A.D. Banker Property & Casualty (FL)
Intrepid Industries carries a CGL with a General Aggregate Limit of $300,000 and an Occurrence Limit of $100,000. After an occurrence resulting in a $200,000 loss, followed by a second occurrence resulting a $100,000 loss, how much of the General Aggregate Limit remains available against future claims?
$100,000 Following the first occurrence, the policy would pay $100,000 of the $200,000 loss, because the occurrence limit is $100,000. The second loss of $100,000 would be paid in full, leaving $100,000 in the Aggregate limit.
An insured's CGL has a Products and Completed Operations Aggregate Limit of $100,000 with a $20,000 limit per occurrence. Following claims for two separate occurrences in the amounts of $35,000 and $25,000, how much of the aggregate remains for all other claims in the policy period?
$60,000 Only $20,000 is paid by the insurer on each of the two claims because the per occurrence limit is $20,000. This reduces the remaining Aggregate to $60,000 ($100,000 - $40,000 = $60,000).
Under the PAP, after a collision the insured is entitled to Transportation expenses up to:
$600 The policy will pay a maximum of $20 per day, up to $600, for transportation expenses.
A wine store discovers that someone has vandalized their display shelves, causing $1,500 in damage to inventory. Further inspection reveals evidence of forcible entry to the store safe, causing another $500 in damage, and the loss of $5,000 in currency. How much will the store's crime policy pay under the Inside The Premises Theft of Money and Securities insuring agreement?
$7,000 All these losses would be covered. The Inside The Premises Theft of Money and Securities insuring agreement provides coverage for theft, disappearance, or destruction of money and securities inside the insured's premises, damage to the insured's premises when caused by an attempted or actual theft, and loss or damage to a locked safe, vault, cash register, cash box, or cash drawer that results from actual or attempted entry into such property.
A Personal Auto Policy is designed to cover:
An individual's or family's personal use of an auto The Personal Auto Policy is designed for insuring individuals and families. A private passenger automobile used for business purposes is eligible, but commercial automobiles are not eligible.
Which of the following is used to resolve differences between the insured and the insurer?
Arbitration The arbitration provision of the insurance policy provides a method of settling disputes between the insurer and the insured as an alternative to legal action.
Plaintiff K was injured after losing control of his skis on a slope with well-marked signs indicating the degree of difficulty. What legal defense is available to the ski resort to avoid liability for the injury?
Assumption of risk When a person participates in an activity where a certain type of injury is known to be probable, that person's rights of recovery are barred or diminished under the doctrine of Assumption of Risk.
Which of the following is not an insured under a Personal Auto Policy? A - A foreign exchange student living with the insured for the school year B - A thief involved in a high-speed police chase C - The resident teenage son of the insured who drives the vehicle without a license D - A spouse living in the same household
B - A thief involved in a high-speed police chase A thief is not considered an insured and is not driving the vehicle with permission.
Which of the following is not a common policy condition on a commercial property policy? A - Transfer of Rights and Duties B - Abandonment C - Inspection and surveys D - Premiums
B - Abandonment The Abandonment provision is found in the conditions section of the Commercial Property Coverage Part, but is not a common policy condition under the CPP.
The following qualifications are required for a life or health agent license, except: A - Complete 40 hours of classroom or correspondence instruction within 4 years immediately preceding the application B - Be at least 21 years of age C - Pass a written licensing examination D - Submit fingerprints and a background check
B - Be at least 21 years of age An individual must be at least 18 years of age.
Which of the following statements best describes the Other Insurance condition on a standard property insurance policy, when two separate property policies provide coverage for the same loss? A - One policy pays up to its limits and the other policy pays the balance B - Each policy pays its pro rata share of the loss C - Each policy pays an equal share D - Neither policy will make payment for the loss
B - Each policy pays its pro rata share of the loss The Other Insurance condition specifies the process to be followed when more than one policy covers the same loss. For property insurance, losses are settled on a pro rata basis, where each policy pays no more than its pro rata share of the loss.
