P&C Practice

What is another way of describing a multi-line policy? Comprehensive policy Package policy Special policy Scheduled policy

Package policy

Which costs would the Medical Payments section of a Casualty contract not pay for? Funeral bills Dental bills Medical bills two years after an occurrence in Personal Lines Pain and suffering

Pain and suffering

Defaming an individual would be an example of what type of injury? Advertising Injury Bodily Injury Mental Anguish Personal Injury

Personal Injury??

Which of the following things would NOT be covered by an Unendorsed Homeowners policy? Dwelling destroyed by fire Detached garage destroyed by wind Personal Property destroyed by flood A tree struck by lightning

Personal Property destroyed by flood

Which of the following things would NOT be covered in a Boatowners policy? Personal property of the insured A water skier injured while being towed by the insured's boat Liability arising from the use of the boat Hull damage to the boat

Personal property of the insured

You insure your commercial building with a Commercial Property policy written with a Special Cause of Loss Form. To assure that building losses will be settled on a Replacement Cost basis you must do which of the following? Nothing, the Special Cause of Loss Form provides Replacement Cost Maintain 80% insurance to value on the building Purchase a Replacement Cost endorsement None of these choices

Purchase a Replacement Cost endorsement

If your company continues your Building and Business Personal Property coverage in the event of vacancy, which of the following perils is still covered? Vandalism Theft Riot Sprinkler leakage

Riot

Which occurrence would not be considered a flood under a flood insurance policy? A river that overflows Mudflow Tsunami Sewer back-up

Sewer back-up

Which statement best describes a hazard? A cause of loss Something identifiable that can be excluded Something that increases the chance of a peril occurring Something that eliminates the need for peril coverage

Something that increases the chance of a peril occurring

What is another way to describe Open Peril coverage? Negotiable Peril coverage Broad Peril coverage Special Peril coverage Named Peril coverage

Special Peril coverage

Investigative Consumer Reports are regulated by _______. The Consumer Protection Act The Fair Credit Reporting Act The Insurance Commissioner State Legislators

The Fair Credit Reporting Act

Which statement is TRUE of an Aleatory Contract? One party to the contract has agreed to a waiver of benefits. The parties to the contract will not benefit equally. Both parties agree to be legally liable. It only applies to Property Insurance, not Life Insurance.

The parties to the contract will not benefit equally.

If a man enters a building through an unlocked window and takes insured property, how is the loss best described? Burglary Robbery Larceny Theft

Theft

Which statement is FALSE about mutual companies? They may pay dividends to Policyowners. They are also called participating companies. Dividends paid represent a return of premium. They are often referred to as nonparticipating companies.

They are often referred to as nonparticipating companies.

What is the purpose of deductibles and coinsurance? To eliminate most claims To control overuse of the policy To provide for Subrogation To punish a Bailee

To control overuse of the policy

Inland Marine coverage would be appropriate for what purpose? To provide higher liability limits for the insured To be secondary policy to a Personal Auto policy To provide better theft coverage for jewelry To cover professional liability

To provide better theft coverage for jewelry

Which statement best describes the purpose of insurance? Transfer of risk Avoidance of risk Reduction of risk Elimination of risk

Transfer of risk

In an insurance contract, only the company makes legally enforceable promises, which means the contract is Aleatory Non-binding Unilateral Not alterable

Unilateral

What is the correct term for a person driving a car with lower liability limits than state law allows? Uninsurable Underinsured Uninsured Unaccountable

Uninsured

A 35-foot-long sailboat would best be covered under which policy? Homeowners Yacht Policy Boatowners Because of its size it cannot be covered

Yacht Policy

Damage to a dwelling caused by a family of raccoons would be covered by which Homeowners policy?

ho-3?

The Fire Department Service Charge addition to Building and Business Personal Property coverage will pay up to which of the following amounts? $500 $1,000 $500 - the deductible $1,000 - the deductible

$1,000

What is the maximum an Unendorsed Homeowners policy would pay for theft of a diamond ring? $500 $1,000 $1,500 $2,500

$1,500

What is the Section II Liability limit of an Unendorsed Homeowners policy? $1,000 per person $10,000 per occurrence $100,000 per person $100,000 per occurrence

$100,000 per occurrence

If you own a $100,000 Building and Business Personal Property coverage and suffer a loss determined to be a $95,000 building loss and a $10,000 debris removal loss, how much will your company pay? $95,000 $100,000 $105,000 $110,000

$105,000

What is the maximum an Unendorsed Homeowners policy would pay for theft of a firearm? $500 $1,000 $1,500 $2,500

$2,500

What is the maximum a Homeowners policy would pay for theft or destruction of cash?$100 $200 -$500 Theft of cash is never covered.

