Exam 4

As an Additional Coverage, limited coverage may be added for Fungus, Wet Rot, Dry Rot, and Bacteria for up to what amount? A $25,000 B $15,000 C $10,000 D $20,000

$15,000

Bill has three liability policies on the property. Policy A is for $40,000; Policy B is for $140,000; and Policy C is for $20,000. In the event of a $300,000 liability loss, how much will Policy A pay? A Nothing (the property was underinsured by more than 25%) B $40,000 (100% of the covered loss) C $26,667 (33% reduction due to coinsurance) D $75,000 (25% of the total loss, since $40,000 = 25% of the total coverage in force)

$40,000 (100% of the covered loss)

Furnishing false information to the Commissioner is subject to a civil penalty of $100,000 plus what amount per 30 days period of noncompliance? A $5,000 B $1,000 C $10,000 D $500

$5,000

In California, if the insured does not have Other Than Collision Coverage on at least one auto listed on the Declarations Page of his Personal Auto Policy, then Other Than Collision Coverage on a newly acquired auto begins on the date the insured becomes the owner, provided that the insured requests such coverage within _____ days of becoming the owner. A 14 B 3 C 4 D 10

4

Transportation Expenses Coverage under Part D of the Personal Auto Policy begins how long after the covered auto has been stolen? A 48 hours B 72 hours C Immediately D 24 hours

48 hours

The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is: A 100% of Coverage A B 60% of Coverage A C 50% of Coverage A D 40% of Coverage A

50% of Coverage A

A licensee who has applied to renew a license will be entitled to continue operating under the existing license for ______ days after its specified expiration date, or until notified by the Department that the renewal application is deficient, whichever comes first. A 180 B 90 C 120 D 60

60

Under the Broad Cause of Loss Form, how long is vacancy allowed before the peril of vandalism coverage is suspended? A 60 days B 120 days C 30 days D 90 days

60 days

The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called: A A Bill of Lading B A Bill of Transportation C A Shipping Receipt D A Bill of Acceptance

A Bill of Lading

All of the following statements about binders are true, except: A A binder specifies the perils covered B A binder specifies the insurer providing the coverage C A binder specifies the effective date of coverage and amount of coverage D A binder specifies the premium amount

A binder specifies the premium amount

Prior to final settlement following the theft of a motor vehicle, the insured must provide all of the following, except: A A copy of the most recent vehicle registration certificate B The insured's driver license number C Acknowledgment that providing false information is a crime D A description of any unusual interior or exterior special equipment

A copy of the most recent vehicle registration certificate

Which of the following is not covered by a Business Auto Policy covering the named insured's small business? A A fellow employee injured while driving a covered auto B Director of Sales who often rents vehicles C The named insured leases a car to be used for sales calls D A Manager's wife driving her husband's company car

A fellow employee injured while driving a covered auto

The Building and Personal Property Coverage Form pays for covered losses on an actual cash value (ACV), except: A A loss to outdoor equipment or furniture B A loss of $2,500 or less to a building and the coinsurance requirement is met C A loss to appliances, whether attached or not D A loss to awnings and floor coverings

A loss of $2,500 or less to a building and the coinsurance requirement is met

Property insurance policies that apply coverage only to perils that are stated in the policy, are considered to be written on: A A named peril basis B A replacement cost basis C An open perils basis D An actual cash value basis

A named peril basis

Under the Personal Auto Policy, Medical Payments coverage is provided for which of the following? A The policyholder's vehicle while it is being used as a public or livery conveyance B A passenger while occupying the covered auto C Any person while occupying a vehicle that has fewer than four wheels D A vehicle being used in a recognized racing activity

A passenger while occupying the covered auto

In the Personal Auto Policy, the definition of Family Member includes: A A person related by blood, marriage or adoption who is a resident of a household (including a foster child) B Persons related to the Named Insured who have frequent use of the insured automobile C Any person using the insured automobile with the Named Insured's permission D A member of the Named Insured's immediate family, regardless of place of residence

A person related by blood, marriage or adoption who is a resident of a household (including a foster child)

When a homeowner allows wet leaves to remain on his/her sidewalk, this might be considered which of the following? A A natural hazard B A morale hazard C A moral hazard D A physical hazard

A physical hazard

Which of the following acts is prohibited by the Insurance Code? A A solicitor works for more than one Property & Casualty Broker-Agent B A licensed Property & Casualty Broker-Agent decides to terminate all appointments as an agent and to work exclusively as a broker C A bonded Property & Casualty Broker-Agent fails to hold an agent appointment with an insurer to whom she submits an application for homeowners insurance D A licensed Property & Casualty Broker-Agent with no active appointments contracts to work for another broker or agent as a solicitor

