Property and Casualty Practice PSI Exam

Which of the following is the standard amount of Coverage A-dwelling provided by the HO-6 Unit-Owners Policy? -$500 -$1,000 -$5,000 -$10,000

$1,000

An insured with split liability limits of 100/300/100 is at fault in an automobile accident and the other vehicle sustains $6,500 in property damages as well as two occupants have bodily injury and are claiming $150,000 each. What is the most insurance will pay to each occupant? -$100,000 -$150,000 -$200.000 -$300,000

$100,000

Homeowner Form HO-2 provides coverage for loss of appliances, carpeting, and other household furnishings for a maximum of how much? -$500 -$2,500 -$3,000 -$4,500

$2,500

A single earthquake constitutes all shocks that occur within which time period? -16 -24 -48 -168

168 hours

Which of the following limits of insurance on the dwelling are available and apply to Coverage D-Fair Rental Value? -10 % -15 % -20 % -25 %

20 %

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: -An insurance agent -A building contractor -The employee of a party store -A crew member of an ocean going vessel

A crew member of an ocean going vessel

Which policy condition is invoked when parties to an insured loss cannot agree? -Arbitration -Assignment -Liberalization -Subrogation

Arbitration

All of the following describe a nonowned auto under the commercial auto policy Symbol 9 EXCEPT: -Auto not titled to an insured but available for regular use of named insured or family member -Nonowned auto is designated for liability coverage only -Includes autos owned by employees but used in the insured's business -Autos used in the insured's business that are not leased, hired, rented, or borrowed.

Auto not titled to an insured but available for regular use of named insured or family member

All of the following are the most commonly used personal inland marine forms EXCEPT: -Personal property form -Personal articles form -Builder's floater form -Personal effects form

Builders floater form

Which of the following hazards is an example of a physical hazard? -Burning debris near the building on a calm sunny day -Leaving the shed unlocked at night because contents are insured -Backing into the garage door because you want insurance to pay for a new one -Leaving the keys in the car and doors unlocked

Burning debris near the building on a calm sunny day

Which coverage forms are used when the insured sustains loss of revenue due to direct physical loss from a peril insured against that forces the insured to suspend operations during the period of restoration? -Causes of Loss forms -Business Income Coverage forms -Suspension forms -Commercial Casualty forms

Business Income Coverage forms

Which of the following would trigger coverage under business income form with extra expense coverage? -Carpet cleaning after a water main break -Employee pay after a building structure is damaged -Building inspectors fees after a loss -Unit rent when tenant is liable

Carpet Cleaning after a water main break

Which document would a lender ask an insured for as evidence that a policy has been written? -Certificate -Declarations -Endorsement -Policy

Certificate

Which of the following situations under dwelling policy conditions describe how the insurance company will settle a loss? -Pay the full value of a pair of earrings when only one is lost -Company has the option to repair to pre-loss condition -If loss is covered by other insurance the other insurance pays full loss -Property is replaced by company at full replacement value at loss

Company has the option to repair to pre-loss condition

All of the following are listed in the duties of the insured following loss EXCEPT: -Notice of claim -Proof of loss -Submitting to examination -Contracting for restoration

Contracting for restoration

All of the following are used to establish negligence EXCEPT: -proximate cause. -legal duty owed. -breach of legal duty owed. -cost of damages.

Cost of damages

In which of the following DP forms is the dwelling covered under open perils and the personal property on a named peril basis? DP-1 DP-2 DP-3 DP-4

DP-3

Which applies when an insured is found legally liable for the loss of another and is ordered to pay general damages? -Compensation is ordered to set an example -Compensation is ordered to punish insured -Damages compensate for pain and suffering -Insured must pay medical and lost wages expense

Damages compensate for pain and suffering

Which part of the commercial general liability designates who is an insured? -conditions -declarations -definitions -insuring agreement

Declarations

Workers' compensation coverage is rated on the basis of which of the following? -Employer's payroll -Employee's earnings -Employer's gross claims -Employer's years in business

