Exam FX Stimulation, ExamFX Chapter 20: Surety Bonds and General Bond Concepts, ExamFX Chapter 21: Workers Compensation - General Concepts, NV Casualty Policies, Bond, Terms, Exam FX P&C Questions, Insurance, chatper commercial coverages, ExamFX Auto...

Matt, the insured, took out a 20-year lease, and at the time invested $25,000 for improvements and betterments to the property. What is Matt's monthly leasehold interest?

$104.16

Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court cost and attorney fees were $15,000. How much will the CGL policy pay?

$115,000

Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay?

$115,000

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 cost $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the third passenger. How much will the policy pay under medical payments coverage?

$14,000

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 third passenger. How much will the policy pay under medical payments coverage?

$14,000

A policyholder has a boiler and machinery policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy?

$175,000

A pizza shop has a neon sign attached to it building during a severe thunderstorm the sign is damaged by wind and hail what is the maximum the business and personal policy will pay for the damage to the sign?

$2,500

A pizza shop has a neon sign attached to its building. During a severe thunderstorm, the sign is damaged by wind and hail. What is the maximum amount the business's building and personal property policy will pay for the damage to the sign?

$2,500

Transportation expenses are usually covered under a personal auto policy for

$20 per day, for a maximum of $600

Transportation expenses are covered under a Personal Auto Policy for

$20 per day, for a maximum of $600.

Tom's Truck Service's vehicle is stolen, the policyholder may obtain coverage for transportation expenses subject to which of the following limits?

$20 per day; $600 maximum

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

$25

The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to

$250,000.

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

An insured's building has an actual cash value of $200,000 and he has insured the property for $120,000 with an 80% coinsurance clause. a $40,000 loss occurs. how much will the policy pay?

$30,000

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

$30,000

In California, the liability for bodily injury or death to all people is a cumulative liability limit of

$30,000.

An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pa for damages? (Dollar amounts are rounded to the nearest hundred)

$41,700

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

$5,000

An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and needs to be replaced. The new roof will cost $6,000 at todays prices. If the roof has been depreciating $200 per year and his policy is ACV, how much will it pay the insures new roof?

$5,000

Under the commercial crime coverage inside a premises-robbery or safe burglary of other property, what is the special occurrences limits that applies to loss or damage to precious metals, precious and semi precious stones, pearls and furs, manuscripts, drawing or records.

$5,000

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 stone, pearls, furs, manuscripts, drawing, or records?

$5,000

A commercial property special form covers property in transit up to

$5,000.

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

$5,000.

In California, the liability for damage to property is limited to

$5,000.

Jack and Jill each own a 50% interest in a dwelling that is insured under a standard fire policy issued to Jill to cover her interest in the structure. The amount of insurance is $40,000. Following a $10,000 fire loss to the structure, Jill will receive

$5,000.

Jane has an auto liability policy with limits of 25/50/15. If Jane is involved in an accident caused by her negligence and is held legally liable for bodily injuries of three 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

Roger owned a grocery store and had a Reporting Form Policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has?

$50,000

Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?

$500

The standard property deductible per occurrence on a CPP is

$500.

An insured's auto strikes a deer, causing the insured to lose control of the car and run into a tree. The total damage to the auto is $6,000. How will this loss be covered?

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

Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay?

$60

John has an automobile policy with limits of $50,000 per person and $100,000 per occurrence. An accident occurs and two people are injured, one with $25,000 in injuries and the other with $75,000 in injuries. If John is found responsible, what is the maximum amount his policy will pay for the injuries?

$75,000

Three years ago an insured move to an unfurnished apartments, she bought new furniture that cost $9,000 last week there was a fire in the apartment that destroyed the furniture. Replacement cost is $10,500. The adjuster told the insured her furniture depreciated $2,500 If the insurance is written on the actual cash value basis how much will it pay for the loss?

$8,000

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

Collision

Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $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 Lily have?

Combined single

Which employee fidelity bond pays no more than its limit of liability for each separate occurrence to matter that several separately identifiable employees were involved in a single loss?

Commercial blanket position

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

Commercial general and professional

All of the following are classes of inland marine risks EXCEPT

Common Carrier Cargo Liability

A Commercial Package Policy (CPP) must contain the following two elements:

Common declarations and common policy conditions.

All of the following statements are true regarding workers compensation insurance in California EXCEPT

Companies with fewer than 5 employees are not required to have workers compensation.

Workers compensation laws provide all of the following types of benefits EXCEPT

Compensatory benefits.

A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly?

Completed operations

Builder's risk is most often written on which form?

Completed value form

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

Conditions

Which of the following risks are eligible for coverage under a businessowners policy (BOP)?

Condominiums

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. The driver is

Considered underinsured

Containerships are used to transport

Containerized cargo.

Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement?

Contractual liability policy

All of the following are supplemental payments found in liability policies EXCEPT

Costs the insured incurred in hiring an attornay

All of the following are supplemental payments found in liability policies EXCEPT

Costs the insured incurred in hiring an attorney.

Losses due to the insured's negligence

Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover Contractual liability. Damage to the insured's product. Losses due to the insured's negligence. Liquor liability.

In a farm policy, which of the following coverages would reimburse the insured for loss of rental income following damage to the insured dwelling by an insured peril?

Coverage D

A residence employee who is injured on the job

Coverage F (medical payments) under a homeowners policy would cover A residence employee who is injured on the job. A tenant who is injured while on the premises. A family member who is injured while residing in the insured premises. The insured for injuries sustained while working at home..

80%

Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of 50%. 75%. 80%. 90%.

3 years

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? 90 days 1 year 3 years 5 years

A startup used car dealership buys cars at auto auctions in 30 states. It wants to be certain that damage coverage is provided when the cars are driven or transported from the auctions to the dealership. In regard to the business auto physical damage coverage, which is true?

Coverage is provided at additional premium

All of the following are true regarding flood insurance EXCEPT

Coverage may be provided for growing crops and livestock.

The extra expense coverage form provides

Coverage that will permit the insured to continue in business without interruption following a property damage loss.

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

Covered Auto

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be

Criminally negligent

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be

Criminally negligent.

Employee Jane 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 Jane when she drives someone else's car for her personal use?

Drive other car 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.

Notify the insured in the event of financial difficulty.

Duties of the insurer found in property policy conditions include all of the following EXCEPT Return any premiums to the insured. Notify the insured in the event of financial difficulty. Pay covered losses. Provide advance notice of cancellation.

Which of the following would NOT be included in a commercial package policy?

Dwelling coverage

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act

Which of the following is the federal body that regulates truckers who travel across state lines?

Federal Motor Carrier Safety Administration

The U.S. Government requirement that public construction be completed in accordance with certain laws and regulations was mandated by the Heard Act. The requirement that a contractor doing this construction be bonded would be classified as a:

Federal bond

The requirement that managers and/or trustees of employee benefit plans that come under the Employee Retirement Income Act must be covered by a fiduciary bond. Because this requirement is mandated by the U.S. Government, the bond would be classified as a

Federal bond.

Farm fences (except field and pasture fences) are covered by which farm coverage form?

Fences, except pasture and field fences, are considered other farm structures and are covered by Coverage G - Other Farm Structures.

If you are called upon to handle the estate of a deceased, the court will require you to post which bond?

Fiduciary

A person who is responsible for the administration of a decedent's estate would have a need for a(n)

Fiduciary bond.

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

Fiduciary liability insurance.

A business owner needs to purchase additional inventory in order to meet a customer's order. He contracts with a competitor, obtains the additional inventory, and satisfies his customer. Unfortunately, he does not have the money to repay his competitor. What type of guaranty should he have purchased?

Financial

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 named insured

The major portion of the premium for an equipment breakdown policy pays

For inspections and examinations.

For what term is a public officials bond normally written?

For the term the principal is elected to serve

California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. If you don't have acceptable financial responsibility and have an accident, you may lose your driver's license for up to

Four years

Which of the following clauses under an Open Cargo Policy is the MOST restrictive?

Free of Particular Average Clause

Which of the following coverages would provide protection for the liability of an auto repair garage to owners of vehicles destroyed in the garage by fire?

Garagekeepers

An owner of a parking lot wants liability coverage for damage to vehicles while in her custody. She needs

Garagekeepers coverage.

5 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? 5 days 7 days 10 days 3 days

.Physical damage

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT Uninsured motorist. No-fault medical payments. Liability. Physical damage.

Within 30 days

If a resident producer or solicitor has a change of residential or business address, how soon must the licensee notify the Commissioner? As soon as possible Within 15 days Within 30 days At license renewal

Louisiana Insurance Rating Commission

If the Louisiana Citizens Property Insurance Corporation denies an application, the applicant may appeal to the Louisiana Citizens Property Insurance Corporation. Commissioner. Louisiana Department of Insurance. Louisiana Insurance Rating Commission.

Situs and status test

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the Situs and status test. Maritime and navigable waters test. Wharf and pier test. Loading and unloading test.

.The insured's camera is stolen from his vacation home while he is there.

In which of the following situations would off-premises coverage in a broad theft endorsement apply? The insured's jewelry is stolen from her vacation home after she returns home. The insured's vacuum cleaner is stolen from her apartment. The insured's camera is stolen from his vacation home while he is there. The insured's live-in maid's quarters are burglarized

CGL Coverage B (Personal Injury and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product

CGL Coverage B (Personal Injury and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product.

Provided that a loss did not result from negligence by the assured, the owners, or the managers of the vessel, additional perils are covered under the

Inchmaree clause.

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?

Individual Named Insured

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

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

Injunction bonds

In a personal auto policy, Coverage C: Uninsured Motorist defines an insured person as any of the following persons EXCEPT

Injured in an auto accident

In a personal auto policy, Coverage C: Uninsured Motorist defines an insured person as any of the following persons EXCEPT

Injured in an auto accident.

Which of the following selections is true regarding the Workers Compensation medical care benefit?

Injured workers are entitled to receive all medical care reasonably required to cure or relieve the effects of the injury, with no deductible or coinsurance.

Which statement is true regarding Workers Compensation law in California?

Injured workers cannot sue an employer for negligence.

If an insured desires protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased?

Inside Premises -Robbery or Burglary of Other Property

Which of the following is NOT true of National Flood Insurance?

Insurance provided by the flood program also is available in standard property policies.

5 years.

Insurer examinations must occur no less frequently than every 2 years. 3 years. 4 years. 5 years.

All of the following are true in regards to 24 Hour Coverage EXCEPT

It can be distributed through a life insurance policy.

Which of the following is true regarding the fire department service charge under the Builders Risk form?

It is an additional coverage.

All of the following statements are true regarding the low-cost auto insurance program in California EXCEPT

It is only available in select counties.

Which of the following statements concerning the builders risk coverage form is correct?

It may be written on a reporting form or the completed value of the structure.

Which of the following is true regarding renewability of a low cost auto insurance policy in California?

It must be renewed annually.

One advantage of claims-made liability forms from the insurer's point of view is that

It prevents stacking of limits

Which of the following statements is NOT true regarding a personal umbrella liability policy?

It provides errors and omissions coverage for an agency

Which of the following statements is NOT true regarding a personal umbrella liability policy?

It provides errors and omissions coverage for an agency.

An insurance producer fails to obtain automobile insurance for client after agreeing to do so. The client is involved in an automobile accident after running a red light and is found to be at fault. The damage to the other vehicle totals $5,000. Which statement regarding the producer's errors and omissions liability policy is true?

It will provide coverage because the damage to the client resulted from the producer's negligence

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

Its common law defenses against liability suits

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

Its common law defenses against liability suits BIts ability to provide group health insurance

The form of payment bond that protects an owner contracting for work against liens from subcontractors, suppliers, or laborers who are not paid for their services and materials by the general contractor is called

Labor and material bond.

