Questions for prop and casualty
Equipment Breakdown coverage is written with a single limit of insurance per accident. However, what is the sublimit for hazardous substance cleanup, or repair or replacement or contaminated property?
$25,000
The regular national flood insurance program would insure an eligible single family dwelling for up to
$250,000
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, causes $15,000 damage to a separate garage, and also kills 10 trees valued at $600 each. How much will the policy pay for the trees?
$5,000 ($500 each tree)
If a licensee violates a cease and desist order of the insurance department, what is the maximum punishment for all violations committed?
$50,000
How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card
$500
Under Coverage C of a Farm Policy, what is the limit payable on business property located away from the premises?
$500
All of the following are special personal property limits under a homeowners policy EXCEPT
$500 for business personal property on the insured premises
Under business owners policy section I, if an insurer wants to non renew a policy, how many days before the expiration date must the insurer notify the mortgageholder?
10 days
Which loss listed below would NOT be covered by a Farm policy with a Broad cause of loss form?
14-day old pigs fell in the pond and drowned
Within how many years of a loss may an insured bring a lawsuite against an insurer, according to dwelling policy?
2 years
Within how many days does a licensee have to inform the commissioner of a change of address?
30
How long is the waiting period after the application has been accepted before flood coverage goes into effect
30 days
Johanna purchased a national flood insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?
30 days after the application has been accepted
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
Assuming the insurer and the insured agree to the amount payable for a loss covered under a dwelling policy, how soon after the insurer has received proof of loss must it make payment?
60 days
Which is an example of a producer's fiduciary obligations?
A producer promptly forwarding premiums to the insurance company
The NFIP emergency program
A) goes into effect after the community has received a flood hazard boundary map and ends when the normal program begins B) Provides limited amounts of coverage at subsidized rates
What company produces evaluations of insurer financial status often used by the insurance department?
AM Best
Which of the following is the most precise synonym for an authorized insurer?
Admitted
Which of the following may be covered by Electronic Data Processing coverage from under an Inland Marine policy?
All of the above. Computer hardware, extra expense that is incurred to continue the business following a loss, and data processing media
Which of the following could be covered by an HO policy?
An oriental rug in an on-premises apartment
An Installation Floater is used to insure
Appliances intended to become a permanent part of the building
Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss?
Appraisal clause
If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply
Automatically
Which Inland Marine Form would provide the best protection for a dry cleaning company against loss or damaged to their customer's property while in the care, custody, and control of the dry cleaners?
Bailee's Customer Policy
3 Dwelling coverage forms
Basic, Broad and Special
3 HO coverage forms
Broad, Special, Comprehensive
All of the following are parts commonly found in the insurance policy, EXCEPT
Cancellation and non-renewal
Which of the following best describes liberalization clause in a policy?
Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium
An insured's home contains 2 apartments. Because the building does not qualify for a homeowners policy, the insured purchased a dwelling policy, form 3. What other coverage is needed to cover any exposure related to owning and maintaining this home?
Comprehensive personal liability
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated?
Consideration
Which of the following property coverage's would provide protection to contents damaged by fire?
Coverage C
In a Farm Policy, which of the coverage would reimburse the insured for loss of rental income following damage to the insured dwelling by an insured peril
Coverage D
Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss?
Coverage D (use)
All of the following are true regarding flood insurance except
Coverage may be provided for growing crops and livestock
which of the following dwelling coverage forms would pay replacement cost for the dwelling>
DP 2 and DP 3
Which of the following is NOT covered under the utility services- time element endorsement
Damage to the insured's property caused by utility service distuption
According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss?
Each side selects an appraiser to represent them; the appraisers select an umpire to settle any differences between the appraisers
which of the following causes of loss would not be covered under a standard form BOP?
Earth movement, power failure and flood
In commercial policies, who has control of the policy?
First named insured
The major portion of the premium for an Equipment Breakdown policy pays
For inspections and examinations
The Essential Insurance Act established for home insurance, other than Inland Marine insurance, will be established on one or more factors, however, classification cannot be based on
Gender of the named insured
All of the following must comply with the standards set forth by the USA PATRIOT Act except
Insurance companies selling exclusively term life policies
When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the
Insurer
All of the following are conditions commonly found in the insurance policy, EXCEPT
Insuring Agreement
Which of the following could be covered under the dwelling policy's falling object peril?
Interior building damage if the exterior was damaged first
Risks which may be subject of Inland Marine Coverage, according to the Nationwide Marine Definition, include all of the following EXCEPT
Large pleasure boats
Under the dwelling policy, coverage C- Personal Property is
Limited to covering a servant's property while at the insured location
Of the following, which IS NOT an insurer?
Lloyd's Association
An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril
Losses will be paid to the mortgagee and mortgagor as their interest appears
Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected?