Employer's payroll

Which part of an insurance contract describes a loss for which the insured will not be indemnified for? -Conditions -Declarations -Exclusions -Insuring Agreement

Exclusions

Employees are barred from suing employers in court to obtain compensation for injuries covered by workers' compensation because of which of the following doctrines? -Employer liability -Exclusive remedy -Workman liability -No fault insurance

Exclusive Remedy

A cable company uses employees to install equipment in customers' homes. The company purchases a bond from an insurance company to protect itself from potential dishonest acts of the employees. Which of the following types of bond does the cable company purchase? -Blanket bod -Fidelity bond -Schedule bond -Surety bond

Fidelity bond

A bank customer's identity was compromised and the thieves made numerous purchases from a retailer by signing the customer's checks. When the bank refused to make payment for the goods, the retailer brought suit against the bank. Which coverage indemnified the bank for liability in the suit? -Shopkeeper's coverage -Forgery and alteration -Lender's liability -Anti fraud coverage

Forgery and alteration

Which Homeowner Form covers fixtures, installations, and improvements made or acquired at the insured's expense? HO-6 HO-5 HO-4 HO-2

HO-4

Which of the following Homeowners form provides the most comprehensive coverage? HO-4 HO-5 HO-6 HO-8

HO-5

Which of the following is an example of risk reduction? -Installing a fire hose system on every floor of a building -Carrying an adequate amount of insurance to cover any loss. -Refusal to work in a building that is not made of brick or concrete -Not purchasing insurance because of a past history of zero claims

Installing a fire hose system on every floor of a building

An extended reporting period attached to a general liability policy provides coverage in which of the following ways? -It provides coverage for claims made outside the policy term. -It gives an additional 30 days coverage beyond the policy term. -It gives an additional 10 years coverage beyond the policy term. -It covers any gap between the claims-made and occurrence forms.

It provides coverage for claims made outside the policy term.

Which of the following would be covered by a commercial package policy? -Small to medium sized businesses -Ocean marine -Loss due to crime -Injury to worker on the job

Loss due to crime

The insured is mowing his lawn when a stranger is noticed in the backyard. The stranger claims to be a substitute delivery person. Several days later a gold watch can not be found. Which of the following describes the loss? -Robbery -Burglary -Theft of property -Mysterious disappearance

Mysterious Disappearance

When the policy term ends and either the insured or the insurance company wants to discontinue coverage which provision is applied? -Expiration -Flat Cancel -Cancellation -Nonrenewal

Nonrenewal

When does the coverage begin for a builders risk form? -The date the policy premium is paid -On the date any construction begins -On the date construction starts above the highest basement floor if there is a basement -On the date construction starts above the lowest basement floor if there is a basement

On the date construction starts above the lowest basement floor if there is a basement

All of the following would be considered an insured person under Part A of a personal automobile policy EXCEPT: -Other persons or organizations that use the car to the extent that they share liability with the insured person. -Anyone using the insured's car with the insured's permission or the reasonable belief that they are entitled to do so. -The named insured and members of the insured's family for the ownership, maintenance and use of any auto or trailer. -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.

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.

Which of the following business liability exposures does a slip and fall loss fall under? -Indirect and contingent -Medical expense -Premises and operations -Retail hazards

Premises and operations

Workers' compensation benefits for loss of wages include which of the following? -Reimbursement for medical bills -Complete replacement for lost wages -Replacement of a portion of lost wages -Income stream for survivors

Replacement of a portion of lost wages

Federal Crop Insurance is a type of insurance sometimes called which one of the following? -Voluntary private insurance -Special broadened forms insurance -National association coverage insurance -Residual market insurance

Residual market insurance

Which of the following would be covered perils under the DP-1 Basic policy form? -Falling objects -Freezing or pluming -Weight of ice or snow -Riot of civil commotion

Riot or civil commotion

Which of the following terms refers to the transfer of the insured's right of recovery against others to his insurance company? -Abandoment -Legal Release -Loss Transfer -Subrogation

Subrogation

How does the BOP differ from the CPP? -The BOP covers property damage only -The BOP is specifically designed for larger companies -The BOP covers small businesses that have multiple locations. -The BOP prepackages a group of coverages desirable to small businesses.