According to the Nationwide Marine Definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT

Large pleasure boats.

Larry invites his neighbors out for a day on the water in his boat powered with a 150hp outboard. While attempting to tie the boat to dock, his neighbor's hand is broken when caught between the boat and dock. What coverage would apply to the broken hand?

Larry's Boatowners policy

Which of the following is defined as a covered cause of loss in businessowners property coverage?

Leakage from fire-extinguishing equipment

A personal auto policy would be considered excess when an insured

Leaves his car in a parking garage and the car is involved in an accident.

An ocean marine hull policy will not pay any of the following EXCEPT

Legal liability for damage to another's ship the insured has run down

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

Liability and medical payments

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

Liberalization clause.

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

License and permit bond.

Which bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits?

License and permit bonds

A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain

License and permit bonds.

Which of the following is NOT a contract bond?

Litigation bond

A property with which of the following deficiencies would be eligible for the California FAIR Plan?

Located in a designated hazardous brush area

Employee fidelity may be written in all the following ways EXCEPT

Location schedule

Bulk carriers are used to transport

Loose cargo.

Insurance is contract by which one seeks to protect another from

Loss

An insured is driving his or her automobile and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair?

Loss is not covered

A shipload of cement has been damaged by water and has become concrete. According to general cargo insurance terms in Ocean Marine policies, this is considered

Loss of specie.

All of the following are exclusions under farm property coverage EXCEPT

Loss of use.

In ocean marine insurance, what does the term "average" mean?

Loss or damage

Which of the following would be covered under the crime coverage inside the premises - theft of money and securities?

Loss or damage to a locked safe, vault, or cash register

What losses are considered when computing individual FMHA emergency loan eligibility?

Losses on crops which the farmer chose to insure will be considered

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

The primary purpose of a surety bond is to

Make sure obligations are fulfilled

The primary purpose of a surety bond is to

Make sure obligations are fulfilled.

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

The type of professional liability coverage a medical doctor needs is

Malpractice coverage

All of the following are excluded from coverage under a standard fire policy EXCEPT

Manuscripts and bullion.

Which of the following events causing financial loss to an insured would not be covered under Federal Crop Insurance?

Market price decline

Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP?

Mechanical breakdown

A common exclusion found under physical damage to your auto includes

Mechanical breakdown.

What Personal Auto Coverage would pay for the insured's injuries sustained when struck by a hit-and-run driver while crossing a busy street?

Medical payments

Which of the following statements concerning a personal auto policy is true?

Medical payments coverage applies per person, per accident

All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT

Mental health counseling.

Coverage territory of the businessowners policy (BOP) includes all of the following EXCEPT

Mexico.

One policy type that allows the insured to select the coverage forms that best fits the individual needs of the client is called the

Modular commercial lines policy.

Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance?

Monoline

Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?

Motor truck cargo policy - truckers form

Joe lit a fire in his fireplace and left it unattended. He had failed to check to see if the flue was open, so the smoke entered the house and, in addition to discoloring the walls, ceiling, and drapes, Joe had to hire a company to remove the smoke odor. The total expense of cleaning and repainting was $6,000. How much would Joe's Standard Fire policy pay?

NOthing

Annual transit policies are written on what kind of basis?

Named peril

Annual transit policies are written on a(n)

Named peril basis.

The livestock coverage form covers which of the following losses?

Named peril coverage for death of livestock

The standard fire policy only covers those perils specified in the policy for that reason it is known as a(n):

Named peril policy.

The transit clause does which of the following?

Names the points of the voyage

An owner and operator of a commercial business has included a Business Income coverage form with his commercial package policy. When the business is severely damaged by fire, the business income coverage will pay for

Net income plus continuing expenses of the business.

Which of the following best describes business income?

Net profit or loss that would have incurred, plus normal operating expenses, including payroll, that continues during the suspension

All of the following statements are FALSE regarding garage physical damage coverage EXCEPT

No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations

Which of the following statements is true regarding physical damage coverage in a garage form?

No coverage is provided for autos stored for more than 45 days at a location not shown in the declarations.

The insured with reporting value coverage has had a covered loss. It is discovered he underreported on the last report filed. Which is true?

No more than the amount reported divided by the actual value on the date the report was due will be covered.

Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?

No, because the claim results from copyright infringement and is not in an advertisement

Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?

No, because the claim results from copyright infringement and is not in an advertisement.

Which of the following losses is covered under an ocean marine policy?

None of the above

Which of the following statements is true regarding Workers Compensation law in California?

None of the above are true.

How many vehicles per household can be covered by the California low-cost auto insurance program?

Not more than 2

A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?

Occupational disease caused or aggravated by a condition of employment

A businessowner has a liability policy for his business. Sometime during the policy period, a loss occurs, but the businessowner does not become aware of the loss until several years after his policy expires. Which of the following types of policies would cover the loss?

Occurrence policy

Which of the following lines of insurance is NOT included in the commercial package policy?

Ocean marine

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

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.

Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT

On his evening stroll, and employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site

When does the coverage begin under the builders risk form?

On the date construction starts

All of the following are FALSE regarding eligibility to place business through the CAARP EXCEPT

Only CAARP-certified agents or CAARP-certified brokers are authorized to accept applications.

All of the following are TRUE statements regarding the requirements of an insurer to offer earth movement coverage in California EXCEPT

Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement.

The Standard Fire Policy is a named perils contract, which means

Only perils listed in the policy are covered.

When would UM coverage apply?

Only when the other party is legally liable but has no insurance

Under the Workers Compensation Reform Act, the Commissioner sets recommended, nonmandatory premium rates and then allows individual companies to add administrative overhead and expense costs which result in a final rate plan. This type of rating method is known as

Open rating plan.

Rental reimbursement is only available if the policy includes which coverage?

Other Than Collision Coverage

Which of the following Personal Auto Coverages would pay for damage to a covered auto due to colliding with a deer?

Other than Collision (Comprehensive coverage)

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid

Other-than-collision

Which of the following personal auto coverages would pay for damage to a covered auto due to contact with a deer?

Other-than-collision (comprehensive coverage)

Which of the following Commercial Crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery?

Outside the premises

All of the following are optional coverages that may be attached to a Garage Policy EXCEPT

Owned Watercraft liability

Which of the following watercraft will NOT be covered by business liability insurance?

Owned watercraft 53 feet long

What is the determining factor in classifying commercial autos as either owned, hired, or nonowned autos?

Ownership of the vehicle.

Workers compensation will pay under which of the following situations?

Paid without consideration of fault or negligence on the part of either employee or employer

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

Payment bond

A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the

Penalty

A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the

Penalty.

Which of the following limits, shown in the declarations of a policy, applies to medical expenses?

Per person

The Workers Compensation permanent disability benefit pays benefits for

Permanent total disabilities and permanent partial disabilities.

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?

Personal and advertising injury liability

If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability will defend the suit?

Personal and advertising injury liability

When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage?

Personal and advertising injury liability

All of the following property is insured under Coverage A of a farm policy EXCEPT

Personal lawnmower of a tenant used to service the described location.

An outboard boat and motor policy covers

Physical damage.

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT

Physical damage.

Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services?

Physicians, surgeons and dentists malpractice

Which professional liability form provides form coverage for liability arising out of malpractice, errors, or mistakes made in rendering professional services?

Physicians, surgeons and dentists malpractice

Which of the following statements is correct with regard to Federal Crop Insurance?

Policies are written on an annual basis and may be continued providing production reports are submitted in a timely manner and renewal premium is paid.

A customer was injured in a supermarket parking lot when a grocery card collided with the customer's leg. Coverage for this claim would be provided under

Premises and operations

Which of the following liability exposures is most likely for a small specialty clothing retail boutique?

Premises liability exposure

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

Principal

Who are the parties to a bond?

Principal - obligee - surety

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

Principal.

Who would participate in a WYO program?

Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a

Product liability claim

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a

Product liability claim.

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim

Professional liability

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?

Professional liability

Which of the following liability policies is usually written on a "claims-made" form?

Professional liability insurance

While Jake was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of Jake's auto policy would pay for the damage to the store?

Property Damage Liability

Under the Personal Auto Policy, liability for bodily injury resulting from the insured's use of a non-owned automobile is

Provided by the insured's policy on an excess basis.

Under the claims-made CGL the supplemental extended reporting period

Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium

Under the claims-made CGL the supplemental extended reporting period

Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium.

After a loss, an insured covered by a business property coverage is NOT required to

Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation.

Which of the following would be covered under the workers compensation rehabilitation benefits?

Rehabilitation-related travel and living expenses

All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT

Replacement cost.

A business owner whose inventory changes significantly throughout the year should consider having coverage written on what type of form?

Reporting form

Which of the following persons may be covered under farm Coverage J?

Resident employees

A date stipulated in the claims-made liability form declarations section as the first date on which an incident may occur and be covered by the policy is known as the

Retroactive date

A date stipulated in the claims-made liability form declarations section as the first date on which an incident may occur and be covered by the policy is known as the

Retroactive date.

A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called

Retroactive date.

All of the following are TRUE regarding the Commercial Automobile Insurance procedure (CAIP) EXCEPT

Risks requiring higher limits of $50,000 are ineligible for coverage.

Extortion - Commercial Entities

Rita drops off her wedding gown at Vicky's Dry Cleaners for a final pressing. The store's press breaks, so Vicky takes Rita's dress to her other store across town. On the way to the other store, Vicky is held at gunpoint until she gives the man the wedding dress. What crime coverage form would pay for the loss of the gown in this situation? Funds Transfer Fraud Extortion - Commercial Entities Miscellaneous Crime None of these

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

Sales

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

Sales.

A type of risk analysis used in commercial insurance in which the underwriter can give credits and debits for certain actions that an insured takes in the normal course of business that either increase the chance of loss or decrease the chance of loss is known as

Schedule rating method.

A company wants its cargo policy to provide coverage for losses caused by crew members. Which of the following is a clause that would NOT provide this type of coverage?

Seaworthiness admitted

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.

In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention

In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention.

Which of the following would NOT be considered a flood?

Sewer backup

U.S. Longshore and Harbor Workers Compensation Act

Shipbuilders and repairers are covered by the U.S. Longshore and Harbor Workers Compensation Act. Jones Act. States' workers compensation laws Federal Employers Liability Act.

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the

Situs and status test

Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?

Sole representative

Which of the following is included under the physical damage coverage of a personal auto policy?

Sound reproduction equipment permanently installed in the covered auto

Greg owns several buildings, each at a different location and insured on a separate policy. What type of coverage does Greg have?

Specific

Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called

Specific coverage.

Under the Commercial Property Coverage program, the Basic Causes of Loss form insures against loss caused by

Sprinkler leakage.

In the event of a claim under a commercial general liability policy, the insured has all the following duties to the insurer EXCEPT

Submitting to a medical exam when requested

In the event of a claim under a commercial general liability policy, the insured has all the following duties to the insurer EXCEPT

Submitting to a medical exam when requested.

When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?

Subrogation

Which of the following is NOT a limitation under Mexico Coverage?

Suits may be brought by either U.S or Mexican citizens.

An insured that plans to cancel his/her claim-made insurance policy can protect themselves against potential claims that may arise from an occurrence that happened during the policy period, but is reported after the cancellation by purchasing

Supplemental Extended Reporting Period

An insured that plans to cancel his/her claim-made insurance policy can protect themselves against potential claims that may arise from an occurrence that happened during the policy period, but is reported after the cancellation by purchasing

Supplemental Extended Reporting Period.

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds

Supplementary payments on a CGL provide all of the following EXCEPT Pre-judgment and post-judgment interest. The cost of bonds to release attachment. Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds. $100 in gasoline costs by the insured driving a witness to and from court.

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?

Supplementary payments, found in Part A - Liability, include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings.

