Guarantee exam questions

An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short-term apartment, and the renter is forced to find other accommodations. Disregarding any extra expense for meals, how much would an HO-3 will pay under coverage D?

$1,050

Homeowners policies limit the amount of property and liability coverage available for boat owners. How much coverage is provided in the homeowners policy for damage to watercraft , accessories, equipment, and trailers?

$1,500

An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?

$10,000

The BOP extension coverage form for personal property off-premises is limited to

$10,000

A trucking company has $1M umbrella policy. The business owner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300,00. It turned out that the business actually carried only 100/250/50 auto liability. What is the total amount the umbrella policy will pay?

$100,000

An insured has $5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insureds medical expenses are $8,000. The first passengers total $4,000; the second passengers total $6,500; and the third passengers total $1,200. How much will the policy pay under the medical payment coverage?

$15,200

Up to how much loss resulting from injury to the insured or destruction of the insureds property is any one accident may be excluded by Uninsured Motorist Coverage?

$250

Andy has violated the Mandatory Financial Responsibility Act and has been charged with a misdemeanor. If convicted, he will have to pay a fine up to

$300

Roger owned a grocery store and had a reporting form policy, with a $100,000 limit for the sites inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has?

$50,000

Using the pro rata method, if a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss?

$8,000

The businessowners liability coverage form will cover medical expenses incurred and reported within what maximum time period after the accident?

1 year

Under business personal property limit- seasonal increase, if no percentage is specified in the declarations, seasonal fluctuations will automatically increase the limit for business personal property by

10%

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10% of coverage C anywhere in the world

Farmer Steve's she'd has been vacant for an entire year. When he files a claim to cover some recent damage to the shed, how much will his farm policy pay?

50% of the limit of insurance

According to business property coverage form vacancy condition, if a policy is issued to the owners of a building, the building will be considered vacant if what portion of the square footage is unused?

65%

How long must an insured wait before business income coverage begins?

72 hours

How soon does the period of restoration for business income coverage began after the direct loss?

72 hours

Which of the following is most likely INELIGIBLE for coverage under a businessowner policy?

A bank

Which of the following risks would be eligible for coverage under a dwelling policy form?

A duplex that is occupied by two families, each of which have a bedroom rented to a boarder

In a personal auto policy, a covered auto includes all of the following EXCEPT

A van used in the delivery business

A house insured with a homeowners policy had been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal?

An additional 5% of the policy limit may be paid for debris removal

Under a commercial general liability policy, which of the following is NOT consider mobile equipment?

An automobile used as a company car by a real estate company

All of the following persons would be covered under a Business Auto Policy EXCEPT

An employee of the named insured operating an auto that is owned by the employees spouse

The second injury fund will pay the benefits in which of the following situations?

An employee with a previous injury suffers a second injury that causes the disability to be more serious

Coverage E (personal property) and/or Coverage F (medical payments) would respond to a claim arising from all of the following EXCEPT

An insureds 14-year-old son was throwing rocks at the neighbors house and broke several windows

A general liability policy will respond to claims against an insured when BI and PD is caused by

An insureds negligence

If an insurer fails to file a continuation of a producer appointment, the producers appointment will automatically terminate on

April 30th of the following year

The transfer of a legal right or interest in an insurance policy is called

Assignment

You are at fault in an auto wreck out of the state. How does your company adjust?

At least to the minimum required by the state

A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT

Auto collision coverage

A provision found in most claims-made liability policy forms that provides a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called

Basic extended reporting period

Which commercial property form is used to insure buildings while under construction?

Builders Risk

A performance bond is an example of which of the following types of bonds?

Contract

Which of the following exclusions would specifically fall under Coverage E?

Contractual liability

The supplemental payments section of the commercial general liability policy would cover

Court costs assessed against the insured in a suit

Other than perils, the difference in the three DP forms is in coverage provided. Which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?

Coverage E-Additional Living Expenses

Coverage C in homeowners policy forms offers all of the following EXCEPT

Coverage for loss of use

Other -than-collision would cover financial losses due to

Damage to an insureds car caused by wind or hail

Which of the following would NOT generally be included in the supplementary payments portion of a liability policy?

Damage to property owned by the insured

The commercial crime coverage that would cover losses resulting from the theft of money, securities and other property be employees is

Employee theft

Which of the following statements does NOT describe endorsements

Endorsements may only add coverage to a current policy, not remove

A motor vehicle approved as self-insured by the superintendent is

Exempt from the Mandatory Financial Responsibility Act

Sarah owns a local toy shop. One day she notices a child taking a toy and trying to leave without paying. Sarah runs out after the child, pushes him down and sits down on him until the police arrive. The child suffers multiple fractures on the ribs, as well as psychological trauma. Which of the following exclusions in the commercial general liability policy applies?

Expected or Intentional injury exclusion

Which type of authority is found in the agents contract?

Express

Which of the following agencies administers the National Flood Insurance Program?

FIA

Which of the following losses would be excluded from coverage under the farm property special form?

Fire cause by curing tobacco

Which of the following is covered under a dwelling policy?

Fire caused by earthquake

Which of the following liability coverages in a general liability policy is NOT subject to the aggregate limit?

Fire legal liability

Which homeowners form provides open peril coverage for dwelling (Coverage A) and contents (Coverage C)?

