Practice Test 7

Under standardized DP-2 or DP-3 policy, what is the maximum that would be paid for additional living expenses if Coverage A was $60,000? a. $12,000 b. $6,000 c. $7,000 d. $9,500

a. $12,000

What is the Part D limit of liability for damage to a non-owned trailer under the Personal Auto policy? a. $1500 b. $500 c. $1000 d. $2000

a. $1500

Under the Regular Program of the NFIP in a state/territory other than Alaska, Hawaii, Guam, or the U.S. Virgin Islands, a single-family residence is insured for up to: a. $250,000 b. $35,000 c. $100,000 d. $185,000

a. $250,000

Part D of the Personal Auto policy provides coverage for all of the following, EXCEPT: a. all direct losses to the insureds covered auto b. coverage for the types of damage that are not excluded c. direct and accidental losses to a non-owned automobile being used by the insured d. auto glass breakage caused by a collision

a. all direct losses to the insureds covered auto

The Ocean Marine coverage that insures either prepaid shipping charges, or the income to be earned for moving cargo is known as: a. freight insurance b. protection and indemnity c. block policy coverage d. cargo coverage

a. freight insurance

Public Official bonds are meant to: a. guarantee faithful performance of the elected or appointed public official b. guarantee financial obligations c. assure the employees are faithful in their jobs d. none of the above are correct

a. guarantee faithful performance of the elected or appointed public official

Many stationary objects, such as bridges, tunnels and power lines fall within the nationwide marine definition because they are considered to be: a. instrumentalities of transportation and communication b. of substantially high values c. capable of being transported d. exposed to the same perils as vessels at sea

a. instrumentalities of transportation and communication

The "per occurrence" limit under a Commercial General Liability policy also contains a sublimit for: a. medical payments b. the completed operations aggregate limit c. the general aggregate limit d. the products aggregate limit

a. medical payments

Coverage A of the HO-2 form would cover which of the following items? a. paint to be used on the building b. riding lawnmower used to service the premises c. a detached fence d. grave marker

a. paint to be used on the building

Under employment practices liability, the coverage territory is worldwide as long as the suit is brought in: a. the United States b. the U.S. and Mexico c. the U.S. and Puerto Rico d. the U.S. and Canada

a. the United States

Which of the following would NOT be included in an adjusters initial/field/preliminary report? a. the results of mediation b. a suggestion of an amount for an initial reserve c. a request for assistance from an expert d. informs the insurer of any questions of coverage

a. the results of mediation

The insurance Commissioner/Director/Superintendent of a give state would refer to an insurance company formed under the laws of a different state as: a. an alien insurer b. a foreign insurer c. a domestic insurer d. a surplus lines insurer

b. a foreign insurer

If a covered business is a limited company, the standard BOP provides coverage for all of the following insureds EXCEPT: a. named insured b. executive director c. members d. managers

b. executive director

Which of the following loss valuations can be stated as "we agree to pay the cost to repair or replace without deduction for depreciation?" a. actual cash value b. replacement cost c. agreed amount d. stated amount

b. replacement cost

Which of the following statements is NOT true of a fidelity bond written on a scheduled basis? a. schedules the covered employee by name b. schedules a single amount to cover all employees c. schedules the employees for different limits of coverage d. schedules an amount for each named employee depending on their specific positions in the company

b. schedules a single amount to cover all employees

The Section II- Additional Coverages of Homeowners policies, damage to the property of others is covered up to: a. $1500 per occurrence b. $5000 per occurrence c. $1000 per occurrence d. $2500 per occurrence

c. $1000 per occurrence

The insured owns a 20 foot fishing boat with a 50 horsepower motor. Which policy would be best suited to cover a theft loss on a lake? a. the homeowners policy b. a hull policy c. a boatowners/watercraft policy d. the yacht policy

c. a boatowners/watercraft policy

Which of the following NFIP policies is required to include the ICC coverage? a. An NFIP contents only policy b. an NFIP Dwelling Policy under the Emergency Program c. an NFIP Dwelling Policy under the Regular Program d. an NFIP General property policy under the Regular Program

