Exam Review 1 & 2
What are the two compensatory damages? A) Normal & punitive B) Special & general C) Pure & speculative D) Tort & general
B
Under farm liability, Coverage H includes A) Bodily injury B) Loss of use C) Medical payments D) Other farm structures
A
All of the following are additional cause of loss included in the broad form of a commercial property policy except A)Water damage B)Replacement cost C)Falling objects D)Weight of snow ice or sleet
B
Rates that are establish based on the similarities of risk with other risks are known as A)Merit rates B)Manual rates C) experience rates D)A rates
B
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? A) Contractual liability policy B) Personal liability policy C) Property damage liability policy D) Bodily injury liability policy
A
What is the maximum amount that the Alabama insurance guarantee association will pay in benefits for a property or casualty insurance claim? A)$150,000 B)$300,000 C) $100 D)$100,000
A
When may the Superintendent issue a letter of reprimand to a licensee? a) Only after the opportunity for a hearing has been provided to the persons who are the subject of the reprimand b) Only after a hearing has been completed on the subject of the reprimand c) At any time d) Only before any hearings are held on the subject of the reprimand
A
A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true? A)Payment for unnamed perils is reduced by 25% B)The insured has no coverage for losses caused by theft C)The insured has no coverage for losses caused by glass breakage D)Payment for unnamed perils is rescued by 15%
A
Which bond is required by court before allowing one to take the assets of another to satisfy a legal obligation? A attachment bond B bail bond C cost bond D in Junction bond
A
An insured has a liability policy that sets the amount for all claims that arise from single incident at $50,000. Which type of limit of liability does this insured's policy have? A) Per occurrence B) Per person C) Aggregate D) Split
A
Any ambiguities in a p&c policy will be resolved in favor of the policyowner because the policy is a A)Contract of adhesion B)Conditional contract C)Unilateral contract D)Aleatory contract
A
Chance of a windstorm causing a loss to one's property is A)risk B)uninsurable C)hazard D)peril
A
The claims-made trigger is based on which of the following? A) 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 B) The date the claim is first made in writing against an insurer for injury or damage that occurred after the policy's retroactive date C) The date the claim is first made orally against an insurer for injury or damage that occurred after the policy's retroactive date D)The date the claim is first made orally against an insured for injury or damage that occurred after the policy's retroactive date
A
The farm liability additional coverage that excludes coverage for borrowed farm equipment is the A) Medical liability coverage B) Bodily injury and property damage coverage C) Medical payments D) Other farm structures
A
The other insurance clause of an ocean marine policy allows coverage for which reason? A) To obtain coverage for war, strikes, and related risks not covered by the policy B) To replace an existing policy C) To add endorsements D) To expand existing coverage such as earthquakes, fire, and hail
A
An incorrect statement made intentionally on an auto insurance application is aMark one answer: A)Fraud B)Warranty C)Misrepresentation D)Concealment
C
A Business owner whose inventory changes significantly throughout the year should consider having coverage written on what type of form? A)Comprehensive form B)Reporting form C)Fluctuating inventory form D)Blanket form
B
A company chartered in Guam and Puerto Rico doing regular business in New York would be considered by new yorkers to be a A)Domestic B)Foreign C)Alien D)International
B
Which of the following risk is eligible for coverage under a businessowners policy? A) Bars or taverns B) Condominiums C) Banks D) Automobile dealers
B
A commercial auto coverage form that is designed for insureds engaged in business of transporting goods for other is a? A) Garagekeeper form B)cargo carrier coverage form C) Truckers coverage form D) Commercial carrier coverage form
C
All of the following are conditions commonly found in the insurance policy EXCEPT A) Subrogation B) Appraisal C) Insuring agreement D) Cancellation and nonrenewal
C
As an employer, the sudden loss of a key employee would be considered a A)Business loss. B)Personal loss. C)Personnel loss. D)Human loss.
