Comprehensive Exams Missed Questions
A manager started receiving anonymous messages threatening damage to the company's facilities unless it changed its hiring practices. The manager chose not to report the threats to the insurer to minimize publicity and dealt the problem privately until the threats escalated to an incident of vandalism that caused significant damage to the company premises. How would the insurer respond to this loss? A The damage would be excluded because the insured did not report the extortionist's demands B The damage would be excluded because no one was kidnapped C The damage would be covered under the extortion endorsement of the company's commercial crime insurance policy D The damage would be excluded because vandalism related to a prior crime is not covered
A
All of the following are true of Protection and Indemnity, except: A It does not cover injuries to sailors from the vessel's lack of seaworthiness B It covers cargo if lost or damaged through negligence C It covers damage to fixed objects D It covers injuries caused by negligence
A
All of the following are true of the Business Auto Coverage Form, except: A Uninsured Motorist Coverage is included in Section II B Medical payments coverage may be added by endorsement C Coverage is primary on owned autos and excess on non-owned autos D Coverage may be written on owned private passenger autos
A
All of the following are true of the extended reporting period, except: A The supplemental extended reporting period must be purchased at the beginning of the policy period B Under the supplemental extended reporting period, the insured must request coverage within 60 days after the end of the policy C Under the mini tail, the insurer must be notified of a claim within 60 days after the end of the policy period D The extended reporting period does not increase the policy limits
A
All of the following statements regarding the Voluntary Compensation endorsement is correct, except: A It exempts employers from state Workers' Compensation law. B The state of employment must be provided C The employees must waive their right to sue and accept coverage under the endorsement D The class of employees to be covered must be provided
A
An agent has authority to do all of the following, except: A Represent the insured's interest B Appoint a solicitor as his or her representative C Countersign insurance contracts D Solicit applications on insurer's behalf
A
An insured should not profit from an insurance transaction. This describes which of the following principles? A The principle of indemnity B The principle of subrogation C The principle of personal aspect D The principle of utmost good faith
A
Coverage D of the Dwelling Policy provides coverage for: A Fair Rental Value B Other Structures C Additional Living Expenses D Trees, Shrubs, and Other Plants
A
Ocean marine hull insurance covers a vessel for: A Physical damage B Seaworthiness C Liability D Cargo damage
A
The Running Down Clause would cover which of the following claims? A Collision damage to another vessel when the insured is liable B Collision damage to the insured vessel when it collides with another vessel C Collision damage to the insured vessel when it collides with a pier or fixed object D Damage to the insured vessel caused by running aground
A
To which injury would CGL Medical Payments apply? A A volunteer worker handing out company coupons during a sale B A company executive who was injured while playing golf in the company golf league C A child injured when he dismantled a company's product and choked on one of the pieces D A tenant of a company's warehouse who cut himself during the manufacturing process of the company's product
A
Which of the following is false about the CGL's two coverage forms? A Coverage under the occurrence form is based on when the loss is reported B Coverage is triggered when an occurrence takes place during the policy period C The claims-made form covers losses that occur after the retroactive date and before the policy expiration date D The retroactive date is unique to the Claims-Made form
A
Which of the following is true of the Dwelling Under Construction Endorsement of a Dwelling Policy? A The premium is based upon a percentage of the Coverage A limit B The amount of insurance in force is the limit of liability stated in the Declarations C The insured has up to 90 days to notify the company that the dwelling is occupied D Insurance applies to the Dwelling and to other structures
A
Which of the following provide coverage for vehicles leased or rented by a company for employees to use for personal use? A Drive Other Car Coverage Endorsement B Employees as Additional Insureds Endorsement C Individual Named Insured Endorsement D Symbol 9 Coverage Endorsement
A
Which of the following statements regarding flood insurance is not true? A No deductible applies to loss of contents B In order to qualify for a federal loan, a property owner located in a recognized flood area must purchase flood Insurance C Under a Flood Policy, protection is provided to property that normally is on dry land D The Federal government is the reinsurer
A
Which of the following wind mitigation designations require documentation of engineering design and installation of a continuous load path? A Gold B Bronze C Platinum D Silver
A
Which statement is not correct about the Right to Recover Payment under the PAP? A The Right to Recover is an insured's right B The right to recover involves going after the negligent party to pay for the insured's loss C The person who is paid a claim must give the insurance company the right to recover damages D The insured must reimburse the insurance company if the insured is paid by the other party
A
Which section of the Garage Coverage Form provides coverage for autos in the care, custody and control of the insured? A Section III B This coverage is not provided under the Garage Coverage Form C Section II D Section I
A (Section III is referred to as Garagekeepers coverage)
The Garage Coverage Form may be written for all of the following, except: A Car rental agency B Service station C Car dealership D Public parking garage
A A car rental agency would not be eligible under this form, which is intended for businesses that sell, service, or store automobiles.