c. an NFIP Dwelling Policy under the Regular Program

Sally Roes vehicle is rear ended by John Doe. Sally and John are good friends. Sally tells John not to worry about the damage. She says she has insurance and will tell her insurance company to pay for the damage. She will waive her subrogation right so that John wont have to pay her anything. Her insurer will" a. Honor the waiver b. not honor the waiver c. proceed with subrogation against John Doe and will not honor the waiver d. refuse to pay the claim because of the waiver of subrogation

c. proceed with subrogation against John Doe and will not honor the waiver

Section I of the Homeowners forms provides up to _______ when the insured is assessed by a corporation or property owners association for damage to property owned collectively, but only if it was damaged by a peril insured against under Coverage A of the policy a. $250 b. $1500 c. $500 d. $1000

d. $1000

What limit of liability would be needed for a risk that transports radio active materials as required by the Motor Carrier Act under the MCS-90 endorsement? a. $500,000 b. $750,000 c. $1,000,000 d. $5,000,000

d. $5,000,000

Which of the following statements is TRUE regarding the debris removal coverage of the Dwelling forms? a. debris removal is not covered b. debris removal coverage is in addition to the limits applicable to dwelling and contents coverage c. there is a specific limit that applies d. Coverage A and Coverage B both include and amount for debris removal

d. Coverage A and Coverage B both include and amount for debris removal

Under which of the following Aviation physical damage losses would a deductible apply? a. fire caused by lightning b. theft or pilferage c. A deductible applies to all Aviation physical damage losses d. Fire caused by a collision

d. Fire caused by a collision

The penalty for acting as an adjuster without a license is: a. a fine of not more than $5,000 and 6 months in jail b. a fine of not more than $10,000 and 6 months in jail c. a fine of not more than $10,000 and 1 year in jail d. a fine of not more than $10,000 and/or 2 years in jail or both

d. a fine of not more than $10,000 and/or 2 years in jail or both

How are household personal property claims settled under the farm policy? a. replacement cost b. market value c. replacement cost if insured 80% to value d. actual cash value

d. actual cash value

An adjuster has procured a photograph of the scene of an accident on a claim that he is adjusting. This photograph is placed into the claims file as which of the following types of evidence? a. criminal b. real c. demonstrative d. documentary

d. documentary

All of the following statements are TRUE regarding the extension of coverage for non-owned detached trailers under the Building and Personal Property coverage form, EXCEPT: a. for coverage to apply, the insured must not own the trailer and must be under a contractual responsibility for any loss or damage to the trailer b. for coverage to apply, the trailer cannot be attached to ANY vehicle c. for coverage to apply, the trailer must be located on the insured premises d. for coverage to apply, the trailer can only be attached to a vehicle owned by the insured

d. for coverage to apply, the trailer can only be attached to a vehicle owned by the insured

A method of settling claim reserves based on the claims circumstances and the claim representatives experience in handling similar claims is known as: a. the expert system method b. the formula method c. the roundtable method d. the individual case method

d. the individual case method

The insured carries a standard Yacht policy on his vessel registered in Florida. One of the crew members is injured while performing a work related task on the yacht while sailing off the coast of Italy. What coverage would respond to the crew members injuries? a. medical payments coverage b. liability coverage c. hull coverage d. the jones act

d. the jones act

Mary left an expensive ring on her bedroom dresser before leaving on a business trip. When she returned, nothing seemed disturbed in her home, but her ring was gone. Under the terms of her HO-3 policy, this would be considered: a. robbery b. burglary c. malicious mischief d. theft

d. theft

Which of the following would not be eligible for coverage under a livestock floater? a. poultry b. cattle c. sheep d. swine

a. poultry

A claim is made on an excess liability policy. It is discovered during the claims investigation, that the underlying liability policy and the excess liability policy have different inception and expiration dates. The adjuster finds that the different dates has created a situation where the underlying policy was not in effect at the time of the occurrence, and therefore cannot trigger the excess liability policy to pay the claim. This situation is known as: a. contribution by equal shares b. nonconcurrency c. liability discrepancy d. split limits

