Insurance Property Licensure Quiz
what is max amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?
$10,000 incurred during a 12-month period.
Any person violating IL premium finance laws if convicted may be imposed a civil fine up to
$2,000 each violation
The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to
$250,000
The regular National Flood Insurance program would insure an eligible single-family dwelling for up to
$250,000
If an insured covered under a mobile homeowners policy moves the mobile home to protect it from a covered peril, the policy will pay up to
$500
Under additional coverages for an HO, what is the max amount that can be charged to the insured for fire department services?
$500
Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective?
12:01 am the day after the application and premium payment are mailed
How many hours of continuing education must a producer complete prior to requesting a renewal of a producer's license
24 hours
The BOP contains a seasonal increase provision that automatically increases the limit of insurance for business PP by ___ % if the actual values exceed the limit of insurance
25%
Under the conditions of a Film Coverage Form, how long must the insured maintain records of each production?
3 years after policy expires.
How long is the waiting period upon purchase of flood coverage through NFIP?
30 days
The Mail Coverage Form is always written on a reporting form basis; after the end of each reporting period shown in the declarations, reports are due within
30 days
What the max amount of time during which multiple volcanic activities would be considered part of one occurrence under a dwelling policy?
72 hours
under the dwelling policy form, what is the maximum time limit during which multiple volcanic activities would be considered part of one occurrence?
72 hours
A contract for the transport of goods between the shipper and the carrier is called
A bill of landing
A mobile home policy is structured the same as
A homeowners policy
A mobile homeowners policy is structured the same as
A homeowners policy
What is a promissory note, loan contract or agreement by which an insured or prospective insured promises to pay another person an amount advanced to an insurer in payment of premiums on the insurance contact together with a service charge and which contains an assignment of the unearned premiums payable by the insurer upon cancellation of the insurance contract
A premium finance agreement
In the event of a covered loss, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within
A specified time. (allotted time- varies, but usually 60 days).
What is a material misrepresentation?
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company.
A builder's risk form is most often written as which of the following? A. Completed value form B. Scheduled form C. Reporting form D. Specific value form
A.
The Federal Fair Credit Reporting Act A. Regulates consumer reports B. Protects customer privacy C. Prevents money laundering
A.
When other insurance is written on the same basis as a CPP the obligation of the insurer is to cover
A. A share of the loss
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 A. Conditions B. Consideration C. Legal purpose D. Offer and acceptance
A. Conditions
In IL, a cancellation provision must be included in all of the following policies except A. Marine B. Commercial fire C. Residential fire D. Automobile liability
A. Marine
A person who is not named as an insured on the declarations page but is protected by the policy is known as the
Additional insured
What describes controlled business?
Anytime more than 50% of the total premiums collected by a producer comes from themselves, his or her spouse, employer or own business
coverage under the builders risk form will end in all of the following situations except
B 60 days after the construction has ended. Coverage under the builders risk form ends if it is abandoned without any plans to complete it or if the insured's interest in the property ceases, or 60 days after the building is occupied, or 90 days after construction is completed.
When a regular bill of landing is issued, who will be responsible for the invoice cost of any damaged property? A. Driver of truck B. Carrier C. Person who gets the shipment D. The shipper
B, the carrier (and the shipper does not have to specifically declare a value)
In return for premium, an insurance company must A. Give the insurer valuable consideration B. Be fair in underwriting and pay covered losses C. Provide the insured with coverage adequate for all potential losses. D. Use standardized tables of coverage for specific risks to be excluded from coverage.
B.
All of the following are essential elements of a commercial package policy except (CPP) A. Policy conditions B. Valuations/and or settlement provisions C. Interline endorsements D. Declarations page
B. Always includes declarations, conditions, interline endorsements and coverage parts
An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? A. $0 B. $30,000 C. $32,000 D. $40,000
B. $30,000. The insured only carried 75% of the amount of the insurance he had agreed to carry ($120,000 of the agreed $160,000), so the insurer will only pay 75% of the loss = $30,000. (-$200,000 with 80% requirement. $200,000 x .8 = $160,000. -He Pays $120,000. $120,000/$160,000 = 75%. -So insurer only pays .75 x $40,000 = $30,000. )
All of the following are covered by a standard builders risk form except A. Machinery that will be permanently attached to the building B. Tools 50 feet away from the building C. The building itself D. Temporary structures
B. (supplies within 100 ft of premises are covered only if they are intended to become a permanent part of the structure- not true of tools).
