FL Martins Quiz
Regina rents a car while her car is undergoing repairs. Unless an endorsement changes the limits, Regina's personal auto policy (PAP) will cover her auto rental expenses up to: $20 per day with a $500 maximum $50 per day with a $500 maximum $20 per day with a $600 maximum $75 per day with a $600 maximum
$20 per day with a $600 maximum
In which case would a garage coverage form NOT protect the named insured?Single choice. A customer buys a car that rapidly depreciates in value. A customer slips and falls on a wet floor at an auto dealership. A customer is injured in a crash after a garage replaces his brake shoes. A customer is injured by a pest control service spray used at an auto dealership.
A customer buys a car that rapidly depreciates in value.
7.Which statement does NOT describe the standard Medicare supplement plans? Plans B through N include Plan A's core benefits. Plan A provides the basic core benefits. A plan may be cancelled if the insured's health significantly deteriorates. Insurers selling Medicare supplement policies must offer Plan A.
A plan may be cancelled if the insured's health significantly deteriorates. Plans B through N contain the core benefits of Plan A plus additional benefits.
Within the body of an insurance policy, what word or phrase refers specifically to the named insured? "the insured" "you" "the insurer" "we"
"you"
What is the purpose of endorsements in a property and/or liability insurance policy? They list the names of famous celebrities who own that type of policy. They contain information unique to a particular policy, such as the name of the insured. They modify the provisions in the policy form. They are the documents that the insurance agent countersigns to validate the policy.
They modify the provisions in the policy form.
According to the Securities and Exchange Commission, which of the following allows one to invest in another person's life insurance policy? an annuity a beneficiary designation a claims settlement a viatical settlement
a viatical settlement
Which health insurance policy pays a benefit if the insured dies or is dismembered because of an accident? disability income policy Medicare supplement policy medical expense policy accidental death and dismemberment (AD&D) policy
accidental death and dismemberment (AD&D) policy Accidental death and dismemberment policies provide a benefit if the insured dies or is severely injured because of an accident.
Underinsured motorists (UIM) coverage protects an insured in an accident caused by a motorist who: has coverage limits that are lower than the insured's UM/UIM limits is not legally responsible for causing the accident has no auto liability insurance is driving a rental car
has coverage limits that are lower than the insured's UM/UIM limits
If a producer does not properly and thoroughly represent an insurance contract or product, his or her failure to do so may be construed as twisting misrepresentation pyramid sales and marketing bait and switch
misrepresentation Failure of a producer to properly and thoroughly represent an insurance contract or product may be construed as misrepresentation. Making misrepresentations about an insurance policy or contract is both illegal and unethical.
Which kinds of health care providers contract with a PPO? medical schools and internship hospitals private clinics and institutional care providers physicians, hospitals, and clinics surgeons and end-stage care specialists
physicians, hospitals, and clinics Physicians, hospitals, and clinics are examples of health care providers that contract with a PPO.
Equipment breakdown coverage typically insures damaged equipment at what value? cash value market value actual value replacement value
replacement value
Pierre does not want collision coverage on the older vehicles in his fleet, so his business auto policy (BAP) lets him choose the vehicles that will have this coverage. Which symbol indicates this? symbol 3 symbol 4 symbol 7 symbol 1
symbol 7
Cyril makes most of his deliveries in his company van, but he occasionally borrows another company's truck to deliver large items. His business auto policy (BAP) covers his use of the truck for any coverage that lists either symbol 1 or: symbol 7 symbol 8 symbol 19 symbol 4
symbol 8
All of the following are perils EXCEPT: texting while driving windstorm lightning theft
texting while driving
The insurance company (principal) grants authority to its agent, the producer. Which of the following types of authority is usually granted via the agent/company contract? expressed apparent approved implied
expressed
An "ordinance or law" exclusion in a property insurance policy deals with: wear-and-tear losses extra expenses required to comply with current building codes when repairing damaged property the cost of building permits that might be required before damaged property can be repaired property damage resulting from vandalism
extra expenses required to comply with current building codes when repairing damaged property
Which of the following loss valuation methods is used with older buildings that have components no longer available or available only at a prohibitively high cost to repair or replace? market value functional replacement cost replacement cost actual cash value
functional replacement cost
Lightning ignites a fire at the Smith Motors garage which damages seven automobiles owned by customers. Smith's garagekeepers coverage has a $1 million limit and a $1,000 deductible. How much of the deductible will be applied to this loss? $1,000 $7,000 None $70,000
None
Private insurers that sell National Flood Insurance Program policies on their own "paper" participate in the: Flood Insurance Risk Management (FIRM) program Write-Your-Own (WYO) program Special Flood Hazard Association (SFHA) Do-It-Yourself (DIY) program
Write-Your-Own (WYO) program
Coverage for seamen protected by the Jones Act can be obtained under a standard workers compensation policy by adding what kind of endorsement? a maritime coverage endorsement a Federal Employers Liability Act coverage endorsement. a Longshoreman and Harbor Workers' Compensation Act coverage endorsement a political endorsement
a maritime coverage endorsement
A mode or standard of personal behavior based on moral or ethical principles defines which of the following? ethics conduct authority behavior
conduct
What are the maximum limits of insurance a business owner can buy to cover the business structure and business contents under a regular flood insurance policy? $250,000 on the building and $100,000 on the contents $250,000 on the building and contents combined $500,000 on the building and $500,000 on the contents $500,000 on the building and $100,000 on the contents
$500,000 on the building and $500,000 on the contents
Toni was injured when his car collided with Owen's at an intersection. In applying the doctrine of comparative negligence, a court determined that Toni sustained damages in the amount of $10,000 and the accident was 70 percent Owen's fault. What amount is Toni entitled to recover from Owen? $7,000 $3,000 $10,000 $0
$7,000
An insurer that does not wish to renew a PAP must give advance notice to the insured of at least 10 days. 30 days. 20 days. 45 days.
