Chapter 2 - Personal Insurance Coverages

Question 1

What does SFP stand for?

Answer 1

Standard Fire Policy

Question 2

What does an SFP Cover?

Answer 2

FLR

• Fire
• Lightning
• Removal

Question 3

What is a hostile fire?

Answer 3

A fire that has moved from the place of it’s intended use.

Question 4

Is theft covered in an SFP policy?

Answer 4

No! Theft is not covered in an SFP policy in most cases.

Question 5

When can theft be covered by an SFP policy?

Answer 5

When the theft occurs during the removal phase.

Question 6

What is the time of inception or expiration for an insurance contract?

Answer 6

12:01 AM

Question 7

What is the maximum term for a SFP policy?

Answer 7

7 Years.

Question 8

What is Pro-Rata Liablity?

Answer 8

When the insured has the same asset covered by two different insurance carriers.

Question 9

What is the formula to figure out Pro-Rata responsibility?

Answer 9

Insurer A’s Limit / (Insurer A’s limit + Insurer B’s Limit)

This gives the percentage of the loss that each insurer will pay.

Question 10

How is the ACV determined?

Answer 10

By an appraiser.

Question 11

When the insurer receives written proof of a loss, how long do they have to respond with the blank form to detail the loss?

Answer 11

15 days.

Question 12

How long does the insured have to submit a signed “proof of loss” to the insurer?

Answer 12

60 Days

Question 13

What happens if the insurer and the insured cannot agree on the ACV of the property?

Answer 13

They will each select an impartial appraiser within 20 days and then the appraisers will select an impartial umpire to decide.

Question 14

What is a Waiver?

Answer 14

The act of giving up or surrendering a right or priviledge.

Question 15

What types of property do Dwelling Policies usually cover?

Answer 15

Dwelling Policies are primarily issued to cover non-owner occupied buildings. However owner occupies buildings are eligible for a DP.

Question 16

Do Dwelling Policies (DPs) cover liability?

Answer 16

Liability coverage is NOT automatically included in DPs, though it can be endorsed.

Question 17

What type of Dwelling Policy is used of a mobile home?

Answer 17

DP1 usually

Question 18

What are the types of coverages in DPs?

Answer 18

Coverage A: Dwelling
Coverage B: Other Buildings
Coverage C: Personal Property
Coverage D: Loss of Fair Rental Value
Coverage E: Additional Living Expenses

Question 19

What perils are covered in a DP1?

Answer 19

FLI
• Fire
• Lightning
• Internal Explosion

Question 20

What coverages are in included in a DP1?

Answer 20

Coverages A-D

Question 21

What coverages do not have a deductible?

Answer 21

The deductible DOES NOT apply towards payment for the loss of Coverage D and Coverage E.

Question 22

What are the coverage extensions for DPs and what do they do?

Answer 22

These extensions are called “Other Coverages” and they may increase the limit of liability or it may be made part of an existing coverage limit.

Question 23

How many “Other Coverages” are there for Dwelling Policies?

Answer 23

Six

Question 24

What are the other coverages for a Dwelling Policy?

Answer 24

1. Removal coverage for the basic form is 5 days on the basic and 30 days on the broad and special forms.
2. Tenant’s improvements, alterations and additions.
3. Worldwide personal property.
4. Reasonable cost of repair.
5. Fire department service charge.
6. Debris removal

Question 25

How much is paid on Coverage A on a DP policy for each form?

Answer 25

Declared amount on DP1, DP2 and DP3

Question 26

How much is paid on Coverage B on a DP policy for each form?

Answer 26

DP1 - 10% of coverage A (Not In addition to) | DP 2 & DP3 10% of coverage A (In addition to A)

Question 27

How much is paid on Coverage C on a DP policy for each form?

Answer 27

Declared amount in addition to Coverage A.

Question 28

How much is paid on Coverage D on a DP policy for each form?

Answer 28

DP1 - 10% of coverage A (Not In addition to) | DP 2 & DP3 10% of coverage A (In addition to A)

Question 29

How much is paid on Coverage E on a DP policy for each form?

Answer 29

DP1 - $0 Not included unless endorsed. | DP 2 & DP3 10% of coverage A (In addition to A)

Question 30

What other coverages do Broad and Special forms include?

Answer 30

1. Lawns, trees, shrubs and plants 2. Collapse of a building 3. Breakage of glass or safety glazing material.

Question 31

How much is paid for Tenants Improvements on each DP form?

Answer 31

DP1 - 10% of Coverage C (Not in Addition to A) | DP2 & DP3 - 10% of Coverage C (In additional to A)

Question 32

How much is paid for Worldwide Personal Property on each DP form?

Answer 32

DP1, DP2 & DP3 - 10% of Coverage C (Not in addition to A)

Question 33

How much is paid for Trees, Shrubs or Plants on each DP form?

Answer 33

DP1 - Not covered | DP2 - $500 per item, max of 5% of coverage A. paid in additional to Coverage A.

Question 34

What properties are excluded from claims in DP policies?

Answer 34

* Other structures used for commercial, manufacturing or farming. * Other structures help for rental to non-tenants * Animals, birds, fish * Loss caused by flood, earth movement or war or nuclear hazards.

Question 35

What coverages are included by a DP2?

Answer 35

1. FLI 2. REVCVSHAW 3. VMM 4. 7 other perils

Question 36

What does the acronym REVCVSHAW mean?

Answer 36

``` Riot Explosion Volcanic Eruption Civil Commotion Vehicle Smoke Hail Aircraft Windstorm ```

Question 37

What is VMM?

Answer 37

1. Vandalism | 2. Malicious Mischief

Question 38

If the insurer is canceling the policy for non-payment of premium, how much notice must the insurer give?

Answer 38

10 Days before the effective date.

Question 39

How much notice must the insurer give for cancellation if the policy has been in effect for 60 days?

Answer 39

30 Days

Question 40

How much notice must the insurer give if they decide to non-renew?

Answer 40

30 Days

Question 41

What does coverage L cover?

Answer 41

Personal Liability, with a maximum limit of $1M

Question 42

What does Coverage M cover?

Answer 42

Medical with a maximum limit of $1,000

Question 43

What are the differences between Broad and Limited Theft?

Answer 43

Broad Theft - Available to the owner-occupant | Limited Theft - Available to the non-owner occupant