test questions

Accidents that occur in which of the following places are covered under a personal auto policy

Alaska

What best describes Lloyd's of london

An association which furnishes procedural and physical facilities for members who write insurance

If a standard homeowners policy contains a replacement cost provision what does this apply to

Any building insured under coverages referred to as a dwelling and other structures

A reciprocal insurance company is characterized as being unicorporated and operated by a(n)

Attorney in fact

Which of the following types of insurance are very similar in design to a boatowners policy

Auto policies

Which of the following is included in the liability section of a personal auto policy

Bodily injury and prospect damage coverage

Under section two of a homeowners policy which of the following is typically not covered

Bodily injury to the insureds resident family

An HO-4 policy is designed to provide coverage for which of the following

Broad coverage on teh contents of tenants who are renting an apartment

Pure risk involves which of the following situations

Chance of a loss only

The term collision as used in a personal auto policy (PAP) can best defined as

Colliding with another vehiclce object or the upset of the vehicle

What is the porpuse of a $1000 deductible on a property insurance policy

Decreasing the premium paid for the policy Reduce the number of small claims paid by the insurer

One of the purposes of coinsurance is to

Encorage the insured to carry a reasonable amount of insurance to value

Coverage provided by a personal umbrella policy falls into which of the following categories

Excess liability losses not covered by the underlying policy,some special liability not covered by the underlying policy

which of the following is associated with the authority of agents

Express or actural,apparent,implied

Alien insurers are located in another state if the united states

False

All property owners in the state of california are eligible to purchase flood insurance through the national flood insurance program

False

An agent has no duty to an insurer if the agent is part of the field force

False

An insurance agent and a life agent do not need to have different license in order to make sales

False

Both excess liability and excess physical damage coverage is provided by a personal umbrella policy

False

By definition,the united stated government is not an insurer

False

Manny is becoming impatient with questions that he can better manage his time by not addressing a question,unless it comees up at least twice,after careful thought,most insurance professionals would agree that this is an ethical practice

False

The creation of a moral hazards is not included in the consideration of the social value of insurance

False

There are about 20 classes of insurance found in the california insurance code auto physical damage is one of these classes

False

If dwayne wishes to be a property insurance broker he may do so if he,

False.there is no such thing as propety insurance broker

under the terms of the standard fire policy which of the following is an obligation of the insured

Furnished proof of loss to the insurer within 60 days,protect property form any additional loss,furnish the insurance companu with an immediatet notice of loss

If there is a failure to display even a minimal degree of care that shoulf and could be excepted of a prudent person accompanied by a total disregard for the safty of others it is known as which type of negligence

Gross

All risk coverage also referred to as special peril coverage is provided by which of the following types of policies

HO-3 with HO15 endorsment attached

Herbert is the owner if a condominium and wants to provide fire and allied coverage for the personal property of himself and his family as well as liability coverage,which of the following types of policies wouldbest suit his needs

HO-6

Of the following statements which is/are correct

I.insurance policies are legal documents II.the pooling of individual risk is basic premises of insurance{1&3}

Managing riks involves all of the following except

Identifying and increasing existing hazards

A fire damages an insureds duplex to the extent that it will uninhabitable for a least 3 months while it is being repared.the loss of rental revenue will be paid under section of the insureds homeowners policy known as loss of use coverage

True

All of the following are deceptive acts or practices or unfair methods of competition except

an agent tries to sell a prospect on three separate occasions a second agent is able to sell the same prospect bu convincing him to buy a more expensive but higher coverage policy

Which of the following would be under other structures in a homeowners contract

any building on the premises that are not attached to the dwelling

A fire and casuality broker/agent can work on all of these areas of insurance except

life and disability

Under an HO3policy how is coverge for jewelry furs and watches provided

lower sublimit amount bout only for the peril of theft

When the terms of a ppolicy are misrepresented by a producer to a client that has commited a

misdemeanor

Property insurance polocies that protect only against those losses that are specially named or listed in the policy are referred to as

named peril policies

An insurance producer is attempting to reassure a client concerned about the safety of a company she represents she may

neither are allowed

When can a person who is a life agent be licensed as a life solicitor

never, life solicitor licenses do not exist

If, after a hearing the commissioner determines that an agent violated an order of the court that was final and still in effect, the commissioner may impose a fine for up to ___if the violation is found to be willful