A surplus line broker must file a bond in the amount of: A $75,000 B $50,000 C $250,000 D $100,000
B
All of the following are covered under a Homeowners Policy, except: A Property of guests and servants B All living expenses incurred when a dwelling becomes uninhabitable after a covered loss C Equipment that is used to maintain the property D Vandalism to a dwelling that was vacant for less than 60 days
B
An insured looking to cover the dwelling against damage from hail would need to purchase which dwelling form? A DP-3 B Any form except for the unendorsed DP-1 C DP-2 D DP-1
B
If your carpet is damaged in your home it would be covered under which of the following coverages? A Contents B Dwelling C Other Structures D Personal Property
B
M and C both have Personal Auto policies with liability limits of 20/30/10. If M borrows C's car and injures a pedestrian, causing injuries that will cost $5,000 to treat, which policy will provide coverage for the injured party? A Both policies will share the loss pro-rata B C's policy C M's policy D Neither policy, since C's car was not on M's policy
B
Once an insurance company has restored the insured following a covered loss, which of the following has the right of salvage of the destroyed property? A Insured B Insurer C Both answers D Neither answer
B
Under a CGL, at what point in time is the earned premium determined by the premium audit? A At the beginning of the policy period B At the end of the policy period C At the time the premium deposit is made D Monthly
B
Under the Building and Personal Property coverage form, what obligation, if any, does an insurer have to a mortgagee in the event the company wishes to cancel the policy? A The company must give the mortgagee a 10 day written notice for cancellation for any reason B The company must give the mortgagee a 10 day written notice of cancellation due to nonpayment of premium and 30 days notice if cancellation is for any other reason C The company must give the mortgagee a 30 day written notice for cancellation for any reason D None of the answers listed
B
Under the Commercial General Liability policy, a separate Aggregate Limit applies to the: A Personal and advertising injury coverage B Products and completed operations hazard C Bodily injury and property damage liability coverage D Medical expense coverage
B
Which Federal entity administers the Terrorism Risk Insurance Program Reauthorization Act? A Department of Defense B Department of the Treasury C Executive office D Secretary of State
B
Which of the following conditions under a Building and Personal Property Coverage Form determines how losses will be paid? A Loss Conditions B Valuation Clause C Appraisal D Deductible
B
Which of the following incidents is not covered under the Inside The Premises Theft of Money and Securities Form? A Disappearance of money by a customer B Attempted robbery of a custodian C Damage to a locked safe D Damage to the bank itself caused during a theft
B
Which of the following is covered under Aircraft Liability Insurance? A The incidental auto liability exposure of private pilots B Liability claims arising from the ownership, maintenance or use of an aircraft C Legal liability of owners and operators of aircraft hangers and aircraft repair shops D Owners of private, municipal, and commercial airports
B
Which of the following is found in the Common Policy Declarations of the CPP? A The provision granting the insurer the right to make inspections of insured property B The deductible C The insurer's cancellation right D The provision that the first named insured is responsible for all premiums
B
