Readiness Exam

When an automobile liability policy is cancelled for a reason other than nonpayment of premium, the insurer must notify the named insured of which of the following?

Possible eligibility for the Iowa Automobile Insurance Plan

A customer was injured in a supermarket parking lot when a grocery cart rolled into the customer's leg. Coverage for this claim would be provided under

Premises and operations

Which of the following liability exposures is most likely for a small specialty clothing retail boutique?

Premises liability exposure

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

Prepackaged software

The party of a surety or fidelity bond who promises to fulfill the obligation is the

Principal

Who are the parties to a bond?

Principal, obligee, and guarantor

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

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

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property called

Pro rata liability

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of

Product liability claim

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

Coercion

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

Collision

Which of the following liability policies is usually written on a "claims-made" form?

Professional liability insurance

A sworn written statement that must be furnished by the insurer before any loss under a policy can be paid is called

Proof of loss

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of loss

In order to receive transportation expenses under the personal auto policy following damage to your auto caused by collision, you must have

Collision coverage

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 in 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

Other than perils, the difference in the three DP forms is in coverage provided. Which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?

Coverage E - Additional Living Expense

In dwelling policies, automatic increase in insurance is

Coverage by endorsement

Coverage C in homeowners policy forms offers all of the following EXCEPT

Coverage for loss of use

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be

Criminally negligent

Which of the following is covered under the mail floater of a commercial inland marine policy ONLY if it sent by registered mail?

Currency and unsold checks

The part of the policy that shows the amount of insurance, premium, and policy term is the

Declarations

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously of that other insurer. The producer could be found guilty of

Defamation

Which of the following terms describes making false statements about the financial condition of any insurer that are not intended to injure any person engaged in the business of insurance?

Defamation

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

Description of the property insured

Which of the following is not a duty of the Commissioner?

Develop insurance rates

A beauty parlor burns to the ground. What type of loss is this to the owner?

Direct

If a fire erupts in the kitchen and spreads to the upstairs bedroom, resulting in the destruction of furniture, what type of loss has occurred?

Direct

What term includes damage where the insured peril was the proximate cause of loss?

Direct loss

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity?

Directors and officers liability

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

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 best describes an insurance company that has been formed under the laws of this state?

Domestic

What is another name for liquor liability insurance?

Dram shop insurance

Which of the following losses would be covered by the Standard Fire Policy?

Fumes from chemicals ignite and explode causing a fire that demolished the building

Which of the following is NOT covered by the condominium unit owners endorsement?

Furniture in the building

What type of compensatory damages will pay for pain and suffering and disfigurement?

General

Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim?

Get the insured's consent

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

HO-6

The homeowners policy form that covers condominium unit owners is

HO-6

The main difference between an HO-4 and an HO-6 is

HO-6 provides limited dwelling coverage as well as contents coverage

Older homes with replacement costs greater than ACV or market value are insured on

HO-8

Hagar has leased part of his building to a tenant who makes fireworks. How does this affect the commercial fire policy on Hagar's building, if at all?

Hagar's insurer has grounds to cancel the policy regardless the length of time it has been in effect

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?

Liability coverage

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 known as

Liberalization clause

Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions?

Limits of liability

Which of the following types of property is NOT insurable under the Standard Fire policy form?

Loan documents

Insurance is a contract by which one seeks to protect another form

Loss

The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as

Loss

Which of the following is the basis for a claim against an insurance policy?

Loss

A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?

Loss by vandalism and malicious mischief is excluded

Which of the following would be covered under the Utility Services - Time Element endorsement?

Loss of business income arising from loss of utility service caused by an insured peril

Which of the following is TRUE regarding business liability and medical payments coverage?

Loss of electronic date is excluded under a business liability policy

The purpose of the Iowa FAIR Plan is to

Make basic property insurance available to qualified applicants with the least possible expense

The primary purpose of a surety bond is to

Make sure obligations are fulfilled

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

Which of the following best describes the unfair trade practice of defamation?

Making derogatory oral statements about another insurer's financial condition

The insured's house is located one mile from the county's new landfill and across the road from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something happened to it, but when the insured tried to sell it, the best offer he received what $80,000. The insurance company will insure the house for only $80,000. What method of valuation is sued to insure this property?

Market value

Coverage territory of the businessowners policy (BOP) includes all of the following EXCEPT

Mexico

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation

Which of the following is NOT included in the definition of an "auto" under a commercial auto policy?

Mobile equipment

Which of the following will be covered by the contractors equipment floater in an unfiled inland marine insurance?

Mobile equipment during transportation to and from the job site

Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?

No, because the claim results from copyright infringement and is not in an advertisement

A private passenger auto operated by the named insured that is not titled to the insurer and that is borrowed from an employee or partner is considered a(n)

Nonowned auto

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal

Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?

Nonrenewal

Which of the following statements about the use of automobile after-market parts in vehicle repair is TRUE?

The use of after-market parts is permitted if the parts are at least equal in kind and quality to the original equipment

An insured wants to transfer his auto insurance policy to his wife. What does the insured need to transfer the policy?

The written consent of the insurer

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

Theft

Coverage for which of the following perils excluded under the Standard Fire Policy may be added by endorsement?

Theft

In commercial crime insurance, what is the term that includes both burglary and robbery?

Theft

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 to service the premises

All of the following are other coverages included in both the broad and special form dwelling policy EXCEPT

Theft of personal property

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage

What is the limit on an employer's liability for medical expenses as the result of a work-related accident?

There is no limit

While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store?

Property damage liability

Under the Iowa FAIR plan, "basic property insurance" means

Property insurance that covers direct loss to property

In which of the following situations would a common carrier be legally liable for damage to property being transported?

Property is stolen as a result of a driver leaving a vehicle unlocked

The Gramm-Leach-Bliley was passed to

Protect private customer information filed with a financial institution

The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of

Protective safeguards endorsement

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

Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called

Specific coverage

In auto insurance, the application of more than one policy limit to the same loss is known as

Stacking

A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?

Stated amount

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as

Stated amount

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

Subrogation

When an insurer acquires the insured's rights against a third party for the purposes of receiving indemnification for loss, this is called

Subrogation

Coverage B - Personal and Advertising Injury Liability responds to claims arising from

Suits alleging infringement of a copyright

How are surety bonds different from insurance?

Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses

A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called

Surplus lines insurer

Which one of the following symbols used in business auto coverage is correctly described?

Symbol 9 - nonowned autos only

Which of the following acts created a federal program that would share the risk of loss from potential terrorist attacks with the insurance industry?

TRIA

Robbery is

Taking of property by use of force, violence, or fear

Burglary is defined as

Taking of property from within the premises leaving visible signed of forced entry

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

Telling a client that his first premium will be waived if he purchases the insurance policy today

The insured rented a car while her regular vehicle was being repaired after an accident. The rented car is considered a

Temporary substitute

Who is NOT considered an employee in a commercial general liability (CGL) policy?

Temporary worker

An apartment occupant's personal property would be insured under which homeowners form?

Tenant broad form (HO-4)

Who is covered by an HO-4 policy?

Tenants

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

All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT

The 22-year-old niece of the insured who is visiting

The cancellation provision in a businessowners policy specifies all of the following EXCEPT

The method of transferring the owner's rights

In personal auto polices, the term "you" refers to

The named insured

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract?

The obligee may engage another contractor and then seek reimbursement from the surety

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education

All of the following statements concerning liability coverage are true EXCEPT

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met

A nonresident Iowa producer moves to Iowa and becomes an Iowa resident. Which of the following is true?

