P&C Missed questions

The personal property off premises extension of dwelling forms provides limits of coverage up to

10% of coverage c anywhere in the world. (other than rowboats or canoes)

Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of

80%. it insures all farm personal property on a blanket basis

an insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a shirt-term apartment, and the renter is forced to find another accomodation. Disregarding any extra expnses for meals, how much would an HO-3 pay under coverage D?

Coverage D would pay $900 as additional living expense and $150 as loss of rent for a total of $1050

Insurer that write ----- property insurance need to belong ot the FAIR plan

Insurers that write basic property insurance need to belong to the FAIR plan in order to write insurance in Oregon

According to the Nationwide Marine definitions, risks that may be subject of inland marine insurance include all of the following EXCEPT a. property while stored at a warehouse b. shipments made by freight train c. cargo transported by truck d. large pleasure boats

Large pleasure boats will not be included as inland marine coverage. they would instead be covered in boatowners policy or if large enough under yacht insurance

under coverage E - scheduled farm personal property livestock is not specifically limited to a coverage limit of a. 500 per head b. 1000 per head c. 2000 per head d. 2500 per head

Livestock not specfically insured is limited to the ACV, 120% of the amount obtained by dividing the total insurance on the class and type of animal by the number of head of that kind of animal owned at the time of loss, or $2000, whichever is less. Thus $2000 is the most that will be paid

How is a professional liability policy written?

Most professional liability policies are written on a claims made basis

If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?

Retention: when an insured has a policy with a large deductible, he or she received a lower premium rate. In return for the lower premium rate, the insured was required to retain a larger amount of a loss, should it occur

For additional premium, the extended coverage written on the basic form dwelling policy would cover which of the following? A. riot b. vandalism c. glass breakage d. fir

The seven perils included in the extended coverages include coverage for damage by riots

What is the purpose of the ordinance or law coverage endorsement?

To remove the exclusion of losses resulting from ordinance or laws.

A business hosted an annual holiday party for employees and customers, after which a customer who had too much to drink was involved in an automobile accident. occupants of the other car involved in the accident sued the buiness for serving the cuwstomer too much alcohol. Will the businessowners policy provide coverage?

Yes, non of tthe exclusions will apply.

The obligation to compensate injured workers without regard to fault or negligence is known as

absolute liability

Under Coverage C, and at the request of an insured, personal property of a guest or residence is covered

while it is in any residence premises occupied by an insured

medical benefits under workers comp statues are provided

without limit

Workers compensation rating is developed by applying a rating bureau job classification rate ro which of the following? a. payroll b. noncash compensation c. minimum wage d. job title

workers compensation rating is developed by applying a rating bureau job classification to each $100 of payroll

Unless additional coverages are added to BOP, the max amount of coverage on an outdoor sign attached to abuilding is limited to

$1000

An insured has $5000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. Th einsured's medical expenses are $8000, the first passengers total $4000, the second total $6500, and the third is $1200. How much will the policy pay under the medical payments coverage?

$15,200 medical payment coverage is provided by a limit of liability per person. In this example the policy is $5000 per person, so the policy will pay the max ($10000) for the insured and the second passenger because their medical expenses exceed the limit. All of the expenses for the first passenger and the third passenger would be paid ($5200). Grand total paid under medical expenses is $15200

under the dwelling policy, the insurer chooses to repair or replace samaged or lost property, it must inform the insured within how many days of receiving proof of loss

30 days

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60 days

The broad cause of loss form in the commercial property policy contains three perils in addition to basic form perils. Which of the following is NOT one of those three perils? A. Falling objects B. Utility services C. Water damage D. Weight of snow, ice, or sleet

Falling objects, weight of snow, ice, or sleet and water damage are three perils added in broad form. Utility services is specifically excluded

An audit revealed the administrator for a pension plan has made investments that were not consistent with the risk tolerance set forth in the plan for its members. The earnings for the past year are substantially below the average for comparable funds. The governingk boar4d wants to take action against the administrator. What type of commercial liability would the board need to provide for this risk?

Fiduciary liability policy paid by the pension fund. Fiduciary liabiloty covers individuals who administer pension or employee benefit plans and have a fiduciary responsibility to manage the funds in the best interest of the plan participants. If the premium for fiduciary liability insurance are paid by the fund, by law the policy must allow for subrogation against the individual trustees involved in the loss.

The difference in the contents coverage on an HO-3 policy and HO-5 policy?

HO-5 providesopen peril coverage for contents; HO-3 is named peril coverage for contents. Replacement cost coverage is available by endorsement to either form.

What type of insurer uses a formal sharing agreement?

