LyteSpeed Learning

Assignment by a policy owner of all control of and rights in the policy to a third party. A. Contingent Clause. B. Absolute Assignment. C. Assignee.

Absolute Assignment.

Traumatic damage to the body of external origin, unexpected and undersigned by the injured person. A. Accidental Personal Injury. B. Accidental Means. C. Accidental Bodily Injury.

Accidental Bodily Injury.

The unexpected or undersigned cause of an accidental bodily injury. Under an accidental means definition the mishap itself must be accidental. A. Accidental means. B. Assignment. C. Pl/pd.

Accidental means.

A person other than the name insured who is protected under the terms of the contract. Usually, additional insureds are added by endorsement or referred to in the wording of the definition of "insured" in the policy itself. A. Additional Insured. B. Primary Beneficiary. C. Contingent Beneficiary.

Additional Insured.

A contract in which the number of dollars to be given up by each party is not equal. Insurance contracts are of this type, as the policyholder pays a premium and may collect nothing from the insurer or may collect a great deal more than the amount of the premium of a loss occurs. A. Aleatory. B. Bi-lateral. C. Co-mingle.

Aleatory.

An insurance company formed under laws of a country other than the united states is: A. Alien insurance company (insurer). B. Foreign insurance company. C. Domestic insurer.

Alien insurance company (insurer).

The right of a party who has received an adverse decision to take the case to a higher court for review. A. Resend. B. Revise. C. Appeal.

Appeal.

Insurance purchased by a Bailee to protect the personal property of customers against loss caused by specific perils. An example would be a carpet cleaner who buys coverage to protect customers against loss or damage to their carpets while in the store's care. A. Bailee Coverage. B. Business Liability. C. Business Owners Policy.

Bailee Coverage.

Minimum amount of insurance. The term is usually used in reference to bodily injury and property damage. Limits that are either the lowest amounts which can be written at the published or manual rates, the minimum amount of insurance an insurer is willing to underwrite or the minimum amount of insurance required by law, e.g. automobile insurance financial responsibility laws. A. Company Minimum. B. Basic Limits of Liability. C. Basic Issue Amount.

Basic Limits of Liability.

The liability that may arise from injury or death of another person. A. Personal injury liability. B. Bodily injury liability. C. Property liability.

Bodily injury liability.

Insurance against the sudden and accidental breakdown of boilers, machinery and electrical equipment. Coverage is provided on (1) damage to the equipment, (2) expediting expenses, (3) property damage to the property of others, (4) supplementary payments and (5) automatic coverage is provided on additional objects. Coverage can be extended to cover consequential losses and loss from interruption of business. A. Machinery Insurance. B. Internal Combustion Equipment Insurance. C. Boiler and Machinery Insurance.

Boiler and Machinery Insurance.

The type of insurance coverage that will insure air conditioning units is called A. Machinery Insurance. B. Internal Combustion Equipment Insurance. C. Boiler and Machinery Insurance. D. Insurance against the sudden and accidental breakdown of boilers, machinery and electrical equipment Coverage is provided on (1) damage to the equipment, (2) expediting expenses, (3) property damage to the property of others, (4) supplementary payments and (5) automatic coverage is provided on additional objects. Coverage can be extended to cover consequential losses and loss from interruption of business.

Boiler and Machinery Insurance.

An obligation of the insurance company to protect one against financial loss caused by the acts of another is? A. Indemnity. B. Coverage. C. Bond.

Bond.

Which of the following would best be described as using forcible entry to steal property when a business is closed? A. Extortion. B. Theft . C. Robbery. D. Burglary.

Burglary. Burglary is by sleath. A business is closed and someone breaks in and takes property.

A time element coverage that pays for loss of earnings when operations are curtailed or suspended because of property loss due to an insured peril. Now referred to as business income insurance. A. Probationary Period. B. Business Interruption. C. Waiting Period.

Business Interruption.

The coverage that is needed for continued income after a business has become inoperatable is called A. Probationary Period. B. Business Interruption. C. Waiting Period.

Business Interruption.