The producer must surrender his/her producer's license from the other state

Under an HO-2 policy, the insurer will pay no more than the actual cash value of the property damage until

The property repair or replacement is complete

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

The proximate cause

On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is

The same as provided on the DP-2 Broad form

Benefits for injury as the result of an occupational disease are

The same as the benefits work other work-related injuries

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if

The tree is blocking the driveway

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss

All of the following are requirements for enrollment in The Iowa Automobile Insurance Plan EXCEPT

The applicant has had a previous auto liability cancelled

Insurers CANNOT transact insurance in this state without a

Certificate of Authority

Which of the following is covered by auto other-than-collision (comprehensive) coverage?

Electric equipment required for the normal operation of the car

An executive is accused of sexual harassment. What type of coverage would respond?

Employment practices liability

The purpose of purchasing an umbrella liability policy is to provide

Excess insurance over the primary liability policy

To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policyowner face?

Financial loss

Which valuation method takes into consideration what a willing buyer would pay for an insured property?

Market value

An insurance agent visits a potential client and explains various types of polices. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

Misrepresentation

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the

Policy

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

Which method of dealing with risk is applied when insurance is purchased?

Transfer

Two individuals of the same age, health status, and life expectancy apply for individual insurance coverage. When policies are issued by the same insurer, the premium rates are different based on the insured's race. What practice does this describe?

Unfair discrimination

If a person violates the Commissioner's cease and desist order, their license may be revoked, and the person may be subject to a maximum fine of

$10,000

Grant lost a hand in a work-related accident. What is he entitled to receive, if anything, while he is taking rehabilitation classes in addition to disability and medical benefits?

$100 a week for up to 13 weeks

Applications for a producer license must be accompanied by a licensing fee of

$50

Which of the following best describes a rebate?

A producer returning part of her commission to her client, as an inducement to buy

Which of the following would be considered a peril?

Fire

What is the main distinction between a hired auto and a nonowned auto?

Who owns the auto

What is the minimum limit for Uninsured Motorist coverage for bodily injury to one person in the state of Iowa?

$20,000

If a producer knowingly violates an insurance law, the producer may be fined up to what amount per violation?

$5,000

The obligation to compensate injured workers without regard to fault or negligence is known as

Absolute liability

Which of the following would NOT generally be included in the supplementary payments portion of a liability policy?

Damage to property owned by the insured

The Commissioner is appointed to a 4 year term by the

Governor

Which of the following best defines the unfair trade practice of rebating?

Offering an inducement of something of value not specified in the policy

The other states' insurance section of a workers compensation policy provides coverage

Only for those states listed in the policy

Before submitting your application for a resident producer license, you must first

Pass a written examination

If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?

The insurer will be reimbursed for the excess costs by the NFIP

All of the following are considerations in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state EXCEPT

The insurer's chartered location or domicile

Which of the following drivers may be excluded form an automobile policy that renews on January 1?

The named insured has his driver's license suspended for two days the previous November

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

Coverage for water backup or sump pump overflow is excluded from the Dwelling policy. However, with the purchase of the water backup and sump pump overflow endorsement, coverage for up to $5,000 in loss or damage can be provided for an additional premium. What is the deductible associated with this coverage?

$250

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

In Iowa, what is the minimum limit for Uninsured Motorist coverage for bodily injury to 2 or more people?

$40,000

A commercial property special form covers property in transit up to

$5,000

How long is the policy period for NFIP flood insurance?

1 year

Under businessowners policy Section I, if an insurer wants to nonrenew a policy for nonpayment of premium, how many days before the expiration date must the insurer notify the mortgageholder?

10 days

Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?

10 days

If the Commissioner believes an individual is involved in unfair trade practices and delivers to that individual a notice of hearing, the hearing may be no sooner than

10 days after receipt of notice

Other structures are covered for what amount under the Coverage B - Other Structures of a homeowners policy?

10% of Coverage A

What is the coinsurance requirement for a theatrical property floater under an Inland Marine policy?

80%

What type of liability would a person who owns wild animals have?

Absolute

An insurer must be fair in underwriting and must pay all covered losses of any insured. For the faithful execution of these duties, an insurer has the right to

Accept the payment of premiums for all policies currently in force

What is a sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended called?

Accident

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Which of the following dwelling coverage forms would pay replacement cost for the dwelling?

DP-2 and DP-3

Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT

Damage to a third-party property for which the insured is legally liable

Which of the following would be covered under a business liability insurance policy?

Damage to a watercraft while on shore at the insured's premises

Other-than-collision would cover financial losses due to

Damage to an insured's care caused by wind or hail

All of the following are optional endorsements that may be added to the standard equipment breakdown coverage form EXCEPT

Debris removal

In Businessowners policies, which of the following additional coverages will require a deductible?

Debris removal

Which of the following is a mandatory part of an insurance policy that varies with each individual policy?

Declarations

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

Deductible

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured's books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy?

Deposit premium aduit

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination

All of the following are other coverages under the dwelling policy EXCEPT

Earth movement

Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will

Either pay or defend as it decides

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

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsements

Which of the following statements does NOT describe endorsements?

Endorsements may only add coverage to a current policy, not remove

As head of the State Division of Insurance, the Commissioner's main responsibility is to

Enforce insurance laws

The Commissioner is appointed by which of the following authorities?

Governor

A Mobile Homeowners Policy is structured the same as a

Homeowners policy

The policy conditions define

How parties to the contract must act following a loss

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

Under which of the following conditions can broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling

Which of the following is FALSE regarding insurance sales presentations to prospective purchasers?

If there is no producer involved, there are no special disclosures that must be made

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

CGL Coverage B (Personal Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product

Restoring an insured financially after a claim is known as

Indemnity

The pro rata liability clause is designed to protect the principle of

Indemnity

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

An additional loss that results from a direct loss of property is called a/an

Indirect loss

To purchase insurance, the policyowner must have financial interest in the property being insured. This is known as

Insurable interest

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement

Which of the following would NOT be covered by HO liability insurance?

Intentional tort

A basic dwelling policy automatically provides coverage against fire, lightning, and

Internal explosion

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

Internal explosion

A structure may be eligible for coverage under the National Flood Insurance Program if it meets all of the following requirements EXCEPT

Is entirely over water

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Which of the following types of property would be covered in homeowners coverage forms?

Landlord furnishings in an on-premises apartment

For a contract to be enforceable by law, the purpose of the contract must be

Legal and not against public policy

Which of the following contract elements best describes insurance written in support of public policy?

Legal purpose

Under a DP-1 form, Coverage C - Personal Property is

Limited to covering a servant's property while at the insured location

The type of professional liability coverage a medical doctor needs is

Malpractice coverage

Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called

Material misrepresentations

Which of the following is a valid reason for cancelling an auto policy after it has been in force for 60 days?

Material misrepresentations

Under contributory negligence, when an individual is found to have contributed to his or her own loss in any way, another party

May not be held liable

Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP?

Mechanical breakdown

Which of the following workers compensation benefits are unlimited?

Medical expense

Which of the following coverages is included in an unendorsed homeowners policy?

Medical payments to others

The Physicians and Surgeons Equipment Floater is NOT intended for which of the following?

Medical supplies located in a hospital

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico

As defined in commercial auto policy forms, mobile equipment includes all of the following types of land vehicles EXCEPT

Self-propelled vehicles used for snow removal

An insured was injured at work on June 1. What is the latest date that his employer must be notified of the accident if the insured is to retain his Workers Compensation benefits?

September 1

Which of the following is included under the physical damage coverage of a personal auto policy?

