Common Homeowners Insurance Questions And Answers
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Here are a few common homeowners insurance questions and answers that every homeowner planning to buy a home policy should know. Also, this quiz will help in solving some of your queries related to property insurance. Homeowners insurance is generally a form of property insurance that covers destruction and damages to an individual's house and assets in the home. So, if you want to know more about it in detail, don't skip this quiz. Take it up and increase your understanding regarding your property.
- 1.
A building that does NOT contain enough personal property to be used for that purpose and no one was home at the time of the loss best describes which of the following terms?
- A.
Uninsurable
- B.
Unoccupied
- C.
Empty
- D.
Vacant
Correct Answer
D. VacantExplanation
Chapter 6Rate this question:
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- 2.
A devise which is used to minimize small nuisance claims, keep insurance premiums down and may reduce morale hazards is called
- A.
Arbitration
- B.
Deductible
- C.
Coinsurance
- D.
Appraisal
Correct Answer
B. DeductibleExplanation
Chapter 3Rate this question:
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- 3.
All of the following are elements necessary for a contract to be valid, EXCEPT:
- A.
Legal Competent Parties
- B.
Signature
- C.
Consideration
- D.
Agreement
Correct Answer
B. SignatureExplanation
Chapter 3Rate this question:
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- 4.
All of the following are resident producer requirements EXCEPT:
- A.
Submit an application to the Commission and have it evaluated
- B.
Be over 21
- C.
Be honest and trustworthy
- D.
Pass the state licensing exam
Correct Answer
B. Be over 21Explanation
Chapter 1Rate this question:
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- 5.
All of the following will be listed on a written binder, EXCEPT:
- A.
Insurer's name
- B.
Policy limits
- C.
Premium
- D.
Effective dates
Correct Answer
C. PremiumExplanation
Chapter 3Rate this question:
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- 6.
An insured responding to a question to the best of their knowledge would be
- A.
Material Fact
- B.
Concealment
- C.
Representation
- D.
Misrepresentation
Correct Answer
C. RepresentationExplanation
Chapter 3Rate this question:
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- 7.
An insured's indifference to a loss or attitude about safety can create a
- A.
Physical Hazard
- B.
Moral Hazard
- C.
Morale Hazard
- D.
Legal Hazard
Correct Answer
C. Morale HazardExplanation
Chapter 2Rate this question:
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- 8.
An unendorsed homeowner policy will settle personal property for which valuation method?
- A.
Replacement Cost
- B.
Actual Cash Value
- C.
Agreed Value
- D.
Salvage Value
Correct Answer
B. Actual Cash ValueExplanation
Chapter 6Rate this question:
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- 9.
Changes or additions to a policy contract are referred to as:
- A.
Exclusions
- B.
Additional payments
- C.
Supplemental payments
- D.
Endorsements
Correct Answer
D. EndorsementsExplanation
Chapter 3Rate this question:
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- 10.
Coverage D on an Homeowner's policy will NOT cover for which of the following claims>
- A.
Loss of rental income following a covered loss
- B.
The cost to stay at a hotel after the insured's home was damaged in a forest fire
- C.
The cost of living in a camper on the insured's property due to a covered loss
- D.
The cost of buying new cloths after the home caught on fire
Correct Answer
D. The cost of buying new cloths after the home caught on fireExplanation
Chapter 6Rate this question:
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- 11.
Coverage D will cover which type of loss?
- A.
Indirect
- B.
Direct
- C.
Sequential
- D.
Optional
Correct Answer
A. IndirectExplanation
Chapter 6Rate this question:
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- 12.
Coverage E on a homeowner policy covers which of the following?
- A.
$100,000 per person
- B.
$1,000 per person
- C.
$100,000 per occurrence
- D.
$1,000 per occurrence
Correct Answer
C. $100,000 per occurrenceExplanation
Chapter 6Rate this question:
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- 13.
Damage to fishing equipment would be claimed under which homeowner policy coverage?
- A.
Coverage A
- B.
