P & C Comprehensive Exam
Which of the following is considered an insured's product? A Goods sold by the insured at a trade show B Goods shipped to a retailer to be sold C Remodeled building D Merchandise held by the insured as inventory
A A covered product is one manufactured and sold by the insured and transferred to the possession of a buyer.
For an injury covered by a Workers' Compensation policy issued in Kansas, the currently employed claimant must submit a notice of injury to the employer within how many days following the date of the accident? A 20 days B 30 days C 10 days D 15 days
A A notice of injury may be given orally or in writing to the employer within 20 calendar days from the date of the accident.
Which of the following best describes the situation when a property has neither contents nor occupants? A Vacancy B Unoccupancy C Ordinance or Law D Abandonment
A A vacant building is empty of both contents and occupants. In contrast, an unoccupied building contains physical contents, but has no residents or ongoing business occupant
All of the following statements regarding the property policy structure are correct, except: A Additional Coverages are added to the policy for an additional premium B The insured's duties and obligations are listed in the Conditions section C The Declarations Page lists other parties having an insurable interest in the property D The Insuring Agreement describes the perils that are covered under the policy
A Additional Coverages are automatically included without an additional premium.
Which is true of Coverage C of the Dwelling Policy? A Coverage C provides coverage for the personal property of a guest B Coverage C provides coverage for grave markers C Coverage C provides coverage for pets D Coverage C provides coverage for a car stereo owned by the insured
A At the insured's request, Coverage C will apply to personal property of a guest or domestic employee while located on the described location. Personal property of a tenant or boarder is not covered.
The taking of property from inside the premises by a person committing forcible entry defines a: A Burglary B Robbery C Borrowing D Mysterious disappearance
A Burglary is the taking of property from inside the premises or a locked safe or vault using visible force of entry or exit.
Which of the following is the best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance? A It provides coverage to employees that are not otherwise covered B It provides coverage for unpaid volunteer workers C It provides coverage for independent contractors D It provides coverage for employees who opt out of Workers' Compensation coverage
A Business Personal Property covers only personal property owned by the insured, plus the insured's interest in improvements and betterments the insured has made to rented real property.
In property and casualty insurance, when a form is attached to alter or add to policy provisions or conditions, it is known as: A An endorsement B A warranty C A consideration D An exclusion
A Endorsements are used to modify a policy. They may be used to broaden or restrict coverage, or further define conditions.
Which of the following indicates a disrupted chain of events that frees the defendant from liability? A Intervening cause B Lost cause C Concurrent causation D Proximate cause
A Intervening cause breaks a natural and continuous sequence of events that are necessary to establish negligence.
In which type of system does an employer have the choice to provide Workers' Compensation benefits at its own option? A Elective B Competitive C Monopolistic D Compulsory
A Jurisdictions where Workers' Compensation benefits are not mandated by state law are known as 'elective' states. Employers in these states may decline to provide benefits if they choose.
Which of the following would not be covered under Coverage B? A Grain silo B Swimming pool C Pole barn D Shed
A No coverage is provided for other structures used for farming purposes.
Which of the following indicates the taking of property from the care and custody of a person by someone who has threatened bodily harm to that person? A Robbery B Theft C Burglary D Assault
A Robbery is defined as the felonious taking of personal property by means of force or fear.
Supplementary payments under Part A of the Personal Auto Policy will pay which of the following? A $250 for bail bonds B Doctor bills when the insured is injured in an auto accident C Loss of earnings when the insured is disabled D A judgment against the insured in excess of liability limits
A Supplementary payments include bail bonds payments up to $250.
After a storm, ABC Bakery suffers the following losses: $500 in damage to a free-standing sign, $500 in damage to a fence, and $1,500 in damage to a decorative Japanese maple tree. How much will ABC Bakery's BOP pay for these losses if the policy includes an Outdoor Property extension? A $2,000 B Zero C $2,500 D $3,000
A The BOP's coverage extension will pay the full cost of the non-attached sign and the fence. The tree would only be covered up to $1,000.
A tenant should buy which of the following Homeowner Policy Forms? A HO-4 B HO-2 C HO-8 D HO-5
A The HO-4 Form, providing Property Coverage C, is intended for tenants of rental dwellings and apartments.
