Texas Practice Exam 4
What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy? a. $100,000 b. $1,000 c. There is no limit. d. $10,000
a. $100,000
A document that temporarily obligates an insurance company to provide coverage while the issuance of a policy is pending is known as: a. A binder. b. An application. c. An endorsement. d. A rider.
a. A binder.
If, during a legal proceeding, the court determines that the facts brought forth, together with the applicable law, fail to make a prima facie case, the court may, without consideration by the jury, administer: a. A directed verdict. b. A dismissal. c. A retrial. d. An Interpleader
a. A directed verdict.
Which of the following could be considered a "covered auto" under a standard ISO Personal Auto policy? a. A newly acquired car reported to the insurer. b. An owned vehicle not listed on the declarations page. c. A non-owned vehicle available for regular use. d. A vehicle used in speed contests.
a. A newly acquired car reported to the insurer.
Premium costs for Workers Compensation insurance are paid by: a. Employers only. b. Employees only. c. Employers and employees jointly. d. The workers compensation board.
a. Employers only.
Which of the following policy forms would BEST protect a business that must keep operating at any cost after a loss? a. Extra Expense b. Business Income c. Gross Earnings d. Contingent Business Interruption
a. Extra Expense
Which of the following is not covered under aircraft hull insurance? a. Personal Effects b. Fuselage c. Wheels d. Propeller
a. Personal Effects
All of the following are elements of insurability, EXCEPT: a. The risk must be unpredictable. b. The loss must be calculable. c. The risk must be unexpected. d. The loss must create a financial hardship.
a. The risk must be unpredictable.
Which of the following losses may not be determined by an adjuster? a. Use of a rental vehicle b. Bodily injury c. Medical bills d. Loss of income
a. Use of a rental vehicle
Loss to insured property caused by self-propelled missiles is covered under which of the following perils? a. Windstorm b. Riot c. Aircraft d. Vandalism
c. Aircraft
Which of the following would be considered a consequential loss under a dwelling policy? a. Water damage to a house as a result of a fire. b. A tree falling on a roof and a branch breaks a window. c. Food spoilage in a freezer as a result of a fire in the house. d. Smoke damage to a detached garage as a result of a fire.
c. Food spoilage in a freezer as a result of a fire in the house.
Which of the following best describes the purpose of workers compensation coverage? a. Medical b. Disability c. Indemnity d. Burial, loss of wage coverage and disability benefits
c. Indemnity
The Commercial Articles Coverage Form is designed to cover: a. Jewelry in excess of $250,000 b. Bulldozers and other construction equipment c. Musical instruments and related equipment; cameras and related equipment d. Retail sporting equipment
c. Musical instruments and related equipment; cameras and related equipment
The Texas Commissioner reasonably believes that a person has violated a cease and desist order. All of the following penalties may be imposed by the Commissioner, EXCEPT: a. An administrative penalty of $25,000 for each act. b. Order of complete restitution to all injured parties. c. A monetary penalty of $25,000 for each act and order complete restitution to all injured parties. d. A jail term of 30 days.
d. A jail term of 30 days.
If a commercial building has been vacant for more than sixty days, which of the perils are affected as regards coverage? a. Vandalism b. Freezing c. Fire d. All of the perils are affected
d. All of the perils are affected
Which of the following would be considered a "collision" peril under auto physical damage coverage? a. Riot b. Striking an animal c. Missiles or falling objects d. Hitting a pot hole
d. Hitting a pot hole
A standard commercial inland marine form is not available for which of the following? a. Equipment dealers b. Accounts receivable c. Valuable papers d. Release bill of lading
d. Release bill of lading
The insured is covered under a Businessowners Policy. He has several computers and the electronic data is corrupted as a result of lightning. The loss is $20,000. How much will the policy pay for the damaged data? a. $10,000 b. $20,000 c. Nothing d. $2,500
a. $10,000 The coverage provides up to an annual aggregate of $10,000.
The insured is covered under a personal auto policy with collision coverage and a $500. deductible. He is involved in an at-fault accident. The loss involves $4,000 damage to the vehicle and a $45.00 storage fee. How much will the insurer pay? a. $3,545 b. $4,000 c. $3,500 d. $4,045
a. $3,545
Under an Equipment Breakdown Protection policy with $500,000 in coverage, a covered "accident" resulted in the following: I. $500,000 worth of damage to the property. II. $10,000 damage to the property of another in the insured's care. III. $5,000 in legal fees to defend the insured in this case. The policy will pay a total of: a. $505,000. b. $500,000. c. $510,000. d. $515,000.
a. $505,000.
