ExamFx: Property Exam Questions
Insurance is the transfer of risk of ? A: Loss B: Risk C: Hazards
A
Which of the following is covered under a dwelling policy? A: Structures used for commercial manufacturing B: Fire caused by an earthquake C: freezing of plumbing systems D: Flood or surface water
B
Which of the following is the Fair Rental Value Coverage in the dwelling policy? A: coverage C B: Coverage D C: Coverage E D: Coverage F
B
Which of the following sections of a contract contains the insurers promise to pay in the event of a loss? A: Declarations B: Insuring Agreement C: Endorsements D: Conditions
B
On behalf and on request of an insurer by which an agent or limited representative is appointed, the agent or limited representative may from time to time act as an adjuster and investigate and report upon claims: however he may do so? A: Only on an emergency basis while in a nonresident status B: After completion of 16 hours of continuing education credit toward an adjuster license C: Without being licensed as an adjuster D: Only after being certified to be competent for such services by the Commissioner
C
To be eligible for coverage under a BOP, an office building cannot exceed how much in square footage? A: 3,00 B: 50,000 C: 100,000 D: 300,000
C
Which of the following commercial property causes of loss forms explicitly covers damages from falling objects? A: General Form B: Basic form C: Broad form D: Special Form
C
Which of the following would NOT be covered under a dwelling property policy? A: Residence occupied by both an owner and a tenant B: Residences undergoing construction C: A farm used to raise and sell cattle D: A vacation rental that is unoccupied for 3 or more months a year
C
A builder's risk form is most often written as which of the following? A: Completed value form B: Scheduled form C: Reporting form D: Specific value form
A
All of the following are options of the insurer in the loss settlement of a standard fire policy EXCEPT? A: Pay replacement cost value B: Take possessions of the damaged property C: Repair or replace the property D: Rebuild the property with material of like kind quality
A
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 $75,00 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? A: $5,000 B: $10,000 C: $60,000 D: $75,000
A
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? A: Consideration B: Good faith C: Representation D: Adhesion
A
Removal coverage under a standard fire policy remains in effect for? A: 5 days B: 10 days C: 30 days D: 15 days
A
Which of the following causes of loss is covered under a commercial property basic form? A: Nuclear hazard B: Dry rot C: Volcanic eruption D: Earth movement
C
The extra expense coverage form provides? A: Coverage that will permit the insured to continue in business without interruption following a property damage loss B: Extra money for an insured whose accounts receivable records have been damaged C: Additional money to pay for property damage losses at a covered location D: Payment for unforeseen expenses an insured may incur while the business is shut down following a property damage loss
A
Which of the following would be considered a cause for flood conditions covered by the National Flood Insurance Program? A: Mudflow B: Snow C: Landslides D: Sewer backup
A
In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT? A: Employers liability B: Separation of insured C: Legal action against insurer D: Bankruptcy
A (Employers liability is an exclusion)
A man is working on the roof of his house, and his neighbor is watching from the ground. when roof shingles are thrown off the roof, they hit the neighbor in the face, injuring his eye. Which best classifies the homeowner's legal liability? A: Personal injury B: Bodily Injury C: Contributory negligence D: Property damage
B
An insured covered under a Mobile Homeowners Policy wants to move the location of the covered mobile home. Which of the following must the insured obtain from the insurer? A: Additional Coverage Property Removed Endorsement B: Transportation/Permission to Move Endorsements C: Housing and Transportation Coverage D: Loss of Use Coverage
B
If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to? A: $350 B: $500 C: $750 D: $1,000
B
In equipment breakdown coverage, all accidents would be considered a single accident if they occur? A: At the same location within a 48-hour period B: At a single location at the same time and from the same cause C: At all insured locations at the same time and from the same cause D: At the same location within a 24-hour period
B
The part of a property that shows the amount of insurance, premium, and policy term is the ? A: Endorsements B: Declarations C: Insuring clause D: Conditions
B
What type of information would be found in a policy's insuring agreement? A: Insurer's address B: Renewal dates C: Location of premises D: Policy limits
B
Which of the following would be covered under personal injury liability? A: Death B: Slander C: A broken arm D: A concussion
B