Which of the following would not be covered under a Businessowners Policy unless specifically activated on the Declarations page? A - Fire Department Service Charge B - Employee dishonesty C - Money Order and Counterfeit Paper Money Coverage D - Exterior building glass
B - Employee dishonesty Employee dishonesty is one of four Optional Coverages. Optional Coverages apply only if there is an entry on the Declarations page indicating that one or more of them apply.
Which of the following is not found on the Declarations Page? A - Expiration date of the policy B - Exclusions C - Limit of liability D - Insured property address
B - Exclusions The Declarations Page contains the information necessary to tailor the policy to the individual and property insured. The exclusions are found in the Exclusions section of the policy and coverage forms.
Who among the following applicants for a motorcycle license would be required to complete a motorcycle education course? A - Applicants with a prior DUI conviction B - First-time applicants under the age of 21 C - First-time applicants under the age of 16 D - All first-time applicants
B - First-time applicants under the age of 21 All first-time applicants under the age of 21 are required to complete a motorcycle education course prior to obtaining a motorcycle license.
Which of the following would be eligible for a Businessowners policy? A - Go-Cart Racing Facility B - Funeral Home C - Credit Union D - RV Storage Facility
B - Funeral Home A funeral home is included as an eligible risk as a service business.
All of the following are true of insurance, except: A - It protects against uncertainty B - It eliminates risk C - It transfers risk D - It is a means of sharing loss
B - It eliminates risk Insurance transfers, but does not eliminate risk.
Personal injury liability includes which of the following? A - Sickness and disease B - Libel and slander C - Medical payments D - Theft
B - Libel and slander Personal injury liability is the legal liability for injury other than bodily injury or property damage. Examples of personal injury include libel, slander, false arrest, invasion of privacy, and copyright infringement.
All of the following statements about the Musical Instrument Floater are true, except: A - It may not be included in the scheduled personal property endorsement B - No additional premium is required if instruments are played for hire C - Claims are settled on an actual cash value D - Newly acquired items must be reported within 30 days
B - No additional premium is required if instruments are played for hire Playing for pay requires an endorsement and additional premium.
The Business Auto Coverage Form is intended for which of the following businesses? A - Owned, leased, or hired trucks, trailers and semi-trailers only B - Owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers C - Owned, leased, hired or borrowed private passenger autos only D - Owned or hired trucks, trailers and semi-trailers only
B - Owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers The Business Auto Coverage Form is used for insuring owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers used in the business of the insured.
All of the following are excluded from the Workers' Compensation Law, except: A - Domestic Servants B - Part time employees C - Farm Labor D - Casual Workers
B - Part time employees Farm labor, domestic servants, and casual workers are excluded from the law in most states. Casual workers are those whose work is nonrecurring or irregular.
Which of the following is true regarding the Medical Payments coverage under the Business Auto Policy? A - Medical Payments coverage is designed to provide medical payments coverage for employees B - The BAP does not automatically include Medical Payments coverage C - Medical Payments coverage pays loss of income during disability arising from a covered accident D - Coverage is limited to medical expenses incurred in the first year after the accident
B - The BAP does not automatically include Medical Payments coverage Commercial medical payments coverage is available by endorsement. The coverage is not automatically included in the commercial auto forms.
Which of the following most accurately describes the abandonment condition? A - The insured must make reasonable and necessary repairs to protect the property B - The insured cannot abandon damaged property to the insurer C - Abandoned property must be protected from further damage D - The insured must cooperate with the company in the investigation of a claim
B - The insured cannot abandon damaged property to the insurer The abandonment clause provides that the company will not accept property abandoned by an insured when there is a claim dispute.
Which of the following best describes the situation when a property has neither contents nor occupants? A - Unoccupancy B - Vacancy C - Ordinance or Law D - Abandonment
B - Vacancy A vacant building is empty of both contents and occupants. In contrast, an unoccupied building contains physical contents, but has no residents or ongoing business occupants.
Under the Garage Coverage Form, covered autos are usually written on which of the following basis?
Blanket By writing coverage on a blanket basis, the insured may be sure that all autos used in the business are covered, whether they are owned, non-owned, customers cars, or other.
If the settlement of a claim has been agreed to by the insurer and claimant, the insurer must pay no later than how long after the settlement is reached?
