Unit 9 Miscellaneous Personal Insurance

Question 1

Flood Insurance: In ____, Congress created the National Flood Insurance Program (NFIP) to make flood insurance available to eligible communities through federal subsidization. The NFIP is managed by ____.

Answer 1

1968, FEMA

Question 2

Is flood insurance always required?

Answer 2

No (in some flood-prone communities it is)

Question 3

Are all homes and buildings eligible for flood insurance?

Answer 3

Yes, and the policy can cover the building, its contents, or both

Question 4

Maximum Limits for Flood Insurance Coverage:
(Emergency/Regular)

Building $____/____
Contents (personal property) $____/____
Commercial Building $____/____
Business Personal Property $____/____

Answer 4

35k / 250k
10k / 100k
100k / 500k
100k / 500k

Question 5

Flood Insurance Deductibles: The standard deductibles are $____ under the emergency program and $____ for the regular program.

Answer 5

$2000, $1000

Question 6

Does flood insurance cover indirect financial losses such as living expenses?

Answer 6

No

Question 7

Flood Insurance: Property is also covered at another place, either above ground or outside of the special flood hazard area, for ____ days when removed to protect it from flood.

Answer 7

45 Days

Question 8

Flood Insurance: Is personal property in a basement or outside in the yard covered?

Answer 8

No

Question 9

A flood includes the following: (4)

Answer 9

1. Overflow of inland or tidal waters
2. Unusual/rapid accumulation of runoff of surface water from any source, unless general flooding exists
3. Mudslides caused by accumulations of water on the ground or underground
4. Collapse of land as a result of excessive erosion due to flood

Question 10

Sewer backup into a dwelling is not considered a flood and is not covered. Also, water from a broken water pipe, washing machine, dishwasher, or water main is NOT a flood. Damage from these is considered water damage from “____” water.

Answer 10

Captured

Question 11

Flood Insurance: If the cost to repair flood damage is increased due to state or local flood management laws or ordinances, the policy will pay up to $____ to cover these extra expenses. This coverage is called the Cost of ____.

Answer 11

$30k, Cost of Compliance

Question 12

Flood Insurance: Are underground structures and equipment such as wells and septic tanks covered?

Answer 12

No

Question 13

Flood Insurance: Are accounts, bills, currency, deeds, evidences of debt, money, securities, bullion and manuscripts covered?

Answer 13

No

Question 14

Flood Insurance: Single-family dwellings (other than ____) are the only buildings that may be insured on a replacement cost basis under a flood policy. Replacement cost coverage is automatically provided when the building is insured for at least ____% of its replacement value or the maximum amount of insurance allowed by the flood program. The dwelling must also be the ____ of the insured. All other losses are paid on an actual cash-value basis.

Answer 14

1. Mobile Homes
2. 80%
3. Primary Residence

Question 15

NFIP policies may be sold by private insurance companies through the ____ Program. Under this system, the government sets the rates, eligibility requirements, and coverage limitations. the participating insurer collects premiums and pays for losses through these premiums. If the amount of losses exceeds the amount of premium collected, the government pays the difference. If the insurer collects more in premiums than it pays out if losses, the excess must be returned to the government. Insurance companies can keep some of the premium to cover the expenses of handling the policy.

Answer 15

Write Your Own Program

Question 16

Flood Insurance: Applications for the NFIP must be completed in full and must be accompanied by payment in full of the ____ for coverage to go into effect. Partial payment is not allowed.

Answer 16

Gross Policy Premium

Question 17

Flood Insurance: Are agents authorized to bind coverage?

Answer 17

No

Question 18

Flood Insurance Applications: The effective date of a new policy is ____ on the ____th calendar day after the date the application and premium are received.

Answer 18

12:01 AM, 30th

Question 19

Flood Insurance Applications:

1. If flood insurance is purchased in conjunction with a loan, is there a waiting period?
2. What is the waiting period when a flood map is being revised?
3. A request to increase coverage is subject to a ____ day waiting period.

Answer 19

1. No
2. 1 Day
3. 30

Question 20

Flood Insurance: since ____, to sell flood insurance agents must complete a one-time course related to the NFIP which will provide ____ hours of continuing education credit.

Answer 20

2004, 3

Question 21

Mobile Home: The dwelling policy can be used to provide property coverage for mobile homes but only the basic form can be used and only mobile homes permanently placed on ____ are eligible. ____ can be used to cover the contents of a mobile home but not the mobile home itself.

Answer 21

Foundations, HO4

Question 22

Mobile Home: Many companies have developed a separate ____ policy (HO____). In addition, a ____ endorsement can be attached to an HO____ or HO____ to modify coverage for mobile homeowners.

Answer 22

Mobile Home Package Policy, HO7
Mobile Homeowners Endorsement, HO2 or HO3

Question 23

Mobile Home: Can this insurance cover the vehicle when it is in transit?

Answer 23

Yes

Question 24

Mobile Home Coverage: Up to ____% of the coverage on the mobile home can be extended to other structures. Personal property is covered up to ____% of the dwelling coverage. Loss of Use is set at ____% of dwelling coverage

Answer 24

10%, 40%, 20%

Question 25

Marine: Inland forms are sometimes called ____. The two most commonly used personal inland marine forms are ____ and ____.

