New Hampshire Test - 2nd Set

The deductible on the Equipment Breakdown form can be stated in which of the following ways? Answer Choices: Select the Correct Answer Fixed dollar deductible Time deductible Percentage of loss deductible All of the responses are correct

All of the responses are correct is correct. EXPLANATION: The deductible on the form can be stated as a fixed dollar amount per accident, or a time deductible such as five days. The deductible could also be stated as a percentage of the loss. This deductible could also be subject to a minimum and maximum amount

The insured carries a Loss Sustained Policy Form. An employee has been stealing for years, unknown to the insured. The bond has been cancelled and the insured discovers the loss 11 months afterwards. What will the insurance company do? Answer Choices: Select the Correct Answer Deny the claim Pay the claim Pay a portion of the claim Send a reservation of rights letter

Pay the claim is correct. EXPLANATION: The Loss Sustained Policy Form has a one-year discovery period after the policy has expired or been terminated. The loss was discovered within that time frame and would be covered since the loss actually occurred during the policy period.

Under the "Business Income from Dependent Properties -- Broad Form", to qualify as a "manufacturing location": Answer Choices: Select the Correct Answer The location must provide components that are essential to the insured's production. The location must provide at least 85% of the components that are essential to the insured's business production. The location must be under contract with the insured's business to provide components that are essential to the insured's business production. The location must provide at least 98% of the components that are essential to the insured's business production.

The location must be under contract with the insured's business to provide components that are essential to the insured's business production..

All of the following statements are TRUE regarding automobile "no-fault" laws, EXCEPT: Medical expense and lost wage claims are paid by the insured's own automobile policy, without assigning fault to any party in the accident. Medical payments and physical damage claims are paid by the state without assigning fault to any party in the accident. No-fault laws have been passed by states to alleviate the backlog of lawsuits brought to assign fault for the accident. No-fault laws expedite claims payments, reducing the amount of time insured's must wait for reimbursement.

The untrue statement in the answer choices is: "Medical payments and physical damage claims are paid by the state without assigning fault to any party in the accident." All of the other answer choices are true statements regarding automobile "no-fault" laws

Inland Marine insurance is commonly used to insure all of the following, EXCEPT: Automobiles. Stamps. Camera equipment. Jewelry.

autos

All of the following illustrations could be expected on a FIRM, EXCEPT: Answer Choices: Select the Correct Answer A community's base flood elevations. The standard premium rates for a flood zone. The Special Flood Hazard Area boundaries. A community's flood zone designations

the standard premium rates for a flood zone.. FIRMs are used to set rates, but the map would not display those rates as there are other factors that can influence the premium amount.

The minimum liability amount per occurrence for bodily injury and property damage claims available under the BOP is: Answer Choices: Select the Correct Answer $500,000 $1,000,000 $100,000 $300,000

$300,000. EXPLANATION: $300,000 of liability per occurrence is automatically included on the BOP. Higher limits are available at the request of the insured and at the discretion of the company.

What limit of liability would be needed for a risk that transports radio active materials as required by the Motor Carrier Act under the MCS-90 endorsement? Answer Choices: Select the Correct Answer $500,000 $750,000 $1,000,000 $5,000,000

$5,000,000 is correct. EXPLANATION: The MCS-90 endorsement requires the insured to carry a minimum of $5,000,000 in liability coverage. The endorsement provides for environmental restoration coverage as a result of pollution damages. The higher limit is required if transporting extra hazardous material.

Depreciation of a total loss to a vehicle as a result of normal wear and tear and rust is limited to: $1,500 $2,000 $1,000 $3,000

1,000

A 2 to 4-Family Dwelling is covered under the NFIP for incidental occupancies if it occupies less than: 25% of the building's replacement cost value. 25% of the building's actual cash value. 25% of the building's total floor area. 25% of the building's common living areas.

25% of the building's total floor area..

Under the farm forms, theft of certain types of property has a theft coverage limitation. The theft limitation on firearms and other related equipment is: Answer Choices: Select the Correct Answer $1,500. $500. $3,000. $5,000.

3,000

An insurer desiring to cancel a residential risk must send to the insured an advance notice at least ______days before the cancellation takes effect. Answer Choices: Select the Correct Answer 30 20 45 15

45. EXPLANATION: The insurer must send the insured a 45 day notice of it's intent to cancel the policy.

ABC Office Temps and Clean-Rite Dry Cleaning are both located in a strip mall and share a common party wall. Fire begins in the dry cleaners and damages the party wall. Clean-Rite decides to go out of business. How will the BOP policy of ABC Office Temps respond regarding the party wall? Answer Choices: Select the Correct Answer Each policy will split the cost of the repair to the party wall Clean-Rite will be responsible for the entire loss ABC's policy will repair the party wall and subrogate against Clean-Rite ABC will be responsible for the entire loss

ABC's policy will repair the party wall and subrogate against Clean-Rite is correct. EXPLANATION: Normally, when there is loss to a party wall, the companies will share the loss in the cost to repair. If one party chooses not to make the repair, then the insurer for the other party will pay the entire cost of the loss and maintain subrogation rights against the other party.

All of the following exposures are covered under the commercial general liability policy, EXCEPT: Injury to an employee of the insured. Liability assumed under a lease of premises. Damages caused by products after their sale. Damages to others by slander.

