Casualty Prep-Course Practice Questions

Within the body of an insurance policy, what word or phrase refers specifically to the named insured?

A. "You" B. "The insurer" C. "We" D. "The insured" *A*

Fran's personal auto policy (PAP) lists her 3 autos. Each has uninsured motorists coverage with a $50,000 limit. Fran is permanently disabled by injuries she receives while riding in a friend's car that is struck by a hit-&-run driver. How much can Fran expect to collect under her PAP/s uninsured motorists coverage?

A. $150,000 B. $100,000 C. Nothing D. $50,000 *D*

Britney is responsible for an auto accident involving another car which will cost $15,000 to repair and for which the two injured occupants of that vehicle were awarded damages in the amounts of $30,000 and $20,000, respectively. Britney's split-limits policy has liability limits of $25/$50/$10. How much will her insurer pay?

A. $55,000 B. $60,000 C. $40,000 D. $65,000 *A*

Toni was injured when his car collided with Owen's at an intersection. In applying the doctrine of comparative negligence, a court determined that Toni sustained damages in the amount of $10,000 & the accident was 70% Owen's fault. What amount is Toni entitled to recover from Owen?

A. $7,000 B. $0 C. $10,000 D. $3,000 *A*

Regina rents a car while her car is undergoing repairs. Unless an endorsement changes the limits, Regina's personal auto policy (PAP) will cover her auto rental expenses up to:

A. $75 per day with a $600 maximum B. $20 per day with a $500 maximum C. $50 per day with a $500 maximum D. $20 per day with a $600 maximum *D*

Jonas received a cease & desist order from the Commissioner fro an unfair practice he committed while transacting insurance business. He is subject to a fine if he does not discontinue the practice within how many days after receiving the order?

A. 5 days B. 3 days C. 10 days D. 7 days *C*

Which of the following incidents would be covered under the Terrorism Risk Insurance Act (TRIA)?

A. A crew's negligence causes a passenger train to derail in California, resulting in losses of $249 million B. A bombing at a U.S. embassy leads to damages of $90 million C. A U.S. cargo ship is attacked by pirates & suffers losses of $188 million D. A U.S. manufacturing plant is sabotaged, resulting in a loss of $220 million *D*

Because Leanne's personal auto policy (PAP) provides liability coverage on temporary substitute autos, it will protect her if she is driving:

A. A delivery van for her employer B. A truck she borrows from a friend while Leanne's car undergoes repairs C. Her sister's car out of the garage to make room for Leanne's car D. A church van because the usual driver is sick *B*

Based on the facts presented, which of the following is an example of adverse selection?

A. A person applying to buy insurance on his new high-performance automobile B. A person applying to buy insurance on his retail business in a crime-ridden neighborhood C. A person applying to buy insurance on her new home D. A person applying to buy insurance on her expensive jewelry *B*

Acme Insurance and Apogee insurance agree to offer different premium rates for persons of equal risk within a particular class. They also agree to limit benefits paid to insureds within this class if the insureds live within certain counties of WA. Acme and Apogee engaging in:

A. Acceptable marketing and underwriting practices B. Unfair and prohibited business practices C. Insurance fraud D. False advertising *B*

A homeowner who owns a vicious dog may be more inclined to purchase liability insurance than one who doesn't own such an animal. What is this an example of?

A. Adverse selection B. Risk avoidance C. An indirect loss D. A speculative risk *A*

Insurance that protects producers from liability arising from professional services they render or fail to render is called:

A. Agents' insurance B. Professional liability insurance C. Commercial insurance D. Errors and omissions insurance *D*

All of the following statements are true about applying for a non-resident producer's license in WA EXCEPT:

A. An applicant must pay a fee B. An applicant's license must be in good standing in the home state C. An applicant must establish residency in WA D. The home state must grant licenses to WA residents on a reciprocal basis *C*

XYZ Insurance Company's auto insurance application includes a Fair Credit Reporting Act Notice. What does this notice inform consumers about?

