Texas Exam 21
Section I of the Homeowners forms provides up to ________ when the insured is assessed by a corporation or property owner's association for damage to property owned collectively, but only if it was damaged by a peril insured against under Coverage A of the policy. Answer Choices: Select the Correct Answer $250. $1,500. $500. $1,000.
$1,000.
What is the limit of insurance that applies to "property in transit" under the extensions of coverage on the ISO standard BOP policy? Answer Choices: Select the Correct Answer $1,000 $2,500 $5,000 $10,000
$10,000
The insured carries a personal auto policy providing a bodily injury limit of $50,000 each person with a per accident injury limit of $100,000. He injures two occupants in another vehicle. Their injuries total $60,000 for Mr. Jones and $50,000 for Mrs. Jones. The insurance company spent $40,000 in defense and investigation costs. How much will the insured's policy pay? $50,000 $100,000 $140,000 $110,000
$140,000
Under the standardized Homeowners forms, how much "additional coverage" is provided under Section II - Liability for loss of earnings by the insured to assist the insurer in the investigation or defense of a claim? Answer Choices: Select the Correct Answer $250 per day $200 per day $300 per day $175 per day
$250 per day
The minimum liability amount per occurrence for bodily injury and property damage claims available under the BOP is: $500,000 $1,000,000 $100,000 $300,000
$300,000
Which of the following represents the amount of coverage a Homeowners policy will provide for personal property located in a self-storage facility? Answer Choices: Select the Correct Answer 5% of the Coverage C limit or $5,000, whichever is greater. 10% of the Coverage C limit or $1,000, whichever is smaller. 10% of the Coverage C limit or $1,000, whichever is greater. $1,000.
10% of the Coverage C limit or $1,000, whichever is greater.
All Texas adjusters are required to complete 24 hours of continuing education each reporting period. How many of those hours must cover the subject of "ethics"? Answer Choices: Select the Correct Answer 3 hours 2 hours 1 hour 4 hours
2 hours
If the insured purchases a new aircraft to replace a scheduled aircraft, there is automatic coverage provided the insurance company is notified within ____ days of the purchase and premium payment is made. Answer Choices: Select the Correct Answer 30 45 60 10
30
Businessowners policies provide "Preservation of Property" coverage when property is removed from the premises to protect it from a covered cause of loss. The coverage will apply at other locations for up to: Answer Choices: Select the Correct Answer 60 days 30 days 10 days 20 days
30 days
The BOP has limitations on the square footage in regard to eligible retail and service risks. What is the maximum square footage a building can contain and still be eligible for the policy? Answer Choices: Select the Correct Answer 15,000 square feet 20,000 square feet 35,000 square feet 30,000 square feet
35,000 square feet
If a ship's captain must jettison a disproportionate amount of his policyholder's cargo in order to save the ship, there is a provision in Ocean Marine policies that will spread that lost among all of the insureds involved with the ship. What is this provision called? Answer Choices: Select the Correct Answer Free of Particular Average clause. Cost in Freight clause. General Average clause. Free on Board clause.
A "general average" is a claim that is shared by all the parties involved in the trip because the jettison of the cargo saved the ship from sinking and saved the other cargo.
Coverage would be provided for trees, shrubs, or other plants under the additional coverages of the standard Homeowners policies in which of the following situations? The insured's 16-year-old son accidentally drives over the new shrubs the named insured has just planted along his driveway. An expensive fruit tree that is killed by the insured's dog who repeatedly urinates at the base of the tree. A neighbor, driving his own vehicle, accidentally runs over the insured's holly tree when he runs off his own driveway and into the insured's yard. Shrubs that are ruined because the named insured emptied motor oil into the yard while changing the oil in his car.
A neighbor, driving his own vehicle, accidentally runs over the insured's holly tree when he runs off his own driveway and into the insured's yard
Which of the following would NOT be covered under Coverage B of the Homeowners forms? Answer Choices: Select the Correct Answer A separate building on the insured premises used for business. A building connected to the main dwelling only by a fence. A private garage rented to a non-tenant. An in-ground swimming pool.
