NC Insurance
A non-residential building in Iowa in a community that was admitted to the NFIP Emergency Program would be provided _______ of coverage for the building. $50,000 $150,000 $100,000 $35,000
$100,000 A commercial building in Iowa that is located in a community that was admitted to the NFIP Emergency Program would be provided $100,000 of coverage for the building.
What is the standard minimum limit of liability for Coverage E -- Personal Liability coverage on Homeowners policies? $100,000 per occurrence. $50,000 per occurrence. $1,000 per person. $1,000,000 per occurrence.
$100,000 per occurrence. Coverage E -- Personal Liability coverage of the Homeowner policies, has a standard minimum limit of $100,000 per occurrence. An insured can request a higher limit if desired.
Blanket Basis
A basis for insuring all items within a single amount of insurance without specifically identifying each item.
A surplus lines insurer.
A nonadmitted insurer that is eligible to insure risks that have been exported by a surplus lines licensee in accordance with a surplus lines law.
Melinda's insurance policy is cancelled because she has not paid the premium. In this scenario, which of the elements of a valid contract is missing? Competent parties. A legal purpose. An offer and an acceptance. A valuable consideration.
A valuable consideration The valuable consideration, in this case the premium, is missing in this scenario.
Flood zone AE
A zone with BFE determined
A domestic insurer.
An insurance company that conducts business in the state of incorporation.
In the insurance industry, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or property damage neither expected nor intended? An occurrence. An accident. An event. A condition.
An occurrence. The definition of "occurrence" includes accident which is bodily injury and/or property damage that is sudden and unforeseen.
Custodian (Fidelity)
Any of the insured's partners, members, or employee when they have care and custody of property while on premises. Except janitor or watchperson.
Natalie assumes that her adjuster has the authority to settle her claim on behalf of her insurance company. This is an example of the adjuster's: Actual authority. Express authority. Apparent authority. Implied authority.
Apparent authority. "Apparent authority" is the authority that a normal prudent person would assume the "agent" has to act on behalf of the principal.
Flood zone V
Areas close to shoreline and subject to flooding and erosion.
The Farm Property policy provides coverage for barns under Coverage B. Coverage E. Coverage A. Coverage G.
Coverage G Coverage G of a Farm Property policy covers barns, silos, fences and outdoor radios and equipment.
Which of the following fidelity bonds guarantees both the honesty and faithful performance of the principal? Coverage form O. Standard form #25. Standard form #23. Standard form #24.
Coverage form O. Public Employee Bond - Coverage Form O guarantees both the honesty and faithful performance of the principal.
A foreign insurer.
Insurance company formed under laws of a different state
Which of the following is NOT a coverage of the Truckers form? Liability. Physical damage. Trailer interchange. Medical payments.
Medical payments Medical payments is not a coverage of the Truckers form. This coverage would need to be added by endorsement.
Scheduled Basis
Only the property listed or scheduled on the policy is insured
Surety and Fidelity Association of America (SFAA)
Produces a number of standardized bond forms to provide for surety data standards
National council on compensation insurance (NCCI)
Produces standardized workers compensation forms
Jamie has submitted a claim against Ron's insurance policy for a loss he has legitimately suffered. This claim is a: Third-party property claim. First-party liability claim. Third-party liability claim. First-party property claim.
Third-party liability claim When a "claimant" submits a claim against an "insureds" policy, the claim is a third-party liability claim (even if the claimant suffered a "property damage loss").
Flood zone VE
V zone with BFE determined
An alien insurer.
is an insurer operating in the U.S. but headquartered outside the U.S.
Hannah must take time away from work to help assist in the investigation of a claim that was made against her BOP policy. The policy will pay for Hannah's actual loss of earnings up to: $150 per day. $250 per day. $200 per day. $500 per day.
$250 per day. The BOP policy will pay for actual loss of earnings, $250 per day, if the insured is asked by the insurance company to take time away from work to assist in the investigation and/or defense of a claim.
The endorsement used to report the insured's actual and estimated business income under an Equipment Breakdown policy is called: Report of net income form. Earnings reporting form. Estimated income form. Business income—Report of Values form.
Business income—Report of Values form This endorsement gives information to the insurer as to the actual values and estimated values of the insured's business income. This form is used to calculate the loss when the insured has purchased the Business Income coverage under an Equipment Breakdown policy.
Under the "Inside the Premises - Theft of Money and Securities" insuring agreement of a crime policy, which of the following situations would NOT be covered: Cash that is stolen by employees. Cash in the register is destroyed in a fire. Travelers checks that have turned up missing A casino suffers a theft of slot machine tokens.