Sound reproduction equipment permanently installed in the covered auto

Wagering on a sporting event is an example of what type of risk?

Speculative

Events in which a person has both the chance of winning or losing are classified as

Speculative risk

Under the commercial property coverage program, the basic causes of loss form insures against loss caused by

Sprinkler leakage

All of the following items may be covered by a personal inland marine insurance policy EXCEPT

Stationary property

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT

Submitting to a medical exam when requested

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called

Subrogation

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

What is the deductible of a commercial liability umbrella policy called?

The SIR

Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy?

The Surf Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction

All of the following situations would be covered under a professional liability policy EXCEPT

The failure of an attorney to properly defend a client due to his personal dislike of the client

If an applicant submits the initial premium with an application, which action constitutes acceptance?

The underwriter approves the application

An insured is driving her auto and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair?

This loss is not covered

All of the following types of property are covered by a standard builders risk form EXCEPT

Tools 50 feet away from the building

Which of the following statements regarding Uninsured/Underinsured Motorists coverage in Iowa is TRUE?

Uninsured Motorists coverage must be offered but an insured may reject it

What is the business auto coverage territory for?

United States, and its territories, Canada, or worldwide for private passenger hired autos

Supplementary payments under the personal auto policy include all of the following EXCEPT

Unlimited cost of bail bonds

An insured opened a locked safe one morning and found $4,000 worth of property missing with no signs of forced entry. How much will the policy covering safe burglary pay?

$0

After a hearing, civil penalties imposed by the Commissioner for each unfair method of competition may NOT exceed

$1,000

What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy?

$1,000

An employee was seriously injured at work and had to be hospitalized with total disability. She is expected to fully recover and return to work in one month. If the employee was earning $1,500 a week before the accident, what is her weekly disability benefit?

$1,200

The extension of coverage under the Commercial Fine Arts Floater includes coverage for newly acquired property for a maximum of

$10,000

What is the maximum aggregate civil penalty that may be imposed by the Commissioner for violations of laws of fair trade practices?

$10,000

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

The pollutant cleanup and removal coverage in the businessowners policy has a limit of

$10,000 in any 12-month period

Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay?

$115,000

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?

$14,000

What is the minimum amount of property damage coverage an insured must have in an automobile liability insurance policy?

$15,000

An insured has $5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are $8,000. The first passenger's total $4,000; the second passenger's total $6,500; the third passenger's total $1,200. How much will the policy pay under the medical payments coverage?

$15,200

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's price. If the roof has been depreciating at $200 per year and the insured's policy is written on the actual cash value (ACV), how much will the policy pay toward the insured's new roof?

$5,000

Under additional coverages for homeowners policies, what is the maximum amount that would be paid for fire department service charge?

$500

All of the following are special personal property limits under a homeowners policy EXCEPT

$500 for business personal property on the insured premises

The maximum payable amount for a property claim through the Iowa Insurance Guaranty Association is

$500,000

In Iowa, proof of financial responsibility in auto policies may be evidenced by filing with the department a certificate of deposit for what minimum amount?

$55,000

The businessowners liability coverage form will cover medical expenses incurred and reported within what maximum time period after the accident?

1 year

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?

12:01 am the day after the application and premium payment are mailed

How many hours of continuing education must be completed on the subject of ethics each license renewal period?

3 hours

A producer must complete a new set of continuing education hours every

3 years

After moving, licensees must inform the Commissioner of a change of address within

30 days

When producers change the address of their residence or office, the Insurance Department must be notified within

30 days

A producer earns 40 continuing education credit hours during the 3-year license renewal period. How many continuing education credit hours will the producer need to complete during the new 3-year period?

36

How many continuing education credit hours must be completed during each licensing period?

36

Which of the following is correct regarding continuing education requirements for producers in this state?

36 hours including 3 hours of ethics every 3 years

For how long must producers maintain records of completing continuing education?

4 years

How soon prior to the nonrenewal of a commercial property policy must an insurer provide notice to the insured?

45 days

In the event of theft of a covered vehicle, transportation expenses coverage in a personal auto policy will cover the expenses starting how many hours after theft?

48 hours

The Commissioner may examine an insurer as often as deemed necessary, but domestic insurers must be examined at least once every

5 years

How long must a property be vacant for an insurer to suspend or restrict coverage under a Standard Fire Policy?

60 days

If an insurer believes that it has received a fraudulent claim, it must notify the bureau and request an investigation within

60 days

Coverage under the builders risk form will end in all of the following situations EXCEPT

60 days after the construction has ended

The insurer of Melco's Fabrication wants to cancel the Commercial Package Policy it issued on the business because it discovered that it made an error in determining the correct premium. Assuming that the error is not so large as the threaten the solvency of the insurer, how long does the insurer have before it can no longer cancel the policy?

60 days from the policy effective date

Under the dwelling policy form, what is the maximum time limit during which multiple volcanic activities would be considered part of one occurrence?

72 hours

One driver makes a left turn on a red light and is hit by another driver who is speeding through the intersection. The driver who was making an illegal turn is found to be 80% guilty of the accident, while the speeding driver is 20% at fault. According to the principle of comparative negligence that is applied in auto accident claims, how much will the speeding driver be able to collect on the claim?

80%

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?

80% of the property's cost or more

The Employee Theft Crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

A contract for the transport of goods between the shipper and the carrier is called

A bill of lading

Which of the following would be considered an unfair claims settlement practice?

A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which of the following losses would NOT be covered by a homeowners policy?

A coin collection valued at $500 lost in a fire

Which of the following is covered under the Camera and Musical Instruments Dealers floater?

A customer's camera left at a camera shop for repair

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

A divorced spouse living in another state

Which of the following risks would be eligible for coverage under a dwelling policy form?

A duplex that is occupied by two families, each of which have a bedroom rented to a boarder

Which of the following would be eligible for Homeowners Coverage F - Medical Payments in the event of injury at the insured's premises?

A full-time maid

Which of the following policies will help an auto dealership cover most of its liability exposures?

A garage liability coverage

In which of the following situations would the jewelers block extension cover a loss?

A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged

Which of the following individuals engaged in the business of insurance would NOT be required to be licensed?

A person who secures information for enrolling individual into a group insurance

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business

In which of the following circumstances is an active producer license NOT required?

A retiree receives renewal commission for policies written when he was an active producer

Which of the following individuals would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

All of the following are ways to demonstrate compliance with the financial responsibility requirements for auto policies in Iowa EXCEPT

A separate bank account specifically for auto liability

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover

A share of the loss

What is a material misrepresentation?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

The declarations page of the homeowner's policy provides all of the following information EXCEPT

A statement that earthquake damage is not covered

Homeowners policies consider all of the following insured locations EXCEPT

A strawberry patch owned by the insured

Which of the following best defines the term "accident"?

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected or intended

As it applies to homeowners policies, the term "business" means

A trade, professions, or occupation

Which of the following would be required to obtain a producer's license in this state?

A trustee of an employee trust plan that is compensated indirectly by the company issuing the contract

In a personal auto policy (PAP), a covered auto includes all of the following EXCEPT

A van used in the delivery business

Which of the following would be considered an uninsured vehicle?

A vehicle fleeing a hit-and-run accident

An uninsured motor vehicle includes all of the following EXCEPT

A vehicle owned and operated by a self-insurer

What guarantees that the information explained in the insurance contract is true?

A warranty

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional coverage

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the

Additional insured

Which of the following would be added for coverage under a property policy by an endorsement?

