Study Exam

Under the additional coverages of the standardized Businessowners policy, how much is the limit for "Pollutant Clean-Up and Removal" if caused by a covered loss?

$10,000 in any 12-month period

Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), the maximum limit (cap) for claims paid by either private insurers or the government in a single program year is:

$100 billion dollars in any one year.

An auto is described in the schedule of the Hired Autos endorsement to a Business Auto policy. For purposes of Business Auto coverage, this auto will be considered:

A covered auto owned by the named insured

Within 60 days following the completion of the examination..

A team of examiners has conducted an examination of an authorized insurer in West Virginia. The examiner in charge must submit a verified written report of examination under oath to the Commissioner

Symbol 48

A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Truckers form by using:

All of the following statements are TRUE regarding the Flood Coverage Endorsement to the Commercial Property policy

Back-up or overflow of a sewer or drain is covered if that overflow occurs WITHIN 72 HOURS after the flood recedes and the overflow was caused by the flood

An agent living in Ohio wishes to write insurance business on clients residing in West Virginia. Which of the following must the Ohio agent do to qualify for a non-resident West Virginia license?

Be a licensed agent in good standing in his home state

Which of the following is a coverage that may be selected on an Equipment Breakdown form by showing a limit of liability amount next to the coverage?

Brands and labels

The endorsement used to report the insured's actual and estimated business income under an Equipment Breakdown policy is called:

Business income—Report of Values form

The Accounts Receivable form

Commercial Inland Marine coverage forms covers payments due to the insured from customers, when these payments cannot be collected due to loss or damage of records

Commercial property losses would be covered by the Act whereas commercial auto, surety bonding, and theft insurance would be excluded under the 2015 Reauthorization.

Commercial property losses would be covered

Any surplus lines licensee in West Virginia must collect a surplus lines tax in the amount of:

In West Virginia, all surplus lines agents must collect a tax 4% of the gross premium of a surplus lines policy

Conrad is a contractor with Builders' Risk coverage written on a reported value basis on his current construction job. He started clearing the land on May 1st, digging the basement on May 13th, pouring the foundation on May 31st, blocking the basement walls on June 5th, flooring the first floor above the basement on June 15th, and constructing the walls of the first floor on June 30th. When did Conrad's Builders' Risk policy begin providing coverage?

June 15th..

Liability that the insured assumes in a contract

Liability that the insured assumes in a contract (contractual liability) is excluded by the CGL policy.

Which of the following statements is CORRECT regarding how the National Flood Insurance Program will reimburse the insured for "loss of use"?

Loss of use is not covered by the National Flood Insurance Program..

Under a Business Auto policy, which of the following types of physical damage loss is not covered?

Loss to radar detection equipment

The Mountain Insurance Company recently had a change in its board of directors. Five new directors were elected by the policyholders at their annual meeting. Which of the following statements correctly identifies Mountain Insurance Company?

Mutual insurance companies are an incorporated insurer without permanent capital stock and the governing body of which is elected by the policyholders.

Extended Reporting Period (ERP) of a CGL policy

Once in effect, Extended Reporting Periods may not be cancelled." ERP's do not extend the policy period or expand the scope of coverage and they apply to BI & PD that occurs before the end of the policy period, but not before the retroactive date.

bond written on a BLANKET basis

Schedules a single amount to cover all employees

Which of the following statements is TRUE regarding the deductible of the Earthquake Endorsement to a Homeowners policy?

The minimum deductible offered for the earthquake endorsement is $500..

Excess Liability insurance policies

They CAN NOT can be written to broaden the coverage of the underlying liability policy

Farmer Joe is covered by a Farm package policy. He conducts farming operations for a neighboring farm based on a $3,000 annual contract. When Joe backs his farm tractor into a delivery truck on the farm premises, which of the following will cover him for the liability?

When a farmer is conducting under $5,000 of custom farming a year, the farm liability coverage picks up his liability. The custom farming liability endorsement is only necessary when a farmer is conducting more than $5,000 per year in custom farming.

Insureds who are covered under a claims-made Commercial General Liability policy have the right to claim and occurrence information

When an insured requests this information in writing, the insurer must provide it within 45 days

A lawyer is covered under a standard "Lawyers Professional Liability" form. All of the following situations would be covered by her policy, EXCEPT:

Your answer: Her activities as a guardian to two young children whose parents have died. is incorrect. The correct answer is: Her fiduciary activities as an administrator of a corporate employee-benefits plan..

Which of the following is not "mobile equipment" under the business auto policy

a self-propelled vehicle with permanently attached street-cleaning equipment is considered to be an auto and not "mobile equipment."

Symbol 23

indicates that "owned private passenger autos only" are covered.

A building that is in danger of collapsing

is NOT covered under the additional coverage for "collapse" under a Commercial Property policy

Builders' Risk form is written for

is written for a period of one year.

