FREE Property & Casualty Insurance License Test Homeowners Insurance Policies Questions and Answers

Question 1

An insured has a standard HO-3 policy.
A severe windstorm damages the roof of their home and also knocks over a large, detached storage shed in the backyard.
Which part of the policy will cover the damage to the shed?

Accepted Answer

Coverage B - Other Structures.

Answer

Coverage A - Dwelling, as it covers all property at the residence.

Answer

The loss is not covered as the shed is not attached to the main house.

Answer

Coverage C - Personal Property, because the shed contains personal items.

Question 2

The standard, unendorsed Homeowners 3 (HO-3) Special Form policy provides what types of peril coverage for the dwelling (Coverage A) and personal property (Coverage C)?

Accepted Answer

Open perils for the dwelling and named perils for personal property.

Answer

Named perils for both the dwelling and personal property.

Answer

Open perils for both the dwelling and personal property.

Answer

Named perils for the dwelling and open perils for personal property.

Question 3

A homeowner lives in an area that experiences a week of unprecedented, heavy rainfall, causing a nearby river to overflow its banks and inundate their property. Which of the following best describes how their standard HO-3 policy will respond to the water damage?

Accepted Answer

The loss will be excluded, as flood is a standard exclusion in homeowners policies.

Answer

The loss will be fully covered under Coverage A - Dwelling.

Answer

The loss will be covered, but only up to a special sub-limit for water damage.

Answer

Coverage will apply only if the water entered through a wind-damaged roof.

Question 4

A kitchen fire makes a family's home uninhabitable for two months while repairs are being made. The family has to rent a furnished apartment, which costs them $2,000 more per month than their usual mortgage and utility payments. Which homeowners policy coverage is designed to reimburse the family for this extra expense?

Accepted Answer

Coverage D - Loss of Use

Answer

Coverage A - Dwelling

Answer

Coverage E - Personal Liability

Answer

Coverage C - Personal Property

Question 5

During a burglary, thieves steal several items from an insured's home, including $1,000 in cash that was kept in a desk drawer. The insured's HO-3 policy has a $300,000 limit for Coverage C - Personal Property. Subject to the policy deductible, how much will the insurer pay for the stolen cash?

Accepted Answer

$200

Answer

$1,000

Answer

$500

Answer

$0, as cash is excluded.

Question 6

An insured is shopping at a grocery store when they accidentally knock over a large display, injuring another shopper and damaging store property. The injured shopper sues the insured. Which section of the insured's homeowners policy would provide coverage for this claim?

Accepted Answer

Coverage E - Personal Liability.

Answer

The policy will not respond as the incident occurred away from the insured's residence.

Answer

Coverage F - Medical Payments to Others.

Answer

Coverage C - Personal Property.

An insured has a standard HO-3 policy.A severe windstorm damages the roof of their home and also knocks over a large, detached storage shed in the backyard.Which part of the policy will cover the damage to the shed?

An insured has a standard HO-3 policy.
A severe windstorm damages the roof of their home and also knocks over a large, detached storage shed in the backyard.
Which part of the policy will cover the damage to the shed?