Chapter 7 - Miscellaneous Personal Lines

Question 1

Personal Inland Marine Insured is also known as a ________ policy.

a. Liability
b. Waterworks
c. Floater
d. Endorsing

Answer 1

c. Floater

Question 2

What does a Personal Inland Marine insured policy mainly cover?

Answer 2

Property in Transit

Question 3

What is the Policy Territory for a Personal Inland Marine Insured policy?

Answer 3

usually Worldwide

Question 4

Can a Personal Inland Marine Insured policy be added to another policy as endorsement or issued as a separate policy?

Answer 4

Both.

Question 5

What payment basis are claims on a Personal Inland Marine Insured policy?

a. Replacement Cost
b. Actual Cost Value or Valued
c. 80% of Replacement Cost
d. Cost to Repair or Replace

Answer 5

b. ACV or Valued

Question 6

What is the “Pairs and Sets” clause?

Answer 6

If a covered loss occurs to an item that is part of a set, the value of the remaining item(s) is reduced based on the difference between the value of the total set and the value of each item individually. This is because each item is worth more as a “set” than on its own.

***For example, if a pair of diamond earrings is valued at $2,000, and a loss occurs to one earring, the value of the pair drops by more than 50%. If one earring by itself is valued at $800, the total loss is $1,200.

Question 7

How long is automatic coverage for newly acquired jewelry?

Answer 7

30 days

Question 8

What types of peril coverage is the Personal Effects Floater?

Answer 8

Open Peril coverage

***mainly used for tourists or travelers

Question 9

How long is the automatic newly acquired coverage for fine arts?

Answer 9

90 days

Question 10

What is the automatic newly acquired coverage for the cameras floater?

Answer 10

30 days

Question 11

What is the automatic newly acquired coverage for the Musical Instrument Floater?

Answer 11

30 days

Question 12

What type of boat does the Boatowners policy insure?

Answer 12

A boat that can be towed by a car.

Question 13

What type of peril coverage does Section I of the boatowners policy provide?

Answer 13

Open Peril coverage for the hull, motor, trailer, equipment and accessories manufactured for marine use.

Question 14

What payment basis are losses settled on in Section I of the boatowners policy?

Answer 14

ACV

Question 15

What coverages does Section II of the Boatowners Policy provide?

Answer 15

Watercraft Liability, medical Payments for passengers and uninsured boaters coverages (does NOT include Personal Injury Liability).

Question 16

What type of vessel is the Yacht policy designed for?

Answer 16

It is designed for larger vessels, many of which have crew members.

Question 17

What is a “Lay Up Warranty”?

Answer 17

applies when the insured boat is in storage and allows for a return of premium due to the reduced risk of the boat not being used when laid up. If the insured operates the yacht during the lay-up period (or lives on it), no coverage is provided.

***this is similar to when a car is put into ‘storage’

Question 18

Are Yachts covered anywhere in the world?

Answer 18

No, Yachts must remain within the navigation territory listed in the policy.

Question 19

What coverages do Yachts have?

Answer 19

Property & Liability, Personal Property (on the Yacht), Fuel Spills, Commercial Towing, Dinghies, Indemnity Coverage for the insured’s legal liability for BI & PD to others.

Question 20

What does DIC insurance require?

Answer 20

DIC insurance requires the use of a special form designed to fill in the coverage gaps contained in a property policy.

Question 21

Does DIC carry a normal deductible?

Answer 21

No, DIC typically carries a high deductible of $10,000 or more.

Question 22

What is DIC most often written to provide coverage for?
a. Earthquake
b. Flood
c. Collapse
D. Subsidence

Answer 22

All of them!

Question 23

Can an Earthquake Endorsement be added to a homeowners policy? Or must is be a separate policy?

Answer 23

It is normally an endorsement added to a homeowners but can be bought as a separate policy in California.

Question 24

What are the covered perils in an earthquake policy?

Answer 24

Earth movement, land shock waves or tremors, landslide, mudslide, mudflow, sinkhole, and the rising, sinking, or shifting of the earth.

Question 25

How long can perils from an earthquake happen and still be considered one occurrence?

Answer 25

All earth movements occurring within a 72-hour period are considered a single occurrence of earth movement.

Question 26

What is the NFIP?

Answer 26

National Flood Insurance Program

Question 27

Who runs the NFIP?

Answer 27

FEMA

Question 28

What communities can participate with the NFIP?

Answer 28

Participating Communities ***Communities in flood-prone areas must have established an approved flood control program in order to participate in the NFIP

Question 29

If a property owner lives in a community that is not a participating community, can the property owner purchase flood insurance?

Answer 29

No, regardless of the degree of flood risk.

Question 30

What does the NFIP cover?

Answer 30

Dwelling and Contents damage or Loss due to covered Flood.

Question 31

What is the WYO Program?

Answer 31

The WYO Program is a cooperative effort involving FEMA and the private sector that allows existing property and casualty insurance companies to write, issue, and service flood insurance under their own names. ***It is estimated that over 90% of the flood insurance policies in force are maintained by WYO companies.

Question 32

How high is the deductible for Umbrella Policies? a. $10,000 b. $100,000 c. $1,000 d. $0

Answer 32

d. $0 The umbrella begins paying out as soon as the primary policies are exhausted.

Question 33

Earthquake Endorsement

Answer 33

The Earthquake Endorsement covers earth movement that is excluded on virtually all property policies, and in some jurisdictions may also be purchased as a separate policy.

Question 34

What Perils does the Earthquake Endorsement cover?

Answer 34

The Earthquake Endorsement covers the perils of earthquake, earth movement, land shock waves or tremors, landslide, mudslide, mudflow, sinkhole, and the rising, sinking, or shifting of the earth.

Question 35

Flood policies are available from participating private insurers under the _______________ Program, as well as directly from the NFIP.

Answer 35

Write Your Own (WYO)

Question 36

The policy territory under a personal umbrella is worldwide and coverage is written at a base limit of $___.

Answer 36

$1,000,000

Question 37

The insured pays a ______________, a form of cost-sharing, if the personal umbrella policy drops down to cover a loss not insured by an underlying primary policy.

Answer 37

self-insured retention

Question 38

All of the following are true regarding the Personal Umbrella Policy, except: a. The Umbrella acts as a contributory liability policy b. The policy requires underlying coverage for automobiles and homes c. The Umbrella can provide broader coverage than the primary policy d. The policy is written for higher liability limits

Answer 38

a. The Umbrella acts as a contributory liability policy

Question 39

Which of the following perils is covered under the Personal Umbrella? a. Aircraft b. Personal injury c. Bailee d. Intentional injury

Answer 39

b. Personal injury

Question 40

The self-insured retention in the Umbrella is described as which of the following? a. Excess coverage b. An Endorsement c. A method of cost-sharing d. Primary coverage

Answer 40

c. A method of cost-sharing