Which of the following is a mandatory part of an insurance policy that varies with each individual policy? A. Insuring agreement B. Declarations C. Conditions D. Exclusions
B. Declarations
All of the following are conditions commonly found in the insurance policy except A. Appraisal B. Insuring agreement C. Cancellation and non-renewal D. Subrogation
B. Insuring agreement (declarations)
Which of the following does the term proximate cause refer to A. Reason for filing a lawsuit B. Negligence that leads to injury C. Injury that leads to compensation D. Duty of the defendant to act
B. Negligence that leads to injury.
Losses or causes caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended or expected is the definition of which of the following terms A. Hazard B. Occurence C. Accident D. Peril
B. Occurence
Which method of loss valuation is contrary to the basic concept of indemnity? A. Agreed value B. Replacement cost C. Functional replacement cost D. Market value
B. Replacement cost Because following a loss it may provide the insured with a settlement in excess of the property's actual cash value. (doesn't account for depreciation).
In a case of loss, the indemnity provision in insurance policies A. Pays the insured as much as 95% of loss B. Restores an insured person to the same financial state as before the loss C. Allows the insured to collect 20% more than actual loss D. Pays the insured a percentage of the loss above and beyond the loss.
B. Restores an insured person to the same financial state as before the loss
An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes there. From an insurance standpoint, the insured's house is considered A. Vacant B. Unoccupied C. Under repair
B. Unoccupied
A building is insured, but no one has lived or worked in it for years. The building is completely empty of furniture or belongings. From an insurance standpoint, the building is considered A. Closed B. Vacant C. Unoccupied D. Condemned
B. Vacant
under HO-4 and HO-6, property is insured against
Broad form perils.
All of the following found in the declarations except A. Limits of Insurance B. Named Insured C. Exclusions
C. Exclusions
which would not be considered a source of insurability information by an insurer? A. Motor vehicle records B. Insurance history C. Applicant's marital status D. Interviews with applicant's neighbors and friends
C. Insurer can inspect motor vehicle records, interview neighbors, friends and employers, inspect property and insurance hx.
All of the following are considered part of the policy structure except A. Insuring clause B. Conditions C. Provisions D. Exclusions
C. Provisions refer to sections or clauses of a policy that communicate the policy's benefits, conditions ect. Parts are: declarations, insuring clause, conditions and exclusions.
What is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
C. Warranty (representations are statements that are true to the best of the applicant's knowledge).
Termination of an in-force insurance policy prior to expiration date is known as
Cancellation
If an insurer neglects to pay a legitimate claim that is covered, what insurance principles have they violated?
Consideration. (The promise to pay in the event of loss)
Actual Cash Value (ACV)
Cost to replace property with new property of like kind and quality minus depreciation. (replacement cost less depreciation).
Which of the following dwelling coverages would provide coverage to a garage not attached to the primary insured dwelling?
Coverage B
what is extra expense coverage for
Coverage that will permit the insured to continue business without interruption following a property damage loss
What is covered under the Mail floater of a commericial Inland Marine policy ONLY if it is sent by registered mail?
Currency and unsold travelers checks, buillion, platinum and precious metals, jewelry, and stones
The Physicians and Surgeons Equipment Floater is not intended for which of the following? A. Surgeons supplies located in his/her office B. Waiting room furniture C. Office equipment in a dentist's office D. Medical supplies located in a hospital
D, coverage protects individuals in medical/dental field for loss to valuable medical equipment, materials, supplies - but not intended for coverage of a whole hospital, school or institution
Which of the following would be covered under the Film Coverage Form? A. Deterioration of a film B. Exposure of a negative film to light C. Electrical erasure of a tape D. None
D, none. The all-risk coverage form excludes the following: deterioration, atmospheric dampness or changes in temperature, exposure of negative film to light, use of developing chemicals, developing or cutting or printing of film or other lab work, electrical or magnetic injury, disturbance or erasure.
What is the maximum the insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy? (___ expenses incurred during a 12-month period) A. $15,000 B. $20,000 C. $5,000 D. $10,000
D.
Which of the following covers a carrier for liability for loss to cargo while being transported in a truck? A. Motor truck cargo policy- owners form B. trip transit policy C. Truckers coverage form D. Motor truck cargo policy- truckers form
D.
The ABC Corporation has $100,000 of coverage on its building through insurance A and $50,000 of identical coverage through insurance B. When a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay? A. A pays $20,000, B pays $4,000 B. A pays $12,000, B pays $12,000 C. A pays $24,000, B pays $0 D. A pays $16,000, B pays $8,000
D. Each policy pays its pro rata share of the loss based on each policy's share of the total amount of coverage.
Which of the following would be named on the declarations page of a property or liability policy? A. Beneficiaries B. All insured C. Additional insured D. First named insured
D. First named insured
All of the following describe the concept of strict liability EXCEPT A. Claimants may need to provide proof that product defect caused an injury B. It is imposed regardless of fault C. It is applied in product liability cases D. It is imposed on defendants engaged in hazardous activities
D. It is imposed on defendants engaged in hazardous activities
Which is an example of a protective safeguard in a businessowner's policy? A. Erros and omissions insurance B. Recordkeeping C. Professional liability endorsement D. Automatic sprinkler system
D. Protective safeguards endorsement adds a policy condition requiring the insured to maintain protective safeguards (automatic sprinklers, fire alarm ect) for coverage
Under a dwelling policy, which of the following is NOT a factor in determining a loss? A. the policy limit B. amount reflecting the insured's interest in the property at the time of loss. C. Amount necessary to repair or replace the property D. Amount negotiated by the insured.