Which of the following would qualify as a competent party in an insurance contract? A: The applicant is under the influence of a mind-impairing medication at the time of application B: The applicant has a prior felony conviction C: The applicant is intoxicated at the time of application D: The applicant is a 12-year-old student
B
Who would participate in a Write Your Own (WYO) flood insurance program? A: Business requiring National Flood Insurance policies B: Private Insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis C: Lloyd's associations D: Government insurance companies that write and service National Flood Insurance policies
B
Which of the following statements is true concerning the special form dwelling policy? A: Coverage A is for all-risk perils, and Coverage C is for basic perils only B: Coverage A is for all-risk perils, and Coverage C is for the broad form perils C: Both Coverage A and Coverage C are provided on an all-risk basis D: Both Coverage A and Coverage C are provided for the broad form perils
B (Because the all-risk coverage applies to property insured under Coverages A and B only)
Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? A: Coverage C B: Coverage D C: Coverage A D: Coverage B
B (Coverage D provides fair rental value coverage when insured rental dwellings suffer a loss covered by Coverage A, B, or C)
Which of the following is defined as a covered cause of loss in businessowners property coverage? A: Pollution B: Leakage from fire-extinguishing equipment C: Rain D: Smoke from agricultural smudging
B (The other causes are specifically excluded)
A commercial property special form covers property in transit up to? A: Full replacement cost B: $5,000 C: ACV D: $500
B (This extension of coverage may be added to the special form. It is additional insurance (in addition to the coverage limit) and coinsurance does not apply)
A Policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? A: $200,000 B: $ 100,000 C: $175,000 D: $180,000
C
A businessowners policy is? A: Part of a commercial package policy B: A monoline policy C: A self-contained prepackaged policy D: A special policy designed for large retail operations
C
All of the following are losses NOT covered under the standard fire policy EXCEPT? A: Acts of war B: Theft C: Fire D: Insured's neglect
C
An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? A: Builders risk form B: General property form C: Contractors equipment floater D: Bailee's customers form
C
Commercial property policies written together into a single contract are referred to as? A: Combined policies B: General liability policies C: Package policies D: Monoline policies
C
Homeowners policies provide coverage for? A: The land under the residence B: Property of tenants, roomers, or boarders not related to any insured C: Business property while on the residence premises D: Losses caused by off-premises power failure
C
In a liability policy with split limits of 20/40/10, what is the maximum amount payable for bodily injury to two or more people per occurrence? A: $10,000 B: $20,000 C: $40,000 D: $70,000
C
Provided that a loss did not result from negligence by the assured, the owners, or the managers of the vessel, additional perils are covered under the? A: Sue and labor clause B: Adventure clause C: Inchmaree clause D: General average and salvage clause
C
The Commissioner reports any violations of insurance laws and regulations to the? A: Governor B: NAIC C: Attorney General D: Guaranty Association
C
The endorsement that can be attached to a Boiler and Machinery policy to provide coverage for perishable property for spoilage or damage caused by contract with refrigerant is called? A: Equipment breakdown coverage B: Pressure and refrigeration object coverage C: Refrigeration interruption coverage D: Refrigeration breakdown coverage
C
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? A: 5 days B: 15 days C: 30 days D: 60 days
C
The required privacy disclosure notice must be provided by the insurer to current policyholders at least once in any period of? A: 3 Months B: 6 Months C: 12 Months D: 24 Months
C
The standard fire policy limits legal action against the insurance company to how many years? A: 5 B: 1 C: 2 D: 3
C
When may an insurer charge a rate different from the one promulgated by the North Carolina Rate Bureau? A: Only if it is a rate increase B: Only if it is a rate decrease C: Only when the insurer files the proposed deviation with the Commissioner and the Bureau D: At any time
C
Business personal property coverage form covers all of the following EXCEPT? A: Machinery that is not permanently installed B: Stock C: Automobiles held for sale D: Furniture and fixtures
C (Automobiles held for sale are among the exclusions in the BPP Form. The rest are covered types of property)
A businessowner has a building and personal property policy that covers a shed in which he stores extra parts. If he buys a second shed for the same purposes, this will be automatically covered for how long? A: 15 days B: 20 days C: 30 days D: 45 days
C (Coverage is for 30 days for newly acquired buildings and personal property that are similar in use to the property insured.)