C
Under farm liability, Coverage H includes A) Loss of use B) Medical Payments C) Other Farm structures D) Bodily injury
D
A company has a businessowners policy on a building with an agreed value of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? A) Nothing, because the company failed to carry the required insurance amount B) Up to $300,000 for the loss C) Up to $150,000 for the loss D) The coinsurance formula would apply
D
A producer who fails to segregate premiums monies from his own personal funds is guilty of A) Larceny B) Embezzlement C) Theft D) Commingling
D
The policy that allows an insured to give or promise her insurance policy as collateral for a loan is known as? A)Promissory Policy B) Policy transfer C) Assignment D) Collateral policy
C
The pro rata liability clause is designed to protect the principle of A)Insurable interest B) waiver and Estoppel C)Indemnity D)Subrogation
C
Valuable papers and records form provides coverage for the reconstruction of all the following types of record EXCEPT A) Deeds B) Historical records C) Prepackaged software D) Blueprints
C
What type of information would be found in a policy's insuring agreement A) Policy limit B) Insurer's address C) Renewal dates D) location of premises
C
What type of insurance can be obtained through a surplus lines insurer? A) Commercial coverage B) Coverage that provides dividends C) Coverage that unavailable through authorized insurers D) Out of state coverage
C
When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy? A) Waiver of premium B) Surety bond C) Subrogation D) Designated beneficiary
C
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 term best describes the advertisement? A) Twisting B) Rebating C) False financial statement D) Defamation
C
If the premium charged for a particular insured is increased or decreased for a future period Based on the insured's lost experience for a period in the recent past the policy uses a/an A)Experience rating plan B)Judgment rating plan C)Manual rating plan D)Retrospective rating plan
A
In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above his limit? A) Deductible B) Self-insured retention C) Coinsurance D) Premium
A
Should an insurer accept business from a a producer who is not appointed as the insurer's agent, what penalty may be exacted? A) The insure is fined 3 times the amount of the premium received on that business B) The producer is fined the amount of commission paid on the business C)The insurer is fined the amount of the commission paid to the unappointed producers D)Both the insurer and the producer is fined $500
A
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following except A)The insured is injured while exiting a friends mobile home B)The insured is injured by a motor vehicle while crossing the street C)The insured's child that sustains injury when the car she is in accidentally rolls down a hill D)A friend is injured while driving the insured's vehicle with permission
A
The transfer of an insured's right to seek damage from a negligent party to the insurer is found in which of the following clauses? A)Subrogation B)Arbitration C)Salvage D)Appraisal
A
To perform work on a customer's car, a mechanic in an auto shop had to put the vehicle on the service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form, which of the following statements is true? A)No coverage is applicable B)Coverage is provided for the car on the hoist only C)Coverage is provided for all perils D)Coverage is provided for the bodily injuries to the mechanic
A
Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is A)Provided by the insured's policy on an excess basis B)Not covered C)Shared on a pro rata basis D) provided by the insurance policy on a primary basis
A
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 A)The excess over the self insured retention B)The amount specified in the policy under the additional coverage provisions C)The amount in excess of policies limits of liability D)A percentage of loss as described on the declarations
A
Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation? A) Attachment bond B) Bail bond C) Cost bond D) Injunction bond
A
Which of the following describes contributory negligence A any degree of negligence by the injured party may bar recovery B The time period in which your claim must be filed C Negligence is appointed between both parties in an accident D The voluntary assumption of exposure to risk
A
Which of the following employee fidelity bond would Cover all employees? A)Blanket position bond B)An individual bond C) A named schedule bond D) Position schedule bond
A
Which of the following state is incorrect with regard to surplus lines insurance? A)Policies written by a surplus lines insurer typically contain standard coverage and forms B) To sell surplus lines insurance, the licensee must obtain a surplus lines broker's license C) Before coverage is placed with surplus lines company diligent effort must be made to place the risk with admitted insurers D)Business placed with surplus lines insurer to subject to a premium tax that must be collected by the broker
A
Which of the following symbols is available to AN insured with vehicles subject to no-fault coverage? A)Symbol 5 B) symbol 6 C)Symbol 7 D) symbol 9
A
With respect to multiple violations of the insurance code, which of the following is correct A)Each violation will be punished as a separate violation of the insurance code B)Each violation is considered a felony C)All violations of the same code will be treated as a single violation D) only the most recent violation will be punished
A
A farmer is remodeling his 100-year-old farmhouse. He is in the process of painting the porch and hanging shutters. He keeps his ladder, paint, and other materials used to remodel his home under the porch. Which of the following provides coverage for his remodeling materials? A coverage D B coverage A C coverage B D coverage C
B
A person who is not named as an insured on the declaration page of a policy but is protected by the policies known as the A First named insured B Additional insured C Policy owner D Named insured
B
According to the business owners policy (bop) definitions, which of the following does not mean valuable papers and records A)Inscribed deeds B)Securities C)Manuscripts D)Drawings and maps
B
All of the following conditions must exists for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy except A)The injury or damage must occur after the insured has released physical possession of the product to another B)The injury or damage must occur within 90 days after the insured's work is completed C) The injury or damage must occur away from the insured premises D) The injury or damage must arise out of the insured's product or work
