license exam
the insured's mother-in-law broker her leg falling down the front steps of the insured's premises. the insured's homeowners medical payments coverage will
apply to injuries of any guests or visitors
An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events T
the agency negligently fails to offer an increased limit of coverage or benefit under a policy the agency is sued by an insured for giving incorrect advice the agency negligently fails to renew a policy causing a client to suffer a financial loss
when a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property
the carrier
in personal auto policies, the term 'you' refers to
the named insured
in terms of parties to a contract, all of the following describes a competent party
the person must not be under the influence of drugs or alcohol; the person must be of legal age; the person must be mentally competent to understand the contract
All are true if a contractor defaults on a performance contract
the surety will attempt to seek reimbursement from the contractor for any amounts it pays the obligee may hire another contractor to complete the job and have the surety repay the obligee the principal's obligations end
a licensed producer moving to PA may become licensed as a resident if the producer submits a completed application within how many days of establishing residence in PA with proof of licensing from their prior home state
90
in which of the following situations would the jewelers block extension cover a loss
a jeweler fixes a necklace and sends it by registered mail to the owner. when the necklace arrives, it has been damaged property in transit by registered mail is covered under the jewelers block extension
which of the following would be required to be licensed as an insurance producer
a salaried employee who advertises and solicits insurance
under the insurance fraud protection act, when can a person who has been convicted of a crime involving dishonesty or a breach of trust engage in the business of insurance
after obtaining the consent of the department of insurance
insurers are required to keep records. when may the department examine these records
at any time
all of the following are unfair claims settlement practices
failing to adopt and implement reasonable standards for settling claims, failing to acknowledge pertinent communication pertaining to a claim, refusing to pay claims without conducting a reasonable investigation
the state insurance code identifies all of the following as prohibited acts that can cause suspension, revocation or denial of an insurance producer license
failing to pay child support obligations, committing a felony or its equivalent, failing to pay state income taxes
in farm insurance, coverage I- personal and advertising injury liability for suits alleging personal injury is most similar to the coverage found in which coverage form
general liability
misrepresentation
issuing sales material with exaggerated statements about policy benefits
which of the following best describes a misrepresentation
issuing sales material with exaggerated statements about policy benefits
which of the following statements concerning the builders risk coverage form is correct
it may be written on a reporting form for the completed value of the structure
the term 'fiduciary capacity' refers to a producers
position of financial trust to clients and insurance company
all of the following are considered a misrepresentation as it pertains to unfair trade practices
stating that the insurance policy is a share of stock, exaggerating the benefits provided in the policy, stating the competitors will arbitrarily increase their premiums each year
which of the following entities established the do not call registry
the federal trade commission
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
the injury or damage must arise out of the insureds product or work the injury or damage must occur after the insured has released physical possession of the product to another the injury or damage must occur away from the insured premises
should an insurance company deny a claim submitted by an insured without providing to that insured a prompt and reasonable explanation of the claim denial, the insurer would be in violation of
unfair claims methods and practices regulations
when would a misrepresentation on the insurance application be considered fraud
if it is intentional and material
what is the civil penalty of up to $10,000 may be leveled for each violation of Commissioner's cease and desist order
$10,000
a producer has become disabled. in order to keep his business going, what may the producer's designee do
obtain a temporary license
where is the policy period stated
on the declarations page of the policy
The insured's car was hit and damaged by a deer. Under which of the following coverages in a personal auto policy would this loss be paid?
other-than-collision
HMS Toys carries more inventory from october 1 to december 31. which of these would provide higher coverage limits during those months and lower limits the rest of the year
peak season
which of the following liability coverages must be added by endorsement to a homeowners policy in order to apply
personal injury
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 $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. how much can the owner collect for his loss
$30,000
what are common carriers required to issue to every shipper that it transports goods for
a uniform bill of lading
an uninsured motor vehicle includes all of the following
a vehicle that has no liability bond in force a vehicle which flees a hit-and-run accident a vehicle not covered by an auto insurance policy
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
If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply
automatically
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
consideration
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
implied exists because not every single detail of an agent's authority can be written in a contract
burglary is defined as
taking of property from within the premises leaving visible signs of forced entry
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?
