FINAL EXAM .

Melanie owns a set of 3 antique crystal vases that is worth $2,800, but during her most recent move, one of the vases was broken. Melanie and her insurer have been unable to find a replacement vase to complete the set and bring it back to its original value. Without the broken vase, the remainder of the set is only worth $1,000. What should Melanie receive from the insurer under the Pair and Set provision of her Personal Articles Floater?

$1,800

Both Steve and his wife, Arlene, carry DP-2 policies on their $135,000 home. Steve's policy has a limit of $108,000 and Arlene's has a $27,000 limit, and both policies pay on a pro rata basis. After a hailstorm causes $13,000 in damage to their roof, how much of the damage will be covered by Steve's policy (ignoring any deductible)?

$10,400

Jacob is severely injured at work and receives $600 per week in Temporary Total Disability benefits under his Workers' Compensation insurance for 8 weeks. After 8 weeks, Jacob dies from his injury. What is the highest total amount that his dependents could receive in Death benefits?

$145,200

Mark is driving along and looking for an address on the East side of Walker Street. As he squints to see the numbers posted on the buildings, he plows into the back of a car waiting at a stoplight. Both the driver and the passenger of the struck car are injured. The driver suffers $70,000 in bodily injury, the passenger suffers $65,000 in bodily injury, and the vehicle Mark hit sustains $30,000 in damage. Mark has liability coverage with split limits of 50/100/25, and both injured people carry the minimum PIP for Florida. How much will Mark be responsible for out-of-pocket after this accident?

$20,000

Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to buy a new one today. How much indemnification will Scott receive for this loss?

$22,500

Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation?

$25,000

Jane has a $150,000 homeowners policy with a 3% percentage deductible. One night, an oven fire destroys her kitchen, causing $50,000 in damage. How much of the damage falls under Jane's responsibility?

$4,500

Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. How much will the primary policy pay for the injuries?

$50,000

How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage in a homeowners policy?

$500

The BOP provides loss of income on an "actual loss" sustained basis for up to:

. 12 months.

Jerry is an adjuster and has signed a contract with ABC Insurance to adjust claims in an area recently devastated by a hurricane. Jerry receives the claims from ABC Insurance, completes the inspections, and settles claims on behalf of ABC Insurance according to his contract. What type of authority has ABC Insurance given Jerry?

. Express authority

Hank has collision coverage with a $2,000 deductible on his 2010 truck. One dark, rainy night, Hank's truck slips off the road and rolls over down the embankment. The truck sustains $45,000 in damages, but the actual cash value of the vehicle is only $25,000. Which of the following statements is TRUE?

. Hank will be indemnified by his insurer for $23,000.

Coverage C - Personal Property of a homeowners policy typically excludes:

. fish.

A stand alone excess liability policy:

. follows a base policy, but may have different exclusions and limitations.

Tim is the plaintiff in a case involving an auto accident. To recover monies he feels are due him, Tim produces documents to prove he had to pay over $55,000 in medical bills. If the court were to award Tim $55,000, the damages would be classified as:

. special damages.

After an insurance claim has been filed in Florida, how soon must the insurer respond to the claim?

14 days

Under the Earthquake and Volcanic Eruption endorsement in a commercial property policy, what is the time span within which multiple earthquake or volcanic events are considered a "single occurrence" for coverage purposes?

168 hours 7 days

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will pay for Jerome's injuries?

25,000

According to the commercial property policy, a commercial building is considered vacant if less than ____ of the available square footage is occupied for ____

31%, 60

Grace purchased a recliner from XYZ Furniture. After getting it home, she decided to try out the new chair. While leaning back, the chair breaks and Grace injures her neck. She sues XYZ Furniture and is awarded $300,000. The costs for the legal defense come to $45,000. XYZ Furniture's CGL policy has a Products-Completed Operations Aggregate limit of $750,000, with a per occurrence limit of $250,000. How much will XYZ Furniture have to pay out-of-pocket for this claim?

50,000

Stephanie owns a house that she rents out for $2,500 a month. A massive kitchen fire forces her tenants to move out while the interior is overhauled. After two months, the repairs are complete, and Stephanie contacts her tenants, only to find that they've found a new place to live. It takes Stephanie another month and a half to find new tenants. Assuming that Stephanie had a $100,000 DP-2 policy, what is the maximum amount she could receive for lost rental income under Coverage D?

5000

Which of the following professionals would be most likely to purchase malpractice insurance?

