ALL INSURANCE
Which loss listed below would be fully covered by a homeowners policy?
$2,000 silver tea set stolen
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
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
A business owner whose inventory changes significantly throughout the year should consider having enough written on what type of form?
Reporting form
What is not an Insurance agent responsibility?
Represent the client
Which of the following kind of property would be covered under a dwelling policy
Rowboats
What clause in insurance policies allows the insured to sell the damage property to recover part of the paid loss
Salvage
A neighbor's tree has fallen into the insured's. The insured's homeowners policy will NOT pay to remove the tree if
The tree is blocking the driveway.
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
If an insurance company sends e-mail solicitations to potential customers, and if a customer chooses to opt out of the list, then how much time will the company have to remove the person from solicitation lists
10 days
An insured falsely reports the theft of a valuable item in order to collect payment from the insurance policy. This is an example of
Fraud
If a producer changes his or her residential address, the director must be notified of the change
30
How long is the waiting period after the application has been accepted before flood coverage goes into effect?
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
if a property and casualty producer has less than 2 years left on his or her existing license, what percentage of the surplus lines broker license fee will the producer be charged for the addition of that license
50%
Monthly premium payment plans must be made available on policies that insure up to
6 vehicles
Vandalism and malicious mischief would be covered if the insured;s premises have been vacant for no more than how many days?
60 Days
How many days must an insurance policy be in effect before an insurer can cancel or nonrenew the policy?
60 days
what is the grace period for payment of premium on an automobile policy
7 days
When insurance coverage is written on an actual cash value bases, losses paid or for the replacement cost minus what?
Depreciation
The commercial property declarations page contains which of the following information?
Description of the property insured
An insurance policy or countersignature endorsement must be signed by any of the following Except
Director of insurance
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
The loss ratio compares what?
Premium income to losses
What is not an example of rest retention?
Premiums
The garage coverage form is used to insure
auto businesses, such as auto dealers, service stations and auto repair shops
f an insurer makes a change to broaden coverage in newly issued dwelling policy while it is in effect, the changes will apply
automatically
What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?
Experience modification factor
Which of the following is a unit of measurement and underwriting uses when determining the premium rates for insurance
Exposure
What is the authority that an agent can hold?
Express and implied
The authority granted to an agent through the agent contract is referred to as
Express authority
What type of reinsurance arrangement is negotiated on a case-by-case basis?
Facultative
A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy?
Lost revenues from the restaurant
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.
which of the following would be covered under the broad form (dp-2) policy's falling object peril?
interior building damage if the exterior was damaged first
Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services?
Physicians, surgeons, and dentists malpractice
Which of the following statements is INCORRECT with regard to surplus lines insurance?
Policies written by a surplus lines insurer typically contain standard coverages and forms
Which of the following would be covered by the broad theft endorsement on a dwelling policy
A camera the insured has with him on vacation
Which of the following losses would NOT be covered by the homeowners policy?
A coin collection valued at $500 lost in fire
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 policies will help an auto dealership cover most of its liability exposures?
A garage liability coverage
All of the following would be eligible for coverage under the dwelling policy EXCEPT
A house that has 5 families living within it.
A person who is not named as an insured 08 declaration page of a policy but is protected by the policy is known as the
Additional insured
Which of the following coverages is not included in the basic form dwelling policy
Additional living expense
According to the law of agency, a principal is represented by an
Agent
provided the reasoning isn't for a nonpayment of premium, how many days of notice must an insured be provided if their automobile insurance policy is being canceled
10 days
In dwelling policies, automatic increase in insurance is
Coverage by endorsement
How many days after initial pretrial hearing date does an insurance producer have to report any criminal prosecution to the director
30
Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation?
Attachment bond
Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something?
Injunction bonds
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
the federal fair credit reporting act
Regulates consumer reports
All of the following are factors in rating workers compensation insurance EXCEPT
Sales.
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
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.
What are the examples of risk retention?
Deductibles, copayments, and self insurance
What is the deductible of a personal liability umbrella policy called?
The SIR
An insured owns a large dog. The first day he has to leave the dog home alone to go to work, the insured comes back to find his $400 couch torn apart, his $100 coffee table chewed up, his $50 window curtain shredded, and a $200 window pane shattered where his dog jumped through. The insured has personal property coverage under a special form of dwelling policy. How much of this loss will the policy cover?
