P & C study questions

the insured has a $1,000,000 personal umbrella policy with a retention limit of $5,000. The insured suffers a $15,000 loss that is excluded by both the underlying policy and the umbrella. How much of this loss would be paid under the umbrella

$0

in liability policies, supple

$10,000

how much coverage does the equipment breakdown protection coverage form automatically provide for losses arising out of ammonia contamination?

$25,000 per breakdown

the insured has two separate dwelling policies that cover the same property: policy A for $30,000 and policy B for $60,000. The insured has a $12,000 loss. If both policies use the pro rata method to handle other insurance, how much will Policy A pay for this loss?

$4,000

If an HO-3 policy has coverage limit of $100,000 on the dwelling, how much coverage would automatically apply to cover the insured's personal property under coverage C?

$50,000

According to the cancellation condition in the common policy condition forms, if the insurance company is canceling a commercial package policy for any reason other than nonpayment of premium, the insured must be given at least ______ days' notice of cancellation.

30

the insured's home is covered by a DP-3. What is the MINIMUM amount of coverage A that the insured must purchase to qualify for replacement cost coverage?

80% of the home's replacement value

assume the following items were stolen from the insured's home. Which one of these losses would be fully covered under Coverage C of the homeowners policy, assuming the loss was for the full value of the property described? A. $500 in cash B. a canoe valued at $2,000 C. a $1,000 emerald bracelet D. a $3,000 mink stole

A $1,000 emerald bracelet

who of the following would NOT have liability coverage under Dave's personal auto policy while driving Dave's car? A. a teenage boy who took Dave's car for a joyride B. Dave's married daughter who borrowed the car with his permission when hers had a flat tire C. Dave's mother, who resides with him D. Dave's 17-year-old son who resides with him, who drove his father's car on an errand for his mother without Dave's permission

A teenage boy who took Dave's car for a joyride while Dave was in a grocery store

Which of the following policies include Liability coverage? (assume there are no endorsements attached to the policy.) A. All homeowners forms B. DP-1 C. DP-2 and DP-3 D. DP-1, DP-2, DP-3, and all homeowners forms

All homeowners forms

coverage for which of the following is excluded by a dwelling policy? A. improvements, alternations, or additions made by an insured at his or her own expense B. animals C. rent an insured was unable to collect because rental property was damaged D. detached garage on the insured's premises

Animals

which one of these commercial inland marine forms CANNOT be included in the commercial inland marine coverage part of the commercial package policy? A. mail coverage form B. film coverage form C. floor plan coverage form D. annual transit policy

Annual Transit policy

which one of the following expresses the meaning of a personal auto policy limit of liability specified as 100/300/100? A. PD per person/ PD per occurrence/ BI per person B. BI per person/ PD per occurrence/ PD per person C. BI per person/ PD per person/ BI per occurrence D. BI per person/ BI per occurrence/PD per occurrence

BI per person/BI per occurrence/ PH per occurrence

which one of the following is a prepackaged policy of property and liability overages designed specifically for certain types of small businesses? A. commercial package policy B. difference in conditions policy C. umbrella policy D. business owners policy

Business owners Policy

What type of ocean marine insurance covers goods while they are in transit over water?

Cargo

Which of the following perils is covered by the HO-2 & HO-3? A. nuclear hazard B. falling objects C. water damage D. mysterious disappearance

Falling objects

loss by which one of the following would NOT be covered by the specified causes of loss coverage of the business auto coverage form? A. flood B. vandalism C. falling objects D. theft

Falling objects

Which one of the following losses would be covered by Coverage A of the commercial general liability coverage form?A. the insured incurs expenses administering first aid to a customer who has fainted and injured his head B. a third party wns damages as a result of becoming ill after eating a meal catered by the insured C. one of the insured's competitors sues the insured for slander D. a third party is extremely embarrassed, but not physically injured, when she slips on a step in the insured's store.

One of the insured's competitors sues the insured for slander

Patrice's property insurance policy has a $500 deductible. this means that... patrice must pay ____ of each loss incurred under the policy

Patrice must pay $500 of each loss incurred under the policy

what personal inland marine form covers an insured's personal belongings, such as baggage, while the insured is traveling?

Person articles form

Trailer interchange coverage is a part of which form/policy?

Truckers coverage form

Which one of the following losses would NOT be paid under the medical payments coverage of Willa Doan's personal auto policy? A. Willa's daughter was injured while driving a car she stole from the school parking lot B. Willa's son was injured when he was stuck by a city bus C. Willa was injured in an accident while riding in a friend's car D. a friend of Willa's son was injured in an accident while riding Willa's car

Willa's daughter was injured while driving a car she stole from the school parking lot

Thieves stole Mrs. halls car and dumped it in a snow bank. before it was recovered, the radiator froze, resulting in serious damage to the car. will the damage be covered under the physical damage section of Mrs. halls personal auto policy?