Cash that is stolen by employees Theft by the insured and/or its partners, members, employees, managers, directors, and trustees is one of the exclusions listed in the policy. "Fire" is excluded under this insuring agreement but there are exceptions to the exclusion.
Which of the following is the provision in a liability policy that allows an insured to report incidents or circumstances that result in claims being filed in the future? Defense Within Limits provision. Other Insurance provision. Supplementary Payments provision. Discovery provision.
Discovery provision. The Discovery provision allows an insured to report incidents or circumstances that may result in a claim being filed in the future. This provision is found mainly in liability policies with "claims-made" coverage triggers.
Loss Sustained Form
Form that covers losses actually sustained during the policy period and discovered no later than one year after policy expiration.
Coverage A of the Commercial General Liability policy may provide all of the following coverages, EXCEPT: Liability arising from slander Bodily injury liability Products liability
Liability arising from slander
Flood zone x
Not expected to flood
The insured is covered under a standard HO-5 policy. What coverage does the insured have for personal property? Open perils. The broad form perils. Named perils. Replacement cost.
Open perils The HO-5 form provides open peril coverage on both the dwelling and personal property.
When workers compensation benefits are payable after an automobile accident, how will Part B of the personal automobile policy be applied? Part B will pay as excess insurance over the workers' compensation benefits. Part B of the personal auto policy will pay pro-rata with the workers' compensation policy. Workers' compensation benefits will be paid as excess insurance over the Part B payments. Part B is excluded if workers' compensation benefits are payable.
Part B is excluded if workers' compensation benefits are payable. The Part B - Medical Payments insuring agreement of the personal automobile policy is excluded if workers' compensation benefits are payable.
Insurance Services Office (ISO)
Provides property and casualty standardized forms that are the most widely used throughout the country.
If an employee has suffered a temporary total disability, what benefit structure is established after the healing of the injury? The employee receives a lump sum amount. The employee receives a set period of benefits. The employee receives a reduced percentage of their weekly benefit. The employee receives a life time benefit.
The employee receives a set period of benefits. The employee may receive a set period of benefits without regard to his/her ability to earn wages.
Which of the following would be covered under the building coverage of an NFIP policy? A portable dishwasher. A clothes washing machine. The plumbing system of the covered building. Window curtains.
The plumbing system of the covered building. Only the plumbing system of the building would be covered under the "building" section of the NFIP policy. The other three answer choices would be covered under the contents (personal property) section of the policy.
The standardized Commercial Crime policy permits the insurer to cancel the policy: With 10 days' advance notice. With 30 days' advance notice. With 45 days' advance notice. Only if the insured commits fraud.
With 30 days' advance notice The insurer must provide 30 days' advance notice for every reason except nonpayment of premium.
Mark is injured at work in a state that provides a TTD benefit at 66 2/3%, the state minimum is $40 and the state maximum is $540. The waiting period is 3 days and the retroactive period is 15 days. Which of the following is Mark's TTD benefit if he earns $20 per hour and usually works a 40-hour week. Mark is injured on July 14th and does not return to work until September 3rd. Which of the following is the amount of TTD benefit he would have received? $2,666.65 $3,696.00 $3,809.58 $4,266.64
$3,809.58 $20 X 40 - $800 (This is the average weekly wage). 66 2/3% X $800 = $533.33 (Still lower than the maximum). July 15th to September 2nd = 50 days, which is 7 weeks and one day (7 1/7th) weeks. The waiting period does not apply because the disability exceeded 15 days. 7 1/7 (7.143) X $533.33 = $3,809.58.
What type of bond guarantees that if a bid is accepted, the bidder will satisfy further bonding requirements? A performance bond. A bid bond. A payment bond. A maintenance bond.
A bid bond. One of the guarantees of a bid bond is that if the principal's bid is accepted, he/she will satisfy further bonding requirements to purchase bonds such as performance or payment bonds.
A document that temporarily obligates an insurance company to provide coverage while the issuance of a policy is pending is known as: A binder. An application. An endorsement. A rider.
A binder. A coverage binder provides temporary coverage and will usually include such items as the insured's name and address, any additional insureds or mortgagees, property description, amount of coverage, effective date of coverage, and identity of the insurer.
Which of the following refers to "any individual or organization, or an attorney or individual authorized to act on their behalf, who asserts a right of recovery under an insurance policy or surety bond through administrative means"? Insured. Plaintiff. Claimant. Defendant.
Claimant "Any individual or organization, or an attorney or individual authorized to act on their behalf, who asserts a right of recovery under an insurance policy or surety bond through administrative means" is known as a claimant. "Administrative means" refers to filing a claim.