Additional insured

Which of the following is NOT an acceptable reason for cancelling an auto policy that has been in effect for more than 60 days?

Additional vehicle operators

Which of the following is another term for an authorized insurer?

Admitted

Which of the following is NOT a valid reason for cancelling an auto policy once it has been in force for 60 days?

Age of the operator

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?

Aggregate limit

In which of the following types of property will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation?

Agreed value

Which of the following types of valuation works best for property whose value does not fluctuate much?

Agreed value

An insurer who transacts insurance in this state but whose articles of incorporation are registered in Canada is considered what type of insurer?

Alien

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer

Which of the following statements is TRUE regarding members of the state's FAIR plan?

All admitted insurers of property insurance must become members

An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured's sister has to stay in a motel. How much will the HO-3 form pay for these additional living expense?

All of the expenses up to the Coverage D limit

The Iowa Automobile Insurance Cancellation Control Act applies to

All private passenger vehicles and other four-wheeled vehicles with a load capacity less than 1,500 pounds

How much is covered for debris removal under the HO property additional coverages?

All reasonable costs

The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?

All volcanic eruptions within a 72-hour period will be considered one occurrence

Under the Garment Contractor Floater of an Inland Marine policy, coverage while the property is in transit between the insured and the subcontractor is usually written on which basis?

All-risk

The inspections and surveys condition in a businessowners policy

Allows the insurer the right to inspect the insured's premises

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies

The limited theft endorsement is intended for which type of property?

An apartment building in which the owner does not reside

In insurance, an offer is usually made when

An applicant submits an application to the insurer

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who owns and lives on a commercial farm

Which of the following would NOT qualify as a hired auto?

An auto borrowed from an employee

Under a commercial general liability policy, which of the following is NOT considered mobile equipment?

An automobile used as a company car by a real estate company

Which of the following injuries is considered compensable under the Iowa Workers Compensation law?

An employee ignores safety rules and is injured as a result

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold

Which of the following injuries is NOT compensable under the Iowa Workers Compensation law?

An employee was injured at work by a distraught spouse because of a marital dispute

Which of the following employers are subject to the state Workers Compensation law?

An employer of one or more people

Which of these would be covered by the medical payments coverage in a personal auto policy?

An insured slams a hand in the car door while getting in, breaking the hand

What is a foreign insurer?

An insurer with a home office in another state

Which of the following could be covered by an HO policy?

An oriental rug in an on-premises apartment

Which coverage form would provide coverage for all incoming and outgoing shipments?

Annual transit

What is the current status regarding stacking of Uninsured Motorists coverage in Iowa?

Anti-stacking provisions in policies are legal, but a stacking option must be available to the insured

Which of the following describes contributory negligence?

Any degree of negligence by the injured party may bar recovery

Which of the following drivers may be excluded from an auto policy under Iowa laws and regulations?

Any driver convicted of driving under the influence of alcohol or drugs

Which of the following is NOT covered under accounts receivable coverage form?

Any loans required to offset uncollectible amounts

Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage?

Any loss paid under Coverage B reduces the Coverage A limit of liability

Which of the following would be considered an insured under a business auto coverage form?

Anyone while using, with permission, a covered auto owned by the named insured

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree on the value of a property loss is known as

Appraisal

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

Which of the following stipulates the procedure that insureds and insurers can use when they cannot agree on the value of a loss?

Appraisal clause

A manufacturing company has adopted some new processes in their operations, so their insurer has decided not to renew their Commercial Package Policy. If the CPP policy expires on May 31, when must the insurer send the notice of nonrenewal?

April 15

First aid costs for others injured on the insured's premises

Are paid in addition to the liability limit

When do binders expire?

As soon as the policy is issued

The transfer of a legal right or interest in an insurance policy is called

Assignment

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

Assignment

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

Under a businessowners policy, an insured can cancel the policy

At any time by mailing a written notice of cancellation

Insurable interest in a property policy must be proven

At the time of loss

The Iowa Insurance Guaranty Association EXCLUDES claims for which of the following?

Attorney fees

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

The garage coverage form is used to insure

Auto businesses, such as auto dealers, service stations, and auto repair shops

A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT

Auto collision coverage

If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?

Auto policy

Which of the following is an example of a protective safeguard in a businessowners policy?

Automatic sprinkler system

According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties

Automatically transfer to a legal representative

Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners?

Bailee's customer policy

In return for premium, an insurance company must

Be fair in underwriting and pay covered losses

Which of the following components is NOT part of a policy structure?

Benefits

Which of the following statements regarding coverage for the flood and earthquake perils is true?

Both flood and earthquake are excluded perils in all property policies

Under the HO-4 homeowners policy form, property is insured against

Broad form perils only

Because of the insured's loss history, the insurer has decided not to renew the insured's homeowner's policy that expires on January 1. When must the insurer mail the notice of nonrenewal?

By December 1

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of

Coercion

The general property policy form is used for other-residential and non-residential structures and their contents such as

Commercial structures, cooperative associations, and apartment buildings

It is suspected that a producer is consistently violating insurance laws. Which of the following entities is responsible for making sure that the producer stops committing these violations?

Commissioner

An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What would this individual use to insure it?

Contractors equipment floater

To be valid, an insurance policy must have all of the following EXCEPT

Countersignature

The extra expense coverage form provides

Coverage that will permit the insured to continue in business without interruption following a property damage loss

A unique feature in a bailee form is that is covers

Customers' property whether or not the insured has been negligent

Which of the following dwelling policy forms primarily insures on an actual cash value basis?

DP-1

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

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

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

Definitions

Which part of the policy clarifies the terms that are used throughout the policy?

Definitions

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation

To determine the actual cash value of an insured property, what must be deducted from the current replacement cost?

Depreciated value

What are the two forms of crime insurance?

Discovery and loss sustained

Residential structures, including individual condominium units, and their contents are insured by what part of the National Flood Insurance Program?

Dwelling policy form

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

Which of the following terms best describes a trembling or shaking of the earth that is volcanic or seismic in origin?

Earthquake

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act

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

Hazards

An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay?

Higher limits

Which of the following terms describes a vehicle that has been leased or rented?

Hired

A BOP (businessowners policy) is most similar to

Homeowners

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered?

In California and any other state

An insured's fire policy was due to renew on January 1. On December 15, the insurance company sent him a notice that it did not intend to renew the policy. The insured's building sustained a fire loss on January 20. What effect did the notice of nonrenewal have on the loss?

It had no effect since he did not receive at least 30 days' notice prior to the expiration date of the policy

All of the following are true regarding deposit premium EXCEPT

It is 50% of the actual premium

Which of the following coverages in dwelling and homeowners policies is for indirect losses?

Loss of use

Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy?

Loss or expense caused by the cancellation of a lease is covered

Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence

A business using its own trucks to move its own cargo would insure the cargo using

Motor truck cargo - owners form

What type of property does a personal floaters policy cover?

Moveable personal property, wherever it may be located

Most insurance policies exclude losses by

Mysterious disappearance

An insurance policy form that lists specific covered perils provides

Named peril coverage

Which of the following does the term proximate cause refer to

Negligence that leads to an injury

All of the following statements are FALSE regarding garage physical damage coverage EXCEPT

No coverage is provided for any auto stored for more than 45 days at a location not shown in the declarations

Auto policies are required to provide Uninsured and Underinsured Motorists coverage. Does the insured have to accept this coverage?

No, the named insured may reject coverage in writing

Losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected is the definition of which of the following terms?

Occurrence

A bond is written for a set limit, and the surety will be liable for this amount of the limit. This limit is known as the

Penalty

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of liability does this insured's policy have?