b. nonconcurrency

Any policy limits expressed on a standard NCCI workers compensation policy, relate to: a. additional expenses b. part one: workers comp c. part two: employers liability d. part three: other states insurance

c. part two: employers liability

Part D of the personal auto policy does NOT cover: a. earthquake b. explosion c. wind d. freezing

d. freezing

In the event of a catastrophe, the Director may permit nonresident adjusters to handle claims in South Carolina if the nonresident adjuster exhibits: a. evidence of an adjusters license in his/her home state b. a surety bond in the amount of $25,000 c. an ability to handle catastrophic losses d. all of the above are correct

a. evidence of an adjusters license in his/her home state

Which of the following statements is TRUE regarding how the standard BOP additional coverage of "Collapse" becomes payable? a. the collapse must be such that the building cannot be used as intended b. the remaining part of the structure standing must be demolished c. the remaining part of the structure must be judged unsound to rebuild d. the building must be leaning, settling, or in danger of collapsing

a. the collapse must be such that the building cannot be used as intended

When an insured is fulfilling the duty of proving a loss by taking an inventory of the damaged property, who pays the expenses incurred by the insured? a. the insured b. the insurer c. the adjuster will provide funds to pay for these expenses d. who pays these expenses will be negotiated at the settlement of the claim

a. the insured

Which of the following NFIP forms provides replacement cost coverage if the building meets the other eligibility requirements for RCV? a. dwelling form only b. dwelling and RCBAP forms only c. dwelling, RCBAP and general property forms d. the general property form

b. dwelling and RCBAP forms only

Under the Business Auto policy, what is the limit for transportation expenses when the insured has suffered a theft loss of a private passenger type vehicle? a. $20 per day subject to a maximum payment of $600 b. $15 c. $15 per day subject to a maximum payment of $600 d. $25

a. $20 per day subject to a maximum payment of $600

The triggering event threshold for the Terrorism Risk Insurance Act of 2002 was: a. $5 million b. $5 billion c. $10 million d. $10 billion

a. $5 million

Written notice of cancellation or nonrenewal of an automobile policy must provide at least: a. 15 days in advance b. 10 days in advance c. 30 days in advance d. 45 days in advance

a. 15 days in advance

When the "Extended Period of Indemnity" option is selected to the insured on their Business Income form, the additional coverage "Extended Business Income' is extended from 60 days up to a maximum of ____ days a. 360 b. 365 c. 90 d. 180

a. 360

A leased vehicle is considered to be a covered auto under the personal auto policy (PAP) if it is a private passenger auto leased for at least: a. 6 consecutive months b. 48 hours c. 30 consecutive days d. 1 year

a. 6 consecutive months

What is the time limit provided under the basic extended reporting period under the CGL claims-made form for the reporting of claims that occurred before the expiration date of the policy? a. 60 days to report the claim and 5 years of coverage for the reported claims b. 60 days to report the claim and 2 years of coverage for the reported claims c. 180 days to report the claim and 5 years of coverage for the reported claims d. 120 days to report the claim and 3 years of coverage for the reported claims

a. 60 days to report the claim and 5 years of coverage for the reported claims

Which of the following vehicles is considered a temporary substitute auto under a personal auto policy? a. an auto loaned by the garage while the vehicle of the insured is being repaired b. a pickup truck owned by a neighbor and borrowed by an insured to run an errand c. an auto purchased by an insured to replace a previously owned vehicle d. an auto rented by an insured when the insured is on vacation

a. an auto loaned by the garage while the vehicle of the insured is being repaired

