Insurance Practice Questions
Under additional coverages for homeowners policies, what is the maximum amount that would be paid for fire department service charge?
$500
Authorized insurance companies are examined by the Commissioner at least once every
5 years.
Which of the following would be required to be licensed as an insurance producer
A salaried employee who advertises and solicits insurance
What type of liability would a person who owns wild animals have?
Absolute
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
Which of the following types of valuation works best for property whose value does not fluctuate much?
Agreed value
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
A man is working on the roof of his house, and his neighbor is watching from the ground. When roof shingles are thrown off the roof, they hit the neighbor in the face, injuring his eye. Which best classifies the homeowner's legal liability?
Bodily injury
Which of the following provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time?
Duties after loss
Who is responsible for filling out a notice of claim form?
Insured
Persons covered under an insurance policy, whether named or not, are known as the
Insureds.
All of the following are conditions commonly found in the insurance policy EXCEPT
Insuring agreement.
How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeowners policy?
It removes the coverage.
A worker received a concussion after getting hit on the head at work and missed work for 5 days. At what point will the worker receive workers compensation benefits for the missed work?
Never; benefits start once a worker has been unable to work for more than 7 days.
Duties of the insurer found in property policy conditions include all of the following EXCEPT
Notify the insured in the event of financial difficulty
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?
Per occurrence
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
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
How are surety bonds different from insurance?
Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses
When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be
The proximate cause
An insured must get advance warning if the premiums will be increased by more than
15%
How long is a waiting period upon purchase of flood coverage through NFIP?
30 days
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.
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
An installation floater is used to insure
Appliances intended to become a permanent part of the building.
Which of the following coverages is included in an unendorsed homeowners policy?
Medical payment to others
Which of the following types of insurers is owned by stockholders?
Stock
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
Utmost good faith.
An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of
Vicarious liability.
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate of Authority
Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity?
Directors and officers liability