Yes; the exclusion pertaining to freezing does not apply if the damage results from the theft of the entire car

which one of the following would NOT be considered a covered auto under the personal auto policy? A. a car owned by the insured's employer that the insured drivers while making sales calls B. a car borrowed by an insured for use while hers is being repaired C. a pickup truck used on a farm and described in the declarations D. a trailer the insured attached to his sedan

a car owned by the insured's employer that the insured drivers while making sales calls

under the commercial property coverage part, the cause of loss - basic form insures against A. earthquake only B. a list of basic named perils only C. a list of basic named perils and additional perils D. all risks of direct physical loss unless specifically excluded

a list of basic named perils only

an insured needs coverage for its liability arising out of pollution losses, including coverage for pollution cleanup costs. This insured should purchase.....

a pollution liability coverage form

ocean marine policies provide coverage for a number of unique perils. One of those perils is jettison, which is A. an illegal act committed willfully by the ship's master or crew for the purpose of damaging the ship or its cargo B. a voluntary action to rid the ship of cargo to prevent further loss C. a peril that only damages part of the cargo D. any perils to which property in transit by water are exposes

a voluntary action to rid the ship of cargo to prevent further loss

liability imposed by law on those participating in activities that are considered to be especially hazardous is A. contingent liability B. vicarious liability C. proximate liability D. absolute liability

absolute liability

replacement cost less depreciation defines A. actual cash value B. market value C. insurable value D. liberalization amount

actual cash value (ACV)

which one of the following terms describes a contract where one party has more power than the other party in drafting the contract? A. aleatory B. utmost good faith C. adhesion D. unilateral

adhension

the cause of loss - special form of the commercial property coverage part insures against A. a list of basic named perils only B. all risks of direct physical loss unless specifically excluded C. volcanic eruption only D. earthquake only

all risks of direct physical loss unless specifically excluded

under the personal auto policy, the named insured and his or her family members have liability coverage while using A. owned autos only B. any auto C. a covered auto only D. private passenger autos only

any auto

in liability policies, an aggregated limit A. applies to all losses that occur within the policy period B. replaces a per occurrence limit C. is a lifetime limit D. applies per occurrence

applies to all losses that occur within the policy period

in the commercial crime forms, new employees and additional premises obtained through a consolidation or merger.....

are automatically covered for 90 days

n liability policies, supplementary payments A. are paid in addition to the policy's limit of liability B. always have a separate limit of liability C. are only available by endorsement D. reduce the policy's limit of liability

are paid in addition to the policy's limit of policy.

which of the following lines of insurance CANNOT be included in the commercial package policy?A. aviation B. commercial general liability C. commercial crime D. commercial property

aviation

in all states, an UNENDORSED personal auto policy's uninsured motorists coverage covers what type of loss caused by an uninsured motorist?

bodily injury

What would be covered under the building coverage of the building and personal property coverage form?

bridges

widget enterprises wants property insurance for a new warehouse it is building. widget also wants the policy's limit of insurance to gradually increase as the value of the building under construction increases. Which commercial property coverage form would best fill widget's needs A. building and personal property coverage form B. business income coverage form C. builders risk reporting form D. business owners coverage form

builders risk reporting form

the insured's commercial general liability coverage form covers bodily injury and property damage for which a claim is first made during the policy period. This is an example of what type of CGL form? A. claims-made B. extended C. occurrence D. retroactive

claims-made

the insured under a property insurance policy must carry insurance equal to specified percentage of the property's value to qualify for replacement cost coverage. This is an example of the.....

coinsurance condition

which one of the following losses would NOT be covered under comprehensive coverage in the personal auto policy? A. contact with a bird or animal B. vandalism C. collision with another object D. loss caused by a falling object

collision with another object

which section of an insurance policy describes the responsibilities and obligations of the insured and the insurance company. A. conditions B. declarations C. insuring agreements D. exclusions

conditions

which of the following commercial auto coverages would insure trucks that have been leased by the insured's house painting business? A. truckers policy B. garage keepers coverage Coverage for nonowned autos D. coverage for hired autos

coverage for hired autos

in the homeowners forms, additional living costs incurred by the insured because the home is uninhabitable due to a covered loss are A. covered under coverage A B. excluded C. covered under coverage D D. covered if the insured has the HO-15 endorsement attached to the policy

covered under coverage D

the workers compensation section of the workers compensation and employers liability policy pays all compensation and other benefits required by the state's workers compensation law

covers sums the insured becomes obligated to pay under common law for work-related injuries