In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT? A: Legal action against insurer B: Bankruptcy C: Employers liability D: Separation of insured
C (Employers liability is an exclusion)
A Commercial Package Policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT? A: Crime Coverage B: Boiler and machinery coverage C: General liability coverage D: Workers compensation coverage
D
Adverse selection is a concept best described as? A: Underwriting slanting the odds in favor of the company B: Poor choices of applicants to be covered C: Only offering coverage to good risks D: Risks with higher probability of loss seeking insurance more than other risks
D
All are true of the additional coverages of a homeowners policy EXCEPT? A: It will pay up to 10% of the policy's dwelling limit for increased building cost because building codes have changed between the time the house was built and the covered loss occurred B: It will pay up to $5000 for grave markers away from the residence premises caused by a Coverage C peril C: It will pay for reasonable repairs to protect the property and prevent further loss D: It will pay up to $1000 for loss because of acceptance of counterfeit US currency
D
All of the following are factors in the determining of actual cash value EXCEPT? A: Type and quality of property B: Age of the property C: Replacement cost D: Insurance premium paid
D
Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called? A: Schedule coverage B: Blanket coverage C: Described coverage D: Specific coverage
D
What do individuals use to transfer their risk of loss to a larger group? A: Insurable interest B: Exposure C: Indemnity D: Insurance
D
What type of form is HO-4? A: Comprehensive form B: Modified coverage form C: Special form D: Contents broad form
D
Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section? A: Up to $2,500 occurrence B: Up to $10,000 aggregate for the policy period C: Up to $5,000 aggregate for the policy period D: Up to $1,000 per occurrence
D
Which of the following endorsements under a Boiler and Machinery policy is used for calculating the amount to be paid on a lost business claim after a direct loss? A: Refrigeration Interruption Coverage B: Turbine Units Explosion Coverage C: Refrigeration Interruption - Report of Values D: Business Income - Report of Values
D
In order to be granted a nonresident license, individuals must meet all of the following requirements EXCEPT? A: Pay the required application fees B: Be licensed in their home state for the lines of insurance in which they are seeking non-resident license C: Be from a state with a reciprocal agreement with North Carolina D: Be registered to vote
D
All of the following actions are prohibited in the sale of life insurance EXCEPT? A: Sharing commissions from the sale of a life policy with another life agent B: Paying anything of value to the insured that is not specified in the contract C: Offering shares of stock in the insurer as an inducement to buy insurance D: Giving a special advantage as an inducement to buy insurance
A
All of the following are duties of the insured following a loss in a standard fire policy EXCEPT? A: Submit a signed proof of loss within 30 days B: Furnish a complete, detailed inventory including values C: Notify the insurer in writing immediately following the loss D: Protect the property from further damage
A
An agent who offers a cash reward to a prospect for buying a policy is guilty of? A: Coercion B: Twisting C: Controlled business D: Rebating
A
An agent who offers a cash reward to a prospect for buying a policy is guilty of? A: Rebating B: Coercoin C: Twisting D: Controlled business
A
An earthquake does $5,00 in damage to a property covered under as dwelling policy. In addition to the initial earthquake damage, the tremors cause a gas main explosion, causing an additional $2,500 in damage to the insured Property. How much will the insurer pay? A: Nothing B: $2,500 C: $5,000 D: $7,500
A
The most the insurer will pay for a loss under a business policy is? A: The amount of the loss minus the deductible B: 80% of the loss C: 20% of the loss D: The limit of insurance after the deductible is paid
D
Which of the following is NOT a coverage part of a commercial package policy? A: Personal article floated B: Inland marine C: Commercial auto D: Equipment breakdown
A
Which of the following is not consider a rebate? a. Offering a client a multi-policy discount b. Returning part of your premium to your client c. Any inducement to buy that is not stated in the policy d. Giving clients who buy policies from you $100 gift cards
