Pearson VUE: Property Insurance Practice Exam, Study questions insurance, Casualty FL
Within how many days must a property insurer pay on a claim after the settlement is reached?
20 days
Which of the following perils is covered under the Commercial Property Basic Cause of Loss form? A. Collapse B. Sinkhole collapse C. Falling objects D. Breakage of glass
B
What is the maximum limit of liability that is available under the Florida Automobile Joint Underwriting Association?
B100/300/50
Which of the following businesses would be eligible for a Businessowners policy? A. Auto body shop B. Theater C. Branch bank D. Barber shop
D
Which of the following statements about a mortgagee's rights under the Dwelling Property Basic Form (DP-1) is INCORRECT? A. No act by the insured will jeopardize the mortgagee's rights. B. The mortgagee may file a Proof of Loss if the insured fails to do so. C. The mortgagee is entitled to receive prior notice of a policy's cancellation. D. The mortgagee may abandon the insured property to the insurer.
D
Under a Commercial General Liability policy, Personal and Advertising Injury Liability coverage does NOT apply to damages resulting from: A.slanderous statements made by an advertising firm A. slanderous statements made by an advertising firm B.copyright infringement by a department store B. copyright infringement by a department store C.harmful, truthful information published by a realtor C. harmful, truthful information published by a realtor D.invasion of an individual's privacy D. invasion of an individual's privacy
a
Under a Fidelity Bond, which of the following individuals is considered the obligee? A.An employer A. An employer B.An employee B. An employee C.A subcontractor C. A subcontractor D.A creditor D. A creditor
a
Which of the following liability coverages may require the insured's consent before the insurance company settles and pays a loss? A.Professional A. Professional B.Automobile B. Automobile C.Products C. Products D.Contractual D. Contractual
a
A legal obligation for injuries that are sustained due to failure to perform a duty is known as: A.negligence A. negligence B.liability B. liability C.physical hazard C. physical hazard D.claims payment D. claims payment
b
A policyholder would expect to find which of the following information in the Insuring Agreement section of an auto policy? A.Bodily Injury limits of liability A. Bodily Injury limits of liability B.The insurance company's promise to pay on the behalf of the insured B. The insurance company's promise to pay on the behalf of the insured C.Exclusions regarding certain uses of the auto C. Exclusions regarding certain uses of the auto D.The obligations of the insured in the event of a loss D. The obligations of the insured in the event of a loss
b
An insured is required to take which of the following actions immediately after an occurence? A.Request a subrogation statement from the producer A. Request a subrogation statement from the producer B.Give notice of claim to the insurance company B. Give notice of claim to the insurance company C.Notify an independent adjuster C. Notify an independent adjuster D.Obtain a written report from the police department D. Obtain a written report from the police department
b
A bond guaranteeing the obligation of one party to another by a third party is known as a: A.municipal bond A. municipal bond B.fiduciary bond B. fiduciary bond C.surety bond C. surety bond D.guarantee bond D. guarantee bond
c
After paying a claim, an insurance company may have the right to pursue legal action against the negligent party. This right is called: A.assignment A. assignment B.other insurance B. other insurance C.subrogation C. subrogation D.action against the company D. action against the company
c
Insurance purchased to protect an insured from death, injury, disability or property damage of another is defined as: A.Credit Insurance A. Credit Insurance B.Property Damage Legal Insurance B. Property Damage Legal Insurance C.Liability Insurance C. Liability Insurance D.Accident and Health Insurance D. Accident and Health Insurance
c
Which of the following vehicles is considered a covered auto under a Personal Auto Policy? A.A vehicle used by the insured to transport passengers to and from an airport for a fee A. A vehicle used by the insured to transport passengers to and from an airport for a fee B.The insured's all-terrain vehicle with three wheels B. The insured's all-terrain vehicle with three wheels C.A replacement car purchased by the insured a week ago but not yet reported to the insurance company C. A replacement car purchased by the insured a week ago but not yet reported to the insurance company D.A company car provided to the insured by an employer D. A company car provided to the insured by an employer
c
A Commercial General Liability policy provides coverage for which of the following hazards? A.Professional Liability A. Professional Liability B.Employee Injury Liability B. Employee Injury Liability C.Pollution Liability C. Pollution Liability D.Premises Liability D. Premises Liability
d
Which of the following occurrences would be included under the definition of a personal injury? A.A customer injured in a department store when a sign falls on her sues the store for medical costs and pain and suffering. A. A customer injured in a department store when a sign falls on her sues the store for medical costs and pain and suffering. B.An employee injured lifting a heavy carton sues his employer for costs. B. An employee injured lifting a heavy carton sues his employer for costs. C.An individual fired from her job sues her employer for unemployment benefits. C. An individual fired from her job sues her employer for unemployment benefits. D.A tenant evicted by his landlord sues the landlord for invasion of privacy and wrongful eviction. D. A tenant evicted by his landlord sues the landlord for invasion of privacy and wrongful eviction.