20 days.
As long as their termination is not due to a dishonest act, an individual is considered an "employee" under the employee theft insuring agreement for: 30 days following termination 60 days following termination 10 days following termination 90 days following termination
30 days following termination Individuals are considered employees for 30 days after their service terminates. The 30-day extension does not apply if the termination was due to dishonest acts.
Why do most insurance policies covering buildings and their contents exclude coverage for a nuclear hazard? Nuclear Regulatory Commission. A nuclear incident can affect many insured properties at the same time. Nuclear coverage on privately owned property should be obtained through the Nuclear radiation is a form of expected wear and tear.
A nuclear incident can affect many insured properties at the same time.
Beck Company's insurance policies include a crime policy that includes blanket coverage on employee theft. Beck's policy would apply to theft of covered property by any of the following individuals EXCEPT Enid, a student intern who works at a computer station in Beck's office Wesley, a full-time clerk in Beck's mailroom Maggie, a leased worker engaged in a special project for Beck Alton, an independent contractor who writes advertising copy for Beck
Alton, an independent contractor who writes advertising copy for Beck An independent contractor who is paid to perform a service but is not under the insured's direction and control in performing that service is not considered an employee. Therefore, a crime policy does not cover theft of property by an independent contractor.
Which type of insurance policy is NOT be among those that business owners typically use to cover their auto liability exposures? Business auto policy (or commercial auto policy) Commercial general liability insurance policy Truckers and motor carrier coverage form Garage coverage form (or auto dealers form)
Commercial general liability insurance policy
Stephan is injured in Hilda's backyard. What additional condition must be met before Hilda's homeowners policy pays damages for Stephan's bodily injury under Coverage E? Hilda must have failed to warn Stephan of hazards in her backyard. Hilda must have invited Stephan onto her property. Hilda must negotiate a reasonable settlement with Stephan. Hilda must be legally responsible for Stephan's injury.
Hilda must be legally responsible for Stephan's injury.
George frequently suffers back pain. To collect medical benefits, he files a workers compensation claim against his employer. In order to prove that workers compensation covers his claim, George must be able to show all the following EXCEPT: His injury resulted in a wage loss. He was injured. His injury arose out of his employment. His injury occurred in the course of his employment.
His injury resulted in a wage loss.
Damien moves to another state, so his insurer issues a different personal auto policy. Damien notices that it has a personal injury protection endorsement that his former policy did not have. What is the purpose of this endorsement? It protects against reckless and aggressive drivers. It provides better coverage for rented cars. It adds no-fault coverage that is available or required in the new home state. It protects against claims for libel, slander, and other offenses.
It adds no-fault coverage that is available or required in the new home state.
Chris did not pay the premium to renew his personal auto insurance policy at the end of its term. What will happen to the policy on its expiration date? It will be rescinded. It will automatically terminate. It will automatically renew. It will be subject to assignment.
It will automatically terminate.
A house is struck by lightning during a thunderstorm, which starts a fire. The house stands in a floodplain and the basement fills with water from the storm. The homeowner files a claim on her homeowners insurance policy, which excludes losses from floods. What is true about her coverage? It will partially cover the loss from the fire and the flood. It will not cover the loss It will cover only the loss from the fire. It will cover the loss.
It will cover the loss.
Which of the following tools and resources would a producer not find useful when considering ethical dilemmas in insurance transactions? GBS Codex S & P 500 ethical standards insurance industry standards
S & P 500 Ethical standards, insurance industry standards, and the Global Business Standards Codex (GBS Codex) would all be useful tools and resources for the producer.
Samuel's homeowners insurance policy has a $300,000 liability limit. His personal umbrella liability policy has a $1 million limit. The umbrella policy provides excess coverage. Samuel accidentally damages a friend's property and the friend obtains a $2,000 judgment against Samuel. How will the policies handle the claim? $2,000 will be paid under the homeowners policy and nothing will be paid under the umbrella policy. $2,000 will be paid under the umbrella policy and nothing will be paid under the homeowners policy. $1,000 will be paid under each policy, for a total of $2,000. The homeowners policy excludes liability claims that are covered by other insurance, so the umbrella policy will pay the full $2,000 claim.
The homeowners policy excludes liability claims that are covered by other insurance, so the umbrella policy will pay the full $2,000 claim.
The errors and omissions coverage in an equipment breakdown policy is most likely to apply in which of the following situations? The insurance company mistakenly issued the wrong policy form to the insured. The insured made a mistake in describing the property location on the application. The insurance agency manager mistakenly credited the policy sale to a different agent than the one who sold the policy. The agent who sold the policy overstated its coverage.
The insured made a mistake in describing the property location on the application.
What does the "No Benefit to Bailee" provision in a property and casualty policy make clear? The policy does not cover bailees. Bailees can be covered only for the value of the insured's property being held by the bailee. Bailees must wait until all other parties are reimbursed for a loss before they can be covered. Only bailees that can show an insurable interest in the insured's property can be covered.
The policy does not cover bailees.
In addition to offering basic, major, and comprehensive medical plans and HMO plans, what else do Blue Cross and Blue Shield plans do? They administer Medicaid programs. They administer basic surgical expense insurance in many states. They are common providers for long-term care insurance plans They administer Medicare programs in many states.
They administer Medicare programs in many states.
Which statement is correct about government health insurance plans? They are available only to state or federal employees. They pay tax-free benefits. They are available to individuals and groups. They are a right of citizenship.
They are available to individuals and groups.
What is the purpose of the symbols listed in a business auto policy (BAP)? They indicate the solvency rating of the insurer. They indicate the coverages that apply to the insured vehicle(s). They refer to other parts of the policy. They identify the insurance company that provides the coverage.
They indicate the coverages that apply to the insured vehicle(s).