collision insurance covers which of the following perils? A. all damage to an unto struck by the insured, if the insured is legally liable B. upset of the auto without a deductible applying C. direct loss to the auto caused by collision with another object D. collision of the covered vehicle with a large animal

direct loss to the auto caused by collision with another object

in a competitive state, an employer purchases workers compensation insurance from A. state fund only B. the federal government C. a private insurance company only D. either a state fund or a private insurance company

either a state fund or a private insurance company

Both the structure and the contents of a mobile home can be insured by purchasing A. a business owners policy B. an unendorsed DP-3 C. either a mobile home package policy or an HO-2 or HO-3 with the mobile homeowners endorsement D. an unendorsed HO-03

either mobile home package policy or an HO-2 or HO-3 with the mobile homeowners endorsement

which one of the following is used to modify the coverage provided under an insurance policy? A. application B. binder C. endorsement D. certificate of insurance

endorsement

which one of the following is NOT one of the required components of a boiler and machinery coverage part when it is written as part of a commercial package policy? A. common policy declarations B. equipment breakdown protection declarations C. equipment breakdown protection coverage form D. equipment breakdown protection conditions form

equipment breakdown protection conditions form

under the personal auto policy, injuries to the insured's employees while they are using the insured's auto for business purposes are A. covered under liability coverage B. excluded under liability coverage C. covered under medical payments coverage D. covered under physical damage coverage

excluded under liability coverage

under the commercial general liability coverage form, liability assumed under contract is ____.

excluded unless the contract meets the policy's definition of an insured contract

all of the following perils are covered by a basic insurance policy except: A. fire B. explosion C. lighting D. removal

explosion

which one of the following is NOT one of the components that is required in all commercial packages policies? A. coverage parts B. common policy conditions C. extended reporting period endorsement D. common policy declarations

extended reporting period endorsement

which one of the following coverages is not included in the commercial crime insuring agreements but can be added by endorsement? A. forgery or alteration B. employee dishonesty C. extortion D. computer fraud

extortion

which commercial property coverage form provides coverage that will permit the insured to continue in business without interruption following a property damage loss? A. building and personal property coverage form B. extra expense coverage form C. business income coverage form D. builders risk coverage form

extra expense coverage form

under the commercial package policy, the person whose name is listed first in the declaration and is assigned certain responsibilities and obligations is the.....

first named insured

the owner of a parking lot wants coverage for her liability for damage to vehicles left in her custody. She needs.....

garagekeepers coverage

insurance agents are considered to be fiduciaries because they A. are regulated by the state insurance department B. are not allowed to discriminate against any insurance prospect C. have a special relationship of trust to another person, especially regarding the handling of premiums D. are usually paid by commission

have a special relationship of trust to another person, especially regarding the handling of premiums

a condition creating or increasing the chance of loss is known as....

hazard

the authority given by the principal to the agent that is not formally expressed or communicated is called....

implied authority

which of the following insurance principles permit's a policyholder to be reimbursed for losses experienced? A. subrogation B. insurable interest C. direct loss D. indemnification

indemnification

when the insured's home is damaged in a tornado, she is forced to move into a hotel for several days while repairs are made. the additional expenses the insured incurs for the hotel are considered a/an

indirect/consequential loss

Who is a responsible for licensing insurance agents?

individual state insurance departments

liability insurance policies sometimes cover personal injury, which is defined as A. bodily injury for which the insured is liable B. bodily injury suffered by the insured C. injury arising out of such things as slander, libel invasion of privacy D. any type of injury other than property damage

injury arising out of such things as slander, libel, and invasion of privacy

a basic dwelling policy automatically includes coverage for fire, lighting, and..... A. the extended coverage perils B. vandalism and malicious mischief C. internal explosion D. liability

internal explosion

which one of the following statements concerning the farm coverage part is NOT correct? A. it covers the farmer's growing crops B. it provides both property and liability insurance C. it covers the farmer's business and personal loss exposures D. it can be included in the commercial package policy

it covers the farmer's growing crops

which commercial property coverage form covers the insured's liability for damage to the property of others in the insured's care, custody or control? A. builders risk coverage form B. all commercial property coverage forms provide this coverage C. legal liability coverage form D. extra expense coverage form

legal liability coverage form

the type of risk that exists as a consequence of an individual's personal actions toward others is a/an....

liability risk

each of the following is a primary coverage provided under the commercial general liability policy except A. personal and advertising injury B. medical payments C. bodily injury and property damage liability D. liquor liability

liquor liability

which type of commercial crime form covers losses that are sustained during the policy period and discovered either during the policy period or up to one year after the policy expires?

