Guarantee exam #2

NJ automobile FUll insurance underwriting association offers all of the following coverages EXCEPT

$1,000,000 bodily injury (Offers only $500,000 for bodily injury)

An insured and his spouse were travelling down an icy road and hit a sign, accumulating $1,350 damge to their car. They have $250 deductible. They already collected on $1,500 claim earlier this year. How much will they collect on this claim?

$1,100

Which of the following acts stated that the federal goverment would not regulate insurance as long as the states did an adequate jobof regulating the industry?

McCarran-Ferguson Act

There are two rating plans available for use to adjust the premium for workers compensation. They are

Retrospective rating and experience rating

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies

which would NOT be covered by an insured's uninsured motorist coverage?

The insured causes a head-on collision with the car of an uninsured motorist

An insurer decides to TERMINATE the appointment of one of its producers and notifies the commissioner 29 days after the fact. On the 9th day after the decision, the producer violates a regulation of the insurance code, and a policyowner wants to hold the insurer legally responsible. Which of the following is true?

The insurer will be held legally responsible (If an insurer cancels an agency contract, it must notify the commissioner in writing within 15 days)

What is an insured contract?

Those contracts that are automatically covered under the exposre of premises coverage in a general liability insurance contract (insured because they are covered whether or not identified)

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

Your farm wagon being towed by your pick up truck (Agricultural equipment is not insured on auto policies, except farm wagons being towed by a covered auto, in which case the rules for trailers apply)

An insured has $5,000 of medical coverage uder a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are $8,000. The first passenger's total $4,000; the second passenger's total $6,500; and the third passenger's total $1,200. How much will the policy pay under medical payments coverage?

15,200 (Medical payments coverage is provided by a limit of liability per person. The limit was $5,000 per person so (10,000 + 4000+ 1200)

A trucking copany has a $1 million umbrella policy in place. The business owner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300000. It turned out that the business actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?

$100000

An insured has an automobile policy with limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded 125,000 for his injuries and 25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1,200. The total payment made under the insured's policy is

$125,200

Space age rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. Georgia has compulsory workers compensation laws. Space Age's owner thinks that his company is too small and unprofitable to carry the workers compensation plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT

Force payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage

IF a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be filed with the department

A policy contains a consent to settle a loss provision, which requires the insurer to obtain the consent of an insured before the settlement of a claim. With this in mind, what kind of liability policy does the insured most likely have?

Professional liability

What happens if the named insured fails to elect a tort option in writing for PIP coverage?

Limitation on lawsuit

Which of the following describes an insurers responsibility for payment under a policy, as stated in common policy provisions?

Limits of liability

An insurance agent visits a potential client and explains various types of policies. The customers displace a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

Misrepresentation (The act of portraying sales material that is false, misleading or deceptive as to policy benefits, the payment of dividends, etc)

A small appliance manufacture in this state provides products around the globe. A customer in Swizterland is injured using one of its products. if the appliance manufacture is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?

The appliance was manufactured in the United States (coverage territory)

What is a sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage that is neither expected nor intended called?

accident

which of the following statements does NOT describe endorsements?

endorements may only add coverage to a current policy, not remove. (endorsements can be used to correct items, add or delete coverage)

While driving, an insured lost control of her automobile and drove it through the side of a hardware store damaging the store and 3 aisles of hardware goods. It was determined that the insured was driving the posted speed limit and that her car was in good repair. the hardware store owner will likely

seek a claim for property damages from the drivers insurer

which of the following entities is considered principal

the insurer issuing a policy

Under a workers compensation policy, premiums will be determined when

the policy period ends (The final payroll will not be known before the policy is issued, the initial premium is considered a deposit and is subject to an adjustment at the end of the policy period)

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

there is no additonal premium (additional coverage is a provision in an insurance policy that provides additional amounts of coverage for specific loss expense at no additional premium)

The insured's product under a commercial general liability policy does NOT included which of the following

vending machines rented to others