Guaranteed questions
Willie Sellum has recently purchased a used car lot with 50 used vehicles. His insurance agent, Bill Emnow, told Wille that it will take 30 days to get a policy-in-force on the cars to be sold. One option that Bill may be able to offer Willie could be a) An insurer's bond b) A CGL policy c) A temporary policy with another insurer d) A binder from the planned insurer
A binder from the planned insurer
Which of the following is indicated on a certificate of insurance? a) Types and cost of insurance b) Amounts and types of insurance c) Terms and conditions of insurance d) Cost and amount of insurance
Amounts and types of insurance
Under a CGL policy, which of the following is NOT considered mobile equipment? a) An automobile used as a company car by a real estate company b) A combine used on a farm c) The Department of Transportation's resurfacing equipment d) The bulldozer used by an excavating company
An automobile used as a company car by a real estate company
A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT a) Auto liability coverage b) Comprehensive personal liability c) Auto collision coverage d) Homeowners Section II coverage
Auto collision coverage
a homeowner has misplace some of her insured personal property and has no idea what may have happened to it. Which HO policy form would cover such a loss a. ho-2 b. ho-3 c. ho4 d. ho-5
D: Ho-5
An "uninsured motor vehicle" DOES NOT include which of the following: a) A vehicle owned by the insured, his/her spouse, or any resident relative in the same household b) A vehicle that is self0insured with the meaning of the Tennessee Financial Responsibility Law c) A vehicle designed for use mainly off public roads except while on public roads d) None of these are considered uninsured motor vehicles
None of these are considered uninsured motor vehicles
An insured has an auto 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 a. $125,200 b. 126,200 c, 100, 200 d. $150,200
a. $125,200
An insured's child ran into a neighbor's planter on his bicycle and broke the planter and ruined the plants. the cost to replace the planter was $400, and the cost to replace the plants was $100. Which section of the insured's homeowners policy would pay? a. Section II with no deductible b. Section I with no deductible c. Section I, subject to the deductible d. Section II, subject to the deductible
a. Section II with no deductible Under Section II - Additional Coverage Damage to Property of Others, the policy would provide replacement cost coverage up to $1,000 to pay for damage to property of others caused by an insured
The limited theft endorsement designed for a landlord excludes all of the following except: a. a lawnmower the landlord owns and keeps at tenant's house b. landlord's jewelry c. landlord's silverware d.
a. a lawnmower the landlord owns and keeps at a tenants house
what two policy components are part of every CPP? a. common policy declarations and common policy conditions b. common policy exclusions and agreement c. consideration and agreement d. property coverage and liability coverage
a. common policy declarations and common policy conditions any commercial lines coverage in the program may be written independently as a monoline policy, or it may be written with other coverage as part of a package. In either case, all policies make use of the same common policy declarations page and the same common conditions. The only difference is the number of coverage parts
An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a statement of good health. Which of the following terms best describes what the applicant has violated? a. consideration b. representation c. adhesion d. contractual agreement
a. consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss
Which of the following exposures is not covered under the garage liability coverage form? a. contractual liability b. premises and operation liability c. products and complete operations liability d. auto liability
a. contractual liability
Which of the following contract elements best describes insurance written in support of public policy? a. legal purpose b. consideration c. offer and acceptance d. competent parties
a. legal purpose
In a personal auto policy (pap), a covered auto inludes all of the following except: a. a nonowned temp substitute vehicle b. a van used in the delivery business c. a trailer owned by the insured d. a farm implement being towed behind the insured's pickup
b. a van used in the delivery business if used primarily of deliveries, a PAP cannot insure the vehicle
Which of the following would not be eligible for coverage under a personal auto policy? a. a trailer owned by the insured b. a vehicle purchased 90 days ago c. a vehicle listed on the declarations page d. a nonowned temporary substitute vehicle
b. a vehicle purchased 90 days ago
