Property And Casualty Insurance License Property Insurance Basics 1

Question 1

What does a standard homeowners insurance policy (HO-3) cover regarding the dwelling?

Accepted Answer

Open perils (all-risk)

Answer

Named perils only

Answer

Flood and earthquake

Answer

Liability only

Question 2

Which of the following is NOT covered by a standard homeowners policy?

Accepted Answer

Flood

Answer

Fire

Answer

Theft

Answer

Windstorm

Question 3

What is the purpose of coinsurance in a property insurance policy?

Accepted Answer

To ensure the insured carries adequate coverage relative to property value

Answer

To share the premium with another insurer

Answer

To cover losses jointly with the insured

Answer

To reduce deductibles automatically

Question 4

Under a Dwelling Policy (DP-1), coverage is provided on which basis?

Accepted Answer

Named perils

Answer

Open perils

Answer

Replacement cost

Answer

Agreed value

Question 5

What is 'actual cash value' (ACV) in property insurance?

Accepted Answer

Replacement cost minus depreciation

Answer

The original purchase price of the property

Answer

The market value of the property

Answer

The cost to rebuild the property new

Question 6

Which homeowners form provides the broadest coverage for both the dwelling and personal property?

Accepted Answer

HO-5

Answer

HO-1

Answer

HO-2

Answer

HO-3