IES Property & Casualty

A dwelling and detached garage are insured under a Homeowner's policy with a $250 Section I "all peril" deductible. In event both buildings are damaged by fire, which of the following statements would be correct? A: One $250 deductible would apply since the deductible does not apply to each building separately. B: The $250 deductible applies to each building separately. C: No deductible applies unless the loss exceeds $500. D: No deductible applies if the insurance carried is 80% of the building's value.

A

A party claiming that a child was injured by an abusive action of the insured has been awarded a judgment in a civil action. Section II of the Homeowner's policy would pay: A: Nothing. B: Legal defense costs only. C: The medical payment limit only D: Up to the full limit of liability coverage afforded by the policy.

A

All of the following are excluded under a HO-3 homeowners' policy, EXCEPT: A: Theft B: Earth movement C: Neglect D: War

A

All of the following procedures would reduce the risk of adverse selection EXCEPT: A: Inclusion of a deductible. B: Rating-up substandard risks. C: Common policy exclusions. D: Endorsements waiving a specific condition from the coverage

A

All of the following procedures would reduce the risk of adverse selection EXCEPT? A: Inclusion of a deductible B: Rating-up substandard risk C: Common policy exclusions D: Endorsements waiving a specific condition from the coverage

A

All of the following requirements apply to the N.C. Reinsurance Facility EXCEPT? A: The twelve members of the Board of Governors are appointed by the members insurers B: Agents may not be given a quota of "clean risk" business in proportion to ceded business C: Ceded operations cannot be provided different services or adjustment methods from non-ceded operations D: Physical damage coverage may not be rated on the basis of ceded liability coverage

A

An insured has a HO 00 05 homeowners policy with a $100,000 Coverage A limit, a $250 deductible and a $300,000 Coverage E limit. An individual has won a $500,000 bodily injury award from the insured with defense costs equaling $75,000. How much will the HO 00 05 policy pay? A: $375,000. B: $374,750. C: $300,000. D: $175,000

A

An insured has a HO-5 homeowners policy with a $100,000 Coverage A limit, a $250 deductible and a $300,000 Coverage E limit. An individual has won a $500,000 bodily injury award from the insured with defense costs equaling $75,000. How much will the HO-5 policy pay? A: $375,000 B: $374,750 C: $300,000 D: $175,000

A

An uninsured motorist claim that cannot be settled between the insured and the insurance company is subject to which of the following? A: Arbitration. B: Appraisal. C: Subrogation. D: Pro rata liability.

A

Coverage D in a Homeowner's policy: A: Covers the necessary increase in living expenses incurred because of a covered peril. B: Will pay a maximum of 1/12 of the limit for each month the premises is untenable. C: Provides the same limit of coverage in all forms. D: All of the above.

A

Dwelling forms may extend coverage to all of the following EXCEPT? A: Personal property of an unrelated tenant B: Personal property of a servant C: Personal property of guests D: Personal property borrowed by the insured

A

How are the expenses of the North Carolina Underwriting Association recovered? A: Assessed proportionately among the members. B: Legislative appropriation. C: Charged against policyholders through rating the coverage. D: Grants awarded by the Postassessment Guaranty Association.

A

The Business Income coverage form applies to: A: Loss of net profit and ongoing operating expenses while operations are suspended due to property damage. B: Loss of income as the result of destruction of accounts receivable. C: Loss of cash receipts because of burglary or robbery. D: Loss of money because of employee dishonesty.

A

The Standard Fire Policy without endorsements provide coverage for? A: fire, lightning and removal of endangered property B: Fire only C: Fire and lightning only D: None of the above

A

The purpose of liability insurance is: A: To protect the insured against financial loss by reason of liability imposed by law, resulting from accidental bodily injury or property damage to another person for which the insured is held responsible. B: To pay for injuries or property damage the insured received through no fault of their own. C: To provide remuneration for jury trials. D: None of the above.

A

Under the Insurance Information and Privacy Protection Act, an authorization for information disclosure in property and casualty insurance is in effect for: A: One year. B: Two years. C: Three years. D: Four years.