D. The amount negotiated by the insured. - The value of a loss is decided according to actual cash value of property, policy limit, amount needed to repair/replace or the amount reflective of the insured's interest in property.
Which DP(s) pay replacement cost for dwelling?
DP-2 and DP-3
Which DP forms primarily insures on an ACV basis
DP1
The part of the policy that clarifies terms in the policy is the
Definitions
An insured has four separate but identical policies by 4 different insurers to cover her $1000,000 building. Each is written for $100,000 and has pro-rata liability. In the event of a total loss, what will each insurer pay?
Each will pay $25,000 of the loss.
What modifies the original insurance contract by either adding or removing coverage
Endorsements.
The section of the insurance policy that details what perils are and are not insured is known as
Exclusions
18. The major portion of the premium for an equipment breakdown policy pays
For inspections and examinations.
The conditions define A.How parties to the contract must act following a loss B. Basic underwriting information C. Excluded perils D. Amount of coverage
How parties to the contract must act following a loss
A specific coverage is listed on the commercial package policy declarations page, but there is no premium shown. What does this mean?
If no premium shown, there is no coverage for that part.
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
The part of the insurance contract that describes the covered perils and nature of coverage of the contractual agreement is called the
Insuring agreement
All of the following statements describe the concept of strict liability EXCEPT
It is imposed on defendants engaged in hazardous activity
which of the following is the type of property not covered by a homeowners policy?
Land on which the property is located
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
All policy applications must identify which of the following?
Licensee which solicited the applicant's business
which of the following coverages in dwelling and homeowners policies is for indirect losses
Loss of use
Which one of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?
Motor Truck Cargo Policy
What kind of property does a personal Floaters policy cover?
Movable personal property, wherever it may be located.
Who would participate in a Write Your Own flood insurance program?
Private insurers that wish to write and service National Flood Insurance policies on a no-risk bearing basis
The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called
Pro rata liability
The Gramm-Leach-Bliley Act was passed to
Protect private customer information filed with a financial institution (can opt out of sharing their info)
All of the following are considered parts of the policy structure EXCEPT?
Provisions
A situation in which a person can only lose or have no change represents
Pure risk
Which method of loss valuation is contrary to the basic concept of indemnity?
Replacement cost
when the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as
Stated amount
What protects consumers against the circulation of inaccurate or obsolete personal or financial information?
The Fair Credit Reporting Act
According to the common policy conditions for a commercial package policy if the insured dies the policy rights and duties ...
The Insurance Services Office Inc. (ISO) commons policy for the commercial package policy states that in the event of the insured's death, rights and duties are automatically transferred to the insured's legal representative
Negligence is defined as
The failure to do what a reasonable prudent person would do under given circumstances
Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT
The insurer does not have the right to inspect the insured's property and operations.
The contents coverage on a homeowners policy would pay how much after the loss of one pair of golden candlesticks?
The insurer may elect to restore the set to its value before the loss or pay the difference between the actual cash value of the property before and after the loss.
If a policyholder has an . equipment breakdown policy with a $200,000 limit and a boiler explosion causes $100,000 damage to the boiler, $50,000 damage to the insured's building and $30,000 expediting expenses how much will the insured collect?
The limit of the equipment breakdown policy applies to property of the insured, property of others and expediting expenses as long as the expediting expenses don't exceed $25,000 so $175,000
In IL, when a fire policy is cancelled the insured must be notified by his or her eligibility for insurance through the FAIR plan unless
The policy is cancelled or non-renewed, except for nonpayment of premium of arson and the property is located in a designated urban area, the insured must be notified
When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be
The proximate cause
What is true of single family dwellings that are insured at least 80% of the replacement value?
They are automatically provided with replacement cost coverage.
Frank steaks furnishes meat to steakhouses. An accident on the premises cause the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerator units to be sold for human consumption and frank loses $18,500 in disposing of the meat. What coverage under franks BOP policy will cove the loss.
Utility service- direct damage
All of the following are essential elements of commercial package policy (CPP) EXCEPT A. Policy conditions B. Valuations and/or settlement provisions C. Interline endorsements D. Declarations page
Valuations or settlement provisions
What does the declarations section provide information on
Who is insured, where they are located, when the policy provides coverage, how much coverage and the amount of deductible applied to a loss.
a house insured under a dwelling policy has been vacant for 70 consecutive days. which of the following statements is true?
loss by vandalism and malicious mischief is excluded
A neighbor's tree falls into the insured house. The insured's homeowners policy will only pay to remove it if
up to $1,000 to remove from premises if a neighbor's tree fell by covered peril or the tree blocks the driveway or handicapped ramp, even if there is no damage