Residual markets systems provide a source of insurance coverage for individuals and businesses that are seeking the most suitable coverage for their risks. are entitled to it but cannot buy it through the voluntary market. have been denied coverage from at least one insurer. want the best value for their premium.
are entitled to it but cannot buy it through the voluntary market. Residual market systems are a source of coverage of last resort for individuals and businesses that have been rejected by insurers in the voluntary market. These individuals and businesses are otherwise in good faith entitled to buy insurance from these insurers but are prevented from doing so.
Which of the following is NOT a covered peril in an equipment breakdown policy? corrosion vacuum failure mechanical failure boiler explosion
corrosion
While on a construction site, Dustin's dump truck strikes a rock that makes a hole in the engine's oil pan, releasing motor oil into the soil. The owner of the site wants Dustin to pay for removal of the oil. Dustin's business auto policy (BAP) will not cover this discharge of a pollutant cover only the repair to the oil pan cover the cost of the removal not cover this release of a lubricant
cover the cost of the removal
Charmaine has other-than-collision coverage but no collision coverage on her auto. She has made four claims for physical damage to her auto within the last three years. Which claim did her policy NOT cover? damage to the car from a hailstorm b. damage to the car when it struck a stray dog running in the street damage to the car when it skidded into a snowbank and rolled over c. damage to the car when a baseball cracked the windshield
damage to the car when it skidded into a snowbank and rolled over
Which is NOT one of the three major parts of a personal auto policy (PAP)? definitions personal auto coverage form declarations page applicable endorsements
definitions
In a trailer interchange agreement, a motor carrier agrees to: exchange trailers with another carrier avoid using another carrier's trucks avoid using another carrier's trailers exchange trucks with another carrier
exchange trailers with another carrier
The street in front of Greg's house is riddled with potholes. He ruins a wheel while driving over one of these potholes. The potholes present a(n): risk hazard exposure peril
hazard
Which of the following is not among the recognized approaches to handling risk? avoiding it ignoring it sharing it transferring it
ignoring it
Protected health information includes all of the following EXCEPT: information about mental or physical health information that is submitted or recorded in any form information about financial status information that might help identify an individual
information about financial status
Who has the authority to determine insurance coverage or to settle insurance claims? producers insurance companies brokers underwriters
insurance companies Only insurance companies and its claims representatives have the authority to determine coverage and settle claims. Producers should understand and explain to consumers that producers do not have such authority.
Who usually determines which party is legally responsible for an auto accident? judges juries insurers police
insurers
Arnold's Auto Repair Shop's garage policy does NOT cover it for loss sustained by a vehicle that it: is selling to a customer is painting for a customer owns hires
is painting for a customer
If a producer adheres to the legal and professional standards of the insurance industry, what type of behavior is being exhibited? unethical illegal and unethical ethical legal and ethical
legal and ethical
In the context of a property or casualty insurance policy, which of the following is considered to be personal property? in-ground garden fountain tool shed heating, ventilation, and air-conditioning (HVAC) system moveable gas grill
moveable gas grill
A homeowner who wants to protect his or her home against the risk of flooding can obtain coverage from which of the following? a property insurance policy specializing in flood protection, or the National Flood Insurance Program (NFIP) any property insurance policy that has a special flood endorsement, or the National Flood Insurance Program (NFIP) only the National Flood Insurance Program (NFIP) only a property insurance policy specializing in flood protection
only the National Flood Insurance Program (NFIP)
Although the policyholder must pay premiums to keep an insurance policy in force, the policy is considered a unilateral policy because: the policyholder is making an enforceable promise neither the policyholder nor the insurer makes an enforceable promise both the policyholder and the insurer make enforceable promises only the insurer makes an enforceable promise
only the insurer makes an enforceable promise
Phoebe rents her home. She loses control of her car on the icy driveway and crashes into the garage door. It will cost $1,000 to repair or replace the door. The property damage liability coverage of Phoebe's personal auto policy will: not pay for the damage because the car was in Phoebe's care, custody, and control pay for the damage not pay for the damage because she does not own the home pay for the damage to Phoebe's car but not for the damage to the garage
pay for the damage
Waldo's 20-year-old truck is damaged in an auto collision. The insurer declares it to be a constructive total loss. Therefore, the insurer will NOT: pay to have the auto repaired pay the owner the vehicle's actual cash value plus tax minus the deductible take possession of the damaged vehicle sell the damaged vehicle as salvage
pay to have the auto repaired
Augusta wants her business auto policy (BAP) to cover liability on every auto her business owns during the policy term. She does not want coverage on any other vehicles. What symbol(s) should the declarations list? symbols 1 and 2 symbol 2 symbol 7 symbols 3 and 4
symbol 2
The typical property and casualty insurance policy contains a provision expressly prohibiting the policyholder from assigning policy ownership to another party without the insurer's written consent because the policy is a(n): aleatory contract unilateral contract personal contract contract of adhesion
personal contract
Alan used his old truck with bald tires and leaking brake lines to move grain from his farm to the grain elevator. During the trip, his brakes failed, and he ran into a school bus. In addition to paying for damage to the bus, the court also ordered Alan to pay an additional $250,000 as punishment for his grossly negligent behavior. What is this additional payment considered? punitive damages special damages compensatory damages general damages
punitive damages
Gina was the only employee in OK Convenience Store at 3 a.m. when a gunman entered the store and made her give him all the money in the cash register. Which of the following correctly describes the cause of loss? robbery kidnapping mysterious disappearance burglary
robbery
When the Brianna collided with the Tania, marine experts determined that the captain of the Brianna was at fault. What provision in the Brianna's ocean marine policy protects the shipowner or operator against the Tania's property damage liability claim? liability insuring clause, also known as a liability insuring agreement Sue and labor clause salvage clause running down clause, also known as a collision liability clause
