Property and casualty
A charge for a unit of insurance set out in a book of instructions is known as
Manual rating
Inland Marine polices provide coverage on which basis?
Open peril
Who has ownership of renewals between a direct writer and a captive agent?
The direct writer
Perils excluded in the standard Homeowners- broad form perils coverage are
Earthquake
A Commercial Property Policy can provide coverage for all of the following EXCEPT
Intangible losses
Which of the following is a CORRECT statement about general aggregate limit?
It does not include products-completed operations aggregate limit.
What effect does the Ordinance or Law exclusion have on a claim?
It excludes that part of a loss resulting from enforcement of a building ordinance or loss
Which of the following statements regarding risk exposure checklists is TRUE?
It is used to identify loss exposures that may be overlooked.
What is one difference between DP-2 and DP-3?
T The perils insured against under Coverage A.DP-2 (broad form)DP-3 (special form)
Under the Business Income coverage form losses are covered if they occur
at a premises designated in the declarations
Under the Commercial Property Coverage Form personal property of others is excluded if the property is
being transported by the insured
According to the California Insurance Code governing advertising standards what must appear on all printed insurance proposals?
the word "insurance"
What is one ADVANTAGE to an insured in purchasing a modular commercial lines policy?
there are fewer policies to buy and maintain
What is another name for liability insurance?
third party insurance
What is the purpose of the inspections and surveys condition of the commercial package policy.
to determine the rate to be charged
What is a self-insured retention under an umbrella policy?
A deductible applicable to losses excluded by underlying coverage, but covered by the umbrella.
All of the following person MUST adhere to the promises made in a contact of insurance EXCEPT the
Commisioner
Which is one of the PRIMARY functions of an umbrella policy?
Provide excess coverage for third party losses.
All of the following are services provided by the Insurance Services Office (ISO) EXCEPT
Provide underwriting services
Miss Shaw
$100,000
What is the MINIMUM discount percentage of the Good Driver Discount
20%
A trade engaged in by the insured on the residence premises on a part time basis is defined by the homeowners polocy as
A business
Which of the following statement is correct, regarding the requirements to be met in order to cancel a property of liability insurance policy
A cancellation noticed may be mailed and does not require a written acknowledgement of receipt by the insured
Subject to the restrictions of the California Insurance Code, any person capable of making a contract may be considered
A insurer
All of the following statements regarding comparative negligence are true EXECPT
A person must be entirely free from negligence in order to collect damages from another party. (Contributory Negligence)
An insurer who offers rates for insurance coverage to insureds who have an average or better than average loss exposure is called
A standard market insurer
Under a personal Automobile policy, on what basis are vehicle valued
Actual cash value
Under a Personal Automobile policy, on what basis are vehicles valued?
Actual cash value (ACV)
Your HO-3 insured wants to makes sure his liability protection insures against claims for false arrest, libel and slander. you should
Add personal injury endorsment
What additional coverage does a DP-2 have compared to a DP-1
Additional living expenses
What coverage is available under the Miscellaneous Type Vehicle Endorsement
All coverage under the Personal Automobile policy
Which of the following describes a defense that can be used by a negligent party for an accident in which the other injured party voluntarily assumed the risk?
Assumption of risk
Under the Business Income coverage form losses are covered if they occur
At the premises designated in the declerations
If Cindy's new automobile is stolen, what type of coverage would Cindy need to have in order to be reimbursed for the loss of her automobile?
Automobile Physical damage insurance
Under a personal umbrella policy what underlying coverages MUST an insured typically maintain?
Automobile and personal liability
Which of the following is covered property under a Homeowners policy?
Bank notes
Damages caused by burglary of personal property are not covered under which dwelling form (except by endorsement)?
Basic form
How are the unendorsed HO-3 and HO-5 similar?
Both provide special form coverage for the dwelling.
which insurance professioanl may transact insurance on behalf of and with another person but not on behalf of an insurer
Broker
all of the following may be insured under a builders risk coverage form except
Builders equipment
Which of the following is coverred property under a Homeowners policy?