How are surety bonds different from insurance?

Surety bonds guarantee specific duties or obligations will be fulfilled: insurance pays for losses

How are surety bonds different from insurance?

Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses.

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

Symbol 5

Which of the following symbols used in business auto coverage is correctly described?

Symbol 9 - Nonowned Autos Only

Robbery is

Taking of property by use of force, violence, or fear.

Burglary is defined as

Taking of property from within the premises leaving visible signs of forced entry.

Who is not considered an employee in a CGL?

Temporary worker

The American Institute warehouse-to-warehouse clause states

That coverage expires 15 days after discharge at destination port.

.After the execution of the contract

The commercial general liability coverage form excludes bodily injury or property damage that the insured has assumed under any contract or agreement. However, the exclusion does not apply to certain types of contracts, as long as the injury or damage occurs After the execution of the contract. After the contract expires. Before the execution of the contract. Before the contract expires.

Mary Smith is the loving wife of John Smith, owner of John Smith Tool Company. One day as Mary was walking through the tool shop to John's office for lunch, Mary inadvertently spilled an oil container onto the floor. One employee slipped on the oil spill and broke her hip which required surgery. Mary is NOT an employee of the company; therefore,

The commercial general liability policy will cover Mary for her negligence since she is the spouse of the insured.

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered "good will" because payments are made without regard to fault

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered "good will" because payments are made without regard to fault.

Which clause provides coverage for the cargo while being transported to or from a vessel in another craft, raft, or lighter?

The craft clause

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?

The damage occurred when the concrete fell

The Claims-Made Trigger is based on which of the following?

The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date

The Occurrence form trigger is based on which of the following?

The date when injury or damage occurs

Covered Auto

The designation symbols used in commercial auto policies can be found in which policy section? Covered Auto Liability Coverage Definitions Conditions

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?

The driver's policy will pay

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?

The driver's policy will pay.

90 days

The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to 30 days. 60 days. 90 days. 120 days.

Which of the following is a true statement regarding who is responsible for paying the premium for Workers Compensation coverage?

The employer is responsible for paying the entire premium.

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?

The endorsement is available for additional premium.

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention

Which of the following is not a factor in determining rates charged by the California State Compensation Insurance Fund for insurance issued by it?

The extent to which the employees in a particular establishment have or have not persons dependent on them for support.

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

Sarah has a Personal Auto Policy with split limits of $25,000/$50,000 bodily injury coverage. She hits a pedestrian who claims damages of $30,000. What is the maximum liability of her policy for this accident?

The first limit stated in the coverage is the limit that may be paid for injuries to one person.

The common policy condition is a modular part combined with other parts to create the contract. The "common policy condition" section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy?

The first named insured may cancel the policy at any time by giving written notice to the insurer.

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT

The injury or damage must occur within 90 days after the insured's work is completed

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT

The injury or damage must occur within 90 days after the insured's work is completed.

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

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.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home.

Under the provisions of the business income coverage form, all of the following are true, EXCEPT

The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first.

In order for a Protection and Indemnity policy to cover a loss which of the following must be TRUE?

The insured must be legally liable for the loss.

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.

Within 45 days.

The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information Within 60 days. As soon as practical. Within 45 days. Within 30 days.

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy?

The insured would be responsible for the amount required as underlying limits in the event of a claim.

With respect to commercial auto policies, the Garage Coverage Form provides liability for all of the following EXCEPT

The insured's business income losses due to personal injury

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT

The insured's business income losses due to personal injury

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT

The insured's business income losses due to personal injury.

If the underwriters direct a vessel to proceed to a particular port for repair, who pays the expenses, including wages and maintenance, of doing so?

The insurer

In Ocean Marine insurance, who pays all reasonable expenses if sue and labor is required to lessen a loss?

The insurer

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.

An ocean marine insurer has paid a total loss. Which of the following is true concerning salvage?

The insurer has all rights to salvage.

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.

Under the limits of insurance provision found in the Physical Damage Coverage Form in a Commercial Auto policy, how much will an insurer pay to repair or replace a covered auto?

The lesser of the actual cash value or the cost to repair or replace a covered auto

In a marine policy, which of the following is referred to as the "amount insured hereunder"?

The limit of insurance

The most the insurer will pay for a loss under a businessowners policy is

The limit of insurance after the deductible is paid.

All of the following statements are true regarding physical damage coverage EXCEPT

The limit of liability is the greater of the ACV of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle

All of the following are true regarding physical damage coverage, EXCEPT

The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.

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

The limited liability company is designated as the named insured.

A dealership loans a car to its customer to use while the dealership is repairing the customer's car. If the dealership has business auto physical damage coverage and a customer's automobile insurance does not cover damages to loaner cars, which of the following is true?

The loaner vehicle is covered by the business auto policy

The cancellation provision in a businessowners policy specifies all of the following EXCEPT

The method of transferring the owner's rights.

According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders?

The mortgageholder must petition the state department of insurance for named status.

The New York Standard Fire Policy is classified as "Standard" because

The policy conditions are identical in every state.

If a loss sustained type of crime coverage policy is terminated, and if a loss is subsequently discovered that had occurred during the life of the policy, then which of the following would most likely happen?

The policy will pay for losses that are discovered within 1 year of policy termination.

All of the following are true statements regarding coverage limits of low-cost automobile insurance EXCEPT

The policy would provide coverage for physical damage.

All of the following statements concerning liability coverage are true EXCEPT

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.

All of the following are eligibility requirements for the FAIR plan EXCEPT

The property must be located in a riot-prone area.

30 days

The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long? 5 days 15 days 30 days 60 days

The individual Named Insured endorsement under a Commercial Auto Policy provides coverage for which of the following?

The sole proprietor of the business and his/her family members

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.

Computer fraud

The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? Computer fraud Money orders and counterfeit paper currency Other crime coverage Outside premises

Who has the rights to veto the repair facility for a vessel?

The underwriter

A used car dealer takes a car in trade as partial payment for a car on its car lot. The customer promises to bring in the car's title but does not. Another customer take s the trade-in for a test drive and has an accident. In regard to the dealership's business auto physical damage coverage, which of the following is true?

There is no coverage

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage.

Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value?

They are automatically provided with replacement cost coverage.

All of the following are true statements regarding the supplementary payments of a Commercial General Liability policy EXCEPT

They pay defense costs even after the aggregate limit has been reached.

An employer is on the verge of bankruptcy. To save money, the employer decides to cancel its workers compensation plan. Which of the following is true?

This business may be closed under a cease and desist order issued by the Department of Industrial Relations.

All of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT

This coverage limit pays in place of the limit of insurance shown in the declarations.

Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage?

This coverage must be written as part of farm coverage.

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

Time element

What is the purpose of the NFIP?

To fill the gap left by the private insurers in flood coverage

What is the purpose of California's State Compensation Insurance Fund (SCIF)?

To make workers compensation insurance available, especially to smaller companies with more limited payrolls

The other insurances clause of an ocean marine policy allows coverage for which reasons?

To obtain coverage for war, strikes, and related risks not covered by the policy

What is the purpose of increased value and excess liability (IVEL) clauses?

To provide extra coverage for the same losses covered by an underlining policy

Prior to state-directed workers compensation statutes being enacted, employees had

To sue an employer for the "loss" and prove that the employer was at fault

Which of the following IS considered a work-related injury/occupational disease under Workers Compensation law?

Tom works as a painter in an auto body shop. The chemicals from the paint aggravated Tom's asthma to the point that he must be hospitalized

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

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

Truckers coverage form.

Discrimination

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called? Misrepresentation Adverse selection Discrimination Law of large numbers

Shipbuilders and repairers are covered by

U.S. Longshore and Harbor Workers Compensation Act.

Increased value and excess liability clauses work like which of the following policies?

Umbrella

Limited to covering a servant's property while at the insured location.

Under the dwelling policy, Coverage C - Personal Property is A prohibited coverage in the dwelling form. Limited to 50% of the amount of insurance that is written as Coverage A. Limited to covering a servant's property while at the insured location. Automatically provided as 50% of Coverage A.

What type of coverage protects the insured in an accident caused by a driver with insufficient coverage?

Underinsured motorist

In the Personal Auto Policy, owned trailers being towed by an insured auto are automatically covered for

Uninsured Motorists Coverage.

What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage?

Uninsured motorist

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for

Uninsured motorists coverage

Which of the following exposures is insured under Coverage I - Personal and Advertising Injury Liability?

Unintentional acts arising from the operation of a farming business

Pete wants to have separate insurance coverage for separate acreages. What kind of insurance should Pete get?

Unit Insurance

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT

Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.

The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?

Up to $2,000

Supplementary payments on a CGL provide all the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.

Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form?

Valuable papers and records

All of the following are essential elements of a commercial package policy (CPP) EXCEPT

Valuations and/or settlement provisions

Besides the peril of earthquake, which other peril is covered by the Earthquake Cause of Loss Form under a Commercial Property Policy?

Volcanic eruption

Institute Cargo Clause A covers all losses except those that are excluded. Which of the following excluded perils can be endorsed back onto the policy to provide coverage?

War, strikes, riots, and civil commotion

General

What type of compensatory damages will pay for pain and suffering and disfigurement? Normal General Special (specific) Tort

When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy?

Whatever coverage applied to the vehicle being replaced

False financial statement

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? Defamation Twisting Rebating False financial statement

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

When being carried or towed by a covered auto.

According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT

When cargo is misplaced.

When does a business need to purchase a liquor liability policy?

When it is in the business of manufacturing, distributing, serving, or furnishing alcoholic beverages

A claim is considered to have been "made"

When notice is received and recorded by any insured or the insurer, whichever comes first.

Stated amount

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as Specific insurance. Stated amount. Replacement cost. Actual cash value.

Even though the Standard Fire Policy is a named peril contract, under which of the following circumstances would the policy provide "all risk of loss" coverage on insured property?

When the loss is to insured property that has be removed because of endangerment by a peril insured against under the policy

When would uninsured motorists coverage apply?

When the other party is legally liable but has no insurance

Discrimination.

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered Discrimination. Twisting. Controlled business. Adverse selection.

Implied

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? Apparent Assumed Express Implied

Reinstatement of limit

Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item? Reinstatement of limit Legal action against the insurer Privilege to adjust with the owner Transfer of rights of recovery

Hill & Morton Funeral Home

Which of the following businesses would be eligible for a businessowners policy? Hill & Morton Funeral Home Family Fun Time Amusement Park Joe's Bar And Grill Hometown Bank & Trust

The insured is injured while driving his motorcycle on his resident premises.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? The insured's friend is injured in an accident while riding as a passenger in the insured's car. The insured's mother is injured while exiting from the insured vehicle. The insured is struck by another vehicle while crossing the street. The insured is injured while driving his motorcycle on his resident premises.

Outside the premises

Which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery? Outside the premises Forgery or alteration Robbery and safe burglary Inside the premises

Garagekeepers

Which of the following coverages would provide protection for the liability of an auto repair garage to owners of vehicles destroyed in the garage by fire? Motor carrier General liability premises and operations Garagekeepers Product liability

Motor truck cargo policy - truckers form

Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? Motor truck cargo policy - owners form Trip transit policy Truckers coverage form Motor truck cargo policy - truckers form

DP-1

Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis? DP-1 DP-2 DP-3 All DP forms

Damage to the dwelling caused by lava or dust from a volcanic eruption

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? Damage to the dwelling caused by lava or dust from a volcanic eruption Damage to the dwelling caused by the insured when moving furniture Accidental scorching caused when a hot iron is placed upon a built-in counter top Interior damage caused by water seeping under the shingles on the roof

Damage to the dwelling caused by ash or dust from a volcanic eruption

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? Interior damage caused by water seeping under the shingles on the roof Damage to the dwelling caused by ash or dust from a volcanic eruption Damage to the dwelling caused by the insured when moving furniture Accidental scorching caused when a hot iron is placed upon a built-in counter top

Permitted incidental occupancies

Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises? Professional liability Business income - report of values Permitted incidental occupancies Special limit of liability

HO-4

Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment? HO-4 HO-6 HO-2 HO-3

Turkeys

Which of the following is NOT covered under Coverage E - Scheduled Farm Personal Property? Fish Turkeys Portable structures Livestock

Any loans required to offset uncollectible amounts

Which of the following is NOT covered under accounts receivable coverage form? Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs Any loans required to offset uncollectible amounts Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds Sums due the insured that are uncollectible due to a covered loss

Coverage is commonly provided through a federally-funded program.