20 days If a person and an insurer have agreed in writing to the settlement of a claim, the insurer must pay according to the terms of the agreement no later than 20 days after the settlement is reached.
A new agent must complete ______ hours of continuing education every ______ year(s).
24 hours/2 years New agents must take 24 hours of continuing education every 2 years and agents licensed for 6 years or more must complete 20 hours in intermediate or advanced courses.
The Businessowners Protective Safeguards endorsement requires the insured to notify the insurer if an automatic sprinkler system is off for how long?
48 hours Because a premium reduction is granted for the protective systems listed in the Protective Safeguards Endorsement, the insurer insists upon being notified if the systems are not functional.
A driver's license may be issued to a 16 or 17 year old who completes an application and the parents certify that they accompanied her for how many hours of behind-the-wheel experience?
50 A driver's license may be issued to a person at least 16 but under 18 years old who completes an application, and if a responsible adult certifies that she, or another licensed driver over 21 years old, accompanied the applicant for a total of not less than 50 hours' behind-the-wheel experience, with at least 10 hours during the night.
Under disability income insurance, a monthly benefit will be ________ of the insured's monthly income.
66 2/3% To avoid over-insurance and possible moral hazards, a disability income insurance benefit will not be 100% of monthly income, but rather 66 2/3%.
Which coverage is not included in a standard Businessowners Policy?
72 hours Direct Damage from Utility Services The Utility Services Direct Damage coverage must be added by endorsement.
Under Uninsured Motorist Coverage of the Personal Auto Policy, which of the following would be an insured? A - A family member, occupying an insured auto struck by an uninsured vehicle B - The operator of an uninsured motor vehicle involved in an accident with the insured C - A family member occupying an uninsured auto D - The owner of an uninsured motor vehicle involved in an accident with the insured
A - A family member, occupying an insured auto struck by an uninsured vehicle Uninsured Motorists Coverage provides liability coverage for an uninsured vehicle involved in an accident with an automobile occupied by the insured or a family member. However, it provides no protection for the owner or operator of the uninsured auto.
Coverage B of a dwelling policy will not apply to a detached garage if which of the following is being stored? A - A helium tank used for the insured's business B - Ski equipment owned by the insured's 18 year old son C - A tenant's lawnmower with a full tank of gas D - A broken down farm tractor belonging to the tenant
A - A helium tank used for the insured's business No coverage is provided for other structures used in whole or in part for commercial, manufacturing, or farming purposes unless the property is only being stored and is owned by the insured or tenant and does not contain gaseous or liquid fuel located other than a fuel tank. The helium tank is not allowed for coverage to apply.
Which of the following statements is correct regarding motor vehicle inspections? A - An insurer may defer an inspection for 30 calendar days following the effective date of coverage for a new policy, but not for a renewal policy B - If the applicant fails to provide the required documents, physical damage coverage may be suspended during the term of the policy C - A physical damage loss occurring after the effective date of the coverage is payable regardless of whether the inspection documents are provided to the insurer D - The insurer must pay the cost of the inspection
A - An insurer may defer an inspection for 30 calendar days following the effective date of coverage for a new policy, but not for a renewal policy If the applicant fails to provide the required documents, physical damage coverage may NOT be suspended during the term of the policy. The applicant may be required to pay the cost of the inspection up to $5. A physical damage loss occurring after the effective date of the coverage is NOT payable until the inspection documents are provided to the insurer.
Which of the following is not a duty of the Florida Surplus Lines Service Office? A - Collect a service fee of up to 3.0% of the total gross premium of each surplus lines policy for the cost of operation of the service office B - Receive all surplus lines insurance policies or documents C - Prepare and send surplus lines records and reports to the service office D - Collect and remit the surplus lines tax to the department
A - Collect a service fee of up to 3.0% of the total gross premium of each surplus lines policy for the cost of operation of the service office The Service Office also collects a service fee of up to .3% of the total gross premium of each surplus lines policy from each surplus lines agent for the cost of operation of the service office, facilitates and encourages compliance with the surplus lines, and prepares and delivers quarterly business reports to each surplus lines agent.
