SC Other Coverages and Options

If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?

• General liability policy

• Auto policy

• Umbrella policy

• Excess policy

Answer explanation

The underlying policy is the primary liability policy. In this scenario, it’s the insured’s personal auto policy.

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called

• Stop-loss.

• Coinsurance.

• Participation requirement.

• Self-insured retention.

Answer explanation

In casualty insurance, the portion of a claim not paid by insurance is called a retention. In property insurance, it is called a deductible.

Who would participate in a Write Your Own (WYO) flood insurance program?

• Businesses requiring National Flood Insurance policies

• Private insurers that write and service National Flood Insurance policies on a no risk-bearing basis

• Lloyd's associations

• Government insurance companies that write and service National Flood Insurance policies

Answer explanation

A WYO program is made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Administration. WYO programs retain part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses.

How long is a waiting period upon purchase of flood coverage through NFIP?

• 10 days

• 30 days

• 60 days

• There is no waiting period.

Answer explanation

Upon purchase of a flood policy, a 30-day waiting period is in place beginning from the time of application and premium payment.

An insured invites his neighbors out for a day on the water in his boat powered with a 150 hp outboard motor. While attempting to tie the boat to dock, his neighbor’s hand is broken when caught between the boat and dock. What coverage would apply to the broken hand?

• Homeowners property coverage

• The insured's boatowners policy

• The insured's outboard boat and motor policy

• Homeowners personal liability coverage

Answer explanation

Outboard boat and motor policies are property coverage only. Homeowners liability does not apply to outboards with more than 25 hp. Boatowners policies contain property, liability, and medical payments coverage.

Who decided which property is “on the coast” and may be insured by the SCWHUA?

• The SC General Assembly

• The DOI

• The SCWHUA

• The governor

Answer explanation

Established by SC law. When the General Assembly passed the wind and hail law, they designated certain areas of South Carolina's 5 counties that touch the Atlantic Ocean as being eligible for coverage by their SCWHUA.

Which of the following would NOT be considered a flood?

• Runoff of surface waters

• Sewer backup

• Overflow of tidal waters

• Mudslides

Answer explanation

Flood is defined by the National Flood Insurance Program. It does not include sewer backup.

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

• 6 months

• 12:01 am the next day

• 5 days

• 30 days

Answer explanation

The waiting period is 30 days as required by the National Flood Insurance Program.

To be eligible for coverage under the National Flood Insurance Program, an insured must live in which of the following communities?

• That has met the minimum population requirements

• That gets flooded at least annually

• That has met the minimum floodplain management guidelines

• That is surrounded by water

Answer explanation

To be eligible for the flood program an insured must live in a community that has met the minimum floodplain management guidelines.

SCWHUA coverage can now be purchased for

• Dwellings only.

• Commercial buildings only.

• Commercial and residential buildings including contents.

• None of the above.

Answer explanation

Established by SC law. Commercial building and residential building are insured by the SCWHUA. The contents are covered only if the wind and hail breach the structure.