d
What is the maximum service charge a general lines agent may charge per year for financial insurance premiums on policies issued by the agent?
36 The service charge cannot exceed $3 per installment, up to the $36 maximum per year
When an insurer plans to nonrenew a commercial property insurance policy, it must give the policyholder a written notice of its intent to nonrenew at least how many days in advance?
45
A building adjacent to an insured's business is severely damaged by fire. Because of the nature of the damage to the adjoining property, the insured is denied access to the business by the fire department. If the insured's property is covered under a Business Income Coverage Form, the insurer will cover the loss of earnings for a MAXIMUM of: A. three weeks B. thirty days C. sixty days D. six months
A
A primary obligation of an insurer is to: A. pay the claims covered under the policy B. provide a financial statement with each policy C. make inspections and surveys of insured property D. prepare an inventory after a loss
A
Actual cash value is most often defined as which of the following options? A. Replacement cost less depreciation B. Amount paid less depreciation C. Fair market value plus appreciation D. Appraised value
A
In order to issue a written binder for a commercial property policy, what is the MINIMUM consideration a producer must secure from an applicant? A. A promise to pay the premium B. A signature on a premium finance agreement C. Payment of six months' premium D. Payment of twelve months' premium
A
Inland Marine insurance is commonly used to insure all of the following items EXCEPT: A. automobiles B. stamps C. camera equipment D. jewelry
A
Which of the following phrases BEST defines a hazard? A. A condition that increases the chance of a loss B. The uncertainty of a loss C. The cause of a loss D. An unexpected loss
A
Which of the following policy forms would BEST protect a business that must keep operating after a loss? A. Extra Expense B. Business Income C. Gross Earnings D. Contingent Business Interruption
A
Which of the following terms is defined as the uncertainty of future outcome? A. Risk B. Hazard C. Peril D. Cause
A
X insures a home for $100,000 under a Dwelling Property Broad Form (DP-2). If a flood causes $1,000 in damage to the home's contents, which of the following MAXIMUM amounts will X's insurer pay? A. $0 B. $800 C. $900 D. $1,000
A
A Commercial Building and Personal Property form provides coverage for: A. a patio attached to the building B. business personal property C. personal auto held for sale D. guard dogs
B
A Commercial Package policy must include at least how many coverage parts? A. One B. Two C. Three D. Four
B
A Commercial Property policy specifies which of the following responsibilities as a duty of the insured? A. To return the policy if it is canceled by the insurer B. To provide a sworn Proof of Loss statement if requested by the company C. To pay the mortgagee in full in the event of a total loss D. To pay premiums within thirty days after receiving an invoice
B
A company's promise to pay for damage caused by or resulting from any covered Cause of Loss would be found in which of the following sections of a Commercial Property policy? A. Declarations B. Insuring Agreement C. Conditions D. Exclusions
B
An applicant's statement included in the insurance contract that the property to be insured has an operable sprinkler system is: A. agency binding authority B. a warranty C. a representation D. an affidavit
B
An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts? A. $1,000 B. $1,250 C. $1,400 D. $1,500
B
Information provided by the insured in a Proof of Loss is considered: A. a warranty B. a representation C. an assignment D. an agreement
B
Under a Homeowners policy, an insured is required to take all of the following actions when a covered loss occurs EXCEPT: A. give prompt notice to the insurer or its producer B. hire an appraiser to determine the amount of loss C. notify the police if the loss is the result of theft D. protect the property from further loss
B
Which of the following coverages may be added by endorsement to a Boiler and Machinery policy? A. Expediting Expenses B. Extra Expense C. Property Damage Liability D. Damage to Property of the Insured