Injuries to employees are only covered by workers compensation insurance.

What is the Part D limit of liability for damage to a non-owned trailer under the Personal Auto policy? Answer Choices: Select the Correct Answer $1,500. $500. $1,000. $2,000.

$1,500.. EXPLANATION: The limit is $1,500 for damage to a non-owned trailer that is designed to be pulled by a private passenger auto, pickup truck or van.

A Personal Automobile policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr. Jones involves a $75,000 liability judgment to Mr. Allen for his injuries and $25,000 liability judgment for the damage to his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay: Answer Choices: Select the Correct Answer $120,000. $25,000. $75,000. $100,000.

$120,000. . EXPLANATION: Legal expenses are in addition to the limit of liability. The single limit covers both bodily injury and property damage liability. Therefore, the policy will pay the $100,000 in damages and the cost to defend the insured in the lawsuit for a total of $120,000.

Every insurer must reply in no later than ____ working days to all claims communications from insureds or claimants. Answer Choices: Select the Correct Answer 15 20 30 10

10

Whenever the Commissioner has reason to believe that any person involved in the insurance business in New Hampshire is engaging in any method of competition, or any act or practice that appears to be unfair or deceptive may call for a hearing. A ____notice must be sent to the involved parties. Answer Choices: Select the Correct Answer 10 20 15 12

10

When does a "standard fire policy" go into effect in New Hampshire? Answer Choices: Select the Correct Answer Noon 12:01 pm 12:01 am 1:00 pm

12:01 am

Unless otherwise provided by law, within ____ days from the receipt of the notice of claim, the insurer must make a complete decision regarding coverage, acceptance, denial or payment of a claim and communicate this to the insured or claimant. Answer Choices: Select the Correct Answer 15 20 30 45

30 is correct. EXPLANATION: With few exceptions to the time limit of 30 days, the insurer must advise the claimant of its intentions regarding the claim.

Unless otherwise provided by law, every insurer must establish procedures to commence an investigation of any notice of a claim filed by an insured or claimant not later than _____ working days from receipt of the notice of a claim. Answer Choices: Select the Correct Answer 10 15 5 20

5

The amount of loss under a fire insurance policy will be due and payable in______ days after receipt by the insuring company of proof of loss, and the insured may commence an action after the expiration of that time to recover the same. Answer Choices: Select the Correct Answer 15 30 60 45

60.

The broad and special dwelling forms (DP-2 and DP-3) will provide replacement cost coverage for buildings if the amount of insurance written on the building is at least: Answer Choices: Select the Correct Answer 80% of the full replacement cost at the time of the loss. 60% of the full replacement cost at the time of the loss. 90% of the full replacement cost at the time of the loss. 100% of the full replacement cost at the time of the loss.

80% of the full replacement cost at the time of the loss.

A personal watercraft policy would pay for which of the following losses? I. A boat's motor is stolen on the 25th day after the insured acquired it, and before the insured reported its acquisition to the insurance company. II. A boat that sank in 40 feet of water is refloated at a cost of $700. II only I only Both I and II Neither I nor II

A boat that sank in 40 feet of water is refloated at a cost of $700. This additional coverage pays for reasonable costs to remove or dispose of the insured watercraft if it is wrecked or sunk. Generally, coverage applies if the loss is caused by an insured peril. Additionally, the motor would have been covered for 14 days after the acquisition even if the insured had not reported it to the insurer, but the question says that the theft occurred on the 25th day after the motor was acquired and the insured had still not reported the motor to the insurer. In that instance, the motor would not be covered.

Which of the following perils would provide coverage under the accounts receivable coverage floater? A fire that caused a building to collapse. War. Bookkeeping errors. Voluntary parting of property to others.

A fire that caused a building to collapse. is correct. EXPLANATION: The fire that caused the building to collapse is covered. All of the other answers are exclusions in the policy.

Which of the following could be considered a "covered auto" under a standard ISO Personal Auto policy? Answer Choices: Select the Correct Answer A newly acquired car reported to the insurer. An owned vehicle not listed on the declarations page. A non-owned vehicle available for regular use. A vehicle used in speed contests.

A newly acquired car reported to the insurer. is correct. EXPLANATION: The insured has 14 days to report a newly acquired auto under a standardized ISO policy, would be considered a "covered auto". The other three answer choices are specifically excluded.

Coverage under the Builders' Risk form is written for: Answer Choices: Select the Correct Answer 90-day increments that follows the construction of the building. A period of one year. Construction jobs that will take up to one year to complete. Contractors who are considered to be high risk because of a large number of claims submitted against them in the previous year.

A period of one year..

Which of the following is covered under the broad form farmowners policy that is not covered under the basic form farmowners policy? Answer Choices: Select the Correct Answer Accidental shooting of livestock Flood damage to structures Collision Earthquake

Accidental shooting of livestock. EXPLANATION: Accidental shooting of livestock, as well as electrocution of covered livestock, drowning of livestock and accidents involving livestock while loading and unloading are covered by the broad form and not covered by the basic form.

Accounts receivable insurance will not pay: Customer's unpaid balances made uncollectible by the insured's loss of account records. The cost of reconstructing the insured's lost or damaged account records. Amounts owned to the insured but left uncollected because of billing errors. Excess collection costs due to the destruction of account records.