A separate building on the insured premises used for business
Lara is moving to Europe for two years in order to take advantage of a promotion at her job. She will not take her 4-seat propeller plane with her. What type of Aviation policy would be best for Lara to purchase for coverage on her plane while it is in storage and she is in Europe? Answer Choices: Select the Correct Answer All Risks - Not in Motion All Risks - Ground and Fight Admitted Aircraft Liability Hangarkeepers Liability
All Risks - Not in Motion
How does surety differ from casualty? Casualty covers legal expenses of the insured and surety does not There are three parties to surety, the principal, obligee and guarantor Casualty covers the named insured and surety covers the obligee in case the principal under the bond defaults All of the responses are correct
All of the responses are correct
An equipment dealers coverage form is designed to provide insurance on: Answer Choices: Select the Correct Answer Equipment owned by the insured dealer. Equipment in the insured's custody for servicing or storage. Equipment entrusted to the insured dealer for sale. All of the responses are correct.
All of the responses are correct.
Under a personal property floater, a loss is covered when it occurs: Answer Choices: Select the Correct Answer Anywhere in the world, except for fine arts. In the United States only. In the United States and Canada only. In the United States, Canada, and Mexico only.
Anywhere in the world, except for fine arts.
The process of bringing a contract dispute before an objective third party for resolution is known as: Litigation. Mediation. Arbitration. Assignment.
Arbitration is the process of bringing a contract dispute before an objective third party for resolution.
The NAIC Unfair Claim Settlement Practices Act is intended to cover all of the following types of insurance claims, EXCEPT: Answer Choices: Select the Correct Answer Health insurance claims. Dwelling and Homeowners insurance claims. Automobile liability claims. Boiler & Machinery (Equipment Breakdown) insurance claims.
Boiler & Machinery (Equipment Breakdown) insurance claims.
All of the following are true of the liability coverage in a Businessowners policy, EXCEPT: Answer Choices: Select the Correct Answer Coverage is provided for products and operations liability. Coverage is provided for both bodily injury and property damage from business operations and premises. Coverage comes with a series of separate aggregate limits. Coverage is provided on a "claims-made" basis.
Coverage is provided on a "claims-made" basis.
Aircraft hull insurance will provide coverage for which of the following? Answer Choices: Select the Correct Answer Damage to or loss of the aircraft hull, fuselage, and personal injury caused. Damage to or loss of the aircraft hull or fuselage. Damage to or loss of the aircraft hull, fuselage, and medical payments. Damage to or loss of the aircraft hull, fuselage, and property damage to others.
Damage to or loss of the aircraft hull or fuselage.
Which of the following is the provision in a liability policy that allows an insured to report incidents or circumstances that result in claims being filed in the future? Defense Within Limits provision. Other Insurance provision. Supplementary Payments provision. Discovery provision.
Discovery provision
Kelly, Vince, Ed, and Ginny are all staff adjusters. Which of these adjusters is acting appropriately as a fiduciary agent? Kelly tries to calm an angry claimant by telling him that she's sure his claim will be covered, even though she has not yet determined the cause of loss. Vince finds additional damage that seems to be related to the claim, but he leaves it off of his estimate because the claimant didn't notice it in the first place. Ed knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy. Ginny investigates the claim and determines the loss is not covered, but writes up her estimate in such a way that it would appear to be covered so she can pay the claimant anyway.
Ed knows the claimant can't possibly afford to pay for their extensive damages, but he denies the claim anyway because the cause of loss was not covered by the policy.
Helena has not paid her insurance premium for a significant amount of time. Which of the following is likely to happen in this scenario? Her policy will be "voided to inception". Her policy will be suspended. Her policy will be voided. Her policy will be cancelled.
Her policy will be cancelled.
A ship has suffered damage and sunk. Which of the following would respond to cover the loss of the ship? Answer Choices: Select the Correct Answer Protection and indemnity coverage Shipper's fees Hull Insurance Cargo coverage
Hull Insurance
The percentage of permanent impairment of the whole body resulting from a compensable injury is called a(n): Answer Choices: Select the Correct Answer Impairment rating. Compensation rating. Impairment percentage. Injury rating.