A

Under the Insurance Information and Privacy Protection Act, an authorization for information disclosure in property and casualty insurance is in effect for? A: 1 year B: 2 years C: 3 years D: 4 years

A

What is a statement of fact given to an insurer by the insured concerning the insured's risk, which, if untrue, voids the policy? A: Warranty B: Waiver of subrogation C: Representation D: Estoppel

A

Which of the following is covered by flood insurance? A: Contents of a dwelling damaged in a mudslide. B: Structural damage to a duplex caused by a landslide. C: Growing crops and livestock destroyed when a river overflows its banks. D: Looting of personal property in a flooded area.

A

Which of the following items would be covered under a Broad form Homeowners policy? A: A neighbor's lawnmower borrowed by the insured B: Property of an unrelated tenant C: A detached garage damaged during an earthquake D: Cassette tapes in the trunk of the insured's vehicle

A

Which of the following statements is FALSE concerning financial responsibility laws? A: Financial responsibility laws make insurance compulsory B: Financial responsibility laws require proof of the ability to respond to damages following certain occurrences C: Driving privileges may be lost if financial responsibility laws cannot be met after an accident D: Proof of future financial responsibility is sometimes required

A

Which of the following statements is true? A: Agents can bind coverage B: Agents and brokers represent insurance companies C: Brokers can bind coverage D: Agents in the field of Property and Casualty insurance issue conditional receipts

A

When a covered automobile is damaged in an accident which causes it to be unusable for a period of time, a personal auto policy will provide coverage for transportation expenses at the rate of $20 per day for up to how much total? A: $300 B: $500 C: $750 D: $1,000

A; A personal auto policy pays up to $20 per day for 15 days for the loss of use of a covered auto.

Hank's Excavating Company has a bulldozer worth $200,000 which is stolen off the back of one of the company's flatbed trailers parked overnight at a job site. Which one of Hank's insurance policies will respond to the loss? A: Commercial Inland Marine B: Commercial Property C: Commercial General D: Commercial Auto

A; Commercial inland marine policies respond to theft of scheduled equipment. Commercial inland marine policies respond to the theft of scheduled equipment.

A new insurance agent tells his client that he has bound coverage on his home. However, he did not follow through with binding coverage making it an ineligible risk. His home burns down. Where can the homeowner seek coverage? A: The agent's professional liability policy B: The agent's general liability policy C: The agent's personal umbrella policy D: The mortgage company who required home insurance

A; The agent's professional liability policy, aka the "errors and omissions policy."

A peril can be defined as: A: The transfer of pure risk. B: The cause of a loss. C: A one-time event definite in time and place. D: A condition increasing the chance of loss.

B

All of the following are TRUE about "insurable risk" EXCEPT? A: The law of large numbers should apply B: The loss must not be definite and definable C: The loss must not be catastrophic in nature D: The loss must be large enough to create hardship

B

All of the following statements regarding the HO 00 02 are correct EXCEPT: A: The dwelling structure is covered. B: This form provides open perils coverage. C: Other structures are covered. D: Losses caused by vandalism are covered.

B

Auto comprehensive covers all of the following EXCEPT A: Flood. B: Upset. C: Theft. D: Hail damage.

B

Automobile limits of liability expressed as 50/100/50 mean: A: $50,000 bodily injury, $100,000 property damage, $50,000 medical payments per occurrence. B: $50,000 bodily injury per person, $100,000 bodily injury per occurrence, $50,000 property damage per occurrence. C: $50,000 property damage per occurrence, $100,000 bodily injury per occurrence, $50,000 bodily injury per person. D: None of the above.

B

Coverage under a vandalism and malicious mischief endorsement added to the standard fire policy is suspended if a building is left vacant for more than: A: 15 consecutive days. B: 30 consecutive days. C: 60 consecutive days. D: 90 consecutive days.

B

Dwelling forms provide limited coverage for: I. Pets II. Rowboats and canoes III. Aircraft A: I only. B: II only. C: I and II. D: I, II and III.

B

If a proposed automobile rate filing is not felt to be in compliance with the regulations of the State of North Carolina, the Insurance Commissioner must notify the North Carolina Rate Bureau within: A: 30 days of the filing B: 50 days of the filing C: 60 days of the filing D: 210 days of the filing

B

If the Rate Bureau implements newly proposed rates prior to the final determination of the validity of such rates, the difference in premium between the old and new rates is: A: Earned by the insurers until the new rates are denied. B: Held in escrow for possible refund if the proposed rates are denied. C: Used for the maintenance of the Department of Insurance. D: Granted to the General Fund of the State of North Carolina.