Per occurrence

Which of the following limits, shown in the declarations of a policy, applies to medical expenses?

Per person

Which of the following is the cause of loss?

Peril

The causes of loss insured against in an insurance policy are known as

Perils

In reference to insurable interest, which of the following is NOT an element of insurable risk?

Personal

Which of the following is used to define any person, firm, or corporation appointed by an insurer that possesses the authority to transact insurance?

Producer

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?

Professional liability

All of the following are considered parts of the policy structure EXCEPT

Provisions

The Federal Fair Credit Reporting Act

Regulates consumer reports

Which of the following would NOT be covered under the directors and officers liability coverage?

Reimbursement for fines and penalties

What type of information would be found in a policy's insuring agreement?

Renewal dates

In a dwelling policy, which of the following other structures would be covered?

Rented to a neighbor for use as a private garage

All of the following are factors in rating workers compensation insurance EXCEPT

Sales

Which of the following would be covered under the Film Coverage Form?

Soundtracks

What entity was created to protect insured's against insurer insolvency?

The Iowa Insurance Guaranty Association

What is the deductible of a personal liability umbrella policy called?

The SIR

An insured's accounts receivable records have been damaged. The loss may be covered with

The accounts receivable coverage form

Due to appreciation, the amount of insurance on a business is less than 80% of its actual cash value on the date of loss. Which of the following is true?

The coinsurance penalty applies

The Commissioner is conducting an examination of a domestic insurance company. Who is responsible for the cost of the examination?

The company being examined

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered good will because payments are made without regard to fault

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention

Which of the following best describes negligence?

The failure to use reasonable and prudent care

If Uninsured and Underinsured Motorists coverage is rejected at the issue of the policy, what happens to this coverage upon renewal of the policy?

The rejected coverages will not be on the renewal policy

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

Prior to state-directed workers compensation statutes being enacted, employees had

To sue an employer for the "loss" and prove that the employer was at fault

A structure that is not inhabited by anyone and stores no property is considered

Vacant

An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of

Vicarious liability

Liability imposed on one party as a result of the actions of another person is known as

Vicarious liability

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

Vicarious liability

When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flower bed. The insured was found to be legally liable for this damage. This is an example of

Vicarious liability

Which of the following is most likely INELIGIBLE for coverage under the businessowners policy?

An auto mechanic shop

In order to get a nonresident license in this state a producer must

Apply and pay a fee to a nonresident state that reciprocates

Loss valuation is best described as the process of

Determining the premium charged and the amount of insurance required on a specific property

An auto insurer may nonrenew an auto policy for which of the following reasons?

Driving while intoxicated

The declarations section in a homeowners policy provides all of the following information EXCEPT

Policy exclusions

What information is found in the conditions part of an insurance policy?

The description of the duties and obligations of the insured

A trucking company has a $1 million umbrella policy in place. The businessowner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300,000. It turned out that the business actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?

$100,000

An insured has an automobile policy with limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another driver's auto. The other driver suffered 125,000 in injuries and had $25,000 worth of damage to his car. The insured's vehicle has damage in the amount of $1,200. The total payment made under the insured's policy is

$125,200

Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?

1

The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy?

Physical damage on a customer's auto

The commercial general liability Coverage Part A - Bodily injury and Property damage provides coverage for which of the following?

Premises

Which of the following is INCORRECT regarding the Insurance Guaranty Association?

Producers may stress its guarantees to customers in a sales presentation

Auto insurers must offer UM/UIM coverage for at least

20/40

How long is a waiting period for workers compensation loss of earnings benefits?

3 days

An insurer intends to cancel a private passenger automobile policy because the insured misrepresented herself on her application for insurance. How many days' notice must be provided prior to cancellation?

30

If a producer changes his address, the Commissioner must be notified within

30 days

An order is issued by the Commissioner that requires someone stop engaging in an unfair method of competition or an unfair deceptive act or practice is called

A cease and desist order

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?

Charging the insured higher premiums based on their race

Insurance producers can only receive commissions for insurance written with

Companies that have appointed them to act as insurance producers

The statutory law defense that reduces injury and awards for damages proportionately when the plaintiff and defendant are both responsible is called

Comparative negligence

Under which legal defense is there an apportionment of damages based upon the degree of fault of each of the plaintiffs and the defendant?

Comparative negligence

Which of the following entities is eligible for a businessowners policy?

Convenience stores

The supplementary payments section of the commercial general liability policy would cover

Court costs assessed against the insured in a suit

A sworn statement must usually be furnished by the insured to an insurer, and must include what information about the occurrence and the amount of indemnity claimed?

Date and description

Which of the following conditions allows the insurer to examine the insured's records at the end of a policy term to make sure an adequate fee is being collected for the exposure?

Deposit Premium Audit

An insured just purchased an auto policy for his new car. He wants to understand what perils are not insured against. Which section of his policy should the insured check?

Exclusions

After a hearing, if the Commissioner finds that a producer is in violation of unfair business practices, his or her initial action will be to

Issue a cease and desist order

Section III of the business auto policy provides physical damage coverage. All of the following are physical damages that may be selected coverages EXCEPT

Limited peril coverage

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

An insured has extended coverage on her dwelling that includes coverage for vandalism and malicious mischief. One evening, she is sitting in her living room when she hears a crash and the sound of glass breaking. She runs to the door and discovers a brick has been thrown through her glass door. To inform her insurer of a possible claim, she fills out a form detailing the events leading to the loss. What is the name of the form?

Notice of Claim form

Prior to paying a claimant under a professional liability policy, the insurer must

Obtain consent of the insured

Among the applicants in the same class and life expectancy, which of the following factors can be used to determine premium rates?

Occupation

Which of the following is FALSE concerning liability coverage of a business auto policy?

The company will reimburse the insured for all loss of earnings

The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT

$1,000 on silverware

An insured has a standard HO-4 policy with a $30,000 limit of coverage for personal property. While he was traveling, a fire in his hotel destroys clothes and luggage with a replacement value of $10,000 and jewelry with a replacement value of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has occurred in both properties, what amount is the insurer obligated to pay?

$16,000

The insured purchased a $200,000 extra expense policy. If the percentages applying to the limit of insurance are 40%, 80%, and 100%, what would be the maximum payable for a 47-day loss?

$160,000

Which loss listed below would be fully covered by a homeowners policy?

$2,000 silver tea set stolen

Transportation expenses are covered under a personal auto policy for

$20 per day, for a maximum of $600

Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits?

$20 per day; $600 maximum

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to

$250,000

A grave maker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?

$3,000

An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pay for damages? (Dollar amounts are rounded to the nearest hundred.)

$41,700

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000

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, $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

What is the maximum benefit a workers compensation policy may pay for burial services?

$5,000

If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person?

$50,000

If a producer knowingly violates the Insurance Code, the maximum aggregate penalty CANNOT exceed

$50,000 in a 6-month period

How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?

$500

If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to

$500

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?

$6,000 would be paid under other-than-collision coverage

An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay?

$60

Using the pro rata method, if a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss?

$8,000

What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000?

$80,000

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?

1 year

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of authority

When a policy is being cancelled due to nonpayment of the premium, the notice of cancellation must be delivered to the insured how many days before the cancellation effective date?

10

If an insurer intends to cancel a commercial umbrella policy, how much notice must be provided to the insured?

10 days

In automobile policies issued in this state, what is the required minimum notice to the insured when a policy is being cancelled for nonpayment of premium?

