Arkansas Personal Lines Insurance License Exam — All Questions

A unit-owner carries Coverage C of $60,000 on an HO-6. The loss of use limit on that form is:

• a.$5,000
• b.$60,000
• c.$18,000
• d.$30,000✓

The unit-owners form writes Coverage D at 50% of Coverage C, so 50% of $60,000 gives $30,000 for additional living expense and fair rental value combined. The $18,000 answer applies the 30% relationship used on the tenants form, and $5,000 is the small built-in building-property limit, not a loss of use figure.

A family displaced by a covered fire pays $2,600 a month for a hotel while their normal monthly living cost is $1,700. Additional living expense pays about:

• a.$4,300 a month, the two added
• b.$900 a month, the rise in cost✓
• c.$1,700 a month, the usual cost
• d.$2,600 a month, the hotel bill

Additional living expense reimburses the increase in living costs needed to keep the household at its normal standard, so $2,600 minus $1,700 leaves $900 a month. Paying the whole hotel bill would hand the family the grocery and utility money they were already spending anyway, which is more than indemnity allows.

Which of these is a named peril insured against on a broad form Homeowners policy?

• a.rust on an outdoor metal railing
• b.gradual seepage from a supply pipe
• c.settling of the foundation footing
• d.weight of ice, snow, or sleet✓

Weight of ice, snow or sleet sits on the broad list alongside fire, windstorm, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, falling objects, freezing and volcanic eruption. Seepage that continues over a period of time, settling and rust are all maintenance conditions the form treats as the owner's problem rather than sudden accidental losses.

Vandalism or malicious mischief is a named peril, but that coverage is suspended when:

• a.the insured has filed a vandalism claim in the past
• b.the police make no arrest for the damage
• c.the dwelling has been vacant past a set period✓
• d.the damage is done by a tenant of the insured

The form withdraws the vandalism peril once the dwelling has stood vacant for more than the stated number of consecutive days immediately before the loss, because an empty house is a far easier target. Whether the police make an arrest has nothing to do with coverage, and a prior claim does not remove a peril from the policy.

A homeowner leaves for the winter, shuts the heat off, and the pipes burst. The freezing loss is covered only if the insured:

• a.carries a higher limit on the dwelling
• b.shut the water off and drained the system✓
• c.had the pipes inspected before leaving home
• d.told the insurer about the trip in advance

Freezing of plumbing, heating or sprinkler systems is excluded while the dwelling is vacant, unoccupied or under construction unless the insured used reasonable care either to maintain heat in the building or to shut off the water supply and drain the system. With the heat deliberately off, draining is the only route left, so notifying the insurer or buying a larger limit changes nothing.

One house has a supply line burst and flood a kitchen; another has a pipe that dripped inside a wall for two years. On a broad form:

• a.both losses are covered as water damage
• b.neither loss is covered by a water peril
• c.the burst is covered and the slow leak is not✓
• d.the slow leak is covered but the burst is not paid

The peril is accidental discharge or overflow of water or steam, and the word that decides these two claims is sudden: a line that lets go without warning qualifies, while constant or repeated seepage over a period of time is treated as a maintenance failure and excluded. Reading both as covered water damage ignores the sudden-and-accidental requirement built into the peril.

A landslide shifts the ground under a house and cracks the foundation. Under Section I the loss is:

• a.excluded under earth movement✓
• b.excluded as a water damage loss
• c.covered as a falling-object loss
• d.covered under the collapse peril

The earth movement exclusion sweeps in earthquake, landslide, mudflow, sinkhole collapse and the settling or shifting of the ground, which is why quake coverage has to be bought back separately. Calling it a water damage loss picks the wrong exclusion, and the falling-object peril is about something striking the building from outside, not the ground moving beneath it.