A commercial property coverage form designed to insure most types of commercial property (buildings, contents or both). It is the most frequently used commercial property form and has replaced the General Property form, Special Building form, Special Personal Property form and others. A. Uniform Business Form. B. Basic General Liability Form. C. Business and Personal Property Form.

Business and Personal Property Form.

A consumer publication that describes the type of coverage being offered and provides a general information to help an applicant for life or health insurance compare different types of policies and reach a decision about whether the proposed coverage is appropriate. A. Consumers guide. B. Insurance guide. C. Buyers guide.

Buyers guide.

An illegal method of marketing insurance policies (often associated with medicare supplement policies) which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance or other similar coverage and that further contact will be made or other similar coverage and that further contact will be made by an insurance agent other producer or insurer. A. Cold lead advertising. B. Cold call advertising. C. Direct marketing.

Cold lead advertising.

General liability coverage that may be written as a monoline policy or part of a commercial package. "CGL" now means "commercial" general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sublines provide very broad coverage and two variations are available - "Occurrence" or "Claims-Made" coverage. A. Business Liability Policy. B. Commercial General Liability. C. Business Liability.

Commercial General Liability.

General liability coverage that may be written as a monoline policy or part of a commercial package. "CGL" now means "commercial" general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sublines, provide very broad coverageand two variations are available - "Occurrence" or "Claims-Made" coverage. A. Business Liability Policy. B. Commercial General Liability. C. Business Liability.

Commercial General Liability.

An indirect loss arising out of the policy holders inability to use the property over a period of time as opposed to a direct loss that happens almost instantaneously. Business interruption, extra expense, rents insurance and leasehold interest are the most common coverages included under the category of consequential loss coverages. (2) A loss not directly caused by a peril insured against such as spoilage of frozen foods caused by fire damage to the refrigeration equipment. A. Consequential Loss. B. Covered Loss. C. Non Peril Loss.

Consequential Loss.

The insurance company's efforts to prevent current policies from lapsing and/or being replaced. A. Fiduciary. B. Compliance. C. Conservation.

Conservation.

This term refers to the amount of insurance countersigned, issued or sold by a producer covering the life, property or interest of the producer, members of the producer's immediate family or the producers employer or employees. Many states limit the amount of controlled business that may be written and if the premium or commissions on controlled business exceed a given percentage (usually 50%) of all business, the producer's license may be suspended, revoked or not revoked. A. Controlled Business. B. Special Lines Business. C. Conversion Percentage.

Controlled Business.

A term used in insurance other than Life or Health to denote that portion of the contract in which is stated such information as the name and address of the insured, the property insured, its location and description, the policy period, the amount of insurance coverage, applicable premiums and supplemental representations by the insured. A. Declaration. B. Statement. C. Condition.

Declaration.

A form authorizing the disclosure of personal information obtained in connection with an insurance transaction. Insurers are required to give applicants advance notice of their information practices. Among other things, the form must state the kind of information collected and to whom information may be disclosed. A. Hipa Form. B. Release Form. C. Disclosure Authorization Form.

Disclosure Authorization Form.

The return of part of the premium paid for a participating policy. A. Refund. B. Rebate. C. Dividend.

Dividend

This is coverage B of the standard workers compensation policy. It provides coverage against the common law liability of an employer for injuries to employees as distinguished from the liability imposed by a workers compensation law. Employer's liability applies in situations where a worker does not come under these laws. A. Business Liability. B. Workers Liability. C. Employers Liability.

Employers Liability.

The legal principle whereby a person loses the right to deny that a certain condition exists by virtue of having acted in such a way as to persuade others that the condition does exist. For example, if an insurer allows an insured to violate one of the conditions of the policy, the insurer cannot at a later date void the policy because the condition was violated. The insurer has acted in such a way as to lead the insured to believe that the violation did not void the coverage. A. Tort Law. B. Estoppel. C. Misstatement.

Estoppel.

The legal principle whereby a person loses the right to deny that a certain condition exists by virtue of having acted in such a way as to persuade others that the condition does exist. For example, if an insurer allows an insured to violate one of the conditions of the policy, the insurer cannot at a later date void the policy because the condition was violated. The insurer has acted in such a way as to lead the insured to believe that the violation did not void the coverage. A. Tort law. B. Estoppel. C. Misstatement.

