Insurance

which of the following statements about policy cancelation and nonrenewal is true?

any action by the insured that increases the risk of the insured peril is grounds for cancellation

Which of the following exclusions would specifically fall under Coverage E in Homeowners policy?

A. Contractual liability

Other than perils, the difference in the three 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?

A. Coverage E- Additional Living Expense

An insured has extended coverage on her dwelling that includes coverage for vandalism and malicious mischief. One evening she is sitting in her living room when she hears a crash and the sound of glass breaking. She runs to the door and discovers a brick has been thrown through her glass window. To inform her insurer of a possible claim, she fills out a form detailing the events leading to the loss. What is the name of the form?

A. Notice of claim form

Which of the following is consideration on the part of an insurer?

A. Paying a claim.

An insured rents out a bedroom in his residence for $50 a week. The residence is badly damaged by fire, during the three weeks required to repair the fire damages, the insured pays $900 in rent for a short-term apartment. And renters are forced to find other accommodations. Disregarding any expense for meals, how much would an HO-3 will pay under coverage D?

$1,050

if a person violates the commissioner's Cease and Deists Order, their license may be revokes, and the person may be subject to a max fine of?

$10,000

which of the following losses would be covered by the Standard Fire Policy?

fumes from chemical ignite and explode causing a fire that demolishes the building

Which of the following is the cause of loss?

peril

in a liability policy with split limits of 25/50/25 which number is the maximum amount that would be payable in the event of damage to a person's property?

the amount of the third number $25,000

In a DP-1, if the insured elects to apply Coverage B to a detached garage, coverage A will.

Be reduced by 10%

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Concealment

Which of the following entities is eligible for a business owners policy?

Convenience Stores

Coverage C in homeowners policy forms offers all of the following EXCEPT

Coverage for loss of use

in a Business owner's policies, a deductible does NOT apply to which of the following additional coverages.

Fire Department Service Charges

Which homeowners form insures both buildings and personal property on an open peril basis?

HO-5

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured.

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered by a dwelling policy. How many deductibles will the insured have to pay. Before the policy covers the damages caused by the eruptions.

One

Which of the following would be covered under a building and personal property coverage form?

Out door sign

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

Personal

which of the following is used to define any person, firm, or corporation appointed by an insurer that possesses the authoritiy to transact insurance?

Producer

A commercial building insured on an 80% coinsurance policy is valued at $500,000. To avoid a coinsurance penalty, at the time of a partial loss, the building would need to be insured for at least.

$400,000

If a producer knowingly violates the insurance code the MAXIMUM aggregate penalty cannot exceed

$50,000 in a 6-month period.

The insurer of Melco's Fabrication wants to cancel the Commercial Package Policy it is issued on the business because it discovered that it made an error in determining the correct premium. Assuming that the error is not so large as to threaten the solvency of the insurer, how long does the insurer have before it can no longer cancel the policy?

60 days from the policy effective date

An insured is the owner of a clothing boutique. She has a floor plan merchandise floater to cover property that is financed until its sold. At closing time, a month ago, she noticed that 3 very expensive dresses had been stolen. However, she did not file a report to her insurance company until recently. How much will the insurance company pay for this loss?

90% of the limit written

Which of the following could be insured with replacement cost coverage under the flood insurance program?

A single family home

A manufacturing company has adopted some new processes in their operations, so their insurer has decided not to renew their Commercial Package Policy. If the CPP policy expires on May 1, when must the insurer send the notice on nonrenewal?

A. April 15

The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of what?

A. Protective safeguards endorsement

An applicant for disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the questions pertaining to heart problems on their application. There answer is considered a.

A. Representation

Under Coverage C, and at the request of an insured, personal property of a guest or residence employee is covered.

A. While it is in any residence premises occupied by an insured.

After a covered loss on a homeowners policy, the insured must do all of the following EXCEPT

Abandon the Property involved to the insurer

Which standard Fire Policy conditions require that the insured cooperate with the insurance company and protect damaged property from further loss?

Abandonment

When do binders expire? a. When an original policy is replaced. b. No later than 30 days c. As soon as the policy is issued. d. After 10 days

As soon as the policy is issued

which of the following is NOT covered under standard fire policy?

Damages cause by war

To determine the actual cash value of an insured property, what must be deducted from the current replacement cost?

Depreciated Value

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

Direct

Which of the following is not a cause of loss form for commercial property coverage?

specific

Unless additional coverages are added to the business policy (BOP) the max amount of coverage on an outdoor sign attached to the building is limited to.