On a standard BOP policy, all of the following items have a limitation on the coverage amount if the cause of loss is theft, EXCEPT: Patterns. Furs. Jewelry. Computers.
Computers. Computers are not included in the list of property with a $2,500 limit of liability for theft.
All of the following are property policy additions and/or extensions of coverage that are likely to be amended by state statutory forms, EXCEPT: Debris removal. Pollution clean-up costs. Ordinance or law coverage. Coverage for property removed.
Coverage for property removed Coverage for property removed is usually standard on the form. The amount of coverage for debris removal, pollution clean-up, or ordinance or law is usually changed or the coverage is completely removed from the policy by state law (statutory endorsement).
Which of the following is not a method for complying with the requirement of providing workers compensation coverage in North Carolina? Purchasing coverage through a private insurance carrier. Qualifying to become a self-insured for the coverage. Posting of a financial guarantee bond to provide the benefits required by statute. A business can become a member of or contributor to a Self-Insured Fund.
Posting of a financial guarantee bond to provide the benefits required by statute. The posting of a financial guarantee bond is not a method of providing workers compensation coverage in North Carolina.
Flood zone A
Subject to flooding during a base flood. Conditions are less severe than zone V
Flood zone AO
Subject to shallow flooding during the base flood. Flood depths, rather than BFEs are shown
A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Truckers form by using: Symbol 69. Symbol 48. Symbol 49. Symbol 70.
Symbol 48 A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Truckers form by using Symbol 48. Under the Motor Carrier form, it is Symbol 69.
The insured is covered under a BOP policy. Contents coverage is included. If the insured buys a separate piece of machinery and insures it separately, how will the BOP policy respond to a loss to this machinery? The equipment policy will be primary and the BOP will be excess if the separate policy does not provide adequate limits of coverage. The BOP would be primary and the separate policy would be excess. The BOP policy will not pay since the equipment is separately insured. Both will share in the loss on a pro/rata basis.
The equipment policy will be primary and the BOP will be excess if the separate policy does not provide adequate limits of coverage. The BOP will only pay on an excess basis if the other coverage does not provide adequate limits of coverage.
The insured is covered under a standard Businessowners policy. She has several computers used in the business and the electronic data stored on them becomes corrupted as a result of lightning. The cost to research and restore this data is $20,000. How much will the policy pay for the electronic data? $10,000. $20,000. Nothing. $2,500.
$10,000 The coverage provides up to an annual aggregate of $10,000. The cost to replace or restore electronic data is covered if the data is corrupted or destroyed by a covered cause of loss.
How much coverage is available for the theft of firearms under the Broad Theft endorsement to a Dwelling policy? $2,500. $200. $250. $1,500.
$2,500 The Dwelling policy Broad Theft endorsement provides $2,500 for the theft of firearm
Don is having a new home built. He has purchased a Dwelling policy to insured the home and has attached the Dwelling Under Construction endorsement. The policy limit for the completed dwelling is $200,000. Don's home is 15% complete when a covered loss occurs. How much of the coverage limit will apply to the loss? $200,000. $30,000. $20,000. $150,000.
$30,000 15% of $200,000 will apply, which is $30,000.
Fred owns two commercial buildings and carries NFIP coverage on them. The area where the buildings are located is a full-risk zone in the Regular Program. Both buildings are 30 years old and when they are damaged by flood, Fred finds that the cost to comply with the new Floodplain Management Ordinance will be quite expensive. What is the total amount of coverage Fred could receive for the Increased Cost of Compliance? $59,000. $58,000. $60,000. $30,000.
$60,000. The amount of coverage for ICC under the policy is $30,000 per building and no deductible applies. Therefore, Fred could receive $60,000.
The insured has sustained a loss of income from a covered peril under his Businessowners policy. What deductible applies to "loss of income" coverage? A "time deductible" of 72-hours. The same deductible that applies to the building or contents coverage. A $500 deductible. No deductible.
A "time deductible" of 72-hours. Business income coverage is triggered by direct physical loss or damage, from a covered cause of loss, to property at the described premises. This loss must result in a suspension of the businesses operations and activities during the period of restoration. The period of restoration begins 72 hours after the time of the direct physical loss or damage. Thus, there is a time deductible.
Any North Carolina lender in making or servicing real estate mortgage or deed of trust loans on one to four family residences must accept a binder as proof of insurance. The binder presented to the lender must include all of the following, EXCEPT: The name and address of the insured. The name and address of the mortgagee. A sworn statement that the insurance will be kept in force. The amount of insurance bound
A sworn statement that the insurance will be kept in force. An insurance binder submitted to a mortgage lender in North Carolina need not include a sworn statement that the insurance will be kept in force. All other answer choices are required to be included in / on the binder.
