Delaware Licensing Exam - #2

The intentional misrepresentation or concealment of known facts for the purpose of gaining an advantage over another party is known as:

Fraud

Upon determining that a producer has violated the insurance law, the Insurance Commissioner is required to take which of the following actions?

Hold a hearing on the infraction

What would be considered an occurrence?

Smoke from a factory discolors paint on nearby homes

Which of the following best defines Res Ipsa Loquitor?

Things speak for itself

Our insured's vehicle is damaged due to a fire loss. There is $1000 of damage done to the vehicle. The OTC ded is $250. Personal effects damaged in the fire are worth $600. How much would we pay?

$1,000 damage to vehicle, $200 for personal effects

What is the applicable monetary penalty for a person who has violated a cease and desist order issued by the Commissioner?

$11,500

John has collision with a $100 ded and OTC covg with no ded. He is driving down the street when his car catches fire and then strikes a tree. The dmg from the fire is $800 and the dmg from the tree is $400. How much will his insurance company pay?

$1200

Our insured is struck by an uninsured vehicle. There is $5,000 worth of damages to his vehicle and $2,000 in personal effects that are damaged. The UPD deductible is $250. How much would we pay on the settlement?

$4,750 for damage to the car and $2,000 for the personal effects

An applicant or licensee may make written demand upon the insurance commissioner for a hearing before the commissioner can non-renew or deny an application for a license within:

10 days

The application for PIP must be mailed to the policyholder or other eligible injured party within:

10 days

The statute of limitations in Delaware to file medical bills for a PIP claim is:

2 years

What is a proof of loss?

A formal statement made by the insured to the insurance company regarding the loss

What constitutes an 'agreement' to enter into a valid contract?

A specific offer by one party and acceptance by the other

An incorporated insurance company with its capital divided into shares and owned by its stockholders is known as:

A stock company

When Proof of Loss has been submitted to an insurer for claim payment, how many days does the insurer have to either affirm or deny the claim? A. 30 B. 10 C. 20 D. 16

A. 30

What is considered a supplementary payment?

All post judgment interest in a suit defended by the insurer

The Insurance Commissioner in Delaware is: A. An elected official B. Appointed by the Governor C. Appointed by the legislature with the approval of the governor D. Nominated by the national associate of insurance commissioners

A. An elected official

Which of the following coverage would apply to a rental car used by an insured executive while on vacation? A. Coverage for non-owned autos B. Drive other car coverage C. Trucker's coverage D. None of the above

A. Coverage for non-owned autos

Which of the following sections of an insurance policy states who may be insured in addition to the named insured? A. Declarations B. Definition of the insured C. Insuring Agreements D. Obligations of the insurance company

A. Declarations

The Insurance Commissioner is empowered to: A. Enforce state laws relating to insurance B. Pass state laws relating to insurance C. Write policy forms for mandatory insurance coverages D. Set rates for mandatory insurance coverage

A. Enforce state laws relating to insurance

Under the Automobile Insurance Plan (AIP), all of the following coverage are available to the eligible owner of a private passenger vehicle except: A. Rental Reimbursement B. PIP C. Underinsured Motorist D. BI

A. Rental Reimbursement

Mr. Thompson carries the minimum auto limits for his state. He drives his car to New York which requires BI limits of 25/50 and a wrongful death limit of 50/100 and no fault coverage. If he has an accident in New York, what coverage would he have? A. The coverage will automatically be modified to comply with the New York requirements B. The insurance company will not raise the limits to those required in New York C. The insured must pay an additional premium to have his limits increased before entering the state D. Mr. Thompson will have to ask his insurer for higher limits before the trip

A. The coverage will automatically be modified to comply with the New York requirements

Insurable interest is clearly present in all of the following except: A. a person is interested in buying a sports car and inquires about the cost of insurance B. A person buys an auto from a friend who signs over the title but the buyer will pay for it in twelve equal, interest free installments C. A person obtains a mortgage on a house from a bank and the bank requires that it be listed on the policy as a lienholder D. A person borrows a freind's tools to repair his house

A. a person is interested in buying a sports car and inquires about the cost of insurance

Replacement cost of an item less depreciation is known as:

Actual Cash Value

Adverse Selection occurs when:

Applicants are accepted by the insurer with little or no attention given to underwriting

The liability coverage of a PAP does not apply to persons who:

Are engaged in work for the insured as an employee

What is the PIP minimum limit required by the State of Delaware? A. 20/40 and 10 PD to prop other than a motor vehicle B. 15/30 and 10 PD to prop other than a motor vehicle C. 5/10 and 5 PD to prop other than a motor vehicle D. 10/20 and 10 PD to prop other than a motor vehicle

B. 15/30 and 10 PD to prop other than a motor vehicle

Domestic insurers must be examined by the Commissioner every: A. 3 years B. 5 years C. 2 years D. One a year for at least 3 years

B. 5 years

An insurance company that generally fails to affirm or deny coverage of claims within a reasonable period of time after receiving proof of loss may be found guilty of: A. A breach of fiduciary responsibility B. An improper claims practice C. Defamation D. Misrepresentation

B. An improper claims practice

The Insurance Commissioner may suspend, revoke, or deny a producer's license for all of the following reasons except: A. untrue statements on the license application B. Conviction of a misdemeanor C. Incompetency D. Converting Funds