Estoppel.

The legal principle whereby a person loses the right to deny that a certain condition exists by virtue of having acted in such a way as to persuade others that the condition does exist. For example, if an insurer allows an insured to violate one of the conditions of the policy, the insurer cannot at a later date void the policy because the condition was violated. the insurer has acted in such a way as to lead the insured to believe that the violation did not void the coverage. A. Tort Law. B. Estoppel. C. Misstatement.

Estoppel.

Expenses incurred in order to speed up repair or replacement so as to reduce the amount of loss by a peril covered in a policy. Most commonly used in connection with business interruption and boiler and machinery insurance. Expediting expenses are generally covered if they do reduce the amount of the loss that the insurer would otherwise have to pay. A. Expending Expenses. B. Repair Expenses. C. Interim Expenses.

Expending Expenses.

The state of being subject to the possibility of loss. The extent of risk as measured by payroll, gate receipts, area or other standards. The possibility of loss to a risk being caused by its surroundings. This is used in property insurance rating. Surroundings producing a loss to the insured property. An example of these definitions would be an insured building suffering loss because a dynamite factory next to it exploded. A. Hazard. B. Peril. C. Exposure.

Exposure.

Form that provides reimbursement to the insured for the extra expenses reasonably incurred to continue the operation of a business when the described property has been damaged by a peril covered by the contract. This insurance is normally used by businesses where continuity of operation, regardless of cost, is a necessity as, for example, any business that would permanently lose customers if there were any suspension of operations. The term Additional Living Expense Insurance is defined with regard to extra expenses incurred by individuals and such coverage is a common feature of homeowner policies. A. Extension of Benefits. B. Additional Expense Insurance. C. Extra Expense Insurance.

Extra Expense Insurance.

A licensee's by an appointing insurer is not effective until received by The Commissioner's Office: A. True. B. False.

False. No, once the appointing insurer signs an action notice of appointment the licensee (agent) may begin to transact insurance.

A form which was once widely used to write automobile insurance for individual car owners. It is a package policy that provides protection against legal liability for bodily injury and property damage to others, injury to the insured and other occupants of the vehicle and damage to the vehicle itself. It has largely been replaced by the more modernized personal auto policy. A. Family Auto Policy. B. Personal Auto Form. C. Non-Business Auto.

Family Auto Policy

An auto policy that covers all family members is a: A. Family Auto Policy. B. Personal Auto Form. C. Non-Business Auto.

Family Auto Policy.

A bond that will reimburse an employer, the insured, for loss due to the dishonest acts of a covered employee. A. State Bond. B. Fidelity Bond. C. Surety Bond.

Fidelity Bond.

A state law that requires the insured to furnish evidence of ability to pay for losses. Some laws require this evidence after the first accident. Evidence of ability to pay most often takes the form of an insurance policy with certain minimum limits of coverage. A. Liability Coverage. B. Financial Responsibility Law. C. Mandatory Insurance Law.

Financial Responsibility Law.

A commercial automobile insurance coverage form used to insure automobile dealers, repair shops, service stations and garage risks. Garage liability, garagekeepers coverage and physical damage coverages may be included. A. Vendors Coverage Form. B. Garage Coverage Form. C. Mechanics Coverage Form.

Garage Coverage Form.

A system which entitles good drivers (as defined by driving safety record, number of miles driven annually, number of years driving experience and other factors related to the risk of loss) to discounts on automobile insurance rates and premiums. A. Good Driver Discount. B. Annual Driver Review. C. Driving Record.

Good Driver Discount.

A period of time (commonly 30-31 days) after premium-due date during which a policy remains in force, without penalty, even though the premium due has not been paid. A. Lapse period. B. Payment period. C. Grace period.

Grace period.

Additions or changed made by a lessee at his or her own cost to a building which he or she is occupying which enhance its value. These become part of the realty and require special insurance consideration. A. Additions. B. Incidentals. C. Improvements and Betterments.

Improvements and Betterments.