Which of the following is not an example of contingent liability exposure? A Contractual liability exposure B Premises liability exposure C Owners and Contractors Protective liability exposure D Liability exposure of an insured's sub-contractors
B
Which of the following is not covered under Equipment Breakdown Coverage? A Spoilage damage B Breakdown test C Business income D Expediting expenses
B
Which of the following is not true of the Multi-Peril Crop Insurance? A Cereal grains are a covered crop B The residual market provides this coverage at the state level C Adverse weather conditions is a covered peril D Tobacco is a covered crop
B
Which of the following is true of supplementary payments under Part A of the Personal Auto Policy? A Any payments made reduce the liability limits by a like amount B They are paid in addition to the liability limits of the policy C They are paid as supplementary benefits only after the limit of liability is exhausted D They are paid only once during the policy term
B
Which of the following is true regarding Extra Expense Coverage under a BOP? A Extra Expense coverage is provided until the Property Limit of Insurance is exhausted B Coverage is for 12 months after the direct loss C There is a monthly limitation equal to 1/12th of the Property Limit of Insurance D Extra Expense coverage is not available to commercial tenants
B
Which type of Commercial Auto policy would be best suited for a business that wished to cover its owned and hired autos against property damage only? A Garage Coverage Form B Auto Physical Damage Coverage Form C Business Auto Coverage Form D Truckers Coverage Form
B
Under Alabama Law, you cannot pay any valuable consideration to a person if they are not licensed as a producer. If you violate this provision you are subject to a fine of up to: A $10,000 B 3 times the commission paid C 3 times the premium paid D $1,000
B A producer is subject to a fine of up to 3 times the commission paid for any compensation received if not licensed as a producer for that line of insurance.
Policyholder J hit a deer with his Honda. J has collision coverage with a $250 deductible and Other Than Collision coverage with a $50 deductible. The damage to J's car was $450. How much will the policy pay? A Nothing B $400 C $200 D $150
B Collision with a bird or animal is covered by Other Than Collision coverage. The $50 deductible would apply.
Which statement is false regarding the Building and Personal Property Coverage Form? A The Peak Season Endorsement can be provided for a specified increase for a certain period B The standard deductible is $100 C Coverage does not apply to money or securities D If either the insurer or the insured submits a written demand for appraisal, each will choose and pay for his or her own appraiser
B It is $500
In respect to Section II of a Homeowners Policy, all of the following are true, except: A Damage to Property of Others pays up to $1,000 per occurrence B Section II losses are subject to a standard $250 deductible C Individual and family cemetery plots qualify as an insured location D Bodily injury or property damage arising from a vehicle used to assist the handicapped, such as a wheelchair, is covered
B Section II losses are not subject to a deductible.
H's liability policy has the following limits: $35,000 per person, $350,000 per occurrence, and $2,000,000 aggregate. This year, three claimants file in the amount $15,000, $30,000, and $45,000. How much will the policy pay? A $350,000 B $80,000 C $90,000 D $35,000
B The per person limit prevents the policy from paying any more than $35,000 per person. Therefore, the $15,000 and $30,000 claims will be paid in full, but the $45,000 claim will only be paid up to the per person limit of $35,000.