$55,000

The other then collision section of a personal auto policy would not cover which of the following

(all are covered}theft of the hood ornament,theft of the CD player mounted in the dashboard,theft of the spare tire from the trunk

An insured has a standard HO-4 policy to cover personall property for up to $40,000 while vacationing in germany a hotel fire causes destruction in the following manner-->Luggage and clothing $15,000 replacement cost,jewelry- 15,000 replacement cost<--assuming a deprecation of 20% for both categories of property,and disregarding

$24,000

10 years ago the insured purchased furniture for $9,000 two weeks ago the furniture was totally destroyed in a fire,estimate show that his furniture had depreciated by $6,000,the actual cash value of the destroyed furniture assuming that the furniture would cost $11,000 to replace at current price

$5,000

Kim is insured by a personal auto policy that contains limits of $25,000 per person $50,000 per occurrence for bodily injury claims.an accident occurs for which is found to be at fault which results in bodily injury suits by three people in the amounts of $9,00,$16,000 and $32,000 how much will the policy pay

$50,000

An auto insurer must provide which of the following to an insured

10 days notice prior to cancellation because of nonpayment of premium,20 days notice prior to cancellation for reason other than nonpayment of premium,20 days notice prior to an offer to renew

An insured with a homeowners policy has rented an automobile in ireland which of the following amounts of coverage apply to the insureds personal property while it is in the rental vehicle

100% of the property limit

Which of the following is issued by the commissioner in the event an agent is found guilty of violating a code provision for the first time

A cease and desist order

A named non-owner endorsement which is attached to a personal auto policy would be advisable for someone who soes not own a car but rents vehicles while traveling for business or pleasure

True

Agents must act on behalf of thier clients in the same manner as they would hope to be treated.this is an important part of acting ethically,according to the code

True

All of the coverage is provided under section 2 of homeowners policy

A neighbors camara is damage when the insured accidentally drops it,defense costs of a lawsuit even if the claim is fraudulent false,the four year old son of the insured hits another child with baseball bat

Insurance contracts must include all of the following except

A.M best insurers rating statement

Which of the flowing categories of insurance are included under "special lines surplus lines"

ALL}materials or merchandise being exported or imported-->aircraft and perils of ocean shipping risk-->liability reinsurance of admitted insurance carries

Regarding an agents ethical behavior,which of the following is/are true

ALL}since agents are always more knowledgeable about insurance than thier prospects and clients,short cutting may be tempting--->the pressure to reach sales quotas may lead to unethical behaviors-->success defines only in terms of money,distorts perspective and ofter causes unethical actions

A standard homeowners policy provides recovery for a personal property losses limited by which of the following

Actual cash value of the property involved,doller amount of the insured interest in the property

According the unfair practices act it is ok for

Advise an insured that a claim for an auto policy liss must be filed within a specified period of time as stated in the policy and approved by state statue

Which of the following is not a contributing factor to an agent acting unethically when selling homeowners insurance?

Keeping the clients best interest foremost in mind

According to the definition of an ideally insurable risk,which of the following is not a requirement

Loss must be the result of a catastrophic event

Of the following losses which are excluded under an unendorsed standard HO-3 policy form

Losses resulting from the enforcement of laws regulating construction

An insured owing a personal auto policy(PAP) has just purchased a new motorcycle but does not have coverage under the auto policy because

Motorcycles are only covered with the proper endorsment

There are several types of insurance company structures of the following which types have individuals that are both th epolicyholders and profit shares in the company

Mutual insurers

When life agents decide to advertise in newspaper or magazines for the sale of insurance products or services the california insurance code states that in order to inform the public of the protection that californiainsurance guarantee association provides

NEITHER(a)NOR(b)it is unlawful to mention in an ad that an insurance company is member of the association

Exclusive agents can be described as which of the following

None

What does the standard form umbrella policy privide

None of these as there is no standres form umbrella policy

Cancellation of property insurance is allowed after 60 days of the policy effective date for which of the following reasons