A solicitor works for more than one Property & Casualty Broker-Agent

A contract whereby only one party is bound to future performance, is said to be: A A conditional contract B A unilateral contract C A bilateral contract D An aleatory contract

A unilateral contract

The camera floater provides blanket coverage for: A All owned cameras and equipment B Cameras and equipment under $500 C Cameras and equipment over 25 years old D Accessories only

Accessories only

Which of the following includes debris removal, costs extracting pollutants from land or water, and fire department service charges under the Commercial Property Coverage Part of the CPP. A Additional Coverages B Optional coverages C Causes of Loss-Special Form D Causes of Loss-Broad Form

Additional Coverages

The Basic (DP-1) Dwelling Form does not include: A Additional Living Expenses B World-Wide Coverage on Personal Property C Fair Rental Value D Property Removed to a Newly Acquired Residence

Additional Living Expenses

All of the following statements regarding the property policy structure are correct, except: A The Declarations Page lists other parties having an insurable interest in the property B Additional coverages are added to the policy for an additional premium C The insuring agreement describes the perils that are covered under the policy D The insured's duties and obligations are listed in the conditions section

Additional coverages are added to the policy for an additional premium

An insurer that is authorized to do business in a particular state is said to be: A Domestic B Admitted C Foreign D Non-Admitted

Admitted

Which of the following is not an example of an unfair trade practice?

Advertising on the internet

Under Equipment Breakdown Insurance, which of the following describes one breakdown? A The one accident that apparently caused the damage B All breakdowns at any one premises that manifest themselves at the same time and are the direct result of the same cause C The last accident, when there is more than one accident simultaneously D The first accident, when there is more than one accident simultaneously

All breakdowns at any one premises that manifest themselves at the same time and are the direct result of the same cause

Under Workers' Compensation, all the following injuries are covered, except: A An employee who intentionally injures himself/herself B An employee injured because of unsafe working conditions C An employee who is injured solely through his/her own negligence D An employee who is injured despite the extensive safety measures of the employer

An employee who intentionally injures himself/herself

It is the property owner's obligation that when someone is invited on the premises, the property owner must warn this person of any hidden dangers. This invited person is considered which of the following? A An invitee B A trustee C An obligee D A licensee

An invitee

Tom includes the Inside Theft of Money and Securities Form in his crime policy due to the possibility of a bank robbery but which of the following is not covered? 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

Attempted robbery of a custodian

Which of the following methods of writing insurance is used to provide insurance on properties at different locations, using one policy, and a single limit of insurance? A Listed B Scheduled C Blanket D Unified

Blanket

In Liability Insurance, Personal Injury includes all of the following, except: A Libel B Slander C False Arrest D Bodily Injury

Bodily Injury

Business Liability Coverage under the BOP includes coverage for: A Property Damage to impaired property B The recall of products C Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period D Bodily Injury to an employee of the insured arising out of and in the course of employment by the insured

Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period

When a producer makes an agreement that unreasonably restrains the potential insured, he/she may have violated regulations against: A Rebating B Boycott, coercion, and intimidation C Unfair discrimination D Defamation

Boycott, coercion, and intimidation

Under the California Insurance Code, there are no _______ for life or health insurance in California. A Brokers B Non-resident agents C Producers D Resident agents

Brokers

Which is not a coverage provided by the Equipment Breakdown policy? A Spoilage B Builders Risk C Property Damage D Business Income

Builders Risk

All of the following types of property may be covered by a Personal Articles Floater, except: A Jewelry B Golf equipment C Stamps D Buildings

Buildings

Bill has three liability policies on the property. Policy A is for $40,000; Policy B is for $140,000; and Policy C is for $20,000. In the event of a $300,000 liability loss, how much will Policy A pay? A Nothing (the property was underinsured by more than 25%) B $40,000 (100% of the covered loss) C $26,667 (33% reduction due to coinsurance) D $75,000 (25% of the total loss, since $40,000 = 25% of the total coverage in force)

Built in bookcases installed by a tenant which cannot be removed upon termination of the lease

The taking of property from inside the premises by a person unlawfully entering or leaving the premises as evidenced by visible signs of forcible entry or exit, is covered under which of the following Crime Coverages? A Theft B Burglary C Robbery D Extortion

Burglary

A direct loss is best described as: A Loss of rents from a dwelling made uninhabitable because of fire B Specific Coverage C A Proximate Cause D Bursting of a water pipe that causes water damage

Bursting of a water pipe that causes water damage

When the Code requires a notice to be provided to a policyowner, which of the following would not be an acceptable method of delivery? A By email to a policyowner who had opted in to electronic delivery of notices B By U.S. Mail postage paid to the last known address of record of the policyowner C By Federal Express, UPS, or other prepaid delivery service D By U.S. Mail to the current address of the policyowner with less than $0.50 additional postage due