B
Which of the following perils is covered by Broad Form perils but is not covered by the Basic Form? A. Vandalism B. Weight of ice and snow C. Riot D. Windstorm
B
Which of the following sources may be used to provide property insurability information? A. Police records B. Physical inspections C. Checking account statements D. Lie detector tests
B
A deer jumps through the window of an insured's home, damaging the interior and exterior walls. Which of the following Homeowners Forms listed below is the LEAST comprehensive form that will still provide coverage for this loss? A. HO-1 Form B. HO-2 Form C. HO-3 Form D. HO-5 Form
C
A family takes their 50 horsepower outboard motor boat to the lake on a trailer towed behind their personal auto. The pleasure boat is appropriately covered for physical damage under which of the following policies? A. Dwelling B. Homeowners C. Boatowners D. Yacht
C
An insured has an HO-3 Form. When using a snowblower borrowed from a neighbor, the insured strikes a large rock and causes $2,000 worth of damage to the snowblower. Under which section of the policy could payment be made on the insured's behalf? A. Personal Property B. Building C. Personal Liability D. Loss of Use
C
An insured owns a set of six drawing pens designed and used by Benjamin Franklin. Each pen is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the Pair and Set clause, the insurer will pay a MAXIMUM of which of the following amounts? A. $1,000 B. $2,000 C. $7,000 D. $12,000
C
During a tornado, a barn is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the: A. fire B. collapse of the wall C. tornado D. smoke
C
In a Commercial Property form, if a building is left vacant, coverage for vandalism will continue for up to how many days? A. Thirty B. Forty-five C. Sixty D. Ninety
C
What organization offers coverage on properties in areas of Florida deemed especially susceptible to windstorm damages?
Citizens Property Insurance Corporation
What type of insurance can be obtained through a surplus lines insurer?
Coverage that is unavailable through authorized insurers
All of the following items are included in the Nationwide Marine definition EXCEPT: A. imports and exports B. fine arts C. furs D. real property
D
All of the following perils are covered under a Building and Business Personal Property Coverage Form with a Causes of Loss-Basic Form attached EXCEPT: A. smoke B. sprinkler leakage C. sinkhole collapse D. earth movement
D
An insured owns an antique marble statue valued at $3,000, which is covered under a Personal Articles Floater. Damage to the statue would be covered in all of the following situations EXCEPT: A. it was accidentally damaged by a housekeeper B. it was damaged in a flood C. a guest of the insured maliciously damaged it D. the insured threw it
D
N's next door neighbor, S, dumps hot ashes in N's trash dumpster, starting a fire and causing severe damage to N's home. N's company pays the loss and then goes after S for payment. This is an example of: A. pro rata liability B. assignment C. appraisal D. subrogation
D
The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences EXCEPT: A. mudslides B. runoff from heavy rain C. overflow of tidal waters D. water-main breakage
D
The Personal Liability section of a Homeowners policy covers which of the following options? A. Damage to an insured's property caused by a visitor B. Bodily injury to a resident caused by a neighbor's dog C. Property damage caused by war D. Bodily injury caused by the personal activities of an insured
D
Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured? A. Negligence B. Liability C. Accident D. Occurrence
D
Joe has tried to obtain automobile insurance in the voluntary market multiple times, but is always turned down. He meets all the general qualifications for auto insurance. Who can Joe go to for auto insurance now?
Florida Automobile Joint Underwriting Association
The operation of the Florida Financial Responsibility Law could be triggered by any of the following events EXCEPT
Registering a vehicle with the Motor Vehicle Department
All of the following may be covered by the miscellaneous type vehicle endorsement EXCEPT
Rented recreational vehicles
Which of the following perils is covered by the HO-2 and HO-3?