Heavy rain overloads a public sewer and water backs up into a basement. On an unendorsed Homeowners policy the damage is:

• a.excluded, and no endorsement can cover it
• b.covered because rain fell in a storm
• c.excluded without a back-up endorsement✓
• d.covered as accidental discharge of water

The water damage exclusion covers three ideas at once: flood and surface water, water below the surface of the ground, and water that backs up through sewers or drains, so the unendorsed policy pays nothing here. A water back-up endorsement can be added for a stated limit, which is why treating the loss as permanently uninsurable is wrong.

Fire destroys most of an older home and the current code requires the rest be rebuilt to new standards. That extra cost is:

• a.treated as an additional living expense
• b.paid under the other structures limit
• c.excluded by the ordinance or law rule✓
• d.paid in full under the Coverage A limit

Section I excludes the increased cost of construction, demolition and repair that comes from enforcing a building ordinance or law, so the dwelling limit responds to the fire damage but not to the upgrade the code demands. Other structures covers detached buildings, and loss of use pays living costs, so neither reaches a code-driven construction cost.

An off-premises transformer fails, a freezer thaws, and the food spoils. On a standard form the food loss is:

• a.covered as an additional living expense
• b.not covered, since food is excluded property
• c.covered, since the freezer sits on site
• d.not covered, as the failure was off site✓

The power failure exclusion applies when the failure of power or another utility service takes place away from the residence premises; had the failure happened on the premises and led to a covered peril there, the ensuing loss would be paid. Food is ordinary personal property and is not excluded, so the answer blaming the property type identifies the wrong reason.

After a small kitchen fire, the owner leaves the roof open to rain for weeks and the damage spreads. The added damage is:

• a.excluded, since rain is not a peril
• b.covered as ensuing water damage
• c.covered as a spread of the original fire
• d.excluded under the neglect exclusion✓

Neglect means the insured's failure to use all reasonable means to save and preserve property at and after the time of a loss, and it is a Section I exclusion, so the damage that spreads while the building sits open is not paid even though the original fire is covered. Calling the later damage an ensuing water loss ignores that the insured's own inaction let it in.

A city condemns and demolishes a house for a zoning violation. On a Homeowners policy this loss is:

• a.excluded as governmental action✓
• b.covered under the ordinance rule
• c.covered as a collapse of the building
• d.excluded as neglect by the owner

Governmental action means the destruction, confiscation or seizure of property by order of a public authority, and it is one of the standard Section I exclusions, so a demolition ordered by the municipality is not an insured loss. The collapse answer describes an abrupt structural failure from a listed cause, not a deliberate teardown carried out under a public order.

Which of these is excluded from Coverage C on a Homeowners policy?

• a.a riding mower used at the home
• b.a motorcycle with plates✓
• c.a bicycle stored in the shed
• d.a laptop taken to a coffee shop

Coverage C leaves out motor vehicles and their equipment, along with aircraft, animals, and the property of roomers and boarders, because those exposures belong on an auto or specialty policy. A riding mower is not treated as an excluded motor vehicle when it is used to service the residence and is not licensed for road use, and a bicycle is ordinary personal property.

A homeowner rents a spare bedroom to an unrelated boarder. The boarder's furniture and clothes are:

• a.covered up to 10% of the Coverage C limit
• b.covered for the theft and fire perils only
• c.not covered, as they belong to a roomer✓
• d.covered up to the full Coverage C limit

Coverage C insures property owned or used by an insured and by household residents related to the insured, and it specifically excludes property of roomers and boarders who are not related, along with property in an apartment regularly rented to others. The boarder needs a tenants policy of his own, so answers paying any part of Coverage C for his goods are wrong.

A dwelling would cost $400,000 to replace and carries Coverage A of $340,000. A covered fire causes $50,000 of repair cost, whose depreciated value is $38,000. The policy pays:

• a.$50,000✓
• b.$38,000
• c.$44,000
• d.$42,500

The dwelling settles at replacement cost with no deduction for depreciation when the amount of insurance is at least 80% of full replacement cost, and $340,000 divided by $400,000 is 85%. That clears the test, so the full $50,000 repair cost is paid. The $38,000 answer is the actual cash value, which is how contents rather than the dwelling would settle.