Amounts owned to the insured but left uncollected because of billing errors.. EXPLANATION: Billing errors are not covered under this form.

Who signs the Declarations page on an Equipment Breakdown policy? Answer Choices: Select the Correct Answer An Authorized Representative The Named Insured Two officers of the company An Authorized Inspector

An Authorized Representative. EXPLANATION: An authorized representative of the company signs the policy Declarations page. This would be the agent.

The insured is a trucking company that carries cargo. One of the insured trucks is involved in an accident and the goods it is transporting are damaged. Which of the following coverages would respond to cover this loss? Answer Choices: Select the Correct Answer The Commercial Auto policy would respond and pay under "property damage". A General Liability policy. An Inland Marine Motor Truck Cargo policy. A Commercial Umbrella policy.

An Inland Marine Motor Truck Cargo policy. is correct. EXPLANATION: Property in the insured's care, custody and control is excluded. The insured would need to carry a motor truck cargo inland marine type of policy.

The CGL policy excludes coverage for damage done to the property of others if at the time of the loss that property was in the care, custody and control of the insured. However, the exclusion does not apply if the damage is caused by: Water Pollution Earthquake Fire, smoke or explosion

Damage done to the property of others, that was in the care, custody and control of the insured, caused by fire, smoke or explosion would be covered by the CGL. The other three choices are all specifically excluded from coverage.

An unendorsed blanket fidelity bond: Answer Choices: Select the Correct Answer Names each covered employee specifically. Names the positions to be covered. Does not list the names of the employees. Covers specified employees by job description and position.

Does not list the names of the employees. is correct. EXPLANATION: A blanket fidelity bond is a type of fidelity bond covering an employer for dishonest acts by employees. The bond grants blanket coverage to all employees in the service of the employer during the term of the bond. Employee names do not need to be listed on the bond.

Flood coverage can be added to a Commercial Property policy by attaching the Flood Coverage Endorsement. If the endorsement is purchased and the property is already covered under a flood policy from the National Flood Insurance Program, then the coverage under this endorsement is considered to be: Answer Choices: Select the Correct Answer Primary. Excess over the NFIP maximum limits. Pro-rata with the NFIP policy. Not applicable.

Excess over the NFIP maximum limits. is correct. EXPLANATION: If a NFIP policy is in force or was eligible for purchase at the time the commercial property policy was endorsed for flood coverage, then the endorsement becomes excess coverage over the NFIP policy maximum limits.

Identify the coverage NOT included for a $25,000 limit of insurance under the ISO Equipment Breakdown policy. Answer Choices: Select the Correct Answer Ammonia Contamination Consequential Loss Data and Media Fire Damage

Fire Damage is correct. EXPLANATION: Fire damage is not included. Commercial property forms include this coverage.

The Forgery and Alteration Coverage Form protects the insured from losses resulting from forgery or alteration of: I. Outgoing checks. II. Drafts. III. Promissory notes. IV. Instruments drawn against the insured. Answer Choices: Select the Correct Answer I, II, III and IV I and II only I and III only I, II, and III only

I, II, III and IV. EXPLANATION: All four of the instruments listed above are covered. This form is meant to protect the insured from loss through theft by these instruments drawn against them.

Which of the following is considered a "garage operation"? I. Ownership, maintenance or use of garage premises. II. Sale of products or services in connection with garage operations. III. Ownership or maintenance of covered autos. IV. Production or support of racing or competitive operations. Answer Choices: Select the Correct Answer I, II, and III only. I and II only. I and III only. I, II, III and IV.

I, II, and III only. . EXPLANATION: Garage operations includes auto and business liability for covered autos, the premises and its associated operations, but specifically excludes all forms of racing.

An insured has suffered a property loss and reported the claim promptly. Which of the following is NOT an immediate duty of the adjuster who received the claim? Answer Choices: Select the Correct Answer Immediately seek subrogation rights against a third party. Verify the effective date of the coverage. Verify the proximate cause of loss. Determine those that have insurable interests in the property.

Immediately seek subrogation rights against a third party. is correct. EXPLANATION: Subrogation of a claim occurs after the claim has been paid. Afterwards, the adjuster may seek subrogation against a third party who may have caused the loss.

The Fit and Trim Fitness Center wants to reduce its carbon footprint. A covered loss destroys some treadmills, damages the roof and most of the interior walls. Fit and Trim finds replacement treadmills that generate and actually return energy to the power grid. The cost is 15% higher than standard equipment. Which of the following, if any, would pay the increase? Answer Choices: Select the Correct Answer Ordinance and Law Coverage Fungi, Wet and Dry Rot Increased cost of loss and related expenses for "green" updates Consequential Loss Coverage

Increased cost of loss and related expenses for "green" updates

All of the following statements are true of liability insurance, EXCEPT: Answer Choices: Select the Correct Answer Legal liability does not have to be determined by a court of law before an insurer will pay. Liability insurance only indemnifies third parties. Liability insurance protects the policyholder against damages he/she causes a third party. Liability insurance provides indemnification for the insured.

Liability insurance provides indemnification for the insured..

Which of the following coverages is included as "no-fault" coverage on the standardized Personal Auto policy?

Medical Payments and Physical Damage.. EXPLANATION: Part B - Medical Payments and Part D - Physical Damage coverage are both "no-fault" coverages provided by the standardized Personal Automobile policies.