Coverage B
- C.
Coverage C
- D.
Coverage D
Correct Answer
C. Coverage CExplanation
Chapter 6Rate this question:
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- 14.
Each of the following must be present to establish negligent liability, EXCEPT
- A.
An intervening cause
- B.
A legal duty to act
- C.
A breach of duty
- D.
Resulting injury or damage
Correct Answer
A. An intervening causeExplanation
Chapter 4Rate this question:
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- 15.
Giving someone sporting tickets in exchange for purchasing a policy is called
- A.
Rebating
- B.
Defamation
- C.
Twisting
- D.
Misrepresentation
Correct Answer
A. RebatingExplanation
Chapter 1Rate this question:
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- 16.
Fire, lightning and hail are best used for which of the following terms?
- A.
Loss
- B.
Hazard
- C.
Risk
- D.
Peril
Correct Answer
D. PerilExplanation
Chapter 2Rate this question:
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- 17.
How is the premium returned when the Named Insured cancels the policy?
- A.
Flat Rate
- B.
Pro-Rata
- C.
Short Rate
- D.
The Named Insured cannot cancel the policy because they are bound by the contract
Correct Answer
C. Short RateExplanation
Chapter 3Rate this question:
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- 18.
The fire department service charge is how much?
- A.
$100
- B.
$500
- C.
$1000
- D.
$2500
Correct Answer
B. $500Explanation
Chapter 6Rate this question:
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- 19.
How will your homeowner policy cover the insured when their pet bites someone?
- A.
It is excluded
- B.
They are covered under Coverage C
- C.
They are covered under Coverage E and Coverage F
- D.
They are covered under both Section I and Section II
Correct Answer
C. They are covered under Coverage E and Coverage FExplanation
Chapter 6Rate this question:
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- 20.
If the insurance company cancels the policy, how will the unearned premium be returned to the policyholder?
- A.
Short Rate
- B.
Pro-Rata
- C.
Flat Rate
- D.
Cancellation Rate
Correct Answer
B. Pro-RataExplanation
Chapter 3Rate this question:
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- 21.
If the Commissioner finds the person has violated insurance laws, it may issue a _______ requiring the offending party to stop the illegal activity
- A.
Suspension
- B.
Cease and Desist Order
- C.
Warrant for arrest
- D.
Complaint with their employer
Correct Answer
B. Cease and Desist OrderExplanation
Chapter 1Rate this question:
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- 22.
In order to collect on an insurance claim
- A.
I must have an insurable interest when I purchase the policy
- B.
I need no insurable interest to collect
- C.
I needed to have an insurable interest at one time
- D.
I must have insurable interest at the time of loss
Correct Answer
D. I must have insurable interest at the time of lossExplanation
Chapter 2Rate this question:
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- 23.
In some states if the injured party can be proven even partially responsible for the accident, they are barred from recovery, this is called
- A.
Comparative Negligence
- B.
Assumption of Risk
- C.
Intervening Cause
- D.
Contributory Negligence
Correct Answer
D. Contributory NegligenceExplanation
Chapter 4Rate this question:
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- 24.
Information about the premium and policy limits, the identity and address of the named insured, and the policy period is found in what part of an insurance policy?
- A.
Declarations
- B.
Insuring Agreement
- C.
Conditions
- D.
Exclusions
Correct Answer
A. DeclarationsExplanation
Chapter 3Rate this question:
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- 25.
Installing an ADT alarm system is an example of which risk management technique?
- A.
Transfer
- B.
Share
- C.
Retain
- D.
Reduce
Correct Answer
D. ReduceExplanation
Chapter 2Rate this question:
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- 26.
It is illegal for an agent to pay, allow, give, offer, or promise to a prospective insurance buyer any return of premiums, any special favor or advantage, or anything of value not specified in the insurance contract, as an inducement to buy insurance because this practice is known as
- A.
Defamation
- B.
Coercion
- C.
Rebating
- D.
Twisting
Correct Answer
C. RebatingExplanation
Chapter 1Rate this question:
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- 27.