A. Any information they provide in the application may be used against them in a court of law B. The insurer might order a credit report on the applicant that includes personal information C. The insurer's privacy policy complies with legal requirements D. They are entitled to opt out of a credit investigation *B*

Effluvia Industries' insurer adds the limited pollution liability extension endorsement to Effluvia's CGL insurance policy. Though Effluvia is now covered for bodily injury or property damage claims for pollution incidents, the endorsement does NOT cover it for liability resulting from:

A. Any pollution release that incurs cleanup costs B. Pollutants seeping from an underground storage tank C. Pollutants from a chimney or smokestack D. Pollutants seeping from an above ground storage tank *B*

All the following are duties to a customer by an insurance producer EXEPT:

A. Apply for and deliver the policy that the applicant intended B. Disclose all pertinent information concerning a proposed policy C. Make suitable recommendations that fit the customer's needs and circumstances D. Overcome the customer's objections to buying a recommended product *D*

How much advance notice must an insurance company give its policyholder if it does not intend to renew a personal auto policy?

A. At least 10 days B. At least 20 days C. At least 7 days D. At least 14 days *B*

How many days' notice must an insurer provide a named insured if the insurer is canceling a commercial property & casualty insurance policy?

A. At least 45 days B. At least 15 days C. At least 10 days D. At least 30 days *A*

In a trailer interchange agreement, a motor carrier agrees to:

A. Avoid using another carrier's trailers B. Exchange trucks with another carrier C. Exchange trailers with another carrier D. Avoid using another carrier's trucks *C*

All of the following are common sources of property & casualty insurance underwriting information EXCEPT:

A. Binder B. Motor Vehicle Record C. Agent's Report D. Loss History *A*

Most property insurance policies on buildings & personal property used by a business cover explosions but exclude coverage for losses covered by a boiler explosion. Why do they have this exclusion?

A. Boilers cannot explode B. Boiler explosion losses are not Insurable C. Boiler inspections make insurance unnecessary D. Boiler explosions are best handled with an equipment breakdown policy *D*

Which statement regarding the licensing of insurance producers is correct?

A. Candidates for a resident license are required to pass a state license exam but candidates for a non-resident license are usually exempt from the licensing exam B. Candidates for a non-resident license are required to pass a state license exam but candidates for a resident license are usually exempt from the license exam C. Whether they are seeking a resident or a non-resident license, all license candidates today must pass a state license exam to obtain a license D. Whether they are seeing a resident or non-resident license, all license candidates today may obtain a license without having to pass a license exam *A*

Jodie is distracted while driving her child to school. She collides with Emanuel's car & pushes it into a utility pole. Emanuel's car is damaged & the pole is destroyed. The accident causes a traffic jam that prevents other drivers from getting to work on time. Which claim on Jodie's personal auto policy does NOT involve property damage?

A. Claims for lost wages by drivers who were late to work B. Emanuel's claim for expenses to rent a car C. Emanuel's claim for damage to his car D. The utility company's claim for destruction of its pole *A*

The complete personal auto policy combines coverage for:

A. Collision, accidental injury & death B. Property, fire, & collision insurance C. Collision, fire, accidental injury & death D. Property & liability insurance *D*

Which part of the business auto policy (BAP) contains information the applicant provided to tailor the coverage for the applicant's needs?

A. Common policy conditions form B. Nuclear energy liability exclusion endorsement C. Business auto declarations D. Business auto coverage form *C*

Which is NOT a component of a typical, stand-alone business auto policy?

A. Common policy conditions form B. Nuclear energy liability exclusion endorsement C. Business auto declarations D. Garage coverage form *B*

A fan in the stands was hit on the hit by a foul ball during a baseball game. His attempt to sue the ball club & the stadium was rejected by the court due to the doctrine of:

A. Comparative Negligence B. Assumption of Risk C. Absolute Liability D. Contributory Negligence *B*

The Motor Carrier Act of 1980 requires some motor carriers to:

A. Comply with state financial responsibility laws B. Pay environmental restitution for their accidents C. Submit their vehicles to regular federal inspection D. Carry liability insurance with minimum coverage limits that depend on their cargo *D*

Although not explicitly permitted in an agent's agreement, the general expectation that producers will telephone and make appointments with prospective customers is an example of:

A. Contractual authority B. Express authority C. Implied authority D. Apparent authority *C*

The Inganno Company gets considerable business from the public's chafusing its name with that of a competitor. Adding to the potential confusion for its benefit, Inganno registers several domain names that incorporate its competitor's registered trademarks. The personal and advertising injury coverage of Inganno's commercial general liability (CG) insurance policy will:

A. Cover the cost of defending Inganno from the competitor's trademark infringement lawsuit B. Cover the cost of changing Inganno's domain names C. Cover liability claims filed against Inganno D. Not cover claims or lawsuits filed against Inganno *D*

Steve's car is in the dealer's garage when a tornado destroys the building & its contents. The dealer's garage policy includes garage-keeping coverage with the excess direct coverage option. How does the policy address the loss?