The focus of Equipment Breakdown coverage is: Answer Choices: Select the Correct Answer Prevention of loss Protection from loss To provide extra coverage over the property policy To reinforce the explosion and fire perils

Prevention of loss is correct. EXPLANATION: The main focus of this coverage is to prevent loss rather than protection from loss. Proper maintenance of the equipment is required and inspections will be performed to help prevent losses.

The "personal injury" coverage of the Commercial General Liability policy insures against all of the following causes, EXCEPT: Products liability. Libel. Slander. Wrongful eviction.

Products liability.. EXPLANATION: Products liability is not a "personal injury" type claim. Products liability coverage includes bodily injury and property damage coverage caused by a faulty product. Personal injury claims involve damages other than bodily injury such as false arrest, detainment, malicious prosecution and a few others.

The claims negotiation process begins for a claims adjuster when: Answer Choices: Select the Correct Answer When the adjuster and the claimant agree to submit to mediation. When the claimant rejects the first settlement offer. When the adjuster has formulated the first settlement offer. The claim is assigned to the adjuster.

The claim is assigned to the adjuster..

The insured carries an unendorsed DP-3 dwelling policy on his home and personal contents. While traveling abroad someone broke into the home and stole $200 in cash, a shotgun valued at $1,000, and other household items valued at $2,000. Damage caused by the burglars is $1,500. Assuming no deductible applies to their coverage how much would be paid? Answer Choices: Select the Correct Answer $3,200 $4,500 $1,500 $2,000

The correct answer is: $1,500. EXPLANATION: The DP-3 only provides damage to covered property caused by the burglars. Theft is excluded under the DP-3 unless endorsed with the theft endorsement.

Which of the following claims would NOT be covered under Section II -- Liability of a Homeowners policy? Answer Choices: Select the Correct Answer The named insured files a claim for damage to his house caused by his dog. The insured's neighbor files a claim for damage to his house caused by the named insured's dog. An insured accidentally runs over his neighbor's foot with a golf cart at the local country club. An insured's dog attacks and damages his neighbor's golf cart.

The named insured files a claim for damage to his house caused by his dog. is correct. EXPLANATION: Section II addresses liability coverages for bodily injury or property damage to others. A claim for damage to the named insured's house is covered under Section I of the policy.

In which of the following situations would trees, shrubs, and other plants be covered by the Homeowners additional coverages? The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them. The insured's shrubs are destroyed when a 100-year snow storm hits the area and the weight of the snow is so heavy, it snaps the branches. The insured's 150-year-old oak tree is pushed over by high winds. The insured's fruit trees are ruined when snow and ice from a storm build up on the trees, causing large sections to break off and fall to the ground.

he insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them.. EXPLANATION: The perils of wind, hail, and the weight of ice and snow are excluded under the Homeowners additional coverage for trees, shrubs and other plants. Therefore, the only situation that would be covered is: "The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them".

Which of the following amounts would be paid on a covered auto suffering a total loss? The retail value is $1,250 and the average trade in value is $1,000. Answer Choices: Select the Correct Answer $1,000 plus applicable taxes $1,500 plus applicable taxes $1,250 plus applicable taxes $2,995 plus applicable taxes

$1,250 plus applicable taxes is correct. EXPLANATION: In case of a total loss to a covered vehicle the insurer is required to pay the retail value of the vehicle plus any applicable sales taxes.

How is personal property of a dwelling covered under a farm policy? Actual Cash Value Basis Stated Amount Basis Agreed Amount Basis Replacement Cost Basis

Actual cash value basis

When a liability policy is contested, which of the following entities ultimately determines legal liability? I. The insurance company. II. A court of law. III. The claimant. Answer Choices: Select the Correct Answer I or II I only II only III only

II Court of law

Part D of the Personal Auto policy provides coverage for all of the following, EXCEPT: All direct losses to the insured's covered auto. Coverage for the types of damage that are not excluded. Direct and accidental losses to a non-owned automobile being used by the insured. Auto glass breakage caused by a collision.

Part D does not cover all direct losses to the insured's covered auto, it covers only those direct losses that are also accidental.

Chantelle is adjusting a claim that involves a house that burned to the ground. The concrete floor of the garage, driveway and sidewalks appear to have flaked up into thin pieces until they have crumbled. This is known as: Answer Choices: Select the Correct Answer Slabbing. Spalling. Fragmenting. Shaving.

Spalling.. EXPLANATION: When concrete loses it moisture due to fire, it flakes up into thin pieces known as "spalling".

Paul's Perfect Pipe Plumbing is repairing the toilet at Dan's home. While resetting the toilet, Paul breaks the water feed line to the tank causing water to discharge ruining the wallpaper, carpet and sub-flooring in the bathroom. How will Paul's CGL respond to this claim? The CGL will pay for all of the damage caused by the water. The CGL will pay for the damage to the water feed line. The CGL will pay for the damaged wallpaper but not the sub floor. The CGL will exclude coverage completely

The CGL will pay for all of the damage caused by the water. is correct. The operations liability hazard will pay for all of the damage caused by the water, but not the damage to the feed line itself as this is Paul's work.

The doctrine that states an insured's policy should provide the coverage that a sensible and prudent person would expect is: Answer Choices: Select the Correct Answer The Reasonable Expectation Doctrine. The Applied Principles Doctrine. The Ambiguous Language Doctrine. The Limited Liability Doctrine.