Business data stored in a computer
The retroactive date of claims made Professional Liability policy is always the
Earliest date an event/loss may occur and still be eligible for recovery.
Which Commercial Property form contains most the exclusions that apply to a Commercial Property policy?
Cause of loss forms
as defined by the CA code of regulations, a person who asserts a right of recovery under an insurance policy is called the
Claimant
What additional coverage is provided in a DP3 that is not included in an unwndorsed DP1
Collapse
The California Insurance Code covering a licensee's fiduciary responsibilities also applies to managing general agents because they
Collect premium money from producing brokers.
When an employer has the choice to purchase Worker's Compensation insurance from wither a state fund or a private carrier, the state fund would be called a
Competitive state fund
In a commercial package policy, interline endorsements are endorsements that
Could apply to more than one coverage part
On a commercial package policy, interline endorsements are endorsements that
Could apply to more than one coverage part
What is the primary difference between an HO3 and an HO5?
Coverage C
What is the primary difference between an HO-3 and an HO-5
Coverage C Perils
insurance solicitation includes all of the following activities except?
Coverage and rate quotations
If an employee embezzles $10,000 from an insured's company, which type of insurance would the employer need for this loss to be covered.
Crime insurance
The Premium for which protection has been provided is the
Earned premium
What would be the insurance commissioner's most likely course of action if and applicant for insurance license has a previous application for a professional license denied for cause by any licensing authority within 5 years of the date of the filling?
Deny the application without a hearing
The medical expense coverage in a Workers' Compensation policy
Does not have a dollar limit or a time limit.
If an applicant has been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to CA PENAL CODE 1203.4 which of the following is true?
Even though the misdeamanor conviction was expunged, the applicant must still disclosed the convction on the application for a insurance license
Which of the following is a covered peril for the coverage C- Personal Property under the HO-3?
Explosion Excludes war, water damage and earth movement
Authority that is specifically granted to the agent is known as
Express authority
In a Commercial Property policy, which of the following perils is included in the broad form and NOT in the basic form?
Falling objects
In a commercial property polocy which o the following perils is included in the broad form and NOT in the basic form
Falling objects
when the state specifies the rates that must be used by insurers for a particular kind of insurance, it is known as?
File and use
All of the following would be considered one of the three major types of loss exposures EXCEPT
Financial loss exposure
The inspections and surveys condition of a commercial package policy is important to the insurer for all of the following reasons except to
Guarantee that the insured is in compliance with safety regulations.
which weather condition is excluded under the concurrent causation exclusion
Hail
if any agent fails to maintain transaction records as required b the california insurance code, the commissioner has the authority to
Immediately suspend the licensees licenses until the records are brought into compliance
who has the ownership of renewals/expiration dates (policyholders) between an insurer and an independent agent?
Independent agent
The Watercraft endorsement to the Homeowners policy extends coverage for
Liability coverage for watercraft listed on the schedule
a claim for money damages due to injury to another or damage to another's property
Liability loss
What coverage is available under the named non owner coverage endorsment
Liability only
What coverage is available under the named non-owner coverage endorsement?
Liability, medical payments and uninsured motorists.
Which of the following classes of insurance is exempt from participating in the California Insurance Guarantee Association? (CIGA)
Life and Annuity
What is a compared by dividing losses incurred during the year by premium earned
Loss ratio
which of the following would be covered by the personal injury endorsement?
Malicious prosecution
What is a person guilty of if her or she acts or assumes to act in the capacity of a licensed agent, but does NOT have a valid license?
Misdemeanor
All of the following have special sublimits that apply only to loss by theft under Coverage C - Personal Property section of the Homeowners policy EXCEPT
Money
Which of the following organizations provides a range of advisory, rating and actuarial services relating to property and casualty insurance
NAIC
Under an unendorsed personal auto policy, what coverage is available for personal effects?