A. Coverage does not apply because the dealer is not responsible for a windstorm B. It will pay for any of Steve's loss that his personal auto insurance does not cover C. It will pay for the loss of Steve's car & other customers' cars, subject to the policy's limit & deductible D. It will pay any loss for which the dealer is legally liable to its customers *B*

Harding Paint Store mixed a gallon of paint with custom color Meghan requested. However, the store clerk failed to tighten the lid on the paint can, which came open while Megan was driving home with the can in her car. Harding was required to pay for the expensive damage to Megan's car that resulted from the paint spill under:

A. Criminal Law B. Worker's Compensation Law C. Tort Law D. Contract Law *C*

Charmaine has other-than-collision coverage but no collision coverage on her auto. She has made 4 claims for physical damage to her auto within the last 3 years. Which claim did her policy NOT cover?

A. Damage to the car when it skidded into a snow bank & rolled over B. Damage to the car from a hailstorm C. Damage to the car when a baseball cracked the windshield D. Damage to the car when it struck a stray dog running in the street *A*

An electrician accidentally shorts a wire in a fuse box he is repairing in the warehouse of a paper supply company. Sparks destroy the fuse box & the inventory. His employer's GL policy will cover:

A. Damage to the fuse box & the paper B. Damage to the fuse box but not to the paper C. Damage to neither the fuse box nor the paper D. Damage to the paper but not to the fuse box *D*

Which is NOT a bodily injury for purposes of coverage by the business auto policy (BAP)?

A. Death B. Disease C. Mental trauma D. Illness *C*

When meeting with a prospect to discuss insurance, Tyler makes disparaging comments about the financial stability & reputation of a competitor to dissuade the prospect from purchasing its policies. Which unfair trade practice has Tyler committed?

A. Defamation B. Coercion C. Unfair discrimination D. Rebating *A*

Evidence indicates that Zeta Construction's negligence caused a stage collapse that resulted in the death of Bonita, a famous performer. Zeta's CGL policy with Alpha Insurance Company has a $300,000 limit that applies to the multimillion dollar claim of Bonita's estate. What must Alpha do under these circumstances?

A. Defend Zeta until Alpha has paid $300,000 in judgments or settlements B. Compel Zeta & Bonita's estate to resolve the claim through arbitration C. Pay $300,000 to Bonita's estate to immediately settle the claim D. Seek a declaratory judgment to determine whether it must defend Zeta *A*

Nathan;s car has a flat tire. His personal auto policy (PAP) has towing & labor costs coverage with a $50 limit. The towing company charges $40 to change the tire in Nathan's driveway. What will Nathan's insurer do?

A. Deny coverage because the service was rendered at Nathan's house B. Pay Nathan $50 C. Reimburse Nathan $40 for the charge D. Deny coverage because the car was not towed *C*

Davis Insurance Company was formed under the laws of Canada. In WA, it would be considered a(n):

A. Domestic insurer B. Foreign insurer C. Unauthorized insurer D. Alien insurer *D*

Nelson is the president of his company & has a company car. He does not have a personal auto policy (PAP) because he does not own another vehicle. Which endorsement to his company's business auto policy (BAP) will protect him when he uses another vehicle?

A. Employee as Insureds B. Hired Autos Specified as Covered Autos You Own C. Drive Other Car — Broadened Coverage for Named Individuals D. Individual Named Insured *C*

Where in a property & casualty insurance policy would the insured expect to see his or her name?

A. Endorsements B. Definitions C. Declarations D. Insuring Agreements *C*

Sandy requires her employees to use their personal autos when calling on customers. If she adds the Employee as Insureds endorsement to her company's business auto policy (BAP), employees who use their personal cars for business calls will have:

A. Excess coverage under the BAP for losses that exceed their personal auto liability limits B. No need to maintain their own personal auto policies C. Primary coverage under the BAP D. Comprehensive coverage under the BAP *A*

As a DEF insurance company policyholder, Simone enjoys the fact that she is also one of the company's owners and that the company might even pay her policy dividends. What type of insurer is DEF?

