Missed Questions
The Business Pursuits endorsement under Section II of a homeowners policy won't cover:
business liability
For there to be negligent liability, all of the following must exist EXCEPT
A reasonable expectation that the act may cause injury or damage
businessowners policy (BOP) extension coverage form for personal property off-premises is limited to
$10,000
towing & labor cost limit
$25
A commercial property special transit form covers property in transit up to
$5,000
The personal property off-premises extension of dwelling forms provides limits of coverage up to
10% of Coverage C anywhere in the world
A building insured w/ commercial property insurance has been vacant for 90 days. How much has payment for unnamed perils reduced by?
15%
All are legal defenses against a claim of negligence EXCEPT
Absolute liability
Coverage E (Personal Liability) and/or Coverage F (Medical Payments to Others) would respond to a claim arising from all of the following situations EXCEPT
An insured's 14-year-old son was throwing rocks at the neighbor's house and broke several windows
equipment breakdown coverage form provides coverage for all of the following EXCEPT
Bodily injury liability
In order to receive transportation expenses under the personal auto policy following damage to an auto caused by collision, an insured must have
Collision coverage
Which of the following exclusions would specifically fall under Coverage E?
Contractual liability
Sarah owns a local toy shop. One day she noticesa child taking a toy and trying him until the police arrive. The child suffers multiple fractures of the ribs, as well as psychological trauma. Which of the following exclusions in the commer to leave without paying. Sarah runs out after the child, pushes him down an liability policy applies?
Expected or intentional injury exclusion
Which of the following agencies administers the National Flood Insurance Program?
FIA The National Flood Insurance Program (NFIP) was created by the federal government to fill the gap left by the private insurance industry and is administered by the Federal Insurance Administration (FIA).
What's the main difference between an H0-4 and H0-6?
H0-6 provides limited dwelling coverage & contents coverage
Insurance rates dveloped by the underwriter based on his skill and experience instead of actuarial analysis are known as
Judgment rates
Which of the following is NOT required to be included on an insured's proof of financial responsibility card?
Mailing address of the insured
In a BOP, which of the following would be covered?
Medical expenses
In a BOP, which of the following would be covered?
Mobile equipment
Which of the following sets the minimum limits of liability for motor vehicle insurance policies?
Motor Vehicle Financial Responsibility Law
An insurance company owned by the policyholders is called a
Mutual insurer
Which of the following would be covered under a building and personal property coverage form?
Outdoor sign
boat owners policy
Package policy that provides property liability and medical payments (regardless of fault) coverage for losses arising out of the ownership maintenance or use of a watercraft.
What does HO personal property coverage NOT cover?
Personal property of roomers not related to the insured
What is a bailee responsible for?
Property of others in his custody
For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?
Riot
An endorsement must be attached to all Dwelling Policies in Arizona. What is this endorsement called?
Special Provisions-Arizona
All of the following statements regarding personal property coverage in the homeowners program are correct EXCEPT
The HO-3 policy covers the mysterious disappearance of personal property
If an insurance policy has the additional coverage provision, how does it affect the policy premium?
There is no additional premium
The owner of a rental dwelling, insured under a DP-2, turns off the heat in the insured dwelling during the winter months because the dweling is not occupied. The building's water pipes freeze and break, causing damage. How will the policy react to this loss?
This loss is excluded from coverage.
The livestock coverage form provides coverage for livestock. Livestock doesnt include:
Turkeys and chickens
When does the insurer's duty to defend a suit or claim end ina commercial general liability policy?
When loss payments equal the applicable limit of insurance
When is the company responsible for actions of its agents?
Whenever the agent is acting within the conditions of the contract
Which is true of workers compensation coverage?
Workers compensation medical payments are unlimited.
Your friend's dog that you are keeping while the friend is out of town bit a visitor in your home. Does your homeowners liability coverage apply?
Yes, coverage applies to all animals in your carw
While engaged in a pick-up soccer game in the neighborhood park, the insured collides with another player, breaking his nose. Would the insured's homeowners medical cover the injury?
Yes, medical payments coverage also applies off the insured premises.