B
Courts will interpret any ambiguity in an insurance contract A)Based on the prudent personal rule B)In favor of the insured C)In favor of the insurer D)Through arbitration
B
Crime insurance is usually written on what basis? A) Closed risk B) All-risk C) Specific risk D) Named peril
B
Extended non owned coverage endorsement in a PAP broadens which of the following coverages? A) Physical damage B) Liability and medical payments C) Transportation expenses D) Uninsured motorists
B
If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage? A)Pay additional premium into his own liability policy B) Attach the home day care coverage endorsement to the HO policy C)Include home business endorsement in the HO Policy D)Buy additional coverage for his business
B
If an insurer decides to cancel an auto insurance policy due to the mechanical conditions of the vehicle, what kind of notice to the insured is required? A) 10days B) 20day C) 30day D) 60day
B
In equipment breakdown coverage all accidents would be considered a single accident if they occur A) at the same location within 48 hour period B)At a single location at the same time from the same cause C)At all insured locations at the same time in the same cause D) at the same location within a 24 hour period
B
In liability insurance policies, supplementary payments are made A At the option of the insurer B In addition to the limits of liability C As part of the limit of liability D At the option of the insured
B
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Alabama within how many days of the final disposition of the matter? A) 10 B) 30 C) 60 D) 90
B
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? A) Funds Transfer Fraud B) Extortion Commercial Entities C) Miscellaneous Crime D) None of these
B
The business pursuits endorsement under section II of a homeowners policy will cover all of the following except A) All business pursuits B)Business liability C)Insured's activities D) Bodily injury to the insured
B
The member of a limited liability company are insured's under a business owners policy BOP if A)Members of the limited liability company cannot be insured under a bop B)The limited liability company is designated as the named insured C)Each individual is listed as a named insured on the policy D)A single individual member of the limited liability company is listed as the name insured
B
The members of a limited liability company are insured under a business owners policy (Bop) if A members of a limited liability company cannot be insured's under a bop B The limited liability company is designated at the named insured C each Individual is listed as a name insured on the policy D A single individual member of the limited liability company is listed as the name insured
B
The occurrence form trigger is based on which of the following? A) The number of claims made during the policy B) The date when injury or damage occurs C) The place where the injury or damage occurs D) The amount of the insured's deductible
B
Under the provisions of the business income coverage form all of the following are true except A) The insured is reimbursed for payroll that continues after the loss begins B)The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date which ever comes first C)If the insured in the insurer unable to come to an agreement as the value of the loss either party may make a written demand for a appraisal D)The insured agrees to resume all or part of operations as quickly as possible
B
What type of information would be found in a policy's insuring agreement? A) Insurer's address B) Renewal dates C) Location of premises D) Policy limits
B
Which loss listed below would be fully covered by a homeowners policy? A)$5000 firearm collection stolen B) $2000 silver tea set stolen C)$1200 pedigreed golden retriever stolen D)$24,000 bass boat destroyed in the tornado
B
Which of the following entities was created to protect insured's against and insurer's insolvency? A The fair credit reporting act B The insurance guaranty association C The insurance regulation commission D The Better Business Bureau
B
Which of the following is covered under the physical damage coverage of a personal auto policy? A)Custom furnishings or equipment in a pick up van B)Sound reproduction equipment permanently installed in the covered auto C)A covered auto seized and destroyed by a government authority D)A cell phone in a locked vehicle
B
Which of the following statement would be an example of a product liability claim? A)The insured's product has to be recalled because of an expiration date B)Faulty packaging of a cereal caused spoilage that results in someone getting sick C)An insured, while delivering product to a customer, hits another car with the delivery truck causing bodily injury and property damage D) Someone tampers with the insured's product causing the insured to have to recall all products that are on the shelf
B
Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? A)The insured would have to pay the self-insured retention limit B)The insured would be responsible for the amount required as underlying limits in the event of a claim C)It would have no effect on the umbrella policy D)The policy will be cancelled
B
Which of the following statements would be true if an insured failed to maintain the underlying limits as requested by a personal umbrella policy A The insured would have to pay the self-insured retention limit B The insured would be responsible for the amount required as underlying limits in the event of a claim C It would have no effect on the umbrella policy D The policy will be canceled
B
Who has the rights to veto the repair facility for a vessel? A) The assured B) The underwriter C) The captain D) The owner
B
insurance policies are not drawn up through negotiations and an insured has little to say about its provisions. What contract characteristic does this describe? A) Personal B) Adhesion C) Unilateral D) Conditional
B
All of the following are supplemental payments included in the liability section of a personal auto policy except A)Premiums on appeal bonds in any suit the insured defense B)Up to $250 for bail bonds required because of a covered accident C)Up to $100 for the cost to secure the release of a vehicle from and impoundment lot following a covered accident D)Up to $200 a day for loss of earnings due to attendance of hearings or trials
C
All of the following statement concerning coinsurance except? A) The insured agrees to maintain insurance equal to some specified percentage of the value of the property B)If the insurance carried is less than required, the insurance may not cover the whole loss C) The coinsurance formula will also applied to total losses D)1. It is used to help adequacy and equity in rates.