The BOP prepackages a group of coverages desirable to small businesses.

Which of the following created The National Flood Insurance Program? -an association of mortgage banks -the United States Congress -governors of flood prone states -a consortium of insurance companies

The United States Coverage

If the insured has a loss with a private passenger nonowned temporary substitute vehicle how will the loss be treated by the insured's own policy for physical damage? -Insured has excess coverage only. -No coverage extends from insured's policy. -Liability coverage extends to the owner of the vehicle. -The broadest coverage available extends from the insured's policy.

The broadest coverage available extends from the insured's policy

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? All coverage is excluded under the garagekeepers insurance for the nonowned car. -The insured's policy is excess to the employee's policy and covers any physical damage -The customer's car is covered for any physical damage while in the custody of the insured. -Physical damage coverage is specifically excluded for off premise occurrences.

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

A woman slips on icy steps and breaks her leg. Which of the following is the peril in this situation? -The fall -The icy steps -The broken leg -The season of the year

The fall

Which of the following is correct for amounts paid as supplementary payments covered in the personal auto policy Part A liability? -They are subject to the deductible -They do not reduce the policy limit. -They are included in the policy limit. -They cannot be paid to the insured.

They do not reduce the policy limit.

What is the purpose of the causes of loss form that lists specific exclusions? -To inform the insurer what the loss is in a claim -To state which properties are covered in a loss -To state which perils are insured against -To inform the insured whether the loss in a claim is covered

To state which perils are insured against

Mobile homes can be insured in all of the following ways EXCEPT: -With a HO-8 Modified Coverage form. -On a separate mobile homeowners package policy. -With a DP-1 if the mobile home is on a foundation. -On a mobile homeowners endorsement to a HO-3 form.

With a HO-8 Modified Coverage form.

Which of the following persons is covered for accidental injury on the insured's premises under the commercial general liability medical payments? -a tenant of the premises -an employee of the insured -person injured in warfare -a volunteer worker

a volunteer worker

All of the following are examples of direct loss EXCEPT: -after a car crash you have to rent a replacement vehicle -a fire destroys your personal property in your rental apartment. -a thief takes your computer from your locker. -a truck throws a stone and cracks your windshield.

after a car crash you have to rent a replacement vehicle

Which of the following professionals would purchase Errors And Omissions insurance to manage the liability risk associated with their business endeavors? -attorney -caregiver -doctor -fireman

attorney

When the insured's child spills red juice on the carpet of insured's covered automobile, which of the following coverages will apply? -broad -basic -comprehensive -limited liability

comprehensive

Under the commercial general liability which one of the following is covered under supplementary payments? -cost of bail bonds -defense costs for the plaintiff -court costs taxed against a third party -loss of earnings expense of over $250 a day

cost of bail bonds

A DP-2 policy covers all of the following EXCEPT: -damage to awnings from weight of snow. -damage to property caused by burglars. -freezing of automatic fire sprinkler systems. -accidental discharge of steam from a plumbing system.

damage to awnings from weight and snow

Underwriters are permitted to use all of the following when underwriting an application for insurance EXCEPT: -disability -inspection services -credit reports. -claim history.

disability

The insured has a commercial auto policy with a drive other car broadened coverage liability for named individuals (DOC) endorsement. In which of the following would the named individual be covered? -racing company car -driving neighbor's auto -any vehicle owned by insured -family member driving company vehicle

driving neighbors auto

Exclusions common to liability coverage for both the personal auto policy and the business auto policy include all of the following EXCEPT: -work related injuries to insured's employees -vehicles used in prearranged racing or speed contests -for bodily injury or property damage caused intentionally by the insured. -for liability arising while the insured auto is being used in an auto business.