running down clause, also known as a collision liability clause
After striking a shoal, the freighter Benita was in danger. The fishing vessel Flossie was in the area and provided assistance. Flossie then billed the Benita to recover its expenses, which marine insurers refer to as: sue and labor salvage charges pilotage and towage particular averages
salvage charges
A society, community, or business industry determines the collective standards of acceptable ethical conduct. An individual, however, approaches ethical decisions from a personal perspective of life experiences along with other factors. Which of the following is not one of the factors from which an individual makes an ethical decision? morals and values state insurance regulations degree of self-interest concept of good versus evil
state insurance regulations State insurance regulations are not personal perspectives or life
Mollie's business auto policy (BAP) must provide liability coverage for all owned, nonowned, and hired autos and physical damage comprehensive coverage for all owned private passenger autos. The declarations of her business auto policy should have: symbol 1 for liability coverage and symbol 4 for comprehensive coverage symbol 1 for liability coverage and symbol 3 for comprehensive coverage symbol 3 for liability coverage and symbol 1 for comprehensive coverage symbols 2, 8, and 9 for liability coverage and symbol 4 for comprehensive coverage
symbol 1 for liability coverage and symbol 3 for comprehensive coverage
Karina owns the four homes listed below. Which one of them is NOT eligible for flood coverage under the NFIP's dwelling form? the residential townhouse in the city where her company is headquartered the one-family mountain home where she stays during the summer the condominium unit in the Sun Belt where she spends her winters the eight-unit apartment building she bought as an investment
the eight-unit apartment building she bought as an investment
Producers owe all of the following duties to their insureds EXCEPT: to make all reasonable attempts to elicit information from the insured to advise the insured of the duty to disclose to the insurance company all material facts pertaining to the risk insured the terms under which the producer may sell, solicit, or negotiate insurance to provide examples to the insured of the types of material facts that need to be disclosed
the terms under which the producer may sell, solicit, or negotiate insurance
While working at his service station, Bert mistakenly fueled a customer's truck with gasoline rather than diesel fuel, damaging the truck's engine. In responding to the trucker's liability claim for damages, Bert's insurance policy requires him to perform all the following duties EXCEPT: try to settle the claim on his own promptly notify the insurer of the claim promptly forward any loss notice or summons to her insurer assist the insurer in making a settlement
try to settle the claim on his own
To discipline his teenage daughter Annie, Alvin forbids her from using the family car. Annie steals the keys and drives the car to a party. She causes an accident that severely injures the other driver. Who, if anyone, is covered by Alvin's personal auto policy (PAP)? Annie is covered because she is a family member, and Alvin is also covered. Annie is covered, but Alvin is not. Neither Annie nor Alvin are covered. Alvin is covered, but Annie is not.
Annie is covered because she is a family member, and Alvin is also covered.
Which plan began the use of risk pools and community ratings? PSO Blue Cross/Blue Shield plan PPO HMO
Blue Cross/Blue Shield plan
Owners of motor vehicles with four or more wheels must carry Personal Injury Protection (PIP) and Property Damage Liability (PDL) coverage with at least which of the following limits? $50,000 for PIP and $25,000 for PDL $100,000 for PIP and PDL $100,000 for PIP and $50,000 for PDL $10,000 for PIP and $10,000 for PDL
$10,000 for PIP and $10,000 for PDL The Florida Np-Fault Insurance statute requires all owners of motor vehicles with at least four wheels to maintain at least $10,000 of Personal Injury Protection (PIP) and $10,000 of property damage liability (PDL).
Doug owns a single-family home with a replacement cost value of $500,000 and contents valued at $250,000. What is the maximum amount of insurance he can buy under a standard flood policy? $500,000 on the building and $250,000 on the contents $250,000 on the building and $100,000 on the contents $400,000 on the building and $200,000 on the contents $250,000 on the building and contents combined
$250,000 on the building and $100,000 on the contents
In which case is the driver of the vehicle not an insured person under a company's business auto policy? An employee uses a company van for a personal errand. An employee's spouse borrows a company car for recreation. A former employee steals a company truck to transport goods. An executive uses a company car for a business trip.
A former employee steals a company truck to transport goods.
An equipment breakdown policy typically would NOT cover which of these incidents? Failure of a hydraulic lift due to a vacuum leak. Failure of a conveyer belt due to extended use. Failure of a die cutter due to an electrical short. Failure of a punch press due to a broken ram.
Failure of a conveyer belt due to extended use.
Which of the following federal legislation does not require that a privacy notice be provided to consumers? Federal Employees' Compensation Act (FECA) Gramm-Leach-Bliley Act (GLBA) Health Insurance Portability and Accounting Act (HIPAA) Federal Credit Reporting Act (FCRA)
Federal Employees' Compensation Act (FECA)
Tyler accompanies Janelle while she visits their employer's customers. Janelle's company car has liability coverage under their employer's business auto policy (BAP). She crashes into a lamppost and Tyler is injured. He sues Janelle for his injuries. How will the BAP treat his lawsuit? It will not cover the loss because of the contractual liability exclusion. It will cover his loss if he proves that Janelle's negligence caused it. It will cover his loss if he pays a deductible. It will not cover the loss because of the fellow employee exclusion.
It will not cover the loss because of the fellow employee exclusion.
Barbara's car is in the dealer's garage when lightning strikes the building and ignites a fire that destroys it and its content. The dealer's garage policy includes garagekeepers coverage with the primary direct coverage option. How does the policy address the loss? It will pay for any of Barbara's loss that her personal auto insurance does not cover. It will pay for the loss to Barbara's car and other customers' cars, subject to the policy's limit and deductible. Coverage does not apply because the dealer is not responsible for a lightning strike. It will pay any loss for which the dealer is legally liable to its customers.
It will pay for the loss to Barbara's car and other customers' cars, subject to the policy's limit and deductible.