C
An employee drive a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering would provide coverage to the employee when she drives someone else's car for her personal use? A)Rental injury protection B)Personal injury protection C)Brive the car coverage D) Bobtail coverage
C
And insured's Home is mortgage to buy the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true A)The mortgagee must settle with the mortgagor in the event of a loss B)The additional premium required for the mortgage endorsement must be paid by the mortgagee C) losses will be paid to the mortgagee in the mortgage or as their interest appears D)Coverage is suspended if the building is mortgage and the insurer is not told of this indebtedness
C
Applicants for which type of insurance license are exempt from Alabama pre-licensing education requirements A)Insurance producer license B) Life producer license used only for selling annuities C)Limited license D)Variable license
C
How long must producer keep records of insurance transaction under their license? A) 7years B) 1years C) 3years D) 5years
C
In Alabama, domestic insurance companies may be examined by the Commissioner of by an examiner designed by A) The national association of insurance commissioners B) The governor C) The commissioner D) The attorney general
C
Increased value and excess liability clauses work like which of the following policies? A) cargo B) errors and omissions C) Umbrella D) Professional liability
C
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) A retro period B) A look back period C) a discovery period D)A indemnity period
C
The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of direct loss which of the following terms best describes the nature of his type of coverage? A) Occurence B) Direct damage C) Time element D) Claims made
C
The limited theft endorsement is intended for which type of property A)A building use for commercial purposes which the owner rents to a business B)A house in which the owner resides C)An apartment building in which the owner does not reside D)A building use for commercial purposes in which the owner operated business
C
The main difference between an HO-4 and an HO-6 is A) HO-6 does not cover additional living expenses B) HO-4 provides limited dwelling coverage as well as contents coverage C) HO-6 provides limited dwelling coverage as well as contents coverage D) HO-4 does not cover additional living expenses
C
Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of a direct damage to a neighboring Location from a payroll covered in the insured's policy, loss would be covered up to A) 90 days B) 1 week C) 2 weeks D) 1month
C
Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy. But was revealed during the policy period? A Reporting form B Loss sustained form C Discovery form D Retro form
C
Which coverage what a business owner need in a crime policy to cover money that may be stolen from a messenger? A Commercial general liability B Safe burglary C Outside the premises D Fidelity bond
C
Which of the following endorsements under and equipment breakdown policies use for calculating the amount to be paid on a loss business claim after I direct loss A Turbine unit explosion coverage B refrigeration interruption-Reports a Value C Business income-Reports a Value D Refrigeration interruption coverage
C
Which of the following is not considered an insured contract under the commercial general liability policy A and obligation as required by ordinance to indemnify am municipality except for work for a municipality B A written lease agreement on the insured premises C A written agreement which indemnifies a person for fire damage to premise rent to the insured D In elevator maintenance agreement
C
Which of the following is not considered an insured contract under the commercial general liability policy A) An obligation as required by ordinance to indemnify a municipality except for work for a municipality B) A written lease agreement on the insured premises C)A written agreement which indemnifies a person for fire damage to the premises rent it to the insured D) an elevator maintenance agreement
C
Which of the following options is available for eligible person who cannot obtain automobile coverage through the voluntary market? A) The alabama uninsured motorist fund B) The alabama insurance guaranty association C) The alabama automobile insurance plan D) AAA auto club coverage
C
Which of the following statements are true concerning UIM coverage under a personal auto policy A)Limits must equal the bodily injury limits of the policy B)Limits may differ from the limits for uninsured motorist coverage C) coverage applies only to the extent that the underinsured motorists limits exceed the bodily injury limits carried by the operator of the other vehicle D)It will pay up to the limits of insurance for any loss which involves an underinsured driver
C
Which of the following would be the insured's duty in the event of the loss according to the duties in event of occurrence, claim, or suit condition? A)Initiating the investigation of claim B)Promptly notifying the insurer of claim by phone C) Providing specific details regarding an occurrence D) Delivering a claim to the insurer in person
C
Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time? A)Profit rating B)Components rating C)Loss costs rating D)Provision rating
C
Which rating method provides and insurer with the portion of a rate that does not include provisions of expense (other than adjusting expenses) for profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value in through trending to a future point in time? A)Profit rating B) components rating C) loss cost rating D) provision rating
C
Why don't commercial auto coverage forms automatically include medical payment coverage? A) Commercial auto coverage is for damage to the vehicles only B) Any personal occupying a commercial vehicle must have a personal auto policy to cover any medical payment that result from an accident C) Often, any person occupying a commercial vehicle would be covered under workers compensation policy D) The business that owns the vehicles must be self-insured for medial payment coverage
C
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 It's called A)Bodily injury/property damage form B)Occurrence form C)Premise form D)Claims made form
D
All of the following are coverages included in both the broad in special form dwelling policy except A)Collapse B)Breakage of glass C)Lawns trees shrubs and plants D)Theft of personal property
D
All of the following are true regarding rebates EXCEPT A rebates are only allowed is specifically stated in the policy B Release can be anything of economic value given as an inducement to buy C Dividends are not considered to be rebates D Rebates are allowed if it's in the best interest of the client
D
An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? A Split B Aggregate C Per occurrence D Combined single
D
And insured purchased an insurance policy five years ago. Last year she received a dividend check from the insurance company that was not taxable. This year she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A Reciprocal B Nonprofit service organization C stock D Mutual
D
Employee self coverage may be written as A Blanket coverage B Name schedule coverage C Position schedule coverage D Any of the above
D
If another governmental agency takes legal action against a licensee whose responsibility is to report the action A) The department of insurance B) The judge C) The personal/entity requesting the action D) The licensee
