P&C License
Maureen is an insurance agent who represents an insurance company. Under the common law rules of agency, what is the insurance company she represents?
A principal
The liability section of the ISO business owners policy has an aggregate limit for:
Products & completed operations
Which are typically NOT among the provisions of a typical property & casualty insurance policy?
waivers
When determining whether a commercial property policy covers a particular peril, the insured should first look at the declarations page to see which form applies to the property & then look at the:
Cause of loss form
Underwriters of property or casualty insurance policies commonly use all of the following sources of information when deciding to accept or reject a risk EXCEPT:
Genealogical records
Which of the following is NOT a penalty that TDI may impose?
Imprisonment for up to five years
Brian is an insurance agent for ABC insurers. When he meets with Sarah to discuss automobile insurance, Brian intentionally does not tell her that the policy has a cap on the amount of benefits it will pay. Sarah buys the policy, thinking it will cover all damages to he car & bodily injuries if she is ever in an accident. Based on the info, Brian has committed which of the following?
Misrepresentation
Which of the following is NOT duty of the Texas Department of Insurance?
Writing the insurance code & laws
Which of the following is NOT a necessary element of contract?
Written terms
The Jones family spends $500 every month on groceries. A fire leaves their kitchen unusable, so they eat their meals in restaurants while the kitchen is being repaired. They spend $2,000 in one month. Their dwelling policy includes coverage for additional living expenses. How much of their expenses will the insurer pay?
$1500
Twenty years ago, Eldon paid a contractor $100,000 to build a house on land worth $50,000. Today the land is worth $75,000 and it would cost $250,000 to build the same kind of house. What is the current replacement cost value of Eldon's house?
$250,000
Earls business owners policy has a liability & medical expenses limit of $300,000. Five customers are injured in an explosion. Each is rewarded $150,000 in damages. How much will Earls insurer pay in response to this claim?
$300,000
Tristan's dwelling policy has an automatic increase in insurance endorsement that gives him 4 percent more coverage at the end of the one-year policy term. The policy has a $100,000 limit on the dwelling. How much coverage will he have when the policy has been in force for six months?
102,000
Terry is licensed in Texas as a property & casualty agent. To maintain his license, how many hours of continuing education must be complete annually?
24
In Texas, an agent will avoid charges of engaging in controlled business as long as at least what percentage of the agents total premium is derived from persons other than the agents work associates or family?
25 percent
Gwen knows that there is a limit to the amount of insurance she can place on herself and her family each year. How much business must she place with persons outside her family and business associates?
25 percent of the total premium volume
Lara's businessowners policy has a $500,000 limit on her office building. It includes the 8 percent per year inflation guard. Six months after the policy takes effect, the building is destroyed by fire. What is the most that Lara can recover?
520,000
How many days' notice must an insurance company give to a policyholder before it will not renew a liability insurance policy?
60
Which of the following incidents would be covered. Under the Terrorism Risk Insurance Act?
A U.S. manufacturing plant is sabotaged, resulting in a loss of $220 million.
Greg's business is covered by an open perils property insurance policy, but he is concerned that the policy excludes coverage for flood and earthquake losses. What might Greg purchase to obtain flood and earthquake coverage?
A difference-in-conditions policy
Because Celina had three auto accidents during the past nine months, ABC Insurance company does not want to provide coverage after the current policy expired. What will ABC send celina to notify her of its decision?
A non renewal notice
Samantha has a life insurance license in Missouri and wants to sell life insurance part-time in Texas. Which of the following describes what she can or cannot do given her licenses?
After submitting an application & application fee, she will then have the same rights & privileges as a resident license holder under the principle of reciprocity
An insurance producers business relationship to an insurance company is defined in a(n):
Agency agreement
As defined in a homeowners insurance policy, the broad term "motor vehicle" includes the following EXCEPT:
An outboard motorboat
Although Todd & his insurers agree that his property claim is covered, they cannot agree on the damaged property's valid. What clause in Todd's Property insurance policy provides a method of resolving this dispute?
Appraisal
Matt, a parcel delivery driver, delivers a package to Christa's front porch where he is attacked by Christa's chained bulldog. In determining the degree of care that Christa owed to Matt, how would the courts probably classify Matt?
