ExamFx: Property Exam Questions

An agent who offers a cash reward to a prospect for buying a policy is guilty of? A: Coercion B: Twisting C: Controlled business D: Rebating

A

The basic dwelling (DP-1) provides all of the following coverages without endorsement EXCEPT? A: Additional Living Expenses B: Fair Rental Value C: Dwelling D: Other structures

A

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is? A: Equal to the amount provided as Coverage B B: Equal to the amount provided as Coverage A C: 50% of the amount provided as Coverage B D: 50% of the amount provided as Coverage A

D

Under which of the following circumstances would a loss be covered under an HO-2 policy form? A: Rain enters a house through an open door, warping the wooden floors B: An insured drives a car into a wooden plat fence on the insureds property C: A house that has been vacant for 65 days is damaged when a water heater bursts D: A hail storm pokes a hole in a roof and a bedroom has hail damage

D

Which Commercial property causes of loss form covers all losses not otherwise excluded in the policy? A: Modified Form B: Basic Form C: Broad Form D: Special Form

D

Which of the following entities is eligible for a business owners policy? A: Amusement parks b: Automobile sales and servicing operations C: Manufacturing operations D: Convince stores

D

Which of the following homeowners forms would be best for a person renting half of a duplex? A: Unit-owners for (HO-6) B: Broad form (HO-2) C: Special form (HO-3) D: Contents broad form (HO-4)

D

Under businessowners policy Section I, if an insurer wants to cancel a policy for any reason except no payment or premium, how many days before the expiration date must the insurer notify the mortgageholder? A: 30 days B: 90 days C: 20 days D: 40 days

A

Which of the following dwelling policies insures a structure on an actual cash value basis? A: DP-1 B: DP-2 C: DP-3 D: DP-6

A

Which of the following other coverages is NOT included in the basic form dwelling policy? A: Breakage of glass B: Removal Coverage C: Personal property temporarily away from the insured premises D: Tenant's improvements, altercations, and additions

A

Which of the following types of insurance would be covered by the North Carolina Post-Assessment Insurance Guaranty Association? A: Automobile policies B: Life Insurance C: Mortgage insurance D: Surety bonds

A

Which of the following types of property would be covered in homeowners coverage form? A: Landlords furnishings in an on-premises apartment B: Structers used for business purposes C: Structured rented to others who are not tenants of the dwelling D: Animals, birds, or fish

A

Which of the following is an advantage of a businessowners policy? A: It offers lower rates to bars and grills B: It combines property and liability coverage in a single package C: It is a monoline policy D: It splits premiums, allowing an insured more flexibility regarding coverage

D

Which of the following perils is excluded in all dwelling policy forms? A: Volcanic Eruption B: Freezing C: Collapse D: Government Action

D

A basic dwelling policy automatically provides coverage against fire, lightening, and ? A: Windstorm B: Internal Explosion C: Riot D: Smoke

B

A homeowner lives in a 150-year-old adobe building that is on the National Register of Historic Places. The homeowner has a HO-8 coverage. If a fire destroys part of the roof, which of the following describes the insurer's responsibility? A: Replacement of the roof to the condition prior to the fire B: Full roof replacement to current code specifications C: Partial roof replacement to current code specifications D: None

B

All of the following are exclusions that apply in all three types of Dwelling Policies EXCEPT? A: Earth movement B: Fire or lightening C: Government action D: water damage

B

All of the following are other coverages under the dwelling policy EXCEPT? A: Improvements, altercations, and additions B: Earth Movement C: Other structures D: Debris removal

B

All of the following help determine flood insurance rates EXCEPT? A: zone classifications B: Simple flood definitions C: Pre-FIRM rates D: Post-FIRM rates

B

An installation floater is used to insure? A: Dams, power plants, water plants, and other such installations B: Appliances intended to become a permanent part of the building C: Buildings under construction D: All types of for-sale merchandise

B

An insured's homeowners policy covers an antique dining set. After a water pipe burst, the insured moves the set to a storage shed to protect it from water damage. What is the longest period of time the homeowners policy will extend coverage to the dining set? A: 14 Days B: 30 Days C: 45 Days D: 60 Days

