ExamFX Readiness Exam Review

What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy?

$1000.

An insured has a commercial blanket bond in the amount of $25,000. 3 identifiable employees still $10,000 each in a single loss how much will the bond pay

$25,000

In business owners policies how son does the period of restoration for business income begin after the direct loss?

72 hours

What is the main distinction between a hired auto and a non-owned auto

A hired auto is any auto that you lease hire borrow or rent

With regard to homeowner Section 2 which of the following does not meet the definition of an insured location

A plot of farmland

Homeowners policies consider all of the following insured locations EXCEPT

A strawberry patch owned by the insured

The obligation to compensate injured workers without regard to fall or negligence is known as

Absolute liability

Under a fidelity bond what happens when the employer discovers the employee has committed a dishonest act?

The employer would file a claim and get reimbursed according to what it agreed to with the insurer

Which of the following risks would not be eligible for coverage under a homeowner's policy?

An applicant who owns and lives on a commercial farm.

Which of the following is most likely ineligible for coverage under the business owners policy?

An auto shop

The businessowners liability coverage form would respond to a claim arising from which of the following events

An injury arising out of a customer falling because of a wet floor

What did the motor carrier act of 1980 do?

Deregulated the trucking industry, Provided auto insurance to motor carriers who could not obtain it on the regular market

Lost Treasures has a guard dog in a fenced lot to protect the salvage yard. The dog scared a passerby, who now claims that it was a traumatic experience and that he now suffers from recurring nightmares. A claim for personal injury of $5,000 is filed against Lost Treasures. Why will the personal and advertising injury liability section (Coverage B) of the CGL policy cover this claim?

Mental anguish is a covered injury

Guaranteeing future dividends is considered to be an unfair, deceptive act known as.

Misrepresentation

The transit cost does which of the following.

Names the points of the voyage.

What does the application of contract of adhesion mean

One party must accept or reject the contract as presented by the insurerOne party must accept or reject the contract as presented by the insurer

An insured is injured while driving his own car. Which of the following coverages will pay for the loss?

Part B medical payments.

In a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage?

Part a liability coverage

Under a commercial general liability policy, which of the following is not considered mobile equipment?

Passenger automobile.

What does homeowners personal property coverage not cover?

Personal property of roomers not related to the insured

An insured diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took four weeks for repairs to be completed, during which the insured was without income. The insurance policy includes both direct and indirect loss coverage. What part of the loss would be paid as an indirect loss?

The loss of income for the time the diner was closed

The owner of a rental dwelling, insured under a DP-2 turns off the heat in the insured dwelling during the winter months because the dwelling is not occupied. The building's water pipes freeze and break, causing damage. How will the policy react to this loss?

The loss will not be covered

What coverage form in the farm policy insurers equipment on an open peril basis

The mobile agriculture machinery and equipment coverage form

Which of the following is an endorsement that changes the actual cache value settlement on personal property to a replacement cost basis?

The personal property replacement cost endorsementThe personal property replacement cost endorsement

An inured wants to transfer his auto insurance policy to his wife. What does the insured need to transfer the policy?

The written consent of the insurer

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage.

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as

Twisting

The commercial general liability coverage part a bodily injury and property damage provides coverage for which of the following.

bodily injury and property damage liability

What are the two sources for worker's compensation insurance?

Private insurers and State funds

When the ownership of a vessel changes, the premium will be returned on a

Pro rata basis

Worker's compensation rating is developed by applying a rating bureau job classification rate to which of the following

100$ of payroll

Joanna purchased a national flood insurance policy 10 days after her community entered into an emergency program. When will her coverage be effective?

12:01 AM. the day after the application and premium payment are mailed.

Under Business Personal Property Limit-Seasonal Increase, if no percentage is specified in the declaration, seasonal fluctuations will automatically increase the limit for business personal property by

25%

What is the maximum civil penalty for an individual willingly violating provisions of the Fair Credit Reporting Act

2500$

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

A business owners policy is discontinued. How long does the insurer have the rights to examine and audit the insureds books and records

3 years

As specified in the protective safeguard endorsement added to a business owners policy, if the automatic sprinkler system is shut down due to freezing conditions, the insured does not need t notify the insurance company as long as the system is restored within

48 hours

What type of policy which may be added by endorsement or purchased separately may an insured purchase in order to provide coverage for other types of contracts ?

A contractual liability policy

What guarantees that the information explained in the insurance contract is true.

A warranty

Under homeowners policy, watercraft liability coverage will apply to all of the following vessels except

A watercraft that is powered by an inboard outboard engine that is no more than 50HP.

Which of the following would not be covered as a loss under coverage D of a homeowner's policy?

An insured leased dwelling for five years. Two years later, the property owner died and the new property owners wanted to make the property their principal residence, so the lease was canceled.

Coverage personal liability and or coverage for medical payments would respond to a claim arising from all of the following situations except

An insureds 14 year old throwing rocks through windows

Coverage B of homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is not true of this coverage

Any loss paid under coverage B reduces the coverage A limit of liability

All of the following are considered insured under the hired and non owned auto liability endorsement added to the business owners policy except

Anyone other than the insureds employees

A single property insurance policy that can provide coverage for multiple classes of policy at one or more locations is called

Blanket

Which of the following exclusions would specifically fall under Coverage E in a homeowners policy

Bodily injury to a residence employee

Which of the following commercial auto coverage provides protection for most commercial auto exposures except truckers garages and motor carriers

Business auto coverage

In aircraft all coverage all of the following perils are covered while an aircraft is in flight except

Collision

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts, which require all of the following elements except.

Conditions

Other than perils, the difference in the 3 DP forms is in coverage provided. which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?