Impairment rating
Which of the following situations would NOT be considered an unfair claim settlement practice according to the NAIC Model Act? Answer Choices: Select the Correct Answer Settling a claim for an amount that was less than the insurance advertisement given to the insured indicated at the time of the insurance application. Issuing a denial of claim before conducting a reasonable investigation. Binders Keepers Insurance routinely fails to acknowledge pertinent communications regarding claims within the time frame required by state law. Indemnify Insurance pays thousands of claims per year, but on two of those claims they failed to accept or deny the claim within the time frame required by state law.
Indemnify Insurance pays thousands of claims per year, but on two of those claims they failed to accept or deny the claim within the time frame required by state law
Coverage for goods in transit is usually provided by which of the following types of insurance?
Inland Marine
When a state requires that all property policies within the state provide coverage equivalent or greater to the SFP with the EC perils attached, ______________ policies are exempt from this requirement. Dwelling policies. Inland marine. Auto policies. Equipment breakdown policies.
Inland marine
Tort Law applies to all of the following, EXCEPT: Liability arising from the commission of an unintentional tort. Liability arising from negligence. Liability arising from a breach of duty. Liability arising from breach of contract.
Liability arising from breach of contract
Which of the following are the Texas Workers' Compensation benefits that are increased by a cost-of-living adjustment (COLAs)? Answer Choices: Select the Correct Answer Supplemental Income Benefits (SIBs) only. Lifetime Income Benefits (LIBs) only. Lifetime Income Benefits and Supplemental Income Benefits (LIBs and SIBs) only. Impairment Income Benefits (IIBs) and Supplemental Income Benefits (SIBs) only.
Lifetime Income Benefits (LIBs) only.
Manfred's Masonry is covered by a standard workers' compensation policy. One day Manfred is looking through his policy and he sees policy limits listed. He begins to worry that his employee's indemnity benefits will not be paid because of these limits. Which of the following statements is TRUE about Manfred's worries? Manfred should not worry, his agent knows how to set the limits in his policy to cover all of the indemnity benefits being paid. Manfred must be mistaken because there are no limits of liability listed anywhere on a standard NCCI workers' compensation policy. Manfred's worries are understandable if the indemnity benefits being paid to his injured employees is higher than the limits expressed in the policy. Manfred's worries are unfounded because the only liability limits shown in a workers' compensation policy are for Part Two - Employers' Liability.
Manfred's worries are unfounded because the only liability limits shown in a workers' compensation policy are for Part Two - Employers' Liability
Which of the following would be considered "economic losses" that could result in compensatory damages being awarded in a negligence case? Answer Choices: Select the Correct Answer Disfigurement. Loss of consortium. Pain and suffering. Medical expense and lost wages.
Medical expense and lost wages.
A covered loss has damaged the property belonging to the owner. Property belonging to a customer is also damaged. The customer brings suit against the insured for this damage. The insurer may do which of the following? Pay the defense costs incurred in the suit against the insured Negotiate the settlement of the property of others directly with the owners of that property Negotiate the settlement of the property of others directly with the owners of that property and pay the defense costs incurred in the suit against the insured Only pay the expense cost and not negotiate a settlement
Negotiate the settlement of the property of others directly with the owners of that property and pay the defense costs incurred in the suit against the insured
The insurance company does not pay for certain damaged property under an Equipment Breakdown policy. Identify the property. Property of others Property of the insured Obsolete property Building damage caused by a steam boiler explosion
Obsolete property
An alien insurance company is: One formed in Great Britian. One formed in Florida. One formed New York. One formed in Chicago and Atlanta.
One formed in Great Britian.
Teri is a Texas adjuster who has had her license suspended by the Commissioner. What is the maximum length of time Teri's license can be suspended according to the Texas insurance code? Answer Choices: Select the Correct Answer Six months. One year. Nine months. Three months.
One year.
The Part A - Liability section of the Personal Auto policy will cover all of the following, EXCEPT: Answer Choices: Select the Correct Answer Only damages caused by those who are considered "insureds" under the policy. Only damages that the insured is legally liable to pay. Only the damages to the insured's automobile in the accident. Only damages for bodily injury and property damage that result from an automobile accident.