D
If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the A) Special limits of liability endorsement B) Personal property replacement cost endorsement C) Blanket personal property endorsement D) Scheduled personal property Endorsement
D
In insurance policies the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? A)Unidirectional B) Aleatory C)conditional D)unilateral
D
In which of the following types of property valuation will the property pay the full value as specified on the policy schedule, regardless of the insured properties appreciation or depreciation? A)Replacement cost B)Stated amount C)Market value D)Agreed value
D
The designation symbols used in Commercial auto polices can found in which policy section? A)Liability coverage B) Definition C) Conditions D) Covered Auto
D
The homeowners policy covers collapse caused by all the following except A)Weight of snow B)In insect or vermin damage C)Weight of too many people attending an event hosted in the house D)Foundation cracks
D
The section of the insurance policy that details what perils are not insured against and what persons are no insured is known as the? A) Declarations B) Endorsements C) Conditions D) Exclusions
D
Under coverage C of a farm policy, what is the limit payable on business property located away from the premises? A)$1000 B) $100 C)$250 D)$500
D
What is reinsurance? A) an agreement between and originating insurer in a ceding insurer B)An agreement between a domestic insurer and a foreign insurer C)An agreement between an insurer and an insured D)An agreement between a ceding insurer and a assuming insurer
D
What is the maximum amount that the Alabama Insurance Guaranty Association will pay in benefits for a property or casualty insurance claim? A) $300,00 B) $100 C) $100,00 D) $150,000
D
A claim is considered to have been made A) When notice is received and recorded by any insured or the insurer, whichever comes first B) When received in writing or telephonically by the insurer c) When notice is received by any insured D) When nice is received and recorded by the insurer
A
All of the following statements concerning liability coverage are true except A) The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met B) The insurer cannot refuse to pay a claim even if the insured is bankrupt C) Liability policies normally include supplementary payment provisions D) Liability policies defend the insured against claims real or alleged
A
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? A)Consideration B)Good faith C)Representation D)Adhersion
A
Commercial properties special form covers property in transit up to A)$5000 B)ACV C)$500 D)Full replacement cost
A
Coverage A - Bodily injury and Property damage in the commercial general liability policy will cover A)Losses due to the insured's negligence B)Liquor liability C)Contractural liability D) Damage to the insured' product
A
Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowner forms? A)None B)HO-2 C)HO-3 D)HO-5
A
Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms? A none B Ho-2 C Ho-3 D Ho-5
A
How does the mobile home endorsement affect the other coverage of law or ordinance in a homeowners policy? A) It removes the coverage B) It broadens the coverage C) It limits the coverage D) It has no effect on this coverage
A
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 policy will defend the suit? A) Personal and advertising injury liability B) Premises and operation C) Product liability D) Completed operations
A
Which policy condition in HO policies states that insurance applies separately to each insured A)Severability of insurance B)Appraisal C)Limit of liability D) payment of claim
A
Who will transport the property of anyone who hires them? A) Common carriers B) Private carriers C) Motor truck carriers D) Commercial carriers
A
A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance of law coverage endorsement. This endorsement will cover all of the following expenses EXCEPT A) Ordinance with which the insured was required to comply prior to the loss B) Loss to the undamaged position of the building C) Any increased cost of repairs or reconstruction D) Demolition and removal cost
A
An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover? A) A child trips over a toy in the driveway, cuts her knee, and requires stitches B) A child is playing in the insureds car, puts it in drive and backs into the neighbors mailbox C) A child has bruises on her legs from receiving a spanking from the insured and must be seen by a pediatrician D) A child riding an insureds horse falls off breaking his collar bone
A
Bulk carriers are used to transport A) Loose cargo B) Break-bulk cargo C) Motor Vehicles D) Containerized cargo
A
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? A) False Advertising B) Defamation C) Coercion D) Misrepresentation
A
Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for those reports? a) Within 30 days after the end of each month b) Within the first 10 days of each month c) By the 15th of each month d) 20 days after the report is due
A
Employment practices liability insurance (EPLI) would NOT cover claims arising from A) Deliberate law violation B) Sexual harassment C) Wrongful termination D) Discrimination
A
Which of the following would be included in the farm liability coverage form? A) Bodily injury to a residence employee B) Any obligation o the insured under a workers compensation law C) Bodily injury to any person who is an insured D) Bodily injury to an employed farmhand
A
The limited theft endorsement is intended for which type of property? A) An apartment building in which the owners does not reside B) A building used for commercial purposed in which the owner operates a business C) A building used for commercial purposes which the owner rents to a business D) A house in which the owner resides
A
The property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called A) Abandonment B) Assignment C) Appraisal D) Arbitration
A
The ranking insured in a personal lines contract is the A)Named insured B)First named insured C)Mortgagee D)Husband
A
The residential condominium building association policy( RCBAP) Is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true? A)it does not protect the individual owner from lost two personal property owned Exclusively by the unit owner B) it provides limited coverage for personal property owned exclusively by the unit owner C) it is designed to provide exclusive coverage for the individual owner and does not provide coverage for the unit owner D) This policy form is not approved for use in the state of New York or New Jersey
A
The transfer of money from insides a banking premies to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? A) Computer fraud B) Money orders and counterfeit paper currency C) Other crime coverage D) Outside premises
A
When the condominium association coverage from and the condominium unit-owners for both cover the same loss A) The association coverage form will be considered primary and pay B) The unit-owner coverage form will be considered primary and pay C) Each coverage form will pay a pro rata share D) Neither will pay
A
Which is a two-party contract? A)Property B)Casualty C)Liability D)Auto
A
Which of the following coverages is included in an unendorsed homeowners policy? A) Medical payment to others B) Personal Property to replacement coverage C) Fungi, wet, or dry rot or bacteria D) Earthquake