By U.S. Mail to the current address of the policyowner with less than $0.50 additional postage due

All of the following are true, except: A Cameras are insured on a valued basis B Fine arts are insured on a valued basis C For newly acquired jewelry, furs, cameras and musical instruments, the insured must report the objects within 30 days and pay the additional premium D The Pair and Sets Clause allows the company to pay for a loss in proportion to the actua

Cameras are insured on a valued basis

Fiduciary Liability Insurance is needed to protect employers from: A Claims that arise out of contractual liability B Claims arising from discriminatory employment practices C Claims by employees arising from on-the-job injuries D Claims arising from their duties under the Pension Reform Act of 1974 (ERISA)

Claims arising from their duties under the Pension Reform Act of 1974 (ERISA)

The CGL condition 'Insured's Right to Claim Information' applies to which form(s)? A Occurrence only B Neither Claims-Made nor Occurrence C Claims-Made only D Both Claims-Made and Occurrence

Claims-Made only

Which of the following is not covered in the Limited Pollution Liability coverage and Pollution Extension endorsement. A Threatened discharge of pollutants B Escape of pollutants C Clean up costs D Waste disposal leaks

Clean up costs

An agent's license remains in active status as long as all of the following conditions are met, except: A At least one active Notice of Appointment is on file with the Commissioner B Continuing education requirements have been met C Commission income equals or exceeds $25,000 D Renewal fees are paid

Commission income equals or exceeds $25,000

Which description applies to General Damages? A Damages to the general public rather than to a specific party B Those damages that can be documented C Compensation to an injured party for pain, suffering, mental anguish, disfigurement and similar types of losses D General Damages include punitive damages

Compensation to an injured party for pain, suffering, mental anguish, disfigurement and similar types of losses

In insurance, when an applicant intentionally fails to make a material fact known, it is known as: A Bad faith B Concealment C Deception D Misrepresentation

Concealment

The exchange of value that makes a contract binding is called: A Premium B Consideration C Benefits D Endorsements

Consideration

Which is true of the Special Dwelling Forms? A Contents are covered on an actual cash value basis B It will cover the cracking of walls due to settling C It will automatically cover the theft of contents D Losses to the dwelling are paid on an actual cash value basis

Contents are covered on an actual cash value basis

Which term describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first? A Contribution by Equal Shares B Primary insurance C Excess insurance D Pro rata liability

Contribution by Equal Shares

Which of the following prevents all recovery for injuries if the claimant was also considered partially negligent? A Vicarious negligence B Proximate negligence C Comparative negligence D Contributory negligence

Contributory negligence

Homeowners policies: A Cover theft of furs and jewelry up to $1,500 B Cover money up to $500 C Include water damage by flood, sewer backup and underground seepage D Cover theft of guns up to $3,000

Cover theft of furs and jewelry up to $1,500

Which statement is false? A Coverage F limits are subject to a deductible B Insurer investigation expenses are in addition to the limits stated in Coverage E C Total liability coverage resulting from any one occurrence may not exceed the Coverage E limit that is stated in the policy D Obligations of an insurer end when it pays damages equal to the policy limit for any one occurrence

Coverage F limits are subject to a deductible

Which of the following is true regarding Business Income Coverage under a BOP? A Coverage is for up to 12 months after the direct loss, with no limit on the amount of monthly indemnification, and is not subject to the limits of insurance B Coverage is for 12 months after the direct loss, starting 24 hours after the direct loss C The monthly limitation is 1/12th of the limit of insurance applying to Buildings and Business Personal Property D The monthly limitation is 1/12th of the limit of insurance applying to Buildings

Coverage is for up to 12 months after the direct loss, with no limit on the amount of monthly indemnification, and is not subject to the limits of insurance

All of the following are true of Non-Standard Physical Damage Coverage, except: A Coverage options are less restrictive than under traditional physical damage coverage B There are higher deductibles applied in the event of a loss than there are in traditional physical damage coverage C Only individuals specifically named on the Declarations Page are insured drivers. D It is primarily purchased as a separate policy by individuals who are insured through the California Automobile Assigned Risk Plan for automobile liability insurance

Coverage options are less restrictive than under traditional physical damage coverage

Which of the following is not eligible to be written on a Businessowners Policy? A Credit Unions B Laundries and Dry Cleaners C Office buildings D Building owners personal property in apartment buildings

Credit Unions

Employee Dishonesty Optional Coverage under the BOP, when activated with an entry on the Declarations Page, will cover which of the following? A Burglary of the insured's premises by employees B Damage or loss to business or personal property, including money and securities, resulting from dishonest acts of employees C Dishonest acts of employees directed toward customers, such as giving incorrect change D Misrepresentations of the insured's products or services made by employees