Coverage C in in HO policy forms offers all of the following EXCEPT a. coverage for property located at another resident premises b. coverage for loss of use c. worldwide coverage d. coverage for property of others
b. coverage for loss of use
The commercial crime coverage that would cover losses resulting from the theft of money, securities, and other property by employees is: a. inside the premises-theft of money and securities b. employee theft c. funds transfer fraud d. forgery or alteration
b. employee theft
An insured just purchased an auto policy for his new car. He wants to understand what perils are not insured against. Which section of his policy should the insured check? a. definitions b. exclusions c. insuring agreement d. declarations
b. exclusions *the exclusions section of an insurance policy details what perils are not insured against and what persons are not insured
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 comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT: a. payment of fines and penalties as dictated by state compliance authorities b. forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage c. closure of the business as a public nuisance by state officials d. payment for injuries in monetary amounts stipulated by the state with respect to workers compensation plans
b. forced payment of billing for services rendered by an private insurer that "binds" coverage based on an employee's request for coverage (an employee cannot contract for workers compensation coverage for an employer without the express authority of that employer
Which of the following MUST the Commissioner do before suspending or revoking the license of an agency? a. inform the NAIC b. Hold a hearing to determine if a violation has been committed c. advise the agency of the suspension in writing within 30 days d. assess a civil penalty of not less than $100 or no more than $1000
b. hold a hearing to determine if a violation has been committed *in order to suspend the license of an agency, a hearing must be held
In reference to insurable interest, which of the following is NOT an element of insurable risk a. business b. personal c. blood d. financial
b. personal for any person or property covered un an insurance policy, insurable interest must exist. insurable interest is broken into three categories which include financial is monetary intrest, blood (elative), and business ( a business partner)
in reference to insurable interest, which of the following is NOT an element of insurable risk a. business b. personal c. blood d. financial
b. personal for any person or property covered under an insurance policy, insurable interest must exist. insurable interest is broken into three categories which include financial (a monetary interest), blood ( a relative) and business ( a business partner)
The commercial general liability Coverage Part A - Bodily injury and Property Damage provides coverage for which of the following? a. machinery b. premises c. hired autos d. employers
b. premises
A corporation is insured under a CGL and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. the insurance company is obligated to provide coverage for all of the following named in the suit EXCEPT a. employees of the corporation b. spouses of officers and stockholders c. officers of the corporation d. stockholders
b. spouses of officers and stockholders
The personal property off-premises extension of dwelling forms provides limits of coverage up to: a. 10% of Coverage A anywhere in the world b. 10% of coverage C anywhere in the U.S. and Canada c. 10% of Coverage C anywhere in the world d. 10% of coverage A anywhere in the U.S. and Canada
c. 10% of coverage C anywhere in the world
which of the following conditions allows the insurer to examine the insured's records at the end of a policy term to make sure an adequate fee is being collected for the exposure? a. underwriting b. excel liability evaluation c. deposit premium audit d. insurable interest evaluation
c. deposit premium audit *Deposit premium audit is an estimated premium paid in advance at the time the policy is issued that may be adjusted based on actual exposures. The actual premium can be determined by the aud of the insured's records at the end of the insuring period
Which HO form provides open peril coverage for dwelling Coverage A and contents (Coverage C)? a. form 2 b. form 3 c. form 5 d. form 8
c. form 5
Which of the following is NOT true regarding the automatic increase in insurance endorsement in dwelling policies? a. it is optional b. it provides protection from inflation c. it does not require additional premium d. it increases the amount of coverage by an annual percentage
c. it does not require additional premium
When an insured purchased his home 10 years ago for $80,000, it had a replacement cost of $100,000. Today, the home has a replacement cost of $200,000 and has depreciated by 4% each year. The insured's home has an actual cash value of a. 60,000 b. 80,000 c. 100,000 d. 120,000