1,000

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

10% of coverage C anywhere in the world

With regard to homeowners' section II, which of the following does NOT meet the definition of insured location?

A) A plot of farmland owned or rented by the insured.

An insurer must be fair in underwriting and must pay all covered losses of any insured. For the faithful execution of these duties, an insurer has the right to

A. Accept the payment of the premiums for all policies currently in force.

Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the resident's premises. Which of the following statements is NOT true of this coverage?

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

For an additional premium, the extended coverage written in the basic dwelling policy would cover which of the following?

Riot

which of the following types of property would be covered under Coverage C- Personal Property in a dwelling policy?`

Rowboats

the Iowa Fair Plan governing committee is composed of 7 member's Five of them are selected from various company and agency groups. where do the other 2 come from?

They are selected by the other 5 members of the governing committee.

Which of the following provisions is usually fund in homeowners policies and provides a replacement cost settlement to policy holders who carry adequate insurance?

insurance to value

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

limits of liability

the purpose of the Iowa Fair plan is?

make basic property insurance available to qualified applicants with the least possible expense

Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?

non renewal

An insured is having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that It was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in the neighbor's home several blocks away. Who pays for this damage?

the contractor

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?

the insurer will be reimbursed for the excess cost by NFIP

An insureds diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of water damage, it took 4 weeks for the repairs to be completed. The unsured was without income for that period. The insured policy includes both direct and indirect loss coverage. What part of the loss would be padding as indirect loss?

the loss of income for the time the diner was closed

On an application for Commercial Property Policy, Arthur stated that he had no losses in the past three years, when in fact he had 5 losses. Within what period of time must the insurer notify Arthur of its intent to cancel the policy for material misrepresentation?

there is no time on cancelation for misrepresentation

When does the federal emergency flood insurance program go into effect?

when a community applies for the program

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?

A. Charging the insured higher premiums because of their race.

Which of the following perils is NOT covered the DP-2?

A. Damage to pets, birds, or fish.

Which of the following is covered under a dwelling policy?

A. Fire caused by an earthquake.

in order to get a nonresident license in this state a producer must?

Apply and pay a fee to a nonresident state that reciprocates

All of the following reasons can justify denial of license for an insurance producer except if the producer.

fails to sell enough policies

A home is insured for $200,000 under an HO-3. Last week the owner purchased a new home and began to move his personal property to the new residence. Last night vandals did $8,000 of damage to the property that had been moved to a new residence. Disregarding any deductible, how will the HO-3 pay?

$8,000

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?

$8,000

Because of the insured's loss history, the insurer has decided not to renew the insured's homeowner's policy that expires January 1 when must the insurer mail the notice of Non-renewal?

A. By December 1

What kind of coverage does Form DP-3 provide?

A. Open peril

What does HO personal property NOT cover?

A. Personal property of roomers not related to the insured.

which standard fire policy condition required that the insured cooperate with the insurance company and protect damaged property from further loss?

Abandonment

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

Accident

John had a disagreement with his insurer on the value of his damaged property. After making a written demand, both john and the insurer selected an appraiser. The appraisers then agreed on a fair value without having to select umpire. What condition did john use?

Appraisal

Which statement best describes agreement as it relates to an insurance contract?

One party accepts the exact terms of the other party's offer

Which of the following risks would be eligible for coverage under a dwelling policy form?

a) A duplex that is occupied by 2 families each of which have a bedroom rented to a boarder.

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

A. It does not require an additional premium.

An insured believes that his insurer is not properly fulfilling its obligations regarding his policy. What section of the policy will give the insured more information about specific duties of the insurer?

conditions

An insured's limit of liability applies for the total of damages for bodily injury and property damage combined resulting from one accident or occurrence. The limit may be used in any combination of amounts, not to exceed a single limit. What type of limit does the insured have?

Combined single

An insured's limit of liability applies to a total of damages for bodily injury and property damage resulting from one accident, which may be used in any combination of amounts, not to exceed the single limit. What type of limit does this insured have?

Combined Single

insurance producers can only receive commissions for insurance written with

Companies that have appointed them to act as insurance producers

which of the following is not covered under a standard Fire Policy?

Damages caused by war

Which of the following contract elements best describes insurance written in support of public policy?

Legal Purpose

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the

Policy

Which of the following statements is correct regarding the debris removal coverage under the businessowners policy?

The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount.

Which of the following would NOT be covered by commercial inland marine policies?

property lost due to military actions