Sharing is a method of dealing with risk for a group of individual persons or businesses with the same or similar exposure to loss to share the losses that occur within that group. A recirpocl exchange is a formal risk-sharing agreement. When insurance is obtained through a recirpocal insurer, the insureds are sharing the risk of loss with the other subsribers of that reciprocal

Which one of the following statements is correct? A. debris of covered property must be reported in writing within 270 days of loss B. The insured's limit is 25% of the direct loss payment plus the deductible amount C. It pays for cleanup or removal of pollutants from land or water D. It pays for removal of the debris of the insured's damaged automobile

The debris coverage pays for the removal of covered property. The insured automobile is not a covered item under BOP. It wou;ld be covered under and atuo policy. The debris must be reported within 180 days of loss. The debris removal provision does not apply to costs for cleanup or removal of pollutants from land - this is provided under provisions of another additional coverage

Which of the following may be covered by electronic data processing coverage form under an inland marine policy? a. computer hardware that is specifically scheduled b. extra expense the insured incurs to continue the business following a loss c. data processing media, including magnetic tapes or paper tapes, punch cards and discs d. all of the above

all of these are covered items under electronic data processing coverage

On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is

although Coverages A and B on a DP-3 are written on an open peril or all-risk basis, the coverage for personal property is written on a named or specificed peril it is the same as provided on the DP-2 Broad Form

In order to get a nonresident license in this state, a producer must

apply and pay a fee to a nonresident state that reciprocates.

The Business Pursuits endorsment under Section II of a homeowners policy will cover all EXCEPT a. all business pursuits b. business liability c. insured's activities d. bodily inury to the insured

b. by an endorsement an insured may extend the section II liability coverage to certain business pursuits that occur away from the premises. It would cover the activities of the insured, but would not cover the liability of a business owned by the insured

Under coverage B - other structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following states is NOT true of this coverage? a. detached garage may be covered if rented to others as a private garage b/. other structure may not be used to store business property of others, even though a business is not conducted from the structure. c. any loss paid under coverage B reduces the coverage a limit of liability d. other structures covered under coverage b must be set apart from the dwelling by clear space

c The automatic limit for coverage B is 10% of the limit of liability that applies to coverage a. use of this coverage does not reduce coverage A

Which of the following is NOT considered an insured contract under the commercial general liability policy? a. an obligation as required by ordinance to indemnify a municipality except for work for municipality b. a written lease agreement on the insured premises c. a written agreement which indemnifies a person for fire damage to the premises rented to the insured d. an elevator maintenance agreement

c general liability covering premises included automatic coverage for written lease of premises, sidetrack agreements, elevator maintenance agreements, easement agreements and municipality indmnification. Protection from claims arising from fire damage to nonowned property would need to be covered by fire damage (legal) liability

Which statement regarding insurable risks is not correct? a. the insurable risk needs to be statistically predictable b. an insurable risk must involve a loss that is definite as to cause, time, place and amount c. insureds cannot be randomly selected d. insurance cannot be mandatory

c granting insurance must not be mandatory, selecting insureds randomly will help the insurer to have a fair proportion of good risks to poor risks. All other statements are true

Which of the following would NOT be eligible for coverage under a PAP? a. a nonowned temporary substitute vehicle b. a trailer owned by the insured c. a vehicle purchased 90 days ago d. a vehicle listed on the declarations page

c. a covered auto includes automobiles listed in the declarations, owned trailers, newly acquired atuos (for 30 days), nonowned temporary substitures vehicles, and additional temporary vehicles due to repair, servicing, breakdown or loss

In order to receive transportation expenses under the personal auto policy following damage to your auto caused by collision, you must have

collision coverage the policy will pay $20 a day for a max of $600 for autos that cannot be used for more than 24 hours due to damage caused by collision only if the declarations page of the policy indicates that collision coverage is provided for that auto

if a consumer request additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

which of the following exclusions would specifically fall under coverage E? a. land b. contractual liability c. bodily injury to a residence employee d. falling objects

contractual liability Coverage E is a personal liability form. The following are the exclusions that apply to it: damage to property owned by or in the care of the insured, liability for any assessment charged against the insured as a member of an association; contact liability; bodily injury to any person eligible for workers comp; and bodily injury to named insured, relative or minor residing inside the household

which of the following exposures is not covered under the garage liability coverage form? a. contractual liability b. premises and operation liability c. products and completed operations liability d. auto liability

contractual liability, other than incidental contracts, is not covered under garage liability forms