Which of the following is NOT true about earthquake coverage? Coverage may be written in a Difference of Conditions policy. Coverage is commonly provided through a federally-funded program. Coverage is excluded by most property forms. Coverage may be added to property policies by endorsements.program.

Federal Motor Carrier Safety Administration

Which of the following is the federal body that regulates truckers who travel across state lines? Federal Motor Carrier Safety Administration Motor Carriers Commerce Agency Truckers and Trade Commission Federal Trade Commission

It is an additional coverage.

Which of the following is true regarding the fire department service charge under the builders risk form? It is an automatic coverage for $500. It is not available in this form. It is a high-deductible endorsement. It is an additional coverage.

All of these are covered

Which of the following may be covered by electronic data processing coverage form under an inland marine policy? Computer hardware that is specifically scheduled. Extra expense the insured incurs to continue the business following a loss. Data processing media, including magnetic tapes or paper tapes, punch cards and discs All of these are covered.

Liability coverage

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? Medical payments Comprehensive coverage Collision coverage Liability coverage

Condominiums

Which of the following risks is eligible for coverage under a businessowners policy? Banks Automobile dealers Bars or taverns Condominiums

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.

Which of the following statements is true regarding the premium computation for workers compensation insurance? The premium basis for workers compensation insurance varies by the type of industry in which the insured is involved. The insured pays a guaranteed premium based on an estimated value of the annual income received. The premium is set at the beginning of the policy period and will not change. 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.

Symbol 5

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? Symbol 5 Symbol 6 Symbol 7 Symbol 9

Anyone while using, with permission, a covered auto owned by the named insured

Which of the following would be considered an insured under a business auto coverage form? a) A partner of the named insured for any covered auto owned by that person or a member of his or her household b) Anyone while using, with permission, a covered auto owned by the named insured c) The owner or anyone else from whom the named insured hires or borrows a covered auto d) Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business

d) All of the above could be considered flood sources

Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? a) Overflow of inland or tidal waters b) Unusual and rapid accumulation or runoff of surface waters from any source c) A mudflow d) All of the above could be considered flood sources

Additional coverage

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 Exclusions Declarations Insuring agreement

Second Injury Fund

Which program was established to encourage employers to hire workers who may have suffered previous work related injury that, when combined with another injury, could be disabled to a greater degree than that of the single injury? Social Security Disability Second Injury Fund Louisiana Guaranty Association Disabled Worker Act

When the damages result from the intentional acts of the employer

While Workers Compensation is intended to be the exclusive remedy for work related injuries, under which of the following circumstance may an employee or an employee's dependent sue the employer? When the injury causes permanent impairment When the injury was inflicted by a fellow employee When the damages result from the intentional acts of the employer Any of the above

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

Will not relieve the insurer of its policy obligations.

Institute Cargo Clause (A) covers which of the following losses?

Windstorm, lightning, hail

Any of the above.

With regards to Uninsured/Underinsured Motorist Coverage, the named insured may Reject the coverage. Select a lower limit of coverage. Select economic-only coverage. Any of the above.

A pickup or van acquired by the named insured during the policy period.

With respect to auto insurance, the term owned autos includes all of the following EXCEPT Any private passenger auto leased to the named insured for a period of more than 6 months. A pickup or van titled to and used in the named insured's business. Any private passenger auto titled to the named insured. A pickup or van acquired by the named insured during the policy period.

Personal business property out in the open is covered under Commercial Property Policy only while

Within 100 feet of the described premises.

The insured with a claims-made CGL may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information

Within 45 days.

Which of the following is NOT an optional coverage available in a BOP?

Workers compensation

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT

Workers compensation coverage

Securities or other valuable papers in the care of a principal have been lost or destroyed. Would any type bond reimburse the owner of the securities or other valuable papers?

Yes, a lost instrument bond

An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage?

Yes, none of the exclusions will apply.

Which of the following would be covered by the physical damage coverage of your Business Auto Policy?

Your car's factory installed disc player was stolen.

Which of the following is covered by the camera and musical instruments dealers floater?

a customers camera left at a camera shop for repair

Most fidelity bonds have a period of time in which occurred whine the bond was in force are covered even though not found until after the coverage has terminated. this is know as?

a discovery period

Which of the following definitions best defines the term accident?

a sudden, unplanned and unexpected event not under the control of the insured resulting in injury or damage neither expected nor intended

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year regardless of the umber of claims that may be made or the number of accidents that may occur?

aggregate limit of liability

Loss of yield from which of the following causes would be covered under a Federal Crop Insurance policy?

all of above

Payments for medical expenses, loss of wages, funeral expenses or the cost to repair or replace damaged property are known as what type of compensatory damages?

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

Under a business owners policy, an insured can cancel the policy?

at the time by mailing a written notice of cancellation

Which inland marine form would provided the best protection for a dry cleaning company against loss or damage to their customers property while in the care custody and control of the dry cleaners?

bailee's customer policy

The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a

burglary

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as?

cancellation

An insure intentionally did not disclose a material fact on the application of insurance. This would be considered?

concealment

An insure neglects to pay a legitimate claim that is covered under the terms of the policy? which of the following term best describes what the insure has violated?

consideration

All of the following are supplemental payments found in liability policies EXCEPT

costs the insured incurred in hiring an attorney

Which of the following is NOT an essential element of an insurance contract?

counteroffer

All of the following are true regarding flood insurance EXCEPT?

coverage may be provided by growing crops and livestock

Which of the following is covered under the mail floater of a commercial inland marine policy ONLY id it is sent by registered mail?

currency and unsold travelers checks

Which of the following is a mandatory part of the insurance policy that varies with each individual policy?

declarations

Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish?

ect! A special limit of $1,000 per occurrence applies to such items.

What is the purpose of the coinsurance clause found in the property insurance policy?

encourage insurance to value

CGL coverage B (personal injury and advertising injury) will cover?

inadvertent injury to others caused in the occur of advertising the insured product

Which of the following is NOT true of National Flood Insurance?

insurance provided by the flood program also is available in standard property policies

How does the mobile home coverage law or ordinance in a homeowners policy?

it removes the coverage

An insured is driving his or her automobile and strikes a large pothole causing a flat tire which coverage of the insured personal auto policy will pay for the repair?

loss is not covered

Which of the following is a common exclusion found in Part D: coverage for damage to your auto of a PAP?

mechanical breakdown

Which of the following would be covered under the film coverage form?

none of these covered

Losses caused by continuous or repeated exposures to conditions resulting in injury persons or damage to property that is neither intended nor expected is the definition of which of the following terms?

occurence

Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following?

on his evening stroll and employee of an advertising company is injured whilew watching a competitors billboard sign being removed from an advertising site

What insurance policy provisions define how the policy will respond if there is more then one insurance policy written on the same risk?

other insurance

Which of the following personal auto coverage pay for damages to be covered auto due to contact with a deer?

other then collision (comprehensive coverage)

A bond is written for a set limit and the surety will be liable only for this amount of the limit. This is known as the?

penalty

which of the following liability exposures is most likely for a small specialty retail clothing boutique?

premises liability exposure

Who are parties to a bond?

principal-oblige-surety

Before an insure will pay any loss under a policy what is usually required from the insured?

proof of loss

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society?

punitive

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

1 year

34. What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement? (Choose from the following options) 1. $25 2. $50 3. $75 4. $100

1. $25

65. Roger owned a grocery store and had a Reporting Form Policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has? (Choose from the following options) 1. $50,000 2. $75,000 3. $100,000 4. $25,000

1. $50,000

72. Under Additional Coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? (Choose from the following options) 1. $500 2. $1,000 3. $5,000 4. Fire department service charges are not allowed.

1. $500

10. Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay? (Choose from the following options) 1. $60 2. $75 3. $100 4. $45

1. $60

90. Which loss listed below would NOT be covered by a farm policy with a broad cause of loss form? (Choose from the following options) 1. 14-day old pigs fell in the pond and drowned 2. A fallen power line electrocuted a cow 3. A hunter who shot the prize bull, thinking it was a white-tail deer 4. Wild dogs attacked a mule

1. 14-day old pigs fell in the pond and drowned

114. If a policyholder contacts an insurance company about a claim and expects a response to the inquiry, within what span of time must the agent respond? (Choose from the following options) 1. 15 days 2. 21 days 3. 31 days 4. 90 days

1. 15 days

15. If a claimant contacts an agent regarding her life insurance policy and clearly expects a response, within what span of time must a complete response be issued? (Choose from the following options) 1. 15 days 2. 21 days 3. 31 days 4. 90 days

1. 15 days

94. Removal coverage under a standard fire policy remains in effect for (Choose from the following options) 1. 5 days. 2. 10 days. 3. 15 days. 4. 30 days.

1. 5 days.

47. What is the primary difference between a surety and a guaranty? (Choose from the following options) 1. A guarantee pays only after the obligee tries to obtain restitution from the principal. 2. A surety bond is issued by an insurance company. 3. A guaranty bond is issued on behalf of the obligee to cover the performance of the principal. 4. A surety pays only if the principal's performance fails to comply contractually.

1. A guarantee pays only after the obligee tries to obtain restitution from the principal.

22. There are over 200 different crops that may be insured under crop insurance policies; however, the eligibility list varies (Choose from the following options) 1. According to weather patterns. 2. Annually. 3. Geographically. 4. Seasonally.

1. According to weather patterns.

26. Which amount is figured by subtracting depreciation from the replacement cost of a covered item? (Choose from the following options) 1. Actual cash value 2. Interest of the insured 3. Repair cost 4. Pro rata percentage

1. Actual cash value

78. First aid costs for others injured on the insured's premises (Choose from the following options) 1. Are paid in addition to the liability limit. 2. Apply only if the insured is legally liable. 3. Also cover injuries to the insured's family members. 4. Are deducted from the liability limit.

1. Are paid in addition to the liability limit.

18. Which of the following defenses attests that if a person recognizes and understands that there is danger involved in an activity and voluntarily chooses to encounter it, he or she may be barred from seeking recovery for injuries due to negligence? (Choose from the following options) 1. Assumption of risk 2. Proximate cause 3. Comparative negligence 4. Intervening clause

1. Assumption of risk

46. All of the following statements regarding a Boatowners policy are true EXCEPT (Choose from the following options) 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required. 2. Watercraft liability coverage provides protection up to specified limits, for claims against a "covered person" for damages because of bodily injury caused by a watercraft occurrence. 3. Physical damage coverage is provided on an actual cash value (ACV) basis. 4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured.

1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required.

123. John was a passenger in his friend's car when they became involved in a head-on collision. While their injuries were serious, both have recovered. John has decided that in order to not be involved in another accident, he will not drive or ride in a car in the future. Which method of risk management does this describe? (Choose from the following options) 1. Avoidance 2. Reduction 3. Sharing 4. Retention

1. Avoidance

124. An individual is worried about getting into a car accident. As a result, he chooses to stop driving. This is an example of which of the following methods of handling risk? (Choose from the following options) 1. Avoidance. 2. Transfer. 3. Reduction. 4. Sharing.

