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Elements of Typical Homeowners' Insurance Policies - Part
4: Practice Questions and Solutions
This area of test problems a...
order to just about any insured to the extent of that insured's insurable fascination within the
property in the time of t...
even having to pay Mrs. Ω the main difference involving the ACV in the entire set and also the
ACV in the remaining sta...
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Elements of Typical Homeowners' Insurance Policies - Part 4: Practice Questions and Solutions

This area of test problems as well as remedies is actually a a component of The Particular Actuary's...

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Elements of Typical Homeowners' Insurance Policies - Part 4: Practice Questions and Solutions

  1. 1. Elements of Typical Homeowners' Insurance Policies - Part 4: Practice Questions and Solutions This area of test problems as well as remedies is actually a a component of The Particular Actuary's free study guide pertaining to Exam 5, authored by Mr. Stolyarov. This could be Section 108 in the Research Guide. Notice an index of all sections simply by subsequent the hyperlink on this paragraph. This area of the research guide is intended to supply practice problems and solutions to be able to accompany all pages regarding Private Insurance, cited below. Students are generally inspired to study these pages before attempting the particular problems. This particular research manual can be totally a completely independent effort by Mr. Stolyarov and it is not affiliated using any kind of organization(s) in order to whose textbooks it refers, nor can it represent such organization(s). A Range Of with the concerns here request for brief created answers based around the reading. This is designed to supply the student practice throughout answering questions in the format that will appear on Exam 5. Students are inspired to type their own answers first then to compare these answers using the solutions offered here. Please note that the solutions provided here are not necessarily the sole feasible ones. Source: Nyce, Charles, ed. Private Insurance. (Second Edition). 2008. Chapter 5, pp. 5.24-5.39. Original Difficulties and also solutions via The Actual Actuary's Totally Free Research Guidebook Issue S5-108-1. Identify ten named perils which are typically covered below Coverage C: personal Property regarding an HO-3 homeowner's insurance policy. Remedy S5-108-1. This question is based about the dialogue inside Private Insurance, pp. 5.25-5.27. The following named perils are usually typically covered beneath Coverage C: 1. Fire or perhaps lightning; 2. Windstorm or even hail; 3. Explosion; 4. Riot or perhaps civil commotion; 5. Aircraft; 6. Vehicles; 7. Smoke; 8. Vandalism or malicious mischief; 9. Theft; 10. Falling objects; 11. Excess Weight associated with ice, snow, or perhaps sleet; 12. "Accidental discharge or overflow involving water as well as steam"; 13. "Sudden as well as accidental tearing apart, cracking, burning, as well as bulging"; 14. Freezing - "if the actual insured has brought reasonable precautions to take good treatment of the heat as well as provides sut off and also drained the actual system or perhaps appliances"; 15. "Sudden and also accidental discharge from artificially generated electrical current"; 16. Volcanic eruption. Any Kind Of ten associated with the aforementioned suffice as an answer. Issue S5-108-2. (a) list the actual nine exclusions that would affect all coverages below Section I of the typical HO-3 homeowner's insurance policy. (b) Checklist the particular 3 exclusions that will specifically connect with Coverage A: Dwelling as well as Coverage B: Private Property of the typical HO-3 homeowner's insurance policy. solution S5-108-2. This specific real question is based on the discussion throughout Private Insurance, pp. 5.27-5.34. (a) The next nine exclusions would apply to most coverages under Section I of the typical HO-3 homeowner's insurance policy: 1. Ordinance or Law; 2. Earth Movement; 3. Drinking Water Damage; 4. Energy Failure; 5. Neglect; 6. War; 7. Nuclear Hazard; 8. Intentional Loss; 9. Governmental Action. (b) The following three exclusions would specifically connect with Coverage A: Dwelling and also Coverage B: Private Property of the typical HO-3 homeowner's insurance policy: 1. Weather conditions; 2. "Acts or choices involving just about any person, group, organization, or governmental body"; 3. Faulty workmanship. Difficulty S5-108-3. (a) What exactly are the two purposes with the Insurable Fascination and limit associated with Liability condition in Section I of a typical HO-3 homeowner's insurance policy? (b) Identify 5 obligations that an insured could get pursuant for the Your Current duties Right After Loss condition in Section I of the typical HO-3 homeowner's insurance policy. Remedy S5-108-3. This particular real issue is based on the discussion inside personal Insurance, pp. 5.35-5.36. (a) The subsequent are usually the 2 purposes with the Insurable Fascination and also Restrict regarding Liability condition inside Section I of your typical HO-3 homeowner's insurance policy: 1. To be Able To restrict the most payments for practically any single loss for the relevant limitations demonstrated on the declaration page. 2. to limit "loss payment in