Which of the following statements is true concerning the National Association of Insurance Commissioners? A The NAIC provides research and recommendations B The NAIC enforces insurance regulations C The NAIC appoints Commissioners/Directors of Insurance for each state D The NAIC establishes insurance law at the federal level
A The NAIC is an advisory group that makes regulatory and legislative recommendations, but has no legal authority to enact or enforce laws.
How long after a loss before the Period of Restoration begins for Business Income coverage? A 72 hours B 168 hours C 48 hours D 24 hours
A The Period of Restoration begins 72 hours after the time of the loss.
In Kansas, all of the following are true regarding persons required to be licensed, except: A The term producer never includes a broker B To qualify for a nonresident license, a nonresident producer must be in good standing in their home state C An individual or business entity that is a resident of another state and licensed as a producer in another state may be licensed as a nonresident producer in Kansas D A producer is an individual or business entity required to be licensed to transact insurance
A The term producer does include a broker, unless otherwise specified.
Which statement about the BOP's Hired Auto and Non-owned Auto endorsement is correct? A Business auto coverage for a vehicle the insured rents is added to the coverage B It changes coverage for owned autos from named perils to open perils C Coverage is limited to owned vehicles D It covers personal use of a non-owned vehicle
A This endorsement adds business auto coverage to the BOP, but only for vehicles the insured hires, leases, and doesn't own. Employee-owned vehicles are excluded; an employee using his/her own vehicle in the course of the insured's business would have to rely on his/ her own auto insurance for liability coverage.
Which of the following is correct regarding license renewal in Kansas? A Unless suspended, revoked, or refused renewal, a producer's license remains in effect, provided that the producer has met the educational requirements by the biennial due date B A producer's license is renewed annually C Unless suspended, revoked, or refused renewal, a producer's license is perpetual D A producer's license remains in effect for 2 years
A Unless suspended, revoked, or refused renewal, a producer's license remains in effect, provided that the producer has met the educational requirements by the biennial due date.
Insurer XYZ certifies a producer on June 1. The insurer must notify the Department of Insurance of the appointment by: A July 1 B June 15 C June 10 D July 31
A An insurer that certifies a producer must notify the Insurance Department within 30 days of the appointment. All producers in an agency are appointed by each insurer and not by the agency. A producer may cancel their certification with a written request to the Insurance Department.
If Policyholder J has no added endorsements, under which of the following scenarios will Policyholder J's injuries be covered by her Personal Auto Policy under Medical Payments Coverage? A J was driving her own car from the Post Office after retrieving her employer's mail B J was using her car as a taxi when the vehicle overturned C J broke her leg during an accident that occurred during a demolition derby D J slid into a tree while driving her company car on a personal errand
A Business use of private passenger cars is NOT excluded under Medical Payments Coverage.
Which of the following scenarios would be covered by E&O insurance? A An agent neglects to renew a customer's policy after they paid the premium B An agent is in a car accident with a customer in the agency parking lot and causes bodily injury C An agent is sued for personal injury for providing testimony in a lawsuit D An agent deposits a commission check in the same account as the client's premium check
A Failing to renew a policy is considered a negligent act resulting in the failure to meet reasonable standards of care in his or her field. E&O does not provide bodily injury coverage.
An insured contract includes all of the following, except: A A side track agreement B An elevator maintenance agreement C Pollution liability D A lease of premises
A Pollution liability is not a type of insured contract.
Which Business Auto Symbol is the most broad of all Symbols? A Symbol 1 B Symbol 4 C Symbol 3 D Symbol 2
A Symbol 1 includes any auto, whether owned or not by the insured if it is used in the insured business.
The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called a: A Bill of Lading B Shipping Receipt C Bill of Acceptance D Bill of Transportation
A The Bill of Lading is a receipt for the goods being shipped that sets forth the basic agreement between the carrier and the shipper.
Which of the following is not true about an insurance policy? A The Insuring Agreement includes the name of the insured B An insurance policy that pays before all other coverage is called primary coverage C An application is a document that provides information for underwriting purposes D A deductible is a specified amount of loss that is retained by the insured
A The Insuring Agreement contains the insurer's promises to the insured. The insured's name is found in the Declarations.
