Readiness Exam Questions

A house insured with a homeowners policy has been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal?

An addition 5% of the policy limit may be paid for debris removal

Which of the following is most likely INELIGIBLE for coverage under the businessowners policy?

An auto mechanic shop

An insured's child ran into a neighbor's planter on his bicycle and broke the planter and ruined the plants. the cost to replace the planter was $400, and the cost to replace the plants was $100. Which section of the insured's homeowners policy would pay?

Section II with no deductible

Which of the following would be eligible for homeowners coverage f - medical payments in the event of injury at the insureds premises

A full-time maid

An insurer must be fair in underwriting and must pay all covered losses of any insured. For the faithful execution of these duties, an insurer has the right to

Accept the payment of premiums for all policies currently in force

Which of the following is NOT a classification of a hazard?

Speculative

Which of the following statements is CORRECT regarding business income coverage under the businessowners policy (BOP)

The business income losses are payable for 12 consecutive months following the occurrence

Under the common policy conditions of a policy, all of the following are true about changes in a policy EXCEPT

The insurer must obtain permission from all named insured to make a change

All of the following are TRUE regarding the cancellation conditions of a policy EXCEPT

The insurer must provide proof that the insured received the notice

Under an HO02 policy, the insurer will pay no more than the actual cash value of the property damage until

The property repair or replacement is complete*******

Exports covered by marine, inland marine and transportation policies must be insured for the hazards of

Transportation

Which of the following terms best describes the home of an insured who goes on vacation for three months?

Unoccupied

Rate and form regulations in this state apply to all of the following EXCEPT

Viatical disclosure forms********

When does the federal emergency flood insurance program go into effect?

When a community applies for a program

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

1050

A temporary license may be issued to a person only once within what time period?

12 months

An insured was told to leave his home because of endangerment by a brush fire that was out of control. The insured was able to have his personal property move to storage away from the endangered area. For how long will the homeowners policy provide coverage for the stored property?

30 days

Insurers are required to pay claims within how many days of receiving proof of loss

30 days

The Property and Casualty Insurance Guaranty Association will assess the member insurers for amount necessary for its operation. When are assessment payments due?

30 days after notice

According to business property 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 and not rented?

69%

An insured is the owner of a clothing boutique and has a Floor Plan Merchandise Floater. She noticed three months ago that 3 dresses had been stolen but didn't file a report until recently. How much will her insurer pay?

90% of the limit written

The equipment breakdown coverage form provides coverage for all of the following except:

Bodily Injury Liability

Which of the following exclusions would specifically fall under coverage E

Contractual liability

Coverage C in a homeowners policy forms offers all of the following EXCEPT

Coverage for loss of use

Loss valuation is best described as the process of

Determining the premium charged and the amount of insurance required on a specific property

In businessowners policies, a deductible does not apply to which of the following additional coverages

Fire department service charge********

A homeowner has misplaced some of her insured personal property and has no idea what may have happened to it. Which HO policy form would cover such a loss?

HO-5

A structure may be eligible for coverage under the national flood insurance program of it meets all of the following requirements except

It is entirely over water

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured

With respect to the commercial package policy, an interline endorsement is one that

May apply to more than one line of insurance this is included in the package

Which of the following is the other major coverage provided by the businessowners liability coverage form?

Medical Payments

Which of the following losses meets the definition of flood and would be covered by a NFIP policy?

Mudflow and collapse

When does the period of restoration for business income coverage end in a businessowners policy?

On the date the property is repaired

The personal property floater in marine insurance provides coverage on what basis?

Open peril

All of the following are additional coverages under a homeowners policy EXCEPT

Outbuildings

In reference to insurable interest, which of the following is not an element of insurable risk?

Personal

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

Personal property while airborne********

Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT

Pollution

Which of the following is NOT available in a package policy?

Professional liability

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the questions pertaining to heart problems on their application. Their answer is considered to be a

Representation

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for repairs to be completed, during which time the insured was without income. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

the loss of income for the time the diner was closed