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AINS 102 Ch 3 Exam/Questions and Answers
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AINS 102 Ch 3 Exam/Questions andAnswers
Steve and Amy were about to purchase their first home. During the process,
they were advised that they needed to purchase a HO-3 insurance policy.
The HO-3 policy would provide Steve and Amy with coverage for all of the
following, EXCEPT:
Select one:
A. Their cars
B. Personal Liability
C. The house
D. The contents of the house - -A. Their cars
-David and Colleen insure their house under a HO-3 policy. One evening,
while they were entertaining some friends at their home, the railing of the
deck collapsed and one of their guests fell to the ground below. The
individual suffered a serious leg injury which required surgery and two days
in the hospital. Which one of the following coverages under David and
Colleen's HO-3 policy would cover the expenses for the injured individual?
Select one:
A. Coverage A—Dwelling
B. Coverage B—Other Structures
C. Coverage D—Loss of Use
D. Coverage E—Personal Liability - -D. Coverage E—Personal Liability
-Nicholas and Laura own property in the country which is insured under an
HO-3 policy. There is a cottage, where they reside, and several detached
structures on the property including a greenhouse, a pool house, and a
storage shed. Under the HO-3, Coverage A—Dwelling applies to
Select one:
A. Any of the structures used by Nicholas, Laura, or any family member as a
residential dwelling.
B. None of the structures.
C. The cottage, which is the structure that is their residence premises and is
listed as such on the policy's declarations.
D. All of the structures. - -C. The cottage, which is the structure that is their
residence premises and is listed as such on the policy's declarations.
-Larry owns and occupies a home with a detached garage that is insured
under an HO-3 policy. Due to the cold winters, Larry has decided to connect
the garage to his home with an enclosed breezeway, permanently
connecting the dwelling and the garage with a connected roof, to avoid
going outside to get to and from his automobile. Which one of the following
is true regarding Larry's homeowner policy coverage?
, Select one:
A. Larry should reduce his Coverage B limit for the value of the garage.
B. Larry may need to increase his Coverage A limit for the value of the
garage and breezeway.
C. Larry should consider the breezeway a "fixture" to be covered under
Coverage A of the policy.
D. Larry should include the cost of the land the garage is on for the Coverage
A limit. - -B. Larry may need to increase his Coverage A limit for the value of
the garage and breezeway.
-Tomas has an HO-3 policy covering his home. A neighbor jumped Tomas's
fence to use his yard as a shortcut to a store, tripped over a small shovel left
on the lawn, and was injured. The neighbor sued Tomas. Tomas's insurer
defended and won the lawsuit on the theory that the neighbor was a
trespasser to whom no duty was owed by Tomas. The insurer's defense
included $20,000 in legal fees. Who is responsible for these fees?
Select one:
A. Tomas and the insurer share responsibility for the legal fees.
B. Tomas's HO-3 insurer is responsible for the legal fees.
C. Tomas is, because liability coverage is not triggered absent a finding of
liability.
D. The insurer is responsible for the legal fees only if Tomas is not able to
pay them. - -B. Tomas's HO-3 insurer is responsible for the legal fees.
-Under Coverage E—Personal Liability of the HO-3 policy, the insurer's
obligation to defend ends
Select one:
A. When the costs of defense limits are exhausted.
B. When the cost of defense exceeds the personal liability limits.
C. When policy limits are exhausted by the claim expenses.
D. When the liability limit for the occurrence is exhausted by payment of a
settlement or judgment. - -D. When the liability limit for the occurrence is
exhausted by payment of a settlement or judgment.
-Coverage F—Medical Payments to Others in the homeowners policy applies
to bodily injury to a residence employee in all of the following situations,
EXCEPT:
Select one:
A. The residence employee is on the insured location and is working
B. The residence employee is away from the insured location and is not
working
C. The residence employee is on the insured location but is not working
D. The residence employee is away from the insured location but is working -
-B. The residence employee is away from the insured location and is not
working
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