What policy has a similar structure to a Mobile Homeowners' policy?
a home owner's policy
According to business property coverage form vacancy condition, ifa policy is issued to the owner of a building, the building will be considered vacant if what porti square footage is unused?
a) 70%
When does the insurer have the right to inspect the insureds workplace?
at any time
A trucking company has a $1 million umbrella policy in place. The businessowner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business is Injuries are awarded to a single injured party in the carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?
b) $100,000
If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?t
b) $2,500
What does the farm liability coverage form include?
bodily injury liability to any insureds
Coverages included in the Business Owners Policy without requesting coverage extensions are:
civil authority, debris removal, pollutant cleanup and removal
To perform work on a customer's car, a mechanic in an auto shop had to put the vehicle on a service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form, which of the following statements is true?
coverage is provided only for the bodily injuries to the mechanic through the garage coverage form
comprehensive dwelling coverage
covers property & living expenses
Which of the following is NOT available in a package policy?
d) Professional liability
The insured's guest cottage, which is insured under his farm policy, is being rented by a young couple. When one of the renters is injured in the rented property, the insured files a claim under his farm liability coverage. How will the coverage respond?
d) The claim will not be covered. Rental or holding for rental of an insured location is excluded from coverage in farm policies.
What do basic and broad forms both cover?
internal explosions
What does an unendorsed H.O. policy cover?
medical payments to others
What method of determining the amount of loss is not subject to coinsurance?
stated amount
What does the accounts receivable form NOT cover?
the loan itself; it will cover the insurance on the loan and amounts that can't be collected due to damage to the company's accounts receivable
What policy is personal & advertising liability most similar to?
umbrella liability
A claim is considered to have been made
when notice is received and recorded by any insured or the insurer, whichever comes first
adverse selection
where one party slants the odds in their own favor, e.g. withholding info
All of the following statements are FALSE regarding garage physical damage coverage EXCEPT a) Specific causes-of-loss coverage is not available for physical damage coverage. b) No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations. c) Collision coverage is provided only for dealers. d) Autos held for sale by a dealer are listed individually in the policy.
A) collision coverage is provided only for dealers Autos held for sale are covered when auto designation Symbol 31 is shown on the declaration page.
#33. All of the following are optional endorsements that may be added to the standard equipment breakdown coverage form EXCEPT: Business interruption. Debris removal. Utility interruption. Extra expense.
Debris removal
change in the Fire Department Service Charge, as it relates to the Arizona Dwelling Policy, now states that the insurer will
Not cover charges incurred when the fire department is called to save covered property
Greg's automobile insurance policy was in effect for 43 days before he had his driver's license suspended. What can his insurer do to his policy?
Nothing, only after an automobile insurance policy has been in effect for 60 days can the insurer cancel or nonrenew a policy.
Section 2- additional coverage to others
The policy would provide replacement coverage of up to $1,000 to pay for damages caused by insured
insurance is a contract by which one seeks to protect another from a) Hazards. b) Loss. c) Exposure. d) Uncertainty.
b) loss
What are the types of compensatory damages?
d) Special and general
How long must an insured wait before business income coverage begins?
t72 hours
what is the purpose of a stated value contract?
to pre-establish the coverage amount; will not change at the time of loss
A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true? a) The insured has no coverage for losses caused by glass breakage. b) Payment for unnamed perils is reduced by 15%. c) Payment for unnamed perils is reduced by 25%. d) The insured has no coverage for losses caused by theft.
C) payment for unnamed perils is reduced by 25%
An insurance policy or countersignature endorsement must be signed by whom?
a licensed insurance producer, a managing general agent, or a bail bond agent
When does coverage under the builders risk form end?
abandoned without any plans to complete it or if the insured's interest in the property ceases, or 60 days after the building is occupied, or 90 days after construction is completed.
In dwelling policies, automatic increase in insurance is
an endorsement that may be added to a DP to increase the amount of insurance by an annual percentage to offset the effects of inflation. This endorsement requires additional premium.
How long and under what do property removal coverages apply for?
30 days under the Homeowner's policy
A commercial property special form covers property in transit up to a) Full replacement cost. b) $5,000. c) ACV. d) $500.