Which of the following is true regarding coverage of trees, shrubs or plants under the Dwelling policies? A - Damage to plants by wind, hail, weight of ice, snow or sleet is not covered B - The Limit of Liability is $1,000 for any tree, shrub, or plant C - Theft of shrubs and plants is covered D - All vehicle damage to trees, shrubs, or plants is covered
A - Damage to plants by wind, hail, weight of ice, snow or sleet is not covered Damage to outdoor plants by forces of nature other than lightning are so common that such damage is considered uninsurable. Coverage for certain other perils is provided, with a limit of $500 for any one tree, shrub, or plant. Only damage from vehicles unowned by the insured is covered.
Choose the false statement about a Homeowners Policy. A - Earth movement is covered in all Homeowners policies B - Coverage C allows Coverage for loss due to theft of jewelry up to $1,500 C - Trees, shrubs, and plants are covered up to $500 each D - Theft from a dwelling under construction is not included
A - Earth movement is covered in all Homeowners policies Earth movement is excluded from all Homeowners Policies.
Which of the following is not an example of contingent liability exposure? A - Premises liability exposure B - Owners and Contractors Protective liability exposure C - Contractual liability exposure D - Liability exposure of an insured's sub-contractors
A - Premises liability exposure Contingent liability exposures exist when the insured is held liable for the actions or failure of actions of others. Premises liability is not a contingent liability exposure.
The Basic Causes of Loss Form under the Commercial Property Coverage Part would not cover which of the following? A - Steam boiler explosion B - Sprinkler leakage C - Sinkhole collapse D - Riot or civil commotion
A - Steam boiler explosion It is necessary to purchase Boiler and Machinery insurance to obtain coverage for steam boiler explosion.
Which of the following statements regarding Supplementary Payments under the CGL is false? A - Supplementary payments will reduce the limits of the policy B - Coverage only applies to losses under Coverages A and B C - The cost of bail bonds is included up to $250 D - Insurer claim related expenses are included
A - Supplementary payments will reduce the limits of the policy Claims payable under Supplementary Payments do not reduce the limits of the policy.
Which of the following is not true about an insurance policy? A - The insuring agreement includes the name of the insured B - An application is a document that provides information for underwriting purposes C - An insurance policy that pays before all other coverage is called primary coverage D - A deductible is a specified amount of loss that is retained by the insured
A - The insuring agreement includes the name of the insured The Insuring Agreement contains the insurer's promises to the insured. The insured's name is found in the Declarations.
Which of the following is not an example of a pure risk? A - Wall Street's decline in the stock market B - A tornado destroying a mobile home park C - A slip and fall injury at a large department store D - A fire causing a home to be uninhabitable
A - Wall Street's decline in the stock market A decline in the stock market is a speculative risk.
Z is a distributor of natural gas. While connecting gas to B's house, an explosion occurs and the house is destroyed. Z's defense is that B did not turn off the pilot light on her furnace before the hookup as instructed by the company. The court ruled that the activities of connecting gas lines were so dangerous that Z's defense did not relieve its liability. What legal principle is applicable in this case?
Absolute liability Some activities are so inherently dangerous that they are bound by the principle of Absolute Liability, which states that no degree of care taken by the insured can defend against a charge of negligence.
Which of the following methods of writing insurance is used to provide insurance on properties at different locations, using a single policy, and a single limit of insurance? A - Scheduled B - Unified C - Blanket D - Listed
C - Blanket Blanket insurance covers more than one item of property on one policy for a single amount of insurance, which applies to each item as needed.
The Condominium Commercial Unit-Owners Coverage Form does not cover which of the following? A - Improvements B - Appliances C - Building exterior wall D - Business personal property
C - Building exterior wall The exterior wall is part of the common property covered by the Condominium Association Coverage Form.
All of the following statements are correct about a Homeowners Policy, except: A - A Homeowners Policy will not cover theft of a boat away from premises B - Home schooling is covered under a Homeowners Policy C - Coverage D of a Homeowners Policy includes loss of income from an incidental business D - Coverage D of a Homeowners Policy covers additional living expenses
C - Coverage D of a Homeowners Policy includes loss of income from an incidental business Coverage D does not cover loss of income from an incidental business.
