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Interpreting a Flood Insurance Policy Final Test

April 23, 2013 by Rhonda Ward

This is the final test for the Interpreting a Flood Insurance Policy course. In order to receive credit, you must pass this test and submit your results along with your full name and license number.

Interpreting a Flood Insurance Policy Final Test

What is the definition of a flood?
- A permanent condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property).
- A general and temporary condition of partial or complete inundation of 20 or more acres of normally dry land area or of 50 or more properties (at least one of which is your property).
- A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property).
Where does the demand for flood insurance come from?
- The federal government.
- People living in river basin areas and lowlands.
- Insurance agencies.
Which is NOT one of the six common types of floods?
- Riverine Floods - Occur when rivers, streams and other watercourses rise and overflow their banks. Floods can result from either heavy rainfall or snow melt upstream in their drainage basins.
- Tidal Floods - Arise from high tides, frequently driven by high winds offshore, and from tropical storms making landfall or passing closely offshore. They affect bays and the portions of rivers along the coast.
- Wind Floods - Occur wherever a strong wind holds back a large body of water from its normal draining course and raises the water level. Back bays behind barrier islands are especially susceptible to wind floods. Water that can not escape through normal channels can flow out of these bays across the barrier islands.
- Plumbing Failure Floods - Occur when pipes burst or leak in a dwelling and do significant damage to the property.
What are the two types of flood insurance and how much will they cover?
- Building Property - up to $250,000. Personal Property - up to $100,000.
- Building Property - up to $500,000. Personal Property - up to $1,000,000.
- Building Property - up to $50,000. Personal Property - up to $100,000.
What do the initials NFIP stand for?
- Nationwide Federal Insurance Program
- National Flood Insurance Plan
- National Flood Insurance Program
Fill in the blanks with the most correct answer. ________________________ and _________________ policies exclude damage caused by flood, surface water, wave, tidal water, and overflow of a body of water.
- Homeowners and Automobile
- Homeowners and Dwelling
- Life and Homeowners
- Dwelling and Automobile
What does WYO stand for?
- Warranted Yearly Outlay
- Write Your Own
- Waiver, Yearly Option
Fill in the Blanks. A __________________ Insurance Policy is a _______________ (flood) policy that pays for direct physical damage to your client’s property up to the replacement cost or Actual Cash Value (ACV) of the actual damages or the policy limit of liability, whichever is less.
- Basic ... WYO
- NFIP ... basic
- Standard ... single-peril
Which of these important facts about a flood policy covered in this course is FALSE?
- Contents coverage is included in the policy.
- It is not a valued policy.
- It is not a guaranteed replacement cost policy.
Choosing the amount of the deductibles is an important decision for your client. As with car or homeowners insurance, choosing a ____________________deductible will ______________________the premium they pay, but will also___________________________ their claim payment.
- higher... lower... reduce
- higher... raise... increase
- lower... reduce... reduce
Flood insurance coverage is limited in areas below the lowest elevated floor (including crawlspaces) depending on the flood zone and date of construction and in basements regardless of zone, or date of construction. Which answer includes the Four areas that are included?
- Basements, Crawlspaces, Enclosed areas beneath buildings elevated on full story foundation walls that are sometimes referred to as “walkout basements,” and Enclosed areas under other types of elevated buildings.
- Basements, Crawlspaces, “walkout basements,” and outbuildings such as sheds.
- Basements and Crawlspaces only.
Which of these is NOT insured under Building Property coverage?
- Foundation walls, anchorage systems, and staircases attached to the building.
- Central air conditioners.
- Washers and dryers.
- Electrical outlets, switches, and circuit breaker boxes.
Which of these is NOT insured under Personal Property coverage?
- Washers and dryers.
- Carpeting, area carpets, and other floor coverings such as tile.
- Food freezers and the food in them (but not refrigerators).
- Portable and window air conditioners.
Which of these IS insured by either Building Property or Personal Property coverage?
- Paneling, bookcases, and window treatments such as curtains and blinds.
- Food freezers and the food in them (but not refrigerators).
- Walls and ceilings not made of drywall.
- Most personal property such as clothing, electronic equipment, kitchen supplies, and furniture.
____________________ – Coverage limitations apply to “enclosed areas’ at ground level under an “elevated building. An elevated building allows water to flow freely under the living quarters, thus putting less strain on the building in the event of flooding. An “enclosure” is the area below the lowest elevated floor that is fully shut in by rigid walls.
- Elevated Building with enclosure
- Elevated Building on the full story foundation walls
What does RCV stand for?
- Routine Cost Valuation
- Replacement Cost Value
- Remittance - Cash Value
_________________ is the cost to replace that part of a building that is damaged (without depreciation).
- Actual Cash Value
- Replacement Cost Value
Actual Cash Value is Replacement Cost Value at the time of loss, less the value of its physical depreciation.
- True
- False
What does F.E.M.A. stand for?
- Funding Eligibility Management Agency
- Federal Emergency Mitigation Allowance
- Federal Emergency Management Agency
True or False: A client can find their inception date on the first page of a flood policy.
- True
- False
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Filed Under: Interpreting a Flood Insurance Policy

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