A Lawyer

Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy?

A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006.

Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession?

Bailee Coverage

Which of the following lines of coverage could be found in a Commercial Package Policy?

Business Auto insurance

This type of agent works for only one insurer and is paid on commission.

Captive Agent

On January 27, 2004, Ryan was using an exercise bike from NusquamCycle when the chain broke, causing him to fall and bruise his knee. Seven years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration was probably caused by his bruise from the exercise bike. Assuming NusquamCycle is no longer in business, which CGL policy would cover Ryan's claim filed on January 25, 2011?

Claims-Made policy from Jan 1 2003-Jan 1 2004 with a supplemental extended tail

Acme Insurance Group agrees to act as a surety to Willis Construction in the development and construction of a new shopping mall. As a condition of the agreement, Acme Insurance Group requires Willis Construction to post $500,000 in a bank account controlled by Acme Insurance Group. If Willis Construction completes their obligation, Acme Insurance Group will return the cash to Willis Construction. What would we call the $500,000 in the bank account?

Collateral

Which of these is NOT a party to a surety bond?

Collateral

D'Anton spills coffee in his lap while driving, causing him to veer off the road and smash into a telephone pole. Which part of his Auto Insurance Policy will help him pay for the repairs to his car?

Collision Coverage

States that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund are called:

Competitive.

Wendy hires Jim to build an addition to her house. Jim takes the job and finishes it in good time. Unfortunately, as Wendy is walking across the threshold of the new addition, a floorboard gives way and Wendy falls into the crawl-space below, injuring her leg and back. Which commercial general liability coverage could help cover the cost of Wendy's injuries?

Completed Operations Liability

Honey's Bakery is a local coffee shop run by two sisters. In a rush to leave one afternoon, their new employee forgets to turn off the gas stove. The leaking gas causes an explosion, destroying the kitchen. Which condition in their commercial property policy could help the sisters cover the cost of the damage?

Control of Property

Cameron is fully insured by a DP-2 on his $130,000 home. His monthly mortgage payment is $775 per month, and he usually pays $400 per month in groceries. When a kitchen fire damages his house, causing $61,000 in damage, he is forced to move out for a month while the repairs can be made. Cameron's hotel bill for the month comes to $1,250 and he spends $600 eating at restaurants. Based only on this information, how much indemnification can Cameron expect to receive for this claim?

Coverage A - $61,000; Coverage E - $1,450

A CGL can provide liability insurance coverage for all of the following persons, EXCEPT:

Customers

This agent is a salaried employee who sells insurance products for only one insurer.

Direct Writer

Dr. Adams is in the middle of a malpractice lawsuit. Her insurer decides it will be more cost effective to simply settle the suit rather than draw the process out over several months. Assuming Dr. Adams holds a Professional Liability Policy, which of the following statements is TRUE in regards to settling the claim?

Dr. Adams' insurer must seek her consent before settling the claim.

Tim, taking advantage of the economic downturn, started a business buying gold and silver from people who needed cash. Tim and one employee negotiated deals with sellers in the front of the shop, while another employee worked in the back of the shop, where she counted the money and kept the books. Which commercial crime coverage would protect Tim from losses resulting from theft, specifically by either his current money counter or any other money counter he may employee after her?

Employee theft: scheduled positions

Jane caused an auto accident while driving the company vehicle for work. Unfortunately, the van she ran into was carrying 6 passengers, all of whom were injured in the accident. The total of everyone's injuries comes to $210,000. Jane's company's business auto policy only covers up to $100,000 in bodily injury per accident. Which of the following might help cover the remaining liability caused by Jane's accident?

Excess liability policy

Martin regularly travels much of the state for work, so his employer has given him a company car. Which endorsement to Martin's PAP would provide him with liability coverage for the company car?

Extended Non-Owner

This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo.

General Average

Anton is purchasing homeowner's insurance for his new house. He wants to make sure his policy offers the BEST coverage available. Which policy should Anton choose?

HO-5

Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement?

HO-5

Under which law is an insurer required to explain its reasons for denying coverage?

IIPPA

When discussing farm insurance, which of the following most accurately describes "scheduled property"?

Itemized property

Strong winds have torn a hole in Janet's roof. On top of that, heavy rain is expected in her area in the next few days. Figuring it would simply be too much effort to put a tarp over the hole in her roof, Janet elects to do nothing. The rains come and destroy several of her possessions inside her home. Janet files a claim with her insurer for the losses, but it comes back denied. This is because:

Janet failed to make a reasonable effort to protect the property from further damages.