A woman has scheduled her tanzanite ring for $2,000 on an Inland Marine endorsement to her Homeowner's policy. In the event of a covered loss. How will the claim be paid disregarding any deductible? A Both policies share in the loss equally B Homeowners pays the entire $2,000 C Inland Marine pays the entire $2,000 D H.O. pays its limit of $1,500 and the Inland Marine pays the balance of $500
C
According to the cancellation condition in the Common Policy Conditions form, if the insurance company is canceling a Commercial Package policy for nonpayment of premium, the insured must be given at least _________ days' notice of cancellation. A 20 B 30 C 10 D 60
C
All of the following are true of Supplementary Payments under the CGL, except: A They include the cost of bail bonds up to $250 B They pay defense costs incurred by the insurer C They reduce the limits of insurance D They apply to bodily injury and property damage liability
C
All of the following are true of a Homeowners Policy, except: A Coverage E is written on a single limit basis B Cemetery plots, burial vaults and vacant land are insured locations C Section II provides coverage for damage to the insured's property D The language in Section II is the same in all Homeowners Policies
C
All the following terms describe a loss covered by a commercial crime policy, except: A Burglary B Theft C Mysterious disappearance D Alteration
C
The concept that the insured should not profit from an insurance transaction is called: A The principle of subrogation B The principle of utmost good faith C The principle of indemnity D The principle of personal aspect
C
The limit of insurance that the insurer will pay for a physical damage loss is the: A Greater of the ACV or the cost to repair or replace with like kind and quality B Actual Cash Value C Lesser of the ACV or the cost to repair or replace with like kind and quality D Replacement cost
C
Under the Personal Auto Policy, medical payments do not apply to passengers occupying which of the following? A A newly acquired vehicle B A non-owned vehicle C A van used in the insured's business in the course of employment D A van being used for shared car pools
C
When firefighters extinguish a house fire with water, the water damage is considered a(n): A Loss that will be subrogated to the fire department B Consequential Loss C Direct loss D Indirect loss
C
Which Commercial Crime form provides coverage for securities against loss caused by theft, disappearance, or destruction while inside a custodian's premises or while being transported by a custodian? A Lessee's Safe Deposit Boxes B Robbery and Safe Burglary Money and Securities C Outside the Premises - Money and Securities D Safe Depository
C
Which form responds to losses that occur while the policy is in force, regardless of when the claim is made? A Premises and Operations B Products C Occurrence D Claims-Made
C
Which of the following is an element of fiduciary responsibility? A Clean credit history B Liability protection C Duty of loyalty D Contractual responsibility
C
Which of the following is covered under a Personal Auto Policy? A Intentional damage done by the insured B Liability for damage caused by a vehicle designed mainly for off road use C A vehicle driven with permission by an unlicensed driver D Use of a non-owned vehicle used without permission
C
Which of the following is included in the building coverage provided by the Building and Personal Property Coverage Form? A Property that is located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the premises B Tenant's interest in Improvements and Betterments C Completed additions, fixtures, including outdoor fixtures, permanently installed machinery and equipment D Furniture, fixtures, machinery and equipment
C
Which of the following is not a coverage under the Farm Property Coverage form? A Coverage C - Household Personal Property B Coverage G - Other Farm Structures C Coverage H - Bodily Injury and Property Damage Liability D Coverage E - Scheduled Farm Personal Property
C
Which of the following workers would be covered by The Federal Employers Liability Act? A A shipbuilder B A sailor injured by the negligence of others C A railroad worker D An employee of the Federal government
C
Which of the following would be covered under a Commercial General Liability policy? A All of the answers listed B Employee injuries C Host liquor liability D Pollution spill
C
Which statement about the Builders Risk form is not correct? A Coverage terminates 90 days after construction is completed, when a policy expires, is cancelled, or 60 days after the owners fully occupy the dwelling, whichever is soonest B There is no vacancy provision C Coverage is always written on an open peril basis D Coverage does not apply to outside radio and television antennas
C
Who is the obligee on a Fidelity Bond? A The employee B The surety C The employer D The court
C
01:57:48 Which of the following is/are the most important factor(s) in conversion to achieve a wind mitigation discount? A Foundation B Walls C All of the answers listed D Roof
D
A property purchased 10 years ago for $100,000 has a replacement value today of $200,000. It has depreciated 3% each year. What is today's actual cash value? A $100,000 B $70,000 C $200,000 D $140,000
D
All of the following are Basic Form Perils in a Farm policy, EXCEPT: A Sinkhole Collapse B Riot or Civil Commotion C Windstorm or Hail D Electrocution of Covered Livestock
D