A home has a replacement cost of $300,000 and Coverage A of $210,000. A covered loss costs $30,000 to repair and has an actual cash value of $18,000. Before the deductible, the settlement is:

• a.$18,000
• b.$30,000
• c.$21,000
• d.$26,250✓

Because $210,000 is only 70% of replacement cost, the insured falls under the 80% requirement and the policy pays the greater of actual cash value or the proportion the limit bears to 80% of replacement cost. Eighty percent of $300,000 is $240,000, and $210,000 divided by $240,000 is 0.875, so 0.875 times $30,000 gives $26,250, which beats the $18,000 actual cash value.

A six-year-old sofa would cost $2,400 to replace and has depreciated by half. On an unendorsed Homeowners form the contents claim settles at:

• a.$2,400, the replacement cost
• b.$1,200, the actual cash value✓
• c.$1,800, three quarters of the new cost
• d.$2,400 with no deductible due

Personal property settles at actual cash value on the unendorsed form, which is replacement cost minus depreciation, so $2,400 less half its value leaves $1,200. Paying the full $2,400 is what a personal property replacement cost endorsement would buy, and the deductible still comes off whichever settlement basis applies.

A windstorm causes $8,400 of covered damage to a dwelling and the Section I deductible is $1,500. The insurer pays:

• a.$1,500
• b.$6,900✓
• c.$8,400
• d.$9,900

The deductible is retained by the insured and comes off the amount otherwise payable for a Section I loss, so $8,400 minus $1,500 leaves $6,900. The $9,900 answer adds the deductible instead of subtracting it, and paying the full $8,400 would ignore the retention the insured accepted in exchange for a lower premium.

A burglar takes $600 in cash and $4,000 of jewelry from an insured home. On a standard unendorsed homeowners form, before any deductible, how much is payable for these two items?

• a.$1,500
• b.$4,600
• c.$1,700✓
• d.$4,200

On a standard unendorsed form the special limit for money and coins is $200 and the limit for theft of jewelry, watches and furs is $1,500, so the payment is $200 + $1,500 = $1,700 before any deductible. The $4,600 figure ignores both special limits and simply pays the full loss. The $4,200 figure caps the cash but forgets that stolen jewelry carries its own $1,500 cap.

Thieves take a firearm collection worth $6,000 from an insured's home. The unendorsed homeowners policy carries a $60,000 Coverage C limit. What is the most it pays for the guns?

• a.$6,000
• b.$1,500
• c.$2,500✓
• d.$60,000

Theft of firearms and related equipment is subject to a $2,500 special limit on a standard unendorsed form, so the large Coverage C limit does not help and the policy pays $2,500 toward the $6,000 collection. The $1,500 figure is the theft limit for jewelry, watches and furs, not firearms. Paying the full $6,000 ignores the special limit entirely.

A theft loss includes a sterling silver flatware service valued at $9,000. On a standard unendorsed homeowners form, the amount payable for the silverware is:

• a.$5,000
• b.$9,000
• c.$1,500
• d.$2,500✓

Theft of silverware, goldware and pewterware carries a $2,500 special limit on the standard form, so $2,500 of the $9,000 loss is paid. The $1,500 figure belongs to theft of jewelry, watches and furs. Paying the full $9,000 would ignore the class limit, which is why owners of a large service schedule it separately.

Two rings worth $2,000 each are stolen in one burglary. Under the special limit for theft of jewelry, watches and furs, the unendorsed policy pays:

• a.$3,000, being two $1,500 caps
• b.$1,500 for each of the rings
• c.$1,500 for the pair of rings✓
• d.$4,000, the full value lost

A Coverage C special limit caps the whole class of property in one loss, not each article, so a single $1,500 limit applies to all jewelry taken in the burglary and the pair brings $1,500. Treating the cap as per item would produce $3,000, and paying $4,000 ignores the special limit. Scheduling each ring is the way to insure them for full value.