d. 120,000
when an insured purchased his home 10 years ago for 80,000, it had a replacement cost of $100,000. Today the home has a replacement cost of $200,000 and has depreciated by 4% each year. The insureds home has an acv of a. 60,000 b. 80,000 c. 100, 000 d. 120,000
d. 120,000 acv is determined by taking today's replacement cost minus depreciation. The equation is (200,000-(200,000x4%) x 10 years =120,000
A sworn statement must usually be furnished by the insured to an insurer, and must include what information about the occurrence and the amount of indemnity claimed? a. type and frequency b. date and description c. category d. extremity
d. date and description
Under a CGL policy, which of the following is NOT considered mobile equipment? a) An automobile used as a company car by a real estate company b) A combine used on a farm c) The DOT resurfacing equipment d) The bulldozer used by an excavating company
An automobile used as a company car by a real estate company
When does the insurer's duty to defend a suit or claim end in a CGL policy? a) When both loss payments and defense costs equal the applicable policy limit b) When the insured agrees to the settlement c) When loss payments equal the applicable limit of insurance d) When defense costs equal the applicable limit of insurance
D when defense costs equal the applicable limit of insurance
In reference to insurance interest, which of the following is NOT an element of insurable risk? a) Blood b) Financial c) Business d) Personal
Personal
The defendant being released on a surety bail bond is the a) Insured b) Principal c) Surety d) Obligee
Principal
Which of the following is FALSE concerning liability coverage of a BAP? a) They company will pay any interest accruing between time of judgment and payment b) The company will defend any suit alleging (BI) or (PD) covered by policy c) The company will reimburse the insured for all loss of earnings d) The company will pay the premium on any appeal bond
The company will reimburse the insured for all loss of earnings
An insured was having a new home build. While digging the footings for the foundation, the contractor stuck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. who pays for this damage? a. the insured's insurer, regardless of negligence b. the contractor c. the neighbor's insurer d. the insured's insurer, if the neighbor proves that the insured was negligent
b. the contractor * most states impose absolute liability when a person's actions are determined to be against public policy. Damage caused by the used of explosives or damage caused by harboring poisonous snakes or wild animals are examples. the neighbor would not need o prove negligence, he would only need to prove that the damage occurred
If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true? a. federal Insurance Administration will remove the insurer form the NFIP b. the insurer will be reimbursed for the excess costs by the NFIP c. the insurer must cover the loss out of its surplus d. the insurer must apply for disaster relief funds
b. the insurer will be reimbursed for the excess costs by the NFIP
The broad cause of loss form in the commercial property policy contains three perils in addition to the basic form perils. Which of the following is NOT one of those three perils? a. falling objects b. utility services c. water damage d. weight of snow, ice, or sleet
b. utility services
When Jane and her insurer could not agree on the amount of liability loss after her accident, the settlement was submitted to someone whose decision was then binding on both parties. What condition did Jane use? a. Fair Value b. Third Party c. arbitration d. appraisal
c. arbitration
How is the premium paid for the businessowners policy? a. itemized premium b. pro rata liability premium c. separate premium for property and for liability d. one indivisible premium
d. one indivisible premium
A golfer slices a tree shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by a. the golfer's homeowners liability coverage b. the homeowner's property coverage on the house c. the liability policy of the golf course d. the property coverage of the golf course
A. the golfer's homeowners liability coverage
An insured has $5,000 of medical coverage under 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 is $6,500. and the third passenger's total is $1,200. How much will the policy pay under the medical payments coverage? a. $5,000 b. $8,000 c. $15,200 d. $19,700
C. 15,200 The medical payments coverage is provided by a limit of liability per person. In this example, the limit for the policy is $5,000 per person, so the policy will pay the maximum ($10,000) for the insured and the second passenger because their medical expenses exceed the limit. All of the expenses for the first passenger and third passenger would be paid ($5,200). The grand total paid under medical expenses is $15,200.