Additional living expenses would be paid by which homeowner policy coverage?
- A.
Coverage A
- B.
Coverage B
- C.
Coverage C
- D.
Coverage D
Correct Answer
D. Coverage DExplanation
Chapter 6Rate this question:
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- 28.
Making a false statement intended to injure an insurer's reputation is an illegal practice known as:
- A.
Coercion
- B.
Misrepresentation
- C.
Defamation
- D.
Twisting
Correct Answer
C. DefamationExplanation
Chapter 1Rate this question:
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- 29.
Non-renewal refers to a termination of coverage anytime during the middle of the policy period
- A.
True
- B.
Sometimes true
- C.
False
- D.
Sometimes false
Correct Answer
C. FalseExplanation
Chapter 3Rate this question:
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- 30.
Perils that are not covered by the policy contract are called
- A.
Open perils
- B.
Special perils
- C.
Inclusions
- D.
Exclusions
Correct Answer
D. ExclusionsExplanation
Chapter 4Rate this question:
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- 31.
Personal automobile medical payments cover
- A.
The insured as an occupant of a car only
- B.
An occupant of the insured vehicle only
- C.
The insured as a pedestrian only
- D.
The insured as an occupant of a car, an occupant of the insured vehicle and the insured as a pedestrian when hit by a car
Correct Answer
D. The insured as an occupant of a car, an occupant of the insured vehicle and the insured as a pedestrian when hit by a carExplanation
Chapter 5Rate this question:
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- 32.
Physical harm to a person is a definition of
- A.
Property Damage
- B.
Bodily Injury
- C.
Personal Injury
- D.
Physical Damage
Correct Answer
B. Bodily InjuryExplanation
Bodily injury refers to physical harm or damage caused to a person's body. It includes injuries such as cuts, bruises, fractures, or any other harm that affects a person's physical well-being. This term is commonly used in legal and insurance contexts to describe the physical harm suffered by an individual as a result of an accident or intentional act.Rate this question:
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- 33.
Returning an insured back to the same financial condition prior to the loss is
- A.
Insurable interest
- B.
Indemnity
- C.
Exposure
- D.
Subrogation
Correct Answer
B. IndemnityExplanation
Chapter 2Rate this question:
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- 34.
Section II, Liability in a homeowner policy would NOT cover all of the following EXCEPT?
- A.
A lawsuit arising out of the insured's malpractice
- B.
Damage the insured caused by their own vehicle
- C.
The Named Insured starting a fight with the neighbor and punching them in the face
- D.
A boating accident the insured caused while operating their 20ft sailboat
Correct Answer
D. A boating accident the insured caused while operating their 20ft sailboatExplanation
Chapter 6Rate this question:
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- 35.
Something that may increase the seriousness of a loss or the likelihood that a loss will occur is called a
- A.
Loss
- B.
Hazard
- C.
Peril
- D.
Risk
Correct Answer
B. HazardExplanation
Chapter 2Rate this question:
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- 36.
The failure to act or not as a reasonable person would under similar circumstance is known as
- A.
Accident
- B.
Negligence
- C.
Proximate Cause
- D.
Occurrence
Correct Answer
B. NegligenceExplanation
Chapter 4Rate this question:
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- 37.
For an investigative consumer report the customer has to be advised in writing within
- A.
3 days
- B.
5 days
- C.
15 days
- D.
30 days
Correct Answer
A. 3 daysExplanation
Chapter 1Rate this question:
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- 38.
The Insurance Commissioner is empowered to:
- A.
Pass state laws relating to insurance
- B.
Set rates for all insurance companies
- C.
Write policy forms for mandatory insurance coverage
- D.
Enforce state laws relating to insurance
Correct Answer
D. Enforce state laws relating to insuranceExplanation
Chapter 1Rate this question:
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- 39.
Underinsured motorist coverage provides protection to an insured after an accident in which of the following situation
- A.
The other driver has insufficient insurance and is negligent
- B.