Nonpayment,change in the risk being insured,discovered of a criminal convention if the insured that increase the hazard insured against

The premises for a personal auto policy (PAP)inthe state of california are determined by which of the foolowing factors

Number of years of driving expirience of the insured,number of miles the insured drives to his /her place of employment,the driving safety of the insured,as well as other factors the insurer may adopt by regulation

How does an insured qualify for an HO-3 policy

Own thier residence,accupy thier residence

Living next to a factory manufactures explosives would be known as what type of hazards

Physical

In some insuranble circumstances a homeowners policy is not an option to insure a particular property,in these cases a dwelling policy is more appropiate,which of the following is a situation where a dwelling policy would be used

The dwelling has more than two units,the dwelling us used only on a seaonal basis,the dwelling is a rental and is not occupied buy the owner,the value,age,or condition of the dwelling does not allow the insurer to offer standard homeowner coverage

Which of the following characteristics must exzist in order for someone to be considered negligent

The individual breeched a legal duty to act or not to act, another persin was injusred or property was damage as a result of this breech,there was a direct or proximate cvause between the breech of the legal duty and the property damage or personal injury

Which of the following refers to the method whereby an insurance company must receive an official approval from the sate DOI before it is uses new reates

Prior approval

A personal auto policy which of the following types of payments without decreasing the limits of the policy

Reasonable expenses incurred at the request of the insurer,cost of defense attorney fees,premium on appeal bonds

If an insurance company transfers part of the risk associated with a particular policy to another insurance company this is known as

Reinsurance

The process whereby an insurer has an agreement with other insureres to share amounts of insurable over established retention limits is known as

Reinsurance

Physical damages losses covered by a personal auto policy can be settled in which of the following ways

Reparing the damaged vehicles,replacing the damage vehicle with a vehicle of the like and quality,paying a cash settlement to the insured

The formula for actual cash value is

Replacement cost minus depreciation

How is insurance marketed through direct mail companies

Salaried employees

The term that best describes an insurance company compensation an insured for a loss caused by another party and the subsequently the insurer recovers damages form the at fault partys insurer resulting in the insured voluntarily surrendering the right to sue party causeing the loss is known as

Subrogation

An agent legally represents the principle,can make payment to the principal and can be assumed to have the knowledge of the principal

True

An employee with a personal auto policy is driving a car owned by her employer this company car would not need an endorsment for liability coverage if the employee were to expirience an accident with the vehicle

True

An open peril or al risk policy is one that protecs against all losses except those that are listed in the policy as excluded

True

As stated in the policy if an insurer cancels a policy and returns the entire premium it is referred to as a flat cancellation

True

Comparative negligence is a legal doctrine that reduces liability damages in direct proportion to the amount of negigence to injured party is responsible for

True

Fast lane auto insurance company forms an agreement with slick sammy auto sales to make free auto insurance(specially physical damage coverage only)available as an incentive to those who buy vehicles form sammy the california code prohibits this activity

True

If an insurance contract contains an assignment clause the insured does not have to inform the insruance company of his transfer rights to another party

True

If an insurer chooses not to continue coveraage under an existing policy past the expiration date of the policy because the insured has submitted a significant number of claims or there has been an increase in the hazard insured against or if fraud was uncovere these are all grounds fro what is reffered to non-renewal

True

Imposing legal liability upon one person as the result of the actions of another person is lnown as vicarious liability

True

One of the basic premises od insurance is to restore the insured to the same(or virtually the same)condition that existed prior to the loss but no opportunity for gain or profit

True

The basic form dwelling policy excludes the peril of damages caused by burglars

True

The california code describes a fire casuality broker agent as someone who may recieve the authority to act as an agent for numerous admitted companies sells property and casuality insurances makes commissions for these sales and workers on behalf of these insurers

True

The california insurance code defines insurance as a legally binding contract i which one party the insurance comapany is agreeing to idemnify another party the insured for any liability,losses or damages that may arise as the result of either an unknown or contingent event

True

The insurance code allows insurers to ask questions about the birth place of applicants if the question is used only to identify the individual not to discriminate against the