On a standard unendorsed homeowners form, the special limit that applies to securities, deeds, manuscripts and similar valuable papers is:

• a.$500
• b.$2,500
• c.$1,500✓
• d.$200

Securities, accounts, deeds, evidences of debt, manuscripts, tickets and stamps share a $1,500 special limit on the standard form, and that limit applies to loss by any covered peril rather than theft alone. The $200 figure is the limit for money and coins. The $2,500 figure is the theft limit for firearms or for silverware and goldware.

A homeowner's small sailboat, its trailer and its outboard motor are damaged by a covered peril. Under Coverage C on an unendorsed form, the most payable for the boat, trailer and equipment together is:

• a.$1,000
• b.$2,500
• c.$1,500✓
• d.$5,000

Watercraft, together with their trailers, furnishings, equipment and outboard motors, share one $1,500 special limit under Coverage C on the standard form. That single limit covers the boat and everything that goes with it, so a real boat needs its own watercraft policy. The $2,500 figure belongs to firearms, silverware or business property, not watercraft.

A homeowner runs a side business from the house and keeps $7,000 of stock and equipment there. Under Coverage C on a standard unendorsed form, business property on the residence premises is limited to:

• a.$500 for that property
• b.$7,000, the full amount
• c.$2,500 for that property✓
• d.$1,500 for that property

Business property on the residence premises carries a $2,500 special limit on the standard form, so $4,500 of the $7,000 exposure is uninsured. The $1,500 figure is the jewelry-theft and watercraft limit, and $500 is the credit card and forgery amount. A home business of this size belongs on a business owners policy or an endorsement.

A house fire destroys $9,000 of silverware. How does the $2,500 special limit for silverware apply to this loss?

• a.It is voided once a fire report is filed
• b.It is a theft limit, so Coverage C applies✓
• c.It applies to any peril, so $2,500 is paid
• d.It applies, but doubles for fire losses

The $2,500 special limit on silverware, goldware and pewterware is written for loss by theft, so a fire loss is settled under the ordinary Coverage C limit instead of the sublimit. The answer applying $2,500 to any peril confuses a theft sublimit with a class limit that runs across all perils. No special limit doubles because the peril happened to be fire.

Which class of property is subject to the $200 special limit under Coverage C on a standard unendorsed homeowners form?

• a.Firearms and related equipment
• b.Money, coins, bullion and bank notes✓
• c.Silverware and goldware flatware
• d.Deeds and manuscripts kept at home

Money, bank notes, bullion, coins, medals and similar items carry the lowest special limit on the standard form, $200, and it applies to loss by any covered peril. Deeds and manuscripts sit in the $1,500 class, while firearms and silverware each carry $2,500 for theft. Cash kept at home is therefore very lightly insured.

A fire destroys three ornamental trees worth $1,200 each on an insured's lot. Coverage A is $300,000. Under the trees, shrubs and other plants additional coverage, the policy pays:

• a.$15,000 in total
• b.$1,500 in total✓
• c.$3,600 in total
• d.$500 in total

This additional coverage is limited to 5% of the Coverage A limit in any one loss, here 5% of $300,000 = $15,000, but no more than $500 for any one tree, shrub or plant. Three trees at $500 each comes to $1,500, well under the $15,000 ceiling. The $15,000 answer applies only the aggregate cap, and $3,600 ignores the per-item cap.

A fire department bills an insured $900 for responding to a fire at the covered dwelling. Under the fire department service charge additional coverage, the policy pays:

• a.$500, with no deductible✓
• b.$450, half of the charge
• c.$900, less the deductible
• d.$0, as this is excluded

The fire department service charge additional coverage pays up to $500 for a charge the insured becomes liable for when a department is called to save covered property, and no deductible applies to it. A $900 bill therefore brings $500 rather than the full amount. The answer that subtracts a deductible misreads how this additional coverage is written.

