Property Insurance (State exam)

Business personal property

Property located in the insured structure or within 100 feet of the structure

Defamation

Making false statements about the financial condition of any insurer intended to injure any person engaged in the business of insurance

Volcanic eruptions

All volcanic eruptions that occur within a 72 hour period will be considered one occurrence/event

Beach Area Property Plan

Covered perils: Smoke, wind, hail

Flood insurance

Must be purchased by the NFIP

Installation Floater

Insures appliances intended to become a permanent part of the building

HO3 policy

Open peril coverage on dwelling and broad form coverage on personal property

Under the dwelling policy:

If a loss occurs, insured must start action towards a law suit within 2 years

pretext interview

An interviewer assumes a false identity, fraud, or refuses to disclose his true identity and interviews a person without disclosing the true purpose of the interview.

Declarations

Part of policy that shows the amount of insurance, premium, and policy term (who, what, when, where, and how much insurance/premium)

Dwelling policy coverage C- Personal property

Not covered: Animals, birds, and fish

The mobile home endorsement

alters the homeowners policy to cover a mobilehome and other structures on land owned or leased by the resident of the mobile home.

Business Income Coverage

Pays for losses of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations. Also called time element forms

HO Additional Coverages

Only up to $500 will be paid for accepting counterfeit US or Canadian currency

Insurer will NOT pay for maintenance and wages for the master and the crew when:

The ship is laid up for repairs

HO Coverage E

Personal liability. Coverage E will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damage caused by an occurrence to which the coverage applies

Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?

Must furnish a blank form in 15 days

Inland Marine form that provides coverage for customer's property while in care, custody and control of the insured

Bailee's customer policy

How long is waiting period upon purchase of flood insurance from NFIP?

30 days after received premium payment and application

Contractors Equipment Floater

A policy that covers mobile equipment or tools left unattended on a job site until the project is finished

Transportation/Permission to move endorsement

Insured covered under a mobile homeowners policy wants to move mobile home in a situation not in threat by an insured peril

Conditions

define what each party is required to do contractually in the event of a loss

Inchmaree Clause

Additional perils are covered, provided such a loss or damage has not resulted from negligence by the assured, owners or managers of the vessel.

When an insurer makes changes to the premium rates, the insurer must notify the policy holder within:

15 days

If the commissioner does examine a person, the expense of that examination will be paid by:

the person being examined

All of the following must be found on a premium payment receipt except:

Signature of the person making the payment

Ocean marine insurance provides physical damage coverage for ship while in transit:

Hull Policy

Duty of insured following a loss in a SFP:

submit signed proof of loss within 60 days

How many days prior to an insurer becoming insolvent may a claim be covered by the NC Insurance Guaranty Association?

30 days

Complaint records must be maintained for :

5 years

termination records:

Insurer must keep records of termination for 3 years.

Additional causes of loss under the broad form of a commercial property policy:

Water damage; falling objects; weight of ice, snow or sleet; collapse; breakage of glass

The initial binding period for new workers comp. coverage issued by the NC rate of bureau is:

30 days

Binder

A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued.

Removal Coverage

Applies for 30 days when the property has been removed to be protected

Flood Hazard Boundary Map (FHBM)

usually the initial flood map in a community. Indicates which areas in the community are subject to severe flooding. FHBM are the basis used for requiring a community to join the NFIP.

Initial binding period for a new workers comp. coverage issued by the NC rate bureau is:

30 days

If an insured covered under a mobile HO policy moves the mobile home to protect it from a covered peril, the policy will pay up to:

$500

Removal coverage for a SFP remains in effect for :

5 days

The insured ship has been stranded, the policy will pay for:

To sight the bottom even if no damage is found

Assuming the insurer and the insured agree on the amount payable for a loss covered under a dwelling policy, how soon after receiving the proof of loss must the insurer pay the claim?

60 days

The BOP liability coverage will pay for necessary medical expenses of others incurred within what max. time period ?

1 year

If the ownership of an insured vessel changes involuntarily, within how many days of the ownership transfer will the hull policy terminate

automatic termination 15 days after transfer

The required privacy disclosure notice must be provided by insurer to current policy holders at least once in any period of:

12 months

Dwelling property coverages:

Coverage A: Dwelling

Coverage B: Other structures

Coverage C: Personal Property

Coverage D: Fair rental value

Coverage E: Additional living expenses

HO property coverages:

Coverage A: Dwelling

Coverage B: Other structures

Coverage C: Personal property

Coverage D: Loss of use

Section 1 : property

Section 2: liability (Coverage E: Personal liability and Coverage F: Medical payments to others)

Hull policy

type of ocean marine insurance that provides physical damage coverage for the ship while it is in transit. If the ownership of an insured vessel changes, the hull policy terminates: 1. At the time of ownership change; 2. if at sea, upon arrival at the final port or; 3. If the termination is involuntary, 15 days after the ownership transfer.

To apply for a hearing after license is denied, person must wait:

30 days

For insurer to notify the commissioner of agent appointment termination:

30 days

Administrative fee of ______ for failing to notify the commissioner of change in residential or email address within 10 days.

$50

An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it?

Contractors equipment floater. This covers equipment left unattended on a job site until the project is finished.

The North Carolina Insurance Underwriting Association has all of the following powers EXCEPT

To engage in writing policies of insurance for town and county mutual insurance associations.

An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?