Which of the following circumstances would NOT be an injury considered to "arise out of and in the course of" the employment? An employee was injured during a lunch break in the factory parking lot. A work-related accident occurred when the risk of injury was well known to the employee. An injury to an employee was caused by the carelessness of another worker. A workplace injury was caused by an employee's own negligence.
An employee was injured during a lunch break in the factory parking lot. Workers Compensation laws are designed to cover employees regardless of the hazards of the occupation, the training provided (or not), or who is at fault. However, an injury must arise "out of and in the course of" employment in order to fall within the scope of these laws.
With a Commercial Package Policy (CPP), "interline endorsements" are endorsements that: Apply to more than one coverage part of the package policy. Are attached to the common declarations page. Apply only to the common policy conditions within the package policy. Apply only to the Commercial Property coverage part within the package policy.
Apply to more than one coverage part of the package policy. Interline endorsements are written to change more than one coverage part that is included in a Commercial Package policy.
Which of the following is NOT covered by Coverage B of the Commercial General Liability policy? False imprisonment. Wrongful entry. Bodily injury. Malicious prosecution.
Bodily injury. Bodily injury is covered by Coverage A, not Coverage B of a CGL policy.
Which of the following statements best describes the process of mediation? It is the most common alternative dispute resolution (ADR) used to resolve claim disputes. Both parties select an impartial expert and those experts select a third. The decision reached by all three impartial experts is legally binding on the disputing parties. Both parties present their dispute to a neutral third party, but no decision reached by the mediator is legally binding. Both parties present their dispute to a neutral third party and the decision of the mediator is legally binding.
Both parties present their dispute to a neutral third party, but no decision reached by the mediator is legally binding. In mediation, both opposing parties present their dispute to an objective and neutral (impartial) third party who helps the parties analyze their dispute and devise a compromise. No decision reached in mediation is binding on either party, unless they come to an agreement and sign documents agreeing to the decision.
Which of the following would cover "unattached structures" under a Homeowners policy? Coverage A. Coverage C. Coverage D. Coverage B.
Coverage B. Coverage B - Other Structures covers structures that are unattached to the covered dwelling.
National Association of Insurance Commissioners (NAIC)
Creates and maintains model laws that establish standards for how insurance is offered and delivered in the us
When an employer self-insures their workers' compensation risks, but would like to purchase insurance to cover claims that may exhaust their self-insured limits, what coverage should be purchased? Excess coverage. Catastrophic coverage. Umbrella coverage. A surety bond.
Excess coverage Excess coverage should be purchased by a self-insured workers compensation plan to cover claims in excess of the self-insured limits of coverage.
Discovery Form
Form that covers losses that occur at any time but are discovered during the policy period, 60 days after policy expiration date if renewed, and up to 1 year if related to an employee health benefits plan. Loss is discovered when insured first becomes aware of it.
What coverage is used to cover damage to a customer's auto in the care and custody of a repair garage? Garagekeeper's liability. Garage liability. Physical Damage coverage. The "Broadened Coverage - Garages" endorsement.
Garagekeeper's liability. Garagekeeper's liability coverage pays for damage to the customer's vehicle while it is in the care, custody or control of the insured's business.
Another person may be listed as an "insured" on a Dwelling policy by attaching the "Additional Insured" endorsement. The additional person listed on the endorsement must: Be related by blood or marriage to the named insured. Have the financial worth to be able to pay losses that are not covered under the policy. Be covered by a personal liability supplement. Have insurable interest in the premises covered by the Dwelling policy.
Have insurable interest in the premises covered by the Dwelling policy. The only requirement of the "Additional Insured" endorsement is that the person have insurable interest in the property.
A licensee, for the first time, does not maintain records of insurance transactions as prescribed by the North Carolina Commissioner. He/she will: Have their license revoked for no less than one month, but not more than six months. Have their license revoked for no less than one year, but not more than two years. Will be subject to a fine of no less than $100, but not more than $1,000. Will be subject to a fine of no less than $1,000, but not more than $2,000.
Have their license revoked for no less than one month, but not more than six months. First offense
A church has had the woodwork in the building refinished and new stain and varnish has been applied. The workers placed the rags and brushes that were used to apply the varnish in a small closet and closed the door, creating the possibility of spontaneous combustion. Which of the following terms best describes this condition? Catastrophe. Hazard. Risk. Peril.
Hazard This condition is a hazard, any condition that increases the possibility or severity of a loss.