The Reasonable Expectation Doctrine. is correct. EXPLANATION: When a person buys an insurance policy to insure a specific exposure, there is a reasonable expectation that in case of a covered loss the policy should respond to cover the loss. The doctrine of reasonable expectations states that a policy should include coverages that an average person would reasonably expect it to include.

Barry's insured watercraft is disabled while on the lake one Sunday afternoon. His motor completely stopped and will not start again. Barry calls George, a mechanic who rides out to the section of the lake where Barry and his boat are stranded. George brings a new starter for the engine and spends the next hour replacing it. When George is finished installing the new starter, the engine still sputters and will not start. Barry then calls a towing service to tow the boat back to the dock and into storage where George can take a closer look. Barry's Watercraft policy has a $250 deductible. The cost of the starter was $80 and the towing bill was $100. How much will Barry's standard Watercraft policy pay under the "Towing and Assistance Expense" coverage, assuming this is the only occurrence Barry has claimed during the current policy period? $100 because this coverage only applies to the towing bill. $180 because the deductible does not apply to the coverage. $0 because Barry's deductible is higher than the entire bill for parts and towing. $80 because this coverage only applies to parts that are purchased in an attempt to get the watercraft running again.

The correct answer is: $180 because the deductible does not apply to the coverage.. The policy will pay $180 under the "Towing and Assistance Expense" coverage because the deductible does not apply to the coverage and pays up to $500.

All of the following are examples of insurable interest in property, EXCEPT: The interest an individual has in the property her parents will someday leave to her. An individual's interest in property she is buying on contract. A tenant's interest in improvements she has made to a leased building. A TV repairman's interest in a customer's TV which has been repaired but is still on premises.

The interest an individual has in the property her parents will someday leave to her. .

A "full release settlement" when properly prepared, should include: The name of the attorney of record. The name of the insurance company. The names of the releasee and releasor. The name of the adjuster resolving the claim.

The names of the releasee and releasor..

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.

The insured has a communication failure at his premises due to a lightning strike at the phone company. The insured's phone system is damaged and he is out of business for four days. Which endorsement is necessary to provide coverage for the loss of business income? Non owned and Hired Auto Earthquake Utility Services - Time Element Utility Services - Direct Damage

Utility Services - Time Element.

Under an equipment dealer's form, which of the following would not be covered? Answer Choices: Select the Correct Answer Inventory Serviced items Customer's property on the insured's premises Vehicles for highway use

Vehicles for highway use. EXPLANATION: Inland marine forms provide coverage for the insured's goods as well as property of others, but they do not cover automobiles.

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a settlement, which is a final binding decision is known as: Answer Choices: Select the Correct Answer Appraisal. Arbitration. Mediation. Negotiation.

arbitration

Milton agrees to steal and wreck Albert's car for $4,000, so that Albert can collect $8,000 under his auto insurance policy. Which of the elements of a valid contract are missing in this agreement? Answer Choices: Select the Correct Answer A valuable consideration. Legal purpose. Competent parties. An offer and an acceptance.

legal purpose

The purpose of the New Hampshire Insurance Guaranty Association is: To pay the covered claims of insolvent insurers. To provide a market for those unable to purchase property insurance in standard markets. To provide excess property coverage in major cities. To provide property and crime coverage's where the insured cannot obtain coverage in the standard markets.

to pay the covered claims of insolvent insurers.

All of the following are types of misrepresentation, EXCEPT: Answer Choices: Select the Correct Answer Twisting. Churning. Turning. Sliding.

turning

Which one of the following situations may be considered "advertising injury"? Answer Choices: Select the Correct Answer A printer's accidental misprinting of the price of an item in a store's advertising flyer. Libel of an organization. An overcharge by a newspaper for placement of an ad by an individual. Misspelling of a product's name.

Libel of an organization. is correct. EXPLANATION: Only the libel of an organization would be covered under "advertising injury"

Which of the following would NOT be covered under employee dishonesty? Dishonest acts of partners Loss resulting from fraudulent use of warehouse receipts Loss resulting from trading in the insured's genuine name None of these losses are covered

None of these losses are covered is correct. EXPLANATION: There are several exclusions applying to employee theft in crime insurance policies, including dishonest acts of the owners, partners, or members, and losses resulting from trading or from fraudulent or dishonest use of warehouse receipts.

Sally Roe's vehicle is rear-ended by John Doe. Sally and John are good friends. Sally tells John not to worry about the damage. She says she has insurance and will tell her insurance company to pay for the damage. She will waive her subrogation right so that John won't have to pay anything. Her insurer will: Answer Choices: Select the Correct Answer Honor the waiver. Not honor the waiver. Proceed with subrogation against John Doe and will not honor the waiver. Refuse to pay the claim because of the waiver of subrogation.

Proceed with subrogation against John Doe and will not honor the waiver..

Which of the following coverage parts would be eligible for inclusion in a Commercial Package policy? Answer Choices: Select the Correct Answer Businessowners coverage. Professional liability coverage. Workers' compensation coverage. Directors & Officers (D&O) liability coverage.

Professional liability coverage.. EXPLANATION: All of the answer choices are excluded from inclusion in a Commercial Package policy except professional liability cover, which would be eligible.

