correct Answer
A. SignatureExplanation
Chapter 3Rate this question:
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- 46.
All of the following will be listed on a written binder, EXCEPT:
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Insurer's name
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Policy limits
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Premium
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Effective dates
Correct Answer
A. PremiumExplanation
Chapter 3Rate this question:
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- 47.
Which of the following is NOT considered an insured location on a homeowner policy?
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Land used for farming and owned by the named insured
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The Named Insured's vacation home they are renting for 2 weeks in Florida
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The Named Insured's 17 year old daughter's dorm room at VCU
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The Named Insured's hotel room where they are staying until their brand new home is completed
Correct Answer
A. Land used for farming and owned by the named insuredExplanation
Chapter 6Rate this question:
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- 48.
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?
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Uninsurable
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Unoccupied
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Empty
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Vacant
Correct Answer
A. VacantExplanation
Chapter 6Rate this question:
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- 49.
Coverage E on a homeowner policy covers which of the following?
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$100,000 per person
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$1,000 per person
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$100,000 per occurrence
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$1,000 per occurrence
Correct Answer
A. $100,000 per occurrenceExplanation
Chapter 6Rate this question:
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