$200

An insured with liability limits of 100/300/100 causes an accident hurting a person and their car. If there was only one occupant in the other vehicle, what is the maximum the insured's policy will pay for this occurrence? $100,000 $200,000 $400,000 $500,000

$200,000

How much would a Homeowners policy pay for a Fire Department Service Charge? $100 $250 $500 10% of the Coverage A limit

$500

How much would a Homeowners policy pay to remove a fallen tree that falls and damages a covered structure? $100 $250 $500 10% of the Coverage A limit

$500

A collection of seven historically important mugs are valued at $10,000. Each is valued at $1,000. If five mugs are destroyed by a covered peril, the Loss to a Pair or Set Clause would dictate a payment of how much? $5,000 -$7,000 $8,000 $10,000

10,000?

Who would not be insured under a Homeowners policy?

18-year-old child of the insured working and living in another city

When does flood insurance coverage begin? Date of application Date of approval 10 days after delivery of the policy 30 days after the application

30 days after the application

Under Homeowners Earthquake Endorsement, earthquakes and aftershocks that occur within which period of time are treated as a single occurrence? -24 hours 48 hours 72 hours -168 hours

72 hours

Which statement would best describe an Indirect Loss? A loss that cannot be attributed to a specific peril A Consequential Loss A loss that can't be calculated in dollars A loss to covered property

A Consequential Loss

Liability polices pay benefits to whom? The insured The First Named Insured A third party Anyone who files a negligence claim

A Third Party

What is Proximate Cause?

A direct and foreseeable connection between act and injury

Who would NOT be covered under an insured's Personal Auto policy? A child at college driving his own car A relative driving the insured's car A mechanic test driving the insured's car A neighbor who borrows the insured's car with permission

A mechanic test driving the insured's car

Who could NEVER collect from an insured's UMBI? The insured A relative riding in the insured's car A pedestrian struck by the insured's car Another person driving the insured's car

A pedestrian struck by the insured's car

In which method of valuation would depreciation be a factor? Actual Cash Value Replacement Cost Functional Replacement Cost Agreed Value

Actual Cash Value

Which element is NOT required to establish negligence? Using a reasonable standard of care Admission of guilt Proximate Cause Breach of Duty

Admission of guilt

Who is considered to be a Named Insured? Any insured in a Personal Lines or Commercial Lines policy An insured who has the authority to change or cancel a Commercial Lines policy An insured who has the authority to change or cancel a Personal Lines policy Anyone who has ever had insurable interest in property

An insured who has the authority to change or cancel a Personal Lines policy

The public assumes an agent has which kind of authority? Expressed Authority Implied Authority Apparent Authority Inherent Authority

Apparent Authority

A person agrees in writing to not hold a company liable for injuries they sustain while white water rafting. What is this in liability terms?

Assumption of Risk

An insured with full coverage swerves off the road and hits a tree. Medical bills for a friend injured while riding in the insured's car would _______. Not be covered Be covered under the insured's Coverage A—Liability Be covered under the insured's UMBI Be covered under the insured's Automobile Med Pay

Be covered under the insured's Automobile Med Pay

Which of the following policies could pay claims over and above the limits of the Commercial General Liability policy? Only the Commercial Umbrella policy Only the Excess Liability policy Both the Commercial Umbrella and the Excess Liability policies Neither the Commercial Umbrella nor the Excess Liability policies

Both the Commercial Umbrella and the Excess Liability policies

The Building and Business Personal Property coverage form of the Commercial Property policy covers all of the following EXCEPT _______. Business buildings Building parking lots Business personal property Personal property of others

Building parking lots

Which of the following things would NOT be part of the Consideration offered by parties in an insurance contract? Premium Promises Statements on the application Commission

Commission

Which element is not always found in a valid contract? Offer Counter-offer Consideration Acceptance

Counter-offer

A Personal Auto Policy can cover a policyowner in many situations and locations. In which of the following circumstances would the policyowner NOT be covered? Driving his car to a business meeting in another state Driving his car on a business trip to Canada Driving his van carrying his daughters and her friends to a softball game Driving his car on a vacation trip to Mexico

Driving his car on a vacation trip to Mexico

Which damage is covered under Basic Perils? Firefighter water Water from pipes Sewer Back up Water from appliances

Firefighter water

In your state, a company from Guam would always be considered a(n) _______. Unauthorized insurance company Foreign company Alien company Domestic company

Foreign company

In Indiana, an Illinois based participating insurance company would be referred to as a(n) _______. Alien, Mutual company Foreign, Stock company Foreign, Mutual company Domestic, Stock company

Foreign, Mutual company

Which Homeowners forms could a condo owner purchase? HO 2 or HO 3 HO 2 or HO 8 HO 5 or HO 8 HO 4 or HO 6

HO 4 or HO 6

Which Homeowners policy provides named periled coverage on the Dwelling? HO-2 HO-3 HO-4 HO-5

HO-2

Which Homeowners policy is designed to cover an older Dwelling? HO-2 HO-3 HO-4 HO-8

HO-8

Which statement is FALSE concerning insurance? Insurance deals with inherent risk. Insurance deals with uncertain losses. Insurance deals with speculative risk. Insurance deals with the transference of risk.