A
A company has a business owners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? A: Up to $300,000 for the loss B: Up to $150,000 for the loss C: The coinsurance formula would apply D: Nothing because the company failed to carry the required insurance amount
C
A policyowner has terminated an insurance policy. The insurer must maintain records for at least how long? A: 2 years B: 3 years C: 5 years D: 7 years
C
How are premiums handled on a prepackage business owners policy? A: Property premiums are set at a fixed rate, while liability premiums increase over time B: There is one premium for property and liability coverage C: Only property coverage requires premium payments D: Premiums may very between property and liability coverage
B
In homeowners policy, coverage for a loss by theft of firearms is? A: 10% of Coverage C, up to $5,000 B: 10% of Coverage C, up to $10,000 C: 25% of Coverage C, up to $10,000 D: $25,000
B
Section I of a homeowners policy would cover which of the following? A: Liability B: Personal Property C: Loss of income D: Personal Injury
B
The perils covered by the beach area property plan include all of the following EXCEPT? A: Fire B: Flood C: Lightening
B
Which of the following refers to the upper limit a liability policy will pay out for all claims that arise from a single accident? A: Split limits B: Per Person C: Per occurrence D: Combined single limits
C
If required, advertisement's must be filed for review at least how many days before the insurer can use them? A: 10 days B: 15 days C: 30 days D: 45 days
C
Maps that indicate which areas in the community are subject to serve flooding are called? A: Flood Susceptibility Maps B: Topographical Representations C: Flood Hazard Boundary Maps D: Flood Insurance Rate Maps
C
Which of the following coverages in the dwelling policy is for indirect losses? A: Personal Property B: Dwelling C: Additional Living Expenses D: Other Structures
C
Which Commercial property causes of loss form covers all losses not otherwise excluded in the policy? A: Modified Form B: Basic Form C: Broad Form D: Special Form
D
Which of the following entities is eligible for a business owners policy? A: Amusement parks b: Automobile sales and servicing operations C: Manufacturing operations D: Convince stores
D
Which of the following homeowners forms would be best for a person renting half of a duplex? A: Unit-owners for (HO-6) B: Broad form (HO-2) C: Special form (HO-3) D: Contents broad form (HO-4)
D
Which of the following is an advantage of a businessowners policy? A: It offers lower rates to bars and grills B: It combines property and liability coverage in a single package C: It is a monoline policy D: It splits premiums, allowing an insured more flexibility regarding coverage
D
Which of the following perils is excluded in all dwelling policy forms? A: Volcanic Eruption B: Freezing C: Collapse D: Government Action
D
Which of the following commercial property condition forms ensure that any adjustments to the coverage by an insurer must apply to all existing policies? A: Subrogation B: Legal action against an insurer C: Liberalization's D: Other Insurance
C
Statements made by an applicant for an insurance policy that are the best of the applicants knowledge are referred to as? A: Indemnity B: Warranties C: Representations D: Material Information
C
All of the following actions are prohibited in the sale of life insurance EXCEPT? A: Offering shares of stock in the insurer as an inducement to buy insurance B: Giving a special advantage as an inducement to buy insurance C: Sharing commissions from the sale of a life policy with another life agent D: Paying anything to value of the insured that is not specified in the contract
C
All of the following help determine flood insurance rates EXCEPT? A: zone classifications B: Simple flood definitions C: Pre-FIRM rates D: Post-FIRM rates
B
All of the following are characteristics of the dwelling policy EXECPT? A: Coverage includes the dwelling only, contents only, or both B: Incidental occupancy of limited service-type exposure is permitted C: Dwellings up to four family units are eligible D: The dwelling must be owner-occupied
D
An insurance broker represents? A: The beneficiaries B: Other agents C: The insurer D: The insured
D
Which of the following types of insurance would be covered by the North Carolina Post-Assessment Insurance Guaranty Association? A: Automobile policies B: Life Insurance C: Mortgage insurance D: Surety bonds
A
