Casualty

What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?

$25

Which of the following statements is true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

A businessowners policy is

A self-contained prepackaged policy.

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault.

Wisconsin's financial responsibility laws require

All motorists operating a vehicle on public roads show evidence of their ability to pay damages resulting from accidents causing bodily injury or property damage for which they are legally obligated to pay.

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry

The Wisconsin Automobile Insurance Plan (WAIP) is available to which of the following?

Anyone with a car registered in Wisconsin who is unable to procure insurance through the voluntary marketplace

Which bonds may be required when a person appeals to a higher court after a judgment already has been entered to guarantee that a judgment will be paid?

Appeal bonds

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page.

A contract given orally or in writing that acknowledges an insurer's acceptance of an applicant's offer to purchase insurance is called

Binder

Which of the following would be included in the farm liability coverage forms?

Bodily injury to residence employee

In Wisconsin, producers are permitted to share or split commissions, providing that

Both are properly licensed

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called

Claims-made form

Which of the following terms describes a situation in which an agent and policyholder act together to defraud the insurer?

Collusion

What are the two major sections of commercial crime policies?

Commercial entities and government entities

A professional who wants coverage for all liability exposures should purchase what form of liability insurance?

Commercial general and professional

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Which of the following would be covered under a business liability insurance policy?

Damage to a watercraft while on shore at the insured's premises

A public official bond guarantees which of the following?

Elected officials will perform their duties honestly.

What type of compensatory damages will pay for pain and suffering and disfigurement?

General

In farm insurance, Coverage I - Personal and Advertising Injury Liability for suits alleging personal injury is most similar to the coverage found in which coverage form?

General Liability

Which of the following would be covered under the Garage Liability Coverage Form?

Insured business premises

Crews of ships are covered by the

Jones Act

If a guest's property is lost or damaged while on an insured's premises or in their control, Guests' Property coverage covers the insured's

Legal Liability

Extended nonowned coverage endorsement in a PAP broadens which of the following coverages?

Liability and medical payments

The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as

Loss

Which of the following is TRUE regarding business liability and medical payments coverage?

Loss of electronic data is excluded under a business liability policy

The XYZ Insurance Company markets standard accident and health policy as a Medicare supplement policy. The company is guilty of

Misrepresentation

Why don't commercial auto coverage forms automatically include medical payment coverage?

Often, any person occupying a commercial vehicle would be covered under a workers compensation policy.

When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)?

Only if the insured does not have commercial auto coverage

Under what circumstance may an insurer cancel or refuse to renew an insurance policy based upon the past criminal record of the insured?

Only upon conviction of an offense directly related to the risk insured

Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due?

Payment bond

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

Reduction

For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as

Robbery

Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy?

The insurer may inspect the workplace after giving the insured 5 days' notice.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums

What is the purpose of Workers Compensation?

To provide medical benefits to injured employees regardless of fault

How much coverage can be available for watercraft damage in the homeowners policy?

Up to $1500

The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured

Will not relieve the insurer of its policy obligations

If an insurer requires that an applicant or insured undergo a physical examination in order to obtain or continue coverage, who must pay the cost of such examination?

insurer

In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period?

loss sustained form

All of the following are factors in rating workers compensation insurance EXCEPT

sales

CGL Coverage B (Personal and Advertising Injury) will cover

inadvertent injury to others caused in the course of advertising the insured products

A life insurance policy has a legal purpose if both of which of the following elements exist?

insurable interest and consent

An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified?

15

An intermediary must maintain records for how long?

3 years

An agent who has had formal disciplinary action taken against them by a state regulatory agency must notify the Commissioner of this within

30 days

To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than

6 stories

An insurance policy is considered a "new policy" if it has been in effect for what maximum time period?

60 days

In the event an insurance company decides not to renew an auto insurance policy, how much notice is required to be given to the policyholder?

60 days

If a covered auto is involved in an auto accident in another state, what happens to the limits of policy liability in a personal auto policy?

Adjust to at least the minimum limits of the other state

Another term for authorized insurer

Admitted

According to the Law of Agency, a principal is represented by a/an

Agent

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold

What type of insurance can be obtained through a surplus lines insurer?

Coverage that is unavailable through authorized insurers

The designation symbols used in commercial auto policies can be found in which policy section?

Covered Auto

Professional liability coverage protects against legal liability resulting from

Errors and omissions.

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions

Which of the following policy provisions would automatically broaden coverage under a policy without requiring additional premium?

Liberalization

A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage will be automatically applied to all policies of the same type is known as

Liberalization Clause

To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?

MCS-90

An individual's tendency to be dishonest would be indicative of a

Moral Hazard

The causes of loss insured against in an insurance policy are known as

Perils

Who might receive dividends from a mutual insurer?

Policyholders

Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?

Promptly forwarding premiums to the insurance company

Robbery is:

Property taken by force, threats or intimidation from another person

When the appointment of an individual agent is terminated, the insurer must notify the Office of the Commissioner with appropriate forms within how many days after the termination date?