Coverage C of a Homeowners Policy includes: A The insured's pet animals B Aircraft stored on the Residence Premises C The insured's personal automobiles, while on the residence premises D An owned camera used by the insured while on vacation in another country
D
During a company golf retreat, the property of several guests is stolen from the golf resort's safe deposit boxes. Under the resort's commercial crime policy, which insuring agreement or endorsement would pay for this loss? A The guests would need to file a claim for this loss under their own homeowners policies B Outside the premises C Inside the Premises: Robbery or Safe Burglary D Guests' Property
D
Every person engaged in the business of making and charging bail bonds (other than in Cullman County) must furnish a bond in the amount of: A $100,000 B $10,000 C $250,000 D $25,000
D
In determining coverage under an Open Perils policy, the burden of proof is on which of the following? A Insured B Appraiser C Contractor D Insurance Company
D
Livestock does not include which of the following animals? A Goats B Horses C Donkeys D Poultry
D
Ocean Marine Protection and Indemnity insurance provides: A Cargo insurance B Hull insurance C Freight insurance D Marine liability coverage
D
The Commercial Property Basic Cause of Loss Form will cover losses caused by which of the following? A Weight of Ice, Snow or Sleet B Falling Objects C Water Damage Caused by Accidental Discharge of Water D Sprinkler leakage
D
The Insurance Guaranty Association is obligated to pay any covered claim that is over $100 and less than: A $100,000 B $250,000 C $200,000 D $150,000
D
The Personal Umbrella Policy does not provide coverage for which of the following? A Homeowners liability B Personal automobile liability C Personal injury D Property damage liability to property in the insured's care
D
Transportation Expenses Coverage under Part D of the Personal Auto Policy begins how long after the covered auto has been stolen? A Immediately B 24 hours C 72 hours D 48 hours
D
Under the Commercial Building and Personal Property Coverage Form, the building is considered vacant, unless at least what percentage of the square footage is rented or is used to conduct operations? A 41% B 61% C 51% D 31%
D
Which commercial crime policy will cover any occurrence that took place during policy period, even if it was not immediately discovered? A Claims-made form B Occurrence form C Discovery form D Loss-Sustained form
D
Which coverage form may not be added to the Commercial Property Coverage Part? A Building and Personal Property Coverage Form B Commercial Builders Risk Coverage Form C Legal Liability Coverage Form D Homeowners Special Form
D
Which of the following conditions under a Building and Personal Property Coverage Form determines how losses will be paid? A Appraisal B Deductible C Loss Conditions D Valuation Clause
D
Which of the following is not true about a claim payment for a Part D under Personal Auto? A The claim payment will include any applicable sales tax B The insurance company can keep or return a stolen car C The insurance company can decide whether to pay cash or repair the vehicle D If the insurer returns stolen property to the insured, no payment for damages incurred will be made
D
Which of the following is true regarding Completed Operations coverage? A Bodily injury arising from negligent or faulty work of the insured is not covered if it occurs after the work is completed and turned over to its owner B Coverage applies only during the period that the insured has custody and control of the work deemed faulty or inadequately performed C If faulty work causes damage to other property of the claimant, then coverage extends to include the faulty work D The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but not for the cost of replacing the work that caused the loss
D
Which of the following is true regarding the Earthquake Cause of Loss Form? A It includes coverage for earthquakes that start within 168 hours after the expiration of the policy B It can be used by itself to provide a stand alone Earthquake policy C It provides coverage for mudslides D It can be used only with another Causes of Loss Form
D
Which of the following would not be considered an insured under a CGL? A Volunteer worker B Executor of the CEO's estate after his death C Real Estate Manager acting on behalf of the insured D An LLC employee's spouse assisting in cleaning the office so they can leave for vacation more quickly
D (LLC SPOUSE)
The Personal Liability endorsement does not provide coverage for which of the following? A Medical payments to others B Defense costs C First aid expenses D Injury caused to a regular resident of the dwelling
D Coverage does apply to expenses incurred by residence employees but not the named insured or regular residents of the named insured's household.
All of the following are true of the Personal Articles Floater, except: A It is written on an itemized or scheduled basis B It insures against open perils C It is used to insure individual personal property D Claims are settled on a replacement cost basis
D Losses are settled on an Actual Cash Value or Valued basis.
A commercial property has a $400,000 Commercial Building and Personal Property policy, and a fire breaks out on the loading dock, causing $80,000 in damage and $20,000 in debris removal. What is the maximum that may be received for the damage? A $90,000 B $80,000 C $400,000 D $100,000
D The $80,000 loss plus the entire $20,000 debris removal will pay, since that amount is less than the 25% of coverage limit.
