IPCI - Indiana Property and Casualty Insurance Exam

Question 21: An insured bakery reopens after a covered fire, but customers drift back slowly and revenue stays below normal for several weeks. The business income coverage form includes an additional coverage for exactly this gap. How long does that additional coverage run?

No more than thirty days after reopening

For a full twelve months

No more than sixty days after reopening

Until the coinsurance requirement is satisfied

Question 22: A dwelling insured under the Special Form for eighty-five percent of its replacement cost burns, damaging both the structure and the furniture inside. The insured expects every item to be replaced new. How will the insurer settle the building loss and the furniture loss?

Building replacement cost, furniture actual cash value

Both at replacement cost

Both at actual cash value

Building actual cash value, furniture replacement cost

Question 23: A newly issued Basic Form dwelling policy carries no endorsements and no additional peril premium. A windstorm tears shingles from the roof, and two weeks later a lightning strike burns the attic. Which of these losses does the unendorsed Basic Form cover?

The windstorm loss only

The lightning loss only

Both losses in full

Neither loss

Question 24: A marine terminal operator asks her producer to place general liability, commercial property, commercial inland marine and ocean marine cargo coverage together in a single commercial package policy. Only one of those four lines cannot be included in a commercial package policy. Which one?

Commercial property coverage

Commercial inland marine coverage

Ocean marine cargo coverage

General liability coverage

Question 25: An insured borrows a neighbor's power washer for the weekend and drops it, cracking the pump. No court would hold him liable, yet he wants the neighbor made whole. Which Section Two additional coverage responds without regard to legal liability?

Damage to property of others

Personal liability under Coverage E

Medical payments to others

Section One loss assessment

Question 26: A rural insured calls the volunteer fire department, which bills him after crews arrive and keep a kitchen fire from spreading. His home sits outside the city limits of the responding department. Which additional coverage pays this bill, and how much?

Reasonable repairs, up to one thousand dollars

Fire department service charge, five hundred dollars

Debris removal, up to five hundred dollars

Property removed, up to two hundred dollars

Question 27: A five-year-old sofa and a worn recliner are destroyed by a covered fire in a home insured on an unendorsed HO-3. The insured is upset that the claim check reflects depreciation. Which change would have produced payment for new furniture?

Buying the HO-5 comprehensive form

Raising the Coverage A limit

The personal property replacement cost endorsement

Scheduling the furniture separately

Question 28: An insured's detached barn on the residence premises is rented to a neighbor who runs a retail craft store inside it. Fire destroys the barn. Which reason best explains the adjuster's decision to deny Coverage B for that structure?

Detached structures fall outside Coverage B

The barn lacked a clear space

Rented garage space is always excluded

Business use bars other structures coverage

Question 29: The owner of a rented single-family house asks why her new dwelling policy will not respond if a burglar carries off the appliances, or if a visitor sues her after tripping on the porch steps. Which statement correctly describes the dwelling policy?

Theft and liability require added endorsements

Theft is covered but liability never is

Both are covered after a waiting period

Liability is automatic once premises are rented

Question 30: An insured adds earthquake coverage by endorsement. A strong quake damages her chimney on a Monday morning, and aftershocks over the next two days crack the interior walls. She worries about paying a separate deductible for each event. How are the deductibles applied?

One deductible for each separate shock

The deductible doubles after the first aftershock

One deductible covers seventy-two hours of shocks

No deductible applies to aftershock damage

Question 31: A student living at home takes a laptop, a camera and clothing on a trip across the country, and the luggage is stolen from a hotel room. Which limit applies to that personal property while it is away from the residence premises?

Ten percent of Coverage C

Fifty percent of Coverage C

Full Coverage C limit applies

Coverage C applies on premises only

Question 32: Two identical warehouses are insured, one on the broad form and one on the special form. A claims trainer says the special form does not simply add a longer list of perils. Which statement best captures how the special form is constructed?

It lists roughly twenty additional named perils

It removes the coinsurance requirement entirely

It doubles every limit shown in declarations

It covers direct physical loss unless excluded

Question 33: A client wants the widest property protection available in the homeowners program: open peril coverage on the dwelling, on the detached structures, and on her personal property as well, all under one unendorsed form. Which form should the producer recommend?

HO-3 special form

HO-2 broad form

HO-5 comprehensive form

HO-6 unit-owners form

Question 34: Two clients want theft coverage added to their dwelling policies. One lives in the insured house; the other rents hers out to a tenant and lives elsewhere. Which endorsement fits the owner who occupies her home, and why does it fit?

The limited endorsement, since she owns it

Neither endorsement, theft is already included

Either endorsement, the choice is hers

The broad endorsement, written for owner-occupied dwellings

Question 35: A buyer closes on a house in a flood zone and his lender requires flood insurance as a condition of the mortgage. He also has a neighbor who applied for flood coverage voluntarily last week. How do the waiting period rules treat these two applications?

Both wait thirty days

Both take effect immediately

No wait for the loan purchase

The neighbor waits ninety days

Question 36: The first page of a commercial package policy issued to a bakery lists the named insured and mailing address, the date and time coverage begins and ends, a description of the business, and every form purchased with its premium. Which document is described?

The common policy conditions

The causes of loss form

An interline endorsement

The common policy declarations

Question 37: A single endorsement attached to one insured's commercial package policy modifies both the commercial property coverage part and the commercial general liability coverage part at the same time. Which of the following terms does the industry use for an endorsement written to apply across more than one line?

Dual-line endorsement

Monoline endorsement

Interline endorsement

Blanket coverage part endorsement

Question 38: A client buys a package policy on his twenty-two-foot bass boat, its motor and its trailer. The policy combines property, liability and medical payments coverage in one contract. On what basis are property losses to the boat normally paid under such a policy?

Replacement cost with no depreciation

An agreed value stated in advance

Functional replacement cost

Actual cash value

Question 39: A duplex insured for two hundred thousand dollars under Coverage A is badly damaged by a covered fire, and the rented half cannot be lived in for three months. The owner wants the lost rent replaced. Which coverage responds, and at what portion of Coverage A?

Coverage D, at twenty percent

Coverage E, at ten percent

Coverage C, at ten percent

Coverage B, at twenty percent

Question 40: A small fire at an insured machine shop brings the volunteer fire department, which later bills the business for responding. The building and personal property coverage form includes an additional coverage for this charge. Which statement describes how that additional coverage pays?

Up to five hundred dollars, deductible applies

Up to ten thousand dollars, deductible applies

Within the building limit, no separate amount

Up to one thousand dollars, no deductible

IPCI Indiana Property and Casualty Insurance Exam - Set 2 - Part 2