Insurance refresher

What is a contract or device for transferring risk from a person, business or organization to an insurance company?

• Law of large numbers

• Adhesion

• Insurance

• Agency

Which is NOT an element of an insurable risk?

• Catastrophic

• Affordable

• Accidental

• Measurable

Answer explanation

Remember that pure risks have 6 elements, Calculable, Affordable, Non-Catastrophic, Homogeneous, Accidental, and Measurable. (CANHAM). They must be non-catastrophic.

Insured has purchased an additional vehicle. How many days after purchase does the insured have to request that the new car is added to their personal auto policy?

• 10

• 14

• 20

• 30

Answer explanation

A new car is considered a covered automobile at purchase but must be added to the policy within 14 days to continue coverage.

Jack wants the maximum comprehensive protection for his home and personal property. Which homeowners policy should he purchase?

• HO-2

• HO-3

• HO-5

• HO-6

Answer explanation

The HO-5 is the comprehensive form and provides open peril coverage for dwellings, other structures, and personal property

All of the following classes of personal property are specifically excluded from homeowners coverage EXCEPT?

• Animals

• Clothing

• Property of boarders

• credit cards

Answer explanation

Animals, birds, fish, and property of boarders is excluded. Clothing is covered with no special limit of liability

Which of the following perils is covered in all homeowners forms?

• Freezing pipes

• Weight of ice, snow, or sleet

• Falling objects

• Smoke

Answer explanation

Smoke is a basic peril covered in all homeowners forms. Fire, Lightning, riot, explosion, vehicle, civil commotion, hail, aircraft, windstorm, theft, volcanic eruption, and vandalism are also covered in all homeowners forms

During a storm, a tree branch fell on Jack's car and broke the windshield. Which coverage of his personal auto policy will cover the damage to the car?

• Property damage

• Collision

• Comprehensive

• There is no coverage for it

Answer explanation

Damage caused by a falling object and breakage of glass are considered Other than collision (comprehensive) losses under part D of the personal auto policy.

Match the following

• Part B

• Uninsured/Underinsured

• Part A

• Liability

• Part C

• Comprehensive/Collision

• Part D

• Medical/PIP

Jack was injured when he lost control of his car and hit a guardrail. Which part of his personal auto policy will cover his medical expenses?

• Part A

• Part B

• Part C

• Part D

Answer explanation

Medical payments coverage provides coverage to the named insured, named insured's family members, and passengers in the name insured's auto

The DP-3 provides

• Basic coverage for the dwelling and broad coverage for personal property

• Broad coverage for the dwelling and basic coverage for the personal property

• Open peril coverage for the dwelling and broad coverage for personal property

• Open peril coverage for both the dwelling and personal popery

Answer explanation

DP-3 is also called the Special Form. It provides named peril coverage for personal property and open peril coverage for the dwelling and other structures.