Answer 25

Floaters
Personal Articles
Personal Effects

Question 26

Marine: is this open or named peril coverage?

Answer 26

Open (with a few exceptions)

Question 27

Marine: Name the 7 Exclusions

Answer 27

1. War
2. Nuclear Hazard
3. Wear and Tear
4. Gradual Deterioration
5. Insects
6. Vermin
7. Inherent Vice (a condition or defect that exists within the property)

Question 28

Marine - The ____ Form provides coverage for nine optional classes of personal property - the same nine categories covered under the homeowners scheduled personal property endorsement…Name the 9 categories:

Answer 28

Personal Articles Form
1. Jewelry
2. Furs
3. Cameras
4. Musical Instruments
5. Silverware
6. Golf Equipment
7. Fine Arts
8. Stamps
9. Coins

Question 29

Marine: There is a Personal Articles Agreed Value Loss Settlement Form and a Personal Articles Standard Loss Settlement Form. Both are under the umbrella of Personal Inland Marine. The Agreed Value Loss Settlement form is used for scheduled property only. The Standard Loss Settlement Form uses the lesser of:

Actual Cash Value
Cost to Repair
Cost to Replace (with a substantially identical item)
____

Answer 29

Amount of insurance specified in the policy

Question 30

Marine: Another important feature of the personal articles form is that it provides automatic coverage for certain classes of newly acquired property when the property is in a category of property that is already insured. Automatic coverage is available for: (5)

Answer 30

1. Jewelry
2. Furs
3. Cameras
4. Musical Instruments
5. Fine Art

Question 31

Marine - Personal Articles Floater: For all property except fine art, coverage applies for ____ days; the property is covered for ____% of the applicable limit of insurance or $____, whichever is less. For fine art, coverage applies for ____ days and is provided for up to ____% of the applicable limit of insurance. Coverage for newly acquired property ceases after these time frames unless the insured notifies the insurance company about the property during this time.

Answer 31

30, 25%, 10k
90, 25%

Question 32

Marine: The Personal Effects Floater is also known as ____. It’s designed for people who want to insure their personal belongings while traveling. ____ peril coverage on an unscheduled basis is provided for the types of property usually carried by tourists, such as clothing, cameras, sports equipment, and souvenirs. Specifically excluded items: (7)

Answer 32

Traveler’s Baggage, Open
1. Valuable Papers
2. Tickets
3. Passports
4. Currency
5. Contact Lenses
6. Artificial Limbs
7. Salesperson’s Samples

Question 33

Boatowners: The insurance industry generally places “watercraft” into 3 categories:
1. ____: Less than 26 feet in length
2. ____: Generally 26 feet or greater in length
3. ____: Jet skis, wave runners, etc.

Answer 33

1. Boats
2. Yachts
3. Personal Watercraft

Question 34

Boatowners: will watercraft be covered if the boat is hired out, chartered, used to transport people or property for a fee, or used in an official race?

Answer 34

No

Question 35

Marine: ____ were developed by insurance companies and they combine property, liability, and medical payments insurance on an ____ basis. They are used to insure boats of certain lengths to certain dollar amounts. Losses are usually paid on an ____ basis.

Answer 35

Boatowners / Watercraft Package Policies
Open Peril
Actual Cash Value

Question 36

Marine: ____ Policies are ocean marine forms that provide a package of property and liability coverages. Most inboard boats, sailboats with inboard auxiliary power, and large pleasure boats are insured under these policies.

Answer 36

Personal Yacht Policies

Question 37

Marine - Personal Yacht Policies: Owners of larger vessels are more likely to purchase the complete package of yacht coverages which includes: (5)

Answer 37

1. Hull Insurance (pays replacement cost for partial losses and on a valued basis for total losses)
2. Boat Trailer Insurance (pays on ACV basis)
3. Protection and Indemnity (form of BI and PD insurance)
4. Medical Payments Coverage
5. Federal Longshore and Harbor Worker’s Compensation Insurance (provides benefits for maritime workers)

Question 38

____ Insurance refers to liability insurance that exceeds specified other policies and potentially primary insurance for losses not covered by the other policies. This need can be met through a ____ policy, which has two important purposes:

• Provide additional liability insurance over and above other owned policies
• Cover some losses excluded by the underlying liability insurance

Coverage limits for this kind of policy begin at $____

Answer 38

Umbrella Insurance
Personal Umbrella Policy
$1 M

Question 39

Umbrella Insurance: If the insured allows an underlying insurance policy to lapse or be reduced in coverage, does the umbrella pay the full liability amount?

Answer 39

No, it will only pay the excess of what the initial underlying policy would not have been able to.

Question 40

The personal umbrella will provide broader coverage for some claims that would not be covered by the insured’s primary insurance policies, which would be subject to the policy retention. This is called ____ coverage, and the insured must select a ____ limit that can vary from $250 to $10k and works like deductibles. This ____ (SIR) represents the amount of loss the insured must cover out of pocket. SIRs do not apply when the umbrella acts as excess coverage to the underlying coverage.

Answer 40

Primary Coverage, Retention Limit, Self-Insured Retention