B

In order for two fire policies to be concurrent, they must cover: A: All real and personal property, as well as liability for an individual. B: The same interest against the same perils. C: All real and personal property of an individual. D: For both direct and indirect losses.

B

Obtaining information through a personal interview where the agent does not accurately identify themselves is known as a(n): A: Consumer report. B: Pretext interview. C: Survey scam. D: Investigative consumer report.

B

Territorial limits of the Personal Articles Floater are? A: Usually the United States and Canada B: Usually worldwide C: Usually the continental United States D: Usually the continental United States and its territories and possessions

B

The Notice of Information Practices indicates that the applicant has all of the following rights EXCEPT: A: To know the reason for any adverse underwriting decision. B: To have access to the underwriting standards of the company. C: To dispute any information felt to be incorrect. D: To know from whom pertinent information was gathered.

B

The definition of an uninsured motor vehicle under the personal auto policy includes all of the following EXCEPT: A: A hit and run vehicle whose driver cannot be identified. B: A vehicle newly acquired by the named insured that has not been reported to the insurer. C: A vehicle to which no liability bond or insurance policy provides coverage at the time of the accident. D: A vehicle insured by a company that is insolvent.

B

The definition of rental value includes: 1: Gross rental income from tenant occupancy 2: Fair rental value of the portion of a dwelling occupied by the insured held for rental 3: Expenses charged to tenants that cease when vacant A: 1 only B: 1 and 2 C: 1 and 3 D: 1, 2, and 3

B

The extended coverage endorsement? A: Increased the recovery limits of the STP B: Has a premium stated for the broadening of perils C: Suspends its coverage after 30 days of unoccupancy D: Covers any explosion

B

The named insured wants to cover an additional auto under an existing personal auto policy. They must notify the company: A: Immediately B: Withing 30 days of purchase C: Within 30 days of inception of the policy D: Anytime during the policy period

B

Under the PAP, supplementary payments could provide payment for all of the following expenses EXCEPT: A: Court costs if a civil lawsuit is defended. B: Charges incurred for renting a car when the insured's vehicle was disabled in a wreck. C: A parking garage fee that the insured incurs while attending a deposition at an attorney's office D: Lost wages the insured might suffer by attending court proceedings.

B

What is the basic benefit provided by Workers Compensation insurance for disabilities arising out of employment? A: 1/2 of weekly earnings. B: 2/3 of weekly earnings. C: 3/4 of weekly earnings. D: 100% of weekly earnings but not more than $356.

B

What is the meaning of actual cash value (ACV)? A: Replacement cost (new for old) without any deduction for depreciation B: Replacement cost less depreciation C: Todays appraisal value less depreciation D: The appraised value

B

What is the purpose of the National Flood Insurance Program? A: To provide open peril property insurance in flood prone areas. B: To encourage communities to implement flood control measures and plan future growth. C: To enable property owners to purchase basic property insurance at unsubsidized rates. D: To allow federal intervention in the regulation of property insurance rates.

B

When the Commissioner intends to hold a hearing concerning an agent's trade practices, notice of the hearing must be given at least: A: 5 days in advance. B: 10 days in advance. C: 20 days in advance. D: 30 days in advance

B

Which of the following acts is legal concerning property insurance policies and business practices? A: Providing a 10-year policy period B: Listing the rates charged for specific types of property coverage C: Issuing a policy that insures property for amounts greater than the value of the property D: Adjusting losses according to company rules not stated in the policy

B

Which of the following practices are considered unfairly discriminatory? A: Refusal to issue property coverage due to the company (use) of the structure B: Adding a surcharge on automobile liability insurance due to the age of the operator C: Placing coverage in a residual market due to information supplied by a consumer reporting service D: Reducing rates for a specific class of insureds without reducing rates for all insured

B

Which of the following statements is or are true concerning the Personal Auto Policy? 1: The policy clarifies the meaning and simplifies the language of automobile policies for the consumer 2: The policy provides coverage for personal effects 3: The policy provides medical payments coverage to riders of motorcycles A: 1 & 3 B: 1 & 2 C: 2 & 3 D: 1 only