None. there is no coverage
Insurance may be defined as a system that enables an insured to
Obtain a loss exposure from an insurance company
When a licensed agent satisfactorily completes continuing education requirements and submits a renewal application with applicable fee on or before the expiration date, the agent will be able to
Operate up to 60 days after the specified expiration date
The Personal Auto Policy offers a coverage that is still called Comprehensive by many insurer. The Personal Auto Policy name for this coverage is
Other than collison
All of the following are considered intentional torts EXCEPT
Ownership of a wild animal
Damage caused by flood is excluded by most insurance contracts. Which of the following policies, if any, includes coverage for this peril as a standard feature?
Personal Automobile policy, with Other Than Collision coverage.
what are the two major coverages provided in section 2 of the HO-3 policy?
Personal liability and medical payments to others
What endorsement can be used to insure a motorcycle under a personal auto policy
Personal property floater
A type of pure risk that consists of the possibility of loss of income as a result of death or disabilirt ia
Personal risk
The written instrument in which a contract of insurance is presented is the
Policy
All of the following expenses are covered in addition to the limits of liability under Coverage A of a personal auto policy EXCEPT
Pre judgment interest
"All Risk" coverage is an old insurance term that, when used, refers to a
Property coverage that does not include coverage for damage caused by any peril.
A contract that an insurer obtains to insure itself against loss to its book of business is known as
Reinsurance
Which of the following coverage is automobile included in a Dwelling policy
Replacement cost 80%
payments receieved by a broker angent fom clients purchaing automobile insurance may be maintained by the licensee in any of the following investments except
Repurchase agreemets
All of the following are important purposes of property insurance deductible EXCEPT it
Requires an insured to insure property to value.
Which item of real property under a HO-3 are valued on an actual cash value basis
Roofing
Which of the following losses would be covered under the Personal Auto Policy other than collision coverage
Someone shoots the rear car window out while the insured's car is parked in the street overnight
Which cases of Loss form provides the broadest coverage
Special Form
Property under inland marine policies is usually valued on
Stated value
Madison's Personal Automobile policy liability coverage will pay for
The cost of repairing a neighbor's fence that Madison damaged through the negligent operation of her car.
Which part of the insurance contract provides information about the property or activity to be insured?
The insuring agreement
Which of the following statements regarding the elements of the insurable risk is TRUE?
The loss must be capable of financial measurement
Which of the following persons in NOT on insured under Section I of a Homeowners policy
The named insured non resident spouse
Which of the following is a principal rating factor for a personal automobile policy?
The number of miles the insured drives each year
If an insured under a personal auto policy leaves a covered auto dealer for repairs, and the auto is involved in an accident while being test-driven by an employee of the dealer, how will the personal auto policy respond to liability claims
The personal auto policy is excess
A surplus lines broker is required to obtain every applicant's signature on a statement that provides all of the following information EXCEPT
The policy was denied by insurers licensed by the state of California.
the CGL contract contains an exlusion for liquor liability the purpose of this exclusion is to exclude coverage for all liabiloity losses arising from
The serving of alcoholic beverages by an insured at any business functions
what additional coverage is provided in a DP-3 that is not included in an unendorsed DP-1?
Theft?
Which of the following is a characteristic of improvements and betterments?
They can be insured as business personal property.
Why is the examination of books and records condition important in a commercial policy?
To ensure that the insureds business in solvent
What's the one purpose of California Automobile Assigned Risk Plan (CAARP)
To make automobile insurance available to residents of the state
Coverage under a comprehensive Personal Liability Policy or a Homeowners Section II extends:
To the premises described and to the personal activities of the insured on or off of the premises
Under the Equipment Breakdown policy all of the following would be covered equipment EXCEPT
Tools subject to periodic replacement
Which of the following is considered an intentional tort?
Unauthorized release of confidential information.
which of the following is an example of loss retention?
a couple decides not to purchase collision coverage on their vehicle.