10 days

The Commissioner has scheduled a hearing for a producer who is implicated in engaging in an unfair method of competition. The notice of hearing must be delivered to the producer NO later than how many days prior to the hearing?

10 days

What is the amount of coverage that would be available for a detached garage under the Coverage B - Other Structures of a homeowners policy?

10% of Coverage A

An insured has an auto policy with limits of 100/300/50. What is the most amount of coverage the insured can buy against Uninsured Motorists?

100/300/50

What is the maximum amount of time that a person can have a temporary producer's permit?

180 days

Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to

2 weeks

Within how many years of a loss may an insured bring a lawsuit against an insurer, according to the dwelling policy?

2 years

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

To be effective, a notice of intent not to renew a commercial policy must be delivered to the insured at least how many days before the policy expiration date?

20

How soon from the effective date of cancellation of a commercial property policy must an insurer provide notice to an insured?

20 days

What are the required minimum limits of liability for personal auto policies in this state?

20/40/15

What is the waiting period for transportation expenses coverage for a loss other than theft of a covered vehicle?

24 hours

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?

3 years

If a person is suspected of violating insurance laws, what can the Commissioner issue that would order the person to stop violating the violations?

Cease and Desist Order

To be effective, a notice of cancellation of a non-commercial lines policy for reasons other than nonpayment of premium must be delivered how many days before the date of the cancellation?

30

To be effective, a notice of intent not to renew a homeowners policy must be delivered to the insured at least how many days before the policy expiration date?

30

According to the definitions that apply to commercial crime policies, an individual is still considered an employee for how many days after termination

30 days

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

30 days

How long is the waiting period upon purchase of flood coverage through NFIP?

30 days

How soon must an insurer re-underwrite and re-rate an insured policy upon notice of incorrect credit information?

30 days

If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for

30 days

The mail coverage form is always written on a reporting form basis; after the end of each reporting period shown in the declarations, reports are due within

30 days

The removal coverage included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?

30 days

Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

How long is the Commissioner's term?

4 years

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate of Authority

If an insurer wants to nonrenew a commercial fire policy, it must send notice of its intent to the insured not less than how many days prior to the expiration date of the policy?

45

How much advance notice must an insurer provide to an insured for the nonrenewal of a commercial property policy?

45 days

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

According to the Insured Duties after a Loss provision in homeowners policies, if the insurer requires a signed, sworn proof of loss, the insured must provide within how many days?

60 days

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60 days

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

60 days

How many members make up the governing committee of the Iowa FAIR plan?

7

In business income additional coverage in a businessowners policy (BOP), the waiting period that must occur before the period of restoration is

72 hours

An insured is the owner of a clothing boutique. She has a Floor Plan Merchandise Floater to cover the property that is financed until it is sold. At closing time a month ago, she noticed that 3 very expensive dresses had been stolen. However, she did not file a report to her insurance company until recently. How much will her insurer pay for this loss?

90% of the limit written

Which of the following is eligible for a businessowners policy (BOP)?

A 5-story office building with less than 100,000 square feet in total area

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy?

A friend rents their boat and runs it into a neighbor's dock

In a participation plan, the insured may be eligible for which of the following?

A partial premium refund

A tornado that destroys property would be an example of which of the following?

A peril

Which of the following statements is true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500-pound capacity

What are common carriers required to issue every shipper that it transports goods for?

A uniform bill of lading

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto?

A vehicle that is titled to another person, but is being used with permission by an insured

The Iowa FAIR plan is

An independent agency operating under the authority of the state legislature

Which of the following statements about policy cancellation or nonrenewal is TRUE?

Any action by the insured that increases the risk of the insured peril is grounds for cancellation

With respect to the business of insurance, a hazard is

Any condition or exposure that increases the possibility of loss

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

An installation floater is used to insure

Appliances intended to become a permanent part of the building

If an insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will

Apply to injuries of any guests or visitors

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

Authorized

Business personal property coverage form covers all of the following EXCEPT

Automobiles held for sale

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

Be reduced by 10%

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page

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 as 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

A policy that insures all property at multiple locations for a single amount is referred to as

Blanket

A single property insurance policy that can provide coverage for multiple classes of property at one location, or one or more classes of property at multiple locations, with one total amount of coverage and no single item assigned a specific amount of coverage is called

Blanket insurance

Which of the following would NOT be covered under the liability section of a personal auto policy?

Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle

The equipment breakdown coverage form provides coverage for all of the following EXCEPT

Bodily injury liability

The liability coverage of the businessowners policy is written on a

Businessowners liability coverage form

Which of the following is NOT found in a commercial package policy?

Certificate of Authority

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have?

Combined single

An insured's limit of liability applies to a total of damages for bodily injury and property damage resulting from one accident, which may be used in any combination of amounts, not to exceed the single limit. What type of limit does this insured have?

Combined single

What are two major sections of commercial crime policies?

Commercial entities and government entities

A professional who wants coverage for all liability exposures should purchase what form of liability insurance?

Commercial general and professional

What two policy components are part of every commercial package policy?

Common policy declarations and common policy conditions

The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?

Company A will pay $16,000; Company B will pay $8,000

What is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent?

Comparative negligence

Which of the following is a statutory defense?

Comparative negligence

A builder's risk form is most often written as which of the following?

Completed value form

A temporary producer's license may be used for which of the following?

Completing the affairs of an insurance producer

In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn?

Comprehensive

A bank manager has had several instances of employee dishonesty involving transfer of funds. His risk manager is researching the best coverage for this situation. Which bond rider should he recommend to the bank manager?

Computer systems rider

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

Concealment

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Concealment

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions

Which of the following risks is eligible for coverage under a businessowners policy?

Condominiums

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Condtions

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential

An insured's home catches fire. As a result, the insured's family must stay in a motel until the home is repaired. The cost of the motel stay would be considered a

Consequential loss

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principals has the insurer violated?

Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Representations are written or oral statements made by the applicant that are

Considered to be true to the best of the applicant's knowledge

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. The driver is

Considered underinsured

The difference in the contents coverage on an HO-3 and HO-5 is which of the following?

Contents are covered open peril on HO-5, and named peril on HO-3

In the event an insurer fails to provide a notice of nonrenewal, a commercial property policy will

Continue in force for the remainder of the notice period, plus 30 days

Which of the following statements is true concerning the special form dwelling policy?

Coverage A is for all-risk perils, and Coverage C is for the broad form perils

Which of the following dwelling coverages would provide coverage to a garage not attached to the primary insured dwelling?

Coverage B

Which of the following coverages in the dwelling policy would provide protection to contents damaged by fire?

Coverage C

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

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

Coverage D

An agreement that is enforceable by law is known as what kind of contract?

Legal

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

Which of the following provisions that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time?

Duties after loss

Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT

Embezzlement

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT

Employers liability

Individuals in the business of selling construction equipment and mobile equipment should insure with a/an

Equipment dealers coverage form

Professional liability coverage protects against legal liability resulting from

Errors and omissions

All of the following are found in the declarations section of a policy EXCEPT the

Exclusions

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

Exclusions

Which of the following is true of dwelling policy coverage?

Exclusions apply to all three policy forms

What method of premium computation related an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

All of the following are excluded in the equipment breakdown basic policy EXCEPT

Explosion of steam boilers

All of the following reasons can justify denial of license for an insurance producer EXCEPT if the producer

Fails to sell enough policies

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

Which of the following is covered under a dwelling policy?

Fire caused by an earthquake

Which of the following claims would be included under the dwelling policy?