Coverage E - additional living expense. Coverage E is a broad or special form under the dwelling policy that pays for additional living expenses while dwelling is being repaired.

Which of the following would NOT be considered a flood?

Sewer back up

Flood Hazard Boundary Maps

Flood Hazard Boundary Maps (FHBM) are usually the initial flood map in a community. They indicate which areas in the community are subject to severe flooding. FHBM are the basis used for requiring a community to join the NFIP.

A dwelling policy has a standard deductible that applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

$250

Which of the following other coverages is NOT included in the basic form dwelling policy?

Breakage of glass. This is included in the DP2 and DP3 only.

The need for essential property insurance for the beach and coastal areas of North Carolina resulted in the creation of the

NC Insurance Underwriting Association

In a dwelling policy, which of the following is true regarding personal liability coverage?

Must be added as a supplement or write as a separate policy.

In North Carolina, a person who violates the law for False Pretenses and Cheats may be found guilty of a/an

Felony

When is liability coverage included in a homeowners policy?

It is included automatically. All HO policies automatically have liability coverage included in section 2.

An insurance policy is prepared by the insurance company, with little or no input from the insured. This means that an insurance policy is a/an

Adhesion contract. Insurance policies are drawn up by the insurer, and the insured simply "adheres." Take it or leave it.

The Standard Fire Policy limits legal action against insurance company to how many years?

3 years

Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value?

they are automatically provided with replacement cost coverage.

A builders risk form is most often written as which of the following?

Completed value form

Business Income Coverage

Includes net income that would have been earned plus continuing normal operations expenses, including payroll.

Which policy condition in HO policies states that insurance applies separately to each insured?

Severability of insurance

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?

During the first 30 days after a community enters the emergency or normal programs, coverage on a flood policy begins at 12:01 a.m. the day after application and premium payment have been mailed.

The amount an insurer will pay under Coverage D (Loss of Use) depends on

amount of coverage on the dwelling

How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?

$500

Homeowners policies provide coverage for____?

Business property while on the residence premises. Your contents coverage will provide up to $2500 for loss of business property on premises.

Which of the following additional perils is covered under both the basic form and broad form dwelling policies?

Internal explosion; it is provided on all forms automatically

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty. A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties but representations. Representations are statements that are true to the best of the applicant's knowledge.

The cancellation provision in a businessowners policy specifies all of the following EXCEPT

The method of transferring the owners rights. The assignment provision outlines the method of transfer of all or a portion of the policyowner's right under an insurance contract.

The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT

Business liability. By endorsement, an insured may extend the Section II liability coverage to certain business pursuits that occur away from the premises. It would cover the activities of the insured, but would not cover the liability of a business owned by an insured.

All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT

Replacement cost. Broad form causes of loss adds falling objects; weight of ice, snow, or sleet; water damage; collapse; and breakage of glass to those perils covered under the basic causes of loss.

When replacement coverage cost is not reasonable, what type of HO coverage is applicable?

The HO8 modified homeowners form is intended for use when replacement cost coverage is not practical.

What are extended covered perils on a basic dwelling policy?

Windstorm or hail, explosion, smoke, aircraft and vehicles, riot or civil commotion, volcanic eruption, vandalism and malicious mischief.

When would theft of property of guests and residence employees be covered under the HO8 form?

Only while on the insureds premises.

Under Coverage C - personal property in the dwelling policy, when will a guests property be covered?

Only when the property is at the insured location

What does form HO5 cover?

The dwelling and other structures, as well as contents and personal property.

What type of coverage is included in HO policies, but is not available in dwelling policies?

Liability coverage

What are the 2 liability coverages included in HO policies forms?

Coverage E - Personal liability

Coverage F - Medical payments to others

Under what conditions can broad theft coverage be added to a dwelling policy?

If the insured is the owner-occupant of the dwelling.

What are some of the exclusions from coverage in ALL of the HO forms?

Land, structures used for business purposes, animals/birds/fish, aircraft, rented property, electronic data, and motor vehicles.

What are the limits of theft coverage on an HO8 form policy?

The ACV of what was stolen; however, additional limits may apply to certain classes of property.

How are the dwelling and other structures covered in an HO3 policy form?

Open peril basis

What HO policy form is known as contents broad form?

HO4

What dwelling coverage form(s) will pay for the replacement cost of a dwelling.

DP2 and DP3

Which dwelling form provides open peril coverage on the building?

DP3

Under Coverage C of an HO3 policy, what is the amount of insurance provided for personal property?

At least 50% of the coverage A limit (this applies to all policies except for an HO4 and HO6

How is coverage usually written for HO8 forms?

For the market value of the property.

What is the most limited HO policy

HO8

Why does the HO4 form not provide dwelling coverage?

Tenant doesn't own the dwelling

What are additional coverages available in HO policies w/out additional premiums?

Debris removal, Lawns/plants/shrubs/trees, removal, reasonable repairs, and fire department service charge.

In HO policies, what determines the amount an insurer will pay under coverage D?

The amount of coverage on a dwelling

In general, what do HO policies cover?

Dwellings used primarily as private residences

What HO policy form is known as a special form?

HO3 special form

In HO policies, which coverage provides protection against an indirect or consequential loss?

Coverage D - Loss of use

Exclusions found in all 3 dwelling forms ?

Earth movement, water damage, power failure, neglect, war, nuclear hazard, intentional loss, freezing of plumbing, ordinance of law, and government action