Coverage A and/or B of the Commercial General Liability (CGL) contract contain coverage for
advertising injury
Which of the following is considered covered equipment under a Equipment Breakdown policy?
air conditioning compressor
which of the following would be covered by coverage F, medical payments to others section of the HO-3 policy
an insured hits a golf ball on a golf course and injures another
All of the statements regarding punitive damages are true EXCEPT they are
compensatory damages that have no specific economic value
Liability coverage under Boatowners policies typically EXCLUDES
contractual liability
The parts of insurance polices that state the amount for which the policies are insuring the risk are the
declerations
The standard Homeowners policy provides replacement cost coverage for which of the following?
dwelling structure
Subsidence under a Homeowners policy is
excluded under the earth movement exclusion.
Who is responsible for the payment of the premium under a Commercial Package policy?
first name insured
The inspections and surveys condition of a commercial package policy is important to the insurer for all of the following reasons, EXCEPT to
guarantee that the insured is in compliance with safety regulations.
the watercraft endorsement to the HO policy extends coverage for
liability coverage for watercraft listed on the schedule
If a motor home is scheduled on a miscellaneous type of vehicle endorsement, all of the following property covered, EXCEPT
luggage
All of the following categories of personal property can be covered under the Scheduled Personal Property Endorsement of the Homeowners policy EXCEPT
manuscripts
The Commercial Lines Program Policy Common Policy Condition - "changes" states that the policy term can be amended or waived
only be endorsement issued by the insurer and made part of the policy.
the vacancy permit endorsement is added to a Building and Personal Property coverage form the vacancy is waived
only for designated perils during the policy period
The purpose of insurance interest is to
prevent and insured from profiting from a loss
If the insurer cancels a 1-year policy effective 3 months after the policy's inception date, the insured
receives a refund in the amount of 75% of the annual premium.9/12 months
If an insurance polocy is rescinded and the insurer has NOT been exposed to a loss, the applicant is entiteld to
refund equal to the full amount of the premium paid
A contract that an insurer obtains to insure itself against loss to its book of business is known as
reinsurance
Which of the following is an insuer'rs option in making a loss settlement with the insured under a personal auto policy?
return stolen property
The Commercial Property Cause of Loss Form do NOT cover any losses caused by
smoke damage from industrial operations that is not sudden or accidental.
A Standard Mortgage Clause in property insurance policy
states that a denial of a claim to the insured that results from the failure of the insured to comply with terms of the insurance policy shall not deny claim to the mortgagee
all the following are covered by protection and indemnity insurance except?
the cost of reasonable measures that the insured must take to protect property from damage at time of loss
The term "loss reserve" can be defined as
the estimate an insurer expects to pay for reported and estimated claims.
According the the California Insurance Code, an insurance polocy must specify all of the following EXCEPT
the financial rating of the insurer
the intentional relinquishment of a known right is
waiver
Driver X was in an automobile accident with Driver Y. Driver X sustained $10,000 in damages and was found to be 30% at fault in the accident. Under the doctrine of contributory negligence, how much can Driver X recover from Driver Y?
$0Must be completely free of fault under contributory negligence.
Mark is insured under a Personal Auto policy with limits of $25,000 per person and $50,000 per occurrence for bodily injury. An accident in which three people and injured result in suits against Mark for $10,000, $12,000 and $35,000. What is the MAXIMUM amount any one person will receive?
$25,000
Under the Financial Responsibility Law Requirements in California, what is the MINIMUM limit for serval people injured in one accident?
$30,000
How many days prior to cancellation must an insurer giver notice to an insured if the automobile policy is being cancelled for nonpayment of premium?
10 days / 20 days for NON PAYMENT PREMIUM
Under comparative negligence a person involved in an auto accident in which the person is
10% at fault, is entitled to 90% of her damages.
What is the coverage limit provided by the Coverage B - Other Structures section of an Insurance Services Office (ISO) Homeowners policy?
10% of the Coverage A limit applies collectively to all the structures.
Under a Personal Automobile Policy if newly acquired automobile replaces a covered automobile with liability coverage only, how long does the insured have to request collision coverage?
