Guarantee Exam (3)

How much notice must the Property and Casualty Guaranty Association give before cancelling insurance policies?

10 days

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10% of Coverage C anywhere in the world

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

25%

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

A warranty

Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. What is FALSE when it comes to this coverage?

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

What is eligible for a business owners policy?

Convenience stores

The authority granted to an agent through the agent's contract is referred to as

Express authority

To have insurable interest, what risk must the policy owner face?

Financial loss

Which commercial property form provides coverage for the insured's legal liability for property in his or her care, custody or control?

Legal liability

Section II describes

Liability coverage, exclusions, additional coverages, conditions

What would NOT be covered by commercial inland Marine policies?

Property lost due to a military action

What type of property would NOT be moveable?

Real property

What type of insurer uses a formal sharing agreement?

Reciprocal insurers

Mary feels that she was unreasonably denied home insurance by Snidley insurance. Under the grievance procedures of the Essential Insurance Act, Mary had a private conference with Snidley insurance, but did not manage to settle their dispute. What will happen now to resolve the issue?

The Commissioner will review and resolve the dispute

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

A bank

If a fire erupts in the kitchen and spread to the upstairs bedroom, resulting in the destruction of furniture, what type of loss has occurred?

Direct

How soon does the period of restoration for business income coverage begin after the direct loss?

72 hours

What kind of coverage does Form DP-3 provide?

Open peril

What is consideration on the part of the insurer?

Paying a claim

In reference to insurable interest, which of the following is NOT an element of insurable risk?

Personal

Section I describes

Property coverage, perils insured against, exclusions, conditions

What is correct regarding business income coverage under the businessowners policy?

The business income losses are payable for 12 consecutive months following the occurrence

If the premiums collected by an insurer participating in the WYO flood insurance program are insufficient to cover losses, which of the following would be true?

The insurer will be reimbursed for the excess costs by the NFIP

What would not be insured under an HO 3 homeowners policy?

The owner-occupant of a condominium unit

How long must an insured wait before business income coverage begins?

72 hours

What can not be added to the standard equipment breakdown coverage form?

Debris removal

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

Riot

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

Under Coverage E - Scheduled Farm Personal Property, livestock that is not specifically insured is limited to a coverage limit of

$2,000 per head

An individual just applied for National Flood Insurance. How many days can she expect to wait before coverage is effective?

30 days

An insured has extended her business income coverage part to a newly acquired location. The insured was able to take this action because her coinsurance percentage is at least

50%

What is correct regarding the replacement cost coverages under the business owners policy?

An 80% insurance-to-value requirement is in place

How is the premium paid for the businessowners policy?

One indivisible premium