An insured's credit card is used fraudulently and a forged check clears the account. The homeowners additional coverage for credit card, fund transfer, forgery and counterfeit money pays up to:

• a.$1,000 with a deductible
• b.$200 with a deductible
• c.$2,500 with no deductible
• d.$500 with no deductible✓

This additional coverage pays up to $500 for the insured's legal obligation from unauthorized use of a credit or fund transfer card, forgery of a check, and acceptance of counterfeit paper currency, and no deductible applies. The $1,000 figure is the loss assessment amount. The $2,500 figure belongs to firearms, silverware or business property.

A condominium association charges each unit owner a $4,300 assessment after a covered loss to the commonly owned property. Under the loss assessment additional coverage on a standard unendorsed form, the policy pays:

• a.$1,000 of the assessment✓
• b.$2,500 of the assessment
• c.$4,300, the full amount
• d.$500 of the assessment

Loss assessment is an additional coverage with a standard limit of $1,000 for the insured's share of an assessment charged by the association after a loss to property owned collectively, so the owner keeps $3,300 of the $4,300 charge. The full-payment answer treats loss assessment as if it shared the Coverage A limit. A higher amount can be bought by endorsement.

An insured rents out an apartment in the covered dwelling and a covered fire destroys the appliances and carpeting supplied to the tenant. The landlord's furnishings additional coverage pays up to:

• a.$5,000 for those items
• b.$1,000 for those items
• c.$2,500 for those items✓
• d.$500 for those items

The landlord's furnishings additional coverage insures appliances, carpeting and other household furnishings in an apartment on the residence premises that is rented or held for rental, up to $2,500. The $1,000 answer is the loss assessment limit and $500 is the credit card and forgery amount. Theft of those furnishings is outside this additional coverage.

Coverage A is $250,000 and a rebuild after a covered fire must meet a newer building code, raising the cost. The ordinance or law additional coverage on a standard form provides up to:

• a.$12,500, being 5% of A
• b.$25,000, being 10% of A✓
• c.$250,000, the full limit
• d.$2,500, a flat sublimit

Ordinance or law is an additional coverage of up to 10% of the Coverage A limit for the increased cost of construction needed to meet a code when repairing covered damage, and 10% of $250,000 is $25,000. The 5% figure is the trees, shrubs and plants aggregate. The $2,500 figure is a Coverage C special limit, not a rebuilding allowance.

An insured moves furniture out of the house to protect it from an approaching covered peril. Under the property removed additional coverage, the removed property is insured against:

• a.direct loss from any cause for 90 days
• b.named perils only, while off premises
• c.theft only, for a period of 30 days
• d.direct loss from any cause for 30 days✓

Property removed from the premises because it is endangered by a covered peril is insured against direct loss from any cause for 30 days while removed, an unusually broad grant. The 90-day answer stretches the period, and limiting the coverage to theft or to named perils understates it. This coverage does not increase the limit on the removed property.

How does a Section I additional coverage differ from the limits shown for Coverage A through Coverage D?

• a.It applies only after the Coverage A limit is exhausted
• b.It is a limit the insured selects when the policy is written
• c.It replaces the Coverage C limit whenever a theft occurs
• d.It carries a stated amount set by the form for one named expense✓

Additional coverages are grants the form supplies for specific expenses, each with its own stated dollar amount or percentage, rather than limits the insured picks on the declarations. The answer describing a limit the insured selects describes Coverage A through Coverage D. Nothing requires the Coverage A limit to be used up first before one applies.

After a covered storm the insured pays a contractor to tarp the roof so rain cannot enter. Which additional coverage responds to that cost?

• a.Debris removal of the damaged roof material
• b.Ordinance or law compliance for the repair
• c.Loss assessment charged for the repair work
• d.Reasonable repairs made to protect the property✓

The reasonable repairs additional coverage pays the necessary cost of measures taken solely to protect covered property from further damage after a covered loss, which is exactly what tarping an opened roof does. Debris removal pays to haul away wreckage rather than to prevent more damage. This coverage does not increase the limit on the damaged property.