transfer of rights and duties under the policy
under the provisions of the business income coverage form, all of the following are true
the insured is reimbursed for payroll that continues after the loss begins; if the insured and insurer are unable to come to agreement as to the value of the loss, either party may make a written demand for an appraisal; the insured agrees to resume all or part of operations as quickly as possible
which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another
twisting
what type of bond guarantees that a construction contractor will enter into a contract at a set price
bid bond
valuable papers and records form provides coverage for the reconstruction of all the following types of records
blueprints, deeds, historical records
Under the HO-4 and HO-6 homeowners policy forms, property is insured against
broad from perils
under a personal auto policy, in which of the following locations would a vehicle primarily garaged in california be covered
any other state
an ocean marine adventure is
any voyage
all of the following is covered under coverage E- scheduled farm personal property
farm machinery, portable structures, livestock
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 only carried out 75% of the amount of insurance, so insurer will pay 75% of the loss
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/day, how much will his policy pay
$60 policy will pay $20/day after 48 hours, not to exceed 30 days in total
for how long after the death of the named insured must basic property insurance continue coverage
180 days
when a producer died, his surviving spouse needed to maintain the insurance agency until it could be sold. without passing an examination, she could qualify for a temporary license for a maximum period of
180 days
prior to license renewal all insurance producers must successfully complete how many hours of continuing education
24 credit hours
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained
3 days
Jean owns a craft store. The Protective Safeguards endorsement of her BOP requires Jean's store to have a functional automatic sprinkler system. One night, a storm with wind chills of 30 degrees below zero freezes the pipes to the sprinkler system, and the system must be shut down. How many hours does Jean have to restore the system before she must notice her insurer?
48 hours
what is the maximum length of time that an employee who is partially disabled can receive loss of time benefits under workers comp
500 weeks
An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase
HO-6
the homeowners policy form that covers condominium unit owners
HO-6
Theft coverage under an HO-8 is restricted to
The actual cash value of what was stolen, with limits for certain classes of property
in PA, all of the following classes of employees may be excluded from the requirement of being covered under workers comp insurance coverage
a licensed insurance producer affiliated by a licensed insurance agency by a written contract and who is compensated only by commissions a domestic servant working in a private home a licensed real estate producer who is compensated by commissions and files federal income taxes as an independent contractor
when other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover
a share of the loss
all of the following are conditions commonly found in the insurance policy
cancellation and nonrenewal, subrogation, appraisal
An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?
collision
An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?
coverage e- additional living expense
a unique feature in a bailee form is that it covers
customers' property whether or not the insured has been negligent
which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy
damage to the dwelling caused by ash or dust from a volcanic eruption
the part of a property policy that shows the amount of insurance, premium, and policy term is the
declarations
if an insurer appoints a producer, which authority must be notified
department of insurance
the major portion of the premium for an equipment breakdown policy pays
for inspections and examinations
all of the following may be covered by the miscellaneous type vehicle endorsement
golf carts, dune buggies, motorcycles
dwelling policy coverage c- personal property will cover all of the following
hobby aircraft, computer software, canoes
persons covered under an insurance policy, whether named or not, are known as
insureds
all of the following is found in a commercial package policy
interline endorsements, common policy conditions, common policy declarations
which of the following terms describes the concept of disrupting the chain of events
intervening cause
the HO-3 homeowners policy provides
open peril coverage on the dwelling and broad form coverage on personal property
The party to a surety or fidelity bond who promises to fulfill the obligation is the
principal
what is the term for the entity that an agent represents regarding contractual agreements with third parties
principal
hazard is best defined as
something that increases the risk of loss
the content coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks
the difference in the actual cash value as a pair and as a single
A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?