Only the damages to the insured's automobile in the accident
Which insuring agreement of the Personal Auto policy would provide coverage for the damage caused to the other driver's car, when the insured was at fault in an accident? Answer Choices: Select the Correct Answer Part D - Physical Damage Part B - Medical Payments Part A - Liability Part C - Uninsured Motorists
Part A - Liability
The part of a standard workers' compensation policy that contains the cancellation procedures is: Answer Choices: Select the Correct Answer Part One - Workers Compensation Part Two - Employers Liability Part Five - Premium Part Six - Conditions
Part Six - Conditions.
Which of the following coverage parts would be eligible for inclusion in a Commercial Package policy? Answer Choices: Select the Correct Answer Businessowners coverage. Professional liability coverage. Workers' compensation coverage. Directors & Officers (D&O) liability coverage.
Professional liability coverage.
Private, unincorporated mutual insurers that consist of associations that agree to equally share risks among its members are known as: Captive insurers. Risk retention groups. Fraternal benefit societies. Reciprocal exchanges.
Reciprocal exchanges
Which of the following statements is true regarding a stock insurance company? Stock companies are owned by their policyholders. Stock companies pay a portion of their earnings to their policyholders as dividends. Stock companies pay a portion of their earnings to their stockholders as dividends. Stock companies permit their policyholders to elect their Board of Directors.
Stock companies pay a portion of their earnings to their stockholders as dividends.
Gena purchased a policy to cover her home. Recently, she has been conducting business from the home and has hired several employees. She also has several clients per day coming to the home for business purposes. When Gena's insurer finds out about the additional exposures she has introduced into her home, they decide to take action. Which of the following actions is Gena's insurer most likely going to take? Answer Choices: Select the Correct Answer Void her policy back to the date in which she started the business. Cancel her policy immediately. Suspend her policy until she moves the business out of her home. Void her policy to inception.
Suspend her policy until she moves the business out of her home
In order to proceed with subrogation, the insurance company generally:
Takes a subrogation assignment from the insured
Which of the following policy provisions or clauses is designed to prevent the violation of the principle of indemnity? Answer Choices: Select the Correct Answer The "Other Insurance" provision. The "Liberalization" clause. The "Coinsurance" clause. The "Subrogation" clause.
The "Other Insurance" provision.
An unendorsed ISO standard Businessowners policy would provide which of the following property coverages? Answer Choices: Select the Correct Answer Named peril coverage Broad form perils Open peril coverage Limited broad peril coverage
The BOP forms provides "open peril" coverage on the property. There is an endorsement that is used to convert the coverage to "named peril" coverage, if more restrictive coverage is desired. Therefore, an unendorsed BOP provides "open peril" coverage
Which of the following statements is TRUE concerning the Businessowners policy? Answer Choices: Select the Correct Answer The BOP is a type of package policy that prepackages a group of coverage desirable to small businesses. The BOP permits insureds to select the coverage parts to be included in the policy. The BOP provides coverage only for the real and business personal property of insureds. The BOP provides coverage for medium- to large-sized businesses.
The BOP is a type of package policy that prepackages a group of coverage desirable to small businesses
Which "conditions" form in a complete Commercial Property policy specifies how a disagreement on the value of damaged property is handled? Answer Choices: Select the Correct Answer The Building and Personal Property Conditions form. The Commercial Property Conditions form. The Common Conditions form. The Additional Conditions form.
The Building and Personal Property Conditions form
Each of the following is true about Homeowners Coverage C - Personal Property coverage, EXCEPT: The HO-8 does not include coverage for personal property. Personal property of a guest may be covered. The full limit applies to personal property anywhere in the world. Special limits of liability apply to some types of personal property.
The HO-8 does not include coverage for personal property
The insured owns a 50 HP fishing boat covered under a Personal Watercraft policy for hull coverage. He also carries a Homeowners policy. He ties his boat to a tree and goes ashore to camp for the night. The next morning he discovers that his boat is stolen. Which policy would pay the claim? Answer Choices: Select the Correct Answer The Homeowners policy. The Personal Watercraft policy. Both policies would pay the claim on a pro-rata basis. Neither policy would pay because both policies exclude the peril of theft.
The Personal Watercraft policy.