B

How are premiums handled on a prepackage business owners policy? A: Property premiums are set at a fixed rate, while liability premiums increase over time B: There is one premium for property and liability coverage C: Only property coverage requires premium payments D: Premiums may very between property and liability coverage

B

How many years from the cancellation or nonrenewal of a commercial property policy may an insurer audit the books or records of the insured? A: 1 year B: 3 years C: 5 years D: Indefinitely

B

In homeowners policy, coverage for a loss by theft of firearms is? A: 10% of Coverage C, up to $5,000 B: 10% of Coverage C, up to $10,000 C: 25% of Coverage C, up to $10,000 D: $25,000

B

Section I of a homeowners policy would cover which of the following? A: Liability B: Personal Property C: Loss of income D: Personal Injury

B

The perils covered by the beach area property plan include all of the following EXCEPT? A: Fire B: Flood C: Lightening

B

Which of the following commercial forms would cover costs associated with a temporary worksite while damaged to an office building are being repaired? A: Builders risk B: Business Income C: Legal Liability D: Extra Expense

B

Which of the following could be covered on a basic dwelling policy form if purchased? A: Hail damage to a dwelling's outside antenna B: Smoke damage from fireplace use C: Damage from broken water pipes D: Damage from vandalism to a property that has been vacant for 45 days

B

Which of the following is covered under a dwelling policy? A: Structures used for commercial manufacturing B: Fire caused by an earthquake C: freezing of plumbing systems D: Flood or surface water

B

Which type of losses are covered by the standard policy? A: Indirect Losses B: Direct Losses C: Both D: Neither

B

A company has a business owners 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? A: Up to $300,000 for the loss B: Up to $150,000 for the loss C: The coinsurance formula would apply D: Nothing because the company failed to carry the required insurance amount

C

All of the following are grounds for license suspension revocation or refusal EXCEPT? A: Having committed any insurance unfair trade practice B: Making an untrue statement on the license application C: Sharing commissions with another agent D: Failure to pay child support

C

An agent in Ohio wants to become an agent in North Carolina. The Commissioner will waive certain examination requirements, provides that Ohio would waive these same requirements if a North Carolina agent sought licensure in Ohio. What term does this describe? A: Rebating B: Indemnity C: Reciprocity D: Residency

C

An insured has a homeowners policy and repairs her 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 $1,200 for her community share of the rebuilding cost. How much of the assessment will the homeowners policy pay? A: None B: $500 C: $1,000 D: $1,200

C

An insured loses $2,500 worth of precious stones in a burglary. How much will the insured's homeowners policy cover? A: Nothing B: $1,250 C: $1,500 D: $2,500

C

Denying insurance coverage on the basis of a person's marital status is? A: Allowed with the insurance commissioners approval B: Allowed under state law C: Considered unfair discrimination D: Considered a category D felony

C

Events or conditions that increase the chances of an insured loss occurring are referred to as? A: Risks B: Perils C: Hazards D: Exposures

C

If required, advertisement's must be filed for review at least how many days before the insurer can use them? A: 10 days B: 15 days C: 30 days D: 45 days

C

In which of the following situations would a property be considered unoccupied? A: A new apartment building has been insured, but no dwellers have moved in yet? B: A building has been condemned and emptied of all property C: The insured went on vacation for a month while the house remained empty D: The insured moved out and removed all the furniture from the house 3 months ago

C

Statements made by an applicant for an insurance policy that are the best of the applicants knowledge are referred to as? A: Indemnity B: Warranties C: Representations D: Material Information

C

To be eligible for coverage under a BOP, an office building cannot exceed how much in square footage? A: 3,00 B: 50,000 C: 100,000 D: 300,000

C

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy? A: The loss reimbursement is paid to the insured B: The loss reimbursement is not awarded if damages arose from the insureds negligence C: The loss reimbursement is paid to the mortgagee D: The mortgagee is prohibited from bringing a suit against the insurer