$0
Workers compensation rating is developed by applying a rating bureau job classification rate to each
$100 of payroll
Bobs home is insured for $100,000 under a dwelling policy. Yesterday his home suffered a $20,000 damage from a fire. Today the home was struck by lightning starting another fire that completely destroyed the structure. Bob's policy will pay
$100,000
The broad theft coverage endorsement on the dwelling form specifies all of the following limitations except
$1000 on silverware
according to the motor vehicle financial responsibility law motor vehicle policies must have a minimum of limit of liability on bodily injury or death of 1 person of
$15,000
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
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
A premium discount is the term that describes when an insured owes a total standard premium greater than
$5,000.
How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?
$500
All of the following are special personal property limits under a homeowners policy EXCEPT
$500 for business personal property on the insured premises
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
She bought new furniture cost $9000. Last week there was a fire that damage the furniture. Replacement cost us $10,500. The adjuster told the insured her insurance depreciated $2500, if the insurance is written on an actual cash value basis how much will it pay for the loss
$8000. Actual cash value basis = losses paid for the replacement cost - depreciation
Under businessowners policy Section I, if an insurer wants to nonrenew a policy, 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.
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
What is the minimum age for obtaining an insurance producer's license in this state
18
A temporary license typically last for how many days in AZ
180
Coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by accident if the expenses are incurred and reported to the insurer within how many years of the accident date?
3 years
Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within
3 years
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
The removal coverage that is 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 conditions of the dwelling policy, within how many days does an insurer have to pay for a loads once a proof of loss form has been receive and an agreement wit the insured as to the amount payable has been reached
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 dyas
A licensed producer is granted an inactive license during military service. He is in active duty for 365 days. For how long will the time period for submission of the license renewal fee be extended
365 days
Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is
A mutual insurer
A tornado that the stories property would be an example of?
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
which of the following would not be accepted as a document showing that an applicant for a license
A social security card
In the event of a loss covered by the policy, if the insurer request a sign sworn proof of loss, the name insured is required to submit within
A specified time
A business income coverage form would cover all of the following situations EXCEPT
A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.
Which of the following would NOT be accepted as a document showing that an applicant for a license is in the United States legally
A valid credit card with a major United States credit company
An uninsured motor vehicle includes all of the following EXCEPT
A vehicle being used for public livery.
An employer that qualifies for a self-insured workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called
Aggregate excess coverage.
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.
What is not an example of an agent acting ethically ?
Always representing the insured
What is reinsurance?
An agreement between a ceding insurer and assuming 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
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
All of the following are instances of fraud except
An insurer charing policyholder information
Employers liability insurance, Part Two of a standard WC&EL policy form, excludes
An intentional act that is caused by the insured.
What is a foreign insurer?
And insurer with a home office in another state
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
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
The 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 a loss occurs, the insured with a homeowners policy is required to do the following EXCEPT
Arrange for an appraisal by an unbiased third party.
Which bonds are issued to secure the release of a person from jail pending a courtroom appearance?
Bail bonds
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.
What type of bond guarantees that a construction contractor will enter into a contract at a set price?
Bid bond
under farm liability coverage h includes
Bodily injury
Farm fences (except field and pasture fences) are covered by which farm coverage form?
Coverage G
Which of the following would NOT be considered an exception to the National Do Not Call List?
Calls based from outside of the United States
An Insurance producer who buy contract is bound to write insurance for only one company or group of companies is classified as
Captive agent
What is owned by a corporation to serve that organization's needs at lower rates than would otherwise be available with commercial insurance?
Captive insurer
What is issued by the state department of insurance to show that the insurer has power through right insurance contracts in that state?
Certificate of authority
Which of the following best describes liberalization clause in a policy?
Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium.
An insured 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 coverages will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damage caused by an occurrence to which the coverage applies?
Coverage E- Personal liability
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the
Company
Workers compensation laws provide all of the following types of benefits EXCEPT
Compensatory benefits.
And Apple can't knowingly fails to communicate information that would help an underwriter makes a sound decision regarding coverage. This is an example of
Concealment
The part of the policy that sets forth the rules of conduct duties and obligations of the parties is called the
Conditions
Which of the following risks are eligible for coverage under a businessowners policy (BOP)?
Condominiums
A startup used car dealership buys cars at an auto auction in 30 states. It wants to be certain that damage coverage is provided when the cars are driven or transported from the auctions to the dealership. In regard to the business auto physical damage coverage, which is true?
