Fire Policies
Which peril was added to the Standard Fire Policy after it was first introduced? a) Lightning b) Windstorm c) Theft d) Water Escape
Lightning
Ed rents an apartment from his landlord Tino. Someone breaks in and steals Eds guitar. What policy is covering this?
Tenants Policy, Fire policies don’t cover theft!
True or False: Personal Line Policies cover health, life, and accident
True
Which of the following would be excluded under a Fire Policy but potentially included in a Personal Line Policy?
A. Fire caused by lightning
B. Smoke damage caused by a nearby factory
C. Fire from an explosion
D. Direct lightning strike damage
Smoke damage caused by a nearby factory
1.The major forms of protection against a fire insurance policy include: A) Theft and vandalism B) Interruption in the business alone C) Earthquake only losses D) Damage due to fire and other related dangers
Damage due to fire and other related dangers
What does the Fire Policy mean by “direct loss or damage”?
a) Any loss happening near a fire b) Loss resulting immediately from the fire c) Smoke damage from a nearby building d) Loss caused by water during firefighting
Loss resulting immediately from the fire
Harman owns his own house and his kitchen catches on fire, damaging his appliances, drawers, cabinets, everything. What policy is covering this?
Homeowners Policy, which covers dwellings and contents
What do specialty personal lines cover?
Unique assets and risks not typically covered by standard policies (jewelry, art, boats, recreational vehicles, etc)
True or False: Personal Line Policies can include automobile insurance and liability insurance, while fire policies cannot?
True
What is the insurance principle of both fire policy and the personal line policy? A) Subrogation B) Indemnity - you can not make any money out of a loss C) No-fault liability D) Salvage recovery
Indemnity - you can not make any money out of a loss
3. A homeowner’s broad form covers a cracked basement wall caused by ground movement. True or False—and why?
a) True, because the Broad Form covers all perils for the building b) False, because earth movement is excluded c) True, because it’s structural damage d) False, because Broad Form is Named-Perils for both building and contents
False, because earth movement is excluded
Nhi owns a small hair salon out of her basement. One day, her client, Brooklyn, trips over a hair tool cord and gets injured. Nhi files a claim under her homeowners’ policy. Will this claim be approved or denied, and why?
Denied because Nhi would need a commercial policy or special home-based business endorsement to cover this.
What type of insurance covers your home and belongings?
Homeowner’s Insurance
A homeowner has a Personal Line Policy that includes “All Risk” property coverage.
If a fire damages their home, how would this coverage differ from a traditional Fire Policy?
A. The loss would not be covered under the Personal Line Policy
B. The Fire Policy would pay more because it’s specific to fire
C. Both policies cover the fire, but the Personal Line Policy may include additional coverage such as debris removal or temporary living expenses
D. Only the Fire Policy would cover the building itself.
Both policies cover the fire, but the Personal Line Policy may include additional coverage such as debris removal or temporary living expenses
When a business has been underinsured in its fire policy, what happens when a loss is brought about by fire? A) The insurer makes the entire claim anyway B) The payout is proportionately decreased (Average Clause) C) Insurance terminates the policy D) The insurer pays double
The payout is proportionately decreased (Average Clause)
4. Under a Comprehensive (All-Risk) form, which loss would NOT be covered unless specifically added?
a) Water escape from plumbing b) Theft of jewelry c) Earthquake damage d) Smoke damage from fire
Earthquake damage
Simranpreet owns a cabin in Buffalo Pound; she only uses it during the summer. One summer, wildfires get very bad, and her cabin suffers from smoke damage. What policy is covering this?
Seasonal Fire Policy , needs limited coverage forms
What is the purpose of an umbrella policy?
Provides extra liability coverage in addition to your existing insurance policies.
Which of the following best explains why Fire Policies are often used as the foundation for other personal lines?
A. Because they include all-risk coverage by default
B. Because fire is the most common peril and forms the base structure for property coverage
C. Because they provide liability coverage for personal injuries
D. Because they are mandatory in all personal insurance contracts
Because fire is the most common peril and forms the base structure for property coverage
Which one of the following is a personal line policy? A) Family house insurance of Homeowner’s Policy B) Factory commercial fire insurance C) Marine cargo insurance D) Equipment coverage under Contractor
Family house insurance of Homeowner’s Policy
Why did insurers move from Fire Policies to Personal Lines Policies?
a) To lower premiums b) To include more perils and liability protection c) To simplify underwriting d) To insure only condos
To include more perils and liability protection
Tajinder just bought a new house and a new homeowner’s policy. Time goes by, and she decides to build solar panels on her house. Unfortunately, a huge hailstorm hits and destroys them. Are they covered? Why or why not?
No, because she never informed her insurer about the change, which would have changed her policy.
Which of the following is not a type of homeowners' form? a) Basic b) Comprehensive c) Endorsement d) Broad
Endorsement
5. What is the main difference in coverage scope between a Fire Policy and a Personal Line Policy?
A. Fire Policy includes liability coverage
B. Personal Line Policy covers only property damage
C. Fire Policy is narrower and covers fewer perils
D. Personal Line Policy excludes fire losses
Fire Policy is narrower and covers fewer perils
What is the most important distinction between a line policy and a personal line policy? A) Fire policy will always have auto coverage B) Buildings only are under personal lines C) Fire policies are those that deal with commercial property, and personal lines are those that deal with personal homes and possessions D) They are both the same with differences in price
Fire policies are those that deal with commercial property, and personal lines are those that deal with personal homes and possessions