Form 5

All of these types of property may be covered on a farm property coverage form EXCEPT

Growing crops

A homeowner has misplaced some of her insured personal property and has no idea what may have happened to it. Which HO policy form would cover such loss?

HO-5

An applicant has taken the written exam for his insurance license 4 times. His highest score was 65%. When can he apply for his license?

He must wait 6 months and take the exam again to get a 70%

When reviewing a standard workers compensation and employers liability policy, the limits of coverage are described in Part One of the policy. The dollar limits of the benefits provided are stated

In the state workers compensation law itself

Fair rental value coverage in the dwelling policy is similar to which homeowners policy form?

Loss of use

In a businessowners policy, which of the following would be covered?

Medical expenses

Which is NOT true of workers compensation coverage?

Medical payments benefits are limited

Which of the following exposures is NOT covered under a homeowners policy?

Medical payments to an insured

An example of an alien insurer doing business in this stare is one formed under the laws of

Mexico

What coverage form in the farm policy insured equipment on an open peril basis?

Mobile agriculture machinery and equipment

An applicant for property insurance owns a building in which combustible materials are stored in the furnace room. From an underwriting standpoint, the risk would likely be considered a

Morale hazard

Which of the following is NOT one of the independent rating services that publishes guides to insurance companies financial integrity?

NAIC

How is the premium paid for the BOP?

One indivisible premium

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

Other insurance

An insured is injured while driving his own car. Which of the following coverages will pay for the loss?

Part B-Medical Payments

The deductible under earthquake coverage is stated as what?

Percentage of loss

In reference to insurable interest, which of the following is NOT an element of insurable risk?

Personal

What does HO personal property coverage NOT cover?

Personal property of roomers not related to the insured

The declarations section in a homeowners policy provides all of the following information EXCEPT

Policy exclusions

Business owners liability coverage automatically includes all of the following liability coverages EXCEPT

Pollution

A policy contains a consent to settle a loss provision, which requires the insurer to obtain the consent of an indeed before the settlement of the claim. With this in mind, what kind of liability policy does the insured most likely have?

Professional liability

Which of the following is NOT available in a package policy?

Professional liability

Which of the following types of property is NOT movable?

Real property

Which of the following types of property would be covered under Coverage C-Personal Property in a dwelling policy?

Rowboats

An insureds child ran into the neighbors planter on his bicycle and broke the planter and ruined the plants. The cost to replace the planter was $400 and the cost to replace the plants was $100. Which section of the insureds homeowners policy would pay?

Section 2 with no with no deductible

Business auto coverage apply only to those autos that are identified as covered autos in the decelerations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?

Symbol 1

In the even of a loss, the most the insurer will pay is

The amount of the loss or the limits as stated in the policy, whichever is less

Although businessowners policy will cover fire damages legal liability, which of the following statements is true?

The general aggregate does not apply to fire damage legal liability

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by

The golfers homeowners liability coverage

An insured is at fault in an auto accident, damaging the insureds own car. The damage to the car is covered by

The insureds collision coverage

Which of the following statements is correct regarding the debris removal coverage under a BOP?

The insureds limit of liability is 25% of the sum of the direct loss payment plus the deductible amount

Under the common policy conditions of a policy, all of the following are TRUE about the changes in a policy EXCEPT

The insurer must obtain permission from all named insureds to make a change

All of the following are TRUE regarding the cancellation conditions of a policy EXCEPT

The insurer must provide proof that the insured received the notice

Which of the following is a federal act that covers crews of ships the same as railroad workers

The jones act

The cost bond guarantees

The plaintiff will pay court cost and damages to the defendant if the plaintiff losses the court case

Several policyholders have complained about the business practices of an insurer. Which of the following authorities will conduct an investigation in order to determine if the insurer has violated the insurance code?

The superintendent

Rates for earthquake coverage in property policies are generally determined by which of the following?

The type of construction

When Symbol 7 is provided, which of the following statements is true with regards to newly acquired autos?

They are covered if they are used to replace previously owned autos with that coverage

What is an insured contract ?

Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract

What was the purpose of the Motor Carrier Act of 1980

To establish financial responsibility requirements for interstate motor carriers

What is the purpose of the ordinance or law coverage endorsement?

To remove the exclusion of losses resulting from ordinances or laws

The main difference between occurrence and claims-made liability policies is

Trigger

Which of the following would be proper choice for a company that transports goods that are irreplaceable in nature?

Valued policy

When does the federal emergency flood insurance program go into effect?

When a community applies for the program

When does the insurers duty to defend a suit or claim end in a commercial general liability policy?

When loss payments equal the applicable limit of insurance

When is the company responsible for actions of its agents?

Whenever the agent is acting within the conditions of the contract

Under coverage C, and at the request of an insured, personal property of a guest or residence employee is covered?

While it is in any residence premises occupied by an insured

Which of the following exclusions applies to both personal injury and advertising injury in the BOP?

Willful violation of penal statute or ordinance committed by the insured

While engaged in a pick-up soccer game in the neighborhood park, the insured collides with another player, breaking his nose. Would the insureds homeowners medical payments cover the injury?

Yes, medical payments coverage also applies off the insured premises

Your friends dog that you are keeping while the friend is out of town bit a visitor in your home. Does your homeowners liability coverage apply?

Yes, the coverage would apply for any animal in your care

Which of the following would be considered a covered auto on your personal auto policy?

Your farm wagon being towed by your pick up truck