Debris removal under a standard homeowners policy pays the cost of:

• a.demolishing an undamaged structure the insured dislikes
• b.removing debris of covered property after a covered loss✓
• c.removing household trash on a scheduled weekly basis
• d.clearing a neighbor's lot of debris blown from the home

Debris removal pays the reasonable expense of removing the debris of covered property when a covered peril causes the loss, and that expense is included in the limit applying to the damaged property. Routine trash collection and voluntary demolition of an undamaged building are maintenance decisions, not losses. The coverage follows the insured's own covered property.

The collapse additional coverage on a standard homeowners form applies when a building collapses from:

• a.wear and tear the insured has known about for years
• b.cracking or bulging that has not yet caused a collapse
• c.a specified cause such as hidden decay or vermin damage✓
• d.any cause at all, including gradual settling of walls

Collapse is an additional coverage that responds to an abrupt falling in of a building caused by one of the causes the form lists, such as hidden decay, hidden insect or vermin damage, or the weight of contents, equipment or people. Settling, cracking, bulging and expansion are specifically not a collapse, and long-known wear is not a listed cause.

On a standard homeowners policy, the minimum limit normally written for Coverage E personal liability is:

• a.$1,000,000 in aggregate
• b.$100,000 per person hurt
• c.$100,000 per occurrence✓
• d.$25,000 per occurrence

Coverage E carries a standard minimum of $100,000 for each occurrence, and higher limits can be purchased for a modest premium. It is an occurrence limit covering all damages from one event, so the per-person answer misreads the structure. Coverage F, medical payments to others, is the Section II coverage written on a per-person basis.

An insured with a $100,000 Coverage E limit is held liable for $100,000 of damages, and the insurer spends $30,000 defending the suit. The insurer's total outlay is:

• a.$130,000✓
• b.$70,000
• c.$100,000
• d.$30,000

Coverage E pays damages the insured is legally liable for up to the limit, and defense is provided at the insurer's expense in addition to that limit, so $100,000 of damages plus $30,000 of defense costs comes to $130,000. The $100,000 answer treats defense as if it eroded the limit, which is how a defense-inside-the-limits policy works, not a homeowners form.

A neighbor's child is hurt on the insured's trampoline and runs up $2,600 of medical bills. The standard minimum Coverage F limit pays:

• a.$1,000 for that child✓
• b.$500 for that child
• c.$2,600 for that child
• d.$100,000 for that child

Coverage F medical payments to others is written per person with a standard minimum of $1,000, so $1,000 of the $2,600 is paid and the balance is not a Coverage F matter. The $100,000 figure is the Coverage E personal liability limit, which responds only if the insured is legally liable. No fault has to be shown to trigger Coverage F.

The insured's own resident daughter breaks her arm on the stairs at home and needs $3,000 of treatment. Under Coverage F, the homeowners policy pays:

• a.$1,000, the per-person limit
• b.$500, half the stated limit
• c.nothing, as she resides there✓
• d.$3,000, as no fault is needed

Medical payments to others is written for people outside the household; it excludes bodily injury to the named insured, the resident spouse and other residents of the household, so a resident daughter brings nothing. Her care is a health insurance matter instead. The answer paying $1,000 forgets that the residency test comes before the no-fault feature.

A 19-year-old foster child living with and cared for by the named insured injures a visitor. Under Section II, this young person is:

• a.an insured only if named on the policy
• b.not an insured, being over 18 years old
• c.an insured, being under 21 in their care✓
• d.not an insured, having no blood relation

Section II defines an insured to include the named insured and resident spouse, resident relatives, and any other person under 21 who is in the care of an insured, which covers a foster child living in the household. Blood relationship is not required for that group. Nobody has to be listed by name on the declarations to qualify as an insured.