Coverage is provided at an additional premium
what type of insurance can be obtained through a surplus lines insurer
Coverage that is unavailable through authorized insurers
A unique feature in a bailee form is that it covers
Customers' property whether or not the insured has been negligent.
Which dwelling coverage forms would pay for the replacement cost of a dwelling?
DP-2 (Broad) and DP-3 (Special)
Which of the following is a mandatory part of an insurance policy that varies with each individual policy
Declaration
When twin brothers applied for life insurance from company A
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.
States with monopolistic state workers compensation funds
Do not allow private insurers to be licensed to write workers compensation coverage
Which of the following dwelling policies insures a structure on an actual cash value basis?
Dp-1
Employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to Jane when she drives someone else's car for her personal use?
Drive other car coverage
which of the following is true the difference in conditions policies
Each DIC policy is an individually
All of the following are other coverages under the dwelling policy EXCEPT
Earth movement
Which federal act provides benefits to injured civilians who are employed by the federal government?
Federal Employees Compensation Act
Which for the following claims would be included under the dwelling policy?
Fire damage to the insured's rowboat located in the attached garage
A basic dwelling policy automatically provides coverage against what?
Fire, lightning, and internal explosion
What is the maximum number of roomer or boarders for properties insured under the dwelling policy
Five
What is defined as the cost to replace damage property with less expensive and more modern construction or equipment?
Functional replacement cost
Which of the following coverages would provide protection for the liability of an auto repair garage to owners of vehicles destroyed in the garage by fire?
Garagekeepers
An Owner of a parking lot wants coverage for her liability for damage to vehicles left in her custody. She needs
Garagekeepers coverage
Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment
HO-4
the homeowners policy form that covers condominium unit owners is
HO-6
When would A misrepresentation on the insurance application to be considered fraud?
If it is intentional and material
What authority is not stated in an agent contract but is required for the agent to conduct business?
Implied
Chords will interpret any ambiguity in an insurance contract in favor of who
In favor of The insured
What is the correct formula for computing and loss ratio
Incurred losses + lost adjusting expense/earned premium
The pro rata liability clause is designed to protect the policy of
Indemnity
which of the following is not subject to workers compensation laws
Independent contractors
What do individuals use to transfer the risk of loss to a larger group?
Insurance
What statement regarding insurable risk is not correct?
Insureds cannot be randomly selected
When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the
Insurer
All of the following conditions are commonly found in the insurance policy except
Insuring agreement
What is not conditions commonly found in the insurance policy
Insuring agreement
Which of the following would NOT be covered by HO liability insurance?
Intentional tort
Which of the following additional perils is covered under both the basic form and broad form dwelling policies?
Internal explosion
The insurer may suspect that a moral hazard exists if the policyholder
Is not honest about his health on an application for insurance
Which of the following is not a limitation under the Mexico Coverage endorsement in personal auto policies
It covers lawsuits brought by either U.S or Mexican citizens
When is liability coverage included in a homeowners policy
It is included automatically
In a dwelling policy, which of the following is true regarding personal liability coverage?
It must be added as a supplement or written as a separate policy
An insurance producer fails to obtain automobile insurance for client after agreeing to do so. The client is involved in an automobile accident after running a red light and is found to be at fault. The damage to the other vehicle totals $5,000. Which statement regarding the producer's errors and omissions liability policy is true?
It will provide coverage because the damage to the client resulted from the producer's negligence
Crews of Ships are covered by the
Jones Act
Under the dwelling policy, Coverage C - Personal Property is
Limited to covering a servant's property while at the insured location.
And insurance organization does not issue insurance policies that provides a meeting place for underwriters to conduct business is known as a
Lloyds association
Insurance is a contract by which one seeks to protect another from
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 NOT a duty of the employer/insured if an injury occurs at the workplace?
Make voluntary payments for treatment of the worker's injury
Which of the following is not considered a misrepresentation as it pertains to unfair trade practices
Making comparisons between different policies
The type of professional liability coverage a medical doctor needs is
Malpractice coverage.
Rates that are established based on the similarities of the risk with all the risks are known as
Manual rates
Rates that are established based on the similarities of the risk with other risks are known as
Manual rates
All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT
Mental health counseling.
A person who does not lock the doors or does not repair leaks show and in different attitude. This person presents what type of Hazard?
Morale
Which of the following perils is covered by flood insurance?
