Missed questions

The personal property off-premises extension of dwelling forms provides limits of coverage up to a) 10% of Coverage A anywhere in the world. b) 10% of Coverage C anywhere in the U.S. or Canada. c) 10% of Coverage C anywhere in the world. d) 10% of Coverage A anywhere in the U.S. or Canada.

10% of Coverage C anywhere in the world.

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? a) Per occurrence b) Combined single c) Split d) Aggregate

Combined single

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? A Nonprofit service organization B Stock C Mutual D Reciprocal

Mutual

Which of the following is NOT a goal of risk retention? A To increase control of claim reserving and claims settlements B To fund losses that cannot be insured C To minimize the insured's level of liability in the event of loss D To reduce expenses and improve cash flow

To minimize the insured's level of liability in the event of loss

An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short-term apartment, and the renter is forced to find other accommodations. Disregarding any extra expense for meals, how much would an HO-3 will pay under Coverage D? a) $150 b) $300 c) $900 d) $1,050

$1,050

What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident? a) Aggregate b) Per occurrence c) Per person d) Combined single

Per occurrence

The term functional replacement cost refers to a) Major classes of property provisions. b) Property loss valuation. c) Deductibles. d) Endorsements.

Property loss valuation

Which of the following would NOT be covered by commercial inland marine policies? a) Property lost due to a military action b) Commercial property floater risks c) Loss caused by weather conditions d) Bridges and tunnels

Property lost due to a military action

Which of the following types of agent authority is also called "perceived authority"? A Implied B Fiduciary C Apparent D Express

Apparent

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of a) Controlled business. b) Defamation. c) Twisting. d) False advertising.

Defamation

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following? a) Glass breakage b) Fire c) Riot d) Vandalism

Riot

All of the following statements regarding personal property coverage in the homeowners program are correct EXCEPT a) Earthquake coverage may be added by endorsement. b) The HO-3 policy covers the mysterious disappearance of personal property. c) Coverage on money is limited to $200. d) Personal property coverage is usually 50% of the Coverage A limit.

The HO-3 policy covers the mysterious disappearance of personal property.

Within 15 days of notifying the Superintendent of the termination of an appointment, the insurer must send a copy of that notification to a) The Guaranty Association. b) The agent. c) The NAIC. d) The president of the insurance company.

The agent

Under the property and casualty conditions of a homeowners policy, what may happen if it is discovered that the policyowner committed concealment or fraud? a) The insured may have the opportunity to reapply for the policy. b) The policy will be voided only if the fraud was committed before a loss. c) The policy may be voided. d) The insurer may void the policy only if it gives the insured 10 days' notice.

The policy may be voided

Under Coverage E (Scheduled Farm Personal Property), coverage for livestock that is not specifically insured is limited to either the ACV or a) $2,500 per head. b) $500 per head. c) $1,000 per head. d) $2,000 per head.

$2,000 per head

What amount of coverage is provided on HO policies for watercraft? a) Up to $1,500 b) Up to $10,000 c) Up to $2,000 d) None

Up to $1,500

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A Consideration B Legal purpose C Contract of adhesion D Acceptance

Consideration

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as a) Twisting. b) Fraud. c) Concealment. d) Misrepresentation.

Twisting

Roger owned a grocery store and had a reporting form policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has? a) $100,000 b) $25,000 c) $50,000 d) $75,000

$50,000

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request? a) 3 days b) 5 days c) 10 days d) 30 days

3 days

Which type of authority is found in the agent's contract? a) Apparent b) Implied c) Assumed d) Express

Express

A scheduled personal property endorsement will be used to insure a) Personal items at their actual cash value. b) Higher limits of coverage for fine arts items. c) High value items only within the U.S. d) Personal vehicles used by travelers anywhere in the world.

Higher limits of coverage for fine arts items.

With respect to the commercial package policy, an interline endorsement is one that a) Never applies to all of the lines of insurance that is included in the package. b) Applies to all of the lines of insurance that are included in the package. c) Applies to only one line of insurance that is included in the package. d) May apply to more than one line of insurance that is included in the package.

May apply to more than one line of insurance that is included in the package.

An insurance company that is owned by the policyholders is called a a) Mutual insurer. b) Fraternal insurer. c) Stock insurer. d) Reciprocal insurer.

Mutual insure

Which services are associated with Standard & Poor's and AM Best? A Storing medical information collected by insurance companies B Rating the financial strength of insurance companies C Investigating violations of The Fair Credit Reporting Act D Providing employment histories for investigative consumer reports

Rating the financial strength of insurance companies

A nonadmitted insurer who provides unique insurance coverage that is not available from an admitted insurer is called a/an A Assessment mutual insurer. B Capital stock insurer. C Reciprocal insurer. D Surplus lines insurer.