The Department of Financial Services can impose which of the following penalties? A - $10,000 fine for failure to answer a subpoena B - Imprisonment up to 2 years for churning C - Fine for violation of a cease and desist order up to $50,000 D - $100,000 fine for a willful violation for submitting fraudulent signatures
C - Fine for violation of a cease and desist order up to $50,000 A willful violation for submitting fraudulent signatures is $75,000 per violation and $5,000 per violation for a non-willful violation.
Under the Workers' Compensation Policy, all of the following are true, except: A - Coverage applies to bodily injury due to disease, as well as to injury due to accident B - The policy covers litigation costs taxed against the insured C - Injury caused by an accident occurring after the policy period expiration date will be covered D - A covered injury must be caused by the conditions of employment
C - Injury caused by an accident occurring after the policy period expiration date will be covered The accident causing the bodily injury must occur during the policy period.
All of the following are true of the Fair Credit Reporting Act, except: A - A consumer has the right to obtain the substance of the information in the reporting agency file B - A report can be changed by court action only C - The Act protects the rights of the individual from overly intrusive information collection practices D - A consumer who was investigated must be informed whenever credit or insurance was denied because of an adverse report
C - The Act protects the rights of the individual from overly intrusive information collection practices If a consumer says that certain information is incorrect, the reporting agency must reinvestigate the facts and make changes as necessary.
Choose the answer that is true regarding the Homeowner HO-4 and HO-6 Forms. A - The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance B - Both provide Open Perils Coverage on the personal property C - The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself D - Losses are paid on a Replacement Cost basis
C - The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself Since the insured under the HO-4 Form does not own the structure, there is no Coverage on the building.
Which of the following might be considered a negligent act? A - Breach of an employment contract B - Assaulting a neighbor over a boundary dispute C - Unintentionally renting a leaky boat to vacationers D - Robbery of a sporting goods store
C - Unintentionally renting a leaky boat to vacationers A negligent act is a type of tort, which rules out breach of contract. It must be an unintentional, civil tort, which rules out both robbery and assault.
The Outdoor Property Extension under the Building and Personal Coverage Form insures against which perils? A - Fire, lightning, riot, civil commotion, aircraft, and vandalism B - Fire, lightning, windstorm, hail, riot, civil commotion and aircraft C - Fire, lightning, windstorm, hail, explosion, aircraft, and vehicles D - Fire, lightning, explosion, riot, civil commotion and aircraft
D - Fire, lightning, explosion, riot, civil commotion and aircraft The most that is paid under the Outdoor Property Extension is $1,000 per Occurrence, but not more than $250 on any one tree, shrub, or plant. The perils covered by this extension are fire, lightning, explosion, riot or civil commotion, and aircraft.
Choose the statement that is false regarding the Citizens Property Insurance Corporation. A - The Department requires all insurers holding a certificate of authority, other than joint underwriting associations, to provide windstorm coverage to eligible applicants B - Property insurers may make agreements to insure applicants unable to procure windstorm insurance through ordinary methods C - The association provides for windstorm coverage on residential properties up to $1 million for personal lines residential risks D - Mobile homes are not eligible for coverage even if used as dwellings
D - Mobile homes are not eligible for coverage even if used as dwellings Mobile homes are eligible for coverage if they are used as dwellings and are tied down in compliance with state requirements.
All of the following are true regarding Ocean Marine Insurance, except: A - There is no standard Ocean Marine Form B - Breach of certain implied warranties may cause the contract to become void C - Cargo coverage is generally written on a valued basis D - Rates for ocean marine insurance are strictly regulated
D - Rates for ocean marine insurance are strictly regulated Ocean Marine coverage is generally unregulated with respect to both forms and rates.
Which of the following statements is false regarding the Florida Automobile Joint Underwriting Association (FAJUA)? A - The FAJUA provides automobile liability insurance for individuals who have been unable to obtain auto insurance through normal markets B - Losses and expenses are equitably apportioned among the member insurers C - Each auto insurer must be a member of the Association D - The FAJUA provides automobile liability insurance when an insurer becomes insolvent
D - The FAJUA provides automobile liability insurance when an insurer becomes insolvent The FAJUA provides automobile liability insurance for individuals who have been unable to obtain auto insurance through normal markets, not claims for an insolvent insurer.