A. Exclusive B. mutual C. Stock D. Reciprocal *B*

Which of the following conditions in an apartment building is a physical hazard?

A. Fire B. Landlord with a bad attitude C. Stained flooring D. Slippery stairwell *D*

After a serious accident, Melanie's insurance company refuses to pay to have her auto repaired because the cost of repairs equal 90% of the vehicle's current market value. The insurer considers Melanie's car to be a(n):

A. General average B. Constructive total loss C. Actual total loss D. Particular average *B*

Miles is told that his application for auto insurance was rejected based on information in his motor vehicle report (MVR). Which of the following is material underwriting information that might have appeared on Miles' MVR?

A. His low credit score B. How many miles he drives each year C. His driving under the influence (DUI) conviction D. The driving records of his wife & children *C*

VWX Insurance Company is considered an alien insurer, which means it is domiciled:

A. In the commissioner's state B. On the internet C. Outside the United States D. In a different state *C*

Spike received a cancellation notice from his insurer stating that his homeowners insurance policy would be canceled in 45 days, but no reason was given for this action. Spike's insurance producer told him that the insurer is required by law to provide the reason. This notice is:

A. Incomplete, but still valid B. Valid because sufficient notice time was provided C. Valid if Spike phones his insurer & is given the reason D. Invalid *D*

Leona rents a storefront space. She signs a lease in which she assumes responsibility for liability to anyone injured in her store, even if the injury is the landlord's fault. What kind of general liability exposure is she assuming under this lease?

A. Independent contractor liability B. Products & completed operations liability C. Contractual liability D. Premises & operations liability *C*

Which of the following is directly responsible for regulating the insurance industry in WA?

A. Insurance companies B. Attorney general C. Insurance Commissioner D. Governor *C*

Eduardo's Music Company sells a piano to Sheri through an online auction service & assures her that they will deliver it in good condition. However, while transporting the piano to Sheri's house, the moving van is in an accident that damages the piano. How will Eduardo's CGL policy respond to this loss?

A. It covers the loss because the piano was not in Eduardo's care, custody, & control at the time of the loss B. It does not cover the loss because of the exclusion for contractual liability C. It covers the loss because it was a contractual liability D. It covers the loss because the piano was in the possession of a 3rd party *B*

what does the limited pollution liability extension endorsement do when added to the CGL insurance policy?

A. It excludes pollution coverage B. It broadens the policy's definition of pollutants C. It limits pollution coverage to losses arising from bacteria & fungi D. It expands pollution coverage *D*

Randall and Russell make a contract to rob a tourist. They agree that Randall will lead the tourist near a dark alley where Russell will take her purse. They promise to share any money and jewelry they acquire. This agreement is not a valid contract because:

A. It involves more than one person B. It has an illegal purpose C. It is not in writing D. It did not include an offer *B*

Which statement regarding the regulation of the insurance industry in the U.S. is correct?

A. It is a non-regulated industry B. It is highly regulated equally by the states & federal government C. It is highly regulated, mostly at the federal level D. It is highly regulated, mostly at the state level *D*

Chris did not pay the premium to renew his insurance policy at the end of the policy term. What will happen to the policy on its expiration date?

A. It will automatically terminate B. It will be subject to assignment C. It will automatically renew D. It will be rescinded *A*

Sylvia is at fault for an auto accident with Lucien in which Sylvia is injured. She has no health insurance, & Lucien has no auto insurance. What is correct about the uninsured motorists coverage of Sylvia's personal auto policy (PAP)?

A. It will pay Lucien's medical bills because he was not at fault B. It will not pay Sylvia's medical bills because she was at fault C. It will pay Sylvia's medical bills because Lucien is uninsured D. It will pay Sylvia's medical bills because she has no health insurance *B*

Josiah is the sole proprietor of a luggage repair business. His wife, Bonnie, is the office manager. Josiah is the named insured listed in the business' commercial general liability insurance policy. Bonnie's sister Ruth is a part-time employee. Who is insured under the policy?

A. Josiah & Bonnie, with respect to the luggage business B. Josiah, Bonnie & Ruth with respect to all business activities C. Josiah alone D. Josiah & Bonnie, with respect to all business activities *B*

Which one of the following incidents is an example of vicarious liability?