loss sustained

which commercial inland marine coverage form covers property in transit by registered mail, express mail, or first-class mail? A. mail coverage form B. domestic shipments form C. personal effects form D. parcel post policy

mail coverage form

retaining the possibility of loss, avoiding the chance of loss, and transferring the possibility of loss are all methods of A. obtaining insurance B. eliminating risk C. preventing loss D. managing risk

managing risk

which one of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? A. trip transit policy B. truckers coverage form C. motor truck cargo policy D. motor carrier coverage form

motor truck cargo policy

Jason runs a red light and strikes Gary's car head-on. Each driver is reimbursed by his own insurance company for their bodily injury and property damage losses. This is an example of?

no-fault law

in the business auto coverage form, employers that want to cover employees' use of their own cars in the employer's business should opt to have liability coverage apply to which type of autos?

nonowned autos

the HO-5 provides....

open peril coverage for both the dwelling and personal property

which one of the following losses would be paid under the physical damage section of the personal auto policy? A. the insured collided with a telephone pole while he was using the car as a taxi to earn extra money B. a permanently installed tape player was damaged when thieves attempted to remove it from the car C. the insured's pickup truck was contaminated by radioactive materials and had to be destroyed D. vandals destroyed a custom mural painted on the side of the insured's van

permanently installed tape player was damaged when thieves attempted to remove it from the car

you learned that one of the elements of a valid contract is that it involved consideration. In an insurance contract, the consideration that the insured gives is the....

premium payment

in surety bonding, the party who both arranges and pays for the bond is the _____?

principal

which one of the following limits in the commercial general liability coverage form is NOT subject to the general aggregate limit? A. products-completed operations limit B. medical payments limit C. per occurrence limit D. premises and operations limit

products-completed operations limit

a person who needs coverage for his or her professional liability exposure can obtain it by purchasing

professional liability policy tailored to the specific occupational need

to close a sale for a homeowners policy, agent Susan agrees to split her commission with the customer, Nancy. This is an illegal practice known as A. twisting B. replacement C. rebating D. misrepresentation

rebating

name the type of insurance company that is a voluntary association of members, managed by an attorney-in-fact, in which members insure each other A. stock company B. vicarious liability C. proximate liability D. absolute liability

reciprocal company

the pair of set condition in personal inland marine forms gives the insurance company the option of reimbursing the insured for the actual cash value of the entire set when any part is damaged A. taking the damaged set as salvage B. repairing, replacing or restoring the set or paying the insured the difference between the actual C. cash value of the full set and the actual cash value of the undamaged part D. paying the insured the market value of the set

repairing, replacing or restoring the set or paying the insured the difference between the actual

which one of the following actions by an insureds would NOT be grounds for the insurance company to void the policy? A. fraud B. representation C. misrepresentation D. concealment

representation

under the claims-made commercial general liability coverage form, the first day that a loss may occur and still be covered under the policy is the......

retroactive date

the chance or uncertainty of loss is called.

risk

uncertainty concerning financial loss best describes the concept of A. indemnity B. insurance C. risk D. hazards

risk

which homeowners endorsement is used to schedule separate coverage for one or more of nine categories of personal property? A. special personal property coverage B. personal property C. scheduled personal property D. personal property replacement cost

scheduled personal property

by entering into an insurance contract, a policyholder transfer the rights of legal action against a responsible third party to the insurer. This process is known as A. insurable interest B. coinsurance C. subrogation D. abandonment

subrogation

what feature of the claims-made CGL provides an unlimited extension for making claims for losses that occurred during the policy period? A. supplemental ERP B. coverage tripper C. basic ERP D. retroactive date

supplemental ERP

Court bonds, fiduciary bonds and supply bonds are all types of A. professional liability bonds B. crime bonds C. fidelity bonds D. surety bonds

surety bonds

under the workers compensation system, who is responsible for the expenses resulting from work related injuries and occupational diseases?

the employer

who of the following can cancel an insurance policy at any time without advance notice, and for any reason? A. the insured B. the insurance company C. neither party to the contract D. either the insured or the insurance company

the insured

Deductibles are used for all of the following purposes EXCEPT: A. to reduce the cost of insurance B. to eliminate small losses C. to increase the insured's caution D. to eliminate nuisance claims

to eliminate small losses

the insured is seriously injured in a wreck with a driver who carries the minimum liability limits required by law, but whose insurance is not adequate to cover the insured's damages. The other driver is at fault for the accident. Which personal auto coverage in the insured's policy would cover the damage not paid by the other driver's policy?

underinsured motorists coverage

ms. meadows was injured when she was struck by a car. the driver, who cannot be identified, left the scene of the accident. Which part of Ms. meadow's personal auto policy will pay for her medical bills?

uninsured motorists

the physical damage section of the personal auto policy excludes losses arising from A. falling objects B. wear and tear C. flood D. earthquake

wear and tear