P&C review test

In most states Worker's Compensation laws are

Compulsory

Susan and George have a plied for automobile insurance for their family with ABC auto insurers. They do not tell the agent that their son who lost his drivers license due to drunk driving uses one of their cars on a regular basis to drive to work. The company found out about their son after he had an accident and they denied the claim. What legal concept could be cited as the reason for claim denial

Concealment

A hardware store is insured under a business income coverage form with the basic causes of loss form. Which of the following perils would not be covered

Damage from the weight of ice, sleet, or snow

Which of the following would not generally be included in the supplementary payments portion of a liability policy

Damage to property owned by the insured

The purpose of insurance is to

Transfer financial risk

Trailer interchange coverage is a part of

Truckers Coverage Form

The physical damage section of the personal auto policy excludes

mechanical breakdown

Crime insurance that is written on a loss sustained form covers losses discovered either during the policy period or

up to one year after policy expires

Which of the following is not covered by a dwelling policy

war

Statements made on an application that are guaranteed to be true are

warranties

The insured has a $1 million personal umbrella policy with a retention limit of $1000. The insured suffers a $15,000 loss that is excluded by the underlying policy but not the umbrella. How much of this loss would be paid under the umbrella

$14,000

Nicole has a personal auto policy with limits of 10/20/10 for liability coverage. She causes an accident that result in $12,000 bodily injury damages to the other driver and $5000 in property damage to the other drivers car. How much would Nicole's policy pay for both the BI and PD losses

$15,000

It will cost Gary $5000 to put a new roof on his home to replace a roof destroyed in a windstorm. Assume that the original roof which Gary paid $3500 for 10 years ago depreciated $300 per year. What was the actual cash value of the roof that was destroyed

$2,000

An insurance policy has a $25,000 per occurrence limit. If the insured has a $5000 covered loss during the policy period How much coverage is available for other covered losses that occur during the remainder of the policy period

$25,000

The insured has $20,000 insurance With company a and $40,000 with company be. Assume both policies contain another insurance clause specifying pro writer. What would company a pay if there was a $24,000 loss

$8,000

The insured's home is covered by a DP-3 Two years ago the insured bought the home for $88,000. Today its replacement value is $100,000. How much coverage A does the insured need to qualify for replacement cost coverage

$80,000

According to the cancellation condition in the common policy conditions form if the insurance company is canceling a homeowners policy for any reason the insurance company must give 10 days written notice to the insured during the first

60 days of the policy term

A company that frequently rents autos and trucks for use in the business should include which symbol in the business auto policy declarations

8

Assume the following items were stolen from the insured's home. Which one of these losses would be fully covered under coverage see the homeowners policy assuming the loss was for the full value of the property described

A $2000 laptop computer the insured uses for her in-home accounting business

Which of the following personal property items is covered in coverage C of the dwelling policy

A 72-inch flat-screen television

And insured needs liability property and medical payments coverage for a 30 foot speedboat with a 75 hp engine. This boat could be covered under

A boat owners or watercraft package policy

Which of the following is a liability loss

A fire that was caused by the insured's negligence burns a neighboring building. The owner of the building sues the insured.

The named insured on a commercial general liability policy is sassy department store. Which of the following losses would be paid under the policies medical payments coverage

A mannequin tips over and injures a customer

Which of the following is not covered in the inland marine sign coverage form

A sign that breaks during installation

In a monopolistic state an employer purchases Worker's Compensation insurance from

A state fund

Which of the following is an example of adverse selection

A terminally ill person purchasing life insurance.

Which one of the following accidents would not be covered under the uninsured motorist coverage of the personal auto policy

An accident with a driver who carries the minimum liability limits required by law but his insurance is not adequate to cover the damages

An additional loss that results from a direct lost to property is called

An indirect/consequential loss

The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is

Appraisal condition

Each of the following kinds of property may be covered under a building and personal property coverage form except

Autos for sale

Under the business auto coverage form the insurance liability arising from which of the following situations would be covered

Bodily injury resulting from loading or unloading a covered auto

Widget Enterprises wants property insurance for a new warehouse it is building. Which it also wants the policies limit of insurance to gradually increase as the value of the building under construction increases. Which commercial property coverage form would best fit widgets needs

Builders risk reporting form

Which of the following forms as used to ensure private passenger and commercial auto exposures

Business auto coverage form

Of the four coverages provided under section 1 of the homeowners policy which one provides coverage against loss of use and indirect loss

Coverage D

What is the difference between the loss sustained and discovery versions of the commercial crime coverage forms

Coverage trigger

Furniture that is destroyed when a building burns down is an example of what kind of loss

Direct loss

A business can obtain coverage for liability arising out of discrimination and sexual harassment by purchasing

Employment Practices Liability Insurance

Which one of the following is not one of the required elements of a legal contract

Equal risk for all parties

Which of the following can be covered as business personal property under the business owners policy

Exterior building glass

Under the commercial package policy who may cancel the policy and writing and make changes to the policy with the consent of the insurer

First named insured

Which of the following would be covered under the building coverage of the building and personal property coverage form

Fixtures

Medical benefits under the Worker's Compensation policy are

Generally unlimited and do not contain deductibles

The homeowners form that provides special peril coverage on the dwelling and Broad coverage on personal property is

HO-3

Special open peril coverage for both the dwelling and personal property is provided by

HO-5

An individual who earns and lives in a condominium can obtain broad coverage for personal property in the condo under which homeowners form

