Attempt 2

Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage? 1 2 7 9

1

For there to be negligent liability, all of the following must exist EXCEPT A reasonable expectation that the act may cause injury or damage. A breach of the legal duty which results in injury or damage to another person. A legal duty to act, or not to act, under the circumstances. Proximate cause between the wrong and the injury or damage.

A reasonable expectation that the act may cause injury or damage.

Which of the following stipulates the procedure that insureds and insurers can use when they cannot agree on the value of a loss? a) Fair value clause b) Appraisal clause c) Loss settlement clause d) Subrogation clause

Appraisal clause

Which commercial property form is used to insure buildings while under construction? Builders risk Legal liability Building and personal property Business income

Builders risk

Who can form a risk retention group? Any group that wants to sell coverage only to its members Any organization authorized to transact insurance business in the state Businesses with similar liability exposure A producer who wants to write coverage for family members and employees

Businesses with similar liability exposure

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered Misrepresentation. Concealment. Coercion. Avoidance.

Concealment.

Loss valuation is best described as the process of Defining the replacement costs of property in relation to other insurers' costs of the same type. Accepting or denying coverage based on historical evidence of an applicant's property losses. Determining the premium charged and the amount of insurance required on a specific property. Providing equal benefits for a wide array of covered properties.

Determining the premium charged and the amount of insurance required on a specific property.

Which of the following provisions is usually found in homeowners policies and provides a replacement cost settlement to policyholders who carry adequate insurance? Coinsurance Actual cash value Pro rata Insurance to value

Insurance to value

Prior to paying a claimant under a professional liability policy, the insurer must Provide legal counsel to the claimant. Reaffirm the claimant's insurance. Obtain the consent of the insured. Terminate the insured's policy.

Obtain the consent of the insured.

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the Insuring agreement. Conditional receipt. Application. Policy.

Policy.

The purpose of the Fair Credit Reporting Act is to Ensure the consumers receive a copy of investigative consumer reports. Ensure coverage for all applicants. Protect consumers against the circulation of inaccurate or obsolete personal or financial information. Protect the insurer from adverse selection.

Protect consumers against the circulation of inaccurate or obsolete personal or financial information.

The exact, direct, uninterrupted cause of loss is the Proximate cause. Actual cause. Intervening cause. Absolute cause.

Proximate cause.

Which of the following would NOT be covered under the directors and officers liability coverage? Wrongful acts while directors and officers are acting in an official capacity Neglect and breach of duty Misstatements made by the directors and officers Reimbursement for fines and penalties

Reimbursement for fines and penalties

Which of the following is a method of establishing a premium on large commercial accounts? Merit rating plan Experience modification factor Retrospective rating Premium discount

Retrospective rating

An insurer's right to take possession of property after having paid for the loss is referred to as the right to Salvage. Exchange. Retain. Replace.

Salvage.

Which of the following symbols in a business auto policy indicates that coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured? Symbol 1 Symbol 2 Symbol 7 Symbol 19

Symbol 7

What information is found in the conditions part of an insurance policy? The description of the duties and obligations of the insured The persons or risks not covered under the policy The identity of the named insured The amount of coverage provided by the policy

The description of the duties and obligations of the insured

If an insurance policy has the additional coverage provision, how does it affect the policy premium? There is no additional premium. Premium will be recalculated when a specific loss covered by this provision occurs. Additional premium will be assessed. Premium will be calculated on a pro rata basis based on the amount of additional coverage.

There is no additional premium.

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by The property coverage of the golf course. The golfer's homeowners liability coverage. The homeowner's property coverage on the house. The liability policy of the golf course.

The golfer's homeowners liability coverage.

Surplus Lines describes insurance coverage that may be purchased from An unauthorized insurer. Any insurer the insured wishes to do business with. An admitted insurer. An authorized insurer.

An unauthorized insurer.

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will Only be applicable if the insured pays a higher deductible. Only be applicable if the insured pays an additional premium. Be increased by 10%. Be reduced by 10%.

Be reduced by 10%

Which of the following elements of an insurance contract requires payment of premium? Offer and acceptance Consideration Legal purpose Competent parties

Consideration

Which of the following exclusions would specifically fall under Coverage E in Homeowners insurance? Contractual liability Bodily injury to a residence employee Falling objects Land

Contractual liability

Other-than-collision would cover financial losses due to Damage to an insured's neighbor's mailbox that was caused by the insured's pickup. Damage to an insured's car in an accident for which the insured was found at fault. Legal action brought against an insured for an accident. Damage to an insured's car caused by wind or hail.

Damage to an insured's car caused by wind or hail.