Fire damage to the insured's rowboat stored in the attached garage

In Businessowners policies, a deductible does NOT apply to which of the following additional coverages?

Fire department service charge

All of the following are exclusions that apply in all three types of Dwelling Policies EXCEPT

Fire or lightning

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

Fire or lightning

What perils are covered under the Standard Fire Policy?

Fire, lightning, and removal

In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?

First limit

Which of the following would be named on the declarations page of a property or liability policy?

First named insured

The major portion of the premium for an equipment breakdown policy pays

For inspections and examinations

Harold died in an accident at work, leaving behind a wife and an autistic child. For how long will the child's survivor benefits continue under the state's Workers Compensation law?

For the remainder of the child's life

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

An insurer incorporated under the laws of another state but doing business in this state is considered

Foreign

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license?

Forgery

The homeowners policy covers collapse caused by all of the following EXCEPT

Foundation cracks

Replacement cost is defined as

Full replacement of property at its current cost, new and without reduction for depreciation

The proof of loss statement must be

In writing

Which of the following was designed to investigate and collect evidence relating to insurance fraud?

Insurance Fraud Bureau

What is surplus lines insurance?

Insurance placed with an unauthorized insurer

All of the following are factors in the determination of actual cash value EXCEPT

Insurance premium paid

Which of the following provisions is usually found in homeowners policies and provides a replacement cost settlement to policyholders who carry adequate insurance?

Insurance to value

Who is responsible for filling out a notice of claim form?

Insured

Persons covered under an insurance policy, whether named or not, are known as the

Insureds

Membership on the FAIR plan's governing committee is selected from

Insurers, insurer associations, and independent agents

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

Insuring agreement

The additional living expense coverage on homeowner policies

Is intended to allow the family to maintain its normal standard of living

The Residential Condominium Building Association Policy (RCBAP) is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true?

It does not protect the individual owner from loss to personal property owned exclusively by the unit owner

Which of the following is TRUE regarding TRIA?

It is a temporary federal program for insured terrorism losses

All of the following statements describe the concept of strict liability EXCEPT

It is imposed on defendants engaged in hazardous activities

When is liability coverage included in a homeowners policy?

It is included automatically

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status

Which of the following statements concerning the builders risk 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 in homeowners policies EXCEPT

It must be added by endorsement to a homeowners policy

Which of the following statements is NOT true regarding a personal umbrella liability policy?

It provides errors and omissions coverage for an agency

How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeonwers policy?

It removes the coverage

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured

An insured is at fault in an auto accident out of state. How will the insurer respond?

It will adjust the benefit to the minimum limits for the other state

The insured was mowing the lawn in his yard with a lawnmower borrowed from his brother. The fuel line ruptured, and the lawnmower was destroyed in the fire. How will the insured's homeowners liability policy respond?

It will cover the damage

If an employer in a state with elective workers compensation law chooses not to be subject to those laws, what does the employer lose?

Its common law defenses against liability suits

What type of property would NOT be covered under the dwelling policy special form Coverage A - Dwelling?

Land on which the dwelling is located

Which of the following would NOT be considered causes for flood conditions covered by the National Flood Insurance Program?

Landslides

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger

Statistical probabilities of loss for a particular class of insureds is best predicted when the insured group is

Larger

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

Law of large numbers

A couple noticed yesterday that several items of personal property were missing from their home. There has not been any apparent robbery committed, the items are merely missing and have seemingly disappeared mysteriously. The couple will

Not be able to make a claim for the property since it is considered to have mysteriously disappeared

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty

A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?

Occupational disease caused or aggravated by a condition of employment

What term includes losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected?

Occurrence

How is property insured under the equipment breakdown coverage form?

On a replacement cost basis

Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT

On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site

When does compensation begin for loss of earnings benefits under workers' compensation?

On the 4th day of disability after the injury

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered by a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damage caused by the eruptions?

One

How is the premium paid for the businessowners policy?

One indivisible premium

Which statement best describes agreement as it related to insurance contracts?

One party accepts the exact terms of the other party's offer

When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)?

Only if the insured does not have commercial auto coverage

The HO-3 homeowners policy provides

Open peril coverage on the dwelling and broad form coverage on personal property

What type of insurance policy insured against all risks of loss that are not specifically excluded from by the policy?

Open peril policy

Rental Reimbursement is only available if the policy includes which coverage?

Other Than Collision Coverage

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?

Other insurance

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

Other insurance

Which of the following personal auto coverages would apply for damage caused by a bird hitting the windshield?

Other-than-collision

All of the following are additional coverages under a homeowners policy EXCEPT

Outbuildings

The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land

Owned or leased by the resident of the mobilehome

Workers compensation will pay under which of the following situations?

Paid without consideration of fault on the part of either the employee or employer

Under a dwelling policy, which of the following clauses applies if an insured has lost one of two matching silver candlesticks?

Pair or set

An insured is injured while driving his own car. Which of the following coverages will pay for the loss?

Part B - Medical Payments

A building insured with commercial property insurance has been vacant for more than 60 consecutive days. Which of the following is NOT true?

Payment for unnamed perils is reduced by 25%

B&B market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?

Personal and advertising injury liability

If an insured bakery is sued because of its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?

Personal and advertising injury liability

When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage?

Personal and advertising injury liability

Which of the following floaters will be used to insure personal effects carried or worn by the insured while traveling?

Personal effects floater

All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT

Personal injury

What type of coverage is Coverage E in homeowners policies?

Personal liability

What does HO personal property coverage NOT cover?

Personal property of roomers not related to the insured

If a person using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT

Physical damage

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is

Provided by the insured's policy on an excess basis

Which of the following would be the insured's duty in the event of a loss according to the duties in event of occurrence, claim, or suit condition?

Providing specific details regarding an occurrence

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society?

Punitive

A situation in which a person can only lose or have no change represents

Pure risk

The risk of loss may be classified as

Pure risk and speculative risk

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it is in the best interest of the client

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

A producer in another state wants to become a producer in Iowa. The other state gives the same privileges to Iowa producers wanting to be licensed in that state as it does its own producers. Iowa therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?

Reciprocity

Paul is a producer in Kansas and wants to become a producer in Iowa. The Department will waive certain examination requirements, provided that Kansas would waive these same requirements if an Iowa producer sought licensure in Kansas. What term is used to describe this phenomenon?

Reciprocity

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

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

Replacement cost

Which method of loss valuation is contrary to the basic concept of indemnity?

Replacement cost

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

Replacement cost

In property insurance, actual cash value is defined as which of the following?

Replacement cost at the time of the loss, less depreciation

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be a

Representation

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss

Which of the following is a method of establishing a premium on large commercial accounts?

Retrospective rating

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?

Riot

Which of the following types of property would be covered under Coverage C - Personal Property in a dwelling policy?

Rowboats

An insurer's right to take possession of property after having paid for the loss is referred to as the right to

Salvage

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured retention

The amount of loss the insured is willing to absorb without insurance protection is known as

Self-insured retention

To be considered effective, a notice of cancellation of a non-commercial lines policy must be

Sent to the named insured

Which of the following statements is NOT accurate regarding commissions and referrals?

Service fees are acceptable as long as the policyholder is licensed

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

All of the following are considered unfair trade practices in the business of insurance EXCEPT

Sharing commissions

A Certificate of Insurance is a written document that

Shows the types and amounts of insurance issued to the insured

The endorsement that provides coverage for losses arising from sudden collapse of earth arising from underground limestone created by the action of water on rock formations is a/an

Sinkhole collapse endorsement

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

Special

What are the two types of compensatory damages?