A commercial property special form covers property in transit up to $5,000. This extension of coverage may be added to the special form. It is additional insurance (in addition to the coverage limit), and coinsurance does not apply.
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?
A drive other car endorsement, when added to a business auto policy, extends coverage to cover these situations. It covers the employees named in the endorsement, as well as their spouses, when they drive another vehicle for personal use.
#130. Which of the following is true regarding a risk retention group? a) It is a liability insurance company owned by its members. b) It provides support for underwriters and is not an insurance company. c) It is a benefit society formed to provide insurance for members of an affiliated lodge. d) It is a company owned by the stockholders that provides nonparticipating policies.
A risk retention group (RRG) is a liability insurance company owned by its members. The members are exposed to similar liability risks by virtue of being in the same business or industry.
Which of the following is covered under a dwelling policy?
Fire caused by an earthquake
Which form insures both buildings and personal próperty on an open peril basis?
HO-5 Only the HO-5 form insures both the buildings and personal property on an open peril basis.
homeowner has misplaced some of her insured personal property and has no idea what may have happened to it. Which HO policy form would cover such a loss?
HO-5 covers misplacing or losing (mysterious disappearance) as a theft loss.
Which of the following types of property will NOT be covered by business liability insurance? a) Owned watercraft 30 feet long used for carrying passengers for a fee b) An auto parked at the insured's premises c) Watercraft while on shore at a premises owned by the insured d) Nonowned watercraft 50 feet long used for transporting personal property of the insured
Watercraft while on shore at a premises owned by the insured, and nonowned watercraft less than 51 feet long not being used to carry persons or property for a fee will be covered.
Which of the following is the other major coverage provided by the businessowners liability coverage form?
Medical payments
A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by The property The golfer's homeowners liability coverage
The golfer's homeowners liability coverage
As part of the Special Provisions- Arizona endorsement found in the Dwelling Policy, a notice of cancellation
Will only be mailed to the insured
Which of the following exclusions applies to both personal injury and advertising injury in the businessowners policy?
Willful violation of a penal'statute or ordinance committed by the insured
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) employers liability is an exclusion
An insured has $5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are $8,000. The first passenger's total $4.000; the second passenger's total $6,500; and the third passenger's total $1,200. How much will the policy pay under the medical payment coverage?
c) $15,200
A Mobile Homeowners Policy is structured the same as a a) Dwelling Policy. b) Commercial Package Policy. c) Homeowners Policy. d) Personal Auto Policy.
C) homeowners
Which of the following entities is eligible for a businessowners policy?
Convenience stores
\Which of the following would be included in the farm liability coverage forms? a) Bodily injury to an employed farmhand b) Bodily injury to a residence employee c) Any obligation of the insured under a workers compensation law d) Bodily injury to any person who is an insured
Just like HO liability, farm liability does not pay for injuries of anyone normally at the insured location except residence employees not covered by workers comp.
What don't retroactive dates in claims-made CGL policies apply to?
Medical payments
#13. A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?
The appliance was manufactured in the United States
Who is the party to a surety or fidelity bond who promises to fulfill the obligation?
The principal
Which of the following is a federal act that covers crews of ships the same as railroad workers?
b) The Jones Act
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? a) The policyholder is allowed to hire an appraiser, and the insurer will pay the amount determined. b) Either party may make a written request for an appraisal. c) The insured is required to accept what the insurer is willing to pay. d) The parties must pursue a lawsuit.
b) either party may make a written request for appraisal
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?
by computer fraud.
An insured was traveling down an icy road and hit a sign, causing $1,500 claim, how much wil he collect on this claim? $1350 damage to the his own car. If the inssured has a $250 deductible and already collected on this claim?
c) $1100 $1,350 The insured will collect the difference between this claim and the amount of his deductible, which equals $1,100. Collision deductibles apply to each collision
Five months ago, Laurie opened her own business and applied for a Commercial Lines Property and Casualty Policy. The insurer recently discovered, however, that Laurie omitted important information on her application regarding hazards in her place of work. If the insurer decides to cancel Laurie's policy, how many days notice must they give?
c) 60
Leo, an employee of the local "Shop A Lot" grocery store, suspects Betty of shoplifting. Leo escorts Betty through the crowded store to the back office and calls the local police. It is later determined that the Betty has not stolen any merchandise. What is Leo is guilty of?
false arrest
Under which of the following conditions can broad theft coverage be added to a dwelling policy?
if the insured is the owner-occupant of the dwelling
reasonable expectations
in the case of an ambiguity in an insurance policy, it's resolved in the favor of the insured's reasonable expectations about the policy
Supplementary payment, in part A - liability
include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings.