As an invitee
Bill's children have grown up & moved away, but the tree house that he built for them now draws other neighborhood children despite his handmade "No Trespassing" sign. If a neighbors child is injured by falling from the tree house, Bill might be held liable for the child's injuries under what legal doctrine or principle?
Attractive nuisance
Which of the following is NOT a requirement to obtain an agent's license?
Being appointed by at least two insurers
Dairy products in Bettes ice cream shop would be destroyed if her freezers failed for more than a few hours. So Bette added the utility services-direct damage endorsement, scheduling overhead transmission lines, to her business owner's policy. When the shop loses electrical power due to a mechanical breakdown of the utility company's equipment:
Bette's loss will not be covered because mechanical breakdown is not a covered peril.
Under the broad causes of loss form of a farm property policy, which of the following losses to livestock would NOT be covered?
Bovine flu kills the farms most productive milk cow.
Larry, Brian, Susan, and Jennifer just started working for AllPro Insurance Company in Texas. Based on their job descriptions below, which of them is NOT an agent?
Brian, who is a vice president in AllPro's human resources department and does not receive commissions
Compared to the Farm Dwelling and Farm Property insurance forms, inland marine forms generally have:
Broader off-premises coverage
A businessowners property coverage applies to
Buildings, business personal property, or both
All of the following are one of the standard flood insurance policies available from the national flood insurance program EXCEPT:
Business owners form
Dixie's business personal property coverage of her building & personal property commercial property form covers almost everything in her barbershop, but NOT:
Cash in the cash register
Wanda suggests to a client that his credit rating might suffer if he does not purchase a life insurance contract from her. This is an unfair trade practice known as
Coercion
RST Insurance company sells auto insurance only through the internet. What type of marketing system does RST use?
Direct Response Marketing
Before permitting roofing contractor to work on his roof, Delmar asks roofing contractor to give him a certificate of insurance, which serves as:
Evidence that roofing contractor has purchased certain types of insurance
Jill is an insurance agent who represents XYZ Insurance company. With what authority does Jill's agency agreement with XYZ explicitly permit her to perform certain functions?
Express authority
Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Texas?
Failing to promptly settle a claim for which liability is uncertain
Which of the following activities is covered under the basic farm liability coverage form (FL 00 20)?
Farmer operates a mower mounted on his tractor in his own hay field. *Although the farm liability coverage form contains an exclusion for mobile equipment, that applies only to the transportation of mobile equipment by a motor vehicle. No coverage is provided for losses due to custom farming, aircraft discharge (crop dusting), or use of livestock to provide rides for a fee or in connection with a charitable function.
Emory and a number of other members of his church but insurance from a church-related organization that provides insurance to members of a particular religious body. What kind of organization is it?
Fraternal benefit society
Blake's commercial automobile policy has been in effect for three years. For which of the following reasons can the insurer cancel the policy?
Fraud in obtaining the policy
An insurances company's loss ratio is determined by dividing the insurers:
Incurred losses by its earned premium
Which condition applies to both commercial property & commercial general liability insurance policies?
Inspections & Surveys
Which of the following licenses works for a person who is licensed as a property & casualty agent & explains coverage, describes insurance products & quotes premium rates?
Insurance service representative
A provision in an auto insurance policy states: "We will pay for direct and accidental loss to your covered auto & it's equipment." In which standard policy provision would this statement be found?
Insuring agreement
Ray's mortgage is more than the value of his house. He hires someone to set the house on fire, and the house is destroyed. Which exclusion in Ray's DP 3 policy will his insurance company cite when it denies his claim?
Intentional loss
Wendy reads in the newspaper that the insurance company that provides one of her policies is an admitted insurer in her state, and she asks her agent what this means. The agent tells her this means that the insurance company:
Is licensed to transact insurance business in her state
Why is a homeowners insurance policy considered a package policy?
It combines two or more separate coverages in a single policy.
An imposter pretends to be Barbara, the president of a successful company, while engaging in scandalous activities. These activities attract media attention & threaten the firm's reputation. So business owners policy address this expense?
It covers this expense of the identity fraud expense coverage endorsement is attached.
Ina's home is located in a special flood hazard area. What does this mean with respect to the areas tendency to flood?
It has 1 percent chance of being flooded in any given year.