Coverage for earthquakes and volcanic eruptions may be attached to Commercial Property Insurance. When the Earthquake Cause of Loss Form is attached, a series of earthquakes or volcanic eruptions will be treated as a single event whenever the series of shocks or eruptions occurs within a: a. 168-hour period. b. 24-hour period. c. 48-hour period. d. 96-hour period.
a. 168-hour period.
A Texas insurer is liable for a claim but is in violation of Texas regulations as to the timely payment of the claim. Texas requires that the insurer must pay, in addition to the settlement amount, interest on the amount of the claim at the rate of _____% per year. a. 18 b. 15 c. 20 d. 17
a. 18
What type of passenger would not be covered under an aircraft liability policy with passenger coverage excluded? a. A Travel Agent b. Pilot c. A Flight Attendant d. Company Aircraft Mechanic
a. A Travel Agent
Which of the following physical damage losses would be covered by a Personal Auto Policy providing Comprehensive (other than collision) and Collision Coverage? a. A front tire blows out in a high-speed head-on collision, which also causes extensive damage to the vehicle. b. An insured did not add antifreeze to his radiator and the engine is damaged when the cooling system freezes. c. A radar detector is destroyed when an insured hits a tree after skidding on a patch of ice. d. The bearings in a rear wheel burn out after 85,000 miles of use.
a. A front tire blows out in a high-speed head-on collision, which also causes extensive damage to the vehicle.
Under a surety bond, the "principal" is the party that: a. Agrees to fulfill an obligation. b. Agrees to pay damages if default occurs. c. Provides the bond in exchange for a fee. d. Will be paid damages if default occurs.
a. Agrees to fulfill an obligation.
An interline endorsement used in a Commercial Package Policy (CPP): I. May be mandatory or optional. II. Is an endorsement that applies to more than one line of insurance. a. Both I and II b. I only c. II only d. Neither I nor II
a. Both I and II
Jean Tyler has the automobile coverages listed below under a personal auto policy. Select the coverage that would apply when a baseball is hit through Ms. Tyler's windshield. a. Comprehensive (other than collision) b. Bodily Injury and Property Damage Liability c. Collision d. Medical Payments
a. Comprehensive (other than collision)
Which of the following coverages would apply to a rental car used by an insured executive while on vacation? a. Coverage for nonowned autos. b. Drive other car coverage. c. Garagekeepers legal liability. d. Truckers coverage.
a. Coverage for nonowned autos.
Which of the following would not be considered an unfair claims practice? a. Failing to pay an uncovered claim. b. Failing to affirm or deny coverage of claims within a reasonable time after proof of loss requirements have been completed and submitted by the insured. c. Failing to adopt and implement reasonable standards for prompt investigation and processing claims arising under insurance policies. d. Misrepresenting to insureds or claimants pertinent facts or insurance policy provisions relating to any coverage at issue.
a. Failing to pay an uncovered claim.
This Ocean Marine insurance coverage protects the vessel owner in the event that cargo shipping costs are not paid. a. Freight Insurance b. Hull Coverage c. Cargo coverage d. Protection and Indemnity
a. Freight Insurance
Watercraft liability, medical expenses and uninsured boaters are coverages provided under which of the following policies? I. Watercraft. II. Homeowners. III. Mariners. a. I only b. I and III only c. III only d. I, II, and III
a. I only
Under the personal automobile policy, the definition of a "covered auto" for Coverage A - Liability includes: I. Private passenger autos the named insured acquires during the policy period. II. Trailers owned by the named insured. III. Autos or trailers not owned by the named insured that are being used as a temporary substitute. IV. Farm wagons or implements towed by a covered vehicle. a. I, II, III, and IV b. I , II, and III only c. I and III only d. I and II only
a. I, II, III, and IV
A personal watercraft policy would pay for which of the following losses? I. A boat's motor is stolen on the 25th day after the insured acquired it, and before the insured reported its acquisition to the insurance company. II. A boat that sank in 40 feet of water is refloated at a cost of $700. a. II only b. I only c. Both I and II d. Neither I nor II
a. II only
Which of the following statements is NOT correct regarding proof of loss? a. It is the insureds option to complete. b. The insurance company requests it. c. It confirms the insureds opinion of the loss. d. It is often a sworn statement.
a. It is the insureds option to complete.