Sudden and accidental rupture of a heating system
Actual cash value is most often defined as: A.replacement cost less depreciation A. replacement cost less depreciation B.original purchase price less depreciation B. original purchase price less depreciation C.stated amount a policy will pay C. stated amount a policy will pay D.cost to replace D. cost to replace
a
An employer wishes to purchase liability coverage to protect against employees who bring suit due to an employment-related offense. Which type of policy would be most appropriate for the employer? A.Employment Practices Liability (EPLI) A. Employment Practices Liability (EPLI) B.Commercial General Liability (CGL) B. Commercial General Liability (CGL) C.Owners and Contractors Protective Liability (OCP) C. Owners and Contractors Protective Liability (OCP) D.Bodily Injury Liability (BI) D. Bodily Injury Liability (BI)
a
Premium costs for standard Workers Compensation insurance are paid by: A.employers only A. employers only B.employees only B. employees only C.employers and employees jointly C. employers and employees jointly D.the Workers Compensation Board D. the Workers Compensation Board
a
The attempt to restore an insured to the insured's previous financial condition before the loss occurred is BEST described as: A.indemnification A. indemnification B.subrogation B. subrogation C.coinsurance C. coinsurance D.self-insurance D. self-insurance
a
Anything that increases the chance of loss is known as a(n): A.risk A. risk B.hazard B. hazard C.direct loss C. direct loss D.indirect loss D. indirect loss
b
In a state where minimum auto bodily injury liability limits are 20/40, S is driving with limits of 20/40. S is responsible for an accident with T in which T suffers bodily injury in the amount of $120,000. T has non-stacked Underinsured Motorists limits of 100/300. How much will T's policy pay toward T's injuries? A.$ 20,000 A. $ 20,000 B.$ 80,000 B. $ 80,000 C.$ 100,000 C. $ 100,000 D.$ 120,000 D. $ 120,000
b
In insurance, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or damage neither expected nor intended? A.An accident B.An occurrence C.An event D.A condition
b
Which of the following policies is intended to broaden the coverages and increase the limits of underlying insurance? A.Owners and Contractors Protective Liability B.Umbrella Liability C.Excess Liability D.Commercial General Liability
b
Which of the following sections of an insurance policy would explain the term "auto" ? A.Declarations A. Declarations B.Definitions B. Definitions C.Insuring agreement C. Insuring agreement D.Obligations of the insurance company D. Obligations of the insurance company
b
An insured has an automobile policy with a combined single limit of $500,000 for Bodily Injury and Property Damage. After an accident, a court awards $300,000 bodily injury and $25,000 property damage to Claimant A, and $200,000 bodily injury and $25,000 property damage to Claimant B. In this situation, the insurance company's limit for liability is: A.$300,000 A. $300,000 B.$350,000 B. $350,000 C.$500,000 C. $500,000 D.$550,000 D. $550,000
c
In a Commercial General Liability policy, medical payment expenses MUST be: A.caused by the negligence of the insured A. caused by the negligence of the insured B.caused by a product manufactured by the insured B. caused by a product manufactured by the insured C.reported within one year of the date of the accident C. reported within one year of the date of the accident D.reported within two years of the policy expiration D. reported within two years of the policy expiration
c
Investment consultants should purchase which of the following policies to protect themselves from errors and omissions claims? A.Owners and Contractors Protective Liability A. Owners and Contractors Protective Liability B.Premises and Operations Liability B. Premises and Operations Liability C.Professional Liability C. Professional Liability D.Products and Completed Operations Liability D. Products and Completed Operations Liability
c
J drives L's car. Both J and L have a Personal Auto Policy. Which of the following statements is CORRECT concerning coverage if J causes an accident? A.J's policy only will pay for any damage B.L's policy only will pay for any damage C.L's policy is primary and J's is excess D.J's policy is primary and L's is excess
c
The Arbitration clause in a Personal Auto policy would be used in which of the following circumstances? A.The insurance company and a pedestrian struck by the insured's auto cannot reach an agreement regarding the settlement of a claim. B.The insured and an injured third party cannot reach an agreement regarding the settlement of a claim. C.The insured and the insurance company cannot reach an agreement regarding the settlement of a claim. D.The courts have ruled against an injured third party.
