Can anyone who’s taken a test to get a license to sell Insurance help me with this question? Please!?
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I am in the process of getting my Fire & Casualty Broker-Agent license.
I am going next month to take the State Exam (California.)
I am completely confused on one of the questions in my ‘Practice Exams’ book.
Here is the question:
An insured with a homeowners policy has rented an automobile in Ireland. Which of the following amounts of coverage apply to the insured’s personal property while it is in the rental vehicle?
A) 10% of the property limit.
B) 50% of the property limit.
C) 100% of the property limit.
D) There is no coverage out of the continental USA.
I put the answer as A,10%! because the course study said that your Homeowners Policy covers up to 10% ANYWHERE IN THE WORLD.
BUT that was WRONG! The answers key (you can check your answers) said that the answer is, C,100%!
The answer said, "Since it’s a homeowners policy, 100% of property limit applies. If not a homeowners policy, then there would be no coverage outside the continental USA."
The STUDY MATERIAL says that on a Homeowners Policy (and here is the quote from the actual study material):
Off-Premises Personal Property Coverage:
"Personal property located AWAY FROM THE RESIDENCE PREMISES IS ONLY COVERED UP TO 10% OF THE LIMIT FOR COVERAGE C, OR ,000, WHICHEVER IS MORE."
So WHY is the practice exam saying that 100% of the property is covered by the homeowners policy?????
Is the practice exam wrong? or am I missing something?
5 Comments on this post
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mbrcatz said:
C. Definately.
See, your homeowners property territory coverage, is "anywhere in the world". BUT, that 10% limitation, only applies to other locations, owned or regularly occupied by you. That would be, your beach house, your stuff in your mom’s house, the stuff your friend is storing for you at their house. The exact wording is, "our limit of liability for personal property usually located at an insured’s residence other than the residence premises, is 10% of the limit of liabiltiy coverage for coverage C, or $1,000, whichever is greater."
So if the off premises personal property coverage isn’t qualified to say, "other residence", then THAT part of the study materials is wrong.
If you have sample policy forms, refer to section 1 property coverages, coverage C, personal property, first paragraph.
Hope that helps.Like or Dislike:
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0December 14th, 2009 at 1:04 am -
Lilly said:
The practice exam is wrong. I would complain to the publisher, they need to correct the editing. These are outside vendors.
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0 0December 14th, 2009 at 1:04 am -
jose l said:
always remember coverage is limited to the U.S ,canada and its territories always
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0 0December 14th, 2009 at 1:04 am -
Tom Z said:
The correct answer is 100%. Your personal property is covered anywhere in the world up to 100% of your contents limit.
The 10% limitation only applies to a secondary residence. So if you had a cottage or your child was away to college your contents coverage would extend to that secondary residence but it would be limited to 10% of your contents limit.
I just reread your question and I can’t say that I have ever seen the limitation of off-premises property coverage as noted. The traditional HO-3 does not have that limitation. I just checked my own policy and it does not have that clause. I can only suggest that the HO-3 used in your jurisdiction is not the standard form.
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0 0December 14th, 2009 at 1:04 am -
car253 said:
The answer is "c".
I would take a one day prep course with the school that you went to. right before you take the test. If you in Los Angeles I recommend Mike Russ. It really does help you pass your test.
Good Luck.
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0 0December 14th, 2009 at 1:04 am