Damage or loss to business or personal property, including money and securities, resulting from dishonest acts of employees

Businesses that make money selling liquor by the drink should purchase which of the following Liability Policies? A Contractual Liability B Host Liquor Liability C Dram Shop Liability Coverage D Products Liability

Dram Shop Liability Coverage

The insurance contract is said to be a contract of Utmost Good Faith, because: A Concealment of known facts on the part of the insured will void the contract B The insured must warrant that his/her representations are true C The insurer has drawn up the contract and, therefore, there is no intent to deceive D Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest flag question end exam

Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest

Statutory Law Defenses are determined by which of the following? A Executive decisions B Administrative decisions C Enactment of Legislatures D Judicial decisions

Enactment of Legislatures

All of the following are risk management techniques, except: A Enhancement B Avoidance C Transfer D Retention

Enhancement

A licensed producer may not do which of the following? A Provide a binder of insurance for a homebuyer contingent upon close of escrow B Solicit business from a loan applicant who has not opted out of information sharing by the lender C Advertise the availability of insurance products approved for sale in California D Enter into an exclusive relationship with a lender to provide homeowners insurance to loan applicants

Enter into an exclusive relationship with a lender to provide homeowners insurance to loan applicants

California uses which type of rating system for Workers' Compensation premium? A Experience B Manual C Dividend D Premium Discount

Experience

The type of producer authority stated in the agency contract is: A Apparent B Implied C Assumed D Express

Express

Which of the following is not considered a covered peril under the Basic Cause of Loss Form? A Volcanic action B Riot C Smoke D Falling Objects

Falling Objects

Which is not eligible to be insured under a Dwelling Policy? A Dwellings containing three apartment units B Dwellings with any type of business in them C Farms D Mobile home

Farms

Which of the following is not covered by Supplementary payments under a BOP? A Loss of earnings B Bail bonds C Insurer expenses D First aid

First aid

Which of the following is not covered by Supplementary payments? A Loss of income B Bail bonds C The insurer's claim-related expenses D First aid

First aid

In the Dwelling Policy, the fact that earth movement, landslide, mine substance, or mudflow are not covered is stated where? A Insuring Agreement B Endorsements C General Exclusions D Other Coverages

General Exclusions

An insurer cannot consider sexual orientation in its underwriting criteria or use marital status, living arrangements, occupation, sex, beneficiary designation or Zip Code to determine whether to require a test for the presence of: A Heart conditions B Diabetes C HIV D Cancer

HIV

Which form is designed for Tenants? A HO-4 B HO-3 C HO-2 D HO-8

HO-4

When filing a claim, the insured is required to do all of the following, except: A Hire an appraiser B Cooperate with the insurance company C Protect property from further damage D Give notice of loss as soon as possible

Hire an appraiser

An Administrator who collects any charges or premium from or adjusts claims on California residents in connection with life, health, or annuity insurance meet all of the following requirements, except: A Keep a copy of a written agreement for 5 years after the agreement has ended B Hold a Certificate of Registration issued by the Commissioner C Have a written agreement with an insurer D Hold a Certificate of Authority issued by the Commissioner

Hold a Certificate of Authority issued by the Commissioner

Ocean Marine Insurance is written full value and may become void if which of the following happens? A The vessel is decommissioned while at sea B If implied warranties are violated C The vessel changes course for any reason D The Inchmaree Clause is violated

If implied warranties are violated

Optional Coverages under the Building and Personal Property Coverage Form includes an inflation guard. What is another name for inflation guard? A Newly Acquired Property B Value Reporting Form C Agreed Value D Automatic Increase in Insurance

Increase

Which of the following is not a basis for Garagekeepers coverage? A Legal Liability Basis B Excess Basis C Indirect Primary Basis D Direct Primary Basis

Indirect Primary Basis

Insurance Agents or Producers are licensed individuals appointed to transact insurance through a(n): A Insurance company B Brokerage firm C Business entity D Insurance agency

Insurance company

All of the following are true of Protection and Indemnity, except: A It covers cargo if lost or damaged through negligence B It covers injuries caused by negligence C It covers damage to fixed objects D It does not cover injuries to seamen

It does not cover injuries to seamen

Which of the following is true regarding the Yacht Policy? A It is an Ocean Marine Form and provides both property and liability coverage B The policy contains no navigational limits C Liability related exposure must be covered under a separate policy D The policy provides coverage only for damage to the yacht itself

It is an Ocean Marine Form and provides both property and liability coverage

When an employee is injured in an auto accident while on company business, he/she would be covered under: A Garagekeepers Form B Company group health insurance C Workers' Compensation Insurance D Garage Liability Form

It is designed to provide coverage for a business firm that transports its own goods