Sallys home is covered under an HO-3 policy. Coverage F of that policy will pay medical expenses for which of the following? a. anyone who is invited onto Sally's property and is injured while there b. Sally's son or daughter, while they are away at college c. Sally and her resident relatives d. Sally's roomers and/or boarders

a. anyone who is invited onto Sally's property and is injured while there

All of the following are excluded under CGL coverage for bodily injury and property damage liability, EXCEPT: a. bodily injury or property damage caused by the operation of mobile equipment b. an injury to an employee of the insured that is work related c. damage to property owned by the named insured d. liability resulting from intentional acts of the insured

a. bodily injury or property damage caused by the operation of mobile equipment

Which of the following is not and additional coverage under Homeowners Liability- Section II coverage? a. damage to property owned by the insured b. interest accruing after a legal judgement is entered c. first aid d. damage to property of others

a. damage to property owned by the insured

A Homeowners policy is a personal package policy. All of the following are advantages of a personal package policy, EXCEPT: a. package policies allow for lower deductibles b. fewer gaps in coverage exist with package policies c. insureds enjoy lower premiums with package policies d. package policies simplify the billing process for insurance companies

a. package policies allow for lower deductibles

Coverage B covered by the general liability policy provides coverage for: a. personal and advertising injury liability b. bodily injury and property damage liability c. medical payments d. supplementary payments

a. personal and advertising injury liability

All of the following are duties of the insured after a loss, EXCEPT: a. promptly hiring a public adjuster to assist in presenting the claim to the insurance company b. promptly reporting the loss to the insurer c. cooperating with the insurer in the investigation of the claim by providing the information requested by the adjuster d. submitting to an examination under oath (EUO) if requested by the insurer

a. promptly hiring a public adjuster to assist in presenting the claim to the insurance company

Each of the following is true about Homeowners Coverage C- Personal Property coverage, EXCEPT: a. the HO-8 does not include coverage for personal property b. personal property of a guest may be covered c. the full limit applies to personal property anywhere in the world d. special limits of liability apply to some types of personal property

a. the HO-8 does not include coverage for personal property

Mr. Thompson carries the minimum auto liability limits in his state. He drives his car to New York which requires bodily injury limits of $25/50 and a wrongful death limit of $50/100 and no fault coverage. If he has an accident in NY what coverage would he have? a. the coverage will automatically be modified to comply with the NY requirements b. the insurance company will not raise the limits to those required in NY c. the insured must pay an additional premium to have their limits increased before entering the state d. Mr. Thompson will have to ask his company for higher limits before the trip

a. the coverage will automatically be modified to comply with the NY requirements

Regarding minimum limits of liability under South Carolina's Financial Responsibility Law, if an insured has an accident in another state or province, the policy will provide a higher specified limit if: a. the state or province in which the accident occurred has a financial responsibility or similar law specifying limits of liability higher than those shown in the policy b. the state or province in which the accident occurred has a financial responsibility or similar law specifying limits of liability lower than those shown in the policy c. the state or province in which the accident occurred has a financial responsibility or similar law specifying limits of liability equal to those shown in the policy d. None of the responses listed are correct

a. the state or province in which the accident occurred has a financial responsibility or similar law specifying limits of liability higher than those shown in the policy

All of the following perils are covered for collapse under the Commercial Property additional coverage, EXCEPT: a. a building that abruptly caves in an becomes unusable b. a building that is in danger of collapsing c. use of defective construction materials that causes a collapse while the construction is in progress d. hidden insect or vermin damage

b. a building that is in danger of collapsing

Coverage under the Builders Risk form is written for: a. 90 day increments that follows the construction of the building b. a period of one year c. construction jobs that will take up to one year to complete d. contractors who are considered to be high risk because of a large number of claims submitted against them in the previous year

b. a period of one year

Which of the following shows a correct sequence of activities for an adjuster when negotiating a claim? a. determining the amount of the damage, then check the policy coverage b. acknowledging the claim, then opening a line of communication with the insured or claimant c. negotiating the settlement, then completing the investigation d. determine the cost to repair or replace, then check for coverage under the policy

b. acknowledging the claim, then opening a line of communication with the insured or claimant