George Poole, a New Hampshire insured, has crashed his automobile. He purchased his new automobile only six months prior to the accident and it has 10,000 miles showing on the odometer. George has taken his automobile to a repair shop of his choice. Which of the following is TRUE in this situation? The insurer may require that after market parts be used to repair the vehicle, but only parts on the exterior of the automobile. The insurer is not permitted to require that after market parts are used in this repair if the insured refuses to allow it. The insurer may require that after market parts be used in this repair to save money. After market parts are never permitted to be used on vehicles that are less than two years old, even if the insurer and the insured co

The insurer is not permitted to require that after market parts are used in this repair if the insured refuses to allow it. . EXPLANATION: New Hampshire law will not allow an insurer to require that after market parts be used in a repair if the vehicle is less than 2 years old and have less than 30,000 miles on the odometer.

At the discretion of the Commissioner, suspend or revoke an adjuster's license or subject that person to an administrative penalty of $______. $500 $1,000 $2,500 $5,000

2,500

In New Hampshire, notice of cancellation or nonrenewal of a commercial fire, marine, multi-peril, casualty, or liability policy (other than automobile or workers compensation) requires a _____ day notice to the insured. Answer Choices: Select the Correct Answer 45 60 30 20

60. EXPLANATION: Commercial policies require a 60-day notice to the insured. However, when cancellation is for nonpayment of premium or substantial increase in hazard, the insurer is only required to give notice at least 10 days in advance.

Which of the following would NOT be covered under Coverage B of the Homeowners forms? Answer Choices: Select the Correct Answer A separate building on the insured premises used for business. A building connected to the main dwelling only by a fence. A private garage rented to a non-tenant. An in-ground swimming pool.

A separate building on the insured premises used for business. is correct. EXPLANATION: A building used for business purposes is not covered as an "other structure". However, there is an exception for buildings that are rented out as private garages. Buildings connected to the dwelling only by a fence are considered detached, and therefore are "other structures". An in-ground swimming pool would also be considered a structure.

Which of the following would be eligible to purchase a BOP? Answer Choices: Select the Correct Answer A movie theater. An automobile repair shop. A six-unit apartment building. A credit union.

A six-unit apartment building..

All of the following are part of the "entire contract", EXCEPT: Answer Choices: Select the Correct Answer The insuring agreement of the policy is included in the entire contract. The entire contract includes all endorsements attached to the policy. An agreement made between the insured and the agent stated verbally, that the agent will personally service the insured's policy, and it will not be delegated to a staff member is part of the entire contract. The complete agreement to which the insurer and the insured are held, with no outside stipulations or agreements, are part of the entire contract.

An agreement made between the insured and the agent stated verbally, that the agent will personally service the insured's policy, and it will not be delegated to a staff member is part of the entire contract. is correct. EXPLANATION: An agreement made between the insured and the agent stated verbally, that the agent will personally service the insured's policy, and it will not be delegated to a staff member is NOT part of the entire contract. This agreement between the agent and the insured is an outside stipulation.

Under the commercial auto policy providing physical damage, which of the following offers the broadest coverage? Answer Choices: Select the Correct Answer Comprehensive. Specified cause of loss. Named perils. Broad named perils.

Comprehensive. is correct. EXPLANATION: Comprehensive coverage would be the broadest because it covers loss that is not defined as collision. The specified cause of loss is a named peril form and thus, is more limited.

Barry's Vending, Inc. covers its automobiles under a Business Auto policy. The owner, Barry, does not own a car since he always drives a company car. If Barry would like to drive his friend's car occasionally, when one of his employees is using his company car, what coverage should be added to the BAP to provide Barry with liability coverage while driving a vehicle not owned by the corporation? Answer Choices: Select the Correct Answer Drive Other Car endorsement. Extended Nonowned Liability endorsement. Named Nonowner endorsement. Drive Away Liability endorsement.

Drive Other Car endorsement. is correct. EXPLANATION: The policy should be endorsed adding "Drive Other Car" coverage. This endorsement would need to be attached to the Business Auto policy to cover Barry when he uses vehicles not owned by the corporation.

All of the following would be covered under Part B - Medical Payments of the Personal Auto policy, EXCEPT: Answer Choices: Select the Correct Answer Injuries sustained by the insured's mother when a tree falls on the automobile while she is sitting inside the automobile while it is parked in the driveway. Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store. Injuries sustained by the insured when using his father's pickup truck to pick up furniture he recently purchased. Injuries sustained by a neighbor who carpools with the insured and who, while getting into the insured's car, slips, falls, and injures her knee.

Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store.. EXPLANATION: Coverage while using the vehicle as a public or livery service is excluded. This does not apply to share-the-expense car pooling

Tori owns a cabin in the Ozark Mountains that she rents to Vincent. Tori has the cabin covered under a DP-2 policy. One cold evening, Vincent started a large fire in the cabin's fireplace and left the room to start dinner in the kitchen. Vincent didn't realize that he forgot to open the chimney flue before starting the fire and by the time he came back into the living room, it was completely filled with smoke. Vincent immediately opened the doors and windows to "air-out" the cabin but when the smoke cleared, there was extensive soot damage to the walls, ceilings and furnishings in the room. Which of the following statements is true regarding how this claim will be handled? Answer Choices: Select the Correct Answer The claim will be paid because the DP-2 extends the peril of "smoke" to cover smoke damage from a fireplace. The claim will be denied because Dwelling policies exclude fireplace smoke damage. The claim will be paid under Vincent's renters insurance policy. The claim will be paid only if the DP-2 is endorsed to cover fireplace smoke.