Which of the following is NOT an exposure covered by an insuring agreement in a Commercial General Liability policy? Premises-operations liability. Independent contractor's legal liability. Insured contracts. Hold harmless agreements.
Hold harmless agreements "Hold harmless" agreements fall under the "contractual liability" exposure which is excluded by the CGL policy.
Many stationary objects, such as bridges, tunnels and power lines fall within the nationwide marine definition because they are considered to be: Instrumentalities of transportation and communication. Of substantially high values. Capable of being transported. Exposed to the same perils as vessels at sea.
Instrumentalities of transportation and communication. Items such as bridges, tunnels, power lines, pipelines, and radio transmission towers fall specifically under the nationwide marine definition category because they are "instrumentalities of transportation or communication."
All of the following statements regarding the basic extended reporting period in a Commercial General Liability policy are TRUE, EXCEPT: It does not provide new policy limits. It is automatically included. It is free of premium charge. It extends the policy period by 60 days.
It extends the policy period by 60 days. The basic extended reporting period of a claims-made CGL policy does not extend the policy period by 60 days. However, it DOES pay claims first received and recorded within 60 days of the policy expiration date.
Which of the following would be eligible for coverage of personal property "off-premises" from the covered dwelling? Cameron who rents a house from Lana who covers the home with a DP-3 policy. Kathy who rents a condominium unit from Dave who covers the unit with a DP-1 form. George who rents an apartment from Tawney who covers the apartment with a DP-2 form. Marisa who lives in a home she owns and is covered by a Dwelling policy with the Theft Coverage endorsement attached.
Marisa who lives in a home she owns and is covered by a Dwelling policy with the Theft Coverage endorsement attached. Off-premises theft of personal property is covered by the Broad Theft coverage endorsement that can only be purchased for dwellings and are owner-occupied.
National Uniform Claim Committee (NUCC)
Organization responsible for the content of health care claims.
All of the following are factors in establishing negligence, EXCEPT: Duty of care owed. Others involved. Causation. Breach of duty.
Others involved The other people involved has no bearing in establishing negligence by the insured. The other responses are factors in established negligence.
Under Part A of a Personal Automobile policy, "supplementary payments" refer to which of the following? Payment of defense and other expenses by the insurance company beyond the limits of liability. Payments made by the insured for damages exceeding his policy limits. Payments received by the insured directly from the person or persons who caused a loss. Payments made by the insurance company for the insured's own medical expenses, to supplement any other medical insurance.
Payment of defense and other expenses by the insurance company beyond the limits of liability. Any expense the insurance company incurs in the processing of a claim is outside the limits of coverage. The insured is not penalized by a reduction in the limits of liability by these expenses incurred by the insurer.
Interstate Insurance Product Regulation Commission (IIPRC)
Produces standardized forms for life insurance, disability income, and long-term care insurance products
The insured carries a workers compensation policy that includes Part Two - Employer's Liability coverage. Which of the following is not covered by Part Two? Statutory benefits set by state law. Suits brought by injured employees, in case of employer's gross negligence. Suits brought by spouses or dependent of injured workers. Legal defense costs.
Statutory benefits set by state law. Statutory coverage is found in the "Part One - Workers Compensation" section of the policy. Part Two - Employer's Liability coverage does not cover those benefits that are set by statute.
All of the following statements are TRUE regarding the "Windstorm or Hail" endorsement to a Dwelling policy form, EXCEPT: The amount of coverage that can be provided by this endorsement is set by state statute. The deductible amount on the endorsement is set by state statute. The endorsement excludes tornadoes and hurricane winds from the covered perils. The amount of coverage available for purchase and the deductible amount is determined by the area within a state the covered dwelling is located.
The endorsement excludes tornadoes and hurricane winds from the covered perils The endorsement does NOT exclude tornadoes and hurricane winds from the covered perils. States that are prone to these types of winds and damage set limits and deductibles by law in order to help people in the most damage-prone areas of the state have access to insurance coverage. The statutes are also drafted with the solvency of insurance companies in mind.
Under the Equipment Breakdown Protection form that covers boilers and machinery, what is considered to be one loss event? The initial breakdown that causes other breakdowns. A boiler that explodes in a building adjacent to the insured's building that causes a loss to the insured. No more than three separate losses that occur during a 7-day period. When expediting expenses are paid to the insured.
The initial breakdown that causes other breakdowns. The breakdown of one covered piece of equipment that causes other breakdowns of covered equipment will be considered one event.