M has a liability policy insuring M's flower shop. After M sells the shop, the buyer asks if M can transfer the liability policy as part of the sale. Which provision prevents M from making this transfer without the insurer's consent? A Assignment B Assumption of risk C Liberalization D Subrogation
A The assignment provision states a policyholder cannot transfer policy ownership without the insurer's written consent.
Which of the following is TRUE of the Dwelling Under Construction Endorsement of a Dwelling Policy? A The liability limit is a percentage of the finished building's value B The insurer does not need to be notified of building completion C The premium is a percentage of the Coverage A limit D The insured has up to 90 days to notify the company that the dwelling is occupied
A The limit of insurance at any given time prior to completion is a percentage of the Coverage A limit that equals the proportion the actual value bears to the value on the date of completion. The insurer must be notified of completion so coverage may be adjusted.
Which term describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first? A Contribution by Equal Shares B Primary insurance C Excess insurance D Pro rata liability
A Under Contribution by Equal Shares, each insurer pays an equal amount to the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first.
A commercial general liability policy that has been in effect for 90 days or more may NOT be cancelled for which of the following reasons? A Nonpayment of premium B Excessive number of claims C Material misrepresentation D Substantial change in the risk
B A commercial policy in effect for 90 days can only be cancelled for certain reasons, including nonpayment of premium, substantial changes to the risk, and material misrepresentation. Other reasons for cancellation after the first 90 days of coverage include fraud, a violation of the material terms and conditions of the policy by the insured, and the Commissioner's determination that the continuation of the policy would place the insurer in violation of insurance laws or that the insurer no longer has adequate reinsurance.
Which of the following is true about a stock insurance company? A A stock insurance company is one whose home office is in some other state, but does business in this state B A stock insurance company is run by officers and directors and has a stated amount of capital stock owned by stockholders C A stock insurance company is any insurance company whose home office is in this state and is incorporated in this state D Policyholders own and control a stock insurance company
B A stock insurance company is owned by its stockholders.
Which statement is false regarding the completed operations exposure? A It includes risks of defective installation, construction or repair B Coverage includes replacement of the work that caused the loss C The exposure must occur away from the insured's premises D It begins after the insured's operations are completed and the insured leaves the job site
B Coverage will pay for bodily injury and property damage caused by negligent or faulty workmanship by an insured, but will not pay for the cost to replace the work that caused the loss.
Which policy provision omits certain risks from coverage? A Declarations B Exclusions C Additional coverages D Conditions
B Exclusions are stated perils that are not covered under a policy.
Which of the following claims would be covered by Collision Coverage under Part D of the Personal Auto Policy? A Damage to the auto caused by objects blown into it during a severe windstorm or tornado B Damage to the insured auto's bumper when the auto crashed into a tree C Breakage of the windshield caused by collision with a stone or other missile D Damage to the auto caused by collision with an animal on the roadway
B Part D of the policy specifically stipulates certain causes of loss that are not considered collision. They include missiles or falling objects, fire, theft, explosion, windstorm, contact with a bird or animal, among others.
Which of the following best describes a liability policy that is written on a primary basis? A It provides only basic coverage B It is the policy that pays first with respect to other policies C It shares the loss with other policies covering the same loss D It pays only after other insurance covering the same loss is exhausted
B Sometimes liability insurance is written in layers to provide higher limits of coverage. When this is done, the primary insurance pays the entire claim until its limits are exhausted, then the excess policy pays the balance of the claim.
All of the following are methods of writing property insurance limits, except: A Scheduled coverage B Concurrent coverage C Blanket coverage D Specific coverage
B Specific, Scheduled, and Blanket are all methods of writing property insurance limits. Concurrent coverage applies to separate policies covering a risk, such as a primary policy and an umbrella policy. It does not indicate a type of insurance limit.
A commercial property has a $400,000 Commercial Building and Personal Property policy, and a fire breaks out on the loading dock, causing $80,000 in damage and $20,000 in debris removal. What is the maximum that may be received for the damage? A $80,000 B $100,000 C $400,000 D $90,000
B The $80,000 loss plus the entire $20,000 debris removal will pay, since that amount is less than the 25% of coverage limit.