B

Which of the following would NOT be considered a consequential loss? A: Loss of rental income B: Damage to be personal property C: Additional living expenses incurred while the damaged property is being restored D: Loss of business income while a business is closed because of a fire loss

B

A Flood policy goes into effect at which of the following times? A: When the agent binds coverage B: Upon the date of application C: Thirty days after the date of the application D: Sixty days after the date of the application

C

A building, insured under a standard fire policy, is damaged by fire for which another person is responsible. From whom will the insured receive payment for the loss? A: The insured has to try to collect from the person responsible. B: The insured can collect from the person responsible and also from the insurance company. C: The company will pay the loss, and will then require the insured to assign to them their right of recovery from the person responsible for the loss, to the extent paid by the company. D: The company will pay the insured the amount of the loss, and will expect the insured to collect from the person responsible, and then reimburse the company.

C

A deductible in an insurance contract is an example of which means of handling risk? A: Control B: Avoidance C: Retention D: Transfer

C

All of the following are included in the definition of personal injury EXCEPT: A: Slander. B: Defamation. C: Bodily injury. D: Libel.

C

All of the following coverage extensions are provided in the various HO policies EXCEPT: A: Coverage for plants, trees and shrubs up to a maximum of 5% of the Coverage A limit. B: Additions and alterations made by a tenant are covered up to $1,000. C: Business structures on the premises are covered for up to 50% of Coverage B limits. D: Expenses incurred to provide temporary protection of the property is covered.

C

All of the following coverage extensions are provided in the various HO policies EXCEPT? A: Coverage for plants, tress, and shrubs up to a maximum of 5% of the Coverage A limit B: Additions and alterations made by a tenant are covered up to $1,000 C: Business structures on the premises are covered for up to 50% of Coverage B limits D: Expenses incurred to provide temporary protection of the property is covered

C

All of the following statements concerning property, casualty and personal lines insurance agents are true EXCEPT? A: They act on behalf of the insurer B: They are authorized by contract to solicit insurance policies C: They act on behalf of the insured D: Their actions and knowledge are binding on the insurance company

C

All of the following statements regarding the personal automobile policy are FALSE EXCEPT? A: Liability coverage excludes non-owned automobiles B: Liability coverage is usually written with a single limit C: Under medical payments, family members are covered as pedestrians D: Business use of a van by a distributor is covered

C

All statement given by applicants on an insurance application are considered? A: Concealments B: Warranties C: Representations D: Depositions

C

Documentation required by an insurer from an insured to substantiate the specifics of a claim is known as a(n): A: Certificate of authority. B: Endorsement. C: Proof of loss. D: None of the above.

C

Documentation required by an insurer from an insured to substantiate the specifics of a claim is known as a? A: Certificate of authority B: Endorsement C: Proof of loss D: None of the above

C

In regards to personal property coverage in the homeowners program, all of the following statements are correct EXCEPT: A: Money and bullion are limited to $200. B: Scheduled personal property coverage of greater than the established limits is available through a Personal Articles Floater. C: The special form (HO 00 03) provides open perils coverage on personal property. D: Personal property coverage is usually 50% of the limit provided for Coverage A.

C

Insurance companies incorporated under the laws of foreign countries are called: A: Domestic companies. B: Foreign companies. C: Alien companies. D: None of the above.

C

Insurance companies incorporated under the laws of foreign countries are called? A: Domestic companies B: Foreign countries C: Alien companies D: None of the above

C

Mr. Jones has a $50,000 HO 00 03 homeowners policy. He has a theft loss that results in $2,000 damage to his home and the theft of $250 in cash and $650 of plane tickets. How much will he collect? A: $2,750 B: $2,800 C: $2,850 D: $2,900

C

Rates proposed by the Rate Bureau: A: Must be conformed to by all companies B: Are recommended rates that are not binding on the companies C: May be altered if such deviations are filed and approved D: Identify rates that are excessive

C

The coverages provided by the various Homeowners forms are: A: Named perils on the dwelling and open perils on the contents in the HO 00 03. B: Open perils on both dwelling and contents in the HO 00 04. C: Open perils on the dwelling and named perils on contents in the HO 00 03. D: Open perils on contents only in the HO 00 04.

