NPCI - Nevada Property and Casualty Insurance Exam

Question 1: The dwelling program offers three policy forms with progressively broader coverage on the dwelling itself, ranging from a basic named-peril form up through the most comprehensive form available. Of those three dwelling forms, which one provides open-peril, or special, coverage on the dwelling structure?

DP-2, the broad form

DP-1, the basic form

DP-3, the special form

All three forms equally

Question 2: A DP-1 basic dwelling policy is issued to a landlord without any added endorsements at all. Before extended coverage or other perils are added for an additional premium, which limited set of perils does the unendorsed DP-1 basic form automatically cover for the insured?

Windstorm, hail, and smoke

All risks of direct physical loss

Fire, theft, and vandalism

Fire, lightning, internal explosion

Question 3: An insured buys a DP-3 special dwelling policy, which covers the dwelling and other structures themselves on an open-peril basis. On what basis does that same DP-3 policy cover the insured's personal property, often called contents, when the insured carries Coverage C for those belongings?

Broad named-peril basis

Open-peril, all-risk basis

Actual cash value only

It excludes contents entirely

Question 4: Loss settlement rules differ noticeably among the three dwelling forms, and this affects how much an insured collects after a fire. When a covered loss to the dwelling occurs under a DP-1 basic form, on what basis does the insurer settle that building loss?

Replacement cost, no depreciation

Actual cash value

Guaranteed replacement cost

Agreed value

Question 5: Under a DP-2 or DP-3 dwelling policy, the building and the personal property are not settled the same way, which surprises many insureds after a loss. Assuming the insured meets the eighty percent coinsurance requirement, how are the dwelling and the contents each settled?

Both at actual cash value

Both at replacement cost

Dwelling replacement cost; contents actual cash value

Dwelling actual cash value; contents replacement

Question 6: A dwelling policy provides automatic amounts for several coverages, each expressed as a percentage of the Coverage A dwelling limit rather than as a flat dollar figure. Under the dwelling program, what is the automatic limit for Coverage B other structures and for Coverage D fair rental value?

Ten percent and fifty percent of A

Twenty percent and ten percent of A

Fifty percent and thirty percent of A

Ten percent and twenty percent of A

Question 7: A homeowner compares a basic dwelling policy to a homeowners policy and notices the dwelling form is much more limited in what it automatically bundles into one contract. Compared with a homeowners policy, what does a standard dwelling policy NOT automatically provide to the insured?

Liability and theft coverage

Coverage on the dwelling

Other structures coverage

Fair rental value coverage

Question 8: The dwelling forms protect personal property that is temporarily removed from the premises to save it from an impending covered loss, but the number of days of that protection differs by form. How long is removed property protected under the DP-1 versus under the DP-2 and DP-3?

Ten days versus sixty days

Thirty days versus five days

Five days versus thirty days

Thirty days for all forms

Question 9: The HO-3 special form is by far the most common homeowners policy sold today. It does not treat the dwelling and the personal property the same way when it comes to which perils are covered, which is a frequent exam point. How does the HO-3 cover the dwelling and the contents?

Named peril on both

Named peril dwelling; open peril contents

Open peril on both

Open peril dwelling; named peril contents

Question 10: An insured wants the broadest homeowners coverage available, with open-peril protection extended not only to the dwelling structure but also to the personal property inside it. Which homeowners form provides open-peril, or special, coverage on both the dwelling and the contents at the same time?

HO-3 special form

HO-5 comprehensive form

HO-4 tenants form

HO-8 modified form

Question 11: The HO-8 modified form exists specifically for older homes whose replacement cost would far exceed their market value, such as historic houses with ornate features. In addition to using a limited set of named perils, how does the HO-8 form settle covered losses to the dwelling?

Actual cash value

Guaranteed replacement cost

Full replacement cost

Agreed value

Question 12: A tenant who rents an apartment buys an HO-4 renters policy to protect the belongings kept there. Because the tenant does not own the building itself, the policy's primary coverage is quite different from that of an owner-occupied homeowners form. What is the primary coverage under an HO-4?

Coverage B other structures

Coverage A dwelling

Coverage C personal property

Coverage E liability

Question 13: A condominium unit-owner buys an HO-6 policy for the unit and its interior. Because the condominium association already insures the main building structure under a master policy, the HO-6 provides only a small amount of building coverage for the unit's interior. What minimum Coverage A amount does the HO-6 typically provide?