Underinsured motorist coverage provides first-party protection to an insured after an accident in which of the following situations? The other driver has insufficient liability limits and is "at-fault". The other driver has no insurance and is "at-fault". The other driver has no insurance but is not "at-fault". The insured driver has insufficient liability limits and is "at-fault".
The other driver has insufficient liability limits and is "at-fault". The purpose of underinsured motorist coverage is to provide protection for the insured when the "at-fault" driver has insurance, but it is insufficient to cover the injuries to the insured. In this case, the insured may collect the "excess" from their own insurer.
All of the following statements are true regarding a Personal Liability Supplement, EXCEPT: The policy can be written as a monoline policy. The policy will cover watercraft liability. It provides Coverage L - Personal Liability coverage at $100,000 per occurrence. If the insured would like to obtain the Loss Assessment coverage, it must be added to the Personal Liability Supplement by endorsement.
The policy will cover watercraft liability. The only answer choice that is NOT true is that the Personal Liability Supplement coverage watercraft liability. The policy does NOT cover watercraft liability, but all three of the other answer choices are true.
The "Extortion -- Commercial or Government Entities Endorsement" to a Crime insurance policy contains an exclusion that the named insured make a reasonable effort to report the extortionists' demands to an associate or local law enforcement for coverage to apply. Which of the following best describes the purpose of this exclusion? To permit the insurer time to determine if the loss is covered by the policy before the named insured surrenders the property. To allow time for all associates of the company to be ruled out as the extortionist by law enforcement. To allow law enforcement time to capture the extortionist before the named insured surrenders the property. To eliminate the possibility of collusion between the named insured and an extortionist.
To eliminate the possibility of collusion between the named insured and an extortionist. The purpose of the exclusion is to eliminate the possibility of collusion between the named insured and an extortionist.
Which of the following zones is not expected to flood during the "base flood"? V zones. X zones. A zones. AO zones.
X zones. X zones are not expected to flood during the base flood.
Admitted (Authorized) Insurer
authorized by this State's Commissioner of Insurance to do business in this State. It has received a Certificate of Authority to do business in this State.
American Association of Insurance Services (AAIS)
provides property and casualty standardized forms, including some forms providing specialty coverages
Alex has his SUV covered under a standard Personal Automobile policy. He has borrowed a trailer from his friend Josh, hitched it to his SUV, and begins moving some boxes from his house to a new house he recently purchased. After he has unloaded the trailer, he is driving back to his house and loses control of his vehicle, wrapping Josh's trailer around a tree. There is no other insurance covering Josh's trailer and Alex's Part D deductible for "Collision" is $250. His deductible for "Other Than Collision" is $300. Before the accident, the ACV of the trailer was $2,000. The cost to repair or replace the trailer with like kind and quality is $1,800. How much coverage would Alex's policy provide? $1,800. $1,550. $1,500. $2,000
$1,500 The policy will pay the LESSER of the ACV or the cost to repair or replace with like kind and quality. This would be $1,800 minus the "Collision" deductible of $250, which leaves us with $1,550. However, the Part D limit of liability specifies that no more than $1,500 will be paid for a non-owned trailer, therefore, the correct answer is $1,500.
Which of the following businesses can cover their private passenger and commercial automobile exposures with a Business Auto policy? An auto dealership. A trucking company. A grocery store. A motor carrier company that delivers cargo.
A grocery store. The grocery store is the only type of business listed in the answer choices that can be covered by the Business Auto policy.
Which of the following is the type of policy that is written to cover the insured for occurrences in which they have become legally liable, but only for those exposures covered on their underlying liability policy? A excess liability policy that is written as a self-contained policy. An excess liability policy that is written on a follow-form basis. An umbrella policy. A personal liability supplement.
An excess liability policy that is written on a follow-form basis. An Excess Liability policy is said to be written on a follow-form basis if the coverage is not defined in the policy, but simply states that the coverage "follows the underlying policy coverages".
Courtney carries two Dwelling policies with a total limit of $20,000 on her home. One policy is with Company A with a limit of $12,000, and the other policy is with Company B in the amount of $8,000. In case of a $10,000 covered loss, which of the following is true regarding the payment of the claim? (Not equal shares) Company A will pay $6,000 and Company B will pay $4,000. Company B will pay $8,000. Each company will pay 50% of the loss. Company A will pay $6,000 and Company B will pay $2,000.
Company A will pay $6,000 and Company B will pay $4,000. The total amount of coverage is $20,000. Company A has 60% of the coverage and Company B has 40% of the coverage. Company A has 60% of the loss and would pay $6,000. Company B has 40% of the loss so it would pay $4,000.