the driver's policy would be primary
what is the purpose of the miscellaneous type vehicle endorsement in personal auto policies
to expand the definition of a covered auto to include various motorized vehicles
to avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days
10 days
which coverage form would provide coverage for all incoming and outgoing shipments
annual transit
who is responsible for paying producer appointment fees
the appointing insurer
the business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. which of the following terms best describes the nature of this type of coverage
time element
if an insurer changes a form that it uses to transact insurance, it must do which of the following
file the form with the commissioner for approval
ABC insurance company wishes to begin transacting business in PA. before it can do so, it must do which of the following
obtain a certificate of authority
according to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means
the consumer directs the licensee not to disclose the consumers nonpublic personal financial information to a third party
the common policy condition is a modular part combined with other parts to create the contract. the common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. which of the following provisions would be found in the common policy conditions section of the policy?
the first named insured may cancel the policy at any time by giving written notice to the insurer
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
all of the following are requirements for producer license renewal
record of fingerprints, up to date continuing education, renewal fees
federal law makes it illegal for any individual convicted of a crime involving dishonestly or breach of trust to work in the business of insurance affecting interstate commerce
without receiving written consent from an insurance regulatory authority
erroneous publishing copied all the material from angels inc's book. the only changes made by erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. angels inc. files a claim against erroneous and seeks damages. will a commercial general liability policy cover the claim
no because the claim results from copyright infringement and is not in an advertisement
which of the following is true regarding continuing education required for those holding a pennsylvania producer license
24 hours each licensing period
which of the following is an example of a producer's fiduciary responsibilities
a producer promptly forwarding premiums to the insurance company
all of the following considered unfair discrimination by insurers
assigning different risk classifications to applicants based on gender identity, charging applicants with similar health histories different premiums based on their ethnicity, cancelling individual coverage based on the insured's marital status
for how long must a company maintain a complete file of all advertisements used
at least 4 years
which of the following includes information regarding a person's credit, character, reputation, and habits
consumer report
which of the following is an example of an unfair claims settlement practice
failure to promptly settle a claim when liability has been clearly established
an insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. what is this an example of
false advertising
a loss has occurred before the first report has been filed on a value reporting coverage form- all below are true
full amount of loss up to the policy limit is paid if the loss occurs before the first report due date, 75% of the loss is paid if the loss occurred after the first report due date, provisional premium is based on 75% of the full amount of coverage
an insurer published intimidating brochures that portray the insurer's competition as financially and professionally unstable. which of the following best describes this act
illegal under any circumstances
which of the following liability exposures is most likely for a small specialty clothing retail boutique
premises liability exposure
the Gramm-Leach-Bliley Act was passed to
protect private customer information filed with a financial institution
all of the following are considered an unfair and deceptive practice
rebating, defamation, misrepresentation
under the fair credit reporting act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
respond to the consumer's complaint
it would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability
sexual orientation can use address, age, and gender
all of the following are considered to be rebated if offered to an insured in the sale of insurance
stocks, securities, or bonds; an offer to share in commissions generated by the sale; an offer of employment
which of the following would the livestock coverage form insure against
the euthanasia of livestock suspected of carrying mad cow disease, death of livestock caused by accidental drowning, death of livestock caused by a tornado
which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information
the fair credit reporting act
a mobile homeowners policy is structured the same as a
homeowners policy
under the commercial crime coverage inside the premises- robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records
$5,000
an insured has an auto liability policy with limits of 25/50/15. the insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: 'A' $15,000, 'B' $30,000, and 'C' $35,000. how much will her insurer pay in total for all injuries
$50,000
to be eligible for businessowners policy (BOP) coverage, an office building cannot be higher than
6 stories
which of the following dwelling policy forms primarily insures a structure on an actual cash value basis
DP-1
the property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called
abandonment
in a personal auto policy, the medical payments coverage is similar to
accident insurance, because it pays the medical expenses regardless of fault
all else being equal, all of the following will be considered unfair discrimination by insurers
charging applicants with similar health histories different premium rates, cancelling individual coverage based on the insured's marital status, assigning different risk classifications to applicants based on ethnicity
which of the following entities must approve all continuing education courses in this state
commissioner
Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct?