Which of the following is not a true statement regarding the use of non-original equipment manufactured replacement parts for vehicles? a. the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit and performance b. insurers specifying the use of non-original equipment manufacture replacement crash parts shall not be required to pay the cost of any modifications to the parts which may become necessary to affect the repair c. insurers specifying the use of non-original equipment manufacture replacement crash parts warrant that such parts are of like kind, quality, safety, fir and performance as original equipment manufacturer replacement crash parts d. non-original equipment manufacture replacement crash parts must carry non-removable identification so as to identify the manufacturer

b. insurers specifying the use of non-original equipment manufacture replacement crash parts shall not be required to pay the cost of any modifications to the parts which may become necessary to affect the repair

Which of the following statements is TRUE regarding the peril of theft under the Homeowners policies? a. theft from a dwelling being rented is covered b. the HO-8 form specifies a limit of $1,000 for theft c. theft of watercraft off the insured premises is covered for up to $5000 d. all of the HO forms provide coverage for the broader definition of theft known as mysterious disappearance.

b. the HO-8 form specifies a limit of $1,000 for theft

Which of the following would NOT be excluded under Part A of a standard Personal Auto policy? a. the covered auto while being used as part of a transportation network company's services b. the covered auto while being used to transport passengers to work as part of a share the expense carpool c. the covered auto while being used to transport passengers from the airport to their hotel for a fee d. the covered auto that is hired to transport students from school to an after school program

b. the covered auto while being used to transport passengers to work as part of a share the expense carpool

Which of the following sections of an insurance policy contains language to assist an insurance company in managing moral and morale hazards? a. the conditions b. the exclusions c. the declarations d. the insuring agreement

b. the exclusions

The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella policy to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this claim likely be settled? a. the underlying policy would pay nothing, the insured would pay $10,000 and the Umbrella policy would pay $200,000. b. the insured would pay $10,000 and the Umbrella policy would pay $790,000 c. the underlying policy would pay $300,000 and the insured would pay $500,000 d. the underlying policy would pay $300,000 and the Umbrella policy would pay $500,000

b. the insured would pay $10,000 and the Umbrella policy would pay $790,000

Which of the following terms means liability through another person? a. strict/absolute liability b. vicarious/imputed liability c. gross liability d. intentional tort

b. vicarious/imputed liability

Which of the following best describes when an aircraft is "In motion" a. when the plane is being pushed from the gate by another vehicle b. when the plane is moving under its own power or from momentum generated from its own power c. when the planes engines are creating movement d. when the planes landing gear has been deployed and is in contact with the ground

b. when the plane is moving under its own power or from momentum generated from its own power

Which of the following are considered unfair claim settlement practices in South Carolina? I. providing misleading information with respect to the coverages II. failing to acknowledge with reasonable promptness pertinent communications with respect to a claim III. attempting in good faith to make prompt, fair and equitable settlements of claims on which liability has become reasonably clear IV. compelling policyholder or claimants to initiate suits to recover amounts due under a policy a. I, II, and III only b. II, III and IV only c. I, II, and IV only d. I and II only

c. I, II, and IV only

An adjuster license is for a term of: a. 2 years b. 1 years c. an indefinite period of time d. 3 years

c. an indefinite period of time

Uninsured Motorist (UM) coverage claims are: a. third party claims b. processed by the state government c. first party claims d. must be litigated in a court of law to determine coverage

c. first party claims

A method of replacing damaged property with something not exactly like the damaged item, but will perform in a similar fashion is known as: a. agreed replacement value b. stated amount value c. functional replacement cost d. replacement cost

c. functional replacement cost

A ship has suffered damage and sunk. Which of the following would respond to cover the loss of the ship? a. protection and indemnity b. shippers fees c. hull insurance d. cargo coverage

c. hull insurance

In which of the following situations should an adjuster consider obtaining a non-waiver agreement? a. when requested by an insurer b. when subrogation may be involved c. in dealing with a potential coverage dispute d. when directed by the court

c. in dealing with a potential coverage dispute

Which of the following statements is TRUE regarding the DP-3 form? a. it provides named peril coverage on both the structure and the personal property b. it provides named peril coverage on the structure and open peril coverage on the personal property c. it provides open peril coverage on the structure and named peril coverage on the personal property d. it provides open peril coverage on both the structure and the personal property

c. it provides open peril coverage on the structure and named peril coverage on the personal property