50,000 dollars

1,000 dollars

25,000 dollars

5,000 dollars

Question 14: Under a homeowners policy, several coverages are set automatically as a percentage of the Coverage A dwelling limit rather than as separate dollar amounts the insured must choose. What is the standard Coverage B other structures limit, expressed as a percentage of the Coverage A dwelling limit?

Ten percent of Coverage A

Fifty percent of Coverage A

Thirty percent of Coverage A

Twenty percent of Coverage A

Question 15: A homeowners policy automatically provides personal property coverage as a percentage of the Coverage A dwelling limit, so a larger home carries proportionally more contents coverage. Under the standard homeowners forms used in this course, what is the Coverage C personal property limit as a percentage of Coverage A?

Thirty percent of Coverage A

Ten percent of Coverage A

Fifty percent of Coverage A

Eighty percent of Coverage A

Question 16: When a covered loss makes a home temporarily uninhabitable, the homeowners policy pays loss of use so the family can live elsewhere while repairs proceed. Under the standard homeowners forms, what is the Coverage D loss of use limit, stated as a percentage of the Coverage A dwelling limit?

Ten percent of Coverage A

Thirty percent of Coverage A

Twenty percent of Coverage A

Fifty percent of Coverage A

Question 17: The liability section of a homeowners policy provides personal liability coverage for bodily injury and property damage the insured accidentally causes to other people anywhere in the world. What is the standard base limit for Coverage E personal liability, stated per occurrence, before an insured buys higher limits?

500,000 dollars

300,000 dollars

25,000 dollars

100,000 dollars

Question 18: A social guest trips and is injured at the insured's home, and the homeowners policy pays that guest's medical expenses on a no-fault basis under Coverage F without any lawsuit being filed. What is the standard base limit for Coverage F medical payments to others, stated per person?

1,000 dollars per person

5,000 dollars per person

500 dollars per person

10,000 dollars per person

Question 19: Homeowners policies place special dollar limits on certain kinds of personal property so the policy is not overexposed to easily stolen valuables. For money, bank notes, coins, and precious metals such as gold, what special limit applies, and does it apply to all covered losses or only to theft?

2,500 dollars, theft only

1,500 dollars, theft only

200 dollars, for all covered losses

200 dollars, theft only

Question 20: A homeowners policy limits how much it will pay for the theft of certain valuable personal property, encouraging insureds to schedule expensive items separately. For the theft of jewelry, watches, furs, and precious or semiprecious stones, what is the special theft limit under the standard homeowners policy?

5,000 dollars

2,500 dollars

200 dollars

1,500 dollars

NPCI Nevada Property and Casualty Insurance Exam - Set 3 - Part 1

Question 2: A DP-1 basic dwelling policy is issued to a landlord without any added endorsements at all. Before extended coverage or other perils are added for an additional premium, which limited set of perils does the unendorsed DP-1 basic form automatically cover for the insured?

Question 4: Loss settlement rules differ noticeably among the three dwelling forms, and this affects how much an insured collects after a fire. When a covered loss to the dwelling occurs under a DP-1 basic form, on what basis does the insurer settle that building loss?

Question 5: Under a DP-2 or DP-3 dwelling policy, the building and the personal property are not settled the same way, which surprises many insureds after a loss. Assuming the insured meets the eighty percent coinsurance requirement, how are the dwelling and the contents each settled?

Question 7: A homeowner compares a basic dwelling policy to a homeowners policy and notices the dwelling form is much more limited in what it automatically bundles into one contract. Compared with a homeowners policy, what does a standard dwelling policy NOT automatically provide to the insured?

Question 8: The dwelling forms protect personal property that is temporarily removed from the premises to save it from an impending covered loss, but the number of days of that protection differs by form. How long is removed property protected under the DP-1 versus under the DP-2 and DP-3?

Question 9: The HO-3 special form is by far the most common homeowners policy sold today. It does not treat the dwelling and the personal property the same way when it comes to which perils are covered, which is a frequent exam point. How does the HO-3 cover the dwelling and the contents?

Question 11: The HO-8 modified form exists specifically for older homes whose replacement cost would far exceed their market value, such as historic houses with ornate features. In addition to using a limited set of named perils, how does the HO-8 form settle covered losses to the dwelling?

Question 18: A social guest trips and is injured at the insured's home, and the homeowners policy pays that guest's medical expenses on a no-fault basis under Coverage F without any lawsuit being filed. What is the standard base limit for Coverage F medical payments to others, stated per person?

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