A property-and-casualty policy raises “risk control.” Which statement should guide the producer?
A. Loss prevention focuses on stopping losses before they occur
B. Risk avoidance eliminates an exposure by not engaging in the activity
C. Risk control reduces the frequency or severity of losses through prevention, safety, or mitigation measures
D. Facultative reinsurance covers an individual risk by separate agreement
Source: NAIC Unfair Claims Settlement Practices Act, Model 900 — Sections 3-4, claim investigation, communications, settlement, and documentation standards; locator 'Risk Control'; https://content.naic.org/sites/default/files/model-law-900.pdf
During coverage analysis, “homeowners ho-3 concept” becomes relevant. Which conclusion is correct?
A. An HO-3 commonly provides open-perils coverage on the dwelling and named-perils coverage on personal property
B. An HO-4 is commonly used for renters and focuses on personal property and liability, not building ownership coverage
C. Homeowners Coverage A applies to the dwelling described in the policy, subject to policy terms
D. Homeowners personal liability can cover damages for bodily injury or property damage for which an insured is legally liable
Source: National Association of Insurance Commissioners — Glossary of Insurance Terms; entry/locator 'Homeowners Ho-3 Concept'; https://content.naic.org/glossary-insurance-terms
Which statement correctly distinguishes “homeowners ho-4 renters” from related property-and-casualty concepts?
A. An HO-6 is commonly used by condominium unit owners for unit-owner property, improvements, personal property, and liability
B. Coverage B applies to other structures on the residence premises separated from the dwelling
C. An HO-4 is commonly used for renters and focuses on personal property and liability, not building ownership coverage
D. Medical payments to others can pay small medical expenses for others injured regardless of legal liability, subject to policy limits
Source: National Association of Insurance Commissioners — Glossary of Insurance Terms; entry/locator 'Homeowners Ho-4 Renters'; https://content.naic.org/glossary-insurance-terms
A producer encounters an issue involving “homeowners ho-6 condo.” Which explanation is accurate?
A. Homeowners Coverage A applies to the dwelling described in the policy, subject to policy terms
B. An HO-6 is commonly used by condominium unit owners for unit-owner property, improvements, personal property, and liability
C. Coverage C applies to covered personal property owned or used by an insured, subject to limits and exclusions
D. A dwelling policy can insure residential property that may not fit a homeowners form, often with fewer package features
Source: National Association of Insurance Commissioners — Glossary of Insurance Terms; entry/locator 'Homeowners Ho-6 Condo'; https://content.naic.org/glossary-insurance-terms
A property-and-casualty policy raises “coverage a dwelling.” Which statement should guide the producer?
A. Coverage B applies to other structures on the residence premises separated from the dwelling
B. Coverage D can pay additional living expense or fair rental value when a covered loss makes premises unusable
C. Homeowners Coverage A applies to the dwelling described in the policy, subject to policy terms
D. The building and personal property coverage form can cover buildings, business personal property, and personal property of others
Source: National Association of Insurance Commissioners — Glossary of Insurance Terms; entry/locator 'Coverage A Dwelling'; https://content.naic.org/glossary-insurance-terms