Meg has been in very good health in the past 3 years. She has been exercising, her blood pressure is at a perfect level, and her cholesterol is the envy of all her friends. Because Meg is feeling so healthy, she decides to cancel her health insurance policy. This is an example of which of the following risk management methods? a. risk control b. risk transference c. risk retention d. risk avoidance

c. risk retention

Which of the following is NOT a responsibility of the Insurance Commissioner in any given state? a. issuing insurance licenses and certificates of authority b. enforcing insurance laws and regulations c. settling insurance rates d. ensuring the availability of necessary insurance in the state

c. settling insurance rates

All of the following statements are TRUE regarding the "Equipment Breakdown" coverage extension of the standard Businessowners policy, EXCEPT: a. provides coverage for direct damage to covered equipment b. the damage must be caused by a sudden and accidental breakdown c. the damage can be caused by a gradual wear and tear of parts within the equipment d. the equipment must be located at the premises described in the Declarations

c. the damage can be caused by a gradual wear and tear of parts within the equipment

When the triggering event threshold has been met under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), the insurers deductible amount: a. Is 20% of the total amount of commercial losses paid in the previous calendar yet b. is 10% of the total amount of losses the insurer has paid from the date the insurer entered the program c. the insurer's deductible is calculated at 20% of the insurers direct earned premiums for commercial insurance d. the insurer's deductible is calculated at 20% of the insurers earned and unearned premiums for all insurance policies delivered

c. the insurer's deductible is calculated at 20% of the insurers direct earned premiums for commercial insurance

Max lives in a large apartment complex where there is no guard station or gate. Several hundred people live in the complex so its very easy to determine the schedules of the neighbors living around him. One morning Max leaves for work at 6:30 AM as he usually does, but he forgets to lock the front door. Later that morning someone comes into the apartment and steals Max's computer. What was the peril in this situation? a. the fact that the apartment complex does not have a guard station b. that Max left the door unlocked c. the theft of the computer d. the number of people living in the apartment complex increasing the chance that one of them may be a thief

c. the theft of the computer

The NFIP Dwelling form provides coverage for all of the following, EXCEPT: a. a single-family residence b. a three-family dwelling c. manufactured housing d. a five-unit apartment building

d. a five-unit apartment building

All of the following would be considered an "insured" on a Homeowners policy, EXCEPT: a. all residents who are related to the named insured b. a trust c. a non-related minor being cared for by the named insureds family d. a non-related tenant living in the insured residence

d. a non-related tenant living in the insured residence

Which of the following is NOT considered a loss under the Employee Theft insuring agreement of a standard Commercial Crime form? a. theft of stock by an employee after business hours b. property that is stolen from the insured by an employee who is acting in collusion with a theft ring in the area c. theft of stock by an individual employee during business hours d. a shortage of inventory that shows up on an inventory report with no evidence to show the reason for that shortage

d. a shortage of inventory that shows up on an inventory report with no evidence to show the reason for that shortage

When is a nonresident of South Carolina permitted to hold an adjuster license in the state? a. at the discretion of the Director of Insurance b. If South carolina has a reciprocal agreement with the adjusters home state c. if the adjusters home state will allow licensees of South Carolina to hold a nonresident license in that state d. all of the above

d. all of the above

Which of the following statements is NOT true regarding the insurers request for an "examination under oath" when investigating a claim? a. an EUO is usually requested by the insurer while investigating a first party claim b. an EUO is requested by an insurance company only when they feel the insureds account of the claim circumstances are questionable c. the insured has a duty under their policy to submit to an EUO if the insurer requests it d. an EUO is usually requested by the insurer while investigating third party claims to determine the truthfulness of the claimants account of their injuries

d. an EUO is usually requested by the insurer while investigating third party claims to determine the truthfulness of the claimants account of their injuries