Which of the following is not automatically included in a Garage Coverage Form? A Garagekeepers Coverage B Contractual Liability C Premises liability D Mandatory $100 deductible for Completed Operations losses
B The Garage Coverage Form provides liability coverage for Premises and Operations, Products, and Completed Operations Liability, but not for Contractual Liability.
Which of the following is stated in the Insuring Agreement? A The location of insured property and the named insured's mailing address B The perils insured against C The perils excluded by the policy D The Other Insurance provision
B The Insuring Agreement states the insurance company's promise to pay the insured, including the exact perils insured against by the policy.
CIn liability insurance, which of the following is the maximum amount that the coverage will pay for loss to any one person regardless of overall policy limits? A The per occurrence limit B The per person limit C The split limit D The aggregate limit
B The per person limit is the amount of coverage available for each person that sustains bodily injuries in an occurrence.
In which section of the Workers' Compensation and Employer Liability policy would the premium amount be found? A Part Three B Part Five C Part One D Part Seven
B The policy Workers' Compensation contains the following parts: General Section, Part One - Workers' Compensation Insurance, Part Two - Employers Liability Insurance, Part Three - Other States Insurance, Part Four - Your Duties if Injury Occurs, Part Five - Premium, Part Six - Conditions.
Which of the following statements regarding commercial crime coverage is correct? A Employee Dishonesty Coverage Form A covers extortion B Theft includes any act of stealing, including burglary and robbery C In order to constitute burglary for insurance purposes; there must be use of force or threat of force D Under the Commercial Crime Program, money includes evidence of debt
B Theft is the broadest category of crime coverage and includes robbery and burglary.
Which of the following statements about Coverage C under the Homeowners Policy is false? A Coverage C has a $1,500 limit on trailers not used with watercraft B Coverage C provides coverage for the property of roomers and boarders C Coverage C provides coverage for machinery used in maintenance of the premises D Coverage C has a base amount equal to 50% of Coverage A
B The Homeowners Policy specifically excludes property of roomers and boarders from coverage.
Which of the following is true about binders? A A binder will not end when the policy is issued B A binder does not name the company providing coverage C The amount of insurance is stated in a binder D A binder always expires 15 days after its inception date
C A binder is a legal agreement that serves to effect insurance coverage temporarily until the actual insurance policy can be issued. It contains only the essential coverage information, including the amount and type of insurance, the name of the insurer, and the perils insured against.
A leased auto is an eligible vehicle if the lease contract is for a continuous period of at least how many months? A 3 B 12 C 6 D 9
C A leased vehicle under a contract for a continuous period of at least 6 months by the insured is an eligible vehicle.
Which of the following might be considered a negligent act? A Breach of an employment contract B Robbery of a sporting goods store C Unintentionally renting a leaky boat to vacationers D Assaulting a neighbor over a boundary dispute
C A negligent act is a type of tort, which rules out breach of contract. It must be an unintentional, civil tort, which rules out both robbery and assault.
When filing a claim, the insured is required to do all of the following, except: A Cooperate with the insurance company B Protect property from further damage C Hire an appraiser D Give notice of loss as soon as possible
C An appraisal is only necessary when the insured and insurer disagree in the amount of the loss.
Which injury is covered under Workers' Compensation in Kansas? A An employee was injured because they refused to wear the required safety glasses B An injury to a terminated employee who notified the former employer 30 days later C An injury that increased a disability originating from a pre-existing condition D A farmer's worker was injured while harvesting the crops
C An employee is entitled to recover for a pre-existing condition only to the extent that a work-related injury caused increased disability. Employment participating in agricultural pursuits and employees who unreasonably fail to use required protection are not covered by Workers' Compensation. Terminated employees seeking benefits from their previous employer must provide notice within 10 calendar days of the employee's last day.
K gets a horrible rash after using wrinkle-prevention cream for 2 months. This is considered: A An accident B Negligence C An occurrence D Punitive damages
C An occurrence is continuous or repeated exposure to the same general harmful conditions.