Under the Equipment Breakdown Protection form that covers boilers and machinery, what is considered to be one loss event? Answer Choices: Select the Correct Answer The initial breakdown that causes other breakdowns. A boiler that explodes in a building adjacent to the insured's building that causes a loss to the insured. No more than three separate losses that occur during a 7-day period. When expediting expenses are paid to the insured.
The initial breakdown that causes other breakdowns.
What is required in order for seasonal increase coverage to apply under the BOP? Answer Choices: Select the Correct Answer The insured must purchase the coverage by endorsement. The limit of insurance must be at least equal 100% of the average personal property values for the previous 12 months. Submit average inventory values for the previous three years. The BOP does not provide automatic seasonal increase in coverage.
The limit of insurance must be at least equal 100% of the average personal property values for the previous 12 months..
When a loss occurs and coverage is provided by a reciprocal exchange, which of the following is responsible to cover the loss? The "name". The reinsurer. The member insurers. The attorney-in-fact.
The member insurers.
Which of the following is TRUE regarding deductibles that pertain to Part D of the standardized Personal Automobile policy? The deductible amount scheduled on the policy for Part D - Collision is $250 and for Part D - Other Than Collision is $500. Any adjustment to these amounts must be made by endorsement. A deductible of $250 is standard for Part D and applies to both the "Collision" or "Other Than Collision" coverage. A single deductible amount, chosen by the insured, applies to both the "Collision" coverage and the "Other Than Collision" coverage. There are separate deductible amounts, chosen by the insured, for the "Collision" coverage and the "Other Than Collision" coverage.
There are separate deductible amounts, chosen by the insured, for the "Collision" coverage and the "Other Than Collision" coverage
Which of the following best describes the reason for using various work classifications in the calculation of workers' compensation premiums? To prevent discrimination by employers. To assure a proper profit margin for insurers. To accurately reflect the risks of each employer. To encourage safety in the workplace.
To accurately reflect the risks of each employer.
All of the following are types of misrepresentation, EXCEPT: Answer Choices: Select the Correct Answer Twisting. Churning. Turning. Sliding.
Turning
Requiring a claimant to travel a long distance to have his or her automobile repaired violates which of the following standards for prompt investigations and fair and equitable settlements? Answer Choices: Select the Correct Answer Unreasonable Travel Avoidance of Payment Notice of Applicable Time Limitations Denial of Claims
Unreasonable Travel
Which of the following terms means "liability through another person"? Strict/Absolute liability. Vicarious/Imputed liability. Gross liability. Intentional tort.
Vicarious/Imputed liability.
All of the following are excluded under the Commercial Building and Personal Property form, EXCEPT: A watch dog Truck Furniture and fixtures Petty cash and IOU's
furniture and fixtures
On an unendorsed special form BOP, how much coverage is there for theft of money & securities? $5000 on the premises only $5000 on the premises but only $2500 off $1000 on and off the premises Nothing
nothing
The NAIC Model Legislation governing the settling of insurance claims was created: To provide insureds with a step-by-step process to submit claims to their insurer. To set forth standards for foreign an alien insurers to follow when conducting business outside of their state/country of domicile. To set forth standards for the investigation and disposition of claims arising under policies or certificates of insurance. To provide mandatory federal legislation that all insurers conducting business in the United States must follow, regardless of the state in which they are domiciled.
To set forth standards for the investigation and disposition of claims arising under policies or certificates of insurance
The insured has sustained a loss of income from a covered peril under his Businessowners policy. What deductible applies to "loss of income" coverage? A "time deductible" of 72-hours. The same deductible that applies to the building or contents coverage. A $500 deductible. No deductible.
A "time deductible" of 72-hours
What type of coverage would a heating and cooling contractor need when work has been done on a newly renovated building but not yet accepted by the owner? Answer Choices: Select the Correct Answer An Installation Floater A Builder's Risk Policy A Bailee Form of Coverage A Transportation Floater
An Installation Floater
A common carrier is not held liable for the loss of a shipper's goods when the loss results from: Answer Choices: Select the Correct Answer Negligence of the carrier. An act of God. Collapse of a bridge. An insured peril.
An act of God.