14 days
Which of the following is commonly found in liability polices, thus creating the need for Inland Marine coverage?
A care, custody, and control exclusion
What is a self-insured retention under an umbrella policy?
A deductible applicable to losses excluded by underlying coverage by the umbrella
The definition of an insured under uninsured motorists coverage includes all of the following EXCEPT
A pedestrian struck by a covered automobile.
The insurance term for an insurer which has met the conditions required to transact insurance in the state of California is
Admitted
An agreement between the insurer and the insured that sets forth the dollar amount that will be paid by the insurer in the event of a total loss is the
Agreed value
All of the following are covered under the equipment breakdown coverage form except
All of the following are covered under the equipment breakdown coverage form except
What perils are insured against under additional coverage, property removed of a HO policy?
All perils
The insurance term for an insurer which has met the conditions required to transact insurance in the state of California is
All-risks -coverage applies top real property. Broad Form named perils - coverage applies only to personal property.
Which of the following events within the past 3 years would disqualify an individual from receiving a Good Driver Discount?
An at- fault accident involving minor bodily injury
What is an insurer guilty of if it fails to adopt and implement reasonable standards for prompt investigation and processing of claims?
An unfair claims process
In a claims made policy, which of the following begins when the policy period ends, and is activated when the policy is cancelled or non-renewed?
Basic extended reporting period
The system that makes automobile bodily injury and property damage liability insurance available to applicants who are unable to obtain coverage in the voluntary market is called
CAARP
What clause is commonly used to require insureds to purchase insurance close to the value of the property?
Coinsurance Clause
A bulldozer an insured is using to level a property for a customer overturns, causing fuel to leak out and pollute the ground; where would this pollution loss be covered
Commercial General Liability
What is an example of a modular policy?
Commercial Package Policy
Which of the following coverages is typically available either as a monoline coverage or in a modular program?
Commercial Property
Karen has a homeowners policy that includes Section I Coverages A, B and C. A, B, and C provide coverage for
Dwelling (Coverage A), other structures (B) and personal property (C).
All of the following perils are excluded by inland marine policy EXCEPT
Earthquake
All of the following are purposes of the California FAIR plan EXCEPT to
Encourage competition among insurers who write business in California.
All of the following are excluded in a boiler and machinery basic policy, except
Explosion of the steam boilers
the purpose of the supplemental extended reporting period endorsement is to provide
Extends the filing reporting period indefinitely
Which of the following is covered property under a Homeowners policy?
Firearms
Your insured is to blame for an auto accident. He files a claim with a claim with his own insurer for the collision damage to his car. This called
First party claim
Under an HO-3, which of the following perils is included for damage to personal property
Freezing
All of the following types of business would need a special inland marine coverage for their stock except
Grocers
In which of the following cases would an Insurance Services Office (ISO) HO-3 insured add a Watercraft Endorsement?
He wants liability coverage for his 50HP outboard watercraft that is not covered under his Homeowners policy.
All of the following are covered property under HO policy EXCEPT
Hovercraft
Yacht policies typically provide coverage for
Hull protection and indemnity
Which advisory organization(s) develop the forms for the standard market?
ISO
All of the following are coverage extensions provided by the Building and Personal Property Coverage Form (BPP) EXCEPT
Increased cost of construction
Abstracts, maps, and mortgages are covered under which of the following?
Inland Marine
Under which of the following classes of insurance would a loss due to theft of jewelry in transit be covered?
Inland Marine
Which of the following statements about the National Flood Insurance Program is true?
It may only be written in communities participating in the program.
Which of the following is NOT covered by either the Personal Automobile Policy collision or other than collision coverage?
Kelly leaves his personal (non-business) laptop computer in his car overnight. His car is parked in the driveway in front of his house. The computer is stolen from his car.PAP does not cover insured's personal effects.
Which of the following is not one of the major coverages available under the building and personal property (BPP) coverage form?
Loss of earnings
If a motor home is scheduled on Miscellaneous Type Vehicle Endorsement, all of the following property is covered EXCEPT
Luggage
Which of the following is covered property under a Homeowners policy?