The claim will be paid because the DP-2 extends the peril of "smoke" to cover smoke damage from a fireplace..

Mrs. Vincent is covered under a standard PAP that covers her 2016 Ford SUV. She carries liability and full physical damage coverage. Her neighbor owns a 2002 Chevrolet pick-up truck with liability coverage only. Mrs. Vincent borrows the truck to pick up lawn furniture, parks the truck at the store, and leaves the keys in the ignition. The truck is stolen and later found wrecked.

The loss is covered under Mrs. Vincent's policy under the "other than collision" coverage because the damage resulted from the theft. Since the neighbor did not carry physical damage coverage Mrs. Vincent's policy would be primary. If the neighbor carried full physical damage coverage then Mrs. Vincent's policy would be excess.

Which of the following is a covered basic form peril of the Homeowners policies? Volcanic eruption. Earthquake. Subsidence. Land shock waves.

Volcanic eruption.. EXPLANATION: Volcanic eruption is a covered basic form peril of Homeowners policies. Earthquake, subsidence, and land shock waves are not covered.

The special cause of loss form of a Commercial Property policy imposes a limitation on the amount of coverage for the theft of jewelry of: Answer Choices: Select the Correct Answer $1,000. $5,000. $250. $2,500.

$2,500

Parmelia is covered under two separate standardized Personal Automobile policies, with Part C limits under both policies set at $200,000. Parmelia is involved in an accident with an uninsured motorist and she sustains bodily injury damages for $262,320. How much will Parmelia receive when she submits a claim for these damages? Answer Choices: Select the Correct Answer $262,320. $200,000. $400,000. It depends Permelia's percentage of fault in the accident.

$200,000. is correct. EXPLANATION: Permelia will receive $200,000, because Part C does not permit the stacking of limits. She will only collect the highest limit of a single policy for uninsured motorists coverage.

Under the "Regular Program" of the NFIP a single-family residence is insured for up to: Answer Choices: Select the Correct Answer $250,000. $35,000. $100,000. $185,000.

$250,000. is correct. EXPLANATION: The limit under the "Regular Program" is $250,000. Under the "Emergency Program" the dwelling is covered for only $35,000.

A covered auto requires $700 in repairs because of damage done by a limb from a dead tree that fell on it. The auto's BAP coverage has a $100 comprehensive deducible and a $250 collision deductible. Assuming that the ACV and replacement cost of the vehicle is $700, the insurer will pay: Answer Choices: Select the Correct Answer -0- $450 $600 $700

$600 . EXPLANATION: Falling objects is a comprehensive loss and the deductible of $100.00 would apply.

In New Hampshire, when an insurer cancels an auto policy for non-payment of premium, a _____ day notice of cancellation must be sent to the named insured. Answer Choices: Select the Correct Answer 10 15 20 30

10. EXPLANATION: At least a 10-day notice of cancellation must be sent to the named insured in advance of the cancellation date.

Under the "additional coverages" contained in Section II of the Homeowners forms, damage to "property of others" will not be covered if that damage was caused intentionally by an insured who is at least: Answer Choices: Select the Correct Answer 13 years of age. 15 years of age. 16 years of age. 18 years of age.

13 years of age.

The Commercial Inland coverages can be included in: Answer Choices: Select the Correct Answer The standard fire policy A homeowner policy A commercial package policy A general coverage policy

A commercial package policy. EXPLANATION: When the Commercial Inland coverages are included in the Commercial Package policy, monoline endorsements are included which may apply to all sections of the policy. A CPP policy must include two or more coverage parts to qualify for this type of insurance contract.

The commercial inland marine conditions form: Contains the basic policy conditions that apply to many controlled inland marine coverage. Is used to write standard commercial fire coverage. Must be used with any commercial inland marine form. Can stand alone as a complete insurance policy.

Contains the basic policy conditions that apply to many controlled inland marine coverage.

Which of the following would be covered under employee dishonesty? Answer Choices: Select the Correct Answer Money lost on the way to the bank Inventory shortages Embezzlement Robbery of the employee

Embezzlement is correct. EXPLANATION: Embezzlement is a dishonest act by an employee, and thus would be covered by Employee dishonesty. The other answer choices are excluded or are not dishonest acts of an employee.

Which of the following is not true regarding laws concerning insurance fraud in New Hampshire? False, incomplete or misleading information must be in written form to be considered insurance fraud. Is considered to be a felony. A class A felony exists where the value of the fraudulent claim exceeds $1,500 and a class B felony where such claim is more than $1,000, but less than $1,500. Insurance fraud if the person assists, abets, solicits or conspires with another to commit insurance fraud.

False, incomplete or misleading information must be in written form to be considered insurance fraud.

A deductible applies to all of the following additional coverages under the standard Homeowners forms, EXCEPT: Answer Choices: Select the Correct Answer Loss Assessment. Fire Department Service Charge. Reasonable Repairs. Debris Removal.

Fire Department Service Charge.. EXPLANATION: The policy deductible does not apply to the Fire Department Service Charge. It does apply to all the other additional coverages listed.

