Review for Prop and Casualty Test

An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay?

$1000

Every auto liability insurance policy in WI must include Uninsured motorist coverage in the limits of at least...

$25,000 per person, $50,000 per accident

What is the standard deductible per occurrence on a Commercial Package policy

$500

WIP's maximum limit of coverage for fire policies on any eligible property, other than a dwelling, at one location is

$500,000

What is the WIP's maximum limit of coverage for a fire policy on personal property at ONE location?

$500,000

An insured just suffered a loss. Within how many days should they file a claim with their insurer?

10 days - All claims must be reported to the insurer or its designated claim representative with 10 consecutive days following the loss.

Any licensed person who activities affect interstate commerce and who knowingly makes a false statements related to business may be imprisoned for up to how long?

10 years

An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified?

15 Days

Insurers are forbidden from requiring notice more expeditious than?

1st class mail

The commissioner obtains a restraining order against a person who has violated an insurance law. The person must comply with this order within how many weeks?

2 weeks(14 days) or pay $5,000 a day that the violation continues

After the original hearing and final order is issued, an aggrieved person my request a re-hearing within how many days?

20 days

An Agent is presumed to have exceeded the "occasional" exchange of business if the agent places more than how many insurance risks per year with all insurers?

25 - Unless proven otherwise, and agent is presumed to have exceeded the occasional exchange of business if she/he places more than 5 insurance risks per calendar year with a single insurer with which he/she is not listed as an agent, or exchanges more than 25 insurance risks per calendar year with ALL insurers.

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

30,000(Insured for 75% so payment is 75% of loss)

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

5 days

When the Commissioner revokes an intermediary's license for any reason other than nonpayment of fees, the intermediary may NOT apply for a new license for how many years?

5 years

If the Commissioner disapproves of a form used by an insurer, the use of the form must be discontinued with the maximum of how many days?

90 days

Which of the following losses would NOT be covered by a homeowners policy?

A coin collection valued at $500 lost in a fire

With respect to WorkComp, what is an EXCEPTION?

A farmer who employs 2 farm laborers - a farmers needs to employ 3 or more laborers to qualify

What is twisting?

A misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuade an insured/owner, to his or his detriment, to cancel, lapse, or switch policies from one to another.

What is NOT eligible for coverage under a personal auto policy?

A vehicle purchased 90 days ago(newly acquired vehicles are only covered for 30 days without being placed on the policy)

Commercial property special form covers property IN TRANSIT up to?

ACV

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional coverage

Which part of the insurance policy covers claim-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional expenses - at no additional premium

What is the closest term to describe an Authorized Insurer

Admitted Insurer

What are examples of rebates?

An offer of employment, Stocks, securities, bonds, an offer to share commission generated by the sale.

An individual skilled in the process of selecting risks that will not create adverse selection for an insurance company is called?

An underwriter

The Commissioner can issue a surplus lines license to

Any licensed agent or broker

What is not an allowable reason for policy cancellation prior to its expiration date?

Any misrepresentation by the insured

What is an example of a protective safeguard in a business owners policy?

Automatic sprinkler system

Which of the following statements regarding coverage for the flood and earthquake perils is true?

Both Flood and Earthquake Perils are excluded from all property policies

Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under?

Business Auto Policy

How is a professional liability policy written?

Claims-made

Surplus lines licensees are obligated to the State of WI to...

Collect and pay to the state 3% premium tax on gross premiums charged for surplus lines insurance they place

The transfer of money from inside a banking premises to a person other than a messenger outside the premises or to a place outside the premises is covered under what commercial crime coverage?

Computer fraud

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential

All of the following are optional coverages that may be attached to an HO-3 policy EXCEPT

Dwelling replacement cost

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy would pay $25,000 of loss

What is an exception to general liability coverage?

Employers liability

Who belongs to the WI Compensation Rating and Inspection Bureau?

Every insurer in WI writing Workers Compensation or Employers Liability insurance

A lender may not require a borrower to insure the property against risks to improvements in an amount that

Exceeds the replacement value or market value of the improvements, whichever is greater

What is a unit of measurement an underwriter uses when determining the premium rates for insurance?

Exposure

If an agent follows the rules of terms of his agent contract he is exercising his...

Express Authority - Express Authority is legitimate authority written into a contract.

The authority granted to an agent through the agents contract is referred to as?

Express Authority - written within the contract

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?

Foreign

Replacement cost is defined as

Full replacement of the property at its current cost, new and without reduction for depreciation

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

Which homeowners from provides open peril coverage for dwelling(Coverage A) and contents(Coverage C)?

HO-5

If a farm building or structure is vacant or unoccupied, which is true?

If for 120 consecutive days the limits are applicable to the building are reduced by 50%

Under what condition can a broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling

Which authority is NOT stated in an agents contract but is required for the agent to conduct business?

Implied Authority

What CANNOT be used as an insurable risk?