A. Lilly is held responsible for her cat's injury to Lilly's guest B. Rudy is held responsible for an accident caused by his employee C. Edie is held responsible for striking a pedestrian with her bicycle D. Dominic is held responsible for food poisoning due to pizza he delivered *B*

The insurance code identifies certain conditions that would allow an insurer to cancel a fire insurance policy with only 5 days' notice if at least two of those conditions exist. Which of the following is not one of these conditions?

A. Major reservation is underway without the appropriate permit B. The building had no utility services for 60 consecutive days C. The structure is in danger of collapse because of its physical condition D. The building has been unoccupied for more than 60 consecutive days *A*

Property & casualty insurance rates are based on all of the following components EXCEPT:

A. Margin for Profits & Contingencies B. Loss Cost Data C. Competitors' Rates D. Expenses *C*

Which of the following does NOT constitute the transaction of insurance?

A. Negotiating an insurance contract B. Mailing an insurance contract C. Soliciting insurance D. Insuring a risk *B*

Which of the following policy provisions generally prohibits the transfer of property & casualty insurance policy ownership from one person to another?

A. No benefit to bailee provision B. Liberalization provision C. Cancellation provision D. Assignment provision *D*

Once a producer is appointed to represent an insurance company, the appointment will remain valid for how long?

A. No more than five years B. Until the Commissioner cancels it C. Until the insurer appoints another producer D. While the producer's license is in good standing *D*

Lightning ignites a fire at the Smith Motors garage which damages 7 automobiles owned by customers. Smith's garagekeepers coverage has a $1 million limit and a $1,000 deductible. How much of the deductible will be applied to this loss?

A. None B. $7,000 C. $70,000 D. $1,000 *A*

While on a construction site, Dustin's dump truck strikes a rock that makes a hole in the engine's oil pan, releasing motor oil into the soil. The owner of the site wants Dustin to pay for removal of oil. Dustin's business auto policy (BAP) will:

A. Not cover the discharge of a pollutant B. Not cover this release of a lubricant C. Cover the cost of the removal D. Cover only the repair to the oil pan *C*

How often must the Washington Insurance Commissioner examine the affairs and transactions of every authorized insurer?

A. Once every five years B. Once every two years C. Once every tree years D. Annually *A*

Last year, PDQ Insurance Company had a combined ratio of 105 percent, which means:

A. PDQ's premiums equaled its expenses last year B. PDQ had an underwriting profit last year C. PDQ had an underwriting loss last year D. PDQ had an an investment profit last year *C*

In an attempt to reduce her expenses, Mattie sells her car. What must she do to cancel her auto insurance?

A. Pay a cancellation fee B. Nothing, because coverage automatically ended when she sold the car C. Notify the insurer in writing of her intent to cancel the policy D. Forfeit the unearned premium *C*

Melanie sells an insurance policy from Outlier Insurance, which is not authorized to transact insurance in her state. Her client files a claim that Outlier wrongfully refuses to pat. Melanie may be required to:

A. Pay the amount of the unpaid claim B. Force Outlier to pay the claim C. Help Outlier become an authorized insurer D. Sue Outlier *A*

Waldo's 20-year-old truck is damaged in an auto collision. The insurer declares it to be a constructive total loss. Therefore, the insurer will NOT:

A. Pay the owner the vehicle's actual cash value plus tax minus the deductible B. Sell the damaged vehicle as salvage C. Take possession of the damaged vehicle D. Pay to have the auto repaired *D*

Coverage under the Insurance Services Office, Inc. (ISO) pollution liability forms is written subject to which 2 policy limits?

A. Per claim & per occurrence limit B. Aggregate limit & "each location" limit C. "Each occurrence" limit & "each location" limit D. Aggregate limit & :each pollution incident" limit *D*

In her insurance policy, Tracy discovers a number of provisions that she thinks should be worded more clearly and asks her insurance agent to change them. The agent explains that changes to the wording are not generally permitted because the insurance policy is a(n):

A. Personal contract B. Contract of adhesion C. Aleatory contract D. Conditional contract *B*

A mutual insurance company is owned by its:

A. Policyholders B. stockholders C. Members D. Board of directors *A*

Stephanie keeps valuable hobby supplies in a self-storage warehouse. The policy was just renewed, and the new policy imposed new limits for property in a self-storage facility, which Stephanie's agent did not point it out to her. If a fire destroys the warehouse, Stephanie might be able to collect in full under what doctrine?