All of the following are exclusions that apply in all three types of Dwelling Policies EXCEPT? A: Earth movement B: Fire or lightening C: Government action D: water damage
B
An insurance agent who embezzles a client's monies is guilty of? A: A Felony B: A misdemeanor C: Fraud D: Perjury
A
If a licensee is convicted in any court for any offense, other than a traffic violation, the licensee must notify the Commissioner within how many days of the conviction date? A: 10 days B: 15 days C: 30 days D: 31 days
A
Which of the following limitations does a homeowners policy place on a home-run business? A: An additional premium is charged based on the income of a home-run business B: There can be no more than 2 people working at any one time C: The business is limited to $10,000 in retail sales D: The home business may operate only between the hours of 7am and 6pm local time
A
Which of the following other coverages is NOT included in the basic form dwelling policy? A: Breakage of glass B: Removal Coverage C: Personal property temporarily away from the insured premises D: Tenant's improvements, altercations, and additions
A
A homeowner lives in a 150-year-old adobe building that is on the National Register of Historic Places. The homeowner has a HO-8 coverage. If a fire destroys part of the roof, which of the following describes the insurer's responsibility? A: Replacement of the roof to the condition prior to the fire B: Full roof replacement to current code specifications C: Partial roof replacement to current code specifications D: None
B
All of the following are other coverages under the dwelling policy EXCEPT? A: Improvements, altercations, and additions B: Earth Movement C: Other structures D: Debris removal
B
An agent in Ohio wants to become an agent in North Carolina. The Commissioner will waive certain examination requirements, provides that Ohio would waive these same requirements if a North Carolina agent sought licensure in Ohio. What term does this describe? A: Rebating B: Indemnity C: Reciprocity D: Residency
C
An insured loses $2,500 worth of precious stones in a burglary. How much will the insured's homeowners policy cover? A: Nothing B: $1,250 C: $1,500 D: $2,500
C
The main difference between an HO-4 and HO-6 is? A: HO-6 does not cover additional living expenses B: HO-4 provides limited dwelling coverage as well as contents coverage C: HO-6 provides limited dwelling coverage as well as contents coverage D: HO-4 does not cover additional living expenses
C
What organization is responsible for administering the plan that ensures access to property insurance for beach properties? A: Division of Insurance B: Post-Assessment Guaranty Association C: North Carolina Insurance Underwriting Association D: FAIR Plan
C
When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy? A: The loss reimbursement is paid to the insured B: The loss reimbursement is not awarded if damages arose from the insureds negligence C: The loss reimbursement is paid to the mortgagee D: The mortgagee is prohibited from bringing a suit against the insurer
C
A building contractor constructs a rental property home using "straw-blue" construction that does not conform to standard building codes. The contractor, who is also the owner, does not want insurance on the building but wants coverage on as many other things as he can get. What coverage plan should be a producer recommend? A: HO-2 B: HO-4 C: HO-5 D: Coverage cannot be extended on this structure
D
A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended is known as ? A: Peril B: Loss Valuation C: Liability D: Accident
D
After receiving proof of loss from an insured, an insurer must notify the insured of its intent to repair or replace damaged or lost property within? A: 10 days B: 20 Days C: 30 days D: 60 days
D
All insurers must keep records of each complaint received and the insurers response for ? A: 1 year B: 2 years C: 3 years D: 5 years
D
In homeowners policies, indirect losses are covered by? A: Coverage A B: Coverage B C: Coverage C D: Coverage D
D
All of the following practices would be prohibited EXCEPT? A: Projecting a dividend on a participating policy B: Misrepresentation of the effects of a loan on a policy C: Using a misleading name for a policy D: Misrepresentation of the benefits or terms of any insurance policy
A
Eligibility requirements for obtaining property coverage in the FAIR Plan include all of the following EXCEPT? A: Property at risk must be owner occupied B: Risk must be insurable C: The applicant must have made an unsuccessful effort to obtain coverage in the normal market D: Risk must be located in a specific area