30 days to notify

Bob's neighbor will not stop parking his motorcycle in Bob's rose garden no matter how many times he has been asked to quit parking there. Bob finally gets a court order requiring the neighbor to refrain from parking there. It turns out it was his neighbor's property all along. What bond was Bob required to post guaranteeing his neighbor's damages in this wrongful action will be paid?

Injunction

When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the

Insurer

Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace?

Make voluntary payments for treatment of the worker's injury

Which of the following is true about a fiduciary?

Must be court-appointed

In what way can an agent demonstrate a high standard of ethics?

Putting clients intentions before their owns

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT

Second injury funds programs.

A hazard is best defined as:

Something that increases the risk of loss

When an insurer is given an order of liquidation, which of the following will protect the insureds' unpaid claims?

The Wisconsin Insurance security fund

An agent makes a sales pitch that contains blatant lies about the insurer and its competitions. Who will ultimately be held legally responsible for this?

The insurer

The members of a limited liability company are insureds under a businessowners policy (BOP) if

The limited liability company is designated as the named insured.

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

rebating

How long are oral contracts valid in Wisconsin?

30 days

An insurer decides to renew a life policy but at a higher premium rate, starting on the renewal date. How many days in advance must the insured be notified?

60

If an insurer develops a new policy form, which authority must approve it?

Commissioner

Insurers must report or list all appointments and all terminations of appointments to what authority?

Commissioner

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

The pro rata liability clause is designed to protect the principle of

Indemnity

If an insurance company underwriter discovers that an applicant for a policy has been convicted of submitting a fraudulent claim to an insurer in the past, the application may be rejected as a

Moral Hazard

What is the business auto coverage territory for?

United States and its territories, Canada, or worldwide for private passenger hired autos

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

All auto liability insurance policies issued in Wisconsin must contain a provision to provide Uninsured Motorist coverage in an amount of at least

$25,000 per person and $50,000 per accident

What is the amount of deductible that applies to the per accident limit by the Broad Form Products Coverage endorsement in commercial auto policies?

$250

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5000

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?

$6,000 would be paid under other-than-collision coverage.

A tow truck was stolen from the insured's premises. The insured has loss of use coverage on his commercial auto policy. How much will the insured be able to collect from the coverage if unable to use the town truck in its operations for 40 days?

$600

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?

1 year

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

An intermediary has just placed insurance on himself. He can receive compensation for this transaction only if he has placed insurance on other individuals with the same insurer within the last

12 months

Coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by an accident if the expenses are incurred and reported to the insurer within how many years of the accident date?

3 Years

The inspections and surveys condition in a businessowners policy

Allows the insurer the right to inspect the insured's premises.

An agent is acting ethically EXCEPT

Always representing the insured

An agent is acting ethically in all of the following situations EXCEPT

Always representing the insured.

A producer who fails to separate premium monies from his own personal funds is guilty of

Commingling

In which of the following sections of a commercial auto policy will you find specific information about the policy period?

Conditions

When Mary decided to sue her neighbor for damages to her yard, she was told to get a bond that would guarantee she would be able to pay court costs and resulting damages if she loses the case. What kind of bond is this?

Cost Bond

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act?

Direct response marketing

An employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?

Drive other car protection

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

A specialized type of insurance that guarantees the faithful performance of a trustee of employee benefit plans is called

Fiduciary liability insurance.

The requirement that agents not commingle insurance monies with their own funds is known as

Fiduciary responsibility

If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose?

Its common law defenses against liability suits

Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?

Judgment

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger

An insured unintentionally accepted forged currency during the course of regular business. Which of the following crime coverages protects against such a loss?

Money orders and counterfeit paper currency

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

A business uses its own trucks to deliver their own products to the customer. Which commercial auto coverage form should the business buy to insure the trucks?

Motor Carrier coverage

The Wisconsin Workers Compensation Insurance Pool was established to

Provide a market for Workers Compensation insurance for employers unable to obtain coverage in the voluntary market.

Which of the following is exempt from Workers Compensation laws?

Sole Proprietors

All of the following situations would be covered under a professional liability policy EXCEPT

The failure of an attorney to properly defend a client due to his personal dislike of the client.

A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely?

The homeowner will need to get written consent from the insurer before the policy can be reassigned.

The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?

The insured person must release the employer and the insurer from further liability.

Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT

The insurer does not have the right to inspect the insured's property and operations.

Which of the following persons are required to furnish proof of financial responsibility?

The owner of a motor vehicle registering that vehicle A person obtaining an occupational license or reinstating a driver's license after operating privileges or vehicle registration has been revoked A person reinstating a driver's license after suspension if the suspension is a damage judgment or a suspension under the state responsibility law

A notice of nonrenewal of an auto insurance policy must contain

The specific reason for the nonrenewal.

All are true if a contractor defaults on a performance contract EXCEPT

The surety may cancel the bond so as to avoid having to pay losses and expenses.

A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession?