An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for the missing inventory?

no coverage

Under a standard HO-3, the limit for Coverage C -- Personal Property for a one or two-family dwelling:

set at 50% of the Coverage A

West Virginia statutes remove all reference to a time limit for reaching an agreement as to loss settlement on real property by ________________________ both Sections I and II of the standard Homeowners policy.

Adding "Condition H"

Medical expense and lost wages

Economic losses are those that include out-of-pocket damages, such as incurred medical expenses or lost wages. It does not include disfigurement, pain and suffering or loss of consortium, as those would be considered "general damages".

Brianna is applying for a new job at General Hospital. Which law limits how much information Brianna's bank and mortgage lender can share with General Hospital, regarding to Brianna's finances and credit score

Fair Credit Reporting Act.

Marcus has two Commercial Property policies covering his warehouse. Policy A is the primary policy and has a $200,000 limit, and Policy B is an excess policy with a $100,000 limit. After a fire causes $140,000 damage to his warehouse, how will each of Marcus' policies respond (disregarding any deductible)?

Policy A will pay $93,333 and Policy B will pay $46,667.. The question specifies that Marcus has suffered a PROPERTY loss. "Primary" and "Excess" insurance only comes into play with LIABILITY losses. With PROPERTY losses the OTHER INSURANCE clause is triggered. When there are two or more property policies covering the same risk, each policy pays its share of the loss, equal to its share of the total insurance in force. Policy A has 67% of the insurance in force ($200,000 is 67% of the total insurance in force, which is $300,000) and therefore, it will pay 67% of the $140,000 loss, which equals $93,333 and Policy B will pay the difference.

Which of the following best describes a licensed insurance professional's "implied authority"?

The authority given by a principal to an agent that is not formally expressed or communicated

Under a standardized DP-2 or DP-3 policy, what is the maximum that would be paid for additional living expenses if Coverage A was $60,000

The form provides 20% for additional living expenses and fair rental value. Therefore the policy would pay up to $12,000. This is a coverage that is frequently amended to comply with state laws.

In West Virginia, a producing agent must report to the Insurance Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in this state within _____ of the final disposition of the matter.

30 days

Aaron purchases a Homeowners insurance policy for $700,000 with a 4% deductible. A few months later, a heavy hailstorm destroys his roof, porch, and windows, causing $50,000 in damages. How much should Aaron expect to receive from the insurance company to pay for the damages?

A 4% deductible is based on the coverage limit of $700,000. 4% of $700,000 is $28,000 which would be the deductible. Subtracting that from the $50,000 in damages, Aaron would receive a net of $22,000.

180 days

An insured has received actual cash value payment from the adjuster for a covered loss. At the time he is satisfied with the payment. He later changes his mind and wants the full replacement value. How many days does he have to submit the receipts to get the replacement cost payment under a HO-3 form?

Under a Personal Articles Floater, the total amount that will be paid for loss or damage to an unscheduled coin collection is:

An unscheduled coin collection is limited to $1,000 under a Personal Articles Floater.

Matilda has been injured by a blender that turned out to be unsafe when she used it. Matilda has decided to file a lawsuit against the manufacturer for damages. Which of the following is NOT grounds for which Matilda may bring the lawsuit?

Breach of contract is not relevant because there was no contract executed between Matilda and the blender manufacturer.

Which of the following statements best describes a "third-party-over action" in workers' compensation insurance?

Damages for which the employer is legally liable to pay, that are won from a third party by an injured worker. Then, the third party sues the employer

The perils most frequently covered by a Difference in Conditions policy are:

Earthquake and flood coverage is almost always excluded under property policies, therefore these two coverages are the most frequently written DIC policies or endorsements.

The perils insured against by a Homeowners policy are contained within the:

Insuring Agreements..

All of the following are defined as "your covered auto" in a personal automobile policy, EXCEPT

PERMANENT substitute vehicles are not covered under a personal automobile policy

A contractor in need of a bid bond to obtain a contract is an example of a(n):

Principal

The Counterfeit Currency insuring agreement of a fidelity bond covers losses when an insured receives counterfeit currency:

Purported to have been issued by the United States or Canada

Private, unincorporated mutual insurers that consist of associations that agree to equally share risks among its members are known as

Reciprocal exchanges

An office building is limited in the number of stories it may contain and still be eligible for coverage under a standard Businessowners Policy. This number is

Six stories

Gino owns a pizza restaurant and has hired drivers to deliver pizzas to customer's homes in their own vehicles. His restaurant carries a standard Businessowners policy and a Commercial Automobile policy. One evening, one of Gino's hired drivers has an accident and injures other people. Those who were injured in the accident sue Gino's Pizza for damages. Which of the following statements best indicates how the claim will be handled?

The Commercial Automobile policy will respond to the claim

Which of the following statements is TRUE regarding the National Flood Insurance Program's Preferred Risk Policy?