All of the following are situations where a Commercial Umbrella policy would be triggered to provide coverage, EXCEPT: a. the policy limits of the underlying policy have been exhausted b. to pay a loss that is excluded by the underlying liability policy, but not excluded by the commercial umbrella policy c. payment on previous losses by the underlying liability policy has reduced its aggregate limit so that a subsequent loss is not fully covered d. the underlying liability policy limits are sufficient to pay the entire claim

d. the underlying liability policy limits are sufficient to pay the entire claim

Under Coverage A- Building of the BOP form, which of the following is NOT covered? a. completed additions, and additions under construction b. all permanently installed fixtures, machinery and equipment c. outdoor fixtures d. valuable papers and records

d. valuable papers and records

Commercial Inland Marine policies require the insured to submit a signed, sworn statement of loss: a. within 60 days of the date of loss b. within 30 days of the insurer requesting it c. within 30 days of the date of loss d. within 60 days of the insurer requesting it

d. within 60 days of the insurer requesting it

The "liberalization clause" of an insurance policy: a. states that if an insurer decides to broaden its standard policy coverages, then all outstanding policies issued prior to that decision will automatically receive those new coverages at no additional premium b. states that the insurer retains the right to suspend or cancel the policy at any time during the policy period c. states that if a mortgage company liberalizes its loan agreement with the named insured, the Insurer must be sent the revised wording within 60 days d. states that If the insurer broadens its underwriting eligibility requirements, all previously denied applicants must be notified within 60 days

a. states that if an insurer decides to broaden its standard policy coverages, then all outstanding policies issued prior to that decision will automatically receive those new coverages at no additional premium

Sarah is purchasing a 100-year old home that hasnt had significant renovations. She has contacted her insurance company and requested coverage under an HO-3 form. Her insurance company has refused to place the coverage but offered to cover the home under an HO-8 form instead. All of the following statements provide a reasonable explanation for the insurance company's choice of the HO-8 form, EXCEPT: a. the HO-8 form provides higher limits of coverage to replace items such as antique building materials to allow the home to remain true to its original design b. covering an older home on a form that would provide a higher limit of liability than the market value of the dwelling, would create a moral hazard c. to cover an older home with an HO-3 that provides replacement cost coverage on the dwelling, would require a prohibitively high premium rate d. the insurance company can settle losses under the HO-8 at "repair cost" instead of the must higher replacement cost settlement

a. the HO-8 form provides higher limits of coverage to replace items such as antique building materials to allow the home to remain true to its original design

When a policy is issued by a surplus lines company who later becomes insolvent, who pays the claim? a. the insured must assume the loss b. the guaranty fund of the state where the insurance was placed c. the operating fund of the state Insurance Department where the insurance was placed d. the NAIC guaranty fund for surplus/excess lines insurers

a. the insured must assume the loss

The purpose of licensing surplus lines brokers in a given state is: a. to allow them to place business with nonadmitted insurers b. to allow them to place business with admitted insurers c. to allow them to place business with domestic insurers d. to allow them to place business with foreign insurers

a. to allow them to place business with nonadmitted insurers

All of the following statements are true regarding the Federal Employers Liability Act (FELA) except: a. it was created to protect railroad workers who were injured on the job b. it provides workers comp coverage for employees working in federal government buildings c. it is not a workers compensation benefit because unlike workers comp coverage, which is not fault, the FELA is fault based d. unless the workers was 100% at fault, workers covered under FELA can sue their employers

b. it provides workers comp coverage for employees working in federal government buildings

