Missed Questions

Major cause

Regarding workers comp, what term is given to a situation that is more than 50% of the cause of an injury?

The appliance was manufactured in the United States.

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?

Spouses of officers and stockholders.

A corporation is insured under a CGL policy 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

$3,000 (will pay up to $5,000)

A grave marker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?

Elimination

All of the following are ways to handle risk EXCEPT

The application was processed without a valid license. (Temp licenses are only good for existing business)

Jane was granted a temporary license for her deceased husband's agency on March 1st. On May 1st she processed an application for life insurance on a new applicant.

Policy.

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

Absolute liability.

The obligation to compensate injured workers without regard to fault or negligence is known as

$1,000.

Unless additional coverages are added to the BOP, the maximum amount of coverage on an outdoor sign attached to a building is limited to

Limits of liability

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

Immediately notify the insurer when the insured has filed for bankruptcy.

Which of the following duties is NOT required of the insured in the event of a loss?

Contractual liability

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

Fire legal liability.

Which of the following liability coverages in a general liability policy is NOT subject to the aggregate limit?

Insured B has 3 convictions for reckless driving in the 3-month period prior to policy issue.

Which of the following may be reasons for an auto policy cancellation after the policy has been in effect for 60 days?

Additional coverage (no additional premium)

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

It transfers the risk to all persons insured.

How does insurance distribute the financial consequences of individual losses?

There is no additional premium.

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

Be reduced by 10%.

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

A van used in the delivery business.

In a PAP, a covered auto could include all of the following EXCEPT

Collision coverage.

In order to receive transportation expenses under the Personal Auto Policy following damage to your auto caused by collision, you must have

A specified time.

In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within

Benefits to be paid as they would if the injury had occurred in Arizona. (Because the repair originates in the covered state)

Road Repair Service operates a mobile truck repair service in Arizona. Billy was called to a rig in Arizona that had a broken turbocharger. Billy had to drive to a border city in New Mexico to get parts. While carrying the part to his truck, Billy dropped it on his foot and fractured 4 toes. Road Repair Service does not carry coverage in New Mexico. Billy can expect

Property lost due to military action

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

Misrepresentation

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

20 days

An insurer needs to cancel a driver's personal auto insurance policy for multiple convictions of driving while intoxicated. What type of notice to the insured is required?

Auto collision coverage.

A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT

Appraisal.

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree is known as

Manufacturer of the tire (it was implied the tire was safe to use, therefore, they are held strictly liable)

An insured as 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?

One indivisible premium.

How is the premium paid for the BOP?

FIA will pay back the difference.

If an insurer participating in the WYO flood program pays more in floor claims than it has collected in floor premiums, which of the following is true?

Personal property of roomers not related to the insured

What does HO personal property coverage NOT cover?

At least to the minimum required by that state.

You are at fault in an auto wreck out of state. How does your company adjust?

Valued Policy Law

Hobart purchased a fire policy on his building with a limit of $300,000. At the time of the loss, the building had an ACV of $100,000. The insurance company declined to pay more than $100,000 and Hobart sued them. The court held that the insurer had to pay Hobart the full amount of the policy limit, $300,000. What law was the court applying in this case?

Yes, the coverage would apply for any animal in your care.

Your friend's dog that you are keeping while the friend is out of town bit a visitor in your home. Does your homeowners liability coverage apply?

Apportionment clause

Anthony has insured his dwelling under two fire policies. If Anthony suffers a fire loss, what provision in the policies will prevent Anthony from collecting more than the actual amount of the fire damage?

Pollution.

Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT

10 days

Harold is remodeling his home, and because of the distraction caused by the work, he forgot to mail in his insurance premium when it was due. How many days' notice is he entitled to before the insurer can cancel his Homeowners policy?

The written consent of the insurer.

Joe has decided to never drive another vehicle. However, Joe's wife and children are not following this example. Joe decided to transfer his auto insurance policy to his wife. What does Joe need to transfer the policy?

Sally's insurer to attempt to recover the damages from Sam and/or his insurance company.