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 a. 10% b. 15% c. 25% d. 50%
C. 25%
The supplementary payments section of the CGL policy would cover? a) Loss of the insured's earnings up to $300 per day b) Up to the policy limit for BI or PD c) Up to $500 for the cost of required bail bonds d) Courts costs assessed against the insured in a suit
Courts costs assessed against the insured in a suit
The amount of loss the insured is willing to absorb without insurance protection is known as a) Maximum deductible b) Stop loss c) Limit of liability d) Self-insured retention
Self-insured retention
Compulsory automobile financial responsibility laws may be satisfied in all the following ways EXCEPT a. a certificate of passing a safe-driver's education course b. posting a bond with the motor vehicle department c. the purchase of insurance from an insurance company d. a certificate of self-insurance
a. a certificate of passing a safe driver's education course
While engaged in a pick-up soccer game in the neighborhood park, the insured collides with another player, breaking his nose. Would the insured's homeowners medical payments cover the injury? a. no, the insured was not negligent b. yes, medical payments coverage also applies off the insured premises c. no, because even though it was a pick-up game, it was an organized event d. no, personal liability applies on-premises only
b. yes, medical payments coverage also applies off the insured premises
Which of the following is FALSE concerning liability coverage of a business auto policy? a) The company will pay any interest accruing between time of judgment and payment b) The company will defend any suit alleging (BI) or (PD) covered by policy c) The company will reimburse the insured for all loss of earnings d) The company will pay the premium on any appeal bond
c) The company will reimburse the insured for all loss of earnings
Which of the following conditions allows the insurer to examine the insured's records at the end of a policy term to make sure an adequate fee is bing collected for the exposure? a. underwriting b. excess liability evaluation c. deposit premium audit d. insurable interest evaluation
c. deposit premium audit
HO policies consider all of the following insured locations EXCEPT a. land owned by the insured on which his new home is under construction b. and individual cemetery plot c. the hotel ballroom rented by the insured for a family reunion d. a strawberry patch owned by the insured
d. a strawberry patch owned by the insured
The supplementary payments section of the commercial general liability policy would cover a. loss of the insured's earnings, up to $300 a day b. up to the policy limit for bodily injury or property damage c. up to $500 for the cost of required bail bonds d. court costs assessed against the insured in a suit
d. court costs assessed against the insured in a suit Supplementary payments are amounts the insurer will pay in addition to the stated policy limits. They include any expenses the insurer incurs, up to $250 for the cost of required bail bonds, up to $250 a day for loss of income, cost taxed against the insured, prejudgement interest and interest that accrues on any judgement
The amount of a fire insurance policy MAY NOT a. be guaranteed b. be less than the fair value of the property c. be negotiated with the owners of the property d. exceed the fair value of the property
d. exceed the fair value of the property
For a motor vehicle accident prevention course to qualify the insured for a reduction in insurance rates and premiums, the course must be approved by a. the commissioner of insurance b. the president of the insurance company c. the governor d. the commissioner of safety
d. the commissioner of safety *the commissioner of safety must approve motor vehicle accident prevention courses for hose courses to qualify an insured for a reduction in insurance rates and premiums
All of the following are considerations in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state EXCEPT a. place where the accident occurred b. the normal location where the employee works c. the state where the employee was hired d. the insurer's chartered location or domicile
d. the insurer's chartered location or domicile *The insurer's location is irrelevant to the processing of workers comp claims. the critical components relate to the employer and employee and their locations
Uninsured Motorist limits must be at least a) 15/30 b) 25/50 c) 50/15 d) $65,000
25/50 *25/50/15
For there to be negligent liability, all of the following must exist EXCEPT? a) A reasonable expectation that the act may cause injury or damage b) A breach of the legal duty which results in injury or damage to another person c) A legal duty to act, or not to act, under the circumstance d) Proximate cause between the wrong the injury or damage
A reasonable expectation that the act may cause injury or damage
in a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will a. only be applicable if the insured pays a higher deductible b. only be applicable if the insured pays an additional premium c. be increased by 10% d. be reduced by 10%
D. be reduced by 10%