An employee is injured on the job and cannot return to perform the duties of his former occupation. It is determined that he is a candidate for vocational rehabilitation services to be trained to perform other types of employment. He refuses this rehabilitation service. How might this affect his South Carolina workers compensation benefits? a. medical benefits will be suspended b. it will result in loss of compensation for each week of the period of refusal c. this will have no effect on his benefits d. his benefits will be reduced by one half until he agrees to the rehabilitation services

b. it will result in loss of compensation for each week of the period of refusal

The Conditions of the Commercial Crime policy require an insured to provide a sworn proof of loss statement to the insurance company: a. within 30 days after the insured has reason to believe there was a loss b. within 120 days after the insured has reason to believe there was a loss c. within 60 days of the actual loss d. within 30 days of the actual loss

b. within 120 days after the insured has reason to believe there was a loss

The Business Auto policy liability exclusion pertaining to pollution removes coverage for each of the following EXCEPT: a. the cost of governmentally ordered clean up of pollutants b. the escape of pollutants while being transported by a covered auto c. the escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto d. the escape of pollutants before they are accepted by the insured for movement onto a covered auto

c. the escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto

Bob and Pete's Used Cars has purchased a garage policy with dealers physical damage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases vehicles and drives them back to the dealership. Which endorsement, if any, is necessary to cover this exposure? a. Coverage will apply only if the "Broadened Coverage- Garages" endorsement is attached to the Garage Policy b. Coverage is excluded under the Garage policy, but would be included under the insureds Business Auto policy c. Coverage will be excluded because the physical damage section of the Garage form specifically excludes collision if an inventory vehicle is driven or transported more than 50 miles from the point of purchase or distribution d. Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage Policy

d. Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage Policy

Calvin has a Business Auto policy covering the automobiles he uses in his business. He acquires a new trailer with a load capacity of 1000 pounds and he plans to attach it to a van he already owns. The van is scheduled on the policy with Symbol 7 listed beside it. Based on this information, how long does Calvin have to report his new trailer to the insurance company? a. calvin will not be covered for the trailer because it exceeds the load capacity of a trailer that will be covered under a BAP b. calvin is required to report newly acquired vehicles to the insurance company within 7 days of making the purchase c. calvin is not required to report newly acquired vehicles under symbol 7 d. calvin is required to report newly acquired vehicles to the insurance company within 30 days

d. calvin is required to report newly acquired vehicles to the insurance company within 30 days

Which of the following is not true regarding those who wish to self-insure their workers compensation exposures in South Carolina? a. the commissioner may allow two or more companies in similar businesses to pool their liabilities for Workers Compensation for the purpose of qualifying as self-insurers b. a surety bond may be posted c. a property bond may be filed equal to 50% of the liquid assets of the company d. self-insured group companies are regulated by the industrial commission and not the Insurance Commissioner

c. a property bond may be filed equal to 50% of the liquid assets of the company

A person, firm, or corporation that, for compensation, acts on behalf of an insured in negotiating the settlement of certain claims for loss or damage to property is known as a/an: a. independent adjuster b. specialty adjuster c. public adjuster d. staff adjuster

c. public adjuster

An insurance contract must comply with the "Principle of Indemnity". Jarron's friend Nick, accidentally destroys Jarron's laptop computer. Nick pays Jarron for the damage, but Jarron also submits a claim to his insurance company for the laptop. The claim will be: a. paid, the fact that Jarron has already been paid for the damage has no bearing on the insurance company's obligation to pay b. denied because Jarron has already been paid for the damage c. paid, but only at 50% of the limit of liability d. denied because the damage was caused by a friend and not the insured

b. denied because Jarron has already been paid for the damage

To qualify as an adjuster, the applicant must comply with all of the following, EXCEPT: a. have sufficient knowledge of the business of insurance b. be of good moral character c. has not violated any insurance laws of South Carolina d. be a resident of South Carolina

d. be a resident of South Carolina

Each of the following is a comprehensive loss under the physical damage coverage of a Business Auto policy, EXCEPT: a. damage to a covered auto caused by hail during a thunderstorm b. damage caused when the auto overturned on a sharp curve c. damage to the auto caused by flood waters d. damage caused when vandals spray painted graffiti on the auto

b. damage caused when the auto overturned on a sharp curve

A company has been hired to determine the extend of pollution damage and recommend methods of its removal. However, it fails to identify some of the pollutants. What coverage might this company need to cover their liability exposures? a. professional liability b. environmental errors and omissions coverage c. general liability with pollution coverage d. directors and officers liability

b. environmental errors and omissions coverage