Mudslide caused by accumulations of water under the ground
Which of the following is a qualification for an adjuster's license
Must be at least 18 years old
Under the Fair Credit Reporting Act, individuals rejected for ins. due to info contained in a consumer report
Must be informed of the source of the report
Which of the following is not a qualification for obtaining a producer's license
Must be retained by a licensed insurance agency
All of the following coverages are included in the BOP standard form without requesting coverage extensions, EXCEPT
Newly acquired or constructed property
To preform work on a customer's car, a mechanic in an auto shop had to put the vehicle on a service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form, which of the following statements is true?
No coverage is applicable
All of the following statements are FALSE regarding garage physical damage coverage EXCEPT
No coverage is provided for any auto stored more than forty five days at a location not shown in the declarations
Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowner forms?
None
When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a
Nonrenewal
The HO-3 homeowners policy provides
Open peril coverage on the dwelling and broad form coverage on personal property
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
Oral statements cannot be considered fraud
Personal auto coverage would pay for damage to a covered auto due to colliding with a deer
Other than collision (comprehensive coverage)
What is the major difference between a stock company and a mutual company?
Ownership
The party to a surety or fidelity bond who promises to fulfill the obligation is the
Principal
Who are the parties to a bond?
Principal - obligee - surety
What statement is an accurate comparison between private and government Insurer
Private insurers may be authorized to transact Insurance by state insurance department
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 a
Product liability claim
What is the most common way to transfer risk?
Purchase insurance
The risk of loss may be classified as
Pure risk and speculative risk
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
Reasonable expectation
What is an Insurance option that would be considered a risk sharing arrangement?
Reciprocal
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.
Installing deadbolt locks on the doors of a home is an example of what method of handling risk?
Reduction
Which of the following persons may be covered under farm Coverage J?
Resident employees
Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information contained in his/her report, the reporting agency must
Respond to the consumer complaint.
Adverse selection is best described as
Risks with higher probability of loss seeking insurance more often than other risks
Adverse selection is a concept best described as
Risks with higher probability of loss seeking insurance more often than other risks.
For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as
Robbery.
What is not a consideration in a policy
The Application given to A prospective insured
Which of the following protected consumers against the circulation or inaccurate or obsolete personal or financial information
The Fair Credit Reporting Act
An insurance agency could purchase an errors and omission insurance policy, which would provide protection in the event of an of the following events EXCEPT
The agency loses commission income from policies that were not issued by the insurer
which of the following is NOT a factor in determining a loss?
The amount negotiated by the insured
Peril is most easily defined as
The cause of loss insured against
A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?
The damage occurred when the concrete fell.
All of the following are characteristics of the dwelling policy EXCEPT
The dwelling must be owner occupied
Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?
The endorsement is available for additional premium.
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
In insurance terms what are components
The factors that determine rates
The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?
The insured person must release the employer and the insurer from further liability.
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible?
The insured will need a written consent of the insurer
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 limits in the event of a claim
Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy?
The insurer may inspect the workplace after giving the insured 5 days' notice.
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.
The most the insurer will pay for a loss under a businessowners policy is
The limit of insurance after the deductible is paid.
If an insurance premium is paid by the policy owner to the agent and the agent fails to remit the premium to the insurer, what will happen?
The policy will not lapse since the payment to the agent is the same as the payment to the insurer
if an insurance policy does not have the proper countersignature
The policy will still be considered valid
A producer could be licensed as a surplus lines producer in which of the following situations
The producer holds a property and casualty license
All of the following are perils covered under the broad form dwelling policy except
Theft
The producer or broker must keep must keep at the place of business the usual and customary records
Three years
what is the purpose of the NFIP
To fill the gap left by the private insurers in the flood coverage
What is not a goal of risk retention?
To minimize the insured's level of liability in the event of a loss
What coverage is necessary to cover a trucking business that swaps trailers with other carriers against loss to the other's trailer while in the borrowing carrier's possession?
Trailer interchange coverage
When an individual purchase Insurance what risk management technique is practicing?
Transfer
When an individual purchases Insurance, what risk management technique is he or she practicing?
Transfer
Shipbuilders and repairers are covered by the
US Longshore and Harbor Workers Compensation Act
The process an insurer uses to evaluate application and determine if a policy should be issue and on what terms, conditions, and rates is known as
Underwriting
The director may require a producer to submit fingerprints in all of the following situation except
Upon insurer insolvency
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
The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured
Will not relieve the insurer of its policy obligations
A business hosted an annual holiday party for employees and customers, after which a customer who had too much to drink was involved in an automobile accident. Occupants of the other car involved in the accident sued the business for serving the customer too much alcohol. Will the businessowners policy provide coverage?