True

The personal articles floated used in a homeowners policy also referred to as a schedualed personal property endorsment covers personal possessions such as jewelry camaras and furs on all-risk basis in a doller amount specified by the insured

True

The state of california has a financial responsibility law that requires minimum insurance limits per accident and property damage limits of $5,000

True

The unfair practices act says that any attempt to settle a claim by an insured for less than a reasonable person believes they were entitled to according to a written or printed advertising document which accompanies an application is an unfair and deceptive

True

Under the collision coverage of a personal auto policythe rental car expenses insurred by an insured after a covered accident are not covered unless the policy has been endoeresd for this expense

True

Vandalism damages to a personally owned automobile is covered under the physical damage section of a personal auto policy

True

You a licensed fire and casuality broker/agent tell a prospect she guaranteed the amount she will receive on a policy divided,if found guilty of this misdemeanor you can put in jail for 3 months

True

insurence companies are allowed to refuse insurenace charge a higher rate,or limit coverage on a person who has a physical handicap if theese lomitations restrictions or rating are based on sound acturial statistics or are related to reasonable anticipated expirience

True

Acording to the code insurance contracts made with a minor child have the same degree of validity as those made with a mentaly incompetent adult

True, they are not valid

Attempting to induce a policyholder to lapse forfeit or surrender existing insurance through the use of misleading representations or comparisons of insurer is the definition of

Twisting

Which department of an insurance company reviews the application that have been completed and submitted by a potential insureds to determine whether or not the individual qualifies for the coverage being applied for

Underwritting

Medical payments of $2,000 are provided under a personal auto policy,all of the following are true concerning this coverage except

Up to $2,000 will be paid for all injuries that result from an accident that occurs while the insured is giving his girlfriend a ride in the vehicle and both are injured

Stans young son accidently releases the brake on the family car causing it to roll down the drivewayacross the street and the strike the neighbors vehicle causing $1,800 damage to it,will stans personal auto policy pay for the damage,and id so which part will be covered

YES, the loss will be covered under the property liability section of stans policy

Is it true that the measure of liability as stated in a property insurance is the amount of insurable interest on the property

Yes

The guaranteed payment in the event of any type of accident claim or loss that an agent states in a sales presentation for auto insurance is an example of

a misrepresentation

all of the following are not examples of insurable risk situations except

a tenant whishes to purchase insurance coverage on improvements which he made on a building owned by the landlord

If the injuries or damages resulting from the behavior of an individual are so hazardous that public policy requiered that those causin geither are to be held legallyresponsible and therefore imposes responsibility it falls under of which of the following types of liability

absolute liability

How is personal property valued in a dwelling form policy

actual cash value

Which of the following is correct about a representation provided by either the insurance company or applicant in negotiations for an insurance policy

may ne altered, may be withdrawn

The failure to disclose to a prospective auto insurer that a person has had several at-fault accidents is referred to as

concealment

The mexico endorsment in a personal auto policy provides which of the following

coverage which is considered excess of the other insurance coverage for accidents that occur in mexico with 25 miles of the US border

Which component of an insurance policy indicates who and what are insured

decleraions

According to california insurance law,who is legally allowed to cancel an insurance policy

either the insurer or insured

Which of the following types of potential losses to dwelling and commercial property is covered by the national flood insurance program

expenses that are deemed reasonable in order to protect insured property from flood

If the person holds a life agent license an administrator certificate is not needed if that person is also collecting ongoing premium and processing claims in california for life and health insurance or annuities

false

Under the insurance information and privacy protection act the disclosure of information that is collected for insured transactions has been eliminated

false

When must earthquake insurance be offered according to the california earthquake authority

for all residential properties up to four units

Which of the following tyoes of insurance can a fire and casuality broker/agent transact after receving an appointmentby an insurer

health,property and auto insurence

If the proper amount of coinsurance is maintained which of the following formulas will be used to calculate the amount paid in the vent of a loss

insurance amount carried divided by the amount required times the loss minus the deductable

To which of the following classifications of transating do the ethical standards regarding replacements of homeowners,auto and disability insurance contracts not apply?

insureds and prospect who want full,fair and unbaised disclosure when replacing excisting contracts-->agents who are recommending replacement of existing contract should be replaced{all are required ethical standards to make the recommendation that is the best interest of the insured}