Your Commercial Auto Policy insured needs coverage for his liability arising out of his employees using their own cars in his business. The best way to be sure your insured is covered is to: A. Require all employees have your insured named as an additional insured on their personal auto policies. B. Include employers non-ownership liability coverage in the employer's commercial auto policy. C. Instruct all employees not to use their cars in your insured's business. D. Include uninsured motorist and also hired auto coverage in your insured's commercial policy.

Include employers non-ownership liability coverage in the employer's commercial auto policy. Employer non owned liability coverage will protect the employer from business related liability by employee.

A bond that indemnifies the obligee against loss which arises as a result of failure on the part of a principal to perform. Illustrations: Warehouse, Lost Instrument, Freight Charge, Lien and numerous other types of miscellaneous bonds. A. Indemnity Bond. B. Public Bond. C. Government Bond.

Indemnity Bond.

Coverage which provides for automatic periodic increases in the amount of insurance on buildings to keep an appropriate "limit to value" considering the effect of inflation on building replacement costs. An endorsement is usually used to add this coverage to a homeowner's policy. A. Cost of Living. B. Inflation Guard Coverage. C. Automatic Coverage.

Inflation Guard Coverage.

A branch of the insurance business that developed from the insuring of shipments which did not involve ocean voyages. The Inland Marine forms borrowed their language from fire, ocean marine, theft and other contracts. Exposures eligible for this form of protection are described in the nationwide definition of marine insurance. Such diverse properties as bridges, tunnels, jewelry and furs can now be written under Inland Marine forms. A. Cargo Insurance. B. Freight Insurance. C. Inland Marine Insurance.

Inland Marine Insurance.

Where would an insured find insurance coverage to protect against damage to a shipment of televisions shipped on a semi-truck for the insured's business? A. Inland marine. B. Commercial auto liability. C. Commercial general liability. D. Fire and allied lines.

Inland marine. Inland marine covers transportation on land, trucks, railroad etc.

The party to an insurance arrangement who undertakes to indemnify for losses, provide pecuniary benefits or render services. It is desirable to use this word in preference to "carrier" or "company" since it is a functional word applicable without ambiguity to all types of individuals or organizations performing the insurance functions. This word is generally used in statutory law. A. Insured. B. Insurer. C. Owner.

Insurer.

The return received by insurers from their investment portfolios, including interest, dividends and realized capital gains on stocks. Realized capital gains means the profit realized on stocks that have actually been sold for more than their purchase price. A. Capital Gains. B. Ordinary Income. C. Investment Income.

Investment Income.

This law states that the larger the number of exposures considered, the more closely the losses reported will match the underlying probability of loss. The simplest example of this law is the flipping of a coin. The more times the coin is flipped, the closer it will come to actually reaching the underlying probability of 50% heads and 50% tails. A. Actuary law. B. Law of large numbers. C. Mortality table.

Law of large numbers.

The maximum amount for which a liability insurance company provides protection in a particular policy. A. Maximum Liability. B. Maximum Limits. C. Liability Limits.

Liability Limits.

Generally refers to (1) The amount of reduction in the value of an insured's property caused by an insured peril, (2) The amount sought through an insured's claim or (3) The amount paid on behalf of an insured under an insurance contract. A. Depreciation. B. Claim Costs. C. Loss.

Loss.

All of the following are characteristics of "an ideally insurable loss exposure" except: A. Losses that are accidental. B. Large number of similar exposure units. C. Losses that are definite and measurable. D. Losses that are catastrophic.

Losses that are catastrophic. Losses that are catastrophic is nature, would not be covered.

Used to measure how insurance companies and insurance agents comply with state laws regulating sales and marketing, underwriting and issuance of insurance products. It means conducting insurance business fairly and responsibly. A. Business Ethics. B. Market Conduct. C. Compliance Rules.

Market Conduct.

In insurance, it refers to a fact which is so important that the disclosure of it would change the decision of an insurance company, with respect to writing coverage, settling a loss or determining a premium. Usually, the misrepresentation of a material fact will void a policy. A. Pertinent fact. B. Material fact. C. Disclosure rules.

Material fact.

