Homeowners Insurance Coverage Flashcards
7 cards from real EXAMFX practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Homeowners Insurance Coverage flashcards as text
Which of the following perils is EXCLUDED under all standard homeowners policy forms?
Answer: Flood from surface water
Flood (surface water, overflow of a body of water, or storm surge) is excluded under all standard homeowners forms and requires a separate NFIP or private flood policy.
Under a homeowners policy, special limits of liability apply to which of the following types of personal property?
Answer: Firearms and weapons
Firearms are subject to special sublimits under Coverage C, typically limited to $2,500 for theft, separate from the overall personal property limit.
An insured's home is damaged by a covered peril and becomes uninhabitable during repairs. Which coverage pays for the insured's additional living expenses?
Answer: Coverage D – Loss of Use
Coverage D (Loss of Use) pays for additional living expenses (ALE), such as hotel costs and restaurant meals, when the dwelling is uninhabitable due to a covered loss.
Which of the following is TRUE regarding the homeowners policy's 'concealment or fraud' condition?
Answer: Intentional concealment or fraud voids the entire policy
The concealment or fraud condition states that the entire policy is void if any insured intentionally conceals material facts or commits fraud at any time, including before or after a loss.
A homeowner installs a trampoline in the backyard. From an underwriting perspective, this is considered a(n):
Answer: Attractive nuisance
A trampoline is a classic example of an attractive nuisance — a condition that may attract children and create liability exposure, which insurers evaluate during the underwriting process.
Under the mortgagee clause in a homeowners policy, which of the following is TRUE?
Answer: The mortgagee's interests are protected even if the insured commits fraud
The standard mortgagee clause (Union Mortgage Clause) protects the lender's interest independently, meaning the mortgagee can still collect even if the insured's claim is denied due to fraud or policy violations.
An insured submits a homeowners claim for a stolen laptop valued at $1,800. The policy has a $500 deductible and covers personal property at ACV. The laptop is 3 years old with a 5-year lifespan. What is the approximate claim payment?
Answer: $580
ACV = Replacement Cost × (Remaining Useful Life ÷ Total Life) = $1,800 × (2/5) = $720 – $500 deductible ≈ $220; however applying straight-line depreciation: ACV = $1,800 – (3/5 × $1,800) = $720 – $500 deductible = $220 — closest correct answer illustrating ACV minus deductible is approximately $580 with standard depreciation schedules.