Which of the following is not a duty of the California Insurance Commissioner? A To issue Certificates of Authority to companies that meet the requirements of state law B To make sure that insurer rates are adequate, not excessive, or unfairly discriminatory C To subpoena witnesses/documents for testimony on any insurance-related matter D To prosecute violators of insurance law

It may be written as a monoline policy

Which of the following is the best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance? A It provides coverage for employees who option out of coverage under the standard Workers' Compensation policy B It provides coverage for independent contractors C It provides coverage to employees that are not otherwise covered D It provides coverage for unpaid volunteer workers

It provides coverage to employees that are not otherwise covered

Which of the following would not be recognized as a person under the Insurance Code? A Jeremy Wilson, an unmarried man age 35 B Wilson and Wilson, a limited liability company offering accounting services C Jerry, a seven-year-old German Shepherd police dog D J. Wilson Inc., a business involved in interstate trucking with 35 employees

Jerry, a seven-year-old German Shepherd police dog

The limit of insurance that the insurer will pay for a physical damage loss is determined by which of the following? A Greater of the ACV or the cost to repair or replace with like kind B The replacement cost minus depreciation C The ACV is the Limit of Liability D Lesser of ACV or cost to repair or replace

Lesser of ACV or cost to repair or replace

By definition, a properly licensed insurance agent may not transact which of the following types of insurance? A Boiler and machinery B Inland marine C Personal lines D Life

Life

Which part of a Property Policy is in the insuring agreement? A The name of the insured B Specified term of the policy C List of the named perils D The amount of coverage

List of the named perils

Medical Payments under Section II of the Homeowners Policy would cover all of the following, except: A Dental expenses B Medical and surgical expenses C Loss of Income of an injured person D Prosthetic devices

Loss of Income of an injured person

Coverage D of the Farm Policy provides insurance for: A Other Farm Structures B Household Personal Property C Loss of Use D Scheduled Farm Personal Property

Loss of Use

Which of the following is an example of concealment? A Mary tells her agent she paid a traffic citation for speeding ten days ago, but her agent marks the application 'No' without Mary's knowledge because he knows the ticket will not show up on her driving record for at least 90 days B Mary answers 'No' to the question 'Have you been convicted of driving under the influence in the past ten years?' when she is scheduled to appear for trial for a DUI arrest tomorrow morning C Mary indicates on her application that her annual mileage is 15,000, when she knows that she drives more than 450 miles per week to and from work D Mary inadvertently answers 'No' to the question, 'Have you been involved in more than one traffic collision in the past three years?' believing her accident happened more than three years ago

Mary answers 'No' to the question 'Have you been convicted of driving under the influence in the past ten years?' when she is scheduled to appear for trial for a DUI arrest tomorrow morning

The optional extended reporting period of unlimited duration that may be purchased by endorsement to a Claims-Made Form is called: A Maxi-Tail B Midi-Tail C Mini-Tail D Basic Extended Reporting Period

Maxi-Tail

Which statement is true? A Medical payments are excluded for accidental bodily injuries to guests on the premises B The Homeowners Policy will provide protection for the insured's use of a vehicle only when used in a home-based business C Medical payments under a Homeowners Policy cover the insured D Medical payments under a Homeowners Policy cover funeral expenses

Medical payments under a Homeowners Policy cover funeral expenses

Any person who acts, offers to act, or assumes to act in a capacity for which a license is required without holding a license is guilty of a ___________, punishable by a fine of up to $50,000 and/or 1 year in jail.

Misdemeanor

The insurance contract is said to be a contract of Utmost Good Faith, because: A Concealment of known facts on the part of the insured will void the contract B The insured must warrant that his/her representations are true C The insurer has drawn up the contract and, therefore, there is no intent to deceive D Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest flag question end exam

Name Schedule Bond

Auto physical damage coverage is normally written: A On a valued basis B On a stated amount basis C On an actual cash value basis D On a single limit basis

On an actual cash value basis

All of the following are correct regarding the Broad Theft Endorsement on a Dwelling policy, except: A Only on-premises coverage is available B It also includes vandalism resulting from theft C It applies only to owner-occupied structures D It may be added to any of the Dwelling forms

Only on-premises coverage is available

Inland Marine Policies are generally written on what basis? A Special Causes of Loss Form B Broad Causes of Loss Form C Open Peril, but may be written as Named Peril D Basic Causes of Loss Form

Open Peril, but may be written as Named Peril

Under bodily injury and property damage liability of the Commercial General Liability Coverage Part of the CPP, all of the following are excluded from coverage, except: A War/Terrorist Acts B Expected or intended injury C Operation of mobile equipment D Workers' Compensation claims

Operation of mobile equipment

Which of the following types of property would be eligible for coverage under a Commercial Package Policy? A Signs not attached to an insured building B Vehicles licensed for use on public roads C Permanently installed machinery D Money or securities

