Insurance Test
Section II of a homeowners policy is Personal Liability. Out of these options, only one best describes this covered:
$100,000 per occurrence
A condominium owner of an HO-6 is assessed a penalty of 10,000 for an unreimbursed cost, what is the MAXIMUM they can claim under their homeowners policy?
1,000
What percentage of the completed value is a builders risk policy limits based on?
100
An insurer must acknowledge a claim within how many days?
15 days
A computer is damaged in a home due to a fire, it is paid on which of the following basis?
2,000 actual cash value
H has a homeowners policy with 75,000 in property coverage. What amount is automatically included for personal property?
37,500
Company A insures a home for 60,000. Company B insures the same home for 25,000 and company C insures the same home for 15,000. Under the Other Insurance clause, when a 40,000 claim arises, how much will Company C pay of the claim?
6,000
P has a property policy with a home valued at 100,000 with an 80% coinsurance clause. If P has a claim of 10,000 what is the MINIMUM amount of coverage P must have to cover the full claim?
80,000
An insured has a home valued at 100,000 and an additional insured mortgage company of 80,000. The insured filed bankruptcy 31 days ago and the home burns down. How will this claim MOST LIKELY be paid?
80,000 mortgage, 20,000 to the insured
In this state, which of the following will satisfy the Motor Vehicle Acts requirements?
Automotive Liability Coverage
A business needs to relocate due to a loss and their new lease is more expensive, which coverage applies?
Extra expense
Which of the following policies will provide for the broadest coverage on structures as well as contents?
HO-5
Which of the following best describes the current National Association of InsuranceCommissioners Trucking Insurance Form?
Motor Carrier Coverage Form
A homeowner is having a contractor install a gas line and their floor is damaged during the install. Which coverage would apply?
Premises and Operations
Which of the following is covered under a Homeowners 002 Broad form?
Theft
Inland Marine insurance includes all of the following except:
Wedding Gifts
Which of the following would likely be covered under a Business Owners Policy?
a 6 unit apartment building
Which of the following can be used as evidence of coverage on a newly formed insurance policy?
a binder
A Commercial General Liability policy's Medical Payments would cover whom?
a customer who injures themselves on the property
Which of the following would be considered an allowable EXEMPT employee under workers Compensation in this state?
a domestic servant
A staircase with a broken railing would be considered:
a hazard
A homeowners policy would not cover which of the following?
a home with a barber shop and 3 employees
A morale hazard is best described as:
a negligent or careless person
A robbery and burglary on premises policy will pay for which of the following?
a person dresses up as a fake messenger and the owners gives them 10,000
A products and completed operations policy will cover which scenario?
a person injured by a rented vending machine
Which of the following best describes an employee in regards to employee theft?
a person registered as an employee and receiving compensation
A Burglary On Premises policy would provide for coverage in which scenario?
a watchman is robbed while protecting the business after hours
A basic mobile home policy is written on which valuation basis?
actual cash value
The definition of indemnity goes hand in hand with which?
actual cash value
Through the National Association of Insurance Commissioners forms, an unendorsed Dwelling Policy 0002 has Coverage C under which loss valuation method?
actual cash value
An insurance services representative (ISR) is NOT able to perform which function?
appointing agents underneath them
When there is a disagreement in coverages, this is alleviated by which process?
arbitration
An insurer who has a certificate of authority in Texas and can transact business is best described as:
authorized
Texas LLoyds is best described as which of the following?
authorized
Which of the following best describes a mutual insurer?
board of trustees elected by policyholders
All of the following are considered a business auto, EXCEPT:
bulldozer
How are benefits for funerals under Workers Compensation decided?
by the laws of the state
An insurer must have which document from the commissioner of insurance in order to transact business?
certificate of authority
Mobile equipment would be covered under which inland marine policy?
contractors equipment
The primary difference between a claims-made form and a per occurrence form is:
coverage triggers
What may an insurer check to determine the financial strength of a customer?
credit report
What is covered under Section I of a Homeowners policy?
detached garages and structures
Part II of a homeowners policy provides coverage for which scenario?
dog bites
R is teaching their 16 year old daughter to drive, she accidentally presses the gas and goes through their garage into their home. Which Dwelling policy will cover the damage to the home?
dwelling policy 2
Supplementary payments are best described as:
excess costs including the help to defend from a lawsuit
When a producer accepts premiums and promises to submit them to an insurer, they are performing which duty?
fiduciary
Which of the following would be covered under Section I of a Homeowners Comprehensive policy?
fire damage to a home
Which of the following would be covered under the comprehensive portion of a Personal AutoPolicy?