Automatic five-year extended reporting period allowing for the making of claims after expiration of a "Claims-Made" liability policy, but only applies to claims arising from occurrences that were reported no later than 60 days after the end of the policy. A. Mini Tail. B. Mid Tail. C. Midi Tail.

Midi Tail.

The smallest premium that an insurance company will accept for writing a particular policy or bond for a designated period. A. Minimum premium. B. Premium mode. C. Premium finance.

Minimum premium.

A term defined in General Liability Policies as land vehicles, including machinery and apparatus attached thereto, whether or not self-propelled and (1) not subject to motor vehicle registration, (2) used exclusively on the insured's premises, (3) designed principally for use off public roads, (4) designed or maintained for the sole purpose of providing mobility for permanently attached equipment such as cranes, loaders, pumps, generators or welding equipment. A. Business Equipment. B. Mobile Equipment. C. Business Personal Property.

Mobile Equipment.

A condition of morals or habits that increases the probability of loss from a peril. An extreme example would be an individual who previously burned his or her own property to collect the insurance. A. Moral hazard. B. Morale hazard. C. Intentional hazard.

Moral hazard.

What type of company issues participating policies? A. Stock. B. Mutual. C. Assessment Company. D. Service Contractor.

Mutual. Mutual insurance companies pay dividends to their policyholders. Mutual companies issue participating companies. Dividends are taxed as income and are not guaranteed.

Any person, firm, corporation or any member thereof, specifically designed by name as the insured(s) in a policy. Others may be protected as insureds even though their names do not appear on the policy. A common application of this latter principle is in automobile policies where under the definition of insured protection is extended to cover other drivers using the car with the permission of the named insured. A. Insurer. B. Named Insured. C. Policy Owner.

Named Insured.

Originally, National Convention of Insurance Commissioners, an Association of State Insurance Commissioners. Formed for the purpose of exchanging information and of developing uniformity in the regulatory practices of the several states through drafting model legislation and regulations. The NAIC has no official power to enforce compliance with recommendations. A. California Insurance Commissioners. B. Federal Insurance Commissioners. C. National Association of Insurance Commissioners. D. Many states have passed laws permitting the individual automobile accident victim to collect directly from his or her own insurance company for medical and hospital expenses regardless of who was at fault in the accident. There are many variations in the laws of those states, which have no-fault statutes. Most states do allow the individual to sue the negligent party if the amount of damages exceeds a certain stated limit.

National Association of Insurance Commissioners.

If there is an auto accident and each insured's insurer pays for the damage for their own insured's damage. What type of coverage is this called? A. No Liability Law. B. No Fault Law. C. No Negligent Law.

No Fault Law.

Many states have passed laws permitting the individual automobile accident victim to collect directly from his or her own insurance company for medical and hospital expenses regardless of who was at fault in the accident. There are many variations in the laws of those states which have no-fault statutes. Most states do allow the individual to sue the negligent party if the amount of damages exceeds a certain stated limit. A. No Liability Law. B. No Fault Law. C. No Negligent Law.

No Fault Law.

An agent licensed in a state in which he does not live. A. Domestic agent. B. Foreign agent. C. Non-resident agent.

Non-resident agent.

An event that results in an insured loss. In some lines of insurance, such as liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured. A. Occurance. B. Accidental. C. Incident.

Occurance.

Which of the following would be eligible for a business owners policy? A. Banks. B. Restaurants. C. Office building of six stories with 25,000 square feet. D. Retail store with gross sales of $2,000,000.

Office building of six stories with 25,000 square feet. The office building qualifies for a business owners policy.

A Commercial Building and Personal Property coverage form covers three kinds of property, one which has "Your Business Personal Property". Your refers to: A. Only the first named insured shown in the declarations. B. Any party who has an insurable interest in the property located at the insured address. C. The named insured and others whose property is in the care, custody or control of the insured. D. Only the named insureds which is shown in the declarations.

Only the named insureds which is shown in the declarations. "Your" is only the named insured's which are listed on the declaration page.