Insured cannot be randomly selected

What is NOT found in the common policy declarations of a commercial package policy?

Insuring agreement

Which of the following is true regarding the fire department service charge under the builders risk form?

Its an additional coverage

Using air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating will the insurer most likely use?

Judgement

Insurance rates developed by the underwriter based on his skill and experience instead of actuarial analysis are known as...

Judgement rates

Section III of the Business Auto Policy provides physical damage coverage. What is an exception?

Limited Peril Coverage - No such thing

What best describes an insurers responsibility for payment under a policy, as stated in the common policy provisions?

Limits of Liability

A common exclusion found under physical damage to your auto is?

Mechanical breakdown

In a BOP, what would be covered?

Medical Expenses

What is NOT covered under a Homeowners policy?

Medical payments to an insured

What is an un-endorsed Homeowners policy?

Medical payments to others is automatically included in Section II of all HO policies

Under the Fair Credit Reporting Act, individuals rejected due to the information contained in a consumer report...

Must be informed of the source of the report

What does HO-3 NOT cover

Mysterious disappearance of personal property

The livestock coverage form covers which of the following losses?

Named peril coverage for death of livestock - except by vehicles

What is Symbol 9 is an Business Auto Policy

Non-owned Auto only

Workers compensation rating is developed by applying a rating bureau job classification rate to what?

Payroll

In reference to insurable interest, what is NOT an element of insurable risk?

Personal

Which inland marine coverage condition says that the insurer will settle with the actual owners of property involved in a loss?

Privilege to adjust with the owner

What is a person, other than an officer or employee of the ceding insurer, who solicits, negotiates, or places reinsurance cessions or retro-cessions of a ceding insurer

Reinsurance Broker

In an umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called?

Self-insurance retention

The amount of loss the insured is willing to absorb without insurance protection is known as

Self-insured retention

Which policy condition in HO policies states that insurance applies separately to each insured?

Severability of insurance

What are the types of compensatory damages

Special and General

Contrasting Stock insurers with Mutual insurers

Stock insurers are owned by shareholders and issue non-participating policies

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

Sudden and accidental rupture of a heating system

Coverage B-Personal and Advertising Injury Liability responds to claims arising from....

Suits alleging infringement of copyright

IN WI, who decides whether an insurer's fire policy must contain the verbatim wording of authorized clauses required to be in the policy?

The Commissioner

What is a unique characteristic of investigative consumer reports?

The consumer's associates, friends, and neighbors provide the reports data.

Which of the following would the livestock coverage form NOT insure against?

The euthanasia of livestock after being hit by a vehicle

Although the BOP will cover fire damage legal liability, what does is do to the liability limit?

The general aggregate does not apply to the fire damage legal liability

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken class is paid for by?

The golfer's homeowners liability coverage - HO Liability covers damages for bodily injury or property damage to others that occur while the insured is engaged in a personal activity

An insured invites a neighbor out for the day on the water in his boat that is powered by a 150 hp outboard motor. While attempting to tie the boat to the dock, his neighbor's hand is broken when caught between the boat and the dock. What coverage would apply to the broken hand?

The insured's boat owners policy

What is the effect of negotiations for a contract

The time when a statement made by the insured can affect the insurers obligations

An insured has decided to never drive another vehicle and wants to transfer his auto insurance to his wife. What does the insured need to transfer the policy?

The written consent of the insurer

The WI Auto Insurance Plan makes automobile insurance available to?

Those person unable to afford it

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

Transfer of rights and duties under the policy

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for?

Uninsured motorist coverage

What is the highest a HO-2 would pay for a grave marker

Up to $5,000 under coverage C

Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss?

Utility service-direct damage

Which of the following is NOT part of Section II of the boat owners policy

Watercraft Damage

A claim is considered to be made when?

When a notice is received and recorded by any insured or the insurer, whichever comes first.

For a CPP, business owners may select from all EXCEPT the following types of coverage

Workers Compensation

If a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, is the damage covered by the auto policy?

Yes freezing exclusion is removed if the car is stolen

While engaged in a pick up game of soccer in the neighborhood park, the insured collides with another player, breaking his nose. Would the insured's homeowners medical payments cover the injury?

Yes, Medical payments also applies off the insured premises

Is a stolen tea set valued at $2,000 a covered loss on a homeowners policy?

Yes, up to $2,500 with special limit for peril or theft

A notice for Non-renewal of an auto policy must contain?

a specific reason for Non-renewal

Every producer must maintain a place of business in this state

accessable to public

An insured's accounts receivable records have been damaged. The loss may be covered with

accounts receivable coverage form

An insured has homeowners insurance on his home and detached garage. He has just completed building another detached garage that he plans to use to store his boat and camper. The insured has also installed an alarm system in his home. In order to add coverage for the new garage and to receive a premium credit for the alarm system, what will the insurer need to do for the insured?

add an endorsement

Medical benefits under Workers Compensation Statutes are provided....

without limit