Georgia Property and Casualty Practice Test Review Questions
A contract for the transport of goods between the shipper and the carrier is called
A bill of lading
Which of the following losses would NOT be covered by a homeowners policy?
A coin collection valued at $500 lost in a fire
Which of the following would be considered an unfair claims settlement practice?
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation?
Agreed Value
A startup used car dealership buys cars at auto auctions in 30 states. It wants to be certain that damage coverage is provided when the cars are driven or transported from the auctions to the dealership. In regard to the business auto physical damage coverage, which is true?
Coverage is provided at additional premium.
An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay?
Higher limits
The policy conditions define
How parties to the contract must act following a loss.
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
When is liability coverage included in a homeowners policy?
It is included automatically.
Which of the following is defined as a covered cause of loss in a businessowners property coverage?
Leakage from fire-extinguishing equipment
Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?
Liability coverage
Which of the following would be covered under the Premises- Theft of Money and Securities crime coverage?
Loss or damage to a locked safe, vault, or cash register
Which of the following is NOT concerning the fair rental value coverage provided in a dwelling policy?
Loss or expense caused by the cancellation of a lease is covered.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
Making comparisons between different policies
The type of professional liability coverage a medical doctor needs is
Malpractice coverage.
Which of the following coverages is included in an unendorsed homeowners policy?
Medical payment to others
Transacting insurance without a license in this state is considered a(n)
Misdemeanor.
What is a definition of a unilateral contract?
One-sided: only one party makes an enforceable promise.
All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT
Personal Injury.
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXECEPT
Physical damage.
Which professional liability form provides coverage for liability arising out of errors or mistakes made in rendering medical services?
Physicians, surgeons and dentists malpractice
Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss?
Privilege to adjust with the owner
Under the coverage of which of the following liability may an insured require the insurer to defend a claim?
Professional liability
Which of the following liability policies is usually written on a "claims-made" form?
Professional liability insurance
Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility?
Promptly forwarding premiums to the insurance company
Which of the following statements is true regarding the commercial general liability policy's Coverage C- Medical Payments?
The coverage is considered good will because payments are made without regard to fault.
All of the following are characteristics of the dwelling policy EXCEPT
The dwelling must be owner-occupied.
Under the provisions of the business income coverage form, all of the following are true EXCEPT
The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first.
If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?
The policy will not lapse since payment to the agent is the same as a payment to the insurer.
On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is
The same as provided on the DP-2 Broad Form.
All of the following are other coverages included in both the broad and special form dwelling policy EXCEPT
Theft of personal property.
A specific coverage part is listed on the commercial package policy declaration page, but there is no premium shown. What does that mean?
There is no coverage.
If a covered auto is involved in an auto accident in another state, what happens to the limits of policy liability in a personal auto policy?
They adjust to at least the minimum limits of the other state.
All of the following types of property are covered by a standard builders risk form EXCEPT
Tools 50 feet away from the building.
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
Which of the following losses would NOT be covered by the dwelling policy if the dwelling is vacant for over 60 days?
Vandalism
Which of the following IS covered under the theatrical property floater of an Inland Marine policy?
Vehicles used on stage
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for the reports?
Within 30 days after the end of each month
The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information
Within 45 days.
An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT
the agency loses commission income from policies that were not issued by the insurer.
All of the following statements concerning coinsurance are true EXCEPT
The coinsurance formula will also be applied to total losses.
An insurance agent has received a request for a hearing from the Commissioner. Within how many days must the hearing be held?
30 days
How many days before a policy is nonrenewed must an insurer deliver or mail written notice to the insured?
30 days
If an agent's residence address is changed, within how many days must the agent notify the Commissioner?
30 days
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?
30 days
Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period?
5 years
Authorized insurance companies are examined by the Commissioner at least once every
5 years
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?
60 days
The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss?
80%
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?
Additional coverage
Which of the following is another term for an authorized insurer?
Admitted
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles had the insurer violated?
Consideration
Which of the following would NOT be considered an unfair and deceptive practice?
Controlled business
Which of the following is NOT true about earthquake coverage?
Coverage is commonly provided through a federally-funded program.
In this state, what is the maximum fine for transacting insurance without a license?
$1,000
The extension of coverage under the Commercial Fine Arts Floater includes coverage for newly acquired property for a maximum of
$10,000
What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy?
$1000
Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay?
$115,000
What is the smallest deductible for Uninsured Motorist coverage in this state?
$250
A premium discount is the term that describes when an insured owes a total standard premium greater than
$5,000
How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?
$500
Workers compensation benefits in Georgia are limited to
$575 a week.
A tow truck was stolen from the insured's premises. The insured has loss of use coverage on his commercial auto policy. How much will the insured be able to collect from the coverage if unable to use the town truck in its operations for 40 days?
$600
A driver who completes a defensive driving course may qualify for a premium discount of
10%
What is the amount of coverage that would be available for a detached garage under the Coverage B- Other Structures of a homeowners policy?
10% of Coverage A
How many hours of continuing education are producers required to complete every licensing period?
24
If an insurer fails to return unearned premiums for a policy that has been cancelled within a specified number of days, the insurer must pay a penalty of
25%
In this state, no automobile insurance policy issued as proof of financial responsibility will be issued with bodily injury and property damage limits less than
25/50/25
Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?
3 years
If drivers complete defensive driving courses, how long will the discount apply to their premiums?
3 years
An individual's driver's license has been suspended for driving without valid insurance, but the driver refused to return the suspended license to the Department of Driver Services. This individual may be found guilty of
A misdemeanor.
Which of the following statements is true regarding the premium computation for workers compensation insurance?
A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.
Coverage F (medical payments) under a homeowners policy would cover
A residence employee who is injured on the job.
Under a businessowners policy, an insured can cancel the policy
At any time by mailing a written notice of cancellation.
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized.
If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?
Auto policy
All of the following are supplemental payments found in liability policies EXCEPT
Automatically transfer to a legal representative
An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?
Benefits will be provided if the state was listed on the policy information page.
Under the HO-4 homeowners policy form, property is insured against
Broad form perils only.
The main difference between an Ho-4 And an HO-6 is
HO-6 provides limited dwelling coverage as well as contents coverage.
To legally transact insurance in the state, an insurer must obtain which of the following?
Certificate of Authority
What are the two major sections of commercial policies?
Commercial entities and government entities
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the
Company.
In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn?
Comprehensive
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment
The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the
Conditions.
The part of a property policy that shows the amount of insurance, premium, and policy terms is the
Declarations.
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy
During the policy period and for up to 3 years after the termination policy.
How often does an agent's insurance license expire?
Every 2 years
All of the following are excluded in the equipment breakdown basic policy EXCEPT
Explosion of steam boilers.
Which federal act provides benefits to injured civilians who are employed by the federal government?
Federal Employees Compensation Act
What type of compensatory damages will pay for pain and suffering and disfigurement?
General
Which of the following homeowners forms is designed for individuals that own and reside in a condominium?
HO-6
A nonresident agent is allowed to conduct insurance transactions in Georgia because his home state allows Georgia residents to transact insurance business in it. This is known as a/n
Reciprocity agreement
What method of loss valuation is contrary to the basic concept of indemnity?
Replacement Cost
Insurance is the transfer of
Risk.
Which of the following is included under the physical damage coverage of a personal auto policy?
Sound reproduction equipment permanently installed in the covered auto
A driver whose license is suspended for violating financial responsibility laws must
Surrender their driver's license.