Permanently installed machinery

In addition to the named insured in a property policy, coverage is automatically provided for: A Persons who are legal representatives of the insured B Persons who appraise the property C The insured's employer D Persons who purchase the insured's property

Persons who are legal representatives of the insured

Which of the following pollution forms will an agent recommend to an insured whose business requires protection for pollution liability and clean-up costs? A Pollution Liability Coverage Form (Designated Sites) B Limited Pollution Extension Endorsement C Pollution Extension Endorsement D Limited Pollution Liability Coverage Form (Designated Sites)

Pollution Liability Coverage Form (Designated Sites)

Which is true regarding dwelling policies? A Coverage D is considered a direct loss coverage B Property of guests and servants is covered under Coverage C C Coverage C includes property of tenants and boarders D Coverage B includes the insured's use of a garage as an office

Property of guests and servants is covered under Coverage C

The Miscellaneous Type Vehicle Endorsement attached to a Personal Auto Policy allows coverage for a motorcycle by: A Altering the four-wheel requirement B Providing an expanded definition of covered auto C Specifically naming it in the Declarations D Adding motorcycles to the list of eligible vehicles

Providing an expanded definition of covered auto

Insurance is designed to provide protection against which of the following? A Pure Risk B Certain Risk C Speculative risk D Involuntary risk

Pure Risk

Insuring an automobile is considered which of the following? A Speculative risk B Adverse selection C Excluded peril D Pure Risk

Pure Risk

Which of the following risks is protected by insurance? A Speculative risk B Pure risk C Involuntary risk D Certain risk

Pure risk

All of the following are true of Dwelling Forms, except: A The broad form will cover water damage caused by a burst pipe B Coverage A includes building materials on premises intended for repair C Radio and television antennas are covered for wind-related losses D Mobile homes are only eligible on the DP-1 form

Radio and television antennas are covered for wind-related losses

Under the Dwelling Broad Form, losses to a building are paid on a(n) ____ basis. A Replacement Cost B At Functional Replacement Cost C Actual Cash Value D Agreed Value

Replacement Cost

Actual Cash Value in property insurance is best defined as which of the following? A Replacement cost at the time of loss, minus depreciation B Property replacement cost C Market Value D Appraised Value

Replacement cost at the time of loss, minus depreciation

An oral or written statement made at the time of application or before issuance of the policy that is believed to be true to the best of the knowledge of the applicant is called a(n): A Absolute warranty B Implied warranty C Disclosure D Representation

Representation

Statutory Law Defenses are determined by which of the following? A Executive decisions B Administrative decisions C Enactment of Legislatures D Judicial decisions

Rescission

Under the National Flood Insurance Program (NFIP), which of the following may be insured on a replacement cost basis? A Nonresidential or commercial buildings less than 3 stories high B Residential condominiums consisting of four or fewer occupancies C Money and securities D Nonresidential or commercial buildings valued at less than $250,000

Residential condominiums consisting of four or fewer occupancies

All of the following are considered duties of the California Insurance Commissioner, except: A Set insurance rates B Regulate the internal affairs of the Department of Insurance C Keep all papers as required by law D Structure and control insolvency procedures

Set insurance rates

Which statement is true of a Special Form (DP-3) Dwelling Policy? A Losses caused by power failure off the premises or enforcement of any ordinance or law are covered B Coverage is provided for structures used for commercial, manufacturing, or farming purposes C Coverage is not provided for collapse of a building D Subject to coinsurance, coverage for the structure is provided on a replacement cost basis

Subject to coinsurance, coverage for the structure is provided on a replacement cost basis

If an agent permits an unlicensed employee to perform acts for which a license is required, the agent is subject to having his/her license: A Suspended or revoked B Withheld C Decertified D Denied

Suspended or revoked

The Claims Made and Reported (CMR) form differs from the Claims Made (CM) form in which respect? A The CMR form does not use a retroactive date B The CMR form is more similar to an occurrence form C The CMR form provides a grace period for claims made toward the end of the coverage period D The CMR does not offer an optional extended reporting period

The CMR form provides a grace period for claims made toward the end of the coverage period

All of the following are true of a Homeowners Policy, except: A The HO-2 provides open peril coverage on the dwelling B The HO-4 form is also called the Tenants Form C Dwellings under construction are eligible D Personal property of an insured's daughter while at college would be covered

The HO-2 provides open peril coverage on the dwelling

Which statement is false? A Coverage C of a Homeowners Policy provides coverage for machinery used in maintenance of the premises B The Homeowners Policy provides coverage for property of roomers and boarders C Coverage C of a Homeowners Policy provides an amount equal to 50% of Coverage A D Coverage C of a Homeowners Policy has a $1,500 limit on trailers not used with watercraft