c
Which of the following coverages may be written with Workers Compensation? A.Products A. Products B.Contractual B. Contractual C.Employers Liability C. Employers Liability D.Completed Operations D. Completed Operations
c
An insurance binder is best described as: A.a large bound volume of rules, rates, and forms A. a large bound volume of rules, rates, and forms B.a rate manual supplied by one of the rating organizations B. a rate manual supplied by one of the rating organizations C.a temporary agreement to pay a claim pending final settlement C. a temporary agreement to pay a claim pending final settlement D.temporary short-term evidence of coverage D. temporary short-term evidence of coverage
d
In a store, all of the following situations would be considered theft EXCEPT: A.merchandise being stolen with evidence of forced entry B.a clerk witnessing a customer shoplifting merchandise C.a clerk being robbed at gunpoint D.the store's year-end inventory coming up short by 5 percent
d
The owner-operator of a computer store often leaves expensive computers balanced negligently on the edges of tables, believing that any damage to the computers will be paid by the insurance policy. This situation is BEST described as a: A. moral hazard B. morale hazard C. catastrophic hazard D. psychological hazard
B
The principle of indemnity is designed to avoid: A. two policies sharing payment for a loss B. overpayment of a claim C. the return of earned premiums D. a Coinsurance clause of less than 80 percent
B
A fire in an insured's restaurant burns the kitchen walls and causes smoke damage to the entire interior. Water used to extinguish the fire causes extensive damage to floors and furnishings. The water damage is best described as: A. a time element loss B. a consequential loss C. a direct loss D. an indirect loss
C
G insures G's television repair shop under a Building and Personal Property Coverage Form with limits of $100,000 on the building and $50,000 on business personal property. A fire causes $10,000 in damage to the building and $20,000 in losses to the contents. G also has to pay $1,000 for debris removal. If the policy has a deductible of $250, G will receive a MAXIMUM of which of the following amounts from the insurer? A. $29,750 B. $30,000 C. $30,750 D. $31,000
C
S is purchasing a Commercial Property policy to cover a commercial building with a replacement cost of $100,000. The policy includes an 80 percent Coinsurance clause. To avoid a coinsurance penalty in the event of a partial loss, S should purchase a policy with minimum limits of AT LEAST which of the following amounts? A. $100,000 B. $90,000 C. $80,000 D. $20,000
C
Special Form or Open Perils coverage: A. Provides coverage against the named perils B. Provides coverage against scheduled risks C. Is limited by the named exclusions D. Includes no exclusions
C
The MAXIMUM amount a policy will pay in the event of a loss is called the: A. coinsurance amount B. deductible C. limit of liability D. pro rata return
C
The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy? A. Declarations B. Insuring Agreement C. Conditions D. Exclusions
C
Under a Personal Property Floater, a loss is covered when it occurs: A. in the insured's home only B. in the United States only C. in the United States or Canada only D. anywhere in the world
C
Which of the following Homeowners coverages does NOT generally contain a deductible? A. Personal property B. Other structures C. Liability D. Dwelling
C
All of the following options are examples of insurable interest EXCEPT: A. a person's interest in property she is buying on contract B. a tenant's interest in improvements she has made to a leased building C. a TV repairman's interest in a customer's TV which has been repaired but is still on premises D. an individual's interest in property her parents will someday leave to her
D
Pro-rata cancellation occurs when: A. a policy is nonrenewed B. a mortgage has been satisfied C. an insured cancels a policy at inception D. an insurer cancels a policy at any time
D
Which of the following statements is CORRECT about the Fair Credit Reporting Act? A. It requires an insurer to send to an applicant a copy of the applicant's credit report. B. It requires an insurer to obtain a credit report on an applicant. C. It allows an insurer to obtain a credit report without the applicant's permission. D. It provides a method for an applicant to correct any incorrect information in the credit report.