XYZ's workers compensation policy lists the insured as "Les Smith and Hiram Jones, a partnership doing business as XYZ." This firm is a new venture for Les and Hiram, both of whom also operate other businesses. For whom does XYZ's workers compensation policy provide coverage? Les and Hiram, but only for injuries to XYZ's employees Les and Hiram only, but not XYZ's employees Les only, because he is the first named insured Les and Hiram, for injuries to employees of any of their ventures
Les and Hiram, but only for injuries to XYZ's employees Because the listed employer is a partnership, each individual partner is insured but only in his capacity as an employer of the partnership's employees.
Reba, First Bank's loan officer, abuses her discretionary authority in more than one way. Which one of her actions would First Bank's financial institution bond be most likely to cover? Reba approves a $2,000 car loan to a student with no current income. Reba subtracts $25,000 from her son's outstanding mortgage loan which had been higher than his home's current value. Reba approves a no-collateral loan to a financially struggling church to get favorable publicity for the bank. Reba falsifies documents to earn a bonus she has not actually qualified for.
Reba subtracts $25,000 from her son's outstanding mortgage loan which had been higher than his home's current value. Arbitrarily reducing the outstanding principal loan to a close relative would cause a financial loss to the bank from which Reba receives an improper financial benefit. This is the kind of loss that a financial institution bond is designed to cover.
Which is correct about the purpose of Medicare supplement policies? They provide financial assistance for persons who are ineligible for Medicare. They help pay for hospital, medical, and surgical costs as well as provide funds for deductibles and coinsurance. They pay routine medical costs of persons eligible for Medicare They only provide funds to pay Medicare deductibles and coinsurance.
They help pay for hospital, medical, and surgical costs as well as provide funds for deductibles and coinsurance.
Nearly all state workers compensation laws specify certain activities for which injuries are not compensable. Which of the following injuries would most likely be covered by a workers compensation policy? Bubba is trying to deliberately run over Jonathan with a backhoe when he crashes the backhoe into a wall, injuring himself. Vinnie is walking across a newly shingled roof when a loose shingle gives way and he slides down the roof, breaking his ankle. During an employee softball game, Butch hits the umpire with a bat because he doesn't like the call he made. Frank is installing steel beams for a skyscraper when he slips and falls to the floor below because he refused to wear a safety harness.
Vinnie is walking across a newly shingled roof when a loose shingle gives way and he slides down the roof, breaking his ankle. Not compensable in most states are injuries sustained in an attempt to injure someone else or injuries sustained while committing a crime. In some states, injuries resulting from an employee's willful failure to use a safety device also are not compensable.
Carmella's personal auto policy describes some coverages for vehicles that are not included in the policy's definition of "your covered auto." Which vehicle is included in this definition? a boat trailer that she tows behind her truck a utility trailer she borrows from a neighbor her boyfriend's sports car that she borrows a coupe she rents during a vacation trip
a boat trailer that she tows behind her truck
Ramiro's homeowners insurance policy refers to an "insured location." Which qualifies as an insured location? Ramiro's office in a downtown building owned by his employer a hotel room that Ramiro occupies while on a vacation the room in a nursing home where Ramiro's mother lives the parking space that Ramiro rents in the garage near his office
a hotel room that Ramiro occupies while on a vacation
Twenty percent of Aubrey's cargo was damaged when the ship transporting it encountered a violent storm in the Bermuda triangle. In terms of ocean marine insurance, what is this partial loss to Aubrey's cargo called? an adventure a general average a salvage a particular average
a particular average
Based only on the facts presented, which of the following is an example of adverse selection? a person applying to buy insurance on his new high-performance automobile a person applying to buy insurance on her new home a person applying to buy insurance on her expensive jewelry a person applying to buy insurance on his retail business in a crime-ridden neighborhood
a person applying to buy insurance on his retail business in a crime-ridden neighborhood
Which of the following incidents would be covered by the equipment insurance breakdown policy? basement flooding causes a company's heating system to malfunction a surge in electricity damages a company's mainframe computer worn-out bearings cause a machine to stop functioning a boiler's tubes are pitted with scale and must be replaced.
a surge in electricity damages a company's mainframe computer
Because Leanne's personal auto policy (PAP) provides liability coverage on temporary substitute autos, it will protect her if she is driving a truck she borrows from a friend while Leanne's car undergoes repairs her sister's car out of the garage to make room for Leanne's car a church van because the usual driver is sick a delivery van for her employer
a truck she borrows from a friend while Leanne's car undergoes repairs
Luke pays a $300 premium for a personal umbrella policy in which the insurance company promises to pay up to $1 million dollars for a liability claim against Luke. This mismatch between the size of the premium and the potential size of the insurer's obligations results because insurance policies are: personal contracts aleatory contracts conditional contracts unilateral contracts
aleatory contracts
In connection with an upcoming construction project in which it hopes to participate, a construction firm is required to furnish a contract bond guaranteeing that it will do the job at the quoted price if the contract is awarded to it. What kind of bond is this? bid bond payment bond performance bond permit bond
bid bond A bid bond guarantees that work will be performed at the price quoted in a bid to obtain the contract. A performance bond guarantees that the contractor will perform the work in accordance with the construction contract. A payment bond guarantees that the contractor will pay its workers and suppliers.