C

This employer coverage pays wage and medical benefits to workers who become injured or ill while on the job. Each state mandates coverage and the wages and medical benefits differ from state to state. A: Group medical B: General liability C: Workers' compensation D: Loss of use

C

Under a Personal Articles Floater, a set of antique salt and pepper shakers are insured for $1,000. When one of the shakers is broken, the remaining shaker is only worth $200. How much will the insured receive for this loss? A: $200. B: $500. C: $800. D: $1,000.

C

When insurance rates come under the jurisdiction of the North Carolina Rate Bureau and an insurer wishes to change those rates, the insured must be given written notice of this change at least: A: 5 days in advance. B: 10 days in advance. C: 15 days in advance. D: 30 days in advance.

C

Where must property be located to receive coverage through the North Carolina Insurance Underwriting Association? A: Anywhere within the territorial boundaries of North Carolina. B: Anywhere within North Carolina east of the Piedmont. C: Anywhere within North Carolina east and/or south of the intracoastal waterway. D: Anywhere in North Carolina within 5 miles of the coast.

C

Which of the following acts may an agent legally conduct? A: Depositing collected premiums into the agent's own bank account. B: Conduct a pretext interview to verify information supplied on an application. C: Represent multiple insurance companies. D: Charge an application fee based upon a written notification posted in the office

C

Which of the following acts of an agent would be considered an Unfair Trade Practice? A: Offering to review the applicant's insurance coverages annually. B: Allowing an existing customer to use the agent's season tickets to a sporting event. C: Stating that the marketing activities of another agent are under investigation. D: Informing the applicant that having a pool on the property may increase premiums.

C

Which of the following acts of an agent would be considered an Unfair Trade Practice? A: Offering to review the applicant's insurance coverages annually B: Allowing an existing customer to use the agents season tickets to a sporting event C: Stating that the marketing activities of another agent are under investigation D: Informing the applicant that having a pool on the property may increase premiums

C

Which of the following occurrences would be provided a benefit under Coverage E of the HO program? A: An insured person injures another person while driving a golf cart to the gold course from the insured premises B: An insured, with the Business Pursuits endorsement, damages someone's property while conducting their home improvement business C: The insured does property damage to another person's boat while operating their 20 HP outboard motorboat at the lake D: An insured, while volunteering at a church day care center, sparks and injures a child who is in the care of the center

C

Who must be members of the North Carolina Insurance Underwriting Association? A: All admitted insurance companies writing insurance in this state. B: All admitted insurance companies, agencies and agents. C: All admitted insurance companies writing direct loss property insurance. D: All admitted insurance companies with an A.M. Best rating of B or higher.

C

With property insurance, an insurable interest: A: Must be present at the time the policy is taken out and also at the time of the loss B: Must be present at the time the policy is written but not necessary at the time of the loss C: It is not necessary at the time of the policy is written but is necessary at the time of the loss D: Is not necessary at the time the policy is written or when the loss occurs

C

A dwelling is insured under two fire policies. Policy A is for $12,000 and policy B is for $8,000. If a loss of $10,000 occurs: A: Policy A pays the entire $10,000. B: Policy A pays $7,500; policy B pays $2,500. C: Policy A pays $5,000; policy B pays $5,000 D: Policy A pays $6,000; policy B pays $4,000.

D

All of the following are essential elements in an insurance contract EXCEPT: A: Agreement. B: Consideration. C: Competent parties. D: Counter-offer.

D

All of the following statements regarding watercraft or yacht coverage are correct EXCEPT: A: Protection and Indemnity provides liability coverage to owners of watercraft. B: Liability arising out of towing a person behind a boat on skis may be provided by an endorsement. C: Coverage on certain types of watercraft can be obtained by endorsing the coverage to a Homeowner's policy. D: Hull insurance protects against damage to the hull of the insured's boat or another vessel damaged by the insured

D

Examples of direct losses covered under the standard fire policy include: 1: Damage to the insureds home caused by lightning 2: Damage to the insureds furniture due to a fire caused by sparks from the fireplace 3: Damage to property removed within 3 days to protect it from damage after a fire A: 1 only B: 2 only C: 1 and 2 D: 1,2, and 3

D

If the insured operates in other states, how will Workers Compensation benefits be satisfied for those locations? A: Coverage must always be purchased in that state. B: The state laws of the state of residence of the insured would apply to all other locations. C: Coverage in compliance with the other state's requirements will become effective 60 days after work commences. D: Coverage is provided in compliance with the other state if the insurer is notified before or within 30 days of work commencing.

