Property

An insured owns a large dog. The first day he has to leave the dog home alone to go to work, the insured comes back to find his $400 couch torn apart, his $100 coffee table chewed up, his $50 window curtain shredded, and a $200 window pane shattered where his dog jumped through. The insured has personal property coverage under a special form dwelling policy. How much of this loss will the policy cover?

$0

An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay?

$1,000

Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?

$1,500

What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?

$10,000 for all expenses incurred during a 12-month period

Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay

$100,000.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

$30,000

What is the limit of coverage for a direct loss caused by a mine subsidence?

$300,000

Property owners applying for basic property insurance coverage in the FAIR Plan must have the property inspected by the inspection bureau. The charge to the applicant for inspection is

$0

A commercial property special form covers property in transit up to

$5,000

Under additional coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services?

$500

If a loss occurs, the insured with a homeowners policy is required to do the following EXCEPT

Arrange for an appraisal by an unbiased third party.

Which of the following describes the transfer of a legal right or interest in an insurance policy?

Assignment

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

In dwelling policies, automatic increase in insurance is

Coverage by endorsement

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?

Damage to the dwelling caused by ash or dust from a volcanic eruption

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

Which of the following losses would be covered by an unendorsed homeowners policy?

Fire or Lightning

Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment?

HO-4

An insured purchases a Difference in Conditions policy. It may contain all of the following characteristics EXCEPT

Low deductible

Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms?

None

All of the following are examples of risk retention EXCEPT

Premiums

Who would participate in a Write Your Own (WYO) flood insurance program?

Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis

Which of the following perils is covered by the HO-2 and HO-3?

Sudden and accidental rupture of a heating system

To whom does the insurer certify that an appointee is competent, financially responsible, and suitable to represent them?

The Superintendent

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

All of the following are perils covered under the broad form dwelling policy EXCEPT

Theft.

An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees?

$5,000

When an insured requests the cancellation of a Homeowners policy, the insurer will refund the unearned premium on a short-rate basis, but is allowed to retain

10%

How often must the Superintendent examine financial affairs of domestic insurers?

3 years

Agents who change their state of residence must notify the Superintendent within how many days of any change in address?

30

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is

50% of the amount provided as Coverage A.

To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than

6 stories

Losses caused by vandalism and malicious mischief are excluded under a homeowners policy if the dwelling had been vacant for more than

60 days

What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property?

80%

The insurer may cancel a commercial property or casualty insurance policy for only certain stated reasons after it has been in effect for how many days?

90

Which of the following would be covered by the broad theft endorsement on a dwelling policy?

A camera the insured has with him on vacation

Which of the following would NOT be considered an insured under a homeowners policy?

A divorced spouse living in another state

All of the following are required to qualify for a resident license EXCEPT

An applicant that is at least 21 years old.

A couple bought tickets to a college hockey tournament. At the game, a stray puck flies into the stands and hits the wife in the face, breaking her nose. Which legal defense may bar her from recovering damages for the injury she received at the hockey game?

Assumption of risk

If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage?

Attach the home day care coverage endorsement to the HO policy

An applicant is purchasing a homeowners policy. A producer comes to her home, fills out the paperwork, and tells the applicant that her home will be covered as soon she signs all of the paperwork, and that she will receive a new policy in the mail in 5 business days. Even though the policy is not issued, the applicant's home is temporarily covered until then. Which of the following makes that possible?

Binder

By what date in each licensing period are agents required to renew their license?

By the last day of their birth month

An agent is suspected of committing an illegal business practice. What can be issued that would legally ban the agent from committing this act again?

Cease and desist order

A producer who fails to segregate premium monies from his own personal funds is guilty of

Commingling

With regards to a homeowners policy, which coverage provides for indirect or consequential losses?

Coverage D

.In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss?

Coverage E

An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?

Coverage E - Additional Living Expense

The part of a policy that clarifies terms in the policy is the

Definitions

The commercial property declarations page contains which of the following information?

Description of the property insured

Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy

During the policy period and for up to 3 years after the termination of the policy.

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss.

What is the purpose of the coinsurance clause found in property insurance policies?

Encourage the insured to insure the property closer to its full value

How often are agents required to renew their insurance license?

Every 2 years

Which of the following is NOT a P&I exclusion?

Excess coverage

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions

Which of the following is true of dwelling policy coverage?

Exclusions apply to all three policy forms.

An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase

HO-6

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

What do individuals use to transfer their risk of loss to a larger group?

Insurance

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement.

Which of the following additional perils is covered under both the basic form and broad form dwelling policies?

Internal Explosion

Which of the following statements concerning the builders risk coverage form is correct?

It may be written on a reporting form for the completed value of the structure

All of the following are true of Coverage B - Other Structures EXCEPT

It must be added by endorsement to a homeowners policy

According to the Nationwide Marine definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT

Large pleasure boats.

What type of coverage does a homeowners policy include that a dwelling policy does not?

Liability

A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage will be automatically applied to all policies of the same type is known as

Liberalization Clause

Under the dwelling policy, Coverage C - Personal Property is

Limited to covering a servants property while at insured location

What is not a consideration when paying an inland marine claim?

Market value when the property was first purchased

According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss?

Mortgagee

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

What was created to keep telemarketers from calling consumers who do not wish contacted?

National Do Not Call Registry

Which of the following does the term proximate cause refer to?

Negligence that leads to an injury

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement?

Nothing

A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true?

Payment for unnamed perils is reduced by 25%

HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year?

Peak season

Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT

Prepackaged software.

Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to

Property and liability losses

Which services are associated with Standard & Poor's and AM Best?

Rating the financial strength of insurance companies

After a loss, an insured covered by a business property coverage is NOT required to

Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation

Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item?

Reinstatement of limit

Which of the following is used in the formula for calculating the actual cash value of a property?

Replacement cost

All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT

Replacement cost.

An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?

Specific

To be eligible for coverage under the National Flood Insurance Program, an insured must live in which of the following communities?

That has met the minimum floodplain management guidelines

Replacement cost coverage is provided in both the broad and special form dwelling policies when

The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss.

All of the following are characteristics of the dwelling policy EXCEPT

The dwelling must be owner-occupied.

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

The proximate cause.

In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?

The right to determine the wording of a policy

Which of the following losses would most likely not be covered under Coverage A in the dwelling policy?

Theft of a renter's lawnmower used toservice the premises

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

Time element

The purpose of FAIR plans is

To provide property insurance to those who cannot obtain it in the normal market.

An endorsement added to a businessowners policy that provides coverage for direct damage caused by utility service disruption stemming from a covered peril is called

Utility Services - Direct Damage.

Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss?

Utility service - direct damage

Which of the following losses would NOT be covered by the dwelling policy if the dwelling is vacant for over 60 days?

Vandalism

When a parent is required to pay for damages caused by his or her children, this is an example of

Vicarious liability.

In the event of a loss covered under mine subsidence coverage, the deductible is set at

a minimum of $250

In equipment breakdown coverage, all accidents would be considered a single accident if they occur

at a single location at the same time and from the same cause

The livestock coverage form covers loss of livestock if caused by which of the following?

windstorm or hail (?)