Which of the garage policy coverages will pay for physical damage to a garage customer's auto regardless of legal liability? Section II - Garage Liability coverage. Section IV - Garage physical damage coverage. Garagekeepers legal liability coverage. Garagekeepers direct primary coverage.
Garagekeepers direct primary coverage. The Garagekeepers direct primary coverage pays for damages to a customer's vehicle regardless of fault. The Garagekeepers legal liability form would require that the claimant prove negligence on the part of the garage.
Conrad is a contractor with Builders' Risk coverage written on a reported value basis on his current construction job. He started clearing the land on May 1st, digging the basement on May 13th, pouring the foundation on May 31st, blocking the basement walls on June 5th, flooring the first floor above the basement on June 15th, and constructing the walls of the first floor on June 30th. When did Conrad's Builders' Risk policy begin providing coverage? June 5th. June 15th. May 1st. May 13th.
June 15th If a Builders' Risk form is written on a reported value basis and the building includes a basement, coverage begins on the date construction begins on the lowest floor that will be located above the basement. In this scenario, this would be on June 15th.
Which of the following would be covered under by Coverage A of the CGL policy? Pollution clean-up. Liability for bodily injury arising from personal and advertising injury. Liability for bodily injury caused by an automobile (not owned by the insured) parked on the insured premises. Damage to real property caused by the insured's operations.
Liability for bodily injury caused by an automobile (not owned by the insured) parked on the insured premises. All of the other answer choices are specifically excluded under Coverage A.
All of the following would be considered an "insured" on a Homeowners policy, EXCEPT: All residents who are related to the named insured. A trust. A non-related minor being cared for by the named insured's family. A non-related tenant living in the insured residence.
A non-related tenant living in the insured residence. A tenant would be considered an "insured" under their own HO-4 policy that covers their personal property. However, a non-relative who is a tenant living in the insured's residence, is not considered an "insured" under the policy.
An insured is covered under a Commercial Property policy with the special cause of loss form attached. The insured suffers a loss to some valuable papers and records pertinent to his business. Which of the following statements is correct about how this loss will be covered? It will not be covered because it is excluded. It will be covered if the loss was caused by one of the broad form perils. It will be covered for up to $1,000 under the special limits of liability of the special cause of loss form. It will be covered but only if the peril that caused the loss was fire.
It will be covered if the loss was caused by one of the broad form perils. Valuable papers and records are covered under the special cause of loss form but only if the loss was caused by one of the broad form perils or the breakage of building glass.
What does the term "comparative negligence" refer to? The percentage of fault is shared by each driver in an accident in which both contribute to causing the accident. The one who is most negligent receives no payment when the claim is settled. The one who is the least negligent receives no payment when the claim is settled. If both parties have contributed to causing the accident, neither party receives any payment when the claim is settled.
The percentage of fault is shared by each driver in an accident in which both contribute to causing the accident Comparative negligence establishes the percentage of fault shared by each driver in an accident in which both contribute to causing the accident. Comparative negligence laws vary by state.
Farmer Joe is covered by a Farm package policy. He conducts farming operations for a neighboring farm based on a $3,000 annual contract. When Joe backs his farm tractor into a delivery truck on the farm premises, which of the following will cover him for the liability? The farm liability coverage form of his policy. The custom farming endorsement attached to his farm liability policy. The additional insured liability endorsement. The non-owned farming liability coverage endorsement.
The farm liability coverage form of his policy. When a farmer is conducting under $5,000 of custom farming a year, the farm liability coverage picks up his liability. The custom farming liability endorsement is only necessary when a farmer is conducting more than $5,000 per year in custom farming.
An insured has her dwelling covered by an HO-3 form, with a $500,000 limit of liability for Coverage A. A fire breaks out and the dwelling is a total loss. The entire $500,000 limit is used to cover the direct physical damage to the dwelling. However, there is a large amount of debris from the burned structure covering the insured's property that will need to be removed. In this situation, how will the cost of the debris removal be paid? -5% of the Coverage A limit is set aside to cover debris removal. This means that the insured must pay $25,000 out-of-pocket to cover the direct physical damage to the dwelling itself. -When the entire Coverage A limit is used to cover the direct physical damage to the dwelling, an additional 5% of the Coverage A limit will be added to cover debris removal. -The policy will only pay its Coverage A limit and the insured must pay for the debris removal out-of-pocket. -An unlimited additional amount of insurance is covered on all of the Homeowners forms for debris removal because the insured cannot begin to rebuild until the debris is removed.