C

Which of the following commercial property causes of loss forms explicitly covers damages from falling objects? A: General Form B: Basic form C: Broad form D: Special Form

C

Which of the following commercial property condition forms ensure that any adjustments to the coverage by an insurer must apply to all existing policies? A: Subrogation B: Legal action against an insurer C: Liberalization's D: Other Insurance

C

Which of the following coverages in the dwelling policy is for indirect losses? A: Personal Property B: Dwelling C: Additional Living Expenses D: Other Structures

C

A building contractor constructs a rental property home using "straw-blue" construction that does not conform to standard building codes. The contractor, who is also the owner, does not want insurance on the building but wants coverage on as many other things as he can get. What coverage plan should be a producer recommend? A: HO-2 B: HO-4 C: HO-5 D: Coverage cannot be extended on this structure

D

A couple has just purchased a condominium. Which of the following policies would they use to insure their dwelling? A: HO-2 B: HO-4 C: HO-5 D: HO-6

D

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended is known as ? A: Peril B: Loss Valuation C: Liability D: Accident

D

After receiving proof of loss from an insured, an insurer must notify the insured of its intent to repair or replace damaged or lost property within? A: 10 days B: 20 Days C: 30 days D: 60 days

D

All insurers must keep records of each complaint received and the insurers response for ? A: 1 year B: 2 years C: 3 years D: 5 years

D

All of the following are characteristics of the dwelling policy EXECPT? A: Coverage includes the dwelling only, contents only, or both B: Incidental occupancy of limited service-type exposure is permitted C: Dwellings up to four family units are eligible D: The dwelling must be owner-occupied

D

How soon after a direct physical loss would the period of restoration begin under the extra expense coverage form of a CPP? A: Immediately B: 24 Hours C: 48 Hours D: 72 Hours

D

In homeowners policies, indirect losses are covered by? A: Coverage A B: Coverage B C: Coverage C D: Coverage D

D

In insurance contracts, consideration on the part of the insured is? A: Warranties made in the application B: The submission of proof of loss C: Transferring policy rights to another person D: The payment of premiums and representations made in the application

D

In order for a dwelling to be covered on a replacement cost basis, the dwelling must be insured up to at least? A: 20% of the replacement cost B: 40% of the replacement cost C: 60% of the replacement cost D: 80% of the replacement cost

D

In order to be granted a nonresident license, individuals must meet all of the following requirements EXCEPT? A: Pay the required application fees B: Be licensed in their home state for the lines of insurance in which they are seeking non-resident license C: Be from a state with a reciprocal agreement with North Carolina D: Be registered to vote

D

What organization is responsible for administering the plan that ensures access to property insurance for beach properties? A: Division of Insurance B: Post-Assessment Guaranty Association C: North Carolina Insurance Underwriting Association D: FAIR Plan

C

An insurance broker represents? A: The beneficiaries B: Other agents C: The insurer D: The insured

D

All of the following actions are prohibited in the sale of life insurance EXCEPT? A: Sharing commissions from the sale of a life policy with another life agent B: Paying anything of value to the insured that is not specified in the contract C: Offering shares of stock in the insurer as an inducement to buy insurance D: Giving a special advantage as an inducement to buy insurance

A

All of the following are duties of the insured following a loss in a standard fire policy EXCEPT? A: Submit a signed proof of loss within 30 days B: Furnish a complete, detailed inventory including values C: Notify the insurer in writing immediately following the loss D: Protect the property from further damage

A

All of the following practices would be prohibited EXCEPT? A: Projecting a dividend on a participating policy B: Misrepresentation of the effects of a loan on a policy C: Using a misleading name for a policy D: Misrepresentation of the benefits or terms of any insurance policy

A

An agent who offers a cash reward to a prospect for buying a policy is guilty of? A: Rebating B: Coercoin C: Twisting D: Controlled business