B. Conviction of a misdemeanor

What is the most important provision on every policy? A. Subrogation B. Declaration C. Endorsement D. Any other provision

B. Declaration

Which of the following would be covered under the PIP coverage? A. Injury to the insured while he is using his car as a taxi B. Injuries sustained by coworkers while riding in the insured's carpool C. Injuries sustained while the insured is riding on a motorcycle D. None of the responses are covered

B. Injuries sustained by coworkers while riding in the insured's carpool

During a tornado, a car is carried away by the wind. It landed on a utility pole which then caught fire and resulted in the vehicle becoming a total loss by fire. The proximate cause of the loss is: A. Fire B. Tornado C. Smoke D. Falling Objects

B. Tornado

Liability coverage under the PAP includes:

Both BI and PD coverage

Uninsured Motorist coverage includeds the named insured's: I. Medical Bills and Pain & Suffering II. Lost wages

Both I and II

Which of the following vehicles is considered an auto under a PAP? A. A vehicle used by the insured to transport passengers to and from an airport for a fee B. The insured's all-terrain vehicle with three wheels C. A replacement car purchased by the insured a week ago but not yet reported to the insurance company D. A company car provided to the insured by an employer

C. A replacement car purchased by the insured a week ago but not yet reported to the insurance company

An insurance adjuster is all of the following except: A. an individual who investigates insurance claims B. An individual who estimates insurance claims C. An individual who underwrites insurance claims D. An individual who negotiates insurance claims

C. An individual who underwrites insurance claims

An insured may cancel a PAP by taking which of the following actions? A. Paying the insurance company any past due premiums B. Waiting until the policy expiration date C. Giving written notice to the insurance company D. Informing the producer by telephone/texting

C. Giving written notice to the insurance company

Upon determining that a producer has violated the insurance law, the Insurance Commissioner is required to take which of the following actions? A. Place the licensee on probation immediately B. Publish notice of the violation C. Hold a hearing on the infraction D. Submit the infraction to the department of insurance for review

C. Hold a hearing on the infraction

Jordan drives Larry's car. Both Jordan and Larry have a PAP. Which of the following statements is correct concerning coverage if Jordan causes an accident? A. Jordan's policy only will pay for any damage B. Larry's policy only will pay for any damage C. Larry's policy is primary and Jordan's is excess D. Jordan's policy is primary and Larry's policy is excess

C. Larry's policy is primary and Jordan's is excess

After paying a claim, an insurance company may have the right to pursue legal action against the negligent party. This right is called: A. Assignment B. Other insurance C. Subrogation D. Action against the company

C. Subrogation

The liability limits of an insurance policy are applied to: A. each vehicle B. each car involved in the accident C. each occurrence D. each pedestrian

C. each occurrence

When is it ok to send unlicensed adjusters to Delaware?

Catastrophe Situation

If an insured conceals a material fact, makes false statements, or engages in a fraudulent act, he or she is guilty of:

Concealment

The Insurance Commisioner may NOT suspend, revoke, or deny a producer's licences for:

Conviction of a misdemeanor

Which of the following situations would be covered by the liability insurance under a PAP? A. An insured damages another vehicle while driving a motorcylce B. An insured causes injuries while operating a taxi cab C. An auto mechanic has an accident while road testing a customer's vehicle D. An insured who rents a private garage, backs his car in and damages the garage

D. An insured who rents a private garage, backs his car in and damages the garage

What are the four elements of legal liability/tort?

Duty owed, breach of duty, proximate cause, damages

If an insurance company covered an excluded claim, it may have to continue paying other such claims because of:

Estoppel

Supplemental Payment under Liability Policies:

In addition to the policy limits

Which principle part of an insurance contract is considered the heart of the policy; states in general what is to be covered or in other words, the losses for which the insured will be indemnified. This section also describes the type of property and perils that are covered:

Insuring Agreement

What statement is correct about Uninsured/Underinsured Motorists coverage in this state?

It is subject to rejection by the PH in writing

If a claimant is able to prove gross negligence, they would be entitled to recover:

Punitive Damages

If you live in Washington DC and want to get a Delaware Insurance License, what type of adjuster license would you receive?

Non-resident adjuster license

What is the deductible for a fire loss?

None

If the insurance company denies or compromises a claim, they are required to:

Notify all parties promptly of the reason for the denial and/or compromise

Our PH carries UIM of 25/50. The clmt carries BI 25/50. Our PH was injured in the accident which he was not at fault and sustained $35,000 in injuries. What best describes what our UIM exposure is under our insured's policy?

Our UIM exposure is $0

Following the payment of a claim, the salvaged property becomes the property of:

The insurer

If an insured has more than one auto policy that provides Uninsured Motorist coverage, what statement about recovery of benefits is correct?

Total recovery is restricted to the highest limits of those coverages

An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:

Unfair Discrimination

An insurance company that permits different rate classificatiosn for individuals of the same class and same hazard may be guilty of:

Unfair Discrimination

Vehicles not eligible for PAP coverage:

Vehicles with fewer than four wheels

The following is true regarding the payment of lost wages:

Wages are to be paid at the time they are incurred