The NFIP Preferred Risk policy is offered to home and apartment dwellers who reside in areas of low to moderate flood risk

Workers compensation

The Terrorism Risk Insurance Program Reauthorization Act of 2015 excludes all acts of terrorism if the act is committed as part of the course of a war declared by Congress with the exception of one line of insurance. Which of the following lines of insurance is the only one that would still be covered for loss or damage due to acts of war?

All of the following statements about Financial Institution bonds are correct, EXCEPT:

The answer choice that is NOT TRUE is: "Provides third-party coverage for the negligent acts of employees." These bonds ARE written on a blanket basis, they are first-party coverage, and they do not cover the shareholders, only the institution itself.

The ACV settlement under a property insurance policy may be determined using "broad evidence rule", which means that the loss is valued

The broad evidence rule takes different methods of valuation into consideration, most often "fair market value" is included in making the determination of the ACV of damaged or destroyed property.

appointment contract..

The contract between an insurance agent/producer that provides them with the authority to bind insurance coverage on behalf of an insurance company is known as the "appointment contract".

supplementary payments

The damages awarded by the court may be paid by the policy if warranted, but they are not paid under supplementary payments.

Under a standardized NCCI workers' compensation policy, the insurance company will pay to the insured, as part of any claim, proceeding, or suit defended, all of the following expenses, EXCEPT:

The insurance company will NOT pay the insured for the loss of earnings that may result from the time they take away from work to assist the insurer to defend them against a lawsuit.

In West Virginia, when a claims investigation has been concluded, which of the following is required of the insurer?

The insurer must either deny the claim in writing or make a written offer within 10 working days of the conclusion of the investigation..

Which of the following is a true statement regarding the "Law of Large Numbers

The law of large numbers is a statistical concept that relates to probability. It is one of the factors insurance companies use to determine rates. As the number of insured units increases, the ability to predict losses increases. In order to be profitable, insurance companies must write a large number of SIMILAR risks. Simply writing a large number of risks may actually make an insurance company insolvent.

Which of the following statements is TRUE regarding the Homeowners "additional coverage" known as Landlord's Furnishings?

The only answer choice that is true is: "The coverage is not additional insurance and does not increase the limits of the policy". The other three answer choices are not true of this additional coverage.

Drive Other Car endorsement

The purpose of this endorsement is to provide coverage for the owner of a business that does not own a personal automobile and therefore, does not have coverage under a Personal Auto policy. The "Drive Other Car" endorsement covers this business owner when he/she is driving "other cars" not owned or leased by the business for personal use. If the owner had a Personal Auto policy, he/she would not need this endorsement to their Business Auto policy.

The term "time-element" is another way of saying

The term "time element" refers to "indirect losses", such as lost income when a store is shut down because a fire from the restaurant next door, spreads to the insured's store and there is a "time-element" to restoring the business to its normal operations.

The "coverage territory" of umbrella liability policies is usually

The umbrella policy expands the coverage territory of the underlying coverages. The coverage is on a "worldwide" basis

Which of the following statements is true regarding the business auto policy

There are 10 symbols used to set up the coverage for the business auto policy risk. Coverage is tailored to the needs of the insured. The trucker risks are insured under the motor carrier coverage form. The selling and/or servicing of vehicles are best covered under a garage liability policy. Equipment dealers need CGL and a form of inland marine coverage.

Which of the following statements is CORRECT regarding fidelity bonds?

They are two-party contracts between the employer and an insurance company

transportation expenses under Part D of his policy?

Transportation expenses are an additional coverage if the insured has purchased collision and/or other than collision coverage. $20 per day up to $600 is available. Coverage begins 48 hours after a theft loss and 24 hours for any other covered loss.

Kathryn is covered under a property insurance broad cause of loss form. Which of the following statements is true for Kathryn

With the broad cause of loss form, the burden of proof lies with the INSURED to prove that a named peril caused the loss. All of the other answer choices are not true of the broad cause of loss form.

The "Business Income" additional coverage under the standard Businessowners policy includes all of the following in its definition of "ordinary payroll expenses", EXCEPT:

Executive payroll is not considered part of the "ordinary payroll expenses".

Goods manufactured in the United States for export to other countries..

Exports are NOT eligible risks for Commercial Inland Marine insurance, they would be covered under Ocean Marine insurance.

The most significant change that occurs when a Mobile Home endorsement is added to a Homeowners policy is that:

The description of covered property is changed..

The insured is covered under a BOP policy. Contents coverage is included. If the insured buys a separate piece of machinery and insures it separately, how will the BOP policy respond to a loss to this machinery

The equipment policy will be primary and the BOP will be excess if the separate policy does not provide adequate limits of coverage..

An insured has his dwelling covered under a DP-2 policy. A 100-year snow storm hit the area where his covered dwelling is located and the weight of the ice and snow caused the roof to cave in. This caused extensive damage to the roof, the personal property inside the dwelling, the foundation of the home, the walkway leading to the outdoor swimming pool, and the pool itself. Which of damaged property would be covered by the policy?

The roof and the personal property located inside the covered dwelling