A major general liability subline which provides coverage for an insured against claims arising out of products sole, manufactured, handled, distributed or operations which are complete. Claims are covered only after a product has been sold and possession relinquished or operations have been completed or abandoned by the named insured. Manufacturers and contractors have a need for this coverage. A. Operations Liability. B. Manufacturers Liability. C. Products and completed

Operations Insurance. Products and completed Operations Insurance.

This rule states that a written instrument or contract cannot be modified by an oral agreement. It is based on the concept that written contracts should contain all of the facts and agreements between the parties and, therefore, prevents contemporaneous oral declarations from being included in the contract. A. Unstated Rule. B. Implied Rule. C. Parole Evidense Rule.

Parole Evidense Rule.

The cause of possible loss. A. Hazard. B. Peril. C. Risk.

Peril.

Under Section II of a Homeowners Policy comprehensive personal liability coverage is extended to which of the following: A. Personal activities of the insured. B. Premises of the insured as described in the policy. C. Premises described in the policy as well as all business and personal activities on or off the described premises. D. Premises described in the policy and all personal activities of the insured on or off the premises.

Premises described in the policy and all personal activities of the insured on or off the premises. The premises and all the persona activities on or off the premises.

A legally binding relationship when, in fact, no formal agency agreement is in effect. For example, if an insurer acts to give the appearance of agency perhaps by furnishing letterhead and/or applications. A. Agency agreement. B. Broker agreement. C. Presumption of agency.

Presumption of agency.

An interview in which the party gathering information refuses to reveal their identity, pretends to be someone else, this represents the true purpose of the interview or pretends to represent someone who is not in fact represented. In most cases, federal and state laws prohibit pretext interviews in connection with insurance related consumer reporting. They are permitted only in connection with the investigations into suspected material misrepresentation, fraud or criminal activity. A. Presale interview. B. Pretext interview. C. Prevent interview.

Pretext interview.

The cost of a given unit of insurance. For example, in ordinary life insurance, it is the price of $1,000 of the face amount. In disability income insurance, it is usually the price per $10 or per $100 of monthly benefits. In property insurance, it is the rate of $100 of value to be insured. The premium, then, is the rate multiplied by the number of units of insurance purchased. A. Cost. B. Rate. C. Premium.

Rate.

A portion of the agent's commission returned to an insured or anything else of value given an insured as an inducement to buy. The payment of policy dividends, retroactive rate adjustments and reduced premiums that reflect the savings of direct payment to an agent or home office are not usually considered to be rebates. In most cases, they are legal both for the agent or insurer to be given one and for an insurer to receive one. A. Refund. B. Rebate. C. Reversal.

Rebate.

Taking steps to reduce the probability or severity of a possible loss. For example, installing alarms and sprinkler systems to reduce the risk of fire loss to a building. One of the four major risk management techniques. See Risk Management. A. Hazard Reduction. B. Risk Reduction. C. Fire Loss Reduction.

Risk Reduction.

A list of specified amounts payable for usually surgical procedures, dismemberment's, ancillary expenses or the like in health insurance policies. (2) The list of individual items covered under one policy as the various buildings, animals and other property in property insurance or the list of the rings, bracelets, etc., insured under a jewelry floater. A. Benefit Plan. B. Item Coverage. C. Schedule.

Schedule.

Market Value is ... A. Selling costs. B. Amount per square foot to rebuild C. Estimated replacement cost. D. Actual cash value.

Selling costs.

An occurrence is best described as: A. Something that happens only once. B. Something that happens when no one is present. C. Something that takes place over a period of time. D. Something that is intentional.

Something that takes place over a period of time. Occurrence is something that takes place over a period of time.

Uncertainty as to whether a gain or loss will occur. An example would be a business enterprise where there is a chance that the business will make money or loose it. These types of risks are not insurable. A. Pure Risk. B. Speculative Risk. C. Normal Risk.

Speculative Risk.

Applying the limits of more than one policy to an occurrence, loss or claim. In some cases, courts have required a stacking of limits when multiple policies or multiple policy periods cover an occurrence. A. Duplication of Benefits. B. Excess Coverage. C. Stacking of Limits.

Stacking of Limits.