Choose the best answer regarding the details of the Yacht Policy. A The policy provides coverage only for damage to the yacht itself B Liability related exposure must be covered under a separate policy C It is an Ocean Marine Form and provides both property and liability coverage D The policy contains no navigational limits
C As an Ocean Marine Form designed for large, ocean-going vessels within a specific territory, a Yacht Policy includes Hull, Protection and Indemnity, Medical Payments, and Jones Act coverages.
All of the following are sections of the Garage Coverage Form, except: A Physical Damage Insurance B Liability Insurance C Comprehensive Insurance D Garagekeepers Insurance
C Comprehensive coverage is part of the Physical Damage coverage provided by Section IV.
Which is true regarding Dwelling policies? A Coverage C includes coverage for personal property of tenants and boarders B Coverage B would cover an attached garage C Coverage C applies while insured property is located at the described location D Coverage D is considered a direct loss coverage
C Coverage C may be extended to cover property of guests and domestic employees. Coverage D - Fair Rental Value is an indirect coverage.
Which of the following best describes a hostile fire? A A fire in a trashcan being used to burn leaves B A fireplace fire whose heat can be felt through the glass fireplace door C A fire caused by a spark escaping from a fireplace and igniting a carpet D The fire in the firebox of a furnace
C Fire insurance is intended to insure against hostile fires. A friendly fire, confined to its proper place, is not insured against by a fire insurance policy.
Which of the following would not be eligible to purchase a Homeowners Policy? A A person who owns and lives on a farm B A person who provides daycare in their home C A person whose dwelling contains an accounting office D A person who owns and occupies a two-family dwelling
C Homeowners eligibility does not include farm property, but does include certain incidental business occupancies.
Producers may not transact insurance business in Kansas unless: A There is reciprocity B The licensee has an endorsement by another producer C There is a certification from at least 1 insurer D The Commissioner is notified within 90 days of the appointment
C In order to transact insurance business in Kansas, a producer must be certified by at least 1 insurer.
After receiving a proof of loss, an insurer in Kansas must affirm or deny coverage on a claim within: A 30 days B 10 days C 15 days D 60 days
C Insurers must notify the claimant of approval or denial within 15 days after receiving proof of loss. If the insurer needs more time to decide, notice must still be given within 15 days, with updates every 45 days after the initial notice.
Which of the following statements about medical payments coverage is true? A They apply to all expenses incurred within 5 years of the accident B They apply to members of amateur athletic teams sponsored by the insured C Payments are made regardless of fault or negligence D They apply to all persons, including the insured on the premises for any reason
C Medical payments coverage provides payment of medical and medically associated expenses on a voluntary basis, without regard to negligence or fault on the part of the insured.
Which of the following is true regarding the HO-4 and HO-6 forms? A The amount of insurance on the dwelling containing personal property is 10% of the Coverage C amount of insurance B Losses are paid on a replacement cost basis C They are used to insure the personal property and personal liability of the insured, but do not include the structure itself D They provide open perils coverage on the personal property
C Since the insured under the HO-4 and HO-6 forms does not have an insurable interest in the dwelling, the coverage on the structure is limited.
Which of the following is true regarding Section II of the Homeowners Policy? A Section II of the HO-6 is modified to adapt to the exposures of the Condominium unit owner B Section II of the HO-4 (Tenants Form) is modified to adapt to the Tenant's exposures C Section II is the same in all Homeowners Forms D Section II of the HO-3 (Special Form) has broader coverage than Section II of the HO-2 (Broad Form)
C Since the liability exposures of individuals and families have little to do with their mode of residence, Section II is the same in all Homeowners Policy forms.
The part of a property policy that gives basic information such as the named insured, a description of the property, the location of the property, and the amount of premium involved, is known as the: A Insuring Agreement B Policy Provisions C Declarations D Conditions
C The Declarations contain the information that is specific to the individual and property being insured.
Which section lists the perils insured against by a property insurance policy? A Additional Coverages B Declarations C Insuring Agreement D Definitions
C The Insuring Agreement is the company's commitment to protect the insured and includes a description of the perils insured against.