The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy? a) Product liability b) Physical damage on a customer's auto c) Auto liability d) Premises and operations liability
Physical damage on a customer's auto
If a car is stolen and left in a snow bank and the radiator freezes and does a lot of damage, is the damage covered by the auto policy? a) No freezing is never covered b) No, theft is never covered c) Yes, freezing exclusion is removed if the car is stolen d) Yes, there is no exclusion for freezing
Yes, freezing exclusion is removed if the car is stolen
Which of the following would be considered a covered auto on your personal auto policy? a) Your pickup truck used for deliveries of your retail business b) Your farm tractor c) Your farm wagon being towed by your tractor d) Your farm wagon being towed by your pickup truck
Your farm wagon being towed by your pickup truck
Which of the following would NOT be eligible for coverage under a personal auto policy? a. a vehicle purchased 90 days ago b. a vehicle listed on the declarations page c. a nonowned temporary substitute vehicle d. a trailer owned by the insured
a. a vehicle purchased 90 days ago A covered auto includes autos listed in the declarations, owned trailers, newly acquired autos (for 30 days), nonowned temporary substitute vehicles, and additional temporary vehicles due to repair, servicing, breakdown, or loss
An insured owns an automobile liability policy with bodily injury limits of $200,000 and an umbrella liability policy with a limit of $1,000,000. The insured is involved in an automobile accident and is found liable for injuries totaling $900,000. Which of the following examples best describes how the benefits will be paid? a. auto liability policy = $200,000; umbrella liability policy = $700,000 b. Automobile liability = $200,000, umbrella liability $200,000 c. auto liability = $450,000, umbrella liability = $450,000 d. auto liability $0, umbrella liability = $900,000
a. auto = $200,000, umbrella = $700,000
An insured was involved in an accident that was caused by a tire blowing out. the insured was severely injured and incurred medical expenses of $100,000. the insured brought a recovery action against the manufacturers of the auto and the tires. the court held that the tire was the cause of the accident. who is required to pay for this loss? a. manufacturer of the tire b. both manufacturers should share this loss c. neither manufacturer would have to pay because of the buyer beware doctrine d. manufacturers of the auto
a. manufacturer of the tire
The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. which of the following coverages are not included in a garage policy a. physical damage on a customer's auto b. auto liability c. premises and operations liability d. product liability
a. physical damage on a customer's auto the garage policy has a care, custody and control exclusion which would eliminate coverage for any damage to a customer's auto. this exposure would need to be covered under a garagekeepers policy
The equipment breakdown coverage form values loss on a/an a. replacement cost basis b. valued basis c. stated amount basis d. actual cash value basis
a. replacement cost basis property is insured on a replacement cost basis. However if damaged property is not repaired or replaced w/in 24 months after the accident, settlement is at the smaller of ACV, or the cost to repair or replace
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions? a. premiums b. limits of liability c. consideration d. utmost good faith
b. limits of liability
Coverage for loss by some perils under a building and personal property form is suspended if a. an uninsured peril causes a partial loss b. the insured building is vacant for over 60 days c. a loss occurs while a hazard beyond the insured's control is increased d. the insured fails to satisfy the coinsurance provision
b. the insured building is vacant for over 60 days *this is a standard condition of commercial property coverage
The federal act that provided more favorable benefits for interstate railroad works by allowing the injured worker to sue the employer for negligence is the a) Federal Black Lung Compensation Act b) Jones Act c) Federal Employers Liability Act (FELA) d) U.S. Longshore and Harbor Workers Compensation Act
c) Federal Employers Liability Act (FELA
The BOP extension coverage form for personal property off-premises is limited to a. 2,500 b. 5,000 c. 10,000 d. 15,000
c. 10,000
Using the pro rata method, if a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss? a. $20,000 b. 12,000 c. 8,000 d. 0
c. 8,000 pro rata liability applies. each policy pays a % of the loss based on the % of coverage that policy provides. since company carries 1/3 of the total coverage then it is responsible for 1/3 of the loss
Willie Sellum has recently purchased a used car lot with 50 used vehicles. His insurance agent, Bill Emnow, told Willie that it will take 30 days to get a policy in-force on the cars to be sold. One option that Bill may be able to offer Will would be a. a CGL policy b. a temporary policy with another insurer c. a binder from the planned insurer d. an insurer's bond