D

Misrepresentation and concealment prevent recovery under an insurance contract if: 1: Fraud is involved 2: They are material to the acceptance of the risk 3: The insurer would have declined the application had known the facts been known A: 1 only B: 2 only C: 2 and 3 D: 1,2, and 3

D

One of the following is considered to be a misrepresentation and is illegal: A: Circulating any derogatory statement calculated to injure any person engaged in the business of insurance B: Issuing a true statement about the terms of a policy issued or to be issued C: Returning a portion of the premium to the insured on a basis not specified in the contract D: Issuing a statement that is not entirely true about the terms of a policy issued or to be issued

D

One of the following is considered to be a misrepresentation and is illegal: A: Circulating any derogatory statement calculated to injure any person engaged in the business of insurance. B: Issuing a true statement about the terms of a policy issued or to be issued. C: Returning a portion of the premium to the insured on a basis not specified in the contract. D: Issuing a statement that is not entirely true about the terms of a policy issued or to be issued.

D

Smith and Jones own a building equally with an actual cash value of $100,000. It is insured for $100,000 in the name of Smith only, and burns to the ground. I. Smith gets all $100,000. II. Smith and Jones share equally in the $100,000. III. Smith gets $50,000.IV. Jones gets nothing. A)I only. B)I and IV. C)III only. D)III and IV.

D

Something that increases the chance of a peril occurring is a: A: Warranty. B: Deductible. C: Peril. D: Hazard.

D

The Homeowner's policy may provide: A: Monoline property coverage on property valued over $15,000. B: Replacement cost for personal property without endorsement. C: Property coverage for aircraft stored at the insured premises. D: Coverage on a secondary dwelling located in the same state if the coverage is written on a separate policy.

D

The Standard Fire policy insuring agreement covers: I. Lightning. II. Removal of contents from endangered premises .III. Water damage caused by firemen putting out a fire at the insured premises. A: I only. B: II only. C: I and II. D: I, II, III.

D

The minimum split limits of liability on an automobile required by the State of North Carolina are? A: 15/30/10 B: 10/20/15 C: 25/50/15 D: 30/60/25

D

Which of the following best defines "risk"? A: The chance for gain or loss. B: The original cause of loss. C: The decrease in economic value. D: The uncertainty of loss

D

Which of the following dwellings may NOT be covered under the Dwelling Program? A: An apartment building with 3 apartments. B: A frame structure considered too old to be insured on a Homeowner's policy. C: A single family dwelling with a beauty parlor operated by the insured. D: A single family dwelling on a farm of less than 30 acres.

D

Which of the following is part of a Commercial Property coverage part? A: One or more causes of loss forms. B: Applicable endorsements. C: Commercial property conditions. D: All of the above.

D

Which of the following losses would be covered under a HO-2 ? A: Food spoilage due to power interruption that occurs away from the premises B: A garage damaged by the named insured backing a vehicle into it C: Theft of cassette tapes while in the insured's car D: First aid provided to an insured person injured on the premises

D

Which of the following structures would NOT be insured under Coverage B? A: A garage connected to the dwelling by utility lines. B: A tree house built in the back yard. C: A free standing utility building. D: A gazebo connected to the dwelling by a wood deck.

D

Which statement concerning the cancellation of a fire policy is true? A: If an insured requests cancellation of a fire policy, the unearned premium calculated on a pro-rated basis will be returned upon return of the policy to the company B: When a company cancels a fire policy, it must give the insured 45 days' notice before cancellation becomes effective C: When a company cancels a fire policy, the unearned premium will be returned to the insured on a short-rate basis D: When the company cancels a fire policy, the unearned premium calculated on a pro-rated basis will be returned to the insured

D

In a Building and Personal Property policy which of the following may be covered? A: The salt water fish. B: Paved Surfaces. C: Contraband. D: A customer's coat.

D; A customer's coat may be covered under Coverage C which is a type of Bailee coverage