Practice Test 4

Which of the following acts protects consumers against the distribution of incorrect information and obsolete personal of financial information?

The Fair Credit Reporting Act

Under a workers compensation policy, premiums will be determined when

The policy period end

What is an insured contract?

Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract

The policy conditions as well as state laws permit the insurance company to cancel or rescind a policy when any of the following exist EXCEPT

representations

Which of the following would trigger coverage under business income form with extra expense coverage?

Carpet cleaning after a water main break

What type of law requires employers to provide workers compensation coverage to employees?

Compulsory

Which of the following represents the primary amount of insurance for the HO-4?

Coverage C

In which of the following DP forms is the dwelling covered under open perils and the personal property on a named peril basis?

DP-3

Which of the following causes of loss is covered under a commercial property basic form?

-Volcanic Eruption -fire, lightning, explosion, windstorm, or hail, -smoke, aircraft or vehicles, riot or civil commotion, vandalism, -sprinkler leakages, sinkhole collapse, and volcanic action.

What is the waiting period for transportation expenses coverage for a loss other than theft of a covered vehicle?

24 hours

If an insurer intends to nonrenew a dwelling policy, it must alert the insured of the nonrenewal at least how many days before the effective date?

45 days

According to Fair Credit Reporting Act, consumer reports are prohibited from reporting negative information about a customer after how many years?

7 years

IN business income additional coverage in a businessowners policy (BOP), the waiting period that must occur before the period of restoration may begin in

72 hours

Which type of crime listed below best describes someone who waits until store personnel are preoccupied and pockets merchandise while no one is looking and leaves without detection?

theft

All of the following describe blanket property insurance coverage EXCEPT

a particular item insured

Who acts on behalf of the principal?

Agent

Which of the following is TRUE when the insured's limits of insurance apply per occurrence?

Coverage is triggered for smoke damage to siding caused by repeated acts by insured's neighbor.

Which of the following liability insurance policies would provide coverage to ABC Company in a suit brought by a fired employee for wrongful discharge?

Employment Practices Liability

Which of the following commercial forms would cover costs associated with a temporary worksite while damages to an office building are being repaired?

Extra expense

Which of the following is true regarding a risk retention group?

It is a liability insurance company owned by its members

All of the following are elements of a valid contract EXCEPT

Provisions

When an insured is driving his covered automobile causes an accident that results in injury, his automobile medical payments will pay medical expenses for all of the following EXCEPT

any occupant of the other not at fault vehicle.

Which of the following is an example of risk retention?

cancelling automobile insurance because of lack of previous accidents

Which of the following is an example of replacement cost valuation?

cost new without depreciation at the time of loss

The State highway department is rebuilding a roadway and the general contractor winning the bid will be required to purchase a bond guaranteeing the work will be completed according to specifications and on time. Which of the following types of bonds will the general contractor need to purchase?

surety bond

Mysterious disappearance in insurance refers to which occurrence?

the disappearance of property without any explanation of what happened

Which of the following is TRUE for stated value?

the insured stipulates the value of property

Which of the following best describes the policy conditions?

the responsibilities and obligations of insured and insurer

All of the following would be found on a declarations page EXCEPT

policy exclusions

All of the following activities would warrant the imposition of absolute liability EXCEPT

risky transportation.

Which of the following types of crime best describe the unlawful act of taking property from the care and custody of another person while threatening to cause bodily harm?

robbery

The law of large numbers states which of the following?

statistics are more reliable with more examples used

Which of the following is the party who agrees to be responsible for loss in the case of a fidelity bond?

the surety

An insured operates a auto repair shop and has a garage coverage form with garagekeepers insurance when an employee on a test drive with a customer's car is involved in a crash. How will the customer's car be covered by the insured's policy?

The customer's car is covered for any physical damage while in the custody of the insured.

A coverage extension under a commercial crime policy may cover theft by employees outside of the coverage territory for

Up to 90 days

For the purpose of workers' compensation insurance all of the following are subject to the workers' compensation laws, either as an employer or employee EXCEPT

a crew member of an ocean going vessel.

In which of the following situations would workers' compensation benefits be covered for an injured employee?

a slip and fall while on the job at work

Which of the following is considered a hired auto under the commercial auto policy Symbol 8?

autos the insured leases, borrows or rents

All of the following are common exclusions in a liability policy EXCEPT

damage caused by acts of civil disobedience and riots.

Which of the following is attached to and used to modify or change the original policy in some way?

endorsement

All of the following are Unfair Claims Settlement Practices EXCEPT

failure to respond to a first notice of loss within 24 hours.

Exclusions common to liability coverage for both the personal auto policy and the business auto policy include all of the following EXCEPT

for liability arising while the insured auto is being used in an auto business.

What is it called if someone plugs too many electrical cords into a single outlet?

hazard

Which of the following defines a loss which is consequential and comes as a result of an original loss?

indirect loss

Determining adequate indemnification after a loss is a principle duty of which of the following?

insurance company

Absolute liability can be imposed by law and exist in the absence of which of the following?

negligence

Which of the following is an example of risk avoidance?

not driving a car to prevent getting in an accident

All of the following would be considered an insured person under Part A of a personal automobile policy EXCEPT

other persons or organizations for their liability from an accident involving an auto or trailer used by the insured but owned by that person or organization.