coverage C limits will no longer apply to the jewelry insured by the endorsement
in a farm policy, which of the following coverages would reimburse the insured for loss of rental income following damage to the insured dwelling by an insured peril
coverage D
when a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of the other insurer. the producer could be found guilty of
defamation
which of the following authorities monitors the financial strength of insurers
department of insurance
all of the following is covered under accounts receivable coverage form
expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs interest on loans required to offset uncollectible amounts pending payments of the insurance proceeds sums due the insured that are uncollectible due to a covered loss
which of the following lists all the required elements for establishing a charge of negligence
legal duty owed, standard of care, proximate cause, damages
The insured's house is located one mile from the county's new landfill and across the road from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something happened to it, but when the insured tried to sell it, the best offer he received was $80,000. The insurance company will insure the house for only $80,000. What method of valuation is used to insure this property?
market value
dwelling coverage includes all of the following
materials on the described location used to alter or repair the dwelling, building and outdoor equipment used to service the described location, the dwelling used principally for residential purposes
all of the following are parts of a personal auto policy
medical payments coverage, duties after an accident or loss, duties after an accident or loss, liability coverage
a person who does not lock the doors or does not repair leaks shows an indifferent attitude. this person presents what type of hazard
morale
what other term is used to refer to unintentional torts
negligence
which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis
nonconcurrency
the following statement is correct with regard to federal crop insurance
policies are written on an annual basis and may be continued providing production reports are submitted in a timely manner and renewal premium is paid
all of the following are found in the declarations section of a policy
policy premiums, name of the insured, limits of insurance
who might receive dividends from a mutual insurer
policyhodlers
Who might receive dividends from a mutual insurer?
policyholders
what fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence
proximate cause
if a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept
reasonable expectations
installing deadbolt locks on the doors of a home is an example of which method of handling risk
reduction
which of the following is a formal program developed by an employer to fund its losses as an alternative to the purchase of insurance
self-insurance
all of the following are examples of risk retention
self-insurance, deductibles, copayments
when an insurer cancels, midterm, a commercial property or casualty insurance policy for an allowable reason, they must
send or deliver a 'notice of cancellation' at least 60 days prior to the effective date of cancellation and state the reason for the cancellation
employment practices liability insurance (EPLI) would cover claims arising from
sexual harassment, wrongful termination, discrimination
which of the following losses would be covered under the property damage liability coverage of a personal auto policy
the insured damages a rented garage when he failed to stop in time
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
losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS
the insured had drained the plumbing system
the medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following
the insured is injured by a motor vehicle while crossing the street the insured's child sustains injuries when the car she is in accidentally rolls down a hill a friend is injured while driving the insured's vehicle with permission
all of the following are supplemental payments included in the liability section of a personal auto policy
up to $200/day for loss of earnings due to attendance at hearings or trials premiums on appeal bonds in any suit the insurer defends up to $250 for bail bonds required because of a covered accident
When a parent is required to pay for damages caused by his or her children, this is an example of
vicarious liability
in order to become a self-insured under workers compensation, an employer would need to show the commissioner the ability to
pay for medical and loss of time benefits in the event an employee is injured
The causes of loss insured against in an insurance policy are known as
perils
who are the parties to a bond
principal, obligee, and guarantor
all of the following would be considered an insurance transaction
advising policyholder regarding a claim, negotiating coverage, soliciting a policy
all of the following are compensable under workers comp insurance
after working for an insulation company for 30 years, joe is diagnosed with mesothelioma, jim's hand is caught in a drill press and one of his fingers is severed, pete works as a roofer. today pete accidentally falls from a ladder and breaks his arm
which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance
exposure
which of the following statements would be an example of a product liability claim
faulty packaging of a cereal caused spoilage that resulted in someone getting sick
States with monopolistic state workers compensation funds
do not allow private insurers to be licensed to writer workers compensation coverage
According to the BOP definitions, all of the following does mean valuable papers and records?