Yes none of the exclusions will APPLY
Which of the following would be considered an illegal inducement to purchase insurance is Arizona
a $50 voucher toward a policyholder's next transaction with an agent
under a businessowners policy, a loss of earnings is subject to
a 12 month time limit for business income.
with respect to the personal auto policy which of the following vehicles could be classified as a non owned auto?
a vehicle that is titled to another person but is being used with permission by an insured
a small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true?
business auto coverage form may apply
Which of the following scenarios would be covered under workers compensation laws
contracting a virus due to an unhealthy work enviroment
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
And insurance company is domiciled in Montana transact Insurance in Wyoming. What term best describes the insurer classification in Wyoming?
foreign
in a personal auto policy Coverage C uninsured motorist defines an insured person as any of the following EXCEPT
injured in an auto accident
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
According to the businessowners policy (BOP) definitions, which of the following does NOT mean valuable papers and records?
securities
All of the following are considered business entities except
sole proprietorships
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 purchased the insurance policy today
Who is covered by an HO-4 policy?
tenants
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
assigned risk plans allow insureds
to procure insurance if the are unable to purchase automobile insurance through ordinary means
A claim is considered to have been made
when the notice of claim is received and recorded by any insured or by the insurer, whichever comes first
In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called
Self-insured retention
a newly licensed producer decided to hold a cookout for friends and family
Soliciting
When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?
Subrogation
which of the following qualifications for selling insurance in the state of arizona is not correct
The applicant must have two letters of recommendation attesting to trustworthiness, reliability, and good reputation
What was created to keep telemarketers from calling consumers who do not wish to be contacted?
National Do Not Call Registry
All of the following are requirements for producer license renewal EXCEPT
Renewal examination
Any person who knowingly attempts to obtain money, goods, or any other thing of value with the intent to cheat and defraud is guilty of
A felony
In a dwelling policy, which of the following other structures would be covered?
Rented to a neighbor for use as a private garage
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
What is not a marketing arrangement use my insurer?
Reinsurance system
A pizza shop has a neon sign attached to it building during a severe thunderstorm the sign is damaged by wind and hail what is the maximum the business and personal policy will pay for the damage to the sign?
$2,500
Tom's Truck service's vehicle is stolen, the policy holder may obtain coverage for transportation expenses subject to which of the following limits?
$20 per day; $600 maximum
What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?
$25
what is the limit for the forgery or alteration coverage in the businessowners policy
$2500
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
provided the reasoning isn't for nonpayment of premium, how many days of notice must an insured be provided if their automobile insurance policy is being canceled
10 days
In dwelling policies, any volcanic activity will be considered part of one occurrence if it all happens within how many hours?
72 hours
In business income additional coverage in a BOP, the waiting period that must occur before the period of restoration may begin is
72 hours.
If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?
8 am
The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss
80%
All of the following would be eligible for coverage on the dwelling policy except
A house that has five residential units
In which of the following situations would the jewelers block extension cover a loss?
A jewelers fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged
An automobile that is owned by nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy of
A joint ownership coverage endorsement is added
Which of the following businessowners policy (BOP) endorsements provides coverage for the inability to collect monies due from customers as the result of a covered cause of loss?
Accounts Receivable
The amount it would currently cost to repair covered property with the new material of like kind and quality minus an allowance for physical deterioration is the definition of
Actual cash value
Which part of an insurance policy covers claims related expenses, reasonable expenses incurred by and insured to protect damage property from further loss or defense expenses
Additional coverage
According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace
At any time.
For any automobile liability policy, authorized insurers must issue
At least 2 identification cards
Replacement cost coverage is provided in both the broad and special form dwelling policies when
At least 80% of the replacement cost
Insurable interest in a property covered in a policy must be proven when?
At time of loss
An Insured business is damage 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
And insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principal has the insurer violated?
Consideration
Representation are written or oral statementsmade by the applicant that are
Considered true to the best of the applicants 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. This driver is
Considered underinsured.
Which dwelling policy coverage will insure a garage not attached to the primary insured dwelling?
