IPCI Indiana Property and Casualty Insurance Exam - Set 2 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: Midway through the policy term an insurer cancels a commercial package policy covering a machine shop because the risk no longer meets underwriting standards. The insurer mails written notice to the last known address of the first named insured. How must the return premium be calculated?

On a short rate basis

On a pro rata basis

No return premium is owed

Reduced by the unearned commission

Question 42: A neighbor's child is hurt while playing on an insured's swing set with permission, and the insured is not at fault in any way. The child's parents submit emergency room bills to the insured. Which homeowners coverage pays those expenses?

Coverage F, medical payments to others

Coverage E, personal liability

Coverage D, loss of use

Coverage C, personal property

Question 43: An agent explains that the Broad Form dwelling policy automatically includes fire, lightning, internal explosion, the nine extended coverage perils and vandalism, plus a longer list such as falling objects and weight of ice. What is still true about how the Broad Form reads?

It insures the dwelling on open peril

It covers flood and earth movement

It settles all losses at replacement cost

A peril not named is excluded

Question 44: A boat owner asks which of his weekend activities could void coverage under his watercraft policy. He takes friends fishing, enters an unofficial poker run with no prize, charters the boat to strangers for a fee, and cruises the lake alone. Which activity is excluded?

Taking friends out fishing

Chartering the boat for a fee

Entering the unofficial poker run

Cruising the lake alone

Question 45: A farmer insures his operation under the farm coverage part. He needs protection for the barns, the grain silo, the fencing around the pasture and the equipment shed, none of which are dwellings. Which farm property coverage responds to those buildings and structures?

Coverage A, farm dwellings

Coverage E, scheduled farm personal property

Coverage J, medical payments

Coverage G, other farm structures

Question 46: A client owns a mobile home that has been set on a permanent foundation at a rented lot in a mobile home park. He asks whether a dwelling policy can insure the home itself and his belongings. Which statement describes how the dwelling program handles mobile homes?

Mobile homes are never eligible

Only the Special Form may be used

Only the Basic Form, added by endorsement

Only contents may be insured

Question 47: A dwelling policy carries one hundred thousand dollars of Coverage A. The insured has a detached workshop at the rear of the lot, separated by open lawn, that he rents to a neighbor for a cabinet-making business. How does the policy treat that workshop?

It is not covered at all

It is covered for ten thousand dollars

It is covered under Coverage A

It is covered for twenty thousand dollars

Question 48: Water escapes suddenly from a household appliance and soaks the hardwood floors of a home insured under the HO-2 broad form. The adjuster confirms the loss is covered. Which classification does accidental discharge of water carry in the homeowners peril lists?

A basic named peril

An excluded cause of loss

A special form exception only

A broad named peril

Question 49: After a fire, the insured's claim includes the house itself, the garage attached to it by a breezeway, and a stack of lumber bought to repair the back deck. All three items fall under the same dwelling policy coverage. Which coverage pays?

Coverage A, dwelling

Coverage B, other structures

Coverage C, personal property

Coverage E, additional living expense

Question 50: A homeowners policy shows one hundred thousand dollars of Coverage A on the dwelling, and the declarations page carries no increased amounts. The insured asks how much automatically applies to her detached garage and storage shed. Which relationship sets that amount?

Thirty percent of Coverage A

Fifty percent of Coverage A

Eighty percent of Coverage A

Ten percent of Coverage A

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