The Workers' Compensation Policy Conditions Section includes which of the following? A - The supplementary coverages B - The list of states where coverage applies C - Name, address, and type of business of the insured D - The cancellation policy
D - The cancellation policy Part Six - Conditions of the Workers' Compensation Policy includes the cancellation requirements.
Which of the following are found in the Workers' Compensation Policy Conditions section? A - Supplementary coverages B - List of states where coverage applies C - Name, address, and type of business of the insured D - The cancellation policy
D - The cancellation policy Part Six of the Workers' Compensation Policy includes the cancellation requirements.
Under which form is the Coverage B limit included in the overall policy limit represented by Coverage A?
DP-1 Under the DP-2 and DP-3, the Coverage B amount is paid in addition to the limits represented by Coverage A. Under the DP-1 form, the Coverage B amount is included in the limit represented by Coverage A. There is no DP-4 policy.
Which type of loss does not reduce an aggregate limit within the Businessowners Coverage Form - Section II?
Damage to Premises Rented to You The aggregate limits do not apply to losses that involve Damages to Premises Rented to You.
Which of the following is an element of fiduciary responsibility?
Duty of Loyalty Fiduciary responsibilities are connected to a person's position of trust in relation to the money or property of others. These include the duties of care and loyalty, in addition to exhibiting due diligence when handling the money and property of the corporation.
Which of the following is attached to a property and casualty insurance policy to amend policy provisions or conditions?
Endorsement Endorsements are used to modify a policy. They may be used to broaden or restrict coverage, or further define conditions.
Which of the following properties is ineligible to be insured under a Dwelling Policy?
Farms Dwellings located on farms are not eligible. Dwellings must be used principally for residential dwelling purposes and cannot have more than 4 dwelling units. Incidental business occupancies, such as schools, studios, and offices, are permitted if the primary use of the dwelling is as a personal residence.
Most of H's jewelry is covered under the Coverage C special limits except for her $10,000 necklace inherited from her mother. Which of the following endorsements might H's agent recommend?
Scheduled Personal Property The Scheduled Personal Property is used to increase limits of liability for certain categories of personal property and to broaden the perils insured against that apply to that property.
Which section of the Garage Coverage Form provides physical damage coverage for the insured's covered autos?
Section IV Section IV of the garage coverage form provides physical damage coverage for covered autos the named insured owns, hires, rents, leases, or borrows in the same fashion the business auto coverage form provides coverage.
The time period in which a lawsuit may be filed after the occurrence of a claim is referred to as:
Statute of limitations Statute of limitations is the length of time from the date of claim that legal proceedings may be initiated. This time period is established by federal or state law
The Personal Articles Floater is similar to which of the following endorsements?
The Scheduled Personal Property Endorsement The PAF and the Scheduled Personal Property Endorsement to the Homeowners Policy are nearly identical.
Which of the following Federal Workers' Compensation Laws applies to ship workers that load, unload, build and repair ships?
The U.S. Longshoremen and Harbor Workers' Compensation Act The only coverage available for workers who load, unload, build and repair ships is the U.S. Longshoremen and Harbor Workers' Compensation Act.
Short rate cancellation occurs when:
The insured cancels the policy mid-term When the insured cancels a policy before the expiration date, a short rate cancellation is issued and the insurer retains a portion of the unearned premium to cover costs.
The assignment provision requires that:
The insured may not transfer ownership of the policy without the insurer's written permission If the insured wishes to assign the policy to another party, such as a new owner of the property, written permission of the company is necessary.
An HO-3 policy provides coverage on which basis?
Open perils coverage on the dwelling and broad form coverage on the personal property The H0-3 provides open perils coverage on the dwelling, and Named Broad Form perils coverage on the personal property. Losses to the dwelling are paid at replacement cost and losses to personal property are paid at actual cash value.
Charging different rates or providing different benefits to insureds of the same actuarial class or hazard category is which of the following?