Special and general

What are the types of compensatory damages?

Special and general

Theft coverage under an HO-8 is restricted to

The actual cash value of what was stolen, with limits for certain classes of property

An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT

The agency loses commission income from policies that were not issued by the insurer

Under a dwelling policy, which of the following is NOT a factor in determining a loss?

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

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

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?

The appliance was manufactured in the United States

Which of the following would NOT be considered a source of insurability information by an insurer?

The applicant's marital status

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

How much is the premium for the dwelling under construction endorsement under the dwelling policy?

The average amount of insurance during construction

In order for a casualty policy to pay in the event of a burglary, what conditions must be met?

The break-in must be made with felonious intent, and visible signs of forced entry should be present

Which item would NOT be covered under building coverage in a building and personal property policy?

The bulldozer being used as part of a business addition under construction that is parked 500 feet from the building

Which of the following statements is CORRECT regarding business income coverage under the businessowners policy (BOP)?

The business income losses are payable for 12 consecutive months following the occurrence

When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property?

The carrier

Peril is most easily defined as

The cause of loss insured against

All of the following statements concerning coinsurance are true EXCEPT

The coinsurance formula will also be applied to total losses

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. Who pays for this damage?

The contractor

The claims-made trigger is based on which of the following?

The date the claim is first made

The occurrence form trigger is based on which of the following?

The date when injury or damage occurs

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?

The driver's policy would be primary

An employee become disabled when

The employee can no longer perform his or her job or any suitable employment

Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?

The endorsement is available for additional premium

The common policy condition is a modular part combined with other parts to create the contract. The common policy condition section provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy?

The first named insured may cancel the policy at any time by giving written notice to the insurer

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by

The golfer's homeowners liability coverage

A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely?

The homeowner will need to get written consent from the insurer before the policy can be reassigned

When a mortgagee is named in a mortgage clause attached to a fire or other direct damage policy

The loss reimbursement is paid to the mortgagee

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT

The injury or damage must occur within 90 days after the insured's work is completed

After a hearing, who issued the written order resolving the factual issued presented in a hearing and stating what remedial action is necessary?

The insurance division

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state

Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS

The insured had drained the plumbing system

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home

Under which of the following circumstances would an insurer be allowed to cancel a dwelling policy midterm?

The insured knowingly misstated the age of the property on the policy application

To send important documents to the insured electronically, all of the following requirements must be met EXCEPT

The insured must be made aware that choosing another method may affect the validity of the document

Which of the following is most likely to occur if it is determined by the audit that the deposit premium was too high?

The insured will receive a return premium

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy?

The insured would be responsible for the amount required as underlying limits in the event of a claim

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT

The insured's business income losses due to personal injury

In which of the following situations would off-premises coverage in a broad theft endorsement of the insured's dwelling policy apply?

The insured's camera is stolen from his suitcase while he is on vacation

The insured and his girlfriend were sitting in the car when it was struck by a hit-and-run driver. The insured's medical bills from the accident were $10,000 and his girlfriend's bills were $25,000. Assuming that the insured had the minimum amount of Uninsured Motorists coverage on his auto policy, how much would the policy pay for both medical bills?

The insured's policy will pay $10,000 for his bills and $20,000 for his girlfriend's bills

Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT

The insurer does not have the right to inspect the insured's property and operations

If more than one person has an insurable interest in the property covered under a dwelling policy

The insurer will be liable for only the insured's interest in the damaged property

Which of the following best depicts the law of large numbers?

The larger the pool of risks under the study, the more accurate the predictions will be

Under the limits of insurance provision found in the Physical Damage Coverage Form in a Commercial Auto policy, how much will an insurer pay to repair or replace a covered auto?

The lesser of the actual cash value or the cost to repair or replace a covered auto

All of the following are true regarding physical damage coverage EXCEPT

The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle

The members of a limited liability company are insureds under a businessowners policy (BOP) if

The limited liability company is designated as the named insured

A dealership loans a car to its customer to use while the dealership is repairing the customer's car. If the dealership has business auto physical damage coverage and a customer's automobile insurance does not cover damages to loaner cars, which of the following is true?

The loaner vehicle is covered by the business auto policy

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

The loss of income for the time the diner was closed

On an application for a Commercial Property Policy, Arthur stated that he had no losses in the past 3 years when, in fact, he had 5 losses. Within what period of time must the insurer notify Arthur of its intent to cancel the policy for misrepresentation?

There is no time limit on cancellation for misrepresentation

Which of the following is true regarding single dwellings that are insured at least 80% of the replacement value?

They are automatically provided with replacement cost coverage

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

When Symbol 7 is provided, which of the following statements is true with regards to a newly acquired auto?

They are covered if they are used to replace previously owned autos with that coverage

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT

They pay defense costs even after the aggregate limit has been reached

Which of the following best expresses the purpose of a stated value contract?

To pre-establish the amount of coverage available for property items that are difficult to value

Which of the following IS considered a work-related injury/occupational disease under Workers Compensation law?

Tom works as a painter in an auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days

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 the written consent of the insurance company?

Transfer of rights and duties under the policy

An insured covered under a Mobile Homeowners Policy wants to move the location of the covered mobile home. Which of the following must the insured obtain from the insurer?

Transportation/Permission to Move Endorsement

The type of insurance used to cover goods for one specific trip is called

Trip transit

An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered

Unoccupied

Which of the following terms best describes the home of an insured who goes on vacation for 3 months?

Unoccupied

An insured is a member of the neighborhood association, and has become liable for damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay?

Up to $1,000

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?

Up to $1,000 per occurrence

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT

Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident

Supplementary payments on a CGL provide all of the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds

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 refrigerating units 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 endorsements could be added to a businessowners policy to protect against loss of income due to lightning striking an electrical grid making the business unable to operate?

Utility servies time element endorsement

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered

Vacant

Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy?

Vacant farmland owned by the insured

Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form?

Valuable papers and records

All of the following are essential elements of a commercial package policy (CPP) EXCEPT

Valuations and/or settlement provisions

Which of the following is NOT one of the available additional coverages in the builders risk form?

Vandalism

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

Vandalism

Which of the following IS covered under the theatrical property floater of an Inland Marine policy?

Vehicles used on stage

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty

Both the broad theft and limited theft endorsements on the dwelling program exclude all of the following types of property EXCEPT

Watercraft

When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy?

Whatever coverage applied to the vehicle being replaced

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

When does a business need to purchase a liquor liability policy?

When it is in the business of manufacturing, distributing, serving, or furnishing alcoholic beverages

When would uninsured motorist coverage apply?

When the other party is legally liable but has no insurance

When is an insurance company NOT required to advise an insured of possible eligibility for the Iowa Automobile Insurance Plan?

When the policy is cancelled due to nonpayment of premium

The Commissioner may examine an insurer's records

Whenever necessary in order to enforce insurance laws and regulations

Which of the following exclusions applies to both personal injury and advertising injury in the businessowners policy?

Willful violation of a penal statute or ordinance committed by the insured

Personal business property out in the open is covered under commercial property policy only while

Within 100 feet of the described premises

Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for those reports?

Within 30 days after the end of each month

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT

Workers compensation coverage

Which of the following types of insurance would be covered under the Terrorism Risk Insurance Act (TRIA)?

Workers compensation insurance

Which of the following would NOT be covered by medical payments to others in Section II of your HO policy?

You cut your leg while whacking weeds in your backyard with your neighbor's weed whacker

Which of the following would be considered a covered auto on your personal auto policy?

Your farm wagon being towed by your pickup truck