A. Reasonable expectations B. Misrepresentation C. Adhesion D. Unilateral change *A*

Insurance is primarily regulated at which level of government?

A. Regional B. Municipal C. State D. Federal *C*

In WA, which of the following persons is not considered an insurance producer?

A. Richard, who only sells auto insurance policies B. Sven, who brokers surplus lines contracts C. Maureen, who sells property insurance D. Mickey, who negotiates insurance contracts *B*

Elizabeth buys a 1999 pickup truck for occasional removal of household trash & yard debris. In light of the vehicle's age & intended use, how will Elizabeth likely decide to insure the truck?

A. She will add non-owned auto physical damage coverage B. She will add temporary substitute auto physical damage coverage C. She will forgo other-than-collisions coverage on the truck D. She will forgo collision coverage on the truck *D*

Which kind of insurer involves mutual agreements to indemnify the insureds from loss?

A. Stock insurer B. Lloyd's association C. Mutual insurer D. Reciprocal insurer *D*

Pierre does not want collision coverage on the older vehicles in his fleet, so his business auto policy (BAP) lets him choose the vehicles that will have this coverage. Which symbol indicates this?

A. Symbol 1 B. Symbol 7 C. Symbol 4 D. Symbol 3 *B*

Lawrence's business does not own any private passenger vehicles, so he wants his business auto policy (BAP) to provide liability coverage & specified causes of loss coverage only for the non-private passenger vehicles that the firm owns. The declarations of his BAP should have:

A. Symbols 2, 8, & 9 for liability coverage & symbol 4 for specified causes of loss coverage B. Symbol 1 for liability coverage & symbol 3 for specified causes of loss coverage C. Symbol 2 for liability coverage & symbol 3 for specified causes of loss coverage D. Symbol 4 for liability coverage & specified causes of loss coverage *D*

An insurance producer whose actions are not authorized by the insurer but which the insurer accepts anyway is demonstrating:

A. Tactic authority B. Implied authority C. Express authority D. Apparent authority *D*

Which federal law prevents certain convicted felons from engaging in the insurance business unless they obtain a waiver from the Department of Insurance?

A. Terrorism Risk Insurance Act (TRIA) B. Federal Trade Commission Act (FTCA) C. Violent Crime Control & Law Enforcement Act D. McCarran-Ferguson Act *C*

Mandy is injured in a collision with a motorist who has no insurance coverage. Mandy's personal auto policy includes uninsured motorists coverage. However, she and her insurer cannot agree on the amount of compensation she is entitled to receive . The policy's arbitration provison will enable them to resolve their dispute over:

A. The amount of damages alone B. Whether Mandy is entitled to damages & the amount of the damages C. Whether Mandy is entitled to damages alone D. Whether settling the claim will affect Mandy's renewal premium *B*

4 years after he was injured in an auto accident die to another driver's negligence, Archie must undergo treatment for a spinal deformity caused by the accident. He submits a claim under the medical payments provision of his personal auto policy (PAP). Why does the insurer deny the claim?

A. The claim exceeded the policy's medical payments limit B. Medical payments coverage does not apply to insured's own injuries after the date of the accident C. Archie's medical expenses were incurred more than 3 years after the date of the accident D. Archie should have first sought payment from the negligent driver *C*

For the past 4 years, Cheryl has insured her business with four different commercial general liability (CGL) insurance policies, each with an occurrence trigger. For a claim to be covered by Cheryl's current policy:

A. The injury or damage must have occurred during the current policy period B. The act that resulted in the claim must have occurred while an earlier CGL policy was in effect C. The accident that produced the injury or damage must have occurred during the current policy period D. The claim must be made during the current policy period *A*

Marty drives to Ritzy Restaurant. After parking in a nearby lot, he slips on the icy pavement & breaks his ankle. 2 months later, he submits his $1,000 medical bill to Ritzy Restaurant for payment. Why might Ritzy's commercial general liability insurer refuse to pay this claim under Coverage C-medical payments?