The Building and Personal Property Coverage Form includes which of the following Coverage Extensions? a. Newly Acquired Property b. Outdoor Signs c. Replacement Cost d. Rental Value
a. Newly Acquired Property
The insured awoke and found that a water line on his side of the water meter has broken. Several thousand gallons of water have escaped. The water company bills the insured for the loss of the water since the breakage occurred on their side of the meter. Their insurance company will: a. Not pay for the loss of water. b. Pay for the loss of the water. c. Apply a deductible to the loss of the water. d. Subrogate against the plumber that installed the water line.
a. Not pay for the loss of water.
Which of the following terms best describes an accident including continuous and repeated exposure to similar harmful conditions? a. Occurrence b. Accident c. Liability d. Negligence
a. Occurrence
Which of the following policies would be used to cover imports and exports? a. Ocean marine b. Personal Property c. General Liability d. Businessowners policy
a. Ocean marine
Under the provisions of the Standard Fire Policy, an insured may file a suit to recover for a loss only if all of the policy requirements have been complied with. The suit must be brought within: a. One year. b. Two years. c. Three years. d. Four years.
a. One year.
A dead tree beside Jerry's home is best described as which of the following types of hazards? a. Physical hazard. b. Proximate hazard. c. Moral hazard. d. Morale hazard.
a. Physical hazard.
All of the following would be covered under a Builders Risk Policy, EXCEPT: a. Prospective buyer. b. Contractor. c. Owner. d. Sub-contractor.
a. Prospective buyer.
In a liability policy, the limits of coverage can be expressed as all of the following, EXCEPT: a. Restricted b. Single c. Split d. Aggregate
a. Restricted
The conditions section of an insurance contract sets forth the: a. Rules of conduct for the insured and the insurance company. b. Limits of liability under the contract. c. Coverages provided by the contract. d. Exclusions of coverage under the contract.
a. Rules of conduct for the insured and the insurance company.
An insurance company that intends to non-renew a policy must take which of the following actions? a. Send a written notice to the insured stating the reason for non-renewal. b. Obtain coverage for the policyholder from another insurance company. c. Obtain coverage for the policyholder under the FAIR Plan. d. Provide a list of other insurance companies that might provide a market for the coverage.
a. Send a written notice to the insured stating the reason for non-renewal.
All of the following are reasons for cancellation of a property insurance policy, EXCEPT: a. Several large claims. b. Nonpayment of premium. c. Conviction of the named insured of a crime arising out of an act increasing the hazard insured against. d. Substantial change in the risk assumed by the insurer since the policy was issued.
a. Several large claims.
What is the definition of "agent"? a. Someone who represents an insurance company in the soliciting and negotiation of insurance. b. Someone who shops and obtains insurance for the insured. c. Someone with a certificate of authority. d. Someone who only handles claims for an insurer.
a. Someone who represents an insurance company in the soliciting and negotiation of insurance.
Which of the following is the first duty of the insured after suffering a property loss? a. Take steps to protect the property from further loss. b. Have the damaged property appraised. c. Hire an outside claims adjuster. d. Increase his coverage.
a. Take steps to protect the property from further loss.
Ocean marine coverage for losses to the insured vessel caused by bursting boilers, latent defects in the vessel and negligence of the master or crew members are addressed by which of the following? a. The Inchmaree clause. b. Protection and indemnity coverage. c. Hull coverage d. Barratry
a. The Inchmaree clause.
Under the standard Equipment Breakdown policy loss settlement provisions, what date is used to determine value? a. The date of the loss. b. The inception date of the policy. c. The original date of the equipment purchase. d. The market value of the equipment.
a. The date of the loss.
Robert boards his dog at a kennel while he is on vacation. While at the kennel, the dog bites a meter reader. How would Robert's HO-3 policy respond to the meter reader's request for repayment of his emergency room costs? a. The insurer will pay for necessary emergency room expenses under the Medical Payments to Others provision. b. The insurer will pay for the emergency room fees only if Robert is found negligent in leaving his dog at the kennel. c. The insurer will not pay for the loss because the injuries occurred away from the insured location. d. The insurer will not pay for the loss because it arose out of the kennel owner's failure to render professional services.
a. The insurer will pay for necessary emergency room expenses under the Medical Payments to Others provision.