Nancy and Drew borrow Joe's car so they can have a picnic at the old water tower. On their way to the picnic, Drew accidentally rear-ends Mr. Jackley, causing $2,900 in damage. Whose liability insurance will pay first for the damages?

Joes

Which of the following losses may qualify for coverage under Coverage F - Medical Payments?

Kevin accidentally shoots himself in the foot with a nail gun while he is helping Joe build a deck in Joe's backyard

After Tony, the owner of XYZ Cleaners, accidentally starts a fire, XYZ Cleaners burns to the ground, taking all the garments with it. Afterwards, Tony has to rent a new building and purchase new equipment and supplies. He is also responsible for all the clothing that was in his care. Which type of coverage in his commercial property policy could help Tony with the cost of paying for his customers' destroyed clothing?

Legal Liability Coverage

Mark is on vacation in Italy when his luggage is stolen, including a $2,000 laptop, a $500 suitcase, and $400 in clothes. Mark has an HO-3 homeowners policy. Excluding any applicable deductible, which of the following statements is TRUE?

Mark's homeowners policy will cover $2,400 of this loss.

Which policy is used as an alternative to the Trucker's Policy to cover companies that offer transportation services to the public on a regular basis, rather than for hire?

Motor Carrier Policy

Nick has a comprehensive individual health insurance policy that he purchased through an HMO, and Charity has a PPO plan through her employer. Which of the following statements is TRUE?

Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.

Babette crosses the street and is struck by a car, causing her to sustain injuries in the amount of $45,000. The driver has minimum coverage. Which coverage section of Babette's auto policy could help pay for her medical costs?

Part B: Medical Payments

When a flood inundates Paul's property, it causes $190,000 in damage to his home and $18,000 in damage to his detached garage. Paul has a Dwelling Form flood policy with a $200,000 limit. How much coverage should Paul use for his garage if he wants to have enough coverage to repair his home completely?

Paul should apply 5% to his garage and the remainder to the home.

In a Personal Auto Policy, deductibles are applied on a/an ________ basis.

Per Claim

Jim has two policies that cover the same risk, but they respond differently: Policy X is primary and Policy Z is excess. Policy X has a limit of $50,000 and Policy Z has a limit of $25,000. When Jim suffers an insured loss totaling $62,000, how will each policy respond?

Policy X will pay $50,000 and Policy Z will pay $12,000

Which of the following people committed soft fraud?

Rafael accidentally slipped on a wet floor at the supermarket. Although his only injury was a sprained ankle, he claimed he had back and neck pain when he sued the supermarket in an effort to get more money in the settlement.

Which of the following would be most likely to purchase an Errors and Omissions policy?

Real Estate Agent

Monica's husband, Sam, likes to buy her expensive jewelry, and she has amassed quite the collection over the years. What endorsement would Monica and Sam need to add to their homeowners policy to fully cover Monica's jewelry collection?

Scheduled Personal Property

Which of the following would you find in the Conditions section of an insurance policy?

The insured's duty after a loss

Jared recently purchased a 25 foot watercraft with a 250 horsepower motor. While cruising on the lake, he accidentally runs into Gary's boat, causing $2,500 in damage to Gary's hull. How will Jared's insurer respond when Gary files a claim against Jared's homeowners policy for the damage he caused?

The insurer will deny the claim because Jared's boat is excluded from his liability coverage.

After a rain storm, Nancy realizes that she left her bedroom windows open the entire time. Now there is extensive water damage to her area rug and furniture, and the laptop that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners policy, so she calls her insurance company and files a claim. What is the likely result of Nancy's claim?

The insurer will not cover any of the damage, since Nancy left the windows open.

Craig has a poor driving record. He lives in Florida, has a valid driver license, and has registered his car, but due to his history, he is unable to obtain auto insurance through the private market. According to state law, Craig must have liability insurance in order to drive on public roads. How will Craig be able to purchase coverage?

Through the Florida Automobile Joint Underwriting Association

Which of the following is NOT a purpose of insurance regulation?

To prohibit insurance-rating

Randy runs a business where he takes on the possessions of others and transports them from one location to another in exchange for a fee. What type of occupation does Randy have?

Trucker

Which of the following statements applies to replacement cost valuation?