Which of the following statements best describes the Other Insurance condition on a standard property insurance policy, when two separate property policies provide coverage for the same loss? A Neither policy will make payment for the loss B Each policy pays an equal share C Each policy pays its pro rata share of the loss D One policy pays up to its limits and the other policy pays the balance
C The Other Insurance condition specifies the process to be followed when more than one policy covers the same loss. For property insurance, losses are settled on a pro rata basis, where each policy pays no more than its pro rata share of the loss. Pro Rata Example: Policy A insures a dwelling for $250,000 and Policy B insures the same dwelling for $500,000. If both policies covered the same loss, Policy A would pay one-third of the loss because $250,000 represents 1/3 of all the insurance available to cover the loss ($250,000 equals 1/3 of $750,000, which is the sum of $250,000 on Policy A and $500,000 on Policy B).
Which of the following parties may assign a standard property policy? A The first named insured B The bailee C The insured with prior written permission of the insurer D The insurer
C The insured can only assign or transfer rights of ownership with prior written consent of the insurer.
Under a policy with limits of 25/50/10, what would be the insurer's liability arising out of a single accident where claimant A has injuries in the amount of $25,000; claimant B, $20,500; and claimant C $4,000? A $50,000 B $85,000 C $49,500 D $25,000
C The policy would pay up to the BI limit of $25,000 for A; $20,500 for B; and $4,000 for C. $25,000 + $20,500 + $4,000 = $49,500.
Property may be turned down for Kansas FAIR Plan coverage due to all of the following, except: A Vacancy B Incompliance with building codes C Being unacceptable in the normal market due to environmental condition D Poor housekeeping
C The property insured under the FAIR Plan must have been unacceptable in the normal market only due to location or environmental condition. Vacancy, poor housekeeping, and building code noncompliance are acceptable reasons to turn down property under the FAIR Plan.
Which of the following is an insured under the CGL policy? A Spouse of volunteer worker B Spouse of LLC members C Spouse of a partner D Trustee's spouse
C The spouse of any individual or partner designated on the Declarations is also an insured.
Under which of the following circumstances will Workers' Compensation Insurance provide benefits to a worker due to a work-related injury? A Only if the employee was negligent B Only if the employer's negligence was the cause of the injury C Regardless of negligence by the employee or employer D Only if the employer carried Employer's Liability Insurance
C Workers' Compensation covers job related injuries without regard to negligence.
In addition to conducting accounting business in his own office, Tom also goes to client's offices for appointments, which represents which type of exposure? A Product B Contingent Liability C Premises and Operations D Completed Operations
C remises and operations liability coverage covers an insured's operations both on and off its own premises.
Under the Building and Personal Property Coverage Form, a building is considered vacant, unless at least what percentage of square footage is rented or used to conduct operations? A 51% B 61% C 31% D 41%
C A building is considered vacant unless 31% or more of the total square footage is rented or is used to conduct operations.
Which of the following would be included in the definition of Business Personal Property under the Building and Personal Property Coverage Form? A Accounts, bills, and currency of others on the premises in the insured's trust B Stock on consignment held for sale by the insured C Furniture and machinery owned by the insured D Business Personal Property of others rented to the insured
C Business Personal Property covers only personal property owned by the insured, plus the insured's interest in improvements and betterments the insured has made to rented real property.
Comprehensive Coverage under Physical Damage Coverage of the Business Auto Coverage Form, includes all of the following, except: A Theft B Lightning C Collision D Glass Breakage
C Comprehensive Coverage under the Business Auto Coverage Form is a broad open perils coverage that covers damage from perils not excluded. Collision is excluded under the policy.
Of the following boats, which can be added to the Homeowners Policy for liability protection? A Private yacht owned by the insured B Racing cruiser C 20' sailing boat D Rented pontoon boat to entertain business clients
C Coverages E and F do not apply to bodily injuries sustained from operation of a watercraft for racing, rented to others, or for business purposes. Coverage is also not provided for any watercraft that is: an inboard motorboat owned by an insured, except while in storage; an inboard motorboat with more than 50 horsepower, owned or rented by an insured; an outboard motorboat with more than 25 horsepower, unless certain conditions are met; or a sailing vessel 26 feet or more in length.
How much notice is required when an insurer cancels a homeowners policy issued in Kansas? A 90 days B 15 days C 30 days D 60 days
C Kansas law requires an insurer to provide 30 days' written notice for cancellations of property or casualty policies.