1. Avoidance.

39. 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? (Choose from the following options) 1. Business auto coverage form may apply. 2. Any coverage form applies. 3. Coverage can continue under the truckers coverage form. 4. Farm liability coverage applies.

1. Business auto coverage form may apply.

30. Monica had a spotless medical record until she was rushed to the emergency room for a gallbladder attack in December. Her major medical provider allowed her to apply her gallbladder-related expenses to the next year so that she could apply them to the new year's deductible. What provision allowed her to do this? (Choose from the following options) 1. Carryover 2. Deductible Transfer 3. Deductible Extension 4. Common accident

1. Carryover

20. Which of the following best describes liberalization clause in a policy? (Choose from the following options) 1. Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium. 2. The insurer is relieved of its contractual obligations to the insured. 3. The insured may assign the policy to any person without their written consent. 4. The policy cannot be cancelled.

1. Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium.

119. If an insured holds more than one policy on a property, and the only difference is in the coverage amount or coverage period, this is called (Choose from the following options) 1. Concurrent Policy Coverage. 2. Side-by-Side Coverage. 3. Coinsurance. 4. Co-Coverage Policy.

1. Concurrent Policy Coverage.

27. All of the following are supplemental payments found in liability policies EXCEPT (Choose from the following options) 1. Costs the insured incurred in hiring an attorney. 2. All expenses and defense costs incurred by the insurer. 3. Reasonable expenses incurred by the insured. 4. Limited amounts for bail bonds and other bonds related to a claim.

1. Costs the insured incurred in hiring an attorney.

148. Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct? (Choose from the following options) 1. Coverage C limits will no longer apply to the jewelry insured by the endorsement. 2. The amount of coverage will be doubled. 3. The endorsement becomes excess coverage. 4. The endorsement becomes primary coverage, and the HO contract is secondary.

1. Coverage C limits will no longer apply to the jewelry insured by the endorsement.

138. In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss? (Choose from the following options) 1. Coverage E 2. Coverage A 3. Coverage B 4. Coverage C

1. Coverage E

58. What type of coverage do umbrella policies provide? (Choose from the following options) 1. Excess coverage over an underlying or primary policy 2. Property coverage for those who do not qualify for homeowners insurance 3. Property coverage for the basic perils of fire, wind, and hail 4. Primary coverage for risks that are difficult to insure

1. Excess coverage over an underlying or primary policy

100. Which of the following is NOT covered by the condominium unit owners endorsement? (Choose from the following options) 1. Furniture in the building 2. Alterations to the building 3. Appliances in the building 4. Fixtures in the building

1. Furniture in the building

13. Which of the following homeowners forms is designed for individuals that own and reside in a condominium? (Choose from the following options) 1. HO-6 2. HO-2 3. HO-3 4. HO-4

1. HO-6

67. All of the following are examples of insurable interest in property insurance EXCEPT (Choose from the following options) 1. Harry who is waiting for his distant cousin's beach-front property as part of his inheritance. 2. Fred and Ethel's personally owned vacation home. 3. Sally's own personal automobile. 4. Joe who is a partner in a thriving business

1. Harry who is waiting for his distant cousin's beach-front property as part of his inheritance.

6. In order to determine whether to test a life insurance applicant for HIV or AIDS, the insurer may do which of the following: I. Base its decision to test on the incidence of AIDS in the person's ZIP code; II. Test only persons who are single and under age 30; III. Establish minimum uniform standards for testing all applicants for insurance; or IV. Not test anyone for HIV or AIDS, because it is discriminatory. (Choose from the following options) 1. III only. 2. I and II. 3. IV only. 4. I, II, III and IV.

1. III only.

115. With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT (Choose from the following options) 1. Immediately report to an emergency room for medical examination. 2. Notify the insurer as soon as possible with a description of the accident. 3. Protect the insured auto from further damage. 4. Promptly contact the police if the accident was a hit-and-run.

1. Immediately report to an emergency room for medical examination.

28. Which of the following organizations has the primary responsibility forms for the standard market? (Choose from the following options) 1. Insurance Services Office 2. Office of Financial Services 3. National Association of Insurance Commissioners 4. Governor's Office

1. Insurance Services Office

59. All of the following statements describe the concept of strict liability EXCEPT (Choose from the following options) 1. It is imposed on defendants engaged in hazardous activities. 2. Claimants may need to provide proof that a product defect caused an injury. 3. It is imposed regardless of fault. 4. It is applied in product liability cases.

1. It is imposed on defendants engaged in hazardous activities.

118. Bulk carriers are used to transport (Choose from the following options) 1. Loose cargo. 2. Break-bulk cargo. 3. Motor vehicles. 4. Containerized cargo.

1. Loose cargo.

103. All of the following are excluded from coverage under a standard fire policy EXCEPT (Choose from the following options) 1. Manuscripts and bullion. 2. Deeds and bills. 3. Stocks and bonds. 4. Money.

1. Manuscripts and bullion.

44. All of the following are parts of a personal auto policy EXCEPT (Choose from the following options) 1. Physical damage coverage 2. Medical payments coverage 3. Duties after an accident or loss 4. Liability coverage

1. Physical damage coverage

110. In a boiler and machinery policy, the items insured under the policy are defined in the (Choose from the following options) 1. Policy definitions as "covered equipment." 2. Boiler and machinery coverage form. 3. Declarations. 4. Conditions.

1. Policy definitions as "covered equipment."

128. A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called (Choose from the following options) 1. Retroactive date. 2. Retrocedent date. 3. Effective date. 4. Retention date.

1. Retroactive date.

71. When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays (Choose from the following options) 1. The excess over the self-insured retention. 2. The amount specified in the policy under the additional coverage provisions. 3. The amount in excess of the underlying policy deductible. 4. A percentage of the loss as described on the declarations.

1. The excess over the self-insured retention.

127. If an insurer wants to recommend an auto repair facility to a claimant whose car has been involved in an accident, which of the following is true? (Choose from the following options) 1. The insured must be informed of his or her right to choose any repair center, and the insurer must cause the car to be restored to its pre-damaged state. 2. It is illegal for the insurer to make this recommendation unless it is requested by the policyowner. 3. Insurers are entitled to make such recommendations orally or in writing under any circumstance. 4. Insurers are only allowed to do this when the car lacks comprehensive and collision coverage

1. The insured must be informed of his or her right to choose any repair center, and the insurer must cause the car to be restored to its pre-damaged state.

105. An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the agent talked to the insured's family, and they explained that the insured was recovering from a surgery and might have been under the influence of medication at the time of application. Which of the following is true? (Choose from the following options) 1. The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application. 2. The policy will remain in force as long as there are no material misrepresentations on the application. 3. The policy is legal since the applicant was able to give all required information. 4. The policy is not legal; agents cannot sell insurance over the phone.

1. The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application.

21. The other insurances clause of an ocean marine policy allows coverage for which reasons? (Choose from the following options) 1. To obtain coverage for war, strikes, and related risks not covered by the policy 2. To replace an existing policy 3. To add endorsements 4. To expand existing coverages such as earthquake, fire, and hail

1. To obtain coverage for war, strikes, and related risks not covered by the policy

Under businessowners policy Section I, if an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgageholder?

10 days

The coinsurance requirement on a Builder's Risk Form is what percentage of the completed value?

100%

Under Federal Crop Insurance policies, an insured may select a coverage level that indemnifies the insured should the yield fall below one of the following percentage of the historic yield, EXCEPT

100%.

In a loss sustained type of crime coverage, losses that occurred during the policy period but were not found until after policy termination will be covered for how long after the policy ends?

12 months

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?

12:01 am the day after the application and premium payment are mailed

If a person wants to include a newly-acquired auto in a policy that is already established for another vehicle, the insurer must be notified within

14 days.

Which loss listed below would NOT be covered by a farm policy with a broad cause of loss form?

14-day old pigs fell in the pond and drowned

Any person who claims that he or she meets the criteria based on a driver's license and driving experience acquired anywhere other than in the United States or Canada is presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada and meets the criteria for that period for at least the previous

18 months.

133. Surety bonds are written for a definite limit called (Choose from the following options) 1. Loss costs. 2. The bond penalty. 3. Indemnity limit. 4. The limit of liability.

2.

73. A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss? (Choose from the following options) 1. $20,000 2. $30,000 3. $40,000 4. $60,000

2. $30,000

84. If a person wants to include a newly-acquired auto in a policy that is already established for another vehicle, the insurer must be notified within (Choose from the following options) 1. 35 days. 2. 14 days. 3. 21 days. 4. 28 days.

2. 14 days.

136. Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss? (Choose from the following options) 1. 10 days 2. 30 days 3. 45 days 4. 60 days

2. 30 days

56. An insured with a homeowners policy has removed property from the insured location to protect it from loss that could be caused by a covered peril. The removal coverage applies for (Choose from the following options) 1. 5 days. 2. 30 days. 3. 60 days. 4. 90 days.

2. 30 days.

48. Which of the following is NOT a requirement for purchasing a Good Driver Discount policy? (Choose from the following options) 1. A person has no more than one dismissal of charges in the last 3 years that would have resulted in the imposition of more than one violation point count. 2. A person must have been licensed to drive a motor vehicle for the previous 5 years. 3. A person has no more than one violation point count of the Vehicle Code in the last 3 years. 4. A person has not been in an accident in which he or she was principally at fault, and that resulted in bodily injury or in the death of any person.

2. A person must have been licensed to drive a motor vehicle for the previous 5 years.

97. In a dwelling policy, which of the following other structures would be covered? (Choose from the following options) 1. A structure used by the insured to house a manufacturing operation 2. A structure rented to a neighbor for use as a private garage 3. A structure used as part of a farming operation 4. A structure used by the insured in which to operate a retail business

2. A structure rented to a neighbor for use as a private garage

8. The personal injury liability endorsement to an HO policy applies to all the following EXCEPT (Choose from the following options) 1. False arrest. 2. A third party breaks a leg when the insured knocks him down. 3. Slander. 4. Invasion of privacy.

2. A third party breaks a leg when the insured knocks him down.

150. The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will (Choose from the following options) 1. Share equally in the cost with the mother-in-law's health insurance. 2. Apply to injuries of any guests or visitors. 3. Pay as excess over the mother-in-law's health insurance. 4. Pay only if the mother-in-law has no health insurance of her own.

2. Apply to injuries of any guests or visitors.

89. Which of the following would be included in the farm liability coverage forms? (Choose from the following options) 1. Bodily injury to an employed farmhand 2. Bodily injury to a residence employee 3. Any obligation of the insured under a workers compensation law 4. Bodily injury to any person who is an insured

2. Bodily injury to a residence employee

57. A married couple is insured under a major medical policy. They are both injured in a house fire. Their medical expenses, however, are applied to a common deductible, as opposed to two separate deductibles. What provision most likely allowed for this? (Choose from the following options) 1. Combined Accident 2. Common Accident 3. Comprehensive Accident 4. Family Accident

2. Common Accident

131. With regards to a homeowners policy, which coverage provides for indirect or consequential losses? (Choose from the following options) 1. Coverage C 2. Coverage D 3. Coverage A 4. Coverage B

2. Coverage D

1. In dwelling policies, automatic increase in insurance is (Choose from the following options) 1. Coverage for newly acquired property. 2. Coverage by endorsement. 3. Automatic coverage. 4. Coverage without additional premium.

2. Coverage by endorsement.

99. Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance? (Choose from the following options) 1. Risk 2. Exposure 3. Loss 4. Hazard

2. Exposure

11. The Standard Fire Policy would provide coverage in which of these cases? (Choose from the following options) 1. Insured's neglect 2. Fire 3. Acts of war 4. Theft

2. Fire

129. Which of the following is true regarding renewability of a low cost auto insurance policy in California? (Choose from the following options) 1. It cannot be renewed. 2. It must be renewed annually. 3. It must be renewed every 2 years. 4. It is issued permanently; no renewal is required.