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy?
$175,000 - The limit of the equipment breakdown policy applies to property of the insured, property of others, and expediting expenses in any combination as long as expediting expense does not exceed $25,000.
waiting period after application before flood coverage goes into effect
30 days
what is the time limit for removal coverage (in broad form dwelling policy) ?
30 days
Coverage C of Home Owners Policy, the amount of insurance provided to cover personal property of the insured
50% of amount provided for Coverage A
Individuals in the business of selling construction equipment and mobile equipment should insure with a/an a) Installation floater. b) Personal property floater. c) Equipment dealers coverage form. d) Contractors equipment floater.
C) an equipment dealers coverage form
Producers in Arizona may do the following:
Bind coverage for their clients and represent more than one insurance company.
11. 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, what is true?
Coverage is provided at additional premium.
An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts?
Fair Credit Reportaig Act
All of the following are special personal property limits under a homeowners policy EXCEPT a) $2,500 for theft of firearms. b) $500 for business personal property on the insured premises. c) $1,500 for securities, accounts, deeds, and evidences of debt. d) $1,500 for trailers not used with watercraft.
HO forms place a $2,500 limit for business personal property that applies on premises only. A limit of $500 applies to loss of business personal property while away
Under the employee theft coverage, when a covered employee is found to have participated in a dishonest act, the coverage for that employee will terminate
Immediately
What program is designed to protect the security and confidentiality of nonpublic information and the security of the information system?
Information security program means the administrative, technical, and physical safeguards that a licensee uses to access, collect, distribute, process, protect, store, use, transmit, dispose of, or otherwise handle nonpublic information.
#131. Assigned risk plans allow insureds a) To assess their level of risk. b) To take self-defense courses to reduce insurance premiums. c) To procure insurance if they are unable to purchase automobile insurance through ordinary means. d) To claim their losses in the event of an accident.
Insureds who are unable to purchase automobile insurance through ordinary means may be able to procure insurance through an assigned risk plan. All insurance companies authorized to sell motor vehicle liability policies must participate in the plan.
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. The copyright infringement was in a product and not an advertisement, coverage is specifically excluded.
What is an insured contract?
Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract
Medical benefits under workers compensation statutes are provided
Without limit
trucking company's truck is out of service for repairs. While making the delivery in a borrowed truck, the driver is responsible for an accident that causes $55,000 in property damage to other vehicles and injuries to 2 individuals. Under the commercial auto liability policy conditions, which policy pays for this loss?
The policy for the company that borrowed the truck will be primary, and the titled owner of the truck will be excess
Under Coverage B-Other Structures, a homeowners policy provides coverage for other structures on the residence premises. What is the limit of coverage?
The automatic limit for Coverage B is 10% of the limit of liability that applies to Coverage A. Use of this coverage does not reduce the Coverage A limit of liability
When a new insurance company wishes to transact business in the state, it must do all of the following EXCEPT a) Set certain capital and surplus requirements. b) Obtain approval of each of its corporate officers and executives. c) Apply for a license or certificate of authority. d) Obtain approval from the state insurance department or division.
b) Obtain approval of each of its corporate officers and executives. Each insurer wanting to transact insurance business in the state must meet the requirements established by the Insurance Code. Upon meeting these requirements, that company will be issued a Certificate of Authority to transact insurance.
An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be a
b) Representation
What does the additional coverage part of an insurance policy cover?
claims-related expenses, reasonable expenses incurred to protect damaged property from further loss or defense expenses
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) Builders risk form c) General property form d) Contractors equipment floater
d) The contractors equipment floater covers equipment left unattended on a job site until the project is finished.
Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?
sole representative