Which part of the business auto policy (BAP) contains information the applicant provided to tailor the coverage for the applicant's needs? common policy conditions form nuclear energy liability exclusion endorsement business auto coverage form business auto declarations
business auto declarations
All the following are standard exclusions in the employers liability insurance section of the workers compensation policy EXCEPT: claims arising out of harassment, discrimination, or employment-related practices claims of bodily injury to an employee employed in violation of the law claims by a covered worker's spouse for loss of consortium fines or penalties imposed for violation of federal or state law
claims by a covered worker's spouse for loss of consortium
Producers who do not meet the standards of which of the following are a threat to the well-being of not only the consumer, but professionals within the insurance industry? honesty ethics loyalty competency
competency
Butch's Meat Market loses electrical power during a flood. The business closes for several days, during which time there is no refrigeration and a large quantity of meat spoils. The loss of the meat is what type of loss? direct unavoidable ancillary consequential
consequential
Which is NOT a typical part of a complete personal auto policy? declarations page personal auto coverage form coverage audit endorsements
coverage audit
Which expense is NOT covered as property damage by a business auto policy (BAP)? damage to property transported in a covered auto lease of a substitute vehicle while a covered auto is repaired damage to a structure caused by a covered auto repairs to a covered auto damaged in a collision
damage to property transported in a covered auto
When the Maritime Coverage Endorsement (WC 00 02 01 A) is added to a workers compensation policy: a copy of the endorsement is filed with Lloyd's of London a single limit applies to all bodily injuries to its workers while they are on any boat employer liability coverage applies on shipments between the United States and Europe employer liability coverage is provided for insureds with true maritime exposures
employer liability coverage is provided for insureds with true maritime exposures
What unfair trade practice has a person committed if he knowingly and with intent to defraud files an insurance claim that is false? churning rebating twisting fraud
fraud A person commits insurance fraud if he or she submits an insurance application that contains false, incomplete, or misleading information.
A fiduciary responsibility requires the utmost in care and the highest standards of conduct with respect to the law or ethics. All of the following are qualities required by a fiduciary EXCEPT loyalty honesty good faith good communication skills
good communication skills A fiduciary is not required to have good communications skills.
What type of behavior is free from deception and unfairness and is characterized by being genuine, truthful, and reputable? honest proper dishonest improper
honest Honest behavior is free from deception and unfairness and is characterized by being genuine, truthful, and reputable.
The motivation of stakeholders in an ethical dilemma involves all of the following EXCEPT: justice versus mercy truth versus loyalty individual versus community honesty versus propriety
honesty versus propriety
Senior clients are more at risk than any other sector of the population in this country. Which of the following is not a practice to which seniors are vulnerable? honesty, no matter how unpleasant the truth scams high-pressure tactics fears about a medical condition or longevity
honesty, no matter how unpleasant the truth Senior clients may be vulnerable to scams, high-pressure tactics, and fears about a medical condition or longevity. Honesty is a behavior and not something that creates vulnerability.
What kind of insurance is the coverage in an ocean marine insurance policy that protects a shipowner against a covered loss to the vessel but not to its cargo? protection and indemnity insurance physical damage insurance collision insurance hull insurance
hull insurance
Understanding practices that are considered unethical is the first step in justifying or rationalizing actions preventing ethical dilemmas being ethical identifying, preventing, and resolving ethical dilemmas
identifying, preventing, and resolving ethical dilemmas The first step in identifying, preventing, and resolving ethical dilemmas is to fully understand practices that are considered unethical.
Following the kidnapper's instructions, an employer sent a messenger to deliver $250,000 to the kidnapper who promised to release its kidnapped employee unharmed. However, the messenger was ambushed and the ransom payment was lost. Which coverage of the employer's kidnap/ransom and extortion policy will reimburse the employer for its $250,000 loss due to the ambush? kidnap/ransom and extortion-direct loss detention or hijack kidnap/ransom and extortion-expenses incurred in-transit delivery of property
in-transit delivery of property
The Law of Agency is a legal concept governing a three-party relationship. Which of the following is not one of the three-parties to an agency relationship in the insurance industry? insured agent insurance agency insurance company
insurance agency The three parties to the legal agency relationship in the insurance industry are the Principal (insurance company), Agent (insurance producer/broker/agent), and the Third Party (insured).
When a bank is named as a mortgagee in a customer's homeowners insurance policy, the bank: no longer has an insurable interest in the mortgaged home will not share in any claims payments for damage to the mortgaged home will have to pay all future premiums on that policy is entitled to advance written notice of any policy cancellation
is entitled to advance written notice of any policy cancellation
As defined by the Insurance Services Office (ISO) motor carrier policy, a trucker is a person or organization that: owns at least one vehicle with more than four wheels owns at least one truck or tractor truck provides transportation by auto in furtherance of a commercial enterprise is in the business of transporting cargo by auto for hire
is in the business of transporting cargo by auto for hire
Upon learning that Bryant, a key executive, has been kidnapped, Bryant's employer contacted the security firm listed in the declarations of its kidnap/ransom and extortion policy. The security firm was able to negotiate Bryant's release and billed his employer $250,000 for its services. Which coverage of the employer's kidnap/ransom and extortion policy will reimburse the employer for its $250,000 loss? detention or hijack kidnap/ransom and extortion-direct loss in-transit delivery of property kidnap/ransom and extortion-expenses incurred
kidnap/ransom and extortion-expenses incurred The expenses incurred insuring agreement pays for the costs and fees of the security firm shown in the declarations that is hired to
Which of the following does NOT qualify as covered equipment under the equipment breakdown coverage form? electric motors laboratory beakers vacuum tank computers
laboratory beakers
Martha's home has an insurable value of $500,000, which she has insured for $300,000 under a property insurance policy with an 80 percent coinsurance clause. Ignoring any deductible that might apply, if the building sustains $20,000 in damage due to a covered peril, how much will the insurer pay? less than $20,000 more than $20,000 nothing exactly $20,000
less than $20,000
The most important coverage in the personal auto policy is the: collision coverage because it protects your car liability coverage because liability losses often involve large amounts of money uninsured motorists coverage because almost every accident involves an uninsured motorist medical payments coverage because it provides some protection against your own injuries
liability coverage because liability losses often involve large amounts of money
Ken's house has an exterior layer of brick that covers wooden walls supported by wooden 2-by-4 studs. What type of construction does Ken's house have? frame masonry fire resistive masonry veneer
masonry veneer
In the insurance workplace, ethical dilemmas occur because differences of opinion and perception exist between clients and producers (and among insurance professionals) with respect to which of the following? expressed authority the law of agency matters of significant value insurance regulations
matters of significant value
In Andrea's state, all employers are required to buy workers compensation coverage through a state workers compensation insurance fund. The state where Andrea's business is located has what kind of fund or plan? voluntary workers compensation fund competitive state fund state residual market plan monopolistic state fund
monopolistic state fund As the state's only workers compensation insurance market, the state fund in Andrea's state has a monopoly on workers compensation insurance, and the funds are referred to as monopolistic.
