Pre-Study P&C

In property insurance, an insurable interest

must be present at the time the policy is written and also at the time of loss

The Fair Credit Reporting Act

obligates insurers that use a third-party source to acquire credit information to inform applicants who have been denied coverage of the identity of that source

When would misrepresentations in an application be a basis for voiding an insurance policy?

only if they were material misrepresentations

The chief officer of an insurance department may issue all of the following penalties to licensees who engage in unfair or deceptive practices EXCEPT

order imprisonment for willful violators

The hired auto and nonowned auto liability endorsement provides coverage for all of the following EXCEPT

owned autos

Condominium association coverage forms insure all of the following against direct physical loss or damage EXCEPT

personal property owned, used, or controlled by the condo unit owner

Which of the following is NOT included in the Nationwide Marine Definition?

personal shipments

Umbrella liability insurance policies do all of the following EXCEPT

provide coverage only to individuals

What is the meaning of actual cash value (ACV)?

replacement cost less depreciation

Self-insurance is an example of what type of risk management?

retention

A restaurant has employees use company vehicles to make deliveries. If a driver has an at-fault accident which causes injuries, the employer may be responsible because of

vicarious liability

The farm covered causes of loss-broad form includes all of the following risks EXCEPT

voluntary parting with covered livestock

Commercial umbrella policies can be written over all of the following primary liability coverages EXCEPT

workers compensation

The insured has an auto policy with liability limits of $30,000/$60,000/$10,000. He negligently runs off the road and causes $70,000 damage to an apartment building. How much will the policy pay?

$10,000

If an HO-3 policy has a coverage limit of $100,000 on the dwelling, how much coverage would automatically apply to cover the insured's personal property under Coverage C? a. $20,000 b. $25,000 c. $50,000 d. $100,000

$50,000

The attempt to restore an insured to his pre-loss condition is known as

Indemnification

Which is a characteristic of the businessowners policy (BOP)?

It includes property and liability coverages, similar to commercial package policy

After a homeowners policy has been in effect for 60 days or more, it may be canceled for all of the following reasons EXCEPT

Material misrepresentations made by the insured

Which of the following would be considered special damages?

Medical expenses There are two types of damages for bodily injury claims - special damages and general damages. Special damages are those expenses to which one can apply a dollar amount such as medical bills, a rental car, travel expenses to a medical facility and loss of wages. General damages are the most difficult to adjust since they usually require negotiation or even court action for a final determination of the amount owed the claimant. General damages include disfiguration, pain and suffering, punitive damages, loss of consortium and loss of the quality of life.

What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?

Open peril policy

Who are the owners of a mutual insurance company?

Policyowners

Who are the three parties to a surety bond?

Principal, Obligee, Surety

Which of the following property policy forms should be used when it is difficult to provide the insurance company with an accurate statement of values because of fluctuations in inventory from month to month?

Reporting form

An insurance broker has contacted an insurance agent in attempt to place a large homeowners policy. When an insurance broker is involved, who does the agent legally represent?

insurer

An insurance policy that contains unclear language will be

interpreted against the party who wrote the contract

Which of the following coverages is included in the homeowners policy but is not included in an unendorsed dwelling policy?

liability

Losses arising from wrongful termination or discrimination are covered by

Employment Practices Liability

What is an authorized insurer?

A company that is approved by the state's department of insurance to transact insurance business in a state.

An agent's license can be terminated for which of the following reasons?

After receiving verbal permission, the agent signed the insured's name on the insurance application.

Once an injured employee has received benefits provided under workers' compensation, that employee may not file a suit against her emplo additional benefits. This is the definition of

Exclusive remedy

Which of the following statements regarding workers' compensation laws is CORRECT?

Benefits are paid to workers injured on the job, regardless of who is at fault.

Who is responsible for enforcing state insurance laws and regulations?

Commissioner, Director, or Superintendent

Physical damage coverage under the business auto coverage form includes collision, comprehensive coverage, and specified causes of loss. If a cover auto accidentally collides with a deer, this will be covered under

Comprehensive coverage

The extra expense coverage form provides

Coverage that will permit the insured to continue in business without interruption following a property damage loss.

Which of the following would NOT be considered a personal injury loss under the commercial general liability (CGL) policy?

Fraud

Which part of the insurance contract contains information about the location of the insured property?

Declarations page

Under the comercial package policy, the person whose name is listed first in the declarations and is assigned certain responsibilities and obligations is

The first named insured

An insured has a $200,000 limit on her homeowners policy and a $1 million umbrella. If there is a $275,000 loss, how much will her homeowners and umbrella policies pay?

The homeowners policy will pay $200,000 and the umbrella policy will pay $75,000

What is the purpose of the ordinance or law coverage?

This additional coverage provides an additional amount of insurance for the increased costs of repair due to zoning laws.

An errors and omissions policy could be issued to cover the following occupations EXCEPT

Veterinarians

A difference in conditions contract is

a policy issued to cover what is normally excluded in other property insurance contracts

The commercial package policy interline endorsements

are those endorsements that apply to more than one coverage form

While at an NHL playoff game, a spectator is injured when a hockey puck hits his face. He files suit against the team. Which defense against negligence might the team's attorney use?

assumption of risk

Temporary, short-term evidence of coverage is provided by

binder

Which of the following auto coverages insures only the policyholder's legal liability?

bodily injury and property damage

What type of policy would cover lost revenue for a business that is forced to close during a period of restoration after a covered physical damage loss?

business income

Which of the following is a defense against negligence?

comparative negligence

Dwelling policies may be used to insure all of the following EXCEPT

farm dwellings

Which of the following bonds protects an employer from the actions of dishonest employees?

fidelity

A personal automobile policy's medical payments coverage will pay for

injury to a family member who is struck by the insured's car