Which of the following are additional coverages under a Businessowners policy with the named peril form attached? I. Debris removal. II. Pollutant cleanup and removal. III. Exterior glass. IV. Collapse. Answer Choices: Select the Correct Answer I, II, and III only I and II only III and IV only I, II, III and IV

I, II, and III only is correct. EXPLANATION: The BOP is issued on an "open peril" basis, and the "open peril" form includes "collapse" as an additional coverage. This question is about a BOP with the named peril endorsement attached. When you attach the named peril endorsement IT REMOVES THE COVERAGE OF COLLAPSE.

The increased cost of compliance coverage on flood insurance provides: I. Policy limit coverage for ordinance and law changes. II. Coverage for flood plain management ordinance or law changes. III. $30,000 of coverage per building. Answer Choices: Select the Correct Answer III only II only I, II and III II and III only

II and III only. EXPLANATION: The increased cost of compliance coverage will provide up to $30,000 of coverage to handle the flood plain management ordinance or law changes affecting the repair and reconstruction of a flood-damaged structure.

With inland marine insurance bridges, tunnels, and communication towers are referred to as: Instrumentalities Subject to the perils of transportation Rolling stock Permanent structures

Instrumentalities

Which of the following is included in the Supplementary Payments under a standardized Personal Automobile policy? Answer Choices: Select the Correct Answer Loss of earnings of 80%, with a daily limit of $50 per day. Interest accruing after a judgement is entered (post-judgement interest). Up to $500 for the cost of bail bonds necessary in defense of a claim. Up to $20 per day, for transportation expenses, not to exceed an aggregate limit of $600.

Interest accruing after a judgement is entered (post-judgement interest).. EXPLANATION: The only answer choice that correctly identifies an item that is covered under the "supplementary payments" of the standard Personal Auto policy is: "Interest accruing after a judgement is entered (post-judgement interest). All of the other answer choices either include an incorrect amount, are covered under a different section of the policy, or both.

Which of the following losses would be covered by Part D of a standard Personal Auto policy providing both "Other Than Collision" (Comprehensive) and "Collision" coverage? A front tire blows out in a high-speed head-on collision, which also causes extensive damage to the vehicle. An insured did not add antifreeze to his radiator and the engine is damaged when the cooling system freezes. A radar detector is destroyed when an insured hits a tree after skidding on a patch of ice. The bearings in a rear wheel burn out after 85,000 miles of use.

A front tire blows out in a high-speed head-on collision, which also causes extensive damage to the vehicle. is correct. EXPLANATION: Road damage to tires is specifically excluded under the PAP, however the claim described in the correct answer involves a collision, therefore the entire claim would be covered minus the deductible. The policy does not cover losses due to freezing or any radar equipment designed to help the drive avoid police. The damage to the bearings is due to wear and tear which is also excluded.

How can the "property causes of loss" be changed under a BOP policy, from risks of "direct physical loss" to "named perils" coverage? Answer Choices: Select the Correct Answer State the named perils on the Declarations page of the policy. Attach the "named perils" form endorsement to the BOP policy. The property "causes of loss" cannot be changed under a BOP policy. Change the policy to a different ISO Businessowners Coverage form.

Attach the "named perils" form endorsement to the BOP policy. is correct. EXPLANATION: To change the property coverage under the Businessowners policy from risks of "direct physical loss" to "named perils" coverage, the named perils endorsement must be attached to the policy.

The Business Income from Dependent Properties -- Broad Form is a variation of the Business Income form as it: Provides coverage for other locations of the insured's business that are dependent on the main location to operate. Provides coverage for loss of income to the insured business when direct physical damage has occurred at another business upon which the insured business depends in some way. Provides coverage for loss of income to the insured business when poor business practices causes bankruptcy at another business upon which the insured business depends. Provides coverage for loss of income to the insured business when a civil authority prevents the insured from conducting business activities after a direct physical loss at a dependent location.

Provides coverage for loss of income to the insured business when direct physical damage has occurred at another business upon which the insured business depends in some way.

Which of the following injuries would be covered under Part A of the Personal Auto policy? Answer Choices: Select the Correct Answer Injuries to the insured that are sustained in an auto accident where he/she is at fault. Injuries to a pedestrian struck by the insured while driving the covered auto. Injuries to a member of the insured's family that are sustained in an auto accident where the named insured is at fault. Damage to personal property being transported by the named insured in the covered auto.

Injuries to a pedestrian struck by the insured while driving the covered auto

George went out for target practice one day with his handgun. He has practiced many times with the same target located in the woods behind his house. Unbeknownst to George, a neighbor was walking in the woods behind the target one day and was shot in the leg by George. Intentional acts are never covered by insurance, however, the claim filed by the injured neighbor may be covered under George's liability coverage. Which of the following is the most likely reason why? Shooting the gun was an intentional act committed by George, but the neighbor did not assume the risk because he did not know George was shooting that day. Because George's intent is not taken into account when another person is harmed. Shooting the gun was an intentional act committed by George, but the consequences of act (his neighbor being shot) were not intended. Because liability insurance is required to provide a civil remedy to an injured person, no matter if the insured intended to commit the act or not.

Shooting the gun was an intentional act committed by George, but the consequences of act (his neighbor being shot) were not intended