Which of the following perils is not covered under the Dwelling Broad Form? A Smoke damage from industrial operations B Vehicle damage to the dwelling C Burglary damage D Weight of ice and snow
C Smoke damage is a covered peril of the Dwelling Broad Form; however, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.
During a tornado, a factory is destroyed when the roof blows off, causing electrical wires to short and start a fire, burning down the building. The proximate cause of the loss is: A Electrical wires B Hail C Tornado D Fire
C The proximate cause is the first event in an unbroken chain of events that caused the loss. Had it not been for the tornado, the building would not have burned down.
An applicant could purchase an insurance policy to cover losses from all the following, except: A Loss of property through burglary or theft B Loss of assets through tort actions brought against the person C Sudden and direct damage to property by natural causes D An operation of drug smuggling
D A contract is void if it is based on an illegal purpose or contrary to public policy. It will not be recognized by a court or enforceable by either party.
Which of the following is not eligible for coverage under a Businessowners Policy? A Beauty Parlors B Barber Shops C Shoe Repair Shops D Auto Dealerships
D Businesses operating in the sale, servicing, or storage of automobiles are not eligible for a Businessowners Policy.
Which of the following property may be covered under a Building and Personal Property Coverage Form? A Personal property that is covered elsewhere B Personal property while waterborne C Vehicles licensed for road use D Grain stored inside a building
D Hay and grain are covered inside a building, but not outside.
The assignment provision requires that: A The insured must give prompt notice to the company upon loss B No requirements may be placed upon the insured without legal action C The naming of parties other than the insured on loss payment checks is prohibited D The insured may not transfer ownership of the policy without the insurer's written permission
D If the insured wishes to assign the policy to another party, such as a new owner of the property, written permission of the company is necessary.
Marine/inland marine insurance issued in Kansas will cover which of the following? A Storage of merchandise B Building improvements C Money and securities in a bank D Pipelines
D Inland marine insurance covers instrumentalities of transportation or communication, such as bridges, piers, pipelines, telephone lines, TV towers, and outdoor cranes.
It is illegal for an agent to submit a claim for the insured without notifying the insured that the agent did which of the following? A Provided a proof of loss B Called the claim representative C Notified the police D Altered the application
D It is an unfair claim settlement practice for the agent to alter an application without notice to, or consent of, the insured.
Which of the following property is not covered under Coverage A of a Dwelling Policy? A Materials for repairing the dwelling, located on the described location B Outdoor equipment on the location used to service the dwelling C Fire or lightning damage to outdoor television antennas D The land on which the dwelling is located
D Land is not covered under the Dwelling program.
Choose the false statement regarding the Businessowners Policy. A Watercraft and associated equipment while afloat are not covered B Named perils coverage is available by endorsement C Pollution clean up and removal are covered as an Additional Coverage D Manufacturers are eligible for coverage
D Manufacturers are ineligible for coverage under the BOP.
Which of the following is not essential in determining if an action is due to negligence? A The injured party must prove the wrongdoer failed to act in a reasonable and prudent manner B The injured party must prove the alleged wrongdoer owed a duty to the injured party or to the public C The injured party must prove the actual injuries or damages were foreseeable D The injured party must prove the wrongdoer committed a criminal act
D Negligence is the commission of a civil or private wrong, not a criminal wrong.
Section II of the Garage Coverage Form does not cover: A Completed operations liability B Premise and operations liability C Products liability D Damage to the customer's car in the insured's care
D Section II (Liability) Coverage does not cover vehicles in the insured's care, custody or control. Section III (Garagekeepers Coverage) provides this coverage.
All of the following are true regarding the structure of a property policy, except: A The Declarations include the insured's name, policy period, policy limits and the amount of premium B The bankruptcy condition does not relieve the insurer of its duties or obligations under the policy C The Exclusions itemize the perils not covered D The insured's duties in case of loss are found in the Insuring Agreement
D The Conditions list the general rules and duties in the event of a loss under the policy.
Under the Earthquake Endorsement to the BOP, if an earthquake begins before the policy expiration, coverage continues for up to how many hours? A 128 B 72 C 48 D 168
D The Earthquake Endorsement provides that one or more earthquake shocks occurring within 168 hours will be considered a single earthquake.