Model aircraft not used to carry people
The commercial building and personal property coverage form covers 3 types of property, one of which is "your business personal property" refers to?
Only the name insured shown in the decleration
Coverage on an annual transit policy is usually provided on which of the following basis?
Open Perils
Under a Commercial Property coverage form, all of the following properties are included in the definition of "Building" EXCEPT
Patio
The commercial lines program policy, common policy conditions, do not include which of the following as a condition?
Perils insured
What is one way in which HO-2, HO-4, and HO-6 are similar?
Perils insured under coverage C
Medical payment coverage in a Boat owners policy cover injuries to
Permissive occupants of the insured's boat.
Which major personal insurance policy coverage provides protection for loss caused by flood?
Personal Automobile comprehensive coverage
Which Inland Marine floater is most similar to the Scheduled Personal Property endorsement on a Homeowners Policy?
Personal articles floater.
In a reinsurance agreement the insurer that transfers its loss exposure to another is called the
Primary insurer
Legal liability cases may involve all of the following types of damages EXCEPT
Proximate
An unincorporated association which provides insurance services to its subscribers is a
Reciprocal insurance exchange
Why is it important to understand the difference between "share-the-expense" carpooling and "for hire" under a Personal Automobile Policy?
Share the expense is covered and for hire is excluded.
When the state specifies the rates that must be used by insurers for a particular kind of insurance, it is known as
State-mandated
In a Commercial Property Policy the insured's claim is denied because of the insured's actions. The mortgage holder will in most cases
Still have the right to receive the full amount of loss payments.
Which course of action must a licensee take if an incomplete action notice is filed with the Department of Insurance?
Submit a fee and amended, complete action of notice.
A written contract that expresses one party's promise to answer for another party's failure to do something as promised is
Surety Bond
A written contract that express one party's premise to answer for another party's failure to do something as promised to
Surety bond
Which of the following would be covered by the Coverage B - Other Structures section of a Homeowners policy?
Swimming pool
In reference to the coverage's provided in the basic form, the Boat owners Policy is similar to what other policy?
The Personal Auto Policy
All the following are covered by protection and indemnity insurance except?
The cost of reasonable measures that the insured must take to protect property from damage at time of loss
All of the following are types of consequential losses EXCEPT
The cost to repair a structure damaged by the wind
Which of the following is a valid reason for an applicant to purchase a Homeowners policy instead of a Dwelling policy?
The insured desired broader coverage
Which of the following would be excluded under the Coverage D -Loss of use section of a HO-3 policy?
The insured is forced by the civil authorities to evacuate due to an impending flood.
What is the primary difference between umbrella and excess liability policies?
The umbrella covers most liability exposures; the liability will cover only one line.
What is one difference between HO and DP for personal property coverage?
There is no applicable difference
What causes of loss are covered under the business income coverage, income coverage form?
Those shown on the declerations
an owner of goods who used common carriers for shipping orders may protect the goods while in transit by purchasing a
Transit policy
The policy territory under a Personal Automobile policy is limited to the
United States, its territories and possessions, and Canada
Which of the following is a covered peril under coverage C of an HO-3?
Weight of ice
All of the following coverages may be included in ISO Commercial Package Policy EXCEPT
Workers compensation
The business income coverage form covers the actual loss of business income sustained due to necessary suspension of operations, the loss of income must
be caused by an insured peril, otherwise there is no coverage
All of the following are valid reasons for the insurance commissioner to deny an applicant a valid license EXCEPT when the applicant
does not have a California business address.
The California Insurance Code states that no rate shall be approved or remain in effect which is
excessive, inadequate, or unfairly discriminatory.
If the coinsurance clause is not met at the time of loss, the
insured must pay a portion of the loss.
Liability coverage in a Yacht policy is referred to as
protection and indemnity
An applicant would like to buy a Personal Umbrella Policy. Your insurer will
require that he maintain underlying auto and personal liability coverage.