A
Which of the following is NOT a P&I exclusion? A) Excess coverage B) Damage to hull and machinery C) Commercial towing of other vessels D) Detention of vessel
A
Which of the following is NOT an optional coverage built into the condominium association coverage form? A) Real estate tax liability B) Agreed value C) Inflation guard D) Replacement cost
A
Which of the following is NOT covered under account receivable coverage form? A) Any loans required to offset uncollected amounts B) Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds C) Sums due the insured that are uncollectible due to a covered loss D) Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs
A
General-cargo ships are used to transport A) Coal, grain, phosphate, and other loose cargo B) Break-bulk cargo C) Motor vehicles D) Containerized cargo
B
A shipment is covered under a cargo policy written on a "warehouse to warehouse basis" for how long is this shipment covered after discharge at the destination port? A) 2 weeks B) 1month C) 60days D) 24hours
C
Homeowners policies provide coverage for AProperty of tenants rumors or borders not related to any insured B Business property while on the residence premise C Loss is caused by off premise power failure D The land under the residence
B
If an insured decides to cancel an auto insurance policy due to the mechanical condition of the vehicle, what kind of notice to the insured is required? A) 10days B) 20days C) 30days D) 60days
B
A grave marker was damaged by vandals. It would cost $3,000 to have the damages repaired. Under these circumstances, how much would a homeowners policy pay? A) $1,000 B) $3,000 C) $0 D) $500
B
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 A)Bid bonds B) license and permit bonds C)Fidelity buns D performance bonds
B
A person who is no named as an insured on the declaration page of a policy but is protected by the policy is known as the A) First named insured B) Additional insured C) Policyowner D) Named insured
B
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? A) 30days B) 60days C) 90days D) 120days
B
All of the following would be covered under the medical expense coverage of a business owners policy EXCEPT A) First aid when the accident occurred B) mental health counseling C ambulance service D x ray
B
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have? A) Special B) Specific C) Schedule D) Blanket
B
An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home was severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays in a motel while the repairs are made. How much will the HO3 pay for their additional living expenses? A. Nothing B. All of the expense up to the Coverage D limit C. The cost of renting and apartment, but not the cost of the motel room D. The cost of renting the apartment, and 50% of the cost of the motel
B
An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? A) Legal, provided that the other insurers are paid royalties for the usage of their names B) illegal under any circumstances C) Legal, provided that the information can be verified D) illegal until endorsed by the Guaranty Association
B
During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes a) Coercion. b) Misrepresentation. c) Defamation. d) Twisting.
B
If an insured has a umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? A) General liability policy B auto policy C umbrella policy D Excess policy
B
In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT A) Assisting the insurer upon request in the enforcement of any right against any person or organization that may be liable to the insured B) Submitting to a medical exam when requested C) providing prom written notice of any claim or suit actually filled against the insured D) Furnishing the insurer with copies of any demands, notices, or other legal papers received in connection with a claim or suit
B
In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within? A) 30days B) A specified time C) 1 year D) 5 business days
B
Insurance contracts offset: A) Speculative risk B)Pure risk C)Gambling D)Created risk
B
Justin's house was destroyed by a fire. There were a few items that were damaged in the fire but Justin wanted to keep due to sentimental value. When the insurance claims adjuster came to visit the fire site, he took note of all the items Justin was keeping. The insurer will reduce the value of what the house is worth by the amount that the items Justin is keeping are worth. The value associated with these items is called what? A)Loss value B)Salvage value C)Keepsake value D)Recovery value
B
Professional photographers and musicians may insure their Equipment with A) An installation floater B) A commercial articles floater C) A theatrical property coverage form D) A contractors equipment form
B
Robbery is A)Taking of property from within the premises leaving visible signs of forced entry B)Taking of property by used of force, violence, or fear C) Taking of property without causing property damage of bodily harm D) Any act of stealing
B
The Other Insurance Clause A)prohibits other insurance on the same property. B)upholds the principle of indemnity. C)allows coverage for catastrophic losses. D)allows more than one person to be insured under the policy.
B
The amount an insurer will pay under Coverage D (Loss of Use) depends on A) The length of time the dwelling is uninhabitable B) The amount of coverage on the dwelling C) How long a dwelling has been occupied D) If the dwelling is owner- occupied or rented out
B
The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a A) Robbery B) Burglary C) Break & Entering D) Theft
B
The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information form the insurer at any time up to 60days After the policy period ends. The insurer must provide information A) As soon as possible B) within 45days C) Within 30days D) Within 60days
B
The members of a limited liability company are insureds under a business owners policy( BOP) if A) Members of a limited liability company cannot be insured under a BOP B) The limited liability company is designated as the named insured C) Each individual listed as a named insured on the policy D) A single individual member of the limited liability company is listed as the named insured
B
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? A) Primary and excess B) Other insurance C) Valid insurance D) Nonconcurrency
B
What is the term used to describe terminating the insurance relationship at the end of the policy period? A)Cancellation B)Nonrenewal C)Separation D) Exclusion
B
Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something? A attachment bonds B injunction bonds C appeal bonds D bail bonds
B
Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? A) Legal action against the insurer B) Privilege to adjust with the owner C) Transfer of rights of recovery D) Reinstatement of limit
B
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? A) Hired auto specified as covered auto you own B) Individual named insured C) Drive other car D) Additional insured- lessor
B
Which of the following is a personal loss exposure? A)Liability for causing damage to another person's property. B)Financial loss incurred by a family caused by death, disability, or sickness of a person whose income contributes toward a family's household expenses. C)Liability arising out of a family's pet biting a neighbor. D)Financial loss incurred by a business due to the death of a key employee.