Which of the following entities is eligible for a business owners policy? a. manufacturing operations b. convenience store c. places of amusement d. automobile sales and servicing operations

convenience store

The extended nonowned coverage provides protection to

only the person named on the policy there is no automatic coverage for spouse or family members

which of the following would NOT be covered as a loss under Coverage D of a homeowners policy? a. an insured has an apartment in his home. kThe tenant's negligence started a fire, and the apartment was not fit to live in for 4 months while repairs were being completed b. after a fire in a building next to the insured's home, the insured could not occupy his home, and had to stay at a motel for one week c. an insured leased a dwelling for 5 years, the property owner died, and the new property owners wanted to make the property their principal residence so the lease was canceled

d. a homeowner's policy does not cover loss or expense due to cancellation of a lease or agreement

Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. Which of the following is true? a. the policy pays nothing b. the full amount of the loss less any deductible is paid c. the policyholder is responsible for twice the amount of the deductible d. the coinsurance penalty applies

d. if coverage does not equal at least 80% of the value of the date of loss, the insured is responsible for the loss (known as coinsurance penalty)

States with monopolistic state workers compensation funds

do not allow private insurers to be licenses to write works comp coverage. in such states, WC is available to all employers, but employer's liability coverage may or may not be offered

Which of the following risks would be eligible for coverage under a dwelling policy? a. a single family duplex that is located on farm premises b. a duplex that is occupied by two families, each of which have a room rented to a boarder c. a single family dwelling occupied by a single person who operate a business of buying and selling firearms in the basement d. a single family dwelling that contains a beauty shop that employs three full time operators

eligible dwelling properties do not need to be exclusively residential, but any incidental business must provide service rather than sales, and not have more than 2 persons working on the premises. Risk cannot be located on a farm

Which of the following losses would be excluded from coverge under farm property special form? a. fire caused by curing tobacco b. loss of livestock caused by attack by dogs or wild animals c. theft of property from insured's residence d. drowning of livestock

fire losses caused by curing of tobacco are specifically excluded

If a guest's property is lost or damaged while on an insured's premises or in their control Guest's property coverage covers the insured's

guest's property coverage covers the insured's legal liability liability for loss or damage to the guest's property while on the insured's premises or in their control

The individual named insured endorsement offers liability coverage to the sole proprietor of a business and his or her family members. Which coverage is also provided under th eindividual amed insured endorsement of a commercial auto policy for owned passenger vehicles and nonowned autos?

physical damage coverage is also extended to the insured's family members for owned private passenger vehicles and nonowned autos

Under a PAP, liability resulting from the insured's use of a non-owned auto is:

provided by the insured's policy on an excess basis

the purpose of a joint underwritin association is to create a mechanism that

requires authorized insurers to provide commercial liability insurance. to certain businesses and service providers on either an assigned risk basis or through a joint underwriting pool

Which of the following symbols in a business auto policy indicates that coverage for newly acquired vehicles applies if insurer already covers all autos owned by the insured?

If symbol 7 is used coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured or if the newly acquired vehicles is replacing a previously owned auto that had that coverage.

How much is covered for debris removal under the HO property additional coverages?

If the debris was caused by a peril that is insured against, the reasonable cost of debris removal is paid by the insurer

According to business propety coverage form vacancy condition, if a policy is issued to the owner of a building, the building will be considered vacant if what portion of the square footage is unused?

In policies issued to building owners, if at least 65% of a building's square footage is not used or rented, the building will be considered vacant

When reviewing a standard works compensation and employers liability policy, the limits of coverage are described in Part One of the policy. the dollar limits of the benefits are stated

In the state workers compensation law itself. The workers compensation and employers liability policy itself does not contain dollar limits of benefits covered by the policy. The state workers compensation law directs amount of coverage benefits provided by all policies written for employers of that state. Policy Part One also contains no exclusions of coverage.

To perform work on a customer's car, a mechanic in an auto shop had to put the vehicle on a service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form what coverage is provided?

The garage coverage form does not cover roperty damage for a customer's vehicle that is on a service hoist or for bodily injury

Insured A is riding in Insured's B auto when they are hit by a drunk driver. Both have basic personal auto policies with PIP coverage. Insured A's medical bills are $17,000 how much will insured A's policy pay for her expenses?

The insurance policy covering the auto in which the claimants are riding is primary. Therefore Insured B's policy would pay for the first $15,000 of Insured A's medical bills and Insured A's own policy would cover the rest ($2,000)

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke seveeral windows and some chinaware in a neighbors home several blocks away. Who pays for the damage?

The insured's insurer, regardless of negligence. Most states impose liability kwhen a person's action are determined to be against public policy.. Damage cause by the use of explosives or damage caused by poisonous or wild animal are examples. The neighbor would not need to prove negligence, he would only need to prove that the damage occurred.