In the event of a loss under a personal auto policy, an insured is required to submit to the insurance company all of the following information, EXCEPT: Answer Choices: Select the Correct Answer An appraisal of the damaged property. A list of any known witnesses. A notice of claim. Proof of loss statement if requested.
An appraisal of the damaged property.
Which of the following is true about "open peril" coverage? It provides coverage for all perils, unless that peril is specifically excluded. It provides coverage for scheduled risks. It provides coverage for the named perils. It does not exclude any perils from coverage.
It provides coverage for all perils, unless that peril is specifically excluded.
James Jackson is a Texas adjuster whose license has been suspended. Which of the following statements is true regarding the reinstatement of the license? Answer Choices: Select the Correct Answer Once a Texas adjuster license has been suspended, reinstatement cannot be requested for 3 years. Reinstatement may be requested after the required one-year waiting period. Reinstatement may be requested after the books and records of the adjuster have been fully examined and the adjuster re-takes the state licensing exam and applies for a new license. The license will not be reinstated until the cause of the suspension no longer exists.
The license will not be reinstated until the cause of the suspension no longer exists
All of the following are duties that a Texas insurer must perform within 15 days after receipt of the claim, EXCEPT: Answer Choices: Select the Correct Answer Acknowledge receipt of the claim. Commence an investigation of the claim. Request from the claimant all items, statements, and forms that the insurer reasonably believes, at the time, will be required from the claimant. Schedule a hearing to dispute the claim, if necessary.
schedule a hearing to dispute the claim, if necessary.
Which of the following statements is TRUE concerning the Part D coverage of a standardized Personal Auto policy? Can be endorsed to settle on a replacement cost basis. It can cover owned and nonowned automobiles. Applies only when the insured is "at-fault" in an accident. Excludes physical damage coverage to cars over 10 years old.
It can cover owned and nonowned automobiles.
Which of the following statements is TRUE regarding the DP-3 special form? Answer Choices: Select the Correct Answer It provides open peril coverage on the structure and named peril coverage on the personal property. It provides named peril coverage on both the structure and the personal property. It provides named peril coverage on the structure and open peril coverage on the personal property. It provides open peril coverage on both the structure and contents.
It provides open peril coverage on the structure and named peril coverage on the personal property.
A business has its building covered under a standardized Commercial Property policy (Policy A). The business has the same building covered under a separate policy that is written under different terms than the standardized policy (Policy B). When there is a covered loss to the building, which of the following statements indicates how the "other insurance" condition of Policy A will require that the loss be settled? Answer Choices: Select the Correct Answer Both policies will settle using the "contribution by equal shares" method. Policy B will be primary and Policy A will be excess. Both policies will pay their "pro-rata share" of the loss. Policy A will be primary and Policy B will be excess.
Policy B will be primary and Policy A will be excess. The "other insurance" clause (two or more insurers) of a standardized Commercial Property policy states that if there is other insurance on the loss that is written with differences in the plan, coverage, conditions or provisions, that other policy becomes primary. Therefore, the correct answer in the scenario provided in the question would be: "Policy B would pay first (primary) and Policy A would pay the remainder (excess) up to the policy limit. If you do not remember how "primary" versus "excess" insurance works, please review again in the Insurance Fundamentals chapter of the course.
The insured sets a fire to his home and is found to be guilty of arson. There is a lien on the burned property by a mortgage company in the amount of $150,000. The property is insured for $300,000 and is a total loss. The personal property of the insured, covered separately by a Homeowners policy for $150,000, is also a total loss. How will this claim most likely be paid? Answer Choices: Select the Correct Answer The insured is paid a total of $300,000. The mortgagee is paid $150,000. The insured is paid $150,000 for the personal property loss. Since the loss is from an intentional act of the insured the entire loss is denied.
The mortgagee is paid $150,000
Underinsured motorist coverage provides first-party protection to an insured after an accident in which of the following situations? The other driver has insufficient liability limits and is "at-fault". The other driver has no insurance and is "at-fault". The other driver has no insurance but is not "at-fault". The insured driver has insufficient liability limits and is "at-fault".
The other driver has insufficient liability limits and is "at-fault".