Coverage B - Other Structures
Which of the following is the fair rental value coverage in the dwelling policy
Coverage D
An insured's house becomes uninhabitable due to damage by a fire. As a result the insured has to rent an apartment until repairs are made. Which type of coverage under the dwelling policy will pay for the expense of renting the apartment?
Coverage E- additional living expenses
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
What would modify they original insurance contract by either adding or removing coverage
Endorsements
The section of an insurance policy that details what perils are not insured against and what person are not insured is known as the
Exclusion
Which of the following is true of dwelling policy coverage?
Exclusions apply to all three policy forms
The major portion of the premium for an equipment breakdown policy pays
For inspections and examinations.
What entity is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?
Fraternal benefit society
An insured condominium unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase
HO-6
Sergio is injured at work and is covered under the workers compensation. He is to miss 2 months of work. How much will Sergio be compensated
His average monthly wage at the time of injury
John fails to pay the premium on a personal line property policy. John policy can be canceled if
His policy has been in effect for at least 60 days
The policy conditions define
How parties to the contract must act following a loss
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?
Individual named insured
What entities protects call the owners insured and beneficiary under insurance contracts when insurers failed to perform contractual obligations due to financial impairment?
Insurance guaranty association
If an employer in a state with elective workers compensation laws chooses not be to subject to the state's workers compensation laws, what does the employer lose?
Its common law defenses against liability suits
And using an air cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?
Judgment
Using an air cooled engine a proposed insured has developed a new experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?
Judgment
dwelling coverage includes all the following except
Land on which the dwelling is located
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
Extended nonowned coverage endorsement in a PAP broadens what coverages?
Liability and medical payments
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
What is a written or printed untrue statement that damages a person reputation?
Libel
What provision in a propertypolicy applies when the insurer broadens coverage but does not increase the premium
Liberalization clause
An insured stated on her application for life insurance that she never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. What will explain the reason a death benefit claim is denied?
Material misrepresentation
And insured purchased an insurance policy five years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchased the policy?
Mutual
And insured who has recovered for all of his personal property has his TV stolen from the shop of a repair man. The owner of the repair shop filed a claim under the insured policy but it paid nothing to the owner of the store. What provision does the policy have?
No benefit to bailee clause
On participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid
An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive?
Nothing
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
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 the coverage begin under the builders risk form?
On the date construction starts
Under a dwelling policy, which of the following clauses applies if an insured has lost one of two matching silver candlesticks?
Pair or set
A participating insurance policy may do what?
Pay dividends to the policyowner
The causes of loss insured against in an insurance policy are known as
Perils
If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a CGL will defend the suit?
Personal and advertising injury liability
If a person is 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
A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy what will happen to the premium?
Premiums would go down
An insured is no longer required to perform many physical activities so he has implemented a program where he walked and jogged for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet which method of dealing with the rest does this scenario described?
Reduction
George just returned from Europe with a beautiful Swiss watch valued at $10,000. He is concerned that his homeowners policy will not provide enough coverage. His insurance agent suggests that he add which endorsement to adequately cover his watch?
Scheduled personal property endorsement.
Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT
Second injury funds programs.
An insured has a personal property replacement cost endorsement under her homeowners policy. One evening, when the insured comes home from work, she discovers her genuine Monet painting and a Louis XVI chair have been stolen from her home. How will her claim be settled under the personal property replacement cost endorsement?
She will receive nothing
In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the
Situs and status test
Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?
Sole representative
Hazard is best defined as
Something that increases the risk of loss
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
What insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Stock
In the event of a claim under a commercial general liability policy, the insured has all the following duties to the insurer EXCEPT
Submitting to a medical exam when requested.
Which fund is designed to encourage employers to hire employees with pre-existing injuries
Subsequent injury fund
Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?
Symbol 5
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.
How much is the premium for the dwelling under construction endorsement under the dwelling policy?
The average amount of insurance during construction
Surely Insurance Co decides to cancel Mandy's insurance policy for obtaining insurance through fraudulent misrepresentation. The effective date of cancellation is May 1. Mandy receives her notice in the mail on May 12. Which of the following is true?
The cancellation is considered invalid
What is a characteristic of a reciprocal insurance exchange
The chief administrator of the insurer is called an attorney in fact
The insured has violated the contract without the knowledge of the mortgage holder. What will happen after a loss?
The insured cannot collect but the mortgage holder will still be paid
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.
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
Under what circumstances can an insurer cancel a dwelling policy midterm?