You are at fault in an auto wreck out of state. How does your company adjust?

at least to the minimum required by that state. This is a standard condition of a PAP

All of the following persons would be covered under a business auto policy EXCEPT? a. Owner from whom a trailer is borrowed and connected to an auto owned by the named insured b. an employee of the named insuref operating an auto that is owned by the employer's spouse c. a person operating an auto borrow by the named insured, with person d. a person operating a covered auto with permission of the insured

b an auto that is owned by an emploee or a member of the employer's household would need to be covered under a PAP

Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in atlanta, georgia. Georgia has compulsory workers compensation laws. Space age's owner thinks that his company is too small and unprofitable to carry the workers comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT a. payment of fines and penalties are dictated by state compliance authorities b. forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage c. closure of business as a public nuisance by state officials d. payment for injuries in monetary amounts stipulated by the state with respect to the workers compensation plans

b an employee cannot contract for workers comp coverage without the express authority of that employer

All of the following statements are true regarding employee dishonesty optional coverage under the business owner policy EXCEPT a. coverage includes all property including money and securities owned or held by the insured b it provides coverage for all employees, even those who were terminated in the past 90 days c. it provides coverage for direct loss or damage to business personal property d. losses result from dishonest acts of any of the insured's employees

b by definition an employee covered under the employee dishonesty optional coverage is one who is currently employed or who was terminated in the past 30 days

Which is not true of workers compensation coverage? a. Medical payments are unlimited b. it offers death benefits c. if offers rehabilitation benefits d. medical payment benefits are limited

d. medical payment benefits are unlimited

what endorsement is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle/

individual named insured

All of the following are considerations in determining which state's law applies wgen a worker is required to travel into another state and is injured while working in the other state EXCEPT a. insurer's chartered location or domicile b. place where accident occurred c. normal location where the employer works d. state where employee was hired

insurer's charted location or domicile insurer's location is irrelevant to processing WC claim. Critical components relate to employer and employee and their locations

Agents may be found guilty of defamation if they make statements that are intended to

maliciously criticize another insurance company. This is illegal

Guaranteeing future dividends is considered to be an unfair or deceptive act is known as

misrepresentation it is considered misrepresentation to make any false or misleading statements regarding the dividends to be received on any insurance policy

What coverage form in the farm policy inures equipment on an open peril basis?

mobile agriculture machinery and equipment

Structures eligible for NFIP coverage must

must have 2 solid walls and a roof, be principally above ground, and not entirely over water. Certain restrictions also apply to properties if located within areas defined by federal govt. as part of the Coastal Barrier Resource System or as an Otherwise Protected Area.

In reference to insurable interest, which of the following is not an element of insurable risk? a. business b. personal c. blood d. financial

personal for any person or property covered under an insurance policy, insurable interest must exist. Insurable interest is broken into three categories which include financial (a monetary interest), blood (a relative) and business (a business partner)

Under which legal defense may a claimant's recovery be defeated if the defendant can show that the claimant contributed, not matter how slightly, to the injury or damage?

recovery under contributory negligence requires that the defendant be 100% at fault and the claimant totally free of fault. comparative negligence means that the other party's negligence or fault will not necessarily defeat the claim but will be used to mitigate the damages payable to the other party

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called

subrogation; when an insured accepts loss payment from insurance comany, they must transfer their rights to recovery to tye insurer. This prevents the insured from collecting twice

The supplementary payments section of the commercial general liability policy would cover

supplementary payments are amounts the insurer will pay in addition will pay in addition to the stated policy limits. They include any expenses the insurer incurs,up to $250 for the cost of required bail bonds, up to $250 a day for loss of incoe, cost taxed against the insured., prejudgment interest and interest that accrues on any judgment

The regulation of insurance industry primary rests within

that state: each state is responsible for the conduct of insurance within that state

A small appliance manufaturer in this state provides products around the globe. A customer in switzerland is injured using one of it's products. If the appliance manufacturer is found liable for the damages, why would its commericla policy cover the customers claim for bodily injury?

the appliance was manufactured in a covered territory

how long does the insurer have to pay or acknowledge a claim after notification?

the insurer has 30 days after receipt of notification of clim to either acknowledge the notification or pay the claim. Insurers are allowed 45 days for claim investigations, however if the investigation remains incomplete, the insurer must notify the claimant of the reason for the extension every 45 days. Responses to directors are limited to 21 days

Which of the following covers the interest of a secured lender in personal property? a. indemnity clause b. loss payable clause c. fair value clause d. third party clause

the loss payable clause covers the interest of a secured lender in personal property

an insured has just received notice that his policy will be cancelled. in the state of Oregon he only has a few days to request a hearing with the director. How many days?

under these circumstances, he has only 30 days to request a hearing