Practice Test 12

What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy? a. $100,000 b. $1,000 c. there is no limit d. $10,000

a. $100,000

Which of the following fidelity bonds guarantees both the honesty and faithful performance of the principal? a. Coverage form O b. Standard form #25 c. Standard form #23 d. Standard form #24

a. Coverage form O

To be covered under the "medical payments" coverage provided by the CGL policy, bodily injury must be caused by: a. an accident b. an occurrence c. legal liability d. negligence

a. an accident

A salesperson having possession of the insureds property on premises is known as: a. custodian b. insured c. messenger d. watchperson

a. custodian

Andrew Daniels has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Andrew's home suffered damage. In this situation, both Andrew and his insurance company are required to perform certain duties because an insurance policy is a(n) _______ contract a. executory b. unilateral c. aleatory d. bi-lateral

a. executory

Under Coverage E- Schedule Farm Property, how is the property covered? a. for the limit scheduled in the declarations b. value basis c. blanket coverage d. replacement cost basis

a. for the limit scheduled in the declarations

All of the following statements are true of coverage under a commercial general liability policy, EXCEPT: a. liability on the part of the insured must be proven before an injured party may be paid medical expenses under the medical payments section of the policy. b. once in effect, an extended reporting period may not be cancelled c. under an occurrence version of the CGL policy, any claim for damages always carries back to the policy in effect when the injury occurred d. the insurer may require an injured party to submit to a medical examination by a company selected doctor before paying a claim

a. liability on the part of the insured must be proven before an injured party may be paid medical expenses under the medical payments section of the policy.

Which of the following standardized Dwelling Insurance forms provides coverage for loss of rental income? a. the DP-1, DP-2 and DP-3 forms b. the DP-1 and DP-2 forms c. the DP-2 and DP-3 forms d. the DP-3 form

a. the DP-1, DP-2 and DP-3 forms

Mrs. Vincent is covered under a standard PAP that covers her 2016 Ford SUV. She carries liability and full physical damage coverage. Her neighbor owns a 2002 Chevrolet pick up truck with liability coverage only. Mrs. Vincent borrows the truck to pick up law furniture, parks the truck at the store, and leaves the keys in the ignition. The truck is stolen and later found wrecked. Which of the following would apply? a. the loss is covered under Mrs. Vincents "other than collision" coverage b. the loss would be covered under her neighbors policy c. the loss is covered under Mrs. Vincents collision coverage d. the loss would be covered under her neighbors Homeowner policy

a. the loss is covered under Mrs. Vincents "other than collision" coverage

Under a directors and officers policy, when can the insurance company reimburse the corporation for reimbursement to directors and officers for defense and damages paid in legal proceedings? a. when allowed by its bylaws b. when approved by the board of directors c. never, because these expenses are excluded d. anytime there is a claim

a. when allowed by its bylawsWHi

Which of the following Crime form insuring agreements pays defense costs for the insured? a. inside the premises- theft of money and securities b. forgery or alteration c. employee theft d. outside the premises

b. forgery or alteration

Under a BAP, which of the following types of physical damage loss is not covered? a. collision with an animal b. loss to radar detection equipment c. transportation expenses following theft of an entire private passenger auto d. glass breakage caused by vandals

b. loss to radar detection equipment

All of the following statements are true regarding the coverage of mobile or trailer homes under a Dwelling insurance policy, EXCEPT: a. mobile or trailer homes must be insured under a DP-1, they cannot be insured under a DP-2 or a DP-3 b. mobile or trailer homes can be owner or tenant occupied c. before the insurance can apply, the mobile home must be permanently installed in the designated location d. the policy period can be for no more than one year

b. mobile or trailer homes can be owner or tenant occupied

The insured and her 18 year old son, who lives in the insureds household, are crossing the street when both of them are struck by a drunk driver. The Part B- Medical Payments coverage of the insureds personal auto policy will: a. provide coverage for the insured, but not her son b. provide coverage for both the insured and her son c. will not apply because the insured and her son were pedestrians when struck d. will cover only the insureds son because the insured should have been more careful crossing the street

b. provide coverage for both the insured and her son

Under the DP-3 special form, which of the following would be covered? a. earthquake b. theft of outside lighting attached the dwelling c. vandalism in a dwelling that has been vacant for 89 days d. the gradual soot build up on the siding of the covered dwelling form the insureds gas grill being used over a period of years

b. theft of outside lighting attached the dwelling

Under Coverage F- Medical Payments in Section II of the standard Homeowners policies, medical expenses for the injured party will paid as long as the claim is submitted: a. within 3 years of the date each medical service was performed b. within 3 years of the date of the accident c. within 1 year of the date of the accident d. within 3 years of the date that a licensed medical professional certifies that the injure person no longer needs treatment

b. within 3 years of the date of the accident

Under Coverage F- Unscheduled Farm Personal Property, the most that will be paid for a 'head' of livestock is: a. $5000 b. $2500 c. $2000 d. $1000