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors? Contractors equipment floater Equipment breakdown Inland marine scuba floater Commercial general liability

Equipment breakdown

Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage? Other structures may not be used to store business property of others, even though a business is not conducted from the structure. Any loss paid under Coverage B reduces the Coverage A limit of liability. Other structures covered under Coverage B must be set apart from the dwelling by clear space. A detached garage may be covered if rented to others as a private garage.

Any loss paid under Coverage B reduces the Coverage A limit of liability

Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. Georgia has compulsory workers compensation laws. Space Age's owner thinks that his company is too small and unprofitable to carry the workers comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage. Closure of the business as a public nuisance by state officials. Payment for injuries in monetary amounts stipulated by the state with respect to workers compensation plans. Payment of fines and penalties as dictated by state compliance authorities.

Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage.

Which of the following duties is NOT required of the insured in the event of a loss? Immediately notify the insurer when the insured has filed for bankruptcy. Authorize the insurer to obtain records and assist the insurer in its investigation. Notify the insurer as soon as possible of the possibility of a claim. Immediately record the specifics of any claim and notify the insurer.

Immediately notify the insurer when the insured has filed for bankruptcy.

The defendant being released on a surety bail bond is the Insured. Principal. Surety. Obligee.

Principal.

The insured's product under a commercial general liability policy does NOT include which of the following? Containers furnished in connection with the product Warranties made with respect to the fitness or quality of the product Any goods or products manufactured by the insured Vending machines rented to others

Vending machines rented to others

An applicant for property insurance owns a building in which combustible materials are carelessly stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a Morale hazard. Speculative risk. Moral hazard. Physical hazard.

Morale hazard.

In the last 72 hours, there were 3 instances of volcanic eruptions that damaged a property covered by a dwelling policy. How many deductibles will the insured have to pay before the policy covers the damages caused by the eruptions? Zero One Two Three

One

Which statement best describes agreement as it relates to insurance contracts? Each party must offer something of value. One party accepts the exact terms of the other party's offer. The intent of the contract must be legally acceptable to both parties. All parties must be capable of entering into a contract.

One party accepts the exact terms of the other party's offer.

In reference to insurable interest, which of the following is NOT an element of insurable risk? Personal Blood Financial Business

Personal

The commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for which of the following? Premises Hired autos Employers Machinery

Premises

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury? The appliance manufacturer is negligent. The appliance was manufactured in the United States. The commercial general liability policy extends rights to Switzerland. The appliance manufacturer did not have a permit to sell globally.

The appliance was manufactured in the United States.

Which of the following statements is correct regarding the debris removal coverage under the businessowners policy (BOP)? The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount. It pays for cleanup or removal of pollutants from land or water. It pays for removal of the debris of the insured's damaged automobile. The debris of covered property must be reported in writing within 270 days of the loss.

The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount.

All of the following are TRUE regarding the cancellation condition of a policy EXCEPT The insured may cancel the policy at any time by mailing a written notice of cancellation to the company. The insurer may cancel the policy by mailing a written notice to the first named insured only. The insurer is required to give advance notice of its cancellation to the insured. The insurer must provide proof that the insured received the notice.

The insurer must provide proof that the insured received the notice.

Late one night on his way home from a local bar, a man runs his covered auto into an insured's car. The man was operating his vehicle while under the influence of alcohol. The insured had no personal injuries, but her car had damage. Her insurance policy paid for the damages to her car. The subrogation provision in her policy allows The insurer to attempt to recover the damages from the man and/or his insurance company. The insured to sue the man to recover only the damages not paid by her own insurance company. The insurer to increase her premiums because of being a higher risk. The insured to sue the man to recover any damages she sees fit.

The insurer to attempt to recover the damages from the man and/or his insurance company.

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss? Both the loss of income and the cost of the floor covering The entire loss would be paid as direct loss by fire The loss of income for the time the diner was closed The cost of replacing the floor covering due to the water damage

The loss of income for the time the diner was closed

Each of the following may be insured under an HO-3 homeowners policy EXCEPT An occupant of a dwelling under a life estate arrangement when dwelling coverage is at least 80% of the current replacement cost. One co-owner when each distinct portion of a two-family dwelling is occupied by co-owners. The intended owner-occupant of a dwelling under construction. The owner-occupant of a condominium unit.

The owner-occupant of a condominium unit.

An insured has decided to never drive another vehicle and wants to transfer his auto insurance policy to his wife. What does the insured need to transfer the policy? The written consent of the insurer An auto policy cannot be transferred. Nothing, because the wife is automatically included as an insured The written consent of all other insureds covered by the policy

The written consent of the insurer

When Symbol 7 is provided, which of the following statements is true with regards to newly acquired autos? They are covered if they are used to replace previously owned autos with that coverage. They are covered only until the end of the policy term. They are not covered until the insurer is notified. They are automatically covered only for 30 days.

They are covered if they are used to replace previously owned autos with that coverage.