Under replacement cost valuation, insurers may safeguard the principle of indemnity by requiring policyholders to replace insured items before making full reparations.

Which of the following BEST describes the insurance provided by residual market insurance programs?

Usually a "last resort" form of insurance

What BOP endorsement would cover a company's lost business income and extra expense due to loss of electrical service?

Utility Time Element

Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn with a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. When will Steve receive full indemnification for his losses on the barn?

When he replaces the barn and submits receipts to the insurer

Phil owns a public pool. One day, Phil has an altercation with a woman visiting the pool. Phil doesn't like the way she looks, so he tells her that she has to leave the premises right away. The woman takes Phil to court for violating her civil rights. This is an example of what type of personal injury covered under Phil's Commercial General Liability policy?

Wrongful Eviction

A dwelling policy would NOT be appropriate for:

a motorhome owned by an individual.

Frank owns a bakery specializing in authentic French bread. He uses two specialty ovens for his daily production of French bread. If one of these giant ovens were to break down, it would cost Frank's bakery a lot of money to repair, not to mention the loss of revenue caused by lower production. On his Equipment Breakdown Protection Form, each of Frank's ovens would be considered:

a object

Participation in the Florida Automobile Joint Underwriting Association is mandatory for:

all insurers who can sell auto insurance in Florida.

In a personal auto policy, the Miscellaneous Vehicle Coverage endorsement:

allows coverage to be added for motorcycles and motor homes.

Liability coverage in a BOP is provided on:

an occurrence basis, only.

The Office of Insurance Regulation:

approves insurance forms.

An injured employee's PPI rating (or Impairment rating) is NOT:

awarded before the employee reaches his Maximum Medical Improvement.

According to the state of Florida, the term "wind mitigation" most closely refers to:

building materials, techniques, and tools used to reduce the damage from a major hurricane.

A CGL can provide liability insurance coverage for all of the following persons, EXCEPT:

customers.

Phil heads over to visit his friend Josh, who is sick with the flu. While at the house, Josh fails to cover his mouth when he coughs and Phil ends up contacting the flu. Phil files a claim with Josh's insurer for medical expenses and lost income while Phil is out sick from work. The insurer denies the claim because:

disease transmitted from the insured to a third party is excluded.

A large corporation owns a small hunting cabin in the woods, that it uses for occasional weekend getaways. The corporation can insure the cabin against property damage with a:

dwelling policy.

An insurer that adheres to the laws of a state but is located outside of that state is called a(n) ___________ insurer.

foreign

A customer representative's duties include:

giving customers information about their policies.

Jackie lives in an area recently devastated by a hurricane and has filed a claim with her insurance company, ABC Insurance. Jerry, an adjuster contracted by ABC Insurance, pulls up to Jackie's house in a truck with the ABC Insurance logo on the side, and wearing a shirt with the ABC Insurance logo on the front. Although Jackie doesn't know that Jerry is contracted by ABC Insurance, she has reason to believe he has the authority to adjust her claim. This is an example of:

implied authority.

After a loss covered under a dwelling policy, Ordinance or Law coverage pays for:

increased repair costs due to laws or codes.

XYZ Films is getting ready to shoot a new Western film. As with most film productions, XYZ Films uses a surety bond from ABC Bonds to help protect the distributor's financial investment in the movie. Because of the magnitude of the budget for the film, ABC Bonds has XYZ Films secure a/an _____________ to act as a co-signer.

indemnitor

Residual market insurance programs are funded by:

insurers and their policyholders.

Customer representatives:

must be licensed by the Florida Department of Financial Services

The factual statements of the insured upon which an insurance policy is based are called:

representations.

Six Stars Development Company has just purchased several large properties in Las Vegas. As a result of this large purchase, they are a little short on money and decide to save money by not purchasing insurance on their new properties. Six Stars is practicing:

risk retention.

In a Commercial Crime policy, a "messenger" is defined as:

the insured or relative of the insured, a business partner, or an employee who has care and custody of insured property while outside the premises.

Veronica owns a pottery business and is insured under a commercial property policy. She was in the process of building an extra structure for the sole purpose of kiln firing her pottery, but after 40 days of waiting for it to be completed, she moved her business to a new location without any intention of moving back. Her Builder's Risk Coverage Form was terminated because:

the property is abandoned.

A Discovery Form Commercial Crime policy can apply to losses discovered during the policy period, as well as up to how many days after its expiration date?

up to 60 days