HO-6

All of the following can be included in a commercial property policy except

Health and disability insurance

Which of the following losses would be covered by a flood policy

Heavy rains cause a lake to overflow and flood the basement and first floor of a house

The principle that states that an insured should be restored to approximately the same financial position after a loss as before is known as

Indemnity

Which type of insurance covers exposures that involve property and merchandise while in transit or floating

Inland marine insurance

Which commercial property coverage form covers damage to the property of others in the insureds care custody or control but only if the insured is legally liable

Legal Liability Coverage Form

Which personal auto coverage reimburses the insured for reasonable expenses incurred within three years of the date of injury without regard to fault

Medical Payments Coverage

All of the following are included under section one of the homeowners policy except

Medical bills

What covers a carriers liability for loss or damage of cargo while it is being transported in a truck

Motor Truck Cargo Policy

The type of insurance company in which the policyholder is considered an owner and also shares in the profit is

Mutual company

The insured has a personal auto policy with all cars insured by one company. He sells one of the cars and buys a new one to replace it. Must the insurer take any action for the liability portion of his current policy to apply to the replacement vehicle

No the insured does not have to do anything liability coverage for a replacement vehicle is automatic

In the business auto coverage form employers that want to cover employees use of their own cars in the employers business should opt to have liability coverage applied to which of the following groups of autos

Nonowned

The personal auto policy's medical payments coverage would not provide protection for which one of the following

Occupants of a car that was struck by the insured

Which one of the following types of benefits is generally not provided by a states Workers Compensation law

Pain and suffering

Coverage for sums an employer becomes legally obligated to pay under common law as a result of a work related injury to an employee is provided by

Part two- Employers liability section of the Workers Comp policy

Coverage L provides coverage for damages that the insured becomes legally obligated to pay because an occurrence caused bodily injury or property damage. This coverage is also known as

Personal Liability Supplement

Which one of the following is not a type of inland marine coverage form

Personal items coverage form

What is a common name for a part D of the personal auto policy

Physical Damage Coverage

Under the commercial general liability policy a separate aggregate limit applies to

Products and completed operations

Insurance arising out of rendering or failing to render services of a professional nature that was developed for positions surgeons dentist lawyers insurance agents directors and accountants is known as

Professional liability insurance

The business owners policy

Provides a prepackaged policy of property and liability coverages for certain types of small businesses

Which of the following broad perils is covered by the HO-2 and HO-3

Sudden and accidental rupture of a heating system

Who of the following would be considered an insured for liability coverage under the personal auto policy

The named insured's son, who lives with the insured, while driving a neighbor's car.

The party to a surety bond he promises to do or not do a specific thing is

The principal

An insured is driving her car to work swerves into the next lane and causes an accident. The accident occurred because of the insurance negligence while driving. This caused the accident is known as

The proximate cause

Which one of the following is not one of the common policy conditions in a commercial package policy

The refund of premium condition

In a liability lost the person to whom the insured cause damage is referred to as

The third party

Which of the following is an available coverage option under the equipment breakdown protection coverage form

Utility interruption

Which of these losses would be covered under the personal auto policy is liability coverage

Will falls asleep at the wheel of his car and strikes and injures a pedestrian

Most flood insurance coverage is provided by

a federal government program

If a building insured under the building and personal property coverage form was vacant for 90 days

a vandalism loss would not be covered

The builders risk reporting form insures a building under construction for

an amount that increases at intervals to correspond with the increasing value of the building

A morale hazard

carelessness or indifference to a loss because of the existence of insurance

Which of the elements of a legal contract does an insurance premium payment represent

consideration

Garagekeepers coverage insures against

damage to autos of others that are in the care, custody, or control of the insured

According to the nationwide definition imports and exports are

eligible for ocean marine insurance

An insurance agent who needs liability coverage for her professional liability exposure can obtain it by purchasing

errors and omissions insurance

The authority specifically given to an agent in a written agency agreement by the principal is called

express authority

Additional living expense coverage that is included under the broad in special dwelling forms protects the insured against

extra living costs incurred when the home becomes uninhabitable due to damage by a peril insured against

Each of the following business occupancies would be permitted in a dwelling insured under a dwelling form except

farm

Which of the following describes an insurance company doing business in a state other than the one where it is incorporated

foreign

What type of ocean marine insurance provides physical damage coverage for the ship while it is in transit

hull

Which of the following is not eligible for commercial inland marine insurance

imports > exports

Each of the following is a primary coverage provided under the commercial general liability policy except

intentional injury

Which one of the following lists all the required elements for establishing a charge of negligence

legal duty owed, breach of legal duty owed, proximate cause, damages

The primary purpose of the business income coverage forms is to reimburse the insured for

loss of income resulting from property damage at the insured's property

What kind of insurance company is owned by its policy owners

mutual

In fidelity bonds the party to whom the promise is made in for whose protection the bond is written is

obligee

The cause of loss is called

peril

Which of the following is not an element of a legal contract

premium payment

The purpose of a binder is to

provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires

The extra expense coverage form provides

reimbursement for addtl costs an insured incurs to avoid or minimize suspending business ops

Under the claims made commercial general liability coverage form the first date that a loss may occur and still be covered under the policy is

retroactive date

Which of the following is covered under a business owners policy

small business

In a commercial liability policy coverage under a claims made form is triggered when

the claim is first made against the insured