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

When an individual with a pre-existing condition is in an automobile accident and the insurance covers rehabilitation only to the level of the condition prior to the accident, this is because of which of the following principles? -reasonable expectations -indemnity -good faith -adhesion

indemnity

All of the following are examples of insurable interest EXCEPT: -insuring your home -insuring expensive jewelry -insuring your friend's automobile -insuring business property you own

insuring your friends automobile

All of the following are correct for towing and labor costs coverage on the personal auto policy EXCEPT: -settlement is by reimbursement -coverage is available by endorsement -towing and labor are combined per occurrence -labor costs are performed at the shop are limited to $25.

labor costs are performed at the shop are limited to $25

All of the following specify limits of insurance for the commercial general liability EXCEPT: -legal defense -medical expense -general aggregate -personal and advertising injury

legal defense

A contract that is against public policy is not enforceable according to which contract characteristic? -competent parties -consideration -legal purpose -statute of limitation

legal purpose

When an employer sends employees out of state on work related business, which of the following must he do to ensure the appropriate workers' compensation coverage? -purchase a separate policy for the state in question -list the names of the employees sent out of state -list the state on the information page for other states' coverage -report the work to the insurance company as soon as it is completed

list the state on the information page for other states' coverage

As a general rule, commercial inland marine insurance covers all of following EXCEPT: -domestic shipments of goods -merchandise while it is being manufactured. -musical instruments for professional use -contractor tools used on a job site.

merchandise while it is being maufacured

Absolute liability can be imposed by law and exist in the absense of which of the following? -hird party liability -hazardous operations -products liability -negligence

negligence

Which of the following forms trigger coverage for a loss under the commercial general liability policy if a loss happens during the policy period? -claims made form -occurrence form -period certain form -static form

occurrence form

When an insured selects Symbol 2 on the automobile declarations, indicating coverage for any auto titled to the insured, which of the following automobile types will be covered? -any auto -mobile equipment -owned autos only -temporary substituted

owned autos only

The Causes of Loss form for farm property lists which of the following? -the type of property insured -the amount of insurance provided -perils property is insured against -exclusions to named insureds

perils property is insured against

All of the following would be found on a declarations page EXCEPT: -limits of insurance -address of insured -policy exclusions -costs for coverage

policy exclusions

The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date? -anniversary date -retroactive date -occurrence date -claims date

retroactive date

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? burglary robbery shoplifting breaking and entering

robbery

Which policy provision provides that an insurance company can take possession of damaged property? -assignment -subrogation -salvage -benefit to bailee

salvage

The Terrorism Risk Insurance Act and the National Flood Insurance Program are similar by providing which of the following? -relief for victims of flood loss -coverage for loss caused by terrorism acts -subsidies, loss sharing or excess coverage -government oversight of specialized insurance

subsidies, loss sharing or excess coverage

When an insured disagrees with the valuation of a loss and his appraiser and the insurance company's appraiser disagree, how will the loss be settled? -by the insurance company's appraiser -a third appraiser called an umpire will make the decision -the insured's appraiser will determine the valuation of the loss -the amount agreed to by any two of the three

the amount agreed to by any two of the three

The insured carries uninsured motorist coverage limits of 100/300/100 and is struck by an uninsured motorist, who will pay insured's bodily injury damages claimed for $100,000? -the state's uninsured motorist fund -the uninsured driver -the insured's insurance company -the insured has no avenue to recover

the insured's insurance company

An injured employee covered under workers' compensation is entitled to reasonably justifiable expenses for retraining. This benefit falls under which of the following? -medical rehabilitation -physical rehabilitation -vocational rehabilitation -educational rehabilitation

vocational rehabilitation

Which of the following are defined as a part of the policy and can void the policy if they are breached, whether the breach was intentional or unintentional? -material facts -representations -waivers -warranties

warranties