flood damage
A Workers Compensation policy will cover all of the following EXCEPT:
health insurance premiums
Which of the following best describes proof of loss?
helps the insurer in settling claims
L has a property policy insuring her home with liability limits of 100,000 and coinsurance of 80 percent. Which of the following claims would be denied?
inherent vice
K has a construction business that is installing an air conditioner. K asks his agent for a policy that would cover the installation until completion. Which policy will Ks agent sell him?
installation floater
An auto policy may have a lien-holder attached to the policy under which premise?
insurable interest
Subrogration is the transfer of rights of an:
insured
The description of the cause of loss is found in which portion of a policy?
insuring agreement
Under a Commercial General Liability Policy, which provision will state what the insurer will pay claims against?
insuring agreement
Which of the following does not describe negligence?
intentional action
Which of the following is used to determine Workers Compensation premiums?
job classification and gross payroll
All of the following are covered under inland marine, except:
leased buildings
A contract with three parties is typically provided on which type of insurance?
liability
M is a passenger in F's car when F is driving and accidentally runs into a tree. M incurs 18,000 in medical bills and 3,000 in pain and suffering. What portion of F's policy will pay for this claim?
liability
A business income policy protects a business in the event of a loss from what?
loss of earnings
Auto insurance medical payments can best be described as:
medical and funeral costs for any person within your vehicle
An imprudent person would be considered which of the following?
negligent
How many days of notification must the insured provide to the insurer when canceling their policy?
none
Which of the following would be excluded under a Comprehensive Homeowners form 5?
nuclear damage
A woman has a coin collection with multiple values of coins with a set price of 10,000. One coin is missing and the value of the collection has dropped to 9,000. Which provision states only 1,000 will be paid out?
pair and set clause
In order to obtain an insurance license a person must perform which?
pass an exam and pay a fee
When would a Business Income Policies Extra Expense coverage cease on a Deli?
payments continue until the date the deli is expected to be repaired
A contractor wins a bid for a municipality construction project. Which type of bond would the contractor purchase to ensure the job is completed on time?
performance bond
When a rental property owner improperly evicts a tenant and the tenant sues, which portion of the policy provides coverage?
personal injury
The document that states how much was lost and what occured during a claim that is filed to the insurer is known as:
proof of loss
An agent prepares a price for the insured and also prepares a policy for issuance using which document?
proposal
he Property and Casualty Insurance Guaranty fund was designed for what purpose?
protect customers in the event an insurer becomes insolvent
An occurrence is best described as:
repeated damage due to the same loss over time
Mobile Home coverage A utilizes which loss valuation?
replacement cost, actual cash value
A DP-2 policy would pay a claim for in which scenario?
rioters set fire to the front porch of the home
The uncertainty of loss is known as:
risk
Which of the following has named exclusions listed in the policy?
special
Under a Commercial General Liability policy, all of the following are considered an insured EXCEPT:
spouse of an employee
Which of the following is NOT defined as a pure risk?
stock market losses
A Robbery and Safe burglary policy will cover which of the following scenarios?
stolen safe
All of the following are parts of a liability policy, EXCEPT:
surety
In order to place business with a nonadmitted company, an agent would need which license?
surplus lines
A business purchases a new property with a MUCH HIGHER risk level. Which of the following is true about it's current insurance policy in regards to the new property?
the insured must call their insurance company for coverage
Which of the following is found on the Declarations page?
the insureds name
Which of the following best describes subrogration?
the insurer has the right to sue a third party on the insureds behalf
A risk is best described as:
the uncertainty of loss
A Basic Form Dwelling Policy will exclude coverage for which of the following?
theft
All of the following are covered under a Dwelling Policy 1 except:
theft
A 10,000 ring covered under a Personal Articles floater, which of the following is NOT true?
there is a deductible and coinsurance for losses
Business Income policies are paid on which of the following basis?
time-element
What is the purpose of the coinsurance clause?
to encourage insuring to value
The portion of a Personal Auto Policy that provides coverage for when the insured is struck by a hit and run driver is known as:
uninsured motorist
Which of the following is TRUE regarding the Uninsured Motorist portion of a Personal Auto Policy?
uninsured motorist must be offered by insurers to insureds
The definition that best describes vacancy is:
unoccupied and no stored items
A person has rented an outboard motorboat and it is struck by lightning. How much will their homeowners policy pay?
up to the limits listed in the policy
Which of the following best describes the Other Insurance clause?
when multiple insurers cover the same risk
When would a Builders Risk policy cease coverage?
when the building becomes occupied by the owner
A Commercial General Liability policy will include all of the following, except:
workers compensation