A
If a licensee is convicted in any court for any offense, other than a traffic violation, the licensee must notify the Commissioner within how many days of the conviction date? A: 10 days B: 30 days C: 20 days D: 15 days
A
The term "essential insurance coverage" as defined by the North Carolina Insurance Association refers to? A: Insurance against direct loss to property as defined in the standard statutory fire policy and extended coverage, vandalism and malicious mischief endorsements B: All risk coverage to include business owners policies, commercial general liability policies, and business income policies C: Catastrophic losses, as determined by the Association and approved by the Commissioner, that are covered under the windstorm and hail coverage in the beach and coastal area D: Policies of windstorm and hail insurance that are available only for risks in the beach and coastal areas
A
Which of the following dwelling policies insures a structure on an actual cash value basis? A: DP-1 B: DP-2 C: DP-3 D: DP-6
A
An individuals construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? A: Bailee's customers form B: Builders Risk form C: General property form D: Contractors equipment floater
D
An ocean marine loss that occurs through the voluntary sacrifice of a part of the vessel or cargo to save the ship, crew, or other cargo is known as? A: Particular average B: Inchmaree clause C: Protection and indemnity D: General average
D
How soon after a direct physical loss would the period of restoration begin under the extra expense coverage form of a CPP? A: Immediately B: 24 Hours C: 48 Hours D: 72 Hours
D
How does the mobilehome endorsement affect the other coverage of law or ordinance in a homeowners policy? A: It removes coverage B: It broadens the coverage C: It limits the coverage D: It has no effect on this coverage
A (The mobilehome endorsement makes the other coverage of law or ordinance inapplicable to the policy)
All of the following are other coverages included in both the broad and special form dwelling policy EXCEPT? A: Theft of personal property B: Collapse C: Breakage of glass D: Lawns, trees, shrubs, and plants
A (theft of personal property can only be included by endorsement)
An insured has a homeowners policy and repairs her to be a member of the homeowners association in her neighborhood. The association's community house has burned down and the insured has been assessed $1,200 for her community share of the rebuilding cost. How much of the assessment will the homeowners policy pay? A: None B: $500 C: $1,000 D: $1,200
C
Denying insurance coverage on the basis of a person's marital status is? A: Allowed with the insurance commissioners approval B: Allowed under state law C: Considered unfair discrimination D: Considered a category D felony
C
Events or conditions that increase the chances of an insured loss occurring are referred to as? A: Risks B: Perils C: Hazards D: Exposures
C
If a claim under a commercial property policy is disputed, what is the maximum time period an insured may bring legal action against an insurer? A: 2 years from a loss B: 6 years From a Loss C: 5 years from the initial application D: 10 years from the initial application
C
A building insured with commercial property insurance has been vacent for more than 60 consecutive days. Which of the following is NOT true? A: The insured has no coverage for losses caused by theft. B: The insured has no coverage for losses caused by glass breakage C: Payment for unnamed perils is reduced by 15% D: Payment for unnamed perils is reduced by 25%
C (If the building has been vacant for more than 60 consecutive days before the loss, the insurer will not pay for damage caused by vandalism, sprinkler leakage, glass breakage, water damage, theft or attempted theft. If the loss is caused by any other peril, the insurer will reduce the amount they would have otherwise paid by 15%)
Besides the peril of earthquake, which other peril is covered by the earthquake cause of loss form under a commercial property policy? A: Hurricane B: Lightening C: Volcanic Eruption D: Tidal wave
C (The earthquake cause of loss form adds two perils for coverage: Earthquake and volcanic eruption)
If an insurer makes a statement misrepresenting or incompletely comparing the terms of any insurance policy to induce a policyholder to drop an existing policy, what unfair practice has occurred? A: Fraud B: Embezzlement C: Defamation D: Twisting
D