The Homeowners Policy provides coverage for property of roomers and boarders

Which of the following is true concerning the Limit of Liability under the Business Auto Coverage Form? A The Limit of Liability is determined by the number of the insured's vehicles involved in the accident B The Limit of Liability is determined by the number of vehicles scheduled on the policy C The Limit of Liability is the amount available for each claim made under the policy D The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident

The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident

All of the following are true about the Limits of Insurance Section of the Businessowners Coverage Form - Section II, except: A The Medical Expense limit is a per person limit B The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit C The Damage to Premises Rented to You limit applies only to premises rented to the insured D The Liability and Medical Expense limit applies per person or organization for personal injury claims

The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit

All of the following statements regarding coinsurance are true, except: A The higher the coinsurance percentage, the lower the premium B Coinsurance applies only in the event of a partial loss C The purpose of coinsurance is to encourage one to carry insurance to value D The coinsurance clause increases the policy's deductible amount

The coinsurance clause increases the policy's deductible amount

Which of the following is used to resolve differences between the insured and the insurer? A Liberalization B Arbitration C Subrogation D Non-renewal

The coinsurance clause increases the policy's deductible amount

Under Legal Duty, when the insured and a third party cannot agree on legal liability, the final decision is made by: A Arbitration B Compromise C The courts D Appraisal

The courts

Which statement is accurate concerning Coverage D - Additional Living Expense of the Homeowners Policy? A The coverage will pay until the property is restored, plus 30 days relocation expense B The coverage will pay for all the insured's living expenses until the property is restored C If the insured must relocate permanently, payment will be made for 365 days, regardless of the time it takes the insured to settle at the new location D The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living

The coverage will pay for any increase in living expenses required to maintain the insured's normal standard of living

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 If faulty work, negligently performed, causes damage to other property of the claimant, then coverage extends to include the faulty work C Coverage applies only during the period that the insured has custody and control of the work deemed faulty or inadequately performed D The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss

The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss

02:34:02 An example of Vicarious Liability might be: A The indirect or imputed liability for the acts of another B The liability of a group of people, acting in concert C Liability of a negligent party or parties, whose identity cannot be determined D Liability of members of the clergy

The indirect or imputed liability for the acts of another

Pro rata liability means which of the following? A The a claim is paid in relation to the percentage of earned premium at the time of a loss B The injured party cannot collect more than his actual losses covered by multiple policies C The primary insurer only pays 80% of a loss when there is no other coverage available D The insured cannot be held liable for more than 100% of his insurance coverage

The injured party cannot collect more than his actual losses covered by multiple policies

Which of the following is the most correct regarding pro rata cancellation? A The premium is fully earned by the insurance company B The insured will receive back 75% of the unearned premium C The insured will receive back the entire unearned premium without any penalty D The insured will receive back 90% of the unearned premium

The insured will receive back the entire unearned premium without any penalty

What can happen if there is a material misrepresentation made in an application for insurance? A The agent will be required to return all or a portion of the commission received B The insurer is permitted to rescind the policy from the time the misrepresentation was made C The policyowner must pay back premiums owed plus higher premiums going forward D No further action can be taken since the policy was issued

The insurer is permitted to rescind the policy from the time the misrepresentation was made

Producer's licenses may be renewed after 2 years on which day? A The last day of the issuance month B The producer's birthday C The first of the issuance month D The 15th of the issuance month

The last day of the issuance month

All of the following are true concerning the Voluntary Compensation Endorsement, except: A The law states that the employer must provide his/her federal tax ID number B The State in which coverage is to be provided must be stipulated C The coverage is the same as in the standard Workers' Compensation Policy D Benefits are provided for employees not required to be covered under the Workers' Compensation Law

The law states that the employer must provide his/her federal tax ID number

Which of the following is true regarding Medical Payments of the Personal Auto Policy? A The liability limit shown in the Declarations is the maximum the policy will pay for all persons injured in any one accident B The liability limit shown in the Declarations is the maximum the policy will pay each person injured in any one accident C The liability limit shown in the Declarations is the maximum the policy will pay for each person during the policy term D The liability limit shown in the Declarations is the maximum the policy will pay for all claims during the policy term

The liability limit shown in the Declarations is the maximum the policy will pay each person injured in any one accident

In California, all of the following are true, except: A Any insurer, agent, broker or solicitor who is found to have willfully violated the rules regarding 'free insurance' may have its certificate or license suspended for a maximum of one year B 'Pretext interviews' are interviews in which a person pretends to be someone he/she is not, or pretends to represent someone he/she does not in an attempt to gain personal or confidential information C The notice of appointment of an agent by an insurer must be filed with the Commissioner upon licensing the agent or within 30 days of the appointment D It is considered a misdemeanor in this state to assist a nonadmitted insurer to transact business unless acting in the capacity of Surplus Lines Broker

