Unit 13 Property Insurance Basics

Question 1

A typical homeowners’ insurance policy covers all of the following EXCEPT
A personal injury claims due to property owner’s negligence.
B theft of property.
C vandalism and malicious mischief.
D flood damage.

Answer 1

D flood damage.

Question 2

A property insurance or casualty insurance policy protects the insured from
A losses caused by damage to the property and the improvements on that property.
B losses caused to third persons or their property.
C both damage to the property and losses caused by third parties.
D damage caused by acts of war or terrorism.

Answer 2

A losses caused by damage to the property and the improvements on that property.

Question 3

Because it provides the insured with a greater amount of protection, the most commonly used residential insurance policy today is the
A HO-2.
B HO-3.
C HO-4.
D HO-5.

Answer 3

B HO-3.

Question 4

A limitation on the coverage of a specific insured property is called
A an exclusion.
B an endorsement.
C a condition.
D a premium.

Answer 4

C a condition.

Question 5

Insurance companies are particularly leery of claims involving the following EXCEPT
A water damage.
B slip and fall injuries.
C storms.
D dog bites.

Answer 5

C storms.

Question 6

Insurance companies may exclude property owners from coverage after a vacancy of
A 30 days.
B 60 days.
C 90 days.
D one calendar year.

Answer 6

B 60 days.

Question 7

Which statement regarding vacant properties is FALSE?
A Insurance policies contain exclusions for vacant property.
B Vacant properties have a greater chance of vandalism, undiscovered damage, and theft, and can adversely affect property insurance claims.
C A vacant property is one that is completely empty or substantially empty of personal property necessary to sustain normal occupancy.
D A vacant property is the same as an unoccupied one.

Answer 7

D A vacant property is the same as an unoccupied one.

Question 8

Which of the following statements is NOT true about homeowners’ insurance?
A Most policies exclude coverage for property that is unoccupied longer than a set time period.
B Most homeowners purchase an HO-3 policies for their residence.
C A homeowner policy can be purchased on a residence by any interested party.
D A property owner with an extensive history of filing insurance claims may be denied insurance.

Answer 8

C A homeowner policy can be purchased on a residence by any interested party.

Question 9

Federal flood insurance is
A required in certain areas to insure properties financed by federally backed mortgage loans against flood damage.
B only required on real estate purchases located on the North Carolina coast.
C only required in North Carolina on federally-owned lands.
D paid for by the federal government.

Answer 9

A required in certain areas to insure properties financed by federally backed mortgage loans against flood damage.

Question 10

The intent of the National Flood Insurance Program is to
A reduce the impact of flooding on private and public structures.
B provide affordable insurance to property owners, renters, and businesses.
C encourage communities to adopt and enforce floodplain management regulations.
D all of these.

Answer 10

D all of these.

Question 11

Under federal law, the purchase of flood insurance
I is mandatory for all federal or federally-related financial assistance for the acquisition and/or construction of buildings in high-risk flood areas.
II is required on all federally-related mortgage loans on property located in high-risk zones.
III can be obtained through insurance brokers and firms.
A I only
B I and II
C I, II, and III
D I and III

Answer 11

C I, II, and III