Under an HO form with replacement cost coverage, what is the maximum amount that will be paid in case of a covered loss? a. The limit of coverage b. Limit of liability c. Actual cash value d. Depreciated value less the deductible
a. The limit of coverage
The insured is covered under a BOP and sustains a direct loss to his building and contents. What is the period of time the policy provides coverage for the loss of income? a. The policy pays for up to twelve months after the loss. b. The policy pays for up to six months. c. The policy pays for up to eighteen months. d. Loss of income is not included and coverage must be added by endorsement.
a. The policy pays for up to twelve months after the loss.
The HO-6 policy provides full replacement cost coverage if it is rendered a total loss by fire, EXCEPT: a. The structure portion occupied by the insured as a residence b. Improvements and betterments made to the structure by the insured c. Structures owned by the insured other than the residence d. Replacement cost coverage does not apply under the HO-6 form
a. The structure portion occupied by the insured as a residence
Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay? a. The water damage. b. The increased cost of the water bill. c. The cost to replace the particular part in the plumbing system that busted and caused the damage. d. The furnace repairs and/or replacement.
a. The water damage.
Under "pollution cleanup and removal" coverage under the standard ISO BOP form, when must a loss be reported? a. Within 180 days b. Within 60 days c. Immediately d. Within 90 days
a. Within 180 days
All Texas adjusters are required to complete 24 hours of continuing education each reporting period. How many of those hours must cover the subject of "ethics"? a. 3 hours b. 2 hours c. 1 hour d. 4 hours
b. 2 hours
Businessowners policies provide "Preservation of Property" coverage when property is removed from the premises to protect it from a covered cause of loss. The coverage will apply at other locations for up to: a. 60 days b. 30 days c. 10 days d. 20 days
b. 30 days
In order to receive full replacement cost recovery on a covered loss under a BOP, the named insured must maintain insurance limits equal to at least what percentage of the covered property's full replacement value? a. 100% of the property value b. 80% of the property value c. An agreed amount on the value of the property d. 90% of the property value
b. 80% of the property value
A non-waiver agreement issued by an insurance company is: a. A loss or damage issue. b. A coverage issue. c. A cause of loss issue. d. An exclusion issue.
b. A coverage issue.
Which of the following would be considered a personal automobile comprehensive ("other than collision") claim? a. A shopping cart hitting the vehicle. b. A load of bricks falling from an apartment building onto the car. c. A hit and run driver striking the vehicle. d. An uninsured motorist colliding with the vehicle.
b. A load of bricks falling from an apartment building onto the car.
Under which of the following claims settlements are the claim invoices presented and paid with no attempt to obtain a separate release? a. A partial release. b. A walk-away release. c. An open-end release. d. Structured settlement.
b. A walk-away release.
Which one of the following statements regarding workers compensation insurance in Texas is false? a. Workers compensation provides compensation to employees who are injured on the job, without regard to fault or negligence on the part of either the employer or employee. b. All Texas employers are required to obtain workers compensation coverage for their employees. c. Providing workers compensation protects the employer from tort liability. d. Workers compensation's primary advantage for the injured employee is that it provides a quick and certain means of compensation.
b. All Texas employers are required to obtain workers compensation coverage for their employees.
Which of the following describes a moral hazard? a. Faulty wiring b. An arsonist applying for property insurance c. Laziness and apathy d. Twelve appliances plugged into one electrical outlet
b. An arsonist applying for property insurance
Which of the following statements concerning installation floaters is not true? a. The form covers property sold by the insured and transported to another location to be installed. b. Coverage is written on a named perils basis only. c. "Hoisting" coverage is a feature often written into Installation Floaters. d. Coverage may be written on a monthly reporting basis.
b. Coverage is written on a named perils basis only.
Dan has coverage under an HO-3. He borrows Mike's scuba diving equipment for a trip to Puerto Rico. While in Puerto Rico, Mike's scuba diving equipment is stolen. Mike's property is: a. Excluded by the care, custody and control rule. b. Covered anywhere in the world at the insured's request. c. More appropriately turned in under Mike's HO policy. d. Covered for up to $500.
b. Covered anywhere in the world at the insured's request.