Trailer interchange coverage

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

Transfer of rights and duties under the policy

In addition to notifying the named insured, when an insurance company has certified a motor vehicle liability policy, the insurer cannot cancel or terminate the insurance until how many days after filing a notice of cancellation with the Secretary of State?

at Least 10 days

The liability coverage of the business owners policy is written on a

business owners liability coverage

To legally transact insurance in this state, an insurer must obtain which of the following?

certificate of authority

Which endorsement adds coverage for employee use of automobiles in the insured's business and the insured's use of rented autos if no coverage is provided on a business auto policy?

hired and nonowned auto liability

Joe had a notice of cancellation for his auto liability policy delivered to him today by his producer. When will this cancellation take effect?

in 10 Days

In liability insurance policies, supplementary payments are made

in addition to limit of liability

What is the purpose of the miscellaneous type vehicle endorsement in personal auto policies?

to expand the definitions of a covered auto to include various motorized vehicles

Which of the following is a statement made in an insurance application by the insured that is the absolute truth?

warranty

Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records?

$5,000

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity?

Directors and officers liability

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding costumer report information

States with monopolistic state workers compensation funds

Do not allow private insurers to be licensed to write workers compensation coverage.

Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy

During the policy period and for up to 3 years after the termination of the policy.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False Advertising

The voluntary compensation endorsement provides statutory coverage for which types of employees?

Farm workers

An individual has started a construction business and plans to specialize in remodeling and rewiring residential properties. Because the city where he is located and where he plans to operate the business has building codes, he will need to obtain a

License and permit bond.

The party to a surety or fidelity bond who promises to fulfill the obligation is the

Principal

All of the following statements regarding a boatowners policy are true EXCEPT

Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium.

An insurance company receives an application with some information missing and issues the policy anyway. What is this called?

Waiver

Under the business auto coverage form, mobile equipment is covered for liability insurance

When being towed or carried by a covered auto

When would uninsured motorist coverage apply?

When the other party is legally liable but has no insurance

In forming an insurance contract, when does acceptance usually occur?

When the underwriter approves coverage

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have?

combined single

NOT an essential element of an insurance contract?

counteroffer

Policies issued in this state must be presented in a meaningful sequence, be appropriately captioned, must provide definitions where appropriate, and must be printed in specified type. All these requirements refer to the rule of

readability

A commercial auto coverage form that is designed for insureds engaged in the business of transporting goods for others is a

Truckers coverage form

An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A" $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries?

$50,000

A small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true?

Business auto coverage form may apply

The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay

Company A will pay $16,000 Company B will pay $8000

In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn?

Comprehensive

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT

Employers Liability

In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?

First name insured

Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something?

Injunction bonds

What kind of insurance must be obtained through nonadmitted insurers, since the type of insurance sought is not available in this state?

Surplus Lines

What is the deductible of a personal liability umbrella policy called?

The SIR

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy?

The insured damages a rented garage when he failed to stop in time

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the

Company

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Mutual

Hazard is best defined as

Something that increases the risk of loss

The Broad Form Products Coverage endorsement in commercial auto policies does which of the following?

removes the defective products exclusions

What insurance concept is associated with the names Weiss and Fitch?

financial integrity

In insurance transactions, fiduciary responsibility means

handling insurer funds in a trust capacity

The authority granted to an agent through the agent's contract is referred to as

Express authority

ABC trucking company recently purchased XYZ manufacturing company. ABC wants to transport the new company's freight with their trucking division. The company also wants to continue to haul freight for the clients it has served for many years. In regard to coverage, which of the following is true?

Motor Carrier coverage is needed

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsements

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

Fair Credit Reporting Act

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False Advertising

Insurance producers must ensure that contracts they recommend are in the best interest of the insured. This is called

Suitability

Carl's application for a life policy was rejected because of information disclosed in an inspection report. Carl reviewed the consumer reporting agency's file and found they had incorrect information concerning his personal life. Carl can legally require the reporting agency to

Reinvestigate

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as?

Consideration

The Commissioner obtains a restraining order against a person who has violated an insurance law. The person continues the violation for 10 days. The person will have to pay a fine of

$0

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?

$14,000

A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?

Damage occurred when the concrete fell

Units with the same or similar exposure to loss are referred to as

Homogeneous

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice

Illegal

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy would not be affected

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

Proximate cause

The risk of loss may be classified as

Pure risk and speculative risk

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss.

What type of liability would a person who owns wild animals have?

Absolute

Every producer must maintain a place of business in this state

Accessible to the public

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim?

Arbitration

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?

Fraud

A deli owner has a businessowners liability policy. When a customer slipped and hurt herself at the deli, the liability policy paid for medical expenses. The customer, however, is now suing the business owner because she claims there was no caution sign warning her that the floor was wet. What is the insurer obligated to do?

Pay to defend the policyowner in the lawsuit because liability coverage contains a duty-to-defend provision

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional coverage

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

Associates, friends, neighbors provide the information