Coverage E-Additional living expense

All of the following statements are true about earthquake coverage and property policies except

Coverage is commonly provided through a federally-funded program

States with monopolistic state workers compensation funds

Do not allow private insurers to be licensed to write workers compensation coverage.

The American Institute hull clause for the return of premium will apply if a vessel has been laid up in port, not under repair and not used for storage. The premium will be returned for.

Each 30 day period

Abc insurance company receives an incomplete application and issues the policy anyway. Six months later, ABC realizes the missing information. What term is used that prevents ABC from forcing the policy owner to answer further questions?

Estoppel

How often must organizations consult the national do not call registry?

Every 31 days

Which of the following is not found in the common policy declarations of a commercial package policy?

Exclusions

Employer's liability coverage under a worker's compensation policy includes

Expenses for punitive damagesq

Which of the following statements is true concerning a worker's compensation and employer's liability policy?

Exposures and states listed on the information page are covered

Which of the following companies protects consumers against the circulation of an accurate or obsolete personal or financial information

Fair Credit Reporting Act

Premiums collected on behalf of the insurance company by an agent will be held in what capacity?

Fiduciary Capacity

Farmer Steve's shed has been vacant for an entire year when he files a claim to cover some recent damage to the shed. How much will his farm policy pay?

Fifty percent of the limit of insuranceFifty percent of the limit of insurance

All of the following are additional coverages under homeowners policies, except.

Fire Department service charges.

Which of the following is covered under a dwelling policy?

Freezing plumbing systems (If the insured has taken steps to maintain the plumbing)

When reviewing a standard worker's compensation and employees liability policy the limits of coverage are described in part one of the policy

In the state worker's compensation law itself

which of the following injuries may be covered under coverage C medical payments of a commercial general liability policy

Injuries to a member of the general public that occurs on premises

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement.

What is the difference between interstate and intrastate truckers?

Interstate truckers are allowed to cross state borders.

Which of the following is not true regarding the automatic increase in insurance endorsement in dwelling policies?

It does not require additional premium

Which of the following is true regarding fraternal benefit societies?

It is operated for the benefit of its members.

Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses.

Loss costs

A property insurance policy that ensures a commercial building on a replacement cost basis includes the ordinance or law endorsement. This endorsement will cover all of the following expenses.

Lost to the undamaged portion of the building, increased cost of repairs or reconstruction, demolition and removal cost.

Which of the following exposures is NOT covered under a homeowners policy?

Medical payments to an insured

A producer in anther state wants to become a producer in Nebraska. The other state gives the same privileges to Nebraska producers wanting to be licensed in that state as it does its own producers. Nebraska therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?

Reciprocity

Which of the following would not be covered under the directors and officers liability coverage

Reimbursement for fines and penalties

Which of the following types of property would be covered under coverage C personal property in a dwelling policy

Rowboats and canoes

Which of the following actions does not constitute false advertising

Stating that dividends are not guaranteed

To share the risk of loss from terrorist attacks within the insurance industry

The TRIA was passed, which makes insurers share in the financial loss of major terrorist attacks

In the event of a loss, the most the insurer will pay is

The amount of the loss or the limits that are stated in the policy, whichever is less

If an applicant for an insurance license is likely to earn an aggregate amount in commissions that would exceed 30% of the aggregate amount represented by all other insurance business that would be procured

The applicant salary would be reduced by the amount of excessive commission for the first year

An Insured owns an automobile liability policy with bodily injury limits of $200,000 and an umbrella liability policy with a limit of $1 million. The insured is involved in an automobile accident is found liable for injuries totaling $900,000. Which of the following examples best describes how the benefit will be paid?

The automobile liability policy will cover $200,000 of the damages and the umbrella liability policy will cover the other 700,000$

The insured's guest cottage, which is being insured under his farm policy, is being rented by a young couple. When one of the renters is injured in the rented property, the insured files a claim under his farm liability coverage. How will the coverage respond?

The claim will not be covered

Which of the following is false concerning liability coverage of a business auto policy

The company will reimburse the insured for all loss of earnings

Which of the following is false concerning liability coverage of a business auto policy?

The company will reimburse the insured for all loss of earnings

When the condominium association coverage form and the condominium unit owners form for both cover the same loss...

The condominium association form will be considered primary and the condominium unit owners form will be considered excess.

All of the following statements are true regarding the Mexico coverage endorsements in personal auto policies except

The endorsement will cover a total loss

What method of premium computation relates an employer's losses payroll and premiums to the rating bureaus classification of operations?

The experience modification factor.

An applicant may challenge information discovered as a result of an investigative consumer report under which of the following acts

The fair credit reporting act

All of the following are considerations in determining which states law applies when a worker is required to travel into another state and is injured while working in the other state except

The insurers charter location or domicile

Which of the following is covered by Auto other than collision comprehensive coverage

Vandalism damage to tires.

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?

WHARVES-Wind, Hail, Aircraft/Vehicles, Riots, Volcanic Eruption, Explosion and Smoke

When does the Federal Emergency Flood Insurance program go into effect

When a community applies for the program (30 day waiting period for coverage)

Under a worker's compensation policy, premiums will be determined when?

When the policy ends

If an applicant submits the initial premium with an application which action constitutes acceptance

When the underwriters approve the application

When must an insurance agency notify the director of an appointment of a producer

Within 15 days.

Your friends dog that you were keeping while a friend is out of town bites a visitor in your home. Does your homeowners liability coverage apply

Yes the coverage would apply for any animal in your care

Which of the following would be considered a covered auto on your personal auto policy

Your farm wagon being towed by your pickup truck

Which of the following situations would be covered by workers compensation?

a printer gets her hand crushed in a printing press at work