Surplus lines insurer.

Which of the following statements is CORRECT regarding the business income under the businessowners policy (BOP)? a) The business income is payable for 12 consecutive months following the occurrence. b) The business income is subject to coinsurance limitations of 50%. c) The business income coverage has an aggregate dollar limit. d) The business income coverage has a monthly limitation and a set benefit period.

The business income is payable for 12 consecutive months following the occurrence

For the purpose of insurance, risk is defined as A The certainty of loss. B The cause of loss. C An event that increases the amount of loss. D The uncertainty or chance of loss.

the uncertainty or chance of loss

A house insured with a homeowners policy has been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal? a) An additional 5% of the policy limit may be paid for debris removal. b) Because the full policy limit must be paid for the house, there is no coverage for debris removal. c) It will be paid if the debris removal endorsement has been added. d) HO policies do not cover debris removal.

An additional 5% of the policy limit may be paid for debris removal

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will a) Only be applicable if the insured pays a higher deductible. b) Only be applicable if the insured pays an additional premium. c) Be increased by 10%. d) Be reduced by 10%.

Be reduced by 10%

An insurance producer who by contract is bound to write insurance for only one company is classified as a/an A Solicitor. B Broker. C Independent producer. D Captive agent.

Captive agent

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 D-P3 but not DP-1? a) Coverage E - Additional Living Expense b) Coverage A - Dwelling c) Coverage B - Other Structures d) Coverage D - Fair Rental Value

Coverage E - Additional Living Expense

Which of the following is an example of a physical hazard? a) Lying b) Bankruptcy c) Diabetes d) Carelessness

Diabetes

FAIR Plans are state insurance pools that provide property insurance to those who cannot obtain it in the normal market. What does the acronym FAIR stand for? a) Free Assistance for Insured Residents b) Fundamental Access to Insurance Regulations c) Fair Access to Insurance Requirements d) Federal Association of Insurance Regulators

Fair Access to Insurance Requirements

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? A Assumed B Express C Implied D Apparent

Implied

Courts will interpret any ambiguity in an insurance contract A Through arbitration. B Based on the prudent person rule. C In favor of the insured. D In favor of the insurer.

In favor of the insured

Which type of insurance is based on mutual agreements among subscribers? A Mutual insurance B Limited liability C Reinsurance D Reciprocal insurance

Reciprocal insurance

An insurance company receives an application with some information missing and issues the policy anyway. What is this called? A Aleatory B Waiver C Estoppel D Subrogation

Waiver

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? A Representation B Warranty C Concealment D Indemnity

Warranty

Which of the following is NOT part of Section II of the boatowners policy? a) Uninsured boaters b) Watercraft damage c) Watercraft liability d) Medical payments

Watercraft damage

In forming an insurance contract, when does acceptance usually occur? A When an insurer's underwriter approves coverage B When an insurer delivers the policy C When an insurer receives an application D When an insured submits an application

When an insurer's underwriter approves coverage

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. b) While it is in any residence premises occupied by a named insured. c) Anywhere in the world. d) Only while on a residence premises.

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

Which of the following exclusions would specifically fall under Coverage E? a) Bodily injury to a residence employee b) Falling objects c) Land d) Contractual liability

Contractual liability

All of the following statements are TRUE about earthquake coverage in property policies EXCEPT a) Coverage is commonly provided through a federally-funded program. b) Coverage is excluded by most property forms. c) Coverage may be added to by endorsements. d) Coverage can be purchased separately for an additional premium.

Coverage is commonly provided through a federally-funded program

Which of the following dwelling policies require insurance equal to at least 80% of the replacement value of the dwelling at the time of loss in order to provide replacement cost coverage? a) DP-1 only b) DP-2 only c) DP-3 only d) DP-2 and DP-3

DP-2 and DP-3

Which of the following is true regarding a risk retention group? A It provides support for underwriters and is not an insurance company. B It is a benefit society formed to provide insurance for members of an affiliated lodge. C It is a company owned by the stockholders that provides nonparticipating policies. D It is a liability insurance company owned by its members.

It is a liability insurance company owned by its members.

All of the following are additional coverages under a homeowners policy EXCEPT a) Payment for reasonable repairs and debris removal following a covered loss. b) Outbuildings. c) Fire department service charge. d) Coverage for trees, shrubs, and other plants

Outbuildings