B
Which of the following is a third party contract? A) Property B)Casualty C)Earthquake D)Theft
B
Which of the following is an additional coverage provided under the Glass coverage form? A) A monoline policy B) A self-contained prepackaged policy C) A special policy designed for large retail operation D) Part of a commercial packaged policy
B
Which of the following losses would NOT be covered by a homeowners policy? A) A $800 outboard motor destroyed by hail B) A coin collection valued at $500 lost in a fire C) A $550 utility trailer blown away by a tornado D) A stolen silver tea set worth $2000
B
The authority granted to an agent thought the agents contract is referred to as A) Absolute authority B) Expressed authority C) Apparent authority D) Implied authority
B Expressed powers are written into the contract between the insurer and the agent
A person convicted of willfully violating an Insurance law of Alabama is subject to A)100 hours of community service B) A sentence to hard labor for a period of 2 years C) A fine up to $1,000, imprisonment, and a sentence to hard labor for a period of one year D) A fine up to $10,000, or a sentence of hard labor, determined by the violator
C
Each of the following involves pure risk EXCEPT: A)bodily injury B)drought C)loss in the stock market D)flood
C
Endorsement added to a business owners policy that provides coverage for a direct damage caused by utility service disruption stemming from my cover peril is called A Additional expense B loss of business income C Utility service- direct damage D Utility service- time element
C
HMS toys carry more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits for the rest of the year? A Spoilage B Inventory increase C Peak season D Value reporting
C
How does the mobliehome endorsement affect the other coverage of law or ordinance in a homeowners policy A) It limits the coverage B) It has no effect on this coverage C) It removes the coverage D) It broad As the coverage
C
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 A) No-fault medical payment B) Liability C) Physical damage D) Uninsured motorist
C
It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability A) Gender B) Address C) Sexual orientation D) Age
C
Kelsey was in a car accident in which her car was deemed a total loss. She called her insurance company to start the claims process and was told it would pay $3,500 for the loss. Kelsey was confused, as she had a policy where she assumed the insurer would pay for the full cost of the total loss of $7,700. Which type of policy did Kelsey most likely have? A)Agreed value B)Total value C)Stated value D)Collision value plus
C
Medical benefits under Workers Compensation are provided without a maximum limit, but are subject to a) An underwriting requirement. b) Nothing. c) A fee schedule. d) A time limit.
C
The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period? A) 90days B) 120days C) 1year D) 3 years
C
The deductible does each of these EXCEPT A)reduce loss costs. B) lower premium costs. C)indemnify the insured. D)excludes payment for small claims.
C
The livestock coverage form covers which of the following losses? A) A cow died after it ran into a moving tractor B) All risk coverage for death fo livestock by any cause except those excluded C) Named peril coverage for death of livestock D) Sheep died after an attack by the family dog
C
When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)? A) Only if the insured has 4 or more employees B) Never C) Only if the insured does not have commercial auto coverage D) Only in addition to commercial auto coverage
C
When would uninsured motorist coverage apply? A) Any time the insured is involved in an accident with an uninsured driver B) Only when the insured is legally liable C) Only when the other party is legally liable but has no insurance D) Only when the insured drives an insured car
C
Which of the following is a characteristic of a Reciprocal Insurance Exchange? A) Stock holders share in any profit B) Issues non assessable policies C) The chief administrator of the insurer is called an "attorney-in-fact." D) Normally write all lines of insurance
C
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a) Indemnity b) Representation c) Warranty d) Concealment
C
Which of the following is not a contract bond? A maintenance bond B bid bond C litigation bond D performance bond
C
Which of the following types of valuation works best for property whose value does not fluctuate much? a) Stated amount b) Inflation guard c) Agreed value d) Market value
C
Which policy consists of a declarations, and conditions, endorsements, and other attachments applicable to a single line of insurance A) Casualty B) Commercial package C) Monoline D) Insurance
C
Which type of commercial prime policy coverage is triggered by a loss that happens during the policy period but is no necessarily discovered during the policy period? A) Mysterious disappearance B) Discovery form C) Loss sustained form D) Retroactive form
C
Who is NOT insured for liability on a BAP? A) Anyone liable for the conduct of the insured B) The named insured in any covered auto C) The owner of a car the insured borrows D) Anyone using a covered auto with permission
C
All of the following are excluded in the equipment breakdown basic policy EXCEPT A) Ordinance or law coverage B) Business interruption C) Loss of power, lights, heat, steam, or refrigeration D) Explosion of steam boilers
D
A shipload of cement has been damaged by wait and has become concrete. According to general cargo insurance terms in Ocean Marine policies this is considered A) Adventure B) Demurrage C) Sympathetic damage D) Loss of species
D
A situation in which a person can only lose or have no change represents A) Speculative risk B) Adverse selection C) Hazard D) Pure risk
D
Any inducement offered in the sale of insurance products that is not specified in the policy is an unlawful practice known as A) Twisting B) False advertising C) Coercion D) Rebating
D
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? A) Defamation B) Coercion C) Misrepresentation D) False advertising
