insurance quiz questions

C. promote the public welfare

The purpose of insurance regulation is to... A. keep producers honest B. make insurance companies pay taxes C. promote the public welfare D. make insurance statutes uniform between states

A. employers liability

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT... A. employers liability B. separation of insured C. legal action against insurer D. bankruptcy

A. deductible

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? A. deductible B. self-insured retention C. coinsurance D. premium

D. a statement that earthquake damage is not covered

The declarations page of the homeowners policy provides all of the following information EXCEPT A. the amount of premium charged for each coverage B. the insured's address C. what deductible amount applies to each loss covered by the policy D. a statement that earthquake damage is not covered

A. workers compensation coverage

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT A. workers compensation coverage B. crime coverage C. boiler and machinery coverage D. general liability coverage

B. misdemeanor

A failure to report insurance fraud to the Commissioner is considered a/an... A. unfair trade practice B. misdemeanor C. felony D. concealment

C. $175,000

A policyholder has an equipment breakdown policy with $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? A. $200,000 B. $100,000 C. $175,000 D. $180,000

D. coverage is provided at additional premium

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? A. coverage is provided for the wholesale amount only B. coverage is not provided under this form C. coverage is provided if dealership employees are in possession of the subject automobile D. coverage is provided at additional premium

C. it is 50% of the actual premium

All of the following are true regarding deposit premium EXCEPT... A. it must be paid in advance B. it is an estimated premium paid at the policy issue C. it is 50% of the actual premium D. it could be adjusted by the audit

B. the injury or damage must occur within 90 days after the insured's work is completed

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT A. the injury or damage must occur after the insured has released physical possession of the product to another B. the injury or damage must occur within 90 days after the insured's work is completed C. the injury or damage must occur away from the insured premises D. the injury to damage must arise out of the insured's product or work

D. an agent misrepresents policy benefits to convince a policy owner to replace policies

All of the following would be considered rebating EXCEPT... A. an agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him B. an agent offers to share his commission with a policyholder C. an agent offers tickets to a baseball game as an inducement to buy insurance D. an agent misrepresents policy benefits to convince a policy owner to replace policies

B. binder

An applicant is purchasing a homeowners policy. A producer comes to her home, fills out the paperwork, and tells the applicant that her home will be covered as soon as she signs all of the paperwork, and that she will receive a new policy in the mail in 5 business days. Even though the policy is not issued, the applicant's home is temporarily covered until then. Which of the following makes that possible? A. notice of claim B. binder C. loss settlement provision D. mortgagee clause

C. legal

An applicant who lives in a state in which a producer is not licensed travels to the state in which the producer is licensed to apply for a policy. This is considered to be... A. a violation of insurance law B. a misdemeanor C. legal D. unfair

C. legal

An applicant who lives in a state in which a producer is not licensed travels to the state in which the producer is licensed to apply for a policy. This is considered to be... A. a violation of insurance law B. a misdemeanor C. legal D. unfair

C. $41,700

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? A. $35,700 B. $40,000 C. $41,700 D. $50,000

D. contractors equipment floater

An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? A. Bailee's customers form B. builder's risk form C. general property form D. contractors equipment floater

C. deposit premium audit

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured's books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy A. contract bond B. errors and omissions insurance C. deposit premium audit D. excess liability coverage

C. combined single

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? A. aggregate B. per occurence C. combined single D. split

D. higher limits

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? A. lower limits B. the insurer will not pay for out-or-state accidents C. only the limits specified in the policy D. higher limits

C. 3 years

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? A. 90 days B. 1 year C. 3 years D. 5 years

B. speculative risk

Events in which a person has both the chance of winning or losing are classified as... A. retained risk B. speculative risk C. insurable D. pure risk

D. physical damage

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 A. uninsured motorist B. no-fault medical payments C. liability D. physical damage

D. 48 hours

Jean owns a craft store. The protective safeguards endorsement of her BOP requires the store to have a functional automatic sprinkler system. A winter storm freezes the pipes to the sprinklers system, causing the system to shut down. How many hours does Jean have to restore the system before she must notify her insurer? A. 12 hours B. 24 hours C. 36 hours D. 48 hours