A PPO provides health care services at fees that are determined on what basis? negotiated, reduced fees federal guidelines fees plus costs usual, customary, and reasonable (UCR) charges for the area
negotiated, reduced fees
Under the Patient Protection and Affordable Care Act, essential health benefits (EHBs) are best described as: emergency health care services that are not subject to benefit limits. pediatric care services that are not subject to benefit limits. pediatric, laboratory, preventive, rehabilitative and emergency care services that are not subject to benefit limits. preventive and wellness medical care services that are not subject to benefit limits.
pediatric, laboratory, preventive, rehabilitative and emergency care services that are not subject to benefit limits.
In connection with an upcoming construction project in which the firm hopes to participate, Roosevelt Construction is required to furnish a performance bond guaranteeing that Roosevelt will: obtain the licenses and permits necessary to perform the work perform the work in accordance with the contract deliver a completed project free of liens agree to do the work at the price quoted
perform the work in accordance with the contract A performance bond guarantees that, if the contractor is awarded the job, it will agree to perform the work in accordance with the construction contract and related documents.
The business auto policy (BAP) may include all of the following EXCEPT: business auto coverage form business auto declarations personal auto insurance common policy conditions form
personal auto insurance
The basic purpose of the vacancy provision in a property and casualty insurance policy is to: allow the policyholder to maintain coverage on a building that remains vacant or unoccupied for a specified period of time require the insurer to waive the policy's premium while an insured building is vacant or unoccupied for a specified period of time permit the insurer to cancel a policy if the policyholder moves out of a home without an immediate buyer for a specified period of time reduce or eliminate coverage if covered premises have been vacant or unoccupied for a specified period of time
reduce or eliminate coverage if covered premises have been vacant or unoccupied for a specified period of time
If a producer considers who are the stakeholders and what are their rights, he or she is undertaking Step One of which of the following? resolving an ethical dilemma stating an ethical dilemma preventing an ethical dilemma identifying an ethical dilemma
resolving an ethical dilemma
Theodore pays an annual premium to the insurance company that covers many of the risks associated with his business. What risk management technique is Theodore using? risk control risk sharing risk avoidance risk transfer
risk transfer
The producer always owes his or her loyalty to the insured during the process of reporting a claim handling a claim selecting an insurance product completing an insurance application
selecting an insurance product
When business income coverage was to be added to Callie's equipment breakdown policy, the insurer required her to complete an annual report of values form. Among other things, what is this form used to determine? Callie's loss experience as regards past equipment breakdowns the value of covered equipment whether Callie qualifies for business income coverage the amount to be paid to Callie in the event an equipment breakdown causes a loss of income
the amount to be paid to Callie in the event an equipment breakdown causes a loss of income
In general, what do fidelity bonds guarantee? the honesty of a person in a trusted position that the surety will cover theft losses attributable to an employee that the insurer issuing the bond will not pay any losses the accuracy and veracity of statements in a written document
the honesty of a person in a trusted position In general, fidelity bonds guarantee the honesty of a person who is in a trusted position.
With respect to property and casualty insurance policies, "subrogation" refers to: the opportunity to double the size of a claim reimbursement by altering facts to make it look like the loss was someone else's fault the requirement that insurers report losses to law enforcement if they suspect fraud the insurer's right to recover its claim payment from the party that was responsible for the loss the requirement that an insured must sue the insurer to get a claim paid
the insurer's right to recover its claim payment from the party that was responsible for the loss
A flood swept some of Bridgette's flood-damaged property onto a neighbor's land, and it swept some of a neighbor's flood-damaged property onto Bridgette's land. The debris removal coverage in Bridgette's National Flood Insurance Policy will pay for removing all the following debris EXCEPT: Bridgette's property on the neighbor's land the neighbor's property on Bridgette's land the neighbor's property on the neighbor's land Bridgette's property on Bridgette's land
the neighbor's property on the neighbor's land
Because he doesn't own an airplane, Lanny thinks it silly that his homeowners insurance policy contains several exclusions that apply to aircraft. What is the purpose of these exclusions? to reduce the incentive to create losses and provide an incentive to prevent losses to remove coverage not needed by a typical insured to remove coverage for uninsurable risks to eliminate or reduce overlapping coverage
to remove coverage not needed by a typical insured
Harding Paint Store mixed a gallon of paint with the custom color Meghan requested. However, the store clerk failed to tighten the lid on the paint can, which came open while Megan was driving home with the can in her car. Under which type of law was Harding required to pay for the expensive damage to Megan's car that resulted from the paint spill? contract law criminal law tort law workers compensation law
tort law
Liability insurance basically involves:Single choice. international law tort law criminal law contract law
tort law
Britney is responsible for an auto accident involving another car which will cost $15,000 to repair and for which the two injured occupants of that vehicle were awarded damages in the amounts of $30,000 and $20,000, respectively. Britney's split-limits policy has liability limits of $25/$50/$10. How much will her insurer pay? $40,000 $55,000 $65,000 $60,000
$55,000
Which one of the following losses would most likely be excluded by one of the maintenance or wear-and-tear exclusions in a property insurance policy? A hailstorm creates cracks in the siding. Heat from a fire in the building next door melts the siding. Pieces of siding blow off in a windstorm. Bees build a nest under the siding.