c. a binder from the planned insurer a binder is temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued
Testimony, documents, or other evidence obtained by the Commissioner may NOT be used in which of the following situations a. an investigation of a producer b. an investigation of an agency c. a private civil proceeding against an agency or producer d. examination of a witness in an investigation
c. a private civil proceeding against an agency or producer *Testimony, documents, or other evidence obtained by the Commissioner is not admissible as evidence in a private civil proceeding
An insurer may pay or assign a commission to persons who DO NOT sell, solicit, or negotiate insurance if such persons are a. officers of the dept of insurance b. licensed insurance producers c. creditors of the insurance producer d. unauthorized insurers
c. creditors of the insurance producer
Which of the following would NOT be covered under the directors and officers liability coverage? a. neglect and breach of duty b. misstatements made by the directors and officers c. reimbursements for fines and penalties d. an insurer's bond
c. reimbursement for fines and penalties directors and officers liability policies will pay only for damages that the corporation would under the law, be required to reimburse the individual director or officer. the policy generally will not pay for fees, penalties, or punitive damages
Which of the following symbols ina business auto policy indicateds that coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured a. symbol 1 b. symbol 2 c. symbol 7 d. symbol 19
c. symbol 7 *if symbol 7 is used, coverage fornewly acquired vehicles applies if the insurer already covers all autos owned by the insured or if the newly acquired vehicle is replacing a previously owned auto that had that coverage
an insured is at fault in an auto accident, damaging the insured's own car. the damage to the car is covered by a. the insured's comprehensive coverage b. uninsured motorist coverage c. the insured's collision coverage d. the other driver's liability coverage
c. the insured's collision coverage
All of the following are considerations in determine which state's law applies when a worker is required to travel into another state and is injured while working in the other state except: a. the normal location where the employee works b. the state where the employee was hired c. the insurer's chartered location or domicile d. place where the accident occurred
c. the insurer's chartered location or domicile the insurer's location is irrelevant tot he processing of workers compensation claims. the critical components relate to the employer and employee and their locations
The insured's product under a commercial general liability policy does NOT include which of the following? a. warranties made with respect to the fitness or quality of the product b. any goods or products manufactured by the insured c. vending machines rented to tohers d. containers furnished in connection with the product
c. vending machines rented to others the renting of vending machines to others would be a contractual liability exposure
Which of the following liability coverages in a general liability policy is NOT subject to an aggregate limit? a. premises operations b. product/completed operations c. personal and advertising d. fire legal liability
d. fire legal liability
What does HO personal property coverage NOT cover? a. the spouse's personal property b. the insured's personal property in another country c. the resident's son's personal property d. personal property of roomers not related to the insured
d. personal property of roomers not related to the insured
Which of the following would NOT be covered under the directors and officers liability coverage? a. wrongful acts while directors and officers are acting in an official capacity b. neglect and breach of duty c. misstatements made by the directors and officers d. reimbursement for fines and penalties
d. reimbursement for fines and penalties directors and officers liability policies will pay only for damages that the corporation would, under the law, be required to reimburse the individual director or officer. The policy generally will not pay for fines, penalties, or punitive damages
When Symbol 7 is provided, which of the following statements is true with regards to newly acquired autos? a) they are covered only until the end of the policy term b) they are not covered until the insurer is notified c) they are automatically covered only for 30 days d) they are covered if they are used to replace previously owned autos with that coverage
they are covered if they are used to replace previously owned autos with that coverage
For there to be negligent liability, all of the following must exist EXCEPT a) A reasonable expectation that the act may cause injury or damage b) A breach of the legal duty which results in injury or damage to another person c) A legal duty to act, or not to act, under the circumstances d) Proximate cause between the wrong and the injury or damage
A reasonable expectation that the act may cause injury or damage