D
Which of the following terms can be defined as a policy provision that omits certain risks from coverage? A. Declarations B. Insuring Agreement C. Conditions D. Exclusions
D
Can an insurer cancel a property policy for nonpayment of premium?
DYes, with 10 days' written notice and reason of cancellation given to the insured
The principle of actual cash value is applied to claims for which of the following policies? A.Accidental Death A. Accidental Death B.Auto Physical Damage B. Auto Physical Damage C.Variable Annuity C. Variable Annuity D.Workers' Compensation D. Workers' Compensation
b
In an application for marine insurance, a yacht owner states that the yacht will only be sailed on inland waters. If the insured subsequently sails the yacht on the seas, coverage may be denied because the insured has breached: A.the Inchmaree clause A. the Inchmaree clause B.the policy clause B. the policy clause C.a representation C. a representation D.a warranty D. a warranty
d
In the event of a loss under a Personal Auto Policy, an insured is required to submit to the insurance company all of the following information EXCEPT: A.a Proof of Loss statement if requested A. a Proof of Loss statement if requested B.a Notice of Claim B. a Notice of Claim C.a list of any known witnesses C. a list of any known witnesses D.an appraisal of the damaged property D. an appraisal of the damaged property
d
Products Liability coverage would insure damages that arise from which of the following situations? A.A manufacturer is required to recall a defective product. B.A contractor installs inferior-grade siding on a building. C.A customer receives an electrical shock from a curling iron during an in-store demonstration. D.A bicycle rider is injured when a wheel malfunctions.
d
The Fair Credit Reporting Act requires the: A.insurance company to review the applicant's credit history prior to underwriting a policy A. insurance company to review the applicant's credit history prior to underwriting a policy B.insurance producer to summarize a policy for the insured B. insurance producer to summarize a policy for the insured C.insurance producer to review the applicant's credit history prior to issuing a policy C. insurance producer to review the applicant's credit history prior to issuing a policy D.insurance company to inform the applicant a credit report may be obtained D. insurance company to inform the applicant a credit report may be obtained
d
W, an electrician, caused damage to the main wiring of a shopping center while working on another building. As a result, the shopping center was forced to close early for the day. The loss resulting from this damage would be considered which of the following types under W's Commercial General Liability policy? A.Products B.Completed Operations C.Premises D.Operations
d
Which of the following individuals is likely to have a valid Workers Compensation claim? A.A retired employee injured while visiting his old workplace A. A retired employee injured while visiting his old workplace B.An employee who suffers a diabetic coma from failure to take prescribed medicine B. An employee who suffers a diabetic coma from failure to take prescribed medicine C.A sole proprietor injured in an auto accident while driving to a friend's house C. A sole proprietor injured in an auto accident while driving to a friend's house D.An employee injured while undergoing job training D. An employee injured while undergoing job training
d
Which of the following losses would be covered under an Inside the Premises - Robbery and Safe Burglary of Other Property Form? A.Valuable papers kept in a locked safe are destroyed by fire. A. Valuable papers kept in a locked safe are destroyed by fire. B.Cash is stolen from a locked safe that shows no signs of forced entry. B. Cash is stolen from a locked safe that shows no signs of forced entry. C.Jewelry is stolen from a locked safe that shows no signs of forced entry. C. Jewelry is stolen from a locked safe that shows no signs of forced entry. D.Gold bars are stolen from a locked safe that shows signs of forced entry. D. Gold bars are stolen from a locked safe that shows signs of forced entry.
d
Which of the following sections of a policy limits coverage? A.Policy summary A. Policy summary B.Conditions B. Conditions C.Binders C. Binders D.Exclusions D. Exclusions
d
Which of the following vehicles is considered a temporary substitute auto under a Personal Auto policy? A.A neighbor's pickup truck borrowed by an insured to run an errand B.An auto purchased by an insured to replace a previously owned vehicle C.An auto rented by an insured when the insured is on vacation D.An auto rented by an insured when the insured's car is in a garage for repairs
d