Randall & Russell make a contract to rob a tourist. They agree that Randall will lead the tourist near a dark alley where Russell will take her purse. They promise to share any money & jewelry they acquire. This agreement is not a valid contract because:
It has an illegal purpose
For a building to be insurable under a regular flood insurance policy, which of the following conditions must be met?
It must have at least two rigid walls.
Oscar rents a car for a business trip and runs into a pedestrian who was crossing the street in a marked crosswalk. Oscar's businessowners policy (BOP) includes a hired auto and nonowned auto liability endorsement. The endorsement's schedule indicates coverage for hired autos but not nonowned autos. The pedestrian wants Oscar to pay her medical bills. Oscar's BOP
It will cover the claim because the endorsement applies to a hired auto.
A house is struck by lightning during a thunderstorm, which starts a fire. The house stands in a floodplain and the basement fills with water from the storm. The homeowner files a claim on her homeowners insurance policy, which excludes losses from floods. What is true about her coverage?
It will cover the loss.
Jones, a producer, offers potential clients court side tickets to a professional basketball game in exchange for purchasing a life insurance policy. Which statement is correct?
Jones has engaged in unlawful conduct.
Alicia, Dave, Michelle, and Sean are licensed agents in Texas. Which of them is NOT required to notify the Texas Department of Insurance about the events listed below within 30 days?
Michelle, who now only works part-time as an agent
Kristie opens the remote-controlled gate to the mansion where she lives to allow her friend Marta to enter the grounds. An uninvited salesman follows Marta through the open gate. Kristies watchdogs are trained to attack intruders, & they injure both Marta & the salesman. Which of the following statements is true?
Kristie has less of an obligation to the uninvited salesman than she has to her invited friend Marta.
Property insurance policies covering buildings & contents commonly exclude all the following causes of loss EXCEPT:
Lightning
Esther an underwriter for QRS insurance company, is not able to provide the coverage requested in Benny's insurance application. Esther can reject the application, or she can
Make a counteroffer
Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend Steven is a nonresident licensee in Texas & every year completes his states continuing education requirements, you inform them that:
Neither Steven nor Janet needs to comply with Texas's continuing education requirements
Frances converts the garage behind her house into an office where she operates a seasonal tax preparation service. She must walk several feet outside to get from her house to the garage. Does Frances's standard, unendorsed homeowners insurance policy cover damage to the office?
No
The Texas Department of Insurance received a written complaint about the marketing practice used by one of best insurance company's agent. Which action must TDI take after receiving the complaint?
Notify the complaining party about the status of the complaint at least once per quarter
Felix owns a 80-year-old apartment building with narrow stairways. If his building is seriously damaged, Felix will not be permitted to rebuild it unless he makes the stairways wide enough to meet the current building code. His property insurance will NOT cover the extra cost of such an alteration if the policy contains a typical:
Ordinance or law exclusion
Loss costs, a key component of property & casualty insurance rates, reflect the insurers:
Past claims & estimated future claims
Which of the following licenses writes property & casualty insurance that is used primarily for personal & household purposes by individuals?
Personal lines agent
In an auto that has spilt limits of 50/100/75, what does the "75" represent?
The maximum amount the insurer will pay for damage to other cars or property
Who is primarily responsible for ensuring that applicants received the appropriate notices about their rights under the Fair Credit Reporting Act?
Producer
What kind of insurer involves mutual agreements to indemnify the insureds from loss?
Reciprocal insurer
Beth is a senior vice president at Acme Insurers. While reviewing some health insurance claims, she discovers that one of the company's agents has been filing illegal claims for financial gain. After discovering the fraudulent insurance act, what must Beth do?
Report the information in writing to the Texas Department of Insurance within 30 days
Gina was the only employee in OK Convenience Store at 3 a.m. when a gunman entered the store and made her give him all the money in the cash register. Which of the following correctly describes the cause of loss?
Robbery
Ralph's car has been damaged beyond repair, and Ralph's insurer pays him what the car was worth just before the accident. The insurer then takes possession of the car. What is the car considered in technical terms?
Salvage
Following a kitchen fire, Milton's restaurant closed for one week. Milton's business income & extra expense coverage form covered the income lost during the period of restoration. Therefore, the insurance reimbursed him for the income he lost during:
Seven days
The Texas Department of Insurance receives a written complaint about an insurer that prompts investigation. The department uncovers evidence of an elaborate money money laundering operation and determines that an undercover investigation is necessary to obtain enough evidence to pursue a conviction of the company's officers. Which of the following statements is true?