Aircraft hull insurance will provide coverage for which of the following? a. Damage to or loss of the aircraft hull, fuselage, and personal injury caused. b. Damage to or loss of the aircraft hull or fuselage. c. Damage to or loss of the aircraft hull, fuselage, and medical payments. d. Damage to or loss of the aircraft hull, fuselage, and property damage to others.
b. Damage to or loss of the aircraft hull or fuselage.
An orthotic device is a custom-fitted or custom-fabricated medical device that is applied to a part of the human body to: I. Correct a deformity. II. Improve a bodily function. III. Relieve the symptoms of an injury. IV. To wholly or partially replace an arm or a leg. a. I and II only. b. I, II and III only. c. I, II, III & IV. d. I, II and IV only.
b. I, II and III only.
An insurance policy is a contract. If any part of the policy language is ambiguous, the court will generally rule: a. In favor of the insurer since the forms were filed and approved by the insurance department. b. In favor of the insured. c. That the policy can be rewritten. d. To refund the premium back to the insured.
b. In favor of the insured.
A claim is made on an excess liability policy. It is discovered during the claims investigation, that the underlying liability policy and the excess liability policy have different inception and expiration dates. The adjuster finds that the different dates has created a situation where the underlying policy was not in effect at the time of the occurrence, and therefore cannot trigger the excess liability policy to pay the claim. This situation is known as: a. Contribution by Equal Shares. b. Nonconcurrency. c. Liability Discrepancy. d. Split Limits.
b. Nonconcurrency.
Scott lives in Texas and has submitted a claim to his insurance company. He has received notice from the insurer that the claim is covered under the policy and they will be paying the claim. How long does the insurer have to pay Scott's claim according to Texas law? a. Not later than the tenth business day after the notice was made. b. Not later than the fifth business day after the notice was made. c. Not later than the 30th business day after the notice was made. d. Not later than the 30th business day after the claims report was received in all circumstances.
b. Not later than the fifth business day after the notice was made.
A Texas adjuster may be subjected to a criminal penalty for all of the following, EXCEPT: a. Acting as an adjuster without a license. b. Not paying court mandated child support. c. Adjusting a claim for workers' compensation when holding a Property & Casualty adjuster license. d. Adjusting a Homeowners claim when holding only a Workers' Compensation adjuster license.
b. Not paying court mandated child support.
An insured purchases several different insurance policies that provide coverage in an amount that would allow him to make a profit from a covered loss. This is known as: a. Indemnification. b. Overinsurance. c. Reinsurance. d. Sharing a risk.
b. Overinsurance.
The insured has his home insured on a HO-2 policy. Lightning has struck the home and causes a fire. The insured takes as much property out of the house as possible awaiting arrival of the fire department that assists him. Some of the property is damaged by the fire department and some friends while moving the property into a pickup truck not owned by the insured. What coverage and under what clause could the insured pursue coverage for his damage? a. Debris Removal Clause b. Removal Clause c. Impaired Property Clause d. Reasonable Repair Property Clause
b. Removal Clause
Linda has received an inquiry from the Texas Commissioner. She realizes that she is required by law to respond to the inquiry, however her response contains information that is confidential and privileged. Which of the following is true of Linda's response to the Commissioner's inquiry? a. The information must be provided to the Commissioner and when Linda sends her response in writing, the information is no longer considered privileged or confidential. b. The information will remain confidential and privileged until it is introduced as evidence in an administrative hearing or in a court of law. c. The portion of Linda's response that is privileged and confidential will be redacted after the Commissioner reviews her response. d. Linda is prohibited by law from including privileged or confidential information in her response.
b. The information will remain confidential and privileged until it is introduced as evidence in an administrative hearing or in a court of law.
The insured owns an expensive rare painting. He has it appraised by an art dealer and has it insured for $50,000 under a personal articles floater. There is a market decline for this item. It is destroyed in a fire at his office. The company offers him $40,000, the current market value. How will the loss be handled? a. The item is not covered because it was away from the insured's residence at the time of the loss. b. The insurance company will cover the item for the full $50,000 amount. c. The insurance company is correct in offering fair market value at the time of the loss. d. The insurance company will ask for a reevaluation of the item based on records and documentation of the price paid, the current market value and the appraised value.
b. The insurance company will cover the item for the full $50,000 amount.