The other driver has no insurance and is negligent
- C.
The insured driver has insufficient limits and is negligent
- D.
The other driver has no insurance but is not negligent
Correct Answer
A. The other driver has insufficient insurance and is negligentExplanation
Chapter 5Rate this question:
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- 40.
Unequal transfer of value between the insurer and Named Insured is
- A.
Consideration
- B.
Adhesion
- C.
Indemnity
- D.
Aleatory
Correct Answer
D. AleatoryExplanation
Chapter 3Rate this question:
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- 41.
What are open perils?
- A.
Perils listed in the insuring agreement
- B.
Perils that are selected by the insured
- C.
All perils are covered with no exlusions
- D.
All perils are covered except those listed in the policy exclusions
Correct Answer
D. All perils are covered except those listed in the policy exclusionsExplanation
Chapter 4Rate this question:
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- 42.
What are payments that are automatically included and do not affect the limit of liability?
- A.
Special payments
- B.
Supplementary Payments
- C.
Medical Payments
- D.
General Payments
Correct Answer
B. Supplementary PaymentsExplanation
Chapter 4Rate this question:
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- 43.
What coverage do the numbers 100/3000 represent in a 100/300/50 split limit?
- A.
Bodily Injury
- B.
Property Damage
- C.
Personal Injury
- D.
Loss of Use
Correct Answer
A. Bodily InjuryExplanation
Chapter 4Rate this question:
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- 44.
What coverage on a homeowners policy will pay out regardless of fault
- A.
Coverage E and Coverage F
- B.
Coverage D
- C.
Coverage E
- D.
Coverage F
Correct Answer
D. Coverage FExplanation
Chapter 6Rate this question:
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- 45.
What is awarded for pain and suffering following an accident?
- A.
General Damages
- B.
Special Damages
- C.
Punitive Damages
- D.
Exemplary Damages
Correct Answer
A. General DamagesExplanation
General Damages are awarded for pain and suffering following an accident. These damages are meant to compensate the injured party for the physical and emotional pain, as well as any loss of enjoyment of life, that they have experienced as a result of the accident. General Damages are different from Special Damages, which are awarded to cover specific financial losses such as medical expenses and lost wages. Punitive Damages and Exemplary Damages, on the other hand, are awarded in cases where the defendant's conduct was particularly egregious or malicious, and are meant to punish the defendant rather than compensate the plaintiff.Rate this question:
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- 46.
What is NOT covered by supplementary payments under Section II of a homeowner policy?
- A.
Court Cost
- B.
Damage to property of others
- C.
Funeral Expenses
- D.
First Aid
Correct Answer
C. Funeral ExpensesExplanation
Chapter 66Rate this question:
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- 47.
What is proximate cause?
- A.
A reasonable explanation of an event
- B.
A peril which resulted in an accident
- C.
An uninterrupted chain of events from negligent act to accident
- D.
A hazard that exacerbated the situation
Correct Answer
C. An uninterrupted chain of events from negligent act to accidentExplanation
Chapter 4Rate this question:
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- 48.
What is the limit called when you have more than one property at more than one location covered by one single limit on the policy?
- A.
Combined Single Limit
- B.
Blanket Limit
- C.
Specific Limit
- D.
Sub-Limit
Correct Answer
B. Blanket LimitExplanation
Chapter 4Rate this question:
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- 49.
What type of financial loss occurs as a consequence of direct loss?
- A.
Predictable loss
- B.
Occurrence
- C.
Indirect loss
- D.
Accident
Correct Answer
C. Indirect lossExplanation
Chapter 2Rate this question:
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- 50.
What will happen to your policy premium if you decrease your deductible?
- A.
Option 1
- B.
Option 2
- C.
Option 3
- D.
Option 4
Correct Answer
A. Option 1Explanation
If you decrease your deductible, it means that you will have to pay less out of pocket before your insurance coverage kicks in. This will result in a lower policy premium because the insurance company will have to cover a larger portion of the costs in the event of a claim.Rate this question:
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