When the entire Coverage A limit is used to cover the direct physical damage to the dwelling, an additional 5% of the Coverage A limit will be added to cover debris removal Coverage for debris removal is included in the Coverage A limit of liability, it is not an additional amount of insurance, except if the entire Coverage A limit is used to cover the damage or destruction to the dwelling. In that case, there is an additional amount of insurance that will be added for debris removal. This additional amount is 5% of the Coverage A limit.
The standardized personal automobile policy considers a newly acquired auto: A non-owned auto until it is reported to the insurer. A covered auto for the first 14 days. An owned auto only after the insured reports the new auto to the insurer. A covered auto for liability only if it replaces an automobile that was already covered on the policy.
A covered auto for the first 14 days A newly acquired auto is considered a "covered auto" under the insured's existing personal automobile policy from the date of purchase until the insured reports the new auto to the insurer. The insured has 14 days to report the new auto for coverage to apply. It doesn't matter if the new auto replaces an old one on the policy. REMEMBER, the 14-day rule is included in the STANDARD personal automobile policy and statutes within certain states may amend this time period. (30 days for NC)
The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as: An alien insurer. A foreign insurer. A domestic insurer. A surplus lines insurer.
A foreign insurer. The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as a foreign insurer. For example, the Superintendent in New York would refer to an insurer that was formed under the laws of Arizona as a "foreign insurer".
Jordan's Jams purchases a standardized Commercial Property policy on August 15th from Binders Keepers, Inc. On September 20th, Binders Keepers adopted a form revision that provided broader coverage without additional premium, however Jordan's policy was written before the form revision was adopted. Which of the following statements is TRUE regarding how the broadened coverage would apply to Jordan's Jams? The broadened coverage would apply to Jordan's Jams but only after a 45-day waiting period as specified by the Liberalization clause of the Commercial Property form. The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium. The broadened coverage would not apply to Jordan's Jams because the coverage was written before the form was revised. The broadened coverage would apply to Jordan's Jams but only on the date that Jordan's renews the policy, it would not apply during the current policy period.
The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium. This is stipulated in the Liberalization clause located in the Conditions of the Commercial Property form.
All of the following statements about the HO-8 are correct, EXCEPT: The policy form is designed for older or historical homes with replacement values that exceed market values. HO-8 covers the dwelling, other structures, and personal property on a named perils basis. HO-8 covers the same named perils as the HO-2. HO-8 is also known as the Modified Coverage Form.
HO-8 covers the same named perils as the HO-2 The HO-8 Form provides coverage for the named BASIC perils for Section I. The HO-2 provides coverage for the BASIC and BROAD form perils, making the HO-2 Form broader than the HO-8 Form.
The 1943 New York Standard Fire policy specifically excludes all of the following, EXCEPT: Currency. Deeds. Evidences of debt. Manuscripts.
Manuscripts. Manuscripts are not specifically excluded, they can be covered if they are specifically named in the policy.
An "other insurance" clause is included in insurance policies to deal with the problem of: Overinsurance. Excess insurance coverage. Inadequate coverage. Conditional coverage.
Overinsurance. The other insurance clause is included in an insurance policy to provide a method of determining how much of a covered claim each insurer will pay when an insured carries more than one insurance policy. This clause is also called the "apportionment clause" or the "pro-rata share" clause. This prevents the problem of over-insurance that would occur if each policy paid up to its limit of liability.
An insured is covered under a CGL policy. He would like to purchase another policy to increase the limits of insurance for his commercial liability exposures. Which of the following statements is correct regarding the insured's situation? A Commercial Umbrella policy is the only type of policy that will permit the insured to increase his liability insurance limits. An Excess Liability policy is the only type of policy that will permit the insured to increase his liability insurance limits. The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits. Neither a Commercial Umbrella nor an Excess Liability policy can be used to increase an insured's liability limits under a CGL policy.
The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits. To increase the limits of insurance for the insured, he could purchase either a Commercial Umbrella or an Excess Liability policy.
All of the following are situations where a Commercial Umbrella policy would be triggered to provide coverage, EXCEPT: The policy limits of the underlying liability policy have been exhausted. To pay a loss that is excluded by the underlying liability policy, but not excluded by the Commercial Umbrella policy. Payment on previous losses by the underlying liability policy has reduced its aggregate limit so that a subsequent loss is not fully covered. The underlying liability policy limits are sufficient to pay the entire claim.
The underlying liability policy limits are sufficient to pay the entire claim. All of the situations in the answer choices would trigger the Commercial Umbrella policy to pay a claim, EXCEPT: "The underlying liability policy limits are sufficient to pay the entire claim." Obviously, if the underlying liability policy pays the entire claim, the Commercial Umbrella policy would not be triggered to pay.