Unfair discrimination Unfair discrimination is knowingly making or permitting individuals of the same actuarially supportable class and equal expectation of life to be charged different rates, paid different dividends or have different terms/conditions regarding any life insurance contract.
During a tornado, a factory is destroyed when the roof blows off, causing electrical wires to short and start a fire, burning down the building. The proximate cause of the loss is:
Tornado The proximate cause is the first event in an unbroken chain of events that caused the loss. Had it not been for the tornado, the building would not have burned down.
What is the term for the idea that some risks are less desirable than average risks, and that these risks tend to seek coverage to a greater extent than more favorable risks?
Adverse selection Adverse selection is tendency of higher risks to seek or maintain coverage.
The maximum amount payable for all losses within a policy period is known as the:
Aggregate limit The aggregate limit is reduced by the amount paid each time a claim is paid during the policy term.
Which term describes the maximum amount payable for loss from all occurrences within a policy period?
Aggregate limit The aggregate limit is the most the policy will pay for all losses in the policy period.
Which term describes the situation when two policies covering the same property contain different policy periods?
Nonconcurrency Nonconcurrency indicates the existence of two or more policies covering the same exposures that don't have the same policy periods.
Physical damage to the insured auto that is not covered under collision, and is not otherwise excluded, would be covered under:
Comprehensive The Other than Collision coverage, also known as Comprehensive, provides coverage for damages not caused by collision and not excluded in the exclusions.
What is the correct term for a secondary loss that occurs as a result of a direct loss from a covered peril?
Consequential Loss The direct loss to the property is the damage to the property caused by an insured peril. The indirect, or consequential, loss is further financial loss that results from the loss of use of the damaged property.
Which of the following prevents all recovery for injuries if the claimant was also considered partially negligent?
Contributory negligence The doctrine of Contributory Negligence prevents the claimant from recovering damages if the claimant was in any way also at fault.
The Additional Coverages part of a property insurance policy provides:
Coverage that supplements the basic coverages in the insuring agreement which is automatically included without an additional premium Additional coverages are automatically included in property policies without an additional premium. The type of additional coverages depends upon the type of policy. Additional coverages are paid in addition to those stated in the insuring agreement and include debris removal, collapse, and fire department service charges.
Personal injury liability insurance does not cover which of the following? A - Libel and Slander B - False Arrest C - Malicious prosecution D - Bodily Injury
D - Bodily Injury Personal injury is a type of loss that injures a person's reputation, emotional well-being, or other non-physical attributes, as distinct from bodily harm or property damage.
Choose the false statement regarding the application of coverage under the Products Exposure Liability Coverage. A - Coverage applies to property damage the product causes B - Coverage applies to bodily injury occurring away from premises the insured owns or rents C - Coverage applies to bodily injury the product causes D - Coverage applies to damage to the product itself
D - Coverage applies to damage to the product itself Products Liability Coverage as relates to Commercial General Liability Insurance covers damage or injuries caused by the product, but does not include damage to the product itself.
Which statement about the Builders Risk form is not correct? A - Coverage terminates 90 days after construction is completed, when a policy expires, is cancelled, or 60 days after the owners fully occupy the dwelling, whichever is soonest B - Coverage does not apply to outside radio and television antennas C - There is no vacancy provision D - Coverage is always written on an open peril basis
D - Coverage is always written on an open peril basis Coverage may be written with any of the Cause of Loss Forms (Basic, Broad, or Special).
Which of the following is correct concerning the Commercial Property Special Causes of Loss Form? A - Coverage is included for the peril of Earthquake B - Coverage is included for loss of Business Income C - Other than coverage for some additional perils, the coverage is identical to that of the Broad Form D - Coverage is provided for all losses except as specifically limited or excluded
D - Coverage is provided for all losses except as specifically limited or excluded The Special Cause of Loss form provides 'open perils' coverage. Beyond the expanded list of covered perils, it provides some additional coverage extensions, and coverage sublimits.
Which of the following statements is correct concerning coverage for a catastrophic ground cover collapse? A - The contents of personal property is not covered pursuant to a catastrophic ground cover collapse B - The insurer may not restrict catastrophic ground cover collapse and sinkhole loss coverage just to the principal building C - Most insurers do not cover catastrophic ground cover collapse D - Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse
D - Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse. The contents of personal property is covered along with the actual structure. Insurers may restrict catastrophic ground cover collapse and sinkhole loss coverage to the principal building.