A friend walks the insured's dog with permission and the dog bites a passerby. Under Section II of the homeowners policy, the friend is treated as:

• a.a stranger with no standing to be covered
• b.an insured for that use of the animal✓
• c.a claimant the policy will defend against
• d.an insured for all of his own activities

Section II extends the definition of an insured to a person legally responsible for an animal owned by an insured while that person is using it with permission, so the friend walking the dog is an insured for that use. He is not an insured for his own unrelated activities. He is not a claimant either, since the bitten passerby is the one making the claim.

Immediately after a guest is hurt on the premises, the insured pays $300 for first aid at the scene. Under the Section II additional coverages, that expense is:

• a.excluded, being a voluntary payment made
• b.covered only when the insured is at fault
• c.charged against the Coverage F limit first
• d.covered as a Section II additional coverage✓

First aid expenses an insured incurs for others after a covered bodily injury are one of the Section II additional coverages, paid in addition to the Coverage E and Coverage F limits rather than out of them. The answer charging the payment against Coverage F confuses an additional coverage with the medical payments limit. First aid to an insured is not covered.

An insured who repairs computers for pay in the garage is sued by a customer whose machine caught fire and burned her desk. Section II of the homeowners policy:

• a.excludes it only if a permit was needed
• b.excludes the claim as a business pursuit✓
• c.covers the claim up to the $1,000 limit
• d.covers the claim under Coverage E in full

Section II excludes bodily injury and property damage arising out of an insured's business pursuits, so a paid repair operation run from the home needs a separate commercial liability policy or an endorsement. The $1,000 answer confuses this with damage to property of others, an additional coverage that itself excludes damage arising out of a business.

A licensed architect works from home and is sued for a design error on a client's building. Under Section II of the homeowners policy, the claim is:

• a.excluded only above $100,000 of loss
• b.covered once a suit is actually filed
• c.excluded, as a professional service✓
• d.covered by Coverage E as an occurrence

Section II excludes bodily injury and property damage arising out of the rendering or failure to render professional services, so a design error belongs on a professional liability policy. The answer treating it as an ordinary occurrence ignores that exclusion. The exclusion is a subject-matter bar, not a dollar threshold that bites above the Coverage E limit.

Which of these Section II claims is excluded on a standard homeowners policy?

• a.The insured's dog bites a child at the park
• b.A car the insured drives injures a cyclist✓
• c.A guest slips on ice on the insured's walk
• d.A ladder the insured drops injures a helper

Section II excludes bodily injury and property damage arising out of the ownership, maintenance or use of motor vehicles, most watercraft and aircraft, because those exposures belong on an auto, boat or aviation policy. A dog bite away from home, a fall on the premises and a dropped-tool injury are ordinary occurrences the homeowners form is written to cover.

During an argument the insured deliberately punches a neighbor and breaks his jaw, and the neighbor sues. Section II will:

• a.deny it only if a conviction follows
• b.deny it as expected or intended harm✓
• c.pay under Coverage F medical payments
• d.pay the damages but not the defense

Section II excludes bodily injury and property damage expected or intended by an insured, so a deliberate punch brings neither damages nor a defense; insuring intentional harm would defeat the fortuity insurance requires. A criminal conviction is not needed for the exclusion to apply, and Coverage F does not step in where the injury was intended.

The insured's 9-year-old son breaks a neighbor's $1,400 laptop while playing, and nobody claims the boy was negligent. The homeowners policy pays:

• a.$500, a goodwill sublimit
• b.$1,000, regardless of fault✓
• c.nothing, as fault is absent
• d.$1,400, the full loss shown

Damage to property of others is a Section II additional coverage that pays up to $1,000 per occurrence for property damage caused by an insured, at replacement cost and whether or not the insured is legally liable, so $1,000 of the $1,400 is paid. The answer paying nothing applies a liability test this additional coverage deliberately leaves out.