An employer's workers' compensation policy will pay the medical expenses of injured workers: Answer Choices: Select the Correct Answer For as long as the injured worker seeks treatment that is related to the injury. Until maximum medical recovery is reached. For the number of days after the injury that is required by state law. Until the policy limit of liability per injured worker, is reached.
Until maximum medical recovery is reached.
The "Part B - Medical Payments" section of the standard Watercraft or Boatowners policy covers all necessary medical expenses if they are claimed: Answer Choices: Select the Correct Answer Within 7 years following a covered accident. Within 30 days of a covered accident. Within 6 months of the covered accident. Within 3 years following a covered accident.
Within 3 years following a covered accident.
How is property covered under an unendorsed Businessowners policy form? Coverage is written on a named peril basis. Coverage is written on a broad peril form. Coverage is written on an open peril basis. Coverage is written on a basic peril basis.
Coverage is written on an open peril basis
Sam's home is located in a rural area and is covered by a standardized DP-2 Dwelling form with a $500 deductible form attached. He experiences a fire at his home and has to call the local volunteer fire department to extinguish the fire. He receives a bill from the fire department in the amount of $800. How much of the bill will Sam's DP-2 form cover? Answer Choices: Select the Correct Answer $0. $300. $500. $800.
The policy will provide $500 to pay for fire department charges incurred when the fire department is called to save or protect covered property from a peril insured against. This coverage is additional insurance and no deductible applies.
Under "Coverage A - Building" of the BOP form, which of the following is NOT covered? Answer Choices: Select the Correct Answer Completed additions, and additions under construction All permanently installed fixtures, machinery and equipment Outdoor fixtures Valuable papers and records
Valuable papers and records
A family takes their 50 horsepower power boat to the lake on a trailer towed behind their personal auto. The pleasure boat is adequately covered under which of the following policies? Watercraft. Dwelling. Homeowners. Automobile.
Watercraft.
If Commercial Property coverage is written on the Building and Personal Property coverage form and a loss occurs, the insured must furnish a signed statement of loss within: Answer Choices: Select the Correct Answer 60 days after the request of the insurer. 30 days after the request of the insurer. 45 days after the request of the insurer. 75 days after the request of the insurer.
60 days after the request of the insurer
All of the following would be considered an "insured" on a Homeowners policy, EXCEPT: Answer Choices: Select the Correct Answer All residents who are related to the named insured. A trust. A non-related tenant living in the insured residence. A non-related minor being cared for by the named insured's family.
A non-related tenant living in the insured residence
Accounts receivable insurance will not pay: Answer Choices: Select the Correct Answer Customer's unpaid balances made uncollectible by the insured's loss of account records. The cost of reconstructing the insured's lost or damaged account records. Amounts owned to the insured but left uncollected because of billing errors. Excess collection costs due to the destruction of account records.
Amounts owned to the insured but left uncollected because of billing errors.
Which of the following refers to "any individual or organization, or an attorney or individual authorized to act on their behalf, who asserts a right of recovery under an insurance policy or surety bond through administrative means"? Answer Choices: Select the Correct Answer Insured. Plaintiff. Claimant. Defendant.
Claimant
As a condition to gain entrance into Louisiana to conduct insurance business, a Texas domestic insurer makes a deposit with the Texas Comptroller. The amount of the deposit is sufficient to satisfy the Louisiana Department that the insurer can cover the claims submitted by the insureds in Louisiana. Who has jurisdiction to collect taxes on the interest earned on this deposit? Answer Choices: Select the Correct Answer The state of Louisiana. The state of Texas. The county and municipality in Texas where the principal business office of the insurer making the deposit is fixed by the insurer's charter. The interest will only be subject to federal taxes.
The county and municipality in Texas where the principal business office of the insurer making the deposit is fixed by the insurer's charter..
Which of the following is generally intended to cover property that moves from one location to another? Answer Choices: Select the Correct Answer Floaters Endorsements Riders Binders
Floaters
Pete is covered under a Personal Auto policy with Indemnify Insurance when his car is stolen. Six months pass, Pete's car is never found and the policy period with Indemnify expires. Pete decides to purchase another Personal Auto policy with Fiduciary Insurance, Inc. Pete is covered under the policy with Fiduciary for about three months, when his stolen automobile is found with only minor physical damage. How will this claim be handled? Answer Choices: Select the Correct Answer Indemnify and Fiduciary will split the claim according to their percentage of liability. Indemnify Insurance will pay the claim. Fiduciary Insurance will pay the claim. The claim will not be covered.