In insurance contracts, consideration on the part of the insured is? A: Warranties made in the application B: The submission of proof of loss C: Transferring policy rights to another person D: The payment of premiums and representations made in the application
D
In order for a dwelling to be covered on a replacement cost basis, the dwelling must be insured up to at least? A: 20% of the replacement cost B: 40% of the replacement cost C: 60% of the replacement cost D: 80% of the replacement cost
D
Replacement cost coverage is provided in both the broad and special form dwelling policies when? A: The amount of insurance on the dwelling is at least 90% of its replacement cost when the policy is written B: The dwelling is insured for 100% of its replacement cost at the time of a loss C: The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss D: The amount of insurance on both the dwelling and personal property is at least 80% of its replacement cost when the policy is written
C
If an insured changes his/her name, the change may be reflected on the insurance policy by attaching what to the policy? A: An additional coverage form B: A notarized authorization C: An additional insuring agreement D: A signed endorsement
D
The Fair Access to Insurance Requirements (FAIR) plan is designed to? A: allow insurers to participate, at their option, in doing the right thing for consumers B: Create shared market to provide fire and extended coverage insurance to individuals unable to obtain this coverage through the standard marketplace C: Insure beach and coastal properties D: Help persons who cannot afford property coverage such coverage
D
A basic dwelling policy automatically provides coverage against fire, lightening, and ? A: Windstorm B: Internal Explosion C: Riot D: Smoke
B
From the date of the loss, how many years does an insured have to file a lawsuit against a homeowners insurer? A: 1 year B: 2 year C: 3 year D: 5 year
A
If a person holding a resident insurance license moves out of state, that person must surrender his or her license to the Commissioner within how many days of terminating their residence? A: 30 days B: 60 days C: 90 days D: 180 days
A
In property and casualty terms, continues or repeated exposure to conditions resulting in damage to property is called? A: Occurrence B: Hazard C: Indirect Loss D: Accident
A
The appraisal clause of the standard fire policy allows for the process of setting disputes over the ACV of the property or the property or the amount of loss. When disputes arise, each party (insurer and the insured) must select an impartial appraisal within? A: 20 days B: 30 days C: 45 days D: 10 days
A
The basic dwelling (DP-1) provides all of the following coverages without endorsement EXCEPT? A: Additional Living Expenses B: Fair Rental Value C: Dwelling D: Other structures
A
A home insured on an HO-3 policy was completely destroyed in a fire. The house was worth $300,000. The limit of the policy is $250,000. The policy will pay for the total loss & debris removal is? A: $250,000 B: $250,000 plus an additional 5% C: $300,000 D: $300,000 minus 5%
B
An installation floater is used to insure? A: Dams, power plants, water plants, and other such installations B: Appliances intended to become a permanent part of the building C: Buildings under construction D: All types of for-sale merchandise
B
An insured's homeowners policy covers an antique dining set. After a water pipe burst, the insured moves the set to a storage shed to protect it from water damage. What is the longest period of time the homeowners policy will extend coverage to the dining set? A: 14 Days B: 30 Days C: 45 Days D: 60 Days
B
Which of the following would be eligible for coverage under a dwelling property policy? A: The acreage on which an apartment complex is built B: A house divided into 3 apartments C: A single-family house with 7 boarders D: A mobile home divided into 2 rental units
B
All of the following are grounds for license suspension revocation or refusal EXCEPT? A: Having committed any insurance unfair trade practice B: Making an untrue statement on the license application C: Sharing commissions with another agent D: Failure to pay child support
C
The Commissioner of Insurance is? A: Elected by authorized insurers B: Elected by the people of North Carolina C: Appointed by the governor D: Appointed by the Attorney General
C
Under businessowners policy Section I, if an insurer wants to cancel a policy for any reason except no payment or premium, how many days before the expiration date must the insurer notify the mortgageholder? A: 30 days B: 90 days C: 20 days D: 40 days
A