2. It must be renewed annually.

81. When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as (Choose from the following options) 1. Specific insurance. 2. Stated amount. 3. Replacement cost. 4. Actual cash value.

2. Stated amount.

122. What is the deductible of a personal liability umbrella policy called? (Choose from the following options) 1. The CPP 2. The SIR 3. The PIL 4. The CGL

2. The SIR

2. Personal business property out in the open is covered under Commercial Property Policy only while (Choose from the following options) 1. Within 150 feet of the described premises. 2. Within 100 feet of the described premises. 3. Located on the described premises. 4. Specifically described on the declarations.

2. Within 100 feet of the described premises.

What is the dollar limitation for workers compensation benefits in the state of California?

2/3 of a worker's weekly wage or a state-specified maximum payment.

The rate charged for a Good Driver Discount policy should be at least what percent below the rate the insured would otherwise have been charged for the same coverage?

20%

If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by

25%

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

Coverage for medical payments under a personal auto policy a lies to expenses following a covered accident that are incurred and services rendered within

3 years

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within

3 years.

31. An insurance policy specifies that it will pay $600 for a specific loss. The policyowner suffers a loss of $535. How much will the policy pay? (Choose from the following options) 1. $300 2. $500 3. $535 4. $600

3. $535

3. Under a Commercial Crime Coverage Part, following a covered loss, the insured must submit a written proof of loss within (Choose from the following options) 1. 60 days. 2. 90 days. 3. 120 days. 4. One year.

3. 120 days.

35. Assuming the insurer and the insured agree to the amount payable for a loss covered under a dwelling policy, how soon after the insurer has received proof of loss must it make payment? (Choose from the following options) 1. 30 days 2. 45 days 3. 60 days 4. 90 days

3. 60 days

113. In order for the California Insurance Code to be changed in any way, what is required? (Choose from the following options) 1. The governor's signature is required on the bill. 2. The state senators vote on any bills and if they are approved, they become law. 3. A bill must be approved by both houses of the California legislature. 4. A bill must be presented to the residents of California who decide by popular vote.

3. A bill must be approved by both houses of the California legislature.

116. The difference in the contents coverage on an HO-3 and HO-5 is which of the following? (Choose from the following options) 1. Contents are covered for replacement cost on HO-5, and ACV on HO-3. 2. Contents are covered for replacement cost on HO-3, and ACV on HO-5. 3. Contents are covered open peril on HO-5, and named peril on HO-3. 4. Contents are covered open peril on HO-3, and named peril on HO-5.

3. Contents are covered open peril on HO-5, and named peril on HO-3.

41. In a Commercial Property, Business Income policy, which section would explain which losses are covered? (Choose from the following options) 1. Provisions 2. Insuring Agreement 3. Declarations 4. Exclusions

3. Declarations

91. Which of the following best describes gross negligence? (Choose from the following options) 1. Unjustified physical restraint of another person's freedom 2. Engaging in hazardous activities 3. Disregard for the safety of others 4. Failure to use reasonable care

3. Disregard for the safety of others

38. Which of the following would NOT be included in a commercial package policy? (Choose from the following options) 1. Equipment breakdown coverage 2. Farm coverage 3. Dwelling coverage 4. Commercial crime coverage

3. Dwelling coverage

4. Which of the following provisions requires an insurer to document all correspondence with an insured? (Choose from the following options) 1. Claims settlement 2. Entire contract 3. Errors and omissions 4. Unfair trade practices

3. Errors and omissions

62. In property and casualty insurance, insurable interest is defined as the right of a person or entity to property in that such a loss to that property would cause a direct monetary loss to the person or entity. Which of the following statements is TRUE regarding insurable interest in property and casualty insurance? (Choose from the following options) 1. Only the owner of the property has insurable interest. 2. Insurable interest also includes indirect monetary loss to the person or entity. 3. If the insured has no insurable interest, the contract is void. 4. The insurable interest must exist only at the time of application of insurance.

3. If the insured has no insurable interest, the contract is void.

5. Which statement is true regarding Workers Compensation law in California? (Choose from the following options) 1. Injured workers may sue an employer for negligence only when fault is clearly established against the employer. 2. Injured workers may always sue an employer for negligence regardless of the degree of fault against the employer. 3. Injured workers cannot sue an employer for negligence. 4. Injured workers may sue an employer for negligence when any degree of fault is established against the employer.

3. Injured workers cannot sue an employer for negligence.

146. Which of the following additional perils is covered under both the basic form and broad form dwelling policies? (Choose from the following options) 1. Weight of ice, snow, or sleet 2. Freezing of plumbing, heating, or air conditioning systems 3. Internal explosion 4. Falling objects

3. Internal explosion

121. Val-U Insurance Company's main goal is to collect sufficient premiums to pay for the insured losses, to cover the costs of expenses and to make a reasonable profit. Val-U predicts the incurred expenses while still allowing for a margin of error. The ultimate premium charged will be reduced by which of the following? (Choose from the following options) 1. Return of unearned premiums 2. Dividends 3. Investment income 4. Earned premiums

3. Investment income

16. While cutting grass in your yard with your brother's borrowed lawnmower, the fuel line ruptures and the lawnmower is destroyed in the fire. How will your HO liability react? (Choose from the following options) 1. It will pay your brother's property insurance deductible. 2. Your HO liability and your brother's property coverage will share on a prorated basis. 3. It will cover the damage. 4. It will not cover the damage because you are not liable.

3. It will cover the damage.

101. A personal auto policy would be considered excess when an insured (Choose from the following options) 1. Pays more for collision coverage than the car is worth. 2. Has another auto policy and the car is involved in an accident. 3. Leaves his car in a parking garage and the car is involved in an accident. 4. Buys a car and is then involved in an accident less than 30 days later.

3. Leaves his car in a parking garage and the car is involved in an accident.

14. Under the dwelling policy, Coverage C - Personal Property is (Choose from the following options) 1. A prohibited coverage in the dwelling form. 2. Limited to 50% of the amount of insurance that is written as Coverage A. 3. Limited to covering a servant's property while at the insured location. 4. Automatically provided as 50% of Coverage A.

3. Limited to covering a servant's property while at the insured location.

9. What license allows an agent to transact only automobile, personal watercraft, residential property, earthquake, flood, inland marine and umbrella insurance? (Choose from the following options) 1. Limited Lines 2. Applicable Lines 3. Personal Lines 4. Fire and Casualty

3. Personal Lines

32. The standard provision that allows the coverage, which is afforded by the policy, to be applied separately to each insured who is seeking coverage or against whom a claim is being made is known as (Choose from the following options) 1. Limited liability clause. 2. Separation clause. 3. Severability clause. 4. Stop loss clause.

3. Severability clause.

50. Which of the following would be covered under the physical damage coverage of a Personal Auto Policy? (Choose from the following options) 1. A cellular phone located in a locked vehicle 2. Custom furnishings or equipment in a pick up or van 3. Sound reproduction equipment permanently installed in the covered auto 4. A covered auto which is seized and destroyed by a government authority

3. Sound reproduction equipment permanently installed in the covered auto

92. The type of insurance that guarantees the behavior of persons and the performance of contracts other than insurance policies is known as (Choose from the following options) 1. Performance Guaranteed insurance. 2. Behavioral Contract insurance. 3. Surety insurance. 4. Contract insurance.

3. Surety insurance.

60. Which of the following would the livestock coverage form NOT insure against? (Choose from the following options) 1. Death of livestock caused by accidental drowning 2. Death of livestock caused by a tornado 3. The euthanasia of livestock after being hit by a vehicle 4. The euthanasia of livestock suspected of carrying mad cow disease

3. The euthanasia of livestock after being hit by a vehicle

68. With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT (Choose from the following options) 1. The insured's business autos. 2. The insured's business products and work performed. 3. The insured's business income losses due to personal injury. 4. The insured's business premises.

3. The insured's business income losses due to personal injury.

64. The key factor of representation that allows the injured party to rescind the contract is (Choose from the following options) 1. If the representation is false in an immaterial point. 2. Representations are statement's believed to be true and hold no legal consequences. 3. The promise or assurance of the representation. 4. If the representation is false in a material point.

3. The promise or assurance of the representation.

40. An insurance company receives an application with some information missing and issues the policy anyway. What is this called? (Choose from the following options) 1. Subrogation 2. Aleatory 3. Waiver 4. Estoppel

3. Waiver

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

30 days

Under businessowners policy Section I, if an insurer wants to cancel a policy for any reason except nonpayment of premium, how many days before the effective cancellation date must the insurer notify the mortgageholder?

30 days

Under the additional coverages of a BOP, property removed to protect it from loss will be covered at another location for up to

30 days.

102. According to the California Law, if an insurer includes a fraudulent claim clause in the contract regarding the legal ramifications of a false claim, the clause must be preceded by which of the following statements? (Choose from the following options) 1. "State law requires that insurance fraud be reported to county, state and federal authorities for the maximum prosecution allowed by law." 2. "WARNING! The following conditions are in accordance with California Law." 3. "For your protection, California Law requires the following to appear on this form." 4. "The legal ramifications only apply to insurance professionals."

4. "The legal ramifications only apply to insurance professionals."3. "For your protection, California Law requires the following to appear on this form."

104. An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay (Choose from the following options) 1. $500. 2. $1,000. 3. $500 minus the deductible. 4. $1,000 minus the deductible.

4. $1,000 minus the deductible.

95. Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay? (Choose from the following options) 1. $75 2. $100 3. $45 4. $60

4. $60

145. How long is the waiting period after the application has been accepted before flood coverage goes into effect? (Choose from the following options) 1. 6 months 2. 12:01 am the next day 3. 5 days 4. 30 days

4. 30 days

24. What is the maximum number of roomers or boarders for properties insured under the dwelling policy? (Choose from the following options) 1. 2 2. 3 3. 5 4. 6

4. 6

7. A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called (Choose from the following options) 1. Extension of coverage. 2. Supplemental extended reporting period. 3. Grace period. 4. Basic extended reporting period.

4. Basic extended reporting period.

98. Which of the following risks are eligible for coverage under a businessowners policy (BOP)? (Choose from the following options) 1. Banks 2. Automobile dealers 3. Bars or taverns 4. Condominiums

4. Condominiums

23. The purpose of the California residential property disclosure statement includes all of the following EXCEPT (Choose from the following options) 1. Becomes a part of your residential property insurance policy. 2. Describes the principal forms of insurance coverage in California for residential dwellings. 3. Identifies the form of dwelling coverage you have purchased or selected. 4. Contains only a general description of coverages.

4. Contains only a general description of coverages.

149. A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be (Choose from the following options) 1. Incompetent. 2. Negligent. 3. Improperly trained. 4. Criminally negligent.

4. Criminally negligent.

12. The major portion of the premium for a boiler and machinery policy pays (Choose from the following options) 1. Repair to prevent. 2. Coverage for BI & PD of others. 3. For replacement parts. 4. For inspections and examinations.

4. For inspections and examinations.

19. The homeowners policy covers collapse caused by all of the following EXCEPT (Choose from the following options) 1. Weight of snow. 2. Hidden insect or vermin damage. 3. Weight of too many people attending en event hosted in the house. 4. Foundation cracks.

4. Foundation cracks.

26. Under which of the following conditions can broad theft coverage be added to a dwelling policy? (Choose from the following options) 1. If permission is granted by the department of insurance 2. Broad theft coverage cannot be added to a dwelling policy. 3. If the policy has been in effect for 60 days 4. If the insured is owner-occupant of the dwelling

4. If the insured is owner-occupant of the dwelling

82. A basic dwelling policy automatically provides coverage against fire, lightning, and (Choose from the following options) 1. Smoke. 2. Riot. 3. Windstorm. 4. Internal explosion.