A

An earthquake does $5,00 in damage to a property covered under as dwelling policy. In addition to the initial earthquake damage, the tremors cause a gas main explosion, causing an additional $2,500 in damage to the insured Property. How much will the insurer pay? A: Nothing B: $2,500 C: $5,000 D: $7,500

A

An insurance agent who embezzles a client's monies is guilty of? A: A Felony B: A misdemeanor C: Fraud D: Perjury

A

Eligibility requirements for obtaining property coverage in the FAIR Plan include all of the following EXCEPT? A: Property at risk must be owner occupied B: Risk must be insurable C: The applicant must have made an unsuccessful effort to obtain coverage in the normal market D: Risk must be located in a specific area

A

From the date of the loss, how many years does an insured have to file a lawsuit against a homeowners insurer? A: 1 year B: 2 year C: 3 year D: 5 year

A

If a licensee is convicted in any court for any offense, other than a traffic violation, the licensee must notify the Commissioner within how many days of the conviction date? A: 10 days B: 15 days C: 30 days D: 31 days

A

If a licensee is convicted in any court for any offense, other than a traffic violation, the licensee must notify the Commissioner within how many days of the conviction date? A: 10 days B: 30 days C: 20 days D: 15 days

A

If a person holding a resident insurance license moves out of state, that person must surrender his or her license to the Commissioner within how many days of terminating their residence? A: 30 days B: 60 days C: 90 days D: 180 days

A

In property and casualty terms, continues or repeated exposure to conditions resulting in damage to property is called? A: Occurrence B: Hazard C: Indirect Loss D: Accident

A

Insurance is the transfer of risk of ? A: Loss B: Risk C: Hazards

A

The appraisal clause of the standard fire policy allows for the process of setting disputes over the ACV of the property or the property or the amount of loss. When disputes arise, each party (insurer and the insured) must select an impartial appraisal within? A: 20 days B: 30 days C: 45 days D: 10 days

A

The term "essential insurance coverage" as defined by the North Carolina Insurance Association refers to? A: Insurance against direct loss to property as defined in the standard statutory fire policy and extended coverage, vandalism and malicious mischief endorsements B: All risk coverage to include business owners policies, commercial general liability policies, and business income policies C: Catastrophic losses, as determined by the Association and approved by the Commissioner, that are covered under the windstorm and hail coverage in the beach and coastal area D: Policies of windstorm and hail insurance that are available only for risks in the beach and coastal areas

A

Which of the following is NOT a coverage part of a commercial package policy? A: Personal article floated B: Inland marine C: Commercial auto D: Equipment breakdown

A

Which of the following is not consider a rebate? a. Offering a client a multi-policy discount b. Returning part of your premium to your client c. Any inducement to buy that is not stated in the policy d. Giving clients who buy policies from you $100 gift cards

A

Which of the following limitations does a homeowners policy place on a home-run business? A: An additional premium is charged based on the income of a home-run business B: There can be no more than 2 people working at any one time C: The business is limited to $10,000 in retail sales D: The home business may operate only between the hours of 7am and 6pm local time

A

A home insured on an HO-3 policy was completely destroyed in a fire. The house was worth $300,000. The limit of the policy is $250,000. The policy will pay for the total loss & debris removal is? A: $250,000 B: $250,000 plus an additional 5% C: $300,000 D: $300,000 minus 5%

B

Under a broad form dwelling policy, frozen water pipes will be covered? A: if the plumbing had been installed within the past 3 years B: If the insured took steps to ensure that the water pipes would not freeze C: If the outside temperature reached 20 degrees of colder D: Under all circumstances

B

Which of the following business owners policy (BOP) endorsements provides coverage for the inability to collect monies due from customers as the result of a covered cause of loss? A: Valuable papers and records B: Accounts receivable C: Money and security D: Extortion

B

Which of the following is the Fair Rental Value Coverage in the dwelling policy? A: coverage C B: Coverage D C: Coverage E D: Coverage F

B

Which of the following sections of a contract contains the insurers promise to pay in the event of a loss? A: Declarations B: Insuring Agreement C: Endorsements D: Conditions

