Insurance Exam

The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT

$1,000 on silverware.

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

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?

$14,000

What is the limit for the forgery or alteration coverage in the businessowners policy?

$2,500

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

A dwelling policy has a standard deductible that applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

$250

An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pay for damages? (Dollar amounts are rounded to the nearest hundred.)

$41,700

An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay?

$60

Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to

2 weeks

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

30,000

The limits of liability for bodily injury or property damage stated in an auto insurance policy are 30/60/25. What are the maximum limits of liability allowed for uninsured/underinsured motorist?

30/60/25

If a deceased employee is survived by a eligible spouse and 3 dependent children, what percentage of the death benefit will be paid to the spouse?

50%

What percentage of continuing education hours must be in a classroom setting?

50%

An insurer may cancel a personal auto policy if the policy has been in effect for at least how many days?

60 days

Insurers must file all rates and forms for Commissioner's approval within how many days prior to use?

60 days

The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

A contract for the transport of goods between the shipper and the carrier is called

A bill of lading

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business.

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500-pound capacity

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault.

Which of the following is another term for an authorized insurer?

Admitted

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

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who owns and lives on a commercial farm

Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT

Animals and birds.

In equipment breakdown coverage, all accidents would be considered a single accident if they occur

At a single location at the same time and from the same cause

Business personal property coverage form covers all of the following EXCEPT

Automobiles held for sale.

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have?

Combined single

Who will transport the property of anyone who hires them?

Common carriers

A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly?

Completed operations

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions.

Which of the following risks is eligible for coverage under a businessowners policy?

Condominiums

All of the following are supplemental payments found in liability policies EXCEPT

Costs the insured incurred in hiring an attorney.

Which of the following is covered under the Mail floater of a Commercial Inland Marine policy ONLY if is sent by registered mail?

Currency and unsold travelers checks

A unique feature in a bailee form is that it covers

Customers' property whether or not the insured has been negligent.

Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period?

Discovery form

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

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss.

Which of the following is true of dwelling policy coverage?

Exclusions apply to all three policy forms.

Expenses that an organization would not have incurred if business interruption had not existed are known as

Extra expenses.

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

A Mobile Homeowners Policy is structured the same as a

Homeowners Policy.

In liability insurance policies, supplementary payments are made

In addition to the limit of liability.

The proof of loss statement must be

In writing

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement.

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement.

An applicant for a license in Texas must include a statement with his application that provides information about all the following EXCEPT

Intending to apply for another license.

All of the following statements describe the concept of strict liability EXCEPT

It is imposed on defendants engaged in hazardous activities.

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

A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage will be automatically applied to all policies of the same type is known as

Liberalization clause.

All of the following are types of adjuster's licenses available in this state EXCEPT

Life and health claims adjuster.

Which of the following coverages is included in an unendorsed homeowners policy?

Medical payment to others

The Physicians and Surgeons Equipment Floater in NOT intended for which of the following?

Medical supplies located in a hospital

Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?

Motor truck cargo policy - truckers form

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty.

Rental Reimbursement is only available if the policy includes which coverage?

Other Than Collision Coverage

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

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 EXCEPT

Physical damage.

Which of the following statements is INCORRECT with regard to surplus lines insurance?

Policies written by a surplus lines insurer typically contain standard coverages and forms.

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is

Provided by the insured's policy on an excess basis.

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society?

Punitive

What type of information would be found in a policy's insuring agreement?

Renewal dates

Insurance is the transfer of

Risk

According to the businessowners policy (BOP) definitions, which of the following does NOT mean valuable papers and records?

Securities

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

Special

Words or terms that appear in an insurance policy in bold face print include

Specific definitions as to their meaning as used in the policy.

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as

Stated Amount

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT

Submitting to a medical exam when requested.

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

An insured's accounts receivable records have been damaged. The loss may be covered with

The accounts receivable coverage form.

How much is the premium for the dwelling under construction endorsement under the dwelling policy?

The average amount of insurance during construction

All of the following statements concerning coinsurance are true EXCEPT

The coinsurance formula will also be applied to total losses.

The claims-made trigger is based on which of the following?

The date the claim is first made

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention.

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises.

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT

The insured's business income losses due to personal injury.

In which of the following situations would off-premises coverage in a broad theft endorsement of the insured's dwelling policy apply?

The insured's camera is stolen from his suitcase while he is on vacation.

A dealership loans a car to its customer to use while the dealership is repairing the customer's car. If the dealership has business auto physical damage coverage and a customer's automobile insurance does not cover damages to loaner cars, which of the following is true?

The loaner vehicle is covered by the business auto policy.

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT

They pay defense costs even after the aggregate limit has been reached.

An insured is driving her auto and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair?

This loss is not covered

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for

Uninsured motorist coverage.

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.

Supplementary payments on a CGL provide all of the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy

all of the above

Insurable interest in a property policy must be proven

at the time of loss

The process of determining the premium charged and how much insurance is required for a particular loss is called

loss valuation

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

mutual

Coverage for all of the following is found in Section I of a homeowners policy EXCEPT

personal liability

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 EXCEPT

physical damage

A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?

stated amount

Insurance procured from an unauthorized insurer is called

surplus lines insurance

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

symbol 5

Which one of the following symbols used in business auto coverage is correctly described?

symbol 9