drawings and maps, inscribed deeds, manuscripts
individuals in the business of selling construction equipment and mobile equipment should insure with an
equipment dealers coverage form
which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant
producer
which crime coverage form is used to cover securities held in trust by another party as collateral for some obligation
coverage J- securities deposited with others
how often must the commissioner examine rating organizations
every 5 years
all of the following are the requirements for property to be eligible for FAIR plan coverage
it must be located in a specific area defined by the state, it must be considered insurable based on reasonable underwriting standards, coverage could not be purchased through the normal insurance market
extended nonowned coverage endorsement in a PAP broadens which of the following coverages
liability and medical payments
what provision in a property policy applies when the insurer broadens coverage but does not increase the premium
liberalization clause
bob's home is insured for $100,000 under a dwelling policy. yesterday his home suffered $20,000 damage from a fire. today the home was struck by lightning, starting another fire that completely destroyed the structure. bob's policy will pay
$100,000 because damage remained unrepaired, total amount of coverage is only the face amount of the policy
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 the limit is not more than $5,000 per person, per accident
What is the limit for the forgery or alteration coverage in the businessowners policy?
$2,500
tom's truck service's vehicle is stolen. the policyholder may obtain coverage for transportation expenses subject to which of the following limits
$20/day; $600 maximum
in the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or record
$5,000
In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?
1st limit
a producer has successfully completed 52 hours of continuing education (CE). how many hours can the producer apply to her current reporting period, and how many hours can she carry toward the next reporting period
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following excess hours accumulated during the 2-year period may be carried forward only to the next 2 year period. a max of 24 hours may be carried forward
coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by an accident if the expenses are incurred and reported the insurer within how many years of the accident date
3 years
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?
30 days
an insured with a homeowners policy has removed property from the insured location to protect it from loss that could be caused by a covered peril. the removal coverage applies for
30 days
when an auto insurance policy is cancelled by the insurer for an allowable reason other than nonpayment of the premium, how much prior notice must be given to the named insured
30 days
under workers compensation, the employer or insurance company must designate how many health care providers from which an injured employee may seek care
6
If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?
auto policy
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
a beauty parlor burns to the ground. what type of loss is this to the owner
direct
professional liability coverage protects against legal liability resulting from
errors and omissions
the personal injury liability endorsement to an HO policy applies to all the following
false arrest, slander, invasion of privacy
employers liability insurance, part two of a standard workers compensation and employers liability (WC&EL) policy form, includes
liability to a third party for claims arising out of injury to an employee, bodily injury caused by accident when the injury occurs during the policy period, bodily injury caused by or aggravated by disease during the policy period
a municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain
license and permit bonds
which of the following is the basis for a claim against an insurance policy
loss
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?
loss by vandalism and malicious mischief is excluded
an insured is driving her automobile and strikes a large pothole that causes a flat tire. which coverage of the insured's personal auto policy will pay for the repair
loss is not covered
What losses are considered when computing individual FMHA emergency loan eligibility?
losses on crops which the farmer chose to insure will be considered
An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true?
losses will be paid to the mortgagee and mortgagor as their interest appears
all of the following types of property are covered by a standard builders risk form
machinery that will be permanently attached to the building, the building itself, temporary structures
all of the following actions can be described as twisting
making an incomplete comparison between the existing and proposed policies, misrepresenting the terms and conditions of the existing policy to make the new one more attractive, embellishing the terms of the proposed policy in order to convince the insured to switch
the type of professional liability coverage as a medical doctor needs is
malpractice coverage
which of the following events causing financial loss to an insured would not be covered under federal crop insurance
market price decline
on its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. the company is guilty of
misrepresentation
on its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. the company is guilty of
misrepresentation issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal
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- carriers form
the livestock coverage form covers which of the following losses
named peril coverage for death of livestock
what was created to keep telemarketers from calling consumers who do not wish to be contacted
national do not call registry
all of the following are considered causes for flood conditions covered by the national flood insurance program
overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters from any source, a mudlfow
the other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property
pro rata liability
which of the following would be the insured's duty in the event of a loss according to the duties in event of occurrence, claim, or suit condition
providing specific details regarding an occurrence
a situation in which a person can only lose or have no change represents
pure risk
what method do insurers use to protect themselves against catastrophic losses
reinsurance
what type of information would be found in a policy's insuring agreement
renewal dates
Which method of loss valuation is contrary to the basic concept of indemnity?