B

Which of the following would be eligible for coverage under a dwelling property policy? A: The acreage on which an apartment complex is built B: A house divided into 3 apartments C: A single-family house with 7 boarders D: A mobile home divided into 2 rental units

B

A policyowner has terminated an insurance policy. The insurer must maintain records for at least how long? A: 2 years B: 3 years C: 5 years D: 7 years

C

All of the following actions are prohibited in the sale of life insurance EXCEPT? A: Offering shares of stock in the insurer as an inducement to buy insurance B: Giving a special advantage as an inducement to buy insurance C: Sharing commissions from the sale of a life policy with another life agent D: Paying anything to value of the insured that is not specified in the contract

C

If a claim under a commercial property policy is disputed, what is the maximum time period an insured may bring legal action against an insurer? A: 2 years from a loss B: 6 years From a Loss C: 5 years from the initial application D: 10 years from the initial application

C

Maps that indicate which areas in the community are subject to serve flooding are called? A: Flood Susceptibility Maps B: Topographical Representations C: Flood Hazard Boundary Maps D: Flood Insurance Rate Maps

C

On behalf and on request of an insurer by which an agent or limited representative is appointed, the agent or limited representative may from time to time act as an adjuster and investigate and report upon claims: however he may do so? A: Only on an emergency basis while in a nonresident status B: After completion of 16 hours of continuing education credit toward an adjuster license C: Without being licensed as an adjuster D: Only after being certified to be competent for such services by the Commissioner

C

Replacement cost coverage is provided in both the broad and special form dwelling policies when? A: The amount of insurance on the dwelling is at least 90% of its replacement cost when the policy is written B: The dwelling is insured for 100% of its replacement cost at the time of a loss C: The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss D: The amount of insurance on both the dwelling and personal property is at least 80% of its replacement cost when the policy is written

C

The Commissioner of Insurance is? A: Elected by authorized insurers B: Elected by the people of North Carolina C: Appointed by the governor D: Appointed by the Attorney General

C

The main difference between an HO-4 and 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

Which of the following refers to the upper limit a liability policy will pay out for all claims that arise from a single accident? A: Split limits B: Per Person C: Per occurrence D: Combined single limits

C

Which of the following would NOT be covered under a dwelling property policy? A: Residence occupied by both an owner and a tenant B: Residences undergoing construction C: A farm used to raise and sell cattle D: A vacation rental that is unoccupied for 3 or more months a year

C

An individuals construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? A: Bailee's customers form B: Builders Risk form C: General property form D: Contractors equipment floater

D

An ocean marine loss that occurs through the voluntary sacrifice of a part of the vessel or cargo to save the ship, crew, or other cargo is known as? A: Particular average B: Inchmaree clause C: Protection and indemnity D: General average

D

If an insured changes his/her name, the change may be reflected on the insurance policy by attaching what to the policy? A: An additional coverage form B: A notarized authorization C: An additional insuring agreement D: A signed endorsement

D

If an insurer makes a statement misrepresenting or incompletely comparing the terms of any insurance policy to induce a policyholder to drop an existing policy, what unfair practice has occurred? A: Fraud B: Embezzlement C: Defamation D: Twisting

D

The Fair Access to Insurance Requirements (FAIR) plan is designed to? A: allow insurers to participate, at their option, in doing the right thing for consumers B: Create shared market to provide fire and extended coverage insurance to individuals unable to obtain this coverage through the standard marketplace C: Insure beach and coastal properties D: Help persons who cannot afford property coverage such coverage

D

The law of large numbers is best defined as a large numbers of people with similar exposures to loss resulting in actual losses being? A: Less predictable B: Smaller C: Larger D: More Predictable

D

The most the insurer will pay for a loss under a business policy is? A: The amount of the loss minus the deductible B: 80% of the loss C: 20% of the loss D: The limit of insurance after the deductible is paid

D

Which of the following perils in NOT covered the DP-2? A: Damage caused by burglars B: Damage caused by the weight of ice and snow C: Damaged caused by falling objects D: Damage to pets, birds, or fish

D