Which of the following types of property would be covered in homeowners coverage form? A: Landlords furnishings in an on-premises apartment B: Structers used for business purposes C: Structured rented to others who are not tenants of the dwelling D: Animals, birds, or fish
A
The mobilehome endorsement alters the homeowners policy to cover a mobilehome and other structures on land ? A: Owned or leased by the resident of the mobilehome B: Owned or leased by a landlord who does not reside on the premises C: Owned by a landlord who does not use the mobilehome located on it D: Leased by the owner of the land
A
Which of the following is TRUE regarding business liability and medical payments coverage? A: Loss of electronic data is excluded under a business liability policy B: Liability arising from alcohol intoxication is only covered for alcohol distributors C: Nonowned watercraft less than 60 feet long are covered D: Mobile equipment may be covered, as long as it is attached to an insured auto
A (Damages arising out of damage to or loss of electronic data are not covered under business liability and medical payments coverage)
The common policy conditions is a modular part combined with other parts to create the contract. The common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? A: The first named insured may cancel the policy at any time by giving written notice to the insurer B: Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained C: Requests for any changes in the policy from the insured may be made by the second named insured D: The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy
A (Only the first named insure may make requests for any changes in the policy)
In which of the following situations would a property be considered unoccupied? A: A new apartment building has been insured, but no dwellers have moved in yet? B: A building has been condemned and emptied of all property C: The insured went on vacation for a month while the house remained empty D: The insured moved out and removed all the furniture from the house 3 months ago
C
Which type of losses are covered by the standard policy? A: Indirect Losses B: Direct Losses C: Both D: Neither
B
How many years from the cancellation or nonrenewal of a commercial property policy may an insurer audit the books or records of the insured? A: 1 year B: 3 years C: 5 years D: Indefinitely
B
Under a broad form dwelling policy, frozen water pipes will be covered? A: if the plumbing had been installed within the past 3 years B: If the insured took steps to ensure that the water pipes would not freeze C: If the outside temperature reached 20 degrees of colder D: Under all circumstances
B
Which of the following business owners policy (BOP) endorsements provides coverage for the inability to collect monies due from customers as the result of a covered cause of loss? A: Valuable papers and records B: Accounts receivable C: Money and security D: Extortion
B
Which of the following commercial forms would cover costs associated with a temporary worksite while damaged to an office building are being repaired? A: Builders risk B: Business Income C: Legal Liability D: Extra Expense
B
A couple has just purchased a condominium. Which of the following policies would they use to insure their dwelling? A: HO-2 B: HO-4 C: HO-5 D: HO-6
D
The law of large numbers is best defined as a large numbers of people with similar exposures to loss resulting in actual losses being? A: Less predictable B: Smaller C: Larger D: More Predictable
D
Which of the following could be covered on a basic dwelling policy form if purchased? A: Hail damage to a dwelling's outside antenna B: Smoke damage from fireplace use C: Damage from broken water pipes D: Damage from vandalism to a property that has been vacant for 45 days
B
Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is? A: Equal to the amount provided as Coverage B B: Equal to the amount provided as Coverage A C: 50% of the amount provided as Coverage B D: 50% of the amount provided as Coverage A
D
Under which of the following circumstances would a loss be covered under an HO-2 policy form? A: Rain enters a house through an open door, warping the wooden floors B: An insured drives a car into a wooden plat fence on the insureds property C: A house that has been vacant for 65 days is damaged when a water heater bursts D: A hail storm pokes a hole in a roof and a bedroom has hail damage
D
Which of the following perils in NOT covered the DP-2? A: Damage caused by burglars B: Damage caused by the weight of ice and snow C: Damaged caused by falling objects D: Damage to pets, birds, or fish
D