The insured knowingly lied about the year the property was constructed
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
Personal property coverage under a homeowners policy would cover
The insured's camera if it is stolen while the insured is on vacation.
Under the limits of insurance provision found in the Physical damage coverage form in a commercial auto policy, how many 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
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
Not all losses are insurable and there are certain requirements that must be met before a risk is a proper subject for insurance, what is not an example of a requirement?
The loss may be intentional
What is not a characteristic of an insurable risk?
The loss must be catastrophic
According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders?
The mortgageholder must petition the state department of insurance for named status.
Who is NOT an insured for liability on a BAP?
The owner of a car the insured borrows
A used car dealer takes a car in trade as partial payment for a car on its car lot. The customer promises to bring in the car's title but does not. Another customer take s the trade-in for a test drive and has an accident. In regard to the dealership's business auto physical damage coverage, which of the following is true?
There is no coverage
What must happen before an insured is eligible for Workers Compensation insurance through the state assigned risk plan
They must be refused coverage by the state Workers Compensation Fund and by 2 or more other insurers
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
All of the following statements are true regarding fire department service coverage under the businessowners policy EXCEPT
This coverage limit pays in place of the limit of insurance shown in the declarations.
A commercial auto coverage form that is designed for insureds engaged in the business of transporting goods for others is a
Truckers coverage form
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract Element does this describe?
Unilateral
What is the business auto coverage territory for
United States and its territories, Canada, or worldwide for private passenger hired autos
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.
When a parent is required to pay for damages caused by his or her children, this is an example of
Vicarious liability
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
under the business auto coverage form, mobile equipment is covered for liability insurance
When being carried or towed by a covered auto
in insurance, and offer is usually made when
When the application is submitted correctly
When would uninsured motorist coverage apply?
When the other party is legally liable but has no insurance
all of the following are other coverages included in both the broad and special form dwelling policy except
theft of personal property
What is the maximum penalty for habitual willful non compliance with the fair credit reporting act?
$2,500
CAN-SPAM legislation requires that any commercial e-mail must contain an opt-out
10 business days
The NFIP emergency program
A) goes into effect after the community has received a flood hazard boundary map and ends when the normal program begins B) Provides limited amounts of coverage at subsidized rates
if any insurer believes an act of fraud is being committed the insurer should
File a report with the director
Which of the following is not a line of authority for an insurance producer may obtain a license
Commercial property
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
The farm liability additional coverage that excludes coverage for borrowed farm equipment is the
Damage to property of others coverage
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
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.
Professional liability coverage protects against legal liability resulting from
Errors and omissions
If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)
Experience rating plan.
circulating deceptive sales material to the public is what type of Unfair Trade Practice
False advertising
The voluntary compensation endorsement provides statutory coverage for which types of employees?
Farmworkers
In farm insurance, Coverage I - Personal and Advertising Injury Liability for suits alleging personal injury is most similar to the coverage found in what coverage form?
General liability
Which of the aviation insurance e coverages can be written to exclude coverage for losses arising from crashes or collisions.
Hull insurance
Bob's neighbor will not stop parking his motorcycle in Bob's rose garden no matter how many times he has been asked to quit parking there. Bob finally gets a court order requiring the neighbor to refrain from parking there. It turns out it was his neighbor's property all along. What bond was Bob required to post guaranteeing his neighbor's damages in this wrongful action will be paid?
Injunction
an individual has started a construction business and plans to specialize in remodeling and wiring residential properties. Because the city where he is
License and permit bond
Which bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits?
License and permit bonds
A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain
License and permit bonds.
A producer who omits a statement which may mislead or deceive the persons addressed has committed
Misrepresentation
When a new insurance company wishes to transact business in the state
Obtain approval of each of its corporate officers and executives
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client.
All are true if a contractor defaults on a performance contract EXCEPT
The surety may cancel the bond so as to avoid having to pay losses and expenses.
insurance institution and producers must provide notice of their information gathering practices to applicants and policyholders no later than
The time the policy is delivered
Which of the following would be included in the farm liability coverage forms?
bodily injury to a residence employee
intentionally misrepresenting or concealing a material fact to induce an insurance company to make a contract is known as
fraud
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
Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due?
payment bond
Section 1 of a boatowners policy covers
physical damage
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as
rebating
A premium payment is due on the saturday before memorial day
tuesday after the due date
Which of the following exposures is insured under coverage 1 personal ad advertising
unintentional acts arising from the operation