Insurance deals with speculative risk

Where will you find the Insurance Company's promise to pay? Application Declarations Page Definitions Section Insuring Agreement

Insuring Agreement

Which of the following things would NOT constitute a Legal Obligation to Pay? Investigator recommendation Out of court settlement Judgment of a court Jury ordered award

Investigator recommendation

Which statement is TRUE of flood insurance offered through the NFIP? It has no deductible. The deductible is always the same no matter the risk. The deductible is waived in the event of hurricane related flood. It can be applied twice.

It can be applied twice.

A boat belonging to a Homeowner injures a swimmer at a lake. What is TRUE concerning how a Homeowners policy will respond? It will pay the claim only if the boat was not motorized. It will pay the claim if the boat is a sailboat smaller than 26 feet. It will pay the claim if the boat has a motor less than 100 horsepower. Homeowners never pays for liability claims arising from the use of a boat.

It will pay the claim if the boat is a sailboat smaller than 26 feet.

Which of the Personal Auto liability coverages does NOT pay to the insured? Medical Payments Liability Uninsured/Underinsured Motorists Collision

Liability

Which peril is not available in any unendorsed Dwelling Policy? Liability Theft Special Perils Broad Perils

Liability

What is the correct term for the fact that insurance companies may not impose more restrictive conditions on an insured during a policy period? Pro Rata Liberalization Indemnification Insurability

Liberalization

You insure your commercial building with a Businessowners policy written with a Special Cause of Loss Form. What must you do to assure that building losses will be settled on a Replacement Cost basis? Nothing, the Special Cause of Loss Form provides Replacement Cost Maintain 80% insurance to value on the building Purchase a Replacement Cost endorsement None of these choices

Maintain 80% insurance to value on the building

Which property could NEVER be covered by an Endorsed Homeowners policy? House with an office in it Home with a garage converted to an apartment Mobile Home Motor Home

Motor Home

The Businessowners policy (BOP) can be sold to any of the following EXCEPT _______. Bakery Dry Cleaners Movie Theater Barber Shop

Movie Theater

A Property policy with a $70,000 limit and a $500 deductible is purchased to cover a $100,000 building against a loss due to Basic Perils. If the building is destroyed by a falling object, what is the amount the policy will pay? Nothing $69,500 $70,000 $99,500

Nothing

Which coverage cannot be added as property coverage to Homeowners through endorsement? Earthquake Sewer back-up Hidden Mold -Animals

Hidden Mold?

Coverage A, B, C, and D of the Farmowners policy are most similar to coverages with the same alphabetical designation found in which policy? Personal Auto Businessowners Homeowners Commercial Property

Homeowners

Which statement is TRUE about a misrepresentation on an application? It is the same as a concealment. If it is material to the risk, the company may contest the policy. If it is intentional, it is a felony. It can never be used as grounds for voiding coverage.

If it is material to the risk, the company may contest the policy.

What is the employer under a Fidelity Bond? Principal Obligee Obligor Surety

Obligee

Which company would pay a dividend to Policyowners? Only a Mutual company Only a Stock company Only Lloyd's Only an authorized company

Only a Mutual company

Which statement is TRUE when comparing Property Contracts to Liability Contracts? They are both two party contracts. They are both third party contracts. Property is a two party contract and Liability is a third party contract. Property is a third party contract and Liability is a two party contract.

Property is a two party contract and Liability is a third party contract.

Which statement is FALSE concerning Vacant and Unoccupied structures? An Unoccupied structure is defined as the absence of people. Vacant structures are never covered under Property policies. Unoccupied structures can be covered under Property policies. Vacancy means the structure contains no property or occupants.

Vacant structures are never covered under Property policies.

An employer is found liable for Bodily Injury to a third party caused by the actions of an employee who was performing job related tasks. The employer was not present when the injury occurred. Which Liability would be imposed in this instance? Absolute Liability Vicarious Liability Presumptive Liability Workers Comp

Vicarious Liability