TDI can withhold any notices to the complaining party until the investigation is complete.
XYZ Insurance company's auto insurance application includes a Fair Credit Reporting Act Notice. What does this notice inform consumers about?
The insurer might order a credit report on the applicant that includes personal information.
An employee accidentally damaged a sprinkler head that is part of Jumbo Stores automatic sprinkler system. The manager shuts off the systems main valve & notifies the sprinkler company, which schedules the repair for that evening. Shortly before the store closes that night, a fire breaks out in a storeroom. How will the protective safeguards endorsement to Jumbos business owners policy respond to the claim for fire damage?
The policy will cover the loss because the protective system was shut off for less than 48 hours
Karina owns the four homes listed below. Which one of them is NOT eligible for flood coverage under the NFIP's dwelling form?
The residential townhouse in the city where her company is headquartered
All of the following equipment is used on Maris farm. Which item could mark cover under a mobile agricultural machinery & equipment coverage form (FP 00 30)?
The tractor that pulls her hay wagon
Although she had been told that she was getting the broadest possible property coverage, Earlene is disappointed to discover that the special causes of loss form attached to a building & personal property coverage form excludes all the following perils EXCEPT:
Theft
All of the following statements regard Coverage J (medical payments) of the farm liability form are correct EXCEPT:
There are no exclusions associated with this coverage
Phil currently buys insurance from another agent, but Connie, a new agent, convinces Phil that he save money by moving his insurance to a policy she recommends. She does not tell him that the recommended policy's premium is lower because the policy provides much less coverage than his current policy. What duty did Connie violate?
To disclose all pertinent information concerning a proposed policy.
Which of the following perils is NOT covered under any cause of loss form?
Transport of farm personal property
Which one of the following is NOT a peril?
Unlocked car
Insurance can only work when the parties go the contract are completely honest with each other. That's why insurance contract us are what kind of contracts?
Utmost good faith
Which exclusion in a DP 3 policy applies only to the dwelling and other structures coverages?
Weather conditions
Clare, a convenience store owner, accepts a $100 bill from a customer who buys a pack of cigarettes. Her bank tells her the bill is counterfeit. Does her businessowners policy cover this loss?
Yea, because the policy provides up to $1,000 coverage for loss due to the insured having accepted counterfeit money.
Glenn was painting trim over the entry to the apartment building he owns when his scaffold collapsed. Several people were injured. Who can recover medical expenses under Glenn's businessowners policy?
a guest who was entering the building
Where do the definitions appear in an ISO businessowners policy?
at the end of the property section and at the end of the liability section
Butch's Meat Market loses electrical power during a flood. The business closes for several days, during which time there is no refrigeration and a large quantity of meat spoils. The loss of the meat is what type of loss?
consequential
Section III of a businessowners policy contains common policy conditions. What do sections I & II provide?
property and liability coverage
Colin hires Sal, a retired farmer, to help him with the harvest. Sal is seriously injured when he falls off the tractor he was operating in Colin's field. Colin's farm liability coverage form
covers Sal's injuries as long as the loss is not subject to the state's workers compensation laws
The Terrorism risk insurance act (TRIA) does NOT compel insurance companies to offer coverage for certified acts of terrorism in which of the following lines of insurance?
homeowners
A benefit of the extra expense additional coverage in a businessowners policy is that it:
is not subject to the limits of insurance
As defined in the farm liability coverage form, farming does NOT include:
mechanized processing operations
Dora hires Shaun to clean the terra-cotta tiles in her home's foyer. Shaun's work is poor, so Dora sues him to recover the cost of the tiles he ruined. Shaun's businessowners policy will:
not cover the damage to the ruined tiles
Laurie applies for a businessowners policy to cover her small enterprise. What kind of business would make her ineligible for a BOP policy?
pinball and video game arcade
Whose insurance needs are businessowners policies specifically designed to meet?
small to medium-sized businesses with typical exposures
After being attacked by a neighbors dog, Rose was hospitalized & spent a month at home recovering from her injuries. In addition to paying for her pain & suffering, the neighbors insurer was required to pay for her medical expenses & lost wages, which are considered:
special damages
From a property insurance perspective, which of the following is NOT a basic type of construction?
steel