Late one night on his way home from a local bar, Sam runs his covered auto into Sally's car. Sam was operating his vehicle while under the influence of alcohol. Sally had no personal injuries, but her car had damage. Sally's insurance policy paid for the damages to her car. The subrogation provision in Sally's policy allows

Physical damage on a customer's auto

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?

Self-insured retention.

The amount of loss the insured is willing to absorb without insurance protection is known as

1

The businessowners liability coverage form will cover medical expenses incurred and reported within how many years of the accident date?

Amounts and types of insurance

Which of the following is indicated on a certificate of insurance?

At least every 5 years.

All admitted insurance companies in Arkansas are subject to fiscal examinations by the Commissioner

Insurer.

All advertisements, regardless of their source of creation, are the responsibility of the

The loss of income for the time the diner was closed.

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

Replacement cost basis.

The equipment breakdown coverage for values loss on a(n)

Bodily injury liability.

The equipment breakdown coverage form provides coverage for all of the following EXCEPT

Who owns the auto

What is the main distinction between a hired auto and a nonowned auto?

Alien

According to the insurance statues definition, an insurer who transacts insurance in this state, but whose articles of incorporation are registered in Canada is considered what type of insurer?

Suits alleging infringement of a copyright.

Coverage B - Personal and Advertising Injury Liability responds to claims arising from

$50,000 (100/300 means that only ONE individual will be awarded for bodily injury is $100,000. So, $50,000 is left unpaid.)

Eric Erickson was judged at fault in an automobile accident. Eric has the 100/300 bodily injury liability coverage. Three other individuals were injured in the vehicle which Eric hit. They were awarded damages of $150,000, $75,000, and $75,000. What amount, if any, was not covered by his insurance policy?

To share the risk of loss from terrorist attacks with the insurance industry

What is the purpose of the Terrorism Risk Insurance Act?

Insuring agreement

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Marine insurance

What type of insurance protects against loss or damage to bridges, tunnels, and other similar transportation facitilies?

Arbitration.

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?

10 days

When a hearing regarding an insurance matter is requested, all parties affected must be notified within what time period of the hearing?

When loss payments equal the applicable limit of insurance

When does the insurer's duty to defend a suit or claim end in a commercial general liability policy?

A bank (BOP is a prepackaged policy to fit a small to medium business. Financial institutions are typically ineligible for BOP coverage.)

Which of the following is most likely INELIGIBLE for coverage under the BOP?

Sales.

All of the following are factors in rating workers comp insurance EXCEPT

An employee of the named insured operating an auto that is owned by the employee's spouse.

All of the following persons would be covered under a Business Auto policy EXCEPT

The insured if responsible for the first $500 of any claim that he makes on his policy.

An insured was backing his car out of the driveway and hit a water hydrant. The automobile sustained $1,300 of damage to the bumper. The insured's auto policy has a $500 deductible. Which of the following is true?

Loss payment

Freedom Mutual has been appointed a servicing carrier for the state's Workers Compensation Plan. Which of the following is NOT a service Freedom will provide under their agreement?

1

Business auto coverages apply to only those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol afford the broadest coverage?

A reasonable expectation that the act may cause injury or damage.

For there to be negligent liability, all of the following must exist EXCEPT

The general aggregate does not apply to fire damage legal liability.

Although a BOP will cover fire damage legal liability, which of the following statements is true?

Morale hazard.

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 be considered a

Proof of loss

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Only for those other states listen in the policy.

The other state's insurance section of a workers comp policy provides coverage

The Thomases and Homeland will be considered co-claimants and receive loss reimbursement from Home Protection Insurance.

Homeland Housing Corp holds a mortgage on a property that John and Carol Thomas purchased. John and Carol have a Homeowners policy with Home Protection Insurance which has a mortgagee clause naming Homeland as a loss payee. If John and Carol suffer a fire to their home

Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage.

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

Medical payments

Which of the following is the other major coverage provided by the BOP liability coverage form?

Insurance to value

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

Your farm wagon being towed by your insured pickup truck. (agriculture equipment is not insured on auto policies - except farm wagons or farm implements being towed by a covered auto)

Which of the following would be considered a covered auto on your PAP?

Other insurance

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

Yes, medical pay also applies off the insured premises.

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?