c. $2000

Collin suffered a work relate injury on the morning of February 5th and was off work completely until he returned to work on full duty on February 19th. Collin had worked for his employer for four years and was paid $42,125 per year. Collin state sets the TTD rate at 66 2/3% of the average weekly wage. The state sets the maximum compensation rate at $420 per week and waiting period at 3 days retroactive after 10 days. Collin was not paid for working on February 5th, so how many days of TTD compensation is Collin entitled to receive? a. 10 b. 11 c. 14 d. 15

c. 14

An insured has an NFIP policy and suffers a direct loss due to flood. how many days does the insured have to submit a proof of loss? a. 90 days b. 45 days c. 60 days d. 30 days

c. 60 days

Jones Manufacturing produces a product for resale. They sell all of the items during the 2014 calendar year. During the year 2014 they are insured by ABC Insurance Company. In 2015 they change coverage to XYZ Insurance Company. Late in 2015, a consumer is injured because of defect in the insureds product. Who is responsible for the claim? a. the consumer under "Let the Buyer Beware" doctrine b. the ABC Insurance Company as Jones liability carrier c. the XYZ Insurance Company as Jones liability carrier d. a pro-rata agreement will have to be reached between the ABC and XYZ insurance companies

c. the XYZ Insurance Company as Jones liability carrier

Which of the following statements is NOT TRUE regarding the "Extended Period of Indemnity" option of the Business Income form? a. if this coverage is selected the coinsurance requirement is waived b. with this coverage option, a monthly limit of insurance is selected, expressed as a fraction, and scheduled on the form c. the coverage applies for 120 days following the period of restoration d. this coverage option only applies to the loss of business income and not to any extra expenses coverage

c. the coverage applies for 120 days following the period of restoration

Workers compensation pays up to __________ as a covered burial expense a. $10,000 b. $5000 c. usual and customary d. $12,000

d. $12,000

Henrietta has purchased a Personal Auto policy and she sees the following under Part A: $25,000/ $50,000 / $30,000 Which of the following statements is TRUE regarding these numbers? a. $25,000 represents the limit of property damage liability b. $50,000 represents the limit of liability paid for both bodily injury to one third party involved in an accident c. $25,000 represents the limit of liability paid for bodily injury to all third parties involved in an accident d. $30,000 represents the limit for property damage liability

d. $30,000 represents the limit for property damage liability

Nina has the "Preservation of Property" additional coverage included in her standard BOP. How long does coverage apply while the property is being stored at another location? a. 45 days from the day the property was first moved b. 30 days from the day the claim was filed c. 60 days from the day the claim was filed d. 30 days from the day the property was first moved

d. 30 days from the day the property was first moved

The Commercial Property coverage extension "Business Personal Property Temporarily in Portable Storage Units" will provide $10,000 of coverage for up to: a. 60 days b. 120 days c. 30 days d. 90 days

d. 90 days

The most common method of settling liability insurance claims is through: a. ADRs b. Arbitration c. Mediation d. Negotiated settlement

d. Negotiated settlement

Which of the following endorsements must be attached to a standard BOP for coverage to apply to a business freezer that was damaged by the interruption of a power source? a. Business Personal Property endorsement b. Protective Safeguards endorsement c. Utility Services- time element endorsement d. Utility Services- direct damage endorsement

d. Utility Services- direct damage endorsement

A BAP has a $100,000 limit of insurance for liability coverage. As a result of an automobile accident involving a covered auto, two people are injured. The first injured party sues the named insured and wins a $150,000 judgement. The insurer pays its limit of insurance. If the other injured party later sues the insured, the insurer will: a. either defend or settle the suit b. pay up to $100,000 of the damages the injured party is awarded c. pay a negotiated amount d. deny further obligations to the insured as a result of the other Injured party

d. deny further obligations to the insured as a result of the other Injured party

Which of the following statements is not true regarding the circumstances, if any, that an individual proprietor or partner can be covered for workers compensation coverage in South Carolina? a. when they have employees eligible for coverage b. they are actively engaged in the operation or business c. the insurer is advised of their election to be covered d. self-employed persons are not eligible for coverage and must purchase individual health and disability coverage

d. self-employed persons are not eligible for coverage and must purchase individual health and disability coverage

An insured is covered under an HO-3 form. If the insured hits his own house and also damages the garage and the attached fence with his vehicle, which of the damages would be covered? a. the damage to the house and garage only b. the damage to the fence only c. none of the damages would be covered because the insureds vehicle caused the damage d. the damage to the house garage and fence would all be covered

d. the damage to the house garage and fence would all be covered

Which of the following is TRUE regarding deductibles that pertain to Part D of the standardized Personal Auto policy? a. the deductible amount scheduled on the policy for Part D- Collision is $250 and for Part D- Other than Collision is $500. Any adjustment to these amounts must be made by endorsements b. a deductible of $250 is standard for Part D and applies to both the "Collision" or Other than Collision coverage c. a single deductible amount, chosen by the insured, applies to both the Collision or Other than Collision coverage d. there are separate deductible amounts, chosen by the insured for both the Collision or Other than Collision coverage

d. there are separate deductible amounts, chosen by the insured for both the Collision or Other than Collision coverage