Before going on vacation, your insured trades in his outboard boat, motor and trailer for new, more expensive models without your knowledge. When he returns, six weeks later, he advises you of the transaction and at the same time reports striking a rock with the motor while he was away, which cost $1,000 to repair. His Homeowners policy contains a "Watercraft, Outboard Motor, Trailer and Miscellaneous Equipment" rider. What would be your response? OA) You will report the change to the insurer, assure him the policy covers the loss and ask him to submit the repair bill. OB) The policy does not cover the loss since he did not report the new acquisition within 30 days. OC) The policy will cover only the proportion that the value of the equipment trade bears to the value of the new equipment. OD) Since he had not paid the extra premium for the higher valued equipment, the policy will not cover.
Before going on vacation, your insured trades in his outboard boat, motor and trailer for new, more expensive models without your knowledge. When he returns, six weeks later, he advises you of the transaction and at the same time reports striking a rock with the motor while he was away, which cost $1,000 to repair. His Homeowners policy contains a "Watercraft, Outboard Motor, Trailer and Miscellaneous Equipment" rider. What would be your response? OA) You will report the change to the insurer, assure him the policy covers the loss and ask him to submit the repair bill. OB) The policy does not cover the loss since he did not report the new acquisition within 30 days. OC) The policy will cover only the proportion that the value of the equipment trade bears to the value of the new equipment. OD) Since he had not paid the extra premium for the higher valued equipment, the policy will not cover.
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:A client has personal home insurance with the Broker. The client calls the Broker to discuss quotes for a property they
are purchasing that will be converted to mini apartment building with 8 units inside. The Broker does not have
experience with commercial properties. What should the Broker do?
OA) Take all the information and submit to the insurer to add to the current home policy.
OB) Refer the client to a Broker who has the necessary expertise.
OC) Advise the client that they do not handle commercial and should find another Broker.
OD) Take the information from the client and submit it to commercial lines for review.
Transcribed Image Text:Before going on vacation, your insured trades in his outboard boat, motor and trailer for new, more expensive models
without your knowledge. When he returns, six weeks later, he advises you of the transaction and at the same time
reports striking a rock with the motor while he was away, which cost $1,000 to repair. His Homeowners policy contains
a "Watercraft, Outboard Motor, Trailer and Miscellaneous Equipment" rider. What would be your response?
OA) You will report the change to the insurer, assure him the policy covers the loss and ask him to submit the
repair bill.
OB) The policy does not cover the loss since he did not report the new acquisition within 30 days.
OC) The policy will cover only the proportion that the value of the equipment trade bears to the value of the new
equipment.
OD) Since he had not paid the extra premium for the higher valued equipment, the policy will not cover.
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