Which of the following is FALSE concerning liability coverage of a BAP? a) The company will pay any interest accruing between time of judgment and payment b) The company will defend any suit alleging BI or PD covered by the policy c) The company will reimburse the insured for all loss of earnings d) The company will pay the premium on any appeal bond
The company will reimburse the insured for all loss of earnings only a limited amount of lost earning per day will be paid, and only on those days the insurer requires the insured to be somewhere other than at work
The Commissioner may issue a temporary license in all of the following cases EXCEPT? a) To the designated employee of a retiring licensed producer for the purpose of continuing the business b) To an employee assuming the duties of a deceased or disabled person c) To the designee of a licensed producer who is called to active duty d) To the spouse of a deceased or disabled producer in order to sell the business
To the designated employee of a retiring licensed producer for the purpose of continuing the business
Two men are partners in a moving company. They have two trucks used to move property of others. they should insure their trucks under a a. business policy b. personal auto policy c. garage liability coverage form d. commercial auto fleet policy
a. business auto policy
which of the following statements does NOT describe endorsements? a. endorsements may only add coverage to a current policy, not remove b. endorsements may be added during the policy term c. endorsements are printed addenda to a policy d. endorsements must be signed by an executive officer
a. endorsements may only add coverage to a current policy, not remove *endorsements can be used to correct items, add coverage or delete coverage from an existing policy. this may be done when the policy is issued or during the policy term. when added, the written endorsement must be signed by an executive officer of the insurer and attached to the policy
prior to paying a claimant under a professional liability policy, the insurer must a. provide legal counsel to the claimant b. reaffirm the claimant's insurance c. obtain the consent of the insured d. terminate the insured's policy
c. obtain the consent of the insured
All of the following are additional coverages under a homeowners policy EXCEPT a. coverage for trees, shrubs, and other plants b. payment for reasonable repairs and debris removal following a covered loss c. outbuildings d. fire dept service charge
c. outbuildings
Which type of damages is intended as a form of punishement for negligent, willful, or outrageous intent? a. general b. property c. punitive d. special
c. punitive punitive damages are a form of punishment for extreme behavior. when compensatory damages are not considered adequate, punitive damages are often allocated
An insured has a commercial blanket bond in the amount of $25,000. Three identifiable employees steal $10,000 each in a single loss. how much will the bond pay? .a 30,000 b. 75,000 c. 10,000 d. 25,000
d. 25,000
An insured is the owner of a clothing boutique. She has a Floor Plan Merchandise Floater to cover the property that is financed until it is sold. At closing time a month ago, she noticed that very expensive dresses had been stolen. However, she did not file a report to her insurance company until recently. How much will her insurer pay for this loss? a. 100% of the limit written b. nothing c. 50% of the limit written d. 90% of the limit written
d. 90% of the limit written
An applicant for property insurance owns a building in which combustible materials are stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a a. speculative risk b. moral hazard c. physical hazard d. morale hazard
d. Morale hazard This insured's lack of caution in storing combustible materials increases the likelihood of fire or explosion. This careless attitude is an example of a morale hazard
Which of the following is a method of establishing a premium on large commercial accounts? a. premium discount b. merit rating plan c. experience modification factor d. retrospective rating
d. retrospective rating retrospective rating is a method of establishing a premium on large commercial accounts
Under the property and casualty conditions of a HO policy, what may happen if it is discovered that the policy owner committed concealment or fraud? a. the insurer may void the policy only if it gives the insured 10 days notice b. the insured may have the opportunity to reapply for the policy c. the policy will be voided only if the fraud was committed before a loss d. the policy may be voided
d. the policy may be voided
if an insurance policy has the additional coverage provision, how does it affect the policy premium? a. premium will be recalculated when a specific loss covered by this provision occurs b. additional premium will be assessed c. premium will be calculated on a pro rata basis based on the amount of additional coverage d. there is no additional premium
d. there is no additional premium additional coverage is a provision in an insurance policy that provides an additional amount of coverage for specific loss expense, at no additional premium