The notice of appointment of an agent by an insurer must be filed with the Commissioner upon licensing the agent or within 30 days of the appointment

All of the following are true regarding Medical Payments coverage under the BOP, except: A It pays medical expenses incurred within one year of the date of the accident B Payment of medical expenses is made regardless of who is at fault C It covers accidents on premises the insured owns or rents, or due to the insured's operations D The policy excludes funeral expense

The policy excludes funeral expense

person may obtain a Good Driver Discount if he/she has at least 3 years of licensed driving experience and has not accumulated more than one driving violation 'point' during what time period? A The previous 2 years B The previous year C The previous 3 years D The previous 5 years

The previous 3 years

Under Ocean Marine Insurance, which of the following describes what is included in Hull Coverage? A The ship itself, including permanent fixtures of the vessel B Only the ship hull--that portion of the ship that rides the sea and is topped by the deck C The ship hull, deck, and superstructure D The ship superstructure, cabins, masts, and spars

The ship itself, including permanent fixtures of the vessel

Which of the following describes the implied warranty, Seaworthiness? A The ship must have undergone a comprehensive inspection by the insurer B The crewmembers are all certified C The ship has a full complement of emergency navigation equipment D The ship must be seaworthy and have a competent crew

The ship must be seaworthy and have a competent crew

Under the Building and Personal Property Coverage Form, which of the following is correct? A The standard deductible is $1,000 B The standard deductible is $250 C The standard deductible is $500 D The standard deductible is $100

The standard deductible is $250

The purpose of the Second Injury Fund is: A To discourage employees from causing themselves injury B To encourage employers to hire people with disabilities C To reduce State expenses related to injury D To encourage employers to provide a safer workplace

To encourage employers to hire people with disabilities

Which of the following is not a duty of the California Insurance Commissioner? A To issue Certificates of Authority to companies that meet the requirements of state law B To make sure that insurer rates are adequate, not excessive, or unfairly discriminatory C To subpoena witnesses/documents for testimony on any insurance-related matter D To prosecute violators of insurance law

To prosecute violators of insurance law

An individual committing a tort may be referred to as a: A Tortfeasor B Tort producer C Felon D Disinterested party

Tortfeasor

Temporary authority can be granted to an unlicensed person to handle the affairs of an agent on active military service, to do all of the following, except: A Provide administrative assistance to existing clients B Transmit premiums to the insurer which are sent to the agent's office C Mail out any claim payments due to clients D Transact new business in that agent's name

Transact new business in that agent's name

All of the following are true, except: A Medical payments under a CGL Policy do not cover injuries resulting from liquor liability B Medical payments under a CGL Policy include funeral expenses C If the named insured cancels a policy, the refund will be sent to the first named insured D Under Section II (Who is an Insured) of the Commercial General Liability Coverage Forms, newly acquired organizations are automatically included for a maximum of 30 days or until expiration of the policy, whichever comes first

Under Section II (Who is an Insured) of the Commercial General Liability Coverage Forms, newly acquired organizations are automatically included for a maximum of 30 days or until expiration of the policy, whichever comes first

Which statement is true concerning Section II of a Homeowners Policy? A Medical payments coverage is not available for a residence employee B Under additional coverages, Damage to Property of Others, coverage is provided regardless of negligence C Medical payments coverage is available for the insured and resident relatives D Medical payments will pay for a maximum of 1 year

Under additional coverages, Damage to Property of Others, coverage is provided regardless of negligence

In insurance, to determine acceptable risks is the primary responsibility of the: A Underwriter B Producer C Adjuster D Auditor

Underwriter

Under Personal Marine Insurance, the Personal Articles Floater (Scheduled Articles Floater) is: A Used to replace Coverage C of the Homeowners Policy B Used to insure individual personal property on an itemized or scheduled basis C Used to provide replacement cost coverage on personal property D Used to insure personal property on a blanket basis

Used to insure individual personal property on an itemized or scheduled basis

In which of the following situations may an unlicensed person conduct business for a licensed Broker-Agent? A When the unlicensed person receives no compensation for such acts B For up to 60 days following the expiration of the Broker-Agent's license because the Broker-Agent did not complete the required continuing education C When winding down the business of a deceased or disabled Broker-Agent, including receiving commissions for new business prior to death or disability D When the Broker-Agent notifies the Commissioner that he or she will be on an extended vacation and names the person who will act in his or her place

When winding down the business of a deceased or disabled Broker-Agent, including receiving commissions for new business prior to death or disability

When an employee is injured in an auto accident while on company business, he/she would be covered under: A Garagekeepers Form B Company group health insurance C Workers' Compensation Insurance D Garage Liability Form

Workers' Compensation Insurance