replacement cost
in property insurance, actual cash value is defined as which of the following
replacement cost at the time of the loss, less depreciation
all of the following are factors in the determination of actual cash value
replacement cost, type and quality of property, age of the property
a certificate of insurance is a written document that
shows the types and amounts of insurance issued to the insured
In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the
situs and status test
which of the following is covered under the physical damage coverage of a personal auto policy
sound reproduction equipment permanently installed in the covered auto
what are the two types of compensatory damages
special and general
the policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called
subrogation
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
what is the deductible of a commercial liability umbrella policy called
the SIR the self-insured retention is an initial part of a loss the insured pays before the umbrella pays if no other policy covers the loss
a passenger in a friend's car is injured while getting into the car. which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy
the driver's policy would be primary
in insurance terms, what are components
the factors that determine rates
all of the following are included under medical payments coverage of a personal auto policy
the insured's friend is injured in an accident while riding as a passenger in the insured's car the insured's mother is injured while exiting from the insured vehicle the insured is struck by another vehicle while crossing the street
which of the following circumstances would be included under medical payments coverage of a personal auto policy
the insured's friend is injured in an accident while riding as a passenger in the insured's car the insured's mother is injured while exiting from the insured vehicle the insured is struck by another vehicle while crossing the street
in ocean marine insurance, who pays all reasonable expenses if sue and labor is required to lessen a loss
the insurer
all of the following are true regarding physical damage coverage
the policy will pay up to $20/day to a mx of $600 for rental transportation the insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limited to $1,500
which of the following would determine the minimum and maximum limits for FAIR plan rates
the state
an example of a producer's fiduciary duty
the trust that a client places in the producer in regard to handling premiums
for the purpose of insurance, risk is defined as
the uncertainty or chance of loss
under crime coverage form I- lessees of safe deposit boxes, securities are only covered in the event of
theft, disappearance or destruction
the other insurances clause of an ocean marine policy allows coverage for which reasons
to obtain coverage for war, strikes, and related risks not covered by the policy
when an individual purchases insurance, what risk management technique is he or she practicing
transfer
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
which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract
warranty
when would uninsured motorist coverage apply
when the other party is legally liable but has no insurance
all of the following losses are covered by the dwelling policy if the dwelling vacant for over 60 days
windstorm, internal explosion, fire
all of the following would be covered by medical payments to others in Section II of you HO policy
you are walking your neighbor's dog and it bites someone; you allow the neighborhood kids to play flag football in your yard- one is injured; your child's nanny falls while walking down your steps
the commissioner of insurance is placed in office by which means
an appointment by the governor
all else being equal, all of the following are considered unfair discrimination by insurers
charging applicants with similar health histories different premium rates, cancelling individual coverage based on the insured's marital status, assigning different risk classifications to applicants based on ethnicity
the transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage
computer fraud
the commercial property declarations page contains which of the following information
description of the property insured
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
discrimination permitting individuals of the same class to be charged a different rate for the same insurance is the unfair trade practice of discrimination
business personal property coverage form covers all of the following
furniture and fixtures, machinery that is not permanently installed, stock
according to the fair credit reporting act, all of the following would be considered negative information about a consumer
late payments, failure to pay off a loan, tax delinquencies
crunchy flakes cereal company shipped some of its product in faulty containers that caused spoilage. this resulted in some consumers becoming ill. if the company is sued for this event, it would be an example of a
product liability claim
a producer licensed in another state wants to become a producer in PA. the other state gives the same privileges to PA producers wanting to be licensed in that state as it does its own agents. PA, therefore, extends the privileges of its agents to the prospective agent of the other state. what is this called?