D
Employee theft coverage may be written as A) Blanket coverage B) Named schedule coverage C) Position schedule D) Any of the above
D
Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss? A) Utility service - time element B) Extra expenses C) Protective safeguards D) Utility service - direct damage
D
Frank's steak furnishes meat to steakhouses. An accident on the premises causes building to lose refrigeration for 32 hours. The State inspectors will opt allow the meat in the refrigeration units to be sold for human consumption, and frank loses $18500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss? a) Utility service - time element b) Extra expense c) Protective safeguards d) Utility service - direct damage
D
If an insured is in the process of moving to a new location his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for A) 60days B) 90days C) 5days D) 30days
D
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 A) After the contract expires B) Before the execution of the contract C) Before the contract expires D) After the execution of the contract
D
The farm liability additional coverage that excludes coverage that excludes coverage for borrowed farm equipment is the A) Supplementary payment coverage B) Medical liability coverage C) Bodily injury and property damage coverage D) Damage to property of others coverage
D
The most the insurer will pay for a loss under business owners policy is A 80% of the loss B 20% of the loss C the limit of insurance after the deductible is paid D the amount of loss minus the deductible
D
The term used to describe the cost and charges associated with the transfer of goods from one location to another is A) Transfer B) Cargo C) shipping D) Freight
D
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? A) 10days B) 15days C) 20days D) 30days
D
Voluntary Compensation Endorsement in workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what? A) The insured person must use the physician of the insurer's choosing B) The insured person must pay a deductible before medical care is received C) The insured person may file only one claim per year D) The insured person must relate the employer and the insurer from the further liability
D
What is a binder? A) A contract for lease of premises B) A condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure C) Written evidence showing the amounts and types of insurance provided by an insurance policy or policies that have been insured D) A temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being used
D
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 A) The amount specified in the policy under the additional coverage provisions B) The amount in excess of the policy's limits of liability C) A percentage of the loss as described on the declarations D) The excess over the self-insured retention
D
Which bond 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? A bail bonds B in junction bonds C cost buns D appeal bonds
D
Which employee fidelity bond pays no more than its limit of liability for each separate occurrence no matter that several separately identifiable employees were involved in a single loss? A) Blanket position B) Position schedule C) Individual D) Commercial blanket position
D
Which is the best example of an indirect loss? A)Sequential loss B)Liability loss C)Employee theft D)Loss of use
D
Which of the following examples of loss paid under HO-3 also would be paid under HO-2 homeowners policy? A) Damage to the dwelling caused by the insured when moving furniture B) Accidental scorching caused when a hot iron is placed upon a built-in counter top C) Interior damage caused by water seeping under the shingles on the roof D) Damage to the dwelling caused by ash or dust from a volcanic eruption
D
Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? A) Property of others B) Manuscripts C) Works of art or antiques D) Valuable paper and record
D
Which of the following is NOT true regarding consideration ina p&c policy? A)Part of the insured's consideration is the premium B)Part of the insured's consideration are the statements on the application C)Part of the company's consideration are the promises in the policy D)Part of the company's consideration is the payment of a claim
D
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? A) Concealment B) Indemnity C) Representation D) Warranty
D
Which of the following is the term used when a person, in fiduciary position, has used funds in manner for which they were not intended such as the wrongful taking or use of money belonging to another? A) Funneling B) Rebating C) Fiduciary capacity D) Misappropriation of funds
D
Which of the following options is available for eligible person who cannot obtain automobile coverage thought the voluntary market? A) AAA Auto club coverage B) The alabama uninsured motorist fund C) The alabama insurance guaranty association D) The alabama automobile insurance plan
D
Which of the following statement is true concerning underinsured motorist coverage under a personal auto policy? A) It will pay up to the limits of insurance for nay loss which involves an underinsured driver B) Limits must equal the bodily injury limits of the policy C) Limits may differ from the limits for uninsured motorist coverage D) Coverage applies only to the extent that the underinsured motorist limits exceed the bodily injury limits carried by the operator of the other vehicle
D
Which of the following would be considered an Insured under a business auto coverage form? A) The owner or anyone else from whom the named insured hires or borrows a covered auto B) Anyone using a covered auto while working in a business of selling, repairing, pr parking autos if it is no the named insured's business C) A partner of the named insured for any covered auto owned by that person or member of his or her household D) Anyone while using, with permission, a covered auto owned by the named insured
D
Which of the following would be covered under the Garage Liability Coverage form? A) Product recalls B) Fellow employee C) Loss of use D) Insured's business premises
D