Which of the following correctly describes "Included Operations" as it relates to Automobile Physical Damage claims? a. The separate sections of the unibody frame that needed to be repaired, and the repair costs for each. b. The separate tasks that are included as part of a repair procedure, and the labor cost to perform these procedures. c. The separate tasks to repair an automobile are grouped into "included operations" and the labor costs for each group of tasks is listed on the repair estimate. d. The number of bolted parts that must be removed from a conventional body frame in order for repairs to be made, and the labor costs to remove them.
b. The separate tasks that are included as part of a repair procedure, and the labor cost to perform these procedures.
The aggregate limits of an expiring claims-made policy are reinstated under: a. The basic extended reporting period. b. The supplemental extended reporting period. c. Limits can never be reinstated when claims are paid. d. Only under a new renewal policy.
b. The supplemental extended reporting period.
Under the ISO standard Businessowners form, the building limit of insurance is $100,000 and the deductible is $1,000. The building loss amount is $110,000. Which of the following is the correct loss payment? a. $89,000 b. $110,000 c. $99,000 d. $100,000
c. $99,000
The Businessowners policy provides loss of income on an "actual loss" sustained basis for up to: a. 24 months b. 6 months c. 12 months d. 18 months
c. 12 months
The coverage extension "Business Personal Property Temporarily in Portable Storage Units" will provide $10,000 of coverage for up to: a. 60 days b. 120 days c. 90 days d. 30 days
c. 90 days
Loss of rental income on an apartment building caused by an insured peril is best described as: a. A direct loss. b. A loss that can never be covered under a Commercial Property policy. c. A consequential loss. d. A loss that would be covered only if the fire was friendly.
c. A consequential loss.
ABC Office Temps and Clean-Rite Dry Cleaning are both located in a strip mall and share a common party wall. Fire begins in the dry cleaners and damages the party wall. Clean-Rite decides to go out of business. How will the BOP policy of ABC Office Temps respond regarding the party wall? a. Each policy will split the cost of the repair to the party wall b. Clean-Rite will be responsible for the entire loss c. ABC's policy will repair the party wall and subrogate against Clean-Rite d. ABC will be responsible for the entire loss
c. ABC's policy will repair the party wall and subrogate against Clean-Rite
The insured has several locations and desires to insure his contents coverage. His agent advises him to complete a statement of values form and issues a policy with one limit to cover all locations. This is an example of: a. Specific coverage. b. Reporting form coverage. c. Blanket coverage. d. Location basis.
c. Blanket coverage.
If a ship's captain must jettison a disproportionate amount of his policyholder's cargo in order to save the ship, there is a provision in Ocean Marine policies that will spread that lost among all of the insureds involved with the ship. What is this provision called? a. Free of Particular Average clause. b. Cost in Freight clause. c. General Average clause. d. Free on Board clause.
c. General Average clause.
What is the difference, if any, between self-insurance and private insurance when it comes to Workers Compensation insurance? a. There is no difference b. In private insurance, the employer pays for claims; in self-insurance, the employee pays c. In private insurance, the insurer pays for claims, in self-insurance, the employer pays d. In private insurance, the state fund pays; in self-insurance, the employer pays
c. In private insurance, the insurer pays for claims, in self-insurance, the employer pays
The Fit and Trim Fitness Center wants to reduce its carbon footprint. A covered loss destroys some treadmills, damages the roof and most of the interior walls. Fit and Trim finds replacement treadmills that generate and actually return energy to the power grid. The cost is 15% higher than standard equipment. Which of the following, if any, would pay the increase? a. Ordinance and Law Coverage b. Fungi, Wet and Dry Rot c. Increased cost of loss and related expenses for "green" updates d. Consequential Loss Coverage
c. Increased cost of loss and related expenses for "green" updates
Mr. Vickers was in a hurry to catch a plane. He parks his car in the parking garage at the airport and leaves the keys in the ignition. When he returns he finds that his car has been stolen. Later the car was discovered with severe collision damage. The airport carries Garagekeeper's Legal Liability coverage and Mr. Vickers carries Liability and Comprehensive coverage on his auto. What coverage would apply? a. No coverage because there were no signs of forcible entry into the vehicle. b. Mr. Vickers' Collision coverage. c. Mr. Vickers' Comprehensive coverage (Other Than Collision). d. The airport coverage.
c. Mr. Vickers' Comprehensive coverage (Other Than Collision).