Indemnify Insurance will pay the claim.
Jim Johnson has an automobile policy with a combined single limit of $50,000. He is involved in an accident where he is at-fault and incurs the following expenses: $30,000 bodily injury judgment; $30,000 property damage judgment; $5,000 damage to traffic light; $6,000 attorney's fees for his defense; $300 in premiums for appeal bond; and $75 in bail bond premiums for related traffic violations. What is the maximum amount his insurance company will pay? $50,000 $56,375 $65,000 $71,375
$56,375
Which of the following injury or damage falls within the products-completed operations hazard as defined in a commercial umbrella liability policy? Answer Choices: Select the Correct Answer A spot remover company hired sales representatives across the country to visit potential customers' homes and demonstrate its product. The company received hundreds of claims from people who said the carpets in their homes were reunited because, during the demonstration, the spot remover ate large holes in the carpet. A home hair preparation was advertised to "curl hair" within two hours." Many people used the product and their hair fell out. A building being constructed by a contractor falls and causes bodily injury. A contractor is blasting and a rock is thrown and a vehicle is damaged.
A home hair preparation was advertised to "curl hair" within two hours." Many people used the product and their hair fell out.
People applying for an adjuster license must demonstrate that they are trustworthy and competent. Which of the following is the method most often utilized to demonstrate competence? Answer Choices: Select the Correct Answer By reaching the age of 21, as reaching the age of 18 is not considered to be "adulthood" by most Insurance Departments. By reaching the age of 18, proving that competent adulthood has been attained. By passing the prescribed state licensing examination. By receiving a high school diploma or GED equivalent.
By passing the prescribed state licensing examination.
All of the following items have a built in limit (maximum) of coverage if the cause of loss is theft, EXCEPT: Answer Choices: Select the Correct Answer Patterns Furs Jewelry Computers
Computers
An insured suffers a partial fire loss to his residence. Under an HO-3 policy what insuring agreement is available to pay for temporary, alternate living quarters? Answer Choices: Select the Correct Answer Coverage A Coverage C Coverage D Coverage B
Coverage D.
Coverages L & M of the Personal Liability Supplement are virtually identical to: Answer Choices: Select the Correct Answer The coverages excluded under a Homeowners policy. Coverages C & D of the Homeowners policy. Coverages E & F of the Homeowners policy. No other liability coverage issued under any personal lines policy.
Coverages E & F of the Homeowners policy
Which of the following is used to bring a standardized insurance form into compliance with state laws? Answer Choices: Select the Correct Answer Reinsurance. State-specific underwriting. Endorsements. Executory contracts.
Endorsements
Angie has suffered an automobile physical damage loss. All of the following are the insured's duties after a loss under Angie's Personal Automobile policy, EXCEPT: Take reasonable steps after the loss to protect the property from further damage. Promptly notify the police if the vehicle is stolen. Allow the insurer to inspect and appraise the damaged property. Facilitate the repairs to the vehicle and submit the invoice to the insurer.
Facilitate the repairs to the vehicle and submit the invoice to the insurer.
What type of bond might an executor of an estate be required to purchase? Cost bond Completion bond Fiduciary bond Performance bond
Fiduciary bond i
Which of the following "additional coverages" of the Building and Personal Property Coverage form is paid without the application of the policy deductible? Answer Choices: Select the Correct Answer Electronic Data. Increased Cost of Construction. Debris Removal. Fire Department Service Charge.
Fire Department Service Charge.
Torts that can be covered by insurance policies include all of the following, EXCEPT: Answer Choices: Select the Correct Answer Intentional torts committed with intent, but the results of the act had unintended consequences that caused harm to another. A negligent tort in which a failure to act, caused harm to another. Vicarious liability due to an employee causing harm to another and the negligence is imputed to the employer. Intentional torts purposely committed to cause harm to another
Intentional torts purposely committed to cause harm to another.