No more than the per occurrence limit applies no matter how many insureds are involved
All of the following are examples of risk retention EXCEPT
Premiums
Who would participate in a WYO program?
Private insurers that wish to write and service national flood insurance policies on a no risk-bearing basis
Which of the following factors is NOT considered by an underwriter when determining the premium rates for an for an individual seeking insurance?
Race
A producer in Ohio wants to become a producer in Michigan. The department will waive certain examination requirements if a Michigan producer sought license in Ohio. What term is used to describe this phenomenon?
Reciprocity
If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the
Scheduled personal property endorsement
Which of the following endorsements is used to insure coverage C (personal property) for values beyond the limitations of the homeowners policy?
Scheduled personal property endorsement
Which of the following would not be considered to be a flood?
Sewer backup
Property insurance which provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called
Specific coverage
Sally has property insurance policy that is not subject to any coinsurance requirements. Her policy has a set amount of insurance scheduled for her property
Stated Amount
According to the Terrorism Risk Insurance Act of 2002, which of the following is true about the act?
The act must be certified by Treasury, Attorney General, and Secretary of State
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
In insurance, an offer usually made when
The application is submitted
Losses which result from the freezing of plumbing system while the dwelling is vacant would be EXCLUDED under the homeowners policy UNLESS
The insured had drained the plumbing system
Under the provisions of the business income coverage form, all of the following are true, EXCEPT
The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first
An insured invites his neighbors out for a day on the water in his boat powered with a 150hp outboard. While attempting to tie the boat to dock, his neighbor's hand is broken when caught between the boat and dock. What coverage would apply to the broken hand?
The insured's boat owners policy
What will happen if a house covered by a standard mortgage clause is a total loss?
The insurer pays the mortgagee according to the mortgagee's interest in the property
Which of the following is the best definition of "adverse selection"?
The insuring of risks that are of a poorer class than the average
The cancellation provision in a typical business owners policy contains all the following EXCEPT
The method of transferring all or portion of the owner's rights
An agent tries to sell insurance over the phone to an applicant who appears confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the family says he was recovering from surgery and on heavy meds, what will happen?
The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application
If an insurance premium is paid by the policy owner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true?
The policy will not lapse since payment to the agent is the same as payment to the insurer.
When an insurer issues a policy to an insured that, based upon underwriting information, may have a greater loss expectancy or loss experience because of geographic location, the insurer may pay the producer commissions that are
The same as normal commissions
In addition to the effective date of termination of coverage, a termination notice must contain
The specific reason or reasons for the termination
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value
They are automatically provided with replacement cost coverage
What is the purpose of NFIP
To fill the gap left by the private insurers in flood coverage
When an insured buys insurance, what method of handling risk has been undertaken?
Transfer
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without written consent of the insurance company?
Transfer of rights and duties under the policy
How much coverage can be available for watercraft damage in the home owners policy?
Up to $1,500
Frank's Steaks furnishes mean to a steakhouse. 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 the meat. What coverage under Frank's BOP policy will cover the loss?
Utility Service - direct damage
In forming an insurance contract, when does an acceptance usually occur?
When an insurer approves a prepaid application
Which of the is NOT an optional coverage available in a BOP
Workers Compensation
Which of the following is eligible for a business owners policy?
a office building
The inspections and surveys condition in a business owners policy
allows the insurer the right to inspect the insured's premises
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?
apparent
Insurable interest in the property covered in a policy must be proven
at the time of loss
Producers are permitted to share or split commissions, providing that
both are properly licensed for the line of insurance
Which of the following other coverages is not included in the basic form dwelling policy
breakage of glass
Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as
cancellation
Which of the following would the livestock coverage form NOT insure against
euthanasia of livestock after being hit by a vehicle
When handling premium funds in the conduct of their business, insurance producers are acting in a
fiduciary capacity
A policy condition that states if a policy is broadened with no additional premium, expanded coverage will automatically be applied to all policies of the same type is known as
liberalization clause
A boat owners policy does not cover
nuclear hazards
Section 1 of a boat owners policy covers
physical damage
The following areas are regulated by the insurance department except
producer commission schedules
A licensed counselor may not perform which of the following duties
solicit business as an insurance producer
Under a dwelling policy, the value of a loss is determined by all of the following except
the amount negotiated by the insured
The amount an insurer will pay under coverage D (loss of use) depends on
the amount of coverage on the dwelling
The most the insurer will pay for a loss under a business owners policy is
the amount of the loss minus the deductible
The inland marine coverage form for outdoor signs provides "open peril" coverage and excludes coverage for breakage only during
transportation, repairing, and installation or dismantling
Uncle Jim's Burger Bar was forced to close for 10 days last August when the power company's transformer was destroyed by lightning and Uncle Jim was without electricity. Which of the following endorsements could be added to Jim's business owners policy that would provide protection against loss of income from such events?
utility services-time element endorsement