4. Internal explosion.

43. The additional living expense coverage on homeowners policies (Choose from the following options) 1. Automatically paid after any loss to the covered house. 2. Does not begin to pay until the family has been out of the house for at least 7 days. 3. Is intended to allow the family to stay in the least expensive accommodations available. 4. Is intended to allow the family to maintain its normal standard of living.

4. Is intended to allow the family to maintain its normal standard of living.

17. According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss? (Choose from the following options) 1. Insurance company 2. Governor 3. Policyholder 4. Mortgagee

4. Mortgagee

25. Which of the following statements is true regarding Workers Compensation law in California? (Choose from the following options) 1. If the employee was partially responsible for causing his/her own injury, there is no coverage. 2. If the employee was partially responsible for causing his/her own injury, damages awarded will be lowered. 3. In cases where pain and suffering is involved and fault is clearly established against the employer, the employer may also be held liable for additional damages. 4. None of the above are true.

4. None of the above are true.

125. Under the Workers Compensation Reform Act, the Commissioner sets recommended, nonmandatory premium rates and then allows individual companies to add administrative overhead and expense costs which result in a final rate plan. This type of rating method is known as (Choose from the following options) 1. Closed rating plan. 2. Nonmandatory rate plan. 3. Reform rating plan. 4. Open rating plan.

4. Open rating plan.

130. All of the following are additional liability coverages automatically provided in a homeowners policy, EXCEPT (Choose from the following options) 1. Claims expenses. 2. Damage to the property of others. 3. Loss assessment coverage. 4. Personal injury protection.

4. Personal injury protection.

96. In insurance, an offer is usually made when (Choose from the following options) 1. The insurer approves the application and receives the initial premium. 2. The agent hands the policy to the policyholder. 3. An agent explains a policy to a potential applicant. 4. The application is submitted.

4. The application is submitted.

142. All of the following statements are TRUE regarding the California Earthquake Authority EXCEPT (Choose from the following options) 1. Authority policies can be marketed by the participating insurer that writes the underlying policy of residential property insurance. 2. The state of California has created the California Earthquake Authority, which must be administered under the authority of the Commissioner. 3. The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. 4. The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage.

4. The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage.

134. All of the following are characteristics of the dwelling policy EXCEPT (Choose from the following options) 1. Coverage includes the dwelling only, contents only, or both. 2. Incidental occupancy of limited service-type exposure is permitted. 3. Dwellings up to four family units are eligible. 4. The dwelling must be owner-occupied.

4. The dwelling must be owner-occupied.

144. Under which of the following circumstances would it be acceptable for an insurer to recommend an auto repair facility to an insured? (Choose from the following options) 1. The vehicle does not have comprehensive and collision coverages. 2. The vehicle has cosmetic damage only. 3. It is always illegal for an insurer to do this. 4. The insurer informs the insured of his/her choice to choose a repair shop and will cause the vehicle to be restored to its pre-accident state at no extra cost (other than that which is stated in the policy).

4. The insurer informs the insured of his/her choice to choose a repair shop and will cause the vehicle to be restored to its pre-accident state at no extra cost (other than that which is stated in the policy).

147. A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffer a loss due to a fire, which of the following is true? (Choose from the following options) 1. The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. 2. The entire loss is payable to the mortgagee. 3. The entire loss is payable to the insured. 4. The loss is payable to the insured and the mortgagee.

4. The loss is payable to the insured and the mortgagee.

55. What is the purpose of increased value and excess liability (IVEL) clauses? (Choose from the following options) 1. To protect an assured from the errors and omissions of his or her insurance agent 2. To protect the insurer from inflation 3. To protect the master and crew of a vessel from being sued 4. To provide extra coverage for the same losses covered by an underlining policy

4. To provide extra coverage for the same losses covered by an underlining policy

77. Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? (Choose from the following options) 1. Property of others 2. Manuscripts 3. Works of art or antiques 4. Valuable papers and records

4. Valuable papers and records

Removal coverage under a standard fire policy remains in effect for

5 days.

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

6 stories.

The standard fire policy specifically excludes losses which occur when a building is vacant or unoccupied for

60 days or more.

In business income additional coverage in a BOP, the waiting period that must occur before the period of restoration may begin is

72 hours.

What is the highest level of protection available under a Federal Crop Insurance policy?

75

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?

80% of the property's replacement cost or more

Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of

80%.

The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

The Employee Theft crime policy coverage includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days.

The 1980 Act requires FCIC to offer one price election that is not less than what percent of the projected market price for the commodity?

90%

Which of the following is eligible for a businessowners policy?

A 6-story office building with less than 100,000 square feet total area

Certificate of Authority

A France-based insurer would like to do business in Louisiana. What document must it first receive? International Certificate of Incorporation Certificate of Authority Transcontinental Commerce Clearance Alien Insurer License

John is applying for crop-hail insurance. He has completed the application and signed it. His producer signed it as well and accepted the first premium from John. Assuming all this was done correctly, the application now serves as what?

A binder

Which of the following Employee Fidelity Bonds would cover all employees?

A blanket position bond

.Motor truck cargo - owners form

A business using its own trucks to move its own cargo would insure the cargo using Motor truck cargo - owners form. Motor truck cargo - truckers form. Motor carrier form. Trip transit coverage.

The tree is blocking the driveway

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if The damage is more than $1,000. The neighbor has no homeowners insurance. The tree has caused damage to the insured's vehicle. The tree is blocking the driveway.

Which of the following will have the broadest coverage provided for a vehicle in the Declarations?

A newly acquired auto

30

A nonresident producer moves to another state. The producer must notify the Department of Insurance of the address change within how many days? 5 10 20 30

In a participation plan, the insured may be eligible for which of the following?

A partial premium refund

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business.

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

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.

$1,000

A producer didn't realize that he had committed an act in violation of the Insurance Code. How much would he probably be penalized? $0 $500 $1,000 $25,000

Cargo is damaged short of its destination. An agent of the insurer at an immediate port sells the damaged cargo at the best price. Settlement is based on the difference between insured value and the net sales proceeds. This is considered

A salvage loss.

A businessowners policy is

A self-contained prepackaged policy.

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover

A share of the loss.

California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the following are acceptable forms of financial responsibility EXCEPT

A surety bond for $50,000 obtained from a company licensed to do business in California.

What's the difference between a fidelity bond and a surety bond?

A surety bond guarantees something will happen; a fidelity bond guarantees something will not happen

Business Auto Coverage applies only to those autos which are identified as "covered autos" in the declarations of the policy. Covered autos are identified by

A symbol.

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500-pound capacity

A business income coverage form would cover all of the following situations EXCEPT

A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.

An uninsured motor vehicle includes all of the following EXCEPT

A vehicle being used for public livery

With regard to the Commercial Auto Policy, all of the following autos would be classified as "owned autos", EXCEPT

A vehicle furnished for use to an insured by an auto repair shop, as a temporary substitute, while the insured's covered auto is being serviced.

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto?

A vehicle that is titled to another person, but is being used with permission by an insured

In an auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault

In an auto policy, the medical payments coverage is similar to

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

Which of the following would be covered by a commercial general liability coverage part?

Accidental bodily injury to a customer on the premises

Which amount is figured by subtracting depreciation from the replacement cost of a covered item?

Actual cash value

What must a retail drug store, insured under a Druggist Liability policy, that hires pharmacists as employees of the business, do in order to have protection for possible claims arising out of the acts of the hired pharmacists?

Add the employed pharmacists to the policy

An insured is at fault in an auto accident in a state other than the state registered and insured in. The insured's business auto policy will

Adjust to at least that state's required minimums.

Up to $1,000 for each violation.

After a hearing, if the Commissioner finds that a licensee is using Unfair Methods of Competition, the Commissioner may issue a Cease and Desist order against that person and levy a fine of how much? $250 for each violation. Up to $500 for each violation. Up to $1,000 for each violation. Up to $2,000 for all violations.

The Commercial General Liability Coverage form excludes bodily injury or property damage that the insured has assumed under any contract or agreement. However, the exclusion does not apply to certain types of contracts, as long as the injury or damage occurs

After the execution of the contract.

An employer that qualifies for a self-insured workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called

Aggregate excess coverage.

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?

Aggregate limit of liability

Which would be considered a single accident in equipment breakdown coverage?

All accidents at single location at same time by same cause

Loss of yield cause by any of the following events would be covered under a Federal Crop Insurance policy, except:

All are exceptions to coverage

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

All are true if a contractor defaults on a performance contract EXCEPT The surety will attempt to seek reimbursement from the contractor for any amounts it pays. The surety may cancel the bond so as to avoid having to pay losses and expenses. The obligee may hire another contractor to complete the job and have the surety repay the obligee. The principal's obligations end.

Which of the following is an additional coverage provided under the Glass Coverage Form?

All of the above

A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. Following a loss to the structure, the endorsement would cover expenses incurred by the insured because of enforcement of any building, zoning, or land use law that result in

All of the above.

Common carrier cargo liability.

All of the following are classes of inland marine risks EXCEPT Bridges, tunnels, and other instrumentalities of transportation and communication. Common carrier cargo liability. Commercial property floater risks. Domestic shipments and transportation risks.

Physical damage coverage

All of the following are parts of a personal auto policy EXCEPT Liability coverage. Physical damage coverage. Medical payments coverage. Duties after an accident or loss.

The injury or damage must occur within 90 days after the insured's work is completed.

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT The injury or damage must arise out of the insured's product or work. The injury or damage must occur after the insured has released physical possession of the product to another. The injury or damage must occur within 90 days after the insured's work is completed. The injury or damage must occur away from the insured premises.

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.

All of the following statements concerning liability coverage are true EXCEPT a) Liability policies normally include supplementary payment provisions. b) Liability policies defend the insured against claims, real or alleged. c) The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. d) The insurer cannot refuse to pay a claim even if the insured is bankrupt.

Tools 50 feet away from the building

All of the following types of property are covered by a standard builders risk form EXCEPT Temporary structures. Machinery that will be permanently attached to the building. Tools 50 feet away from the building. The building itself.

A Boatowners policy covers

All of these.

The inspections and surveys condition in a businessowners policy

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

Which of the following would NOT qualify as a hired auto?

An auto borrowed from an employee

Which of the following would NOT quality as a hired auto?

An auto borrowed from an employee

A joint ownership coverage endorsement is added

An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if An extended ownership endorsement is added. Separate policies are written for each individual involved. A joint ownership coverage endorsement is added. A miscellaneous-type vehicle endorsement is added.

Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage?

An employee is caught stealing cash from the register

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

Which of the following would NOT be an insured under the Business Auto Coverage Form?

An employee using his own car for another business

Following a property loss that is covered under a Businessowners policy, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue?

Appraisal

An insurer has the right of cancellation/nonrenewal of an existing insurance policy for all of the following EXCEPT

Arbitrary exclusion from coverage due to age of driver and type of vehicle to be insured.

Replacing the property with other property of a lesser kind or quality.

At the time of loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following EXCEPT Paying the value of the lost or damaged property. Replacing the property with other property of a lesser kind or quality. Paying the cost of repairing or replacing the lost or damaged property. Taking all or part of the property at an agreed or appraised value..

Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation?

Attachment bond

The garage coverage form is used to insure

Auto businesses, such as auto dealers, service station, and auto repair shop

The garage coverage form is used to insure

Auto businesses, such as auto dealers, service stations, and auto repair shops.

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

Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required.

According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties

Automatically transfer to a legal representative.

Which bonds are issued to secure the release of a person from jail pending a courtroom appearance?

Bail bonds

A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called

Basic extended reporting period

A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called

Basic extended reporting period.

Connor, an employee for Marble Tile, Inc., is injured outside of his home state. How will the workers compensation benefits be determined?