All of the following are true of insurance except

it eliminates risk

What is true about insurance

it is a form of transferring risk

Both concealment and representatiuons can be material to the facts,how materiality is best defined here

it is based on the influence of the facts on the parties on forming an opinion as the disadvantages of the considered policy

A representation can be presented

orally and in writting

In a personal auto policy the damage caused to a vehicle by hail storm would be covered by which of the following

other than collision coverage

In an HO-3 and HO-8 homeowners policy which two categories of coverage are identical

personal liability and medical payments

Section 2 of a homeowners policy provides two major categories of coverage,identify these two from the following choices

personal medical payments and additional living expenses

Which of the following are violation of the california insurance code provisions regarding an agent capacity in handling an aproviding advice to clients on insurance claims

presenting a false claim for payment of a loss preparing a false claim for a friend as a favor

From the following who is eligible to obtain flood coverage under the national flood insurance program

property owners that reside in communities designated as quality to participate in the national flood insurnce program

Property insurance can be provided under the california fair plan for which of the following categories ofproperties

propeties located in hazardous brush areas,well maintained propertieslocated in neighborhoods that are subject to civil distrubances

All of the following are withing the insurance code definitions of transacting insurance except

purchasing a lavish vacation with the commission money

Admitted auto insurers cannot decline an application for auto insurance for a reason that doesnt apply to people of every

sexual preference,religion,race,ancestry

If an insurer cancels a policy and subsequently retains any earned premium plus an added amount to cover overhead wxpenses incurred it is referred to as

short rate cancellation

An HO-3 policy can be used to provide coverage for what type of risk

single family detached dwelling

The type of dwelling policy form that provides the broadest coverage is

special

The insurance code provides which of the selections listed below

state of california law as applied to the practice and pricinples of insurance

An insurance company which is owned bu individuals who purchase of stock in the company share in profit in proportion to share owned and vote for a board of directors is know as what tyoe of insurer

stock insurer

When can an application for a personal lines broker agent be denied without a hearing

the applicant has had an application for a license previously denied within 5 years for cause

which best defines the structure of a stock company

the company is managed by a board of directors who are elected by shareholders

One which of the following dates does the authority given to a licensee from an insurer to transact insurance becomes effective

the date the insurer signs the notice of appointment

Personal auto policies can be cancelled by an insurance company under which of teh following circumstances

the drivers license of the person who normally drives the vihecle has been suspended

From the choices listed,choose the one that best describes insolvency as it relates to insurance

the inability of an insurer to meet financial obligations to policy owners as a result of deficient amount of paid-in capital

Amie forgets about a minor auto accident she had some years ago.an auto insurance policy is issued t her, short time after policy insurance she is in a car accident and files a cliam for the damages,the discovered just a day after the accident since

the insurer would only cancel if these concealed facts were material

of the following which is true regarding the principle of the large numbers

the predictability of losses occuring becomes more accurate as the number of insured units increases

What type of coverage does a comprehensive personal liability policy extend under section 2of a homeowners policy

the premises described in the policy combiened with on or off premises personal activities of the insured

The life analysist is allowed to charge a fee for servicees provided as long as it is stated in writing in advance of performing the services each of the following must be included in this written agreement,except

the services which will be performed and provided but which no fee will be charged

If an insurer is deemed an admitted company in california

they are approved to sell insurance products in this state

A public insurance adjuster is a licensed person who earns financial compensation working on behalf of an insured and helps to settle insurance claims

true

It is illegal according to provisions of the california insurance code for personal lines broker agent to act as an agent for a non admitted insurer and to advertise the products of non-admitted insurers in california

true

which best defines risk

uncernity of loss

Personal property is covered in a dwelling policy away from the premises anywhere in the world for which of the following amounts

up to 100% of the amount for coverage for personal property there is no coverage away from the premises

Broad perils homeowners policies included coverage for all of the following except,

water damage to the insureds personal property resulting from rain entering the dwelling through a window left open by the insured

When does the license of a personal lines broker agent become inactive

when the agent is not currently appointed by an insurer but renewal fees are paid and continuing education requirements on file for him/her