Bees build a nest under the siding.
Most property insurance policies on buildings and personal property used by a business cover explosions but exclude coverage for losses covered by a boiler explosion. Why do they have this exclusion? Boilers cannot explode. Boiler explosion losses are not insurable. Boiler inspections make insurance unnecessary. Boiler explosion losses are best handled with an equipment breakdown policy.
Boiler explosion losses are best handled with an equipment breakdown policy.
An equipment breakdown policy does NOT cover which of the following? damage due to interruption of utilities damage due to spoilage damage from smoke damage to data and media
Damage from smoke
Why is an MCS-90 endorsement attached to a motor carrier policy insuring a fleet of commercial trucks? It increases the number of insureds under the policy. It confirms compliance with department of transportation regulations in states where the carrier operates. It increases coverage limit for losses caused by the transport of hazardous materials. It amends the policy to comply with the Motor Carrier Act of 1980.
It amends the policy to comply with the Motor Carrier Act of 1980
Ina's home is located in a special flood hazard area (SFHA). What does this mean with respect to the area's tendency to flood? It has a 1 percent chance of being flooded in any given year. It has one flood every 100 years. It will never have more than one flood during any 100-year period. It will always have at least one flood during any 100-year period.
It has a 1 percent chance of being flooded in any given year.
For a building to be insurable under a regular flood insurance policy, which of the following conditions must be met? It cannot be located in a special flood hazard area (SFHA). It must have at least two rigid walls. It must be able to float. It must be 100 percent above ground.
It must have at least two rigid walls.
Steve's car is in the dealer's garage when a tornado destroys the building and its contents. The dealer's garage policy includes garagekeepers coverage with the excess direct coverage option. How does the policy address the loss? It will pay any loss for which the dealer is legally liable to its customers. It will pay for the loss to Steve's car and other customers' cars, subject to the policy's limit and deductible. It will pay for any of Steve's loss that his personal auto insurance does not cover. Coverage does not apply because the dealer is not responsible for a windstorm.
It will pay for any of Steve's loss that his personal auto insurance does not cover.
Augustus has his business office in his large house on several acres of land, where he employs several people. Which of these workers is NOT a "residence employee" as defined in Augustus's homeowners insurance policy? Oliver, the groundskeeper Lilliana, the chef Allison, the nanny Marla, the office secretary
Marla, the office secretary
Medicare supplement insurance policies supplement coverage of which Medicare Part? Medicare Part C (Medicare Advantage) Medicare Part A only Medicare Parts A, B, and C Medicare Parts A and B only
Medicare Parts A and B only Medicare supplement policies supplement Original Medicare (Parts A and B), but not Part C, which covers many of the gaps that Medigap policies cover.
Which product supplements Medicare by offering benefits delivered through a network of health care providers? Medicaid tax-qualified long-term care Medicare SELECT plan long-term care insurance
Medicare SELECT plan
Which of the following best characterizes the ownership of health insurance coverage? Most people are insured through a state or municipal plan. Most people are insured through an individually-owned plan. Most people do not have health insurance coverage. Most people are insured through a group plan.
Most people are insured through a group plan. Most people have health insurance coverage through a group plan.
Harriet's dental office sustained serious water damage when a pipe broke sometime over the weekend. Which one of the following is NOT a duty required of Harriet by her property insurance policy? Cooperate with the insurer in the investigation. Provide prompt notice of the claim to the insurer or its agent. Provide a sworn proof of loss if the insurer requests it. Notify the police.
Notify the police.
With an open perils policy, which of the following statements correctly describes the burden of proof with respect to covering a loss? To deny coverage, the insurer has the burden of proof to show the loss was not caused by a covered peril. To cover the loss, the policyholder has the burden of proof to show the loss was caused by a covered peril. To cover the loss, the policyholder has the burden of proof to show the loss was not caused by an excluded peril. To deny coverage, the insurer has the burden of proof to show the loss was caused by an excluded peril.
To deny coverage, the insurer has the burden of proof to show the loss was caused by an excluded peril.
Personal Injury Protection (PIP) covers the insured owner of a motor vehicle under what conditions? If the owner was not negligent in causing an accident with a motor vehicle Without regard to fault in an accident with a motor vehicle Only if the insured is in an accident with an uninsured or underinsured motorist If an injured party wins judgement against the owner of a motor vehicle
Without regard to fault in an accident with a motor vehicle Personal Injury Protection (PIP) insurance covers the owner or operator of a motor vehicle up to the limits of the policy and without regard to the insured's fault in an accident involving a motor vehicle.
Melanie becomes intoxicated at a party and then Pierre persuades her to sell her car to him for $25. Pierre puts the terms in writing and both of them sign the document. The next day, Pierre goes to Melanie's house with the money and demands that she deliver the car to him. The agreement he made with her is: enforceable because it was in writing enforceable because it was signed by both parties unenforceable because one of the parties was incompetent unenforceable because it was made for an illegal purpose
unenforceable because one of the parties was incompetent
Brad's home is badly damaged by flood. Which of the following items is covered under the personal property coverage (Coverage B) of his NFIP dwelling form? money and stamps his home's septic system window air conditioner his property fence
window air conditioner
An employee of Company was injured after a supervisor intentionally disabled safety equipment to speed up production. Due to this willful misconduct, a court ordered Company to pay punitive damages in addition to workers compensation benefits. In this case, the workers compensation insurer is obligated to pay: workers compensation benefits but not punitive damages. both workers compensation benefits and punitive damages nothing punitive damages but not workers compensation benefits
workers compensation benefits but not punitive damages. According to the workers compensation policy, the insured is responsible for any payment in excess of those provided by workers compensation law. The insurer assumes no responsibility for punitive damages resulting from the employer's willful misconduct.