B. regulates consumer reports

The Federal Fair Credit Reporting Act A. prevents money laundering B. regulates consumer reports C. protects customer privacy D. regulates telemarketing

D. covered auto

The designation symbols used in commercial auto policies can be found in which policy section? A. liability coverage B. definitions C. conditions D. covered auto

C. within 45 days

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... A. within 60 days B. as soon as practical C. within 45 days D. within 30 days

B. how parties to the contract must act following a loss

The policy conditions defines A. the amount of coverage B. how parties to the contract must act following a loss C. the basic underwriting information D. the excluded perils

B. in writing

The proof of loss statement must be... A. an oral statement B. in writing C. both oral and in writing D. in a videotape format

A. a producer's retirement

This state provided for a temporary license for all of the following EXCEPT A. a producer's retirement B. the death of a producer C. a producer's disability D. a producer's time in the military service

A. certificate of authority

To legally transact insurance in this state, an insurer must obtain which of the following? A. certificate of authority B. power of attorney C. business entity license D. certificate of insurance

B. other insurance

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? A. primary and excess B. other insurance C. valid insurance D. nonconcurrency

B. a written document showing the types and amounts of insurance that have been issued to the insured

What is Certificate of Insurance? A. a written document allowing the insurer to inspect the insured's books B. a written document showing the types and amounts of insurance that have been issued to the insured C. a written document obligating the insurer to the person to which the insurance was issued D. a written document naming the insured's beneficiary

A. to protect the public

What is the main justification for the existence of the State Insurance Department? A. to protect the public B. to protect companies from malicious law suits C. to protect producers from the National Association of Insurance Commission D. to protect the State from harmful practices of companies and producers

B. concealment

What term best describes that act of withholding material information that would be crucial to an underwriting decision? A. breach of warranty B. concealment C. withholding D. leading

D. defamation

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of... A. misrepresentation B. discrimination C. nothing, unless the remarks were in writing D. defamation

A. when the type or amount of insurance required is not available from an authorized insurer

When may a surplus lines broker place insurance with a surplus line insurance company? A. when the type or amount of insurance required is not available from an authorized insurer B. when permission is granted by a licensed resident insurance agent C. when requested and authorized by the insured D. when the rates are lower than the rates with an authorized insurer

C. discrimination

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered A. controlled business B. adverse selection C. discrimination D. twisting

C. hired and non owned auto liability

Which endorsement adds coverage for employee use of automobiles in the insured's business and the insured's use of rented autos if no coverage is provided on a business auto policy? A. newly acquired auto exposure liability B. additional insured C. hired and non owned auto liability D. substitute auto liability

D. HO-4

Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment? A. HO-6 B. HO-2 C. HO-3 D. HO-4

A. Anne carelessly walks through a glass door at her employer's place of business

Which of the following is a compensable injury? A. Anne carelessly walks through a glass door at her employer's place of business B. Muriel gets drunk at an office party and misses 2 days of work C. Tom and 3 co-workers from a bowling team that is not sponsored by their employer. Tom is injured when someone drops a bowling ball on his foot D. Willis and Orson are clowning around during a break at their work site and Willis is injured

A. a garage liability coverage

Which of the following policies will help an auto dealership cover most of its liability exposures? A. a garage liability coverage B. a motor carrier coverage form C. a commercial general liability policy with a crime and endorsement D. a business owners policy

D. none of these are covered

Which of the following would be covered under the Film Coverage Form? A. deterioration of a film B. exposure of a negative film to light C. electrical erasure of a tape D. none of these are covered

D. any condition or exposure that increases the possibility of loss

With respect to the business of insurance, a hazard is... A. the risk taken when performing something dangerous B. the tendency of poorer risks to seek insurance more often than better risks C. the basic reason for an insured to purchase insurance D. any condition or exposure that increases the possibility of loss

D. any condition or exposure that increases the possibility of loss

With respect to the business of insurance, a hazard is... A. the risk taken when performing something dangerous B. the tendency of poorer risks to seek insurance more often than better risks C. the basic reason for an insured to purchase insurance D. any condition or exposure that increases the possibility of loss