In Kansas, the benefit amount for a temporary total disability covered by Workers' Compensation is _________ of the employee's weekly wages. A 75% B 33 1/3% C 25% D 66 2/3%
D The benefit amount is 66 2/3% of the weekly wage, at least $25 per week and not exceeding 75% of the state's average weekly wage.
Which of the following describes the coverage of the Extra Expense Coverage Form? A It covers the expense of removing the debris of a covered direct loss B It covers the loss of business income during the period of restoration C It covers the expense of disposing of spoiled merchandise caused by a power outage D It covers the necessary additional expenses incurred during the period of restoration which would not otherwise have been incurred in the absence of a direct loss
D The principal function of the Extra Expense Coverage Form is to reimburse the insured for necessary and reasonable expenses incurred in getting back into business as soon as possible after a loss.
Short-rate cancellation occurs when: A The policy is non-renewed B A policy is flat cancelled C An insurer cancels the policy mid-term D The insured cancels the policy mid-term
D When the insured cancels a policy before the expiration date, a short-rate cancellation is issued, and the insurer retains a portion of the unearned premium to cover costs.
Which of the following best defines short-rate cancellation? A The insured will receive exactly half of the unearned premium B The insured will receive none of the unearned premium C The premium is fully earned by the insurance company D The insured will receive less than the full amount of the unearned premium
D With short-rate cancellation, the premium refund is based upon a short-rate table in which the insurer retains a portion of the unearned premium.
Which section of the BAP provides auto medical payments coverage? A Section III B Section I C Section II D This coverage is available by endorsement only
D Commercial auto policies do not automatically provide medical payments coverage, which must be added by endorsement.
Most states provide Workers' Compensation medical benefits coverage up to what limit? A $125,000 B $500,000 C $250,000 D Unlimited coverage
D Most states provide unlimited coverage for all necessary medical and hospital expenses relating to the covered injury
All of the following statements regarding a Workers' Compensation policy are correct, except: A Part Three of a Workers' Compensation Policy includes Other States Insurance B Under a Workers' Compensation Policy, a partial disability affects earning capacity but does not indicate a total inability to work C Under the Workers' Compensation Policy, survivor income benefits are a percentage of the deceased worker's wages D Part Two of a Workers' Compensation Policy provides unlimited coverage
D Part Two of a Workers' Compensation policy provides Employers Liability coverage, which is subject to limits, unlike the medical benefits provided under part one of the policy.
Self-insurance is an example of which of the following types of risk management? A Eliminating the risk B Avoiding the risk C Pooling the risk D Retaining the risk
D Self-insurance is an example of retaining the risk
According to the Kansas Automobile Injury Reparations Act, PIP coverage must provide which of the following benefits? A Minimum disability benefits up to $1,500 per month B Survivors' benefits cover lost income up to $1,000/month C Minimum coverage for medical benefits is $5,000 D Substitution benefits are required with coverage up to $25 per day
D Substitution benefits are required with coverage up to $25 per day for up to 365 days. Minimum disability benefits and survivors' benefits are $900/month, and minimum medical benefits are $4,500.
What is the date after which an occurrence can take place and be covered under the claims-made form? A The Effective Date B The Expiration Date C The Countersignature Date D The Retroactive Date
D The Retroactive Date is the date that defines the period of coverage under a claims-made form. Claims resulting from occurrences prior to the policy's stated retroactive date are excluded.
The unendorsed Businessowners Policy will pay no more than what amount for the theft of jewelry? A $3,500 B $7,500 C $5,000 D $2,500
D The theft of jewelry, watches, pearls, precious and semi-precious stones, bullion, gold, silver, platinum, and other precious alloys or metals is limited to $2,500 in any one loss.
Which of the following may be insured on a replacement cost basis under the National Flood Insurance Program? A Nonresidential or commercial buildings less than 3 stories high B Nonresidential or commercial buildings valued at less than $250,000 C Money and securities D 1- to 4-family residences and residential condominiums
D Under the National Flood Insurance Program, property is insured on an actual cash value basis, except one- to four- family residences and residential condominiums may be insured on a replacement cost basis.