reciprocity
personal business property out in the open is covered under commercial property policy only while
within 100 feet of the described premises
in a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by
the insurer
any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
all of the following are excluded in the equipment breakdown basic policy
ordinance or law coverage, business interruption, loss of power, lights, heat, steam, or refrigeration
licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in PA within how many days of the final disposition of the matter
30
a participating insurance policy may do which of the following
pay dividends to the policyowner
crews of ships are covered by the
jones act
what is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000
$80,000
the part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the
conditions
all of the following are a duty of the employer/insured if an injury occurs at the workplace
provide the name and address of the injured worker and any witnesses to the injury, provide immediate medical care required by the law, notify the insurer at once
an insured owns several buildings, each at a different location and insured on a separate policy. what type of coverage does the insured have
specific
property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called
specific coverage
the insured's home is covered by an HO-3. two years ago, the insured bought the home for $58,000. today, its replacement value is $60,000. how much coverage A does the insured need to qualify for replacement cost coverage
$48,000
a commercial property special form covers property in transit up to
$5,000
what is a material misrepresentation
a statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
for the purpose of insurance, an owner-occupied residential dwelling is
a structure of not more than four units, one of which is occupied by the owner
what is a binder
a temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued
all of the following would be eligible for coverage under the dwelling policy
a tenant-occupied dwelling, a dwelling in the course of construction, a duplex with one primary owner
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 be insured under a personal auto policy
a two-wheeled trailer designed to be towed by the station wagon; a farm pickup with 1,000-pound capacity; a station wagon that is used personally
How much is covered for debris removal under the HO property additional coverages?
all reasonable costs if the debris was caused by a peril that is insured against, the reasonable cost of debris removal is paid by the insurer
which of the following would be considered an insured under a business auto coverage form
anyone while using, with permission, a covered auto owned by the name insured
insurable interest in a property policy must be proven
at the time of loss
If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage?
attach the home day care coverage endorsement to the HO policy
which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation
attachment bond used to guarantee that if the action to attach property was wrong, any damage suffered will be paid
in which of the following sections of a commercial auto policy will you find specific information about the policy period
conditions
What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?
experience modification factor
an employee drives a company auto, but does not own a vehicle herself. what endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use
drive other car coverage
According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss?
either party may make a written request for an appraisal
the section of an insurance policy that details what perils are not insured against what persons are not insured is known as the
exclusions
the provision in the PA workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called
exclusive remedy
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
which of the aviation insurance coverages can be written to exclude coverage for losses arising from crashes or collisions
hull insurance
according to businessowners policy section I, all of the following are conditions to be met for the terms of the policy to apply to mortagageholders
if the insurer denies the claim, the mortgageholder may still take steps to receive loss payment the mortgageholder has the right to receive loss payment the insurer will pay covered losses or damage to each mortgageholder shown in the declarations
CGL Coverage B (Personal and Advertising Injury) will cover
inadvertent injury to others caused in the course of advertising the insured's product
After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured's house, breaking his arm. Which defense will reduce recovery for the neighbor's injury?
intervening cause
the additional living expense coverage on homeowners policies
is intended to allow the family to maintain its normal standard of living
when an insurer cancels an auto policy for an allowable reason, they must give notice to the named insured of possible eligibility for coverage through the pa auto insurance plan, unless the reason for cancellation is
nonpayment of premium
a property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. this endorsement will cover all of the following expenses EXCEPT
ordinance with which the insured was required to comply prior to the loss
which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery
outside the premises provides coverage for a company's money and securities for outside loss
In a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage for which the insured becomes legally liable because of a watercraft accident?
part A
duties of the insurer found in property policy conditions include all of the following
pay covered losses, provide advance notice of cancellation, return any premiums to the insured
which of the following terms refers to such disabilities as the loss of a limb, hearing, or eye sight
permanent partial disability
what type of coverage is coverage E in homeowners policies
personal liability
farm policy coverage B - structures would pay how much for loss of an outside antenna, tower, or satellite dish
up to $1,000
all of the following can be included in an insurance company's advertisment
the policies' limitations or exclusions the name of a specific agent an identification of a limited policy as a limited policy
when a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy
they do not change
in a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss
coverage E
the medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following
the insured is injured by a motor vehicle while crossing the street the insured's child sustains injuries when the care she is in accidentally rolls down a hill a friend is injured while driving the insured's vehicle with permission
once it has been reasonably proven that a person has knowingly violated the insurance code regarding unfair methods of competition, the department may impose a civil penalty of
$5,000 per violation