A. The injury was caused by Marty's negligence B. The injury occurred off the insured premises C. Ritzy's negligence caused the accident D. The injury involved a member of the public *B*

If the insurer and the insured cannot agree on the value of damaged property in settling a property loss claim, all the following statements are correct EXCEPT:

A. The insured is required to select an appraiser B. The umpire appraiser's valuation must be accepted by all parties C. The insurance company is required to select an appraiser D. The insured's appraiser & the insurance company's appraiser are required to select a third appraiser to act as umpire *B*

All of the following are true statements about an insurer's cancellation of a medical malpractice insurance policy EXCEPT:

A. The insurer must provide the named insurer with at least 30 days' notice of cancellation if the reason for cancellation is nonpayment of premium B. The cancellation notice must state the actual reason why the insurer canceled the policy C. The cancellation notice must describe the significant risk factors that led to the insurer's underwriting action D. The insurer must provide the named insured with at least 90 days' notice of cancellation unless canceled for non-payment of premium *A*

What does the "No Benefit to Bailee" provision in a property & casualty policy make clear?

A. The policy does not cover bailees B. Bailees can be covered only for the value of the insured's property being held by the bailee C. Only bailees that can show an Insurable interest in the insured's property can be covered D. Bailees must wait until all other parties are reimbursed for a loss before the can be covered *A*

Although the policyholder must pay premiums to keep an insurance policy on force, the policy is considered a unilateral policy because:

A. The policyholder is making an enforceable promise B. Neither the policyholder nor the insurer makes an enforceable promise C. Only the insurer makes an enforceable promise D. Both the policyholder and the insurer make enforceable promises *C*

The Commissioner can suspend a producer's license without a hearing in all of the following cases EXCEPT:

A. The producer is convicted of a felony B. The public safety id threatened C. The producer has violated a department regulation D. The public welfare is at risk *C*

An insurer that decides to cancel a PAP after it has been renewed can do so if:

A. The renewal occurred within the last 60 days B. The policy was obtained through a material misrepresentation C. The insured was cited for a moving violation D. The premium payment was received after the due date *B*

Under the Coverage A insuring agreement of the CGL policy, what does the insurer promise to do?

A. To determine the most suitable coverage for the insured's loss exposures B. To pay damages on behalf of the insured for bodily injury or property damage that the policy cover C. To cover the insured's obligation under a court injunction D. To sue those who file claims against the insured for bodily injury or property damage *B*

What is the purpose of no-fault auto insurance?

A. To eliminate the need for uninsured motorists coverage B. To make it easier for accident victims to collect from at-fault motorists C. To lower insurance costs by reducing or eliminating litigation D. To make motorists responsible for their own injuries *C*

Doris has a homeowners insurance policy and a separate insurance policy that covers her jewelry. A provision in her homeowners policy states "We do not cover articles specifically insured in another insurance policy." What is the purpose of this exclusion?

A. To remove coverage not needed by a typical insured B. To remove coverage for uninsurable risks C. To reduce the incentive to create losses & provide incentive to prevent losses D. To eliminate or reduce overlapping coverage *D*

It is an unfair business practice for an insurance producer to fail to issue a proper receipt for a premium payment. The receipt must be delivered as soon as possible, but no later than:

A. Two business days B. The next business day C. The next calendar day D. Two calendar days *B*

The most important coverage in the personal auto policy is the:

A. Uninsured motorists coverage because almost every accident involves an uninsured motorists B. Liability coverage because liability losses often involve large amounts of money C. Collision coverage because it protects your car D. Medical payments coverage because it provides some protection against your own injuries *B*

Mary loses control of her car & strikes Wilmer, a pedestrian. Mary suffers minor cuts & bruises. Katharine sees the accident & must seek psychiatric treatment for her resulting mental anguish. Because Mary's personal auto policy covers liability resulting from bodily injury, it will pay for:

A. Wilmer's doctor bills but not Katharine's psychiatrist bills B. Mary's medical bills but not Wilmer's or Katharine's bills C. Wilmer's doctor bills & Katharine's psychiatrist bills D. Katharine's psychiatrist bills but not Wilmer's doctor bills *A*

Which of the following is not among the recognized approaches to handling risk?

A. avoiding it B. Transferring it C. sharing it D. Ignoring it *D*

After finding it difficult to obtain the insurance it needs, Mathews Corporation joins other companies in the same industry and forms an insurance company that they all own. The insurance company they formed is most likely organized as a(n):

A. reinsurance company B. Stock insurance company C. Captive insurance company D. Exclusive insurance company *C*