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

Connor, an employee for Marble Tile, Inc., is injured outside of his home state. How will the workers compensation benefits be determined?

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

What type of bond guarantees that a construction contractor will enter into a contract at a set price?

Bid bond

Which of the following forms provides the broadest coverage under an employee theft coverage form?

Blanket position

Employee theft coverage may be written as

Blanket, Name schedule, Position schedule coverage

A policy that insures all property at multiple locations for a single amount is referred to as

Blanket.

Which of the following would NOT be covered under the liability section of a personal auto policy?

Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.

Under farm liability, Coverage H includes

Bodily injury.

A loss has occurred before the first report has been filed on a value reporting coverage form. Which is/are true?

Both A & B

Pollution Liability coverage under a General Liability Policy provides which types of coverage?

Both A and B

Retroactive dates in claims made CGL policies apply to

Both BI and PD and PIL and Advertising Liability.

General-cargo ships are used to transport

Break-bulk cargo.

What are the two causes of loss covered under the Glass Coverage Form?

Breakage and accidentally or maliciously applied chemicals

The crime of forced entry into the premises of another by a person or persons with felonious intent, is defined as a

Burglary.

The liability coverage of the businessowners policy is written on a

Businessowners liability coverage form.

Where are most of the exclusions found in the Commercial Property policy?

Causes of Loss Forms

Which of the following is NOT found in a commercial package policy?

Certificate of authority

False advertising

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? False advertising Defamation Coercion Misrepresentation

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.

Your accounts receivable records have been destroyed or damaged. Your loss may be covered with

the accounts receivable coverage form

Theft coverage under an ho-8 is restricted to?

the actual cash value of what was stolen with limits for certain classes of property

Which of the following would NOT considered a source of insurability information by an insurer?

the applicants marital status

In insurance an offer is usually made when?

the application is submitted

Surety bonds are written for a definite limit called

the bonds penalty

Negligence can be defined as?

the failure to use reasonable and prudent care

The insured has violated the contract without the knowledge of the mortgage holder after a loss

the insured cannot collect but the mortgage holder will still be paid

For the purpose of insurance risk is defined as

the uncertainty or chance of loss

What is the purpose of the NFIP?

to fill the gap left by the private insurers in flood coverage

Prior to state- directed workers compensation statues being enacted employees had?

to sue employer for the loss and prove that the employer was at fault

Frank steaks furnishes meat to steakhouses. An accident on the premises cause the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerator units to be sold for human consumption and frank loses $18,500 in disposing of the meat. What coverage under franks BOP policy will cove the loss.

utility service- direct damage

Liability imposed on one party as a result of the actions of another person ( parent/child employer/employee) is known as?

vicarious liability

In forming an insurance contract when does acceptance usually occur?

when an insure approves a prepaid application

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

Farmworkers

What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?

$10,000 for all expenses incurred during a 12-month period

Vandals do damage to glass that is a part of a covered building. Under the broad form of a building and personal property policy, each glass plate will be covered for up to

$100

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll.

A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicle that transport oil?

$1 million

A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to

$1,000.

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?

A cost bond

Most fidelity bonds have a period of time in which losses which occurred while the bond was in force are covered even though not found until after the coverage has terminated. This is known as

A discovery period

A state-established program that requires insurers who write property insurance to accept risks in economically depressed areas in the same proportion as their other business bears to the total property insurance market is called

A fair access to insurance (FAIR) plan.

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy?

A friend rents their boat and runs it into a neighbor's dock.

Which of the following policies will help an auto dealership cover most of its liability exposures?

A garage liability coverage

An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if

A joint ownership coverage endorsement is added.

Never more than 75% of the loss is paid

A loss has occurred before the first report has been filed on a value reporting coverage form. Which is NOT true? Full amount of loss up to the policy limit is paid if the loss occurs before the first report due date. 75% of the loss is paid if the loss occurred after the first report due date. Never more than 75% of the loss is paid. Provisional premium is based on 75% of the full amount of coverage.

If the ocean marine contract pays the ACV of the property just prior to the loss, it is

An indemnity contract.

Which of the following would be eligible for the California low-cost auto insurance?

An individual with a good driving record whose income is at 100% of the federal poverty level

Fraud

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? Defamation Unfair discrimination Errors and omissions Fraud

False advertising

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 Unfair claims Twisting Defamation

$14,000

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 $15,000 $5,000 maximum for the accident $5,000 minus the policy deductible

$1,000

An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay? None $500 $1,000 $1,200

Material misrepresentation

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied? Waiver Utmost Good Faith Estoppel Material misrepresentation

$30,000

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? $0 $30,000 $32,000 $40,000

Employers liability insurance, Part Two of a standard WC&EL policy form, excludes

An intentional act that is caused by the insured.

A liability policy that covers all claims arising out of incidents occurring during the policy period, regardless of whether the policy is still in effect at the time of the claim, is known as

An occurrence policy

Which of the following is NOT considered an insured contract under the Commercial General Liability Policy?

An written agreement which indemnifies a person for fire damage to the premises rented to the insured

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

An ocean marine adventure is

Any voyage.

All of the following are eligibility criteria for applicants in the CAARP EXCEPT

Anyone who does not owe money on any automobile insurance policy within the last 18 months.

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 installation floater is used to insure

Appliances intended to become a permanent part of the building.

Ocean marine policies commonly refer to the person covered by the policy as the

Assured.

Under a businessowners policy, an insured can cancel the policy

At any time by mailing a written notice of cancellation.

According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace

At any time.

When must application for coverage be made for Federal Crop Insurance?

At or before a date established by the Federal Crop Insurance Corporation

Zachary is the proud owner of a 1998 sports car to which he has added a high performance engine costing several thousand dollars. Zachary has added an endorsement to his auto policy which will provide coverage against loss or damage to the engine. This type of endorsement is known as

Damage to your auto (customized equipment

Other than collision would cover financial losses due to

Damage to your car caused by wind or hail.

In a Commercial Property, Business Income policy, which section would explain which losses are covered?

Declarations

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation.

The commercial property declarations page contains which of the following information?

Description of the property insured

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

States with monopolistic state workers compensation funds

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

The American Institute's Hull Clause for the Return of Premium will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be returned for

Each 30-day period.

A public official bond guarantees which of the following?

Elected officials will perform their duties honestly.

The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as

Electronic Effective Date Procedure (EEDP).

Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following, EXCEPT

Embezzlement.

Which coverage applies to losses caused by larceny, embezzlement, misappropriation, wrongful abstraction and other acts of theft by an employee?

Employee Theft

Which endorsement under the commercial auto policy provides the insured's employees additional protection while using a vehicle not owned, hired, or borrowed for the insured business?

Employees as insureds

An intentional act that is caused by the insured

Employers liability insurance, Part Two of a standard workers compensation and employers liability (WC&EL) policy form, excludes An intentional act that is caused by the insured. Liability to a third party for claims arising out of injury to an employee. Bodily injury caused by accident when the injury occurs during the policy period. Bodily injury caused by or aggravated by disease during the policy period.

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

Employers liability.

Professional liability coverage protects against legal liability resulting from

Errors and omissions

.Payment of a third physical damage claim in 5 years

Even though an insured maintains a valid driver's license and has paid the premium when due, an insurer may modify the deductible of an auto policy after Payment of a third physical damage claim in 5 years. The named insured files for divorce. The named insured is charged with a speeding ticket. Any of the above.

Which of the following is NOT a P&I exclusion?

Excess coverage

What type of coverage do umbrella policies provide?

Excess coverage over an underlying or primary policy

Under the Commercial Crime coverage part, loss resulting from employee theft is

Excluded unless a limit of insurance is shown in the Declarations for Employee Theft coverage.

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

Experience modification factor

If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)

Experience rating plan.

All of the following are excluded in the equipment breakdown basic policy EXCEPT

Explosion of Steam Boilers.

All of the following are excluded in the boiler and machinery basic policy EXCEPT

Explosion of steam boilers.

Expenses that an organization would not have incurred if business interruption had not existed are known as

Extra expenses.

An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the Declarations. What amount will the insured's policy pay?

Higher limits

Which of the following businesses would be eligible for a businessowners policy?

Hill & Morton Funeral Home

A BOP (businessowners policy) is most similar to

Homeowners.

A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?

The coinsurance formula would apply

In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT

If the policy is cancelled by the insured.

Which of the following is NOT true if ownership changes, voluntary or otherwise?

If the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge.

With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT

Immediately report to an emergency room for medical examination.

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

In a personal auto policy, the medical payments coverage is similar to Bodily injury coverage, because it pays the insured's doctor bills. Bodily injury coverage, because it provides legal protection if the insured causes injuries to others. Accident insurance, because it pays medical expenses regardless of fault. Accident insurance, because it has the same limits.

In liability insurance policies, supplementary payments are made

In addition to the limit of liability

In liability insurance policies, supplementary payments are made

In addition to the limit of liability.

Pass Insurance sells a lot of crop insurance. Because they sell crop insurance, they are reinsured by who?

The FCIC

All of the following are TRUE regarding the California Automobile Assigned Risk Plan (CAARP) EXCEPT

The Federal government has regulatory oversight over the program due to the pilot California Low Cost Auto Insurance Program.

A driver with 10 years of experience driving an automobile has never had a traffic violation or a DUI. He is now applying for a separate motorcycle policy. He has obtained his motorcycle license 2 years ago. Which of the following is true?

The Good Driver Discount will not apply to the motorcycle.

Provide a method of insuring licensed drivers who are unable to purchase auto liability insurance in the voluntary market

The Louisiana Automobile Insurance Plan was established to Subsidize losses of insured who are insured under the Plan. Approve rates to be charged of high risk auto insureds. Provide a method of insuring licensed drivers who are unable to purchase auto liability insurance in the voluntary market. All of the above.

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

The SIR

Which situation would NOT be covered by the Basic Causes of Loss Form under a Commercial Property Policy?

The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant

An insurance agency could purchase an errors and omission insurance policy, which would provide protection in the event of an of the following events EXCEPT

The agency loses commission income from policies that were not issued by the insurer

Which of the following would be considered the most important factor in determining the rates and premiums for an applicant for an auto policy?

The applicant's driving record

All of the following statements are TRUE regarding the California Earthquake Authority EXCEPT

The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage.

Surety bonds are written for a definite limit called

The bond penalty.

Which item would NOT be covered under building coverage in a building and personal property policy?

The bulldozer being used as part of a business addition under construction that is parked 500 feet from the building

Time element

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? Time element Claims made Occurrence Direct damage

Cargo has been insured warehouse to warehouse. Which of the following is true?

The cargo is covered from origin to destination or 60 days after discharge, whichever is first.

The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date

The claims-made trigger is based on which of the following? The date the claim is first made in writing against an insurer for injury or damage that occurred after the policy's retroactive date The date the claim is first made orally against an insurer for injury or damage that occurred after the policy's retroactive date The date the claim is first made orally against an insured for injury or damage that occurred after the policy's retroactive date The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date

All of the following statements concerning coinsurance are true, EXCEPT

The coinsurance formula also will be applied to total losses.

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract?

The obligee may engage another contractor and then seek reimbursement from the surety.

The date when injury or damage occurs

The occurrence form trigger is based on which of the following? The place where the injury or damage occurs The amount of the insured's deductible The amount of claims made during the policy period The date when injury or damage occurs

Which of the following would NOT be considered an "insured" under a business auto coverage form?

The owner from whom the named insured hires or borrows a covered auto

Who is not an insured for liability on a BAP?

The owner of a car the insured borrows

Druggist Liability insurance automatically provides professional liability coverage for a pharmacist when the pharmacist is

The owner of the business.

What is the primary objective of workers compensation?

The payment of benefits to employees for injuries arising out of their employment