Damages awarded to a plaintiff in a tort action that are in excess of the cash value of the economic loss, as a punishment to the wrongdoer and as a deterrent to similar conduct by others, is known as: a. Compensatory damages. b. General damages. c. Punitive damages. d. Special damages.
c. Punitive damages.
All of the following are additional property coverages under the homeowners program, EXCEPT: a. Debris removal. b. Reasonable repairs. c. Special damages. d. Loss assessment.
c. Special damages.
In order to proceed with subrogation, the insurance company generally: a. Verifies equity if not established in contract b. Has the right to request a motion in replevin c. Takes a subrogation assignment from the insured d. Verifies that the claim is of the sort contractually allowed by the subrogation clause
c. Takes a subrogation assignment from the insured
What are the unique features of the ISO standardized Businessowners policy form? a. The BOP provides "Owned Auto" and "Ocean Marine" coverage. b. The BOP premium is adjustable, and is based on number of employees in the coverage business. c. The BOP provides "open peril" coverage for property. d. The BOP has fewer exclusions than other commercial property policies.
c. The BOP provides "open peril" coverage for property.
Ellie's Engineering Inc. has several warehouses and it is necessary for employees to transport different items between the warehouses, depending on what products are being manufactured at any given time. One day Bill, Karen, and Josh were required to load several containers of an explosive chemical onto a truck to transport it across town to another warehouse. Karen knew that the chemical must be handled carefully to prevent it from exploding, but she did not refuse to move the containers nor did she indicate to Bill and Josh that the chemical was dangerous. After loading the containers, Josh is moving the truck out of the loading zone and negligently backs it into a brick wall, injuring all three workers. Bill died from the injuries several days after the accident. Which of the following statements most accurately describes the common-law defense(s) that Ellie's Engineering might use to defend themselves against a lawsuit filed by Karen? a. The contributory negligence doctrine only. b. The assumption of risk, contributory negligence, and fellow worker doctrine. c. The assumption of risk and the fellow worker doctrine only. d. The assumption of risk only.
c. The assumption of risk and the fellow worker doctrine only.
If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured: a. No action needs to be taken unless the breach is ongoing for more than 30 days. b. No action is necessary at all. c. The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid. d. The insurer must be notified within 10 days after the breach and no additional premium is assessed.
c. The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid.
Which of the parties to a bond is the insurance company? a. The principal b. The obligee c. The surety d. The agency
c. The surety
The insured has an HO-3 policy. He is robbed and the thief stole $500 in cash. What amount, if any, can the insured collect under his Homeowner policy disregarding any deductibles? a. $100 b. Nothing c. $500 d. $200
d. $200 The Homeowner policy limits the theft of money to $200.
Identify the coverage NOT included for a $25,000 limit of insurance under the ISO Equipment Breakdown policy. a. Ammonia Contamination b. Consequential Loss c. Data and Media d. Fire Damage
d. Fire Damage
The selling of insurance products through the use of captive agents, independent agents, or insurance company employees in a call center are examples of: a. Unfair trade practices. b. Fair trade practices in insurance. c. Monopolizing markets. d. Marketing distribution systems.
d. Marketing distribution systems.
The most common method of settling liability insurance claims is through: a. ADRs. b. Arbitration. c. Mediation. d. Negotiated settlement.
d. Negotiated settlement.
All of the following types of signs can be covered by the Sign Coverage Form, except: a. Neon b. Fluorescent c. Electrical, not attached to a building d. Signs carved in stone or brick
d. Signs carved in stone or brick
The BOP provides liability coverages. Which of the following is a correct statement regarding the limits of coverage? a. The BOP only provides a Per Occurrence limit. b. The BOP only provides Aggregate Limits of Liability coverage. c. The BOP Liability section provides for Split Limits of Liability coverage. d. The BOP contains two Aggregate limits, one for Premises and Operations Liability and one for Products and Completed Operations. The coverage also has a Per Occurrence limit.
d. The BOP contains two Aggregate limits, one for Premises and Operations Liability and one for Products and Completed Operations. The coverage also has a Per Occurrence limit.