An agreed amount of insurance which is shown on the policy and which will be paid in the event of total loss regardless of the actual value of the property. A. Stated Amount. B. Face Value. C. Actual Cash Value.

Stated Amount.

Any limit of insurance that exists within another limit. For example, special classes of property may be subject to a specified dollar limit per occurrence even though the policy has a higher overall limit. A health insurance policy may limit certain benefits to fixed dollar amounts or maximum amounts per day even though the overall coverage limit is higher. A. Sub-Limit. B. Partial Limit. C. Ceiling Limit.

Sub-Limit.

The one who has taken over another's loss to also take over the other person's right to pursue remedies against a third party. It is never used in life insurance and seldom in health. A. Replacement. B. Subrogation. C. Beneficiary.

Subrogation.

The means by which one person or entity, the surety, guarantees another entity, the obligee, that a third entity, the principal, will or will not do something. It differs from insurance by being a three-party contract, but most sureties today are insurers. A. Suretyship. B. Broker Bond. C. Obligation Bond.

Suretyship.

This term has been used to describe both the exposure that exists after expiration of a policy and the coverage that may be purchased to cover that exposure. On "Occurrence" forms a claims tail may extend for years after policy expiration and the losses may be covered. On "Claims Made" forms tail coverage may be purchased to extend the period for reporting covered claims beyond the policy period. A. Exposure. B. Claims Made. C. Tail.

Tail.

Policyholders or prospects for insurance whose values require large premiums are considered targets for insurance agents. Also used to describe risks of large value and severe hazards that are difficult to insure. A. Deferred Risk. B. High Value Risk. C. Target Risks.

Target Risks.

All of the following are used to determine an Insurable Risk except: A. Loss must be calculable. B. Risk of loss must represent a financial hardship. C. Cost of insurance must be affordable. D. The risk of loss must be a speculative risk.

The risk of loss must be a speculative risk. Insurable companies do not insure speculative risk.

The provision in an insurance policy that protects both the policyholder and the insurer is called: A. Statute of Limitations. B. Time Limit on Certain Defenses. C. Expiration Date.

Time Limit on Certain Defenses.

Automobile coverage for transportation expenses incurred by the named insured only in the event of theft of an entire covered auto. Coverage begins after a 48-hour waiting period and is subject to a daily limit and maximum dollar limit and it applies only when the insured has physical damage coverage for theft. A. Hired Auto. B. Non-Owned Auto. C. Transportation expenses.

Transportation expenses.

Farm owners package policies combine BOTH commercial and residential coverages along with liability and property coverages. A. False. B. True.

True. Farm policies do cover commercial risk. Barns, milking parlors etc. and residential coverage. The farm haouse with liability property coverages.

A contract such as an insurance policy in which only one party to the contract, the insurer makes any enforceable promise. The insured does not make a promise, but pays a premium which constitutes the insured's part of the consideration. A. Universal. B. Specific. C. Unilateral.

Unilateral.

A coverage in automobile insurance policy under which the insurer will pay damages to the insured for which another motorist is liable if that motorist is unable to pay because he is uninsured. This coverage usually applies to bodily injury damages only. Injuries to the insured caused by a hit-and-run driver are also covered. A. Uninsured motorist. B. Other than Collision.

Uninsured motorist.

Refers to property which may be furnished or have furnishings in it, but is not occupied or being lived in. The standard fire policy prohibits unoccupancy beyond a specified period of time. This term is contrasted with vacant which means that there is nothing within the building. A. Abandoned. B. Vacant. C. Unoccupied.

Unoccupied.

A policy which states that in the event of a total loss, a specific amount will be paid, that being the amount being stated in the policy. The effect is to eliminate the need for determining the actual cash value of an item of property in the event of a total loss. It is generally used with certain more valuable items such as fine arts, antiques and furs. A. Valued Policy. B. Full Loss Policy. C. Viatical Policy.

Valued Policy.

The law says that under certain circumstances a person is liable for the acts of someone else. For example, in matters related to an automobile a parent might be held responsible for the negligent acts of a child. A. Standard liability. B. Vicarious liability. C. General liability.

Vicarious liability.