The Truckers Coverage Form is designed for:
Firms in the business of transporting goods or commodities The Truckers Coverage Form is written for trucking and freight companies---those companies that are in the business of transporting property for others.
The endorsement providing evidence of financial responsibility for motor carriers is know as:
Form MCS-90 Form MCS-90 provides evidence of financial responsibility, on behalf of the motor carrier, to the Interstate Commerce Commission (ICC). The endorsement must be included on all policies, and a policy must meet the financial responsibility requirements of the Department of Transportation.
Driving while under the influence of alcohol is an example of:
Gross negligence Gross Negligence exhibits a lack of care through recklessness or deliberate indifference to the well-being of others.
The purpose of Part Two of the Workers' Compensation Policy is to:
Handle suits against the employer for damages arising from an injury to an employee when those damages are not covered by Workers' Compensation Part Two of the Workers' Compensation Policy is Employers Liability Insurance, which provides the employer coverage for employees' bodily injury claims that do not fall within the scope of the Workers' Compensation Law.
An agent is not considered to be holding a license for the purpose of controlled business as long as:
Not more than 50% of the total volume of premiums per year is derived from controlled business An agent is not considered to be holding a license for the purpose of controlled business as long as no more than 50% of the total volume of premiums per year is derived from controlled business.
Which provision specifies that no coverage applies if the loss benefits a person who has care, custody, or control of the insured's property?
No Benefit to Bailee The No Benefit To Bailee provision specifies that no coverage applies if loss payment benefits a bailee.
The DP-3 provides what coverage for damage to the insured's dwelling due to a power failure when lightning strikes a power transformer 2 miles away?
No coverage Damage from power failure that takes place away from the insured premises is excluded under the Dwelling forms.
Company D's cashier is robbed of $500 in currency. This loss would be covered under which insuring agreement?
Inside the premises: Theft of money and securities Theft of money and securities coverage covers theft, disappearance, or destruction of money and securities inside the insured's premises, or inside a banking premises, when committed by a person present on the premise. It also covers loss or damage to a locked safe, vault, cash register, cash box, or cash drawer that results from actual or attempted entry into such property.
A second negligent act that interferes with the chain of events leading to a loss is known as a(n):
Intervening cause An Intervening cause prevents or limits recovery from the wrongdoer when a second, distinctly separate negligent act occurs after the original negligent act, but before damage occurs, and interferes with the chain of events that brings about the loss. The intervening cause must be unexpected and unforeseen.
Coverage for recreational vehicles can be added to the Personal Auto Policy by the:
Miscellaneous Type Vehicle Endorsement The Miscellaneous Type Vehicles coverage includes recreational vehicles.
Which 1980 regulation deregulated the trucking industry?
Motor Carrier Act This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000 depending on the type of merchandise transported.
When considering insurability of a commercial property for renewal, the insurer can use:
Physical inspection Under the common policy conditions, the insurer can use inspections and surveys for the purpose of underwriting and rating.
Unlicensed entities is a regulatory concern due to which of the following issues?
Potential for criminal activity Unlicensed entities also have an adverse economic impact on authorized insurers, potential for unpaid claims due to dishonesty and lack of sound actuarial decisions and the state and federal guaranty funds do not pay for those unpaid claims.
Sudden and accidental damage from artificially generated electrical current best describes a(n):
Power surge Sudden and accidental damage from artificially generated electrical current is caused by man-made electricity or power surge.
An insured owns a home with a replacement cost of $300,000 and a market value of $250,000. What is the most a valued policy will pay in the event of a total loss without a deductible?
The policy limit A total loss under a valued policy is payable based on the policy limit listed on the declarations page.
The provision that establishes the method by which coverage will be applied if other insurance applies to the loss, is sometimes called:
The pro rata liability provision This provision is found in the policy in the Other Insurance condition. It is sometimes known as the pro rata liability provision because it provides for claim settlement to be proportioned to the amount of other insurance.