  2. 2. order to just about any insured to the extent of that insured's insurable fascination within the property in the time of the loss". (b) The subsequent would always be the duties an insured might have pursuant to the Your Current Obligations Right After Loss situation inside Section I of your typical HO-3 homeowner's insurance policy: 1. giving prompt recognize involving loss towards the insurer; 2. Notifying your policy when the loss is as simple as theft; 3. Notifying the particular charge card company, electronic fund transfer (EFT) company, or access device company, if the loss involves a new credit score card, EFT device, or access device; 4. Protecting the property coming from further damage; 5. Cooperating using the insurer; 6. Preparing an stock regarding damaged personal property; 7. Verifying the particular loss - including permitting an insurer to create replicates regarding documents and to submit to examination under oath, if requested to accomplish so; 8. Signing the sworn proof of loss; Virtually Any 5 regarding the over mentioned suffice as the possible answer. Issue S5-108-4. (a) under the Loss Settlement situation inside Section I of your typical HO-3 homeowner's insurance policy, losses to private property under Coverage C tend to be settled on the time frame in the lesser involving that of 2 amounts? (b) Mr. Σ's chair has been destroyed in a fire and also is actually a covered loss below Coverage C associated with his homeowner's insurance policy. no deductible applies towards the loss. It would expense $200 to buy an identical chair with the current market price. 12 many years ago, the actual chair price $500 and also has been depreciated making use of the particular straight-line method, let's assume that the actual helpful existence in the chair can be 18 years. How a lot will Mr. Σ become reimbursed for that chair? Answer S5-108-4. This question is based about the dialogue throughout Individual Insurance, p. 5.37. (a) Below your Loss Settlement condition within Section I of the typical HO-3 homeowner's insurance policy, losses to non-public property under Coverage C are settled on the time frame with the lesser associated with 1. actual cash value (ACV) in the damaged objects in the duration of the actual loss as well as 2. The Particular price to repair or substitute the actual damaged items. (b) It emerges that the replacement price in the chair is $200. Since the particular chair can be depreciated in the straight-line fashion, it incurs the identical dollar quantity of depreciation for each year. The Particular annual depreciation is actually $500/(18 years) = 27.8888888. Right After 12 a extended time have got passed, you will find six a long time left for that chair to depreciate, therefore the real money value of your chair prior to its destruction had been 27.8888888*6 = 166.66666667 = $166.67 < 200, and consequently the insurer will pay Mr. Σ $166.67 - your ACV with the chair. Difficulty S5-108-5. Mrs. Ω owns any pair of 3 statuettes made through the exact same sculptor. the statuettes are more valuable with each and every other compared to always be able to what they are generally individually. the statuettes are usually insured through Mrs. Ω beneath Coverage C: Private Property associated with an HO-3 homeowner's insurance policy. The following information is known: The single statuette throughout Mrs. Ω's possession would have an actual money value (ACV) regarding $500. Virtually Any a pair of statuettes throughout Mrs. Ω's possession would use a combined ACV of $1500. all three statuettes inside Mrs. Ω's possession would use a combined ACV associated with $5000. Your sculptor with the statuettes is ready to produce exact reproductions of each statuette, and also achieving this would always expense $3000 for each statuette. (a) Just what would your insurer do if seventy one statuettes had been lost due in order to a covered loss? (b) Just what would the actual insurer do if a couple of of the three statuettes were lost because of a covered loss? (c) Precisely what would the actual insurer do if one of your statuettes had been lost as any outcome of covered loss? Answer S5-108-5. This real issue is based on the discussion in Individual Insurance, pp. 5.37, 5.39. Your policy conditions that would apply here would be Loss Settlement, too as Loss to a Pair or Set. (a) Within this case, the particular Loss Settlement issue applies, as when the pair of statuettes were a single unit. The Particular insurer would pay the lesser involving ACV and replacement cost. Here, the particular ACV in the statuettes is $5000, whereas the replacement expense regarding all three is 3000*3 = $9000, therefore the insurer would pay $5000 to always be able to Mrs. Ω. (b) Here, your Loss to a Pair or perhaps Set condition applies, and furthermore the insurer would hold the choice involving both replacing the actual lacking statuettes (at a cost of 2*3000 = $6000) or
  3. 3. even having to pay Mrs. Ω the main difference involving the ACV in the entire set and also the ACV in the remaining statuette (at an expense involving 5000 - 500 = $4500). Since 4500 < 6000, the insurer would spend $4500 to become able to Mrs. Ω. (c) Here, the actual Loss to some Pair or even Set issue applies, as well as the insurer would possess the selection regarding possibly replacing the missing statuette (at a cost associated with $3000) as well as having in order to pay Mrs. Ω the real difference between the ACV of the entire set and also the ACV with the remaining 2 statuettes (at an expense of 5000 - 1500 = $3500). Since 3000 < 3500, the insurer would replace Mrs. Ω's lacking statuette. The Particular information given suggests that the particular insurer would employ the particular original sculptor as well as spend the actual cash for sculptor $3000. Discover various other sections involving The Particular Actuary's Totally Free study Manual with regard to Exam 5.

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