Exam FX attempt 1

The party to a surety or fidelity bond who promises to fulfill the obligation is the a. Principal b. Custodian c. Surety d. Obligee

a. Principal

if an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to a. 350 b. 500 c. 750 d. 1000

b. 500

Which of the following is NOT an acceptable reason for an insurer to cancel a personal property insurance policy that has been in effect for more than 60 days a. Violation of safety regulations b. Cancellation by previous insurer c. Fraudulent claims on an application d. Nonpayment of premiums

b. Cancellation by previous insurer

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? a. The Guaranty Association b. Consumer Privacy Act c. The Fair Credit Reporting Act d. Unfair Trade Practices Law

c. The Fair Credit Reporting Act

The occurrence form trigger is based on which of the following? a. The amount of the insured's deductible b. The number of claims made during the policy period c. The date when injury or damage occurs d. The place where the injury or damage occurs

c. The date when injury or damage occurs

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insured standpoint, the building is considered a. Condemned b. Closed c. Vacant d. Unoccupied

c. Vacant

The state requires the motorists maintain a certain amount of insurance, per accident, for bodily injury liability. According to the Financial Responsibility Law, what is this limit?' a. 50,000 b. 1000 c. 10,000 d. 25,000

a. 50,000

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called a. Claims-made form b. Bodily injury/property damage form c. Occurence form d. Premises coverage

a. Claims-made form

All of the following are conditions commonly found in the insurance policy EXCEPT a. Appraisal b. Insuring agreement c. Cancellation and nonrenewal d. Subrogation

b. Insuring agreement

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss? a. Loss payment clause b. Valuation clause c. Loss settlement clause d. Appraisal clause

d. Appraisal clause

In indiana, what is the minimum, required limit for Underinsured Motorist coverage? a. 50,000 b. 10,000 c. 25,000 d. 30,000

a. 50,000

Under additional coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? a. 500 b. 1000 c. 5000 d. Fire department services charges are not allowed

a. 500

A candidate applying for which of the following which of the following licenses will NOT be required to pass a written examination? a. A nonresident producer b. A surplus lines producer c. An insurance producer d. An insurance consultant

a. A nonresident producer

Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim? a. Arbitration b. Proof of loss c. Restoration d. Appraisal

a. Arbitration

If a complaint has been filed against a producer who has been implicated in an unfair trade practice, the Commissioner will hold a hearing, When must the producer be notified on the charges? a. At least 5 days prior to the hearing b. Not more than 63 days after the complaint review c. No later than 20 business days from the file of a complaint d. 10 days from the receipt of complaint by the commissioner

a. At least 5 days prior to the hearing

If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose? a. Its common law defenses against liability suits b. Its ability to provide group health insurance c. Its right to hire persons with disabilities d. Its eligibility for workers compensation insurance

a. Its common law defenses against liability suits

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society? a. Punitive b. General c. Compensatory d. Specific

a. Punitive

Events in which a person has both the chance of winning or losing are classified as a. Speculative risk b. Insurable c. Pure risk d. Retained risk

a. Speculative risk

An insurance agency could purchase an error and omission policy which would provide protection in the event of any of the following EXCEPT a. The agency loses commission income from policies that were not issued by the insurer b. The agency negligently fails to offer an increased limit of coverage benefit under a policy c. The agency is sued by an insured for giving incorrect advice d. The agency negligently fails to renew a policy causing a client to suffer a financial loss

a. The agency loses commission income from policies that were not issued by the insurer

When are the limits for uninsured motorist coverage set? a. When the coverage is purchased b. The limits vary depending on the severity of an accident c. After the first qualifying accident d. At the time of the first claim

a. When the coverage is purchased

The proof of loss statement must be a. An oral statement b. In writing c. Both oral and in writing d. In a videotape format

b In writing

How long is a waiting period upon purchase of flood coverage through NFIP? a. 10 days b. 30 days c. 60 days d. There is no waiting period

b. 30 days

In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss? a. Coverage C b. Coverage E c. Coverage A d. Coverage B

b. Coverage E

All of the following are excluded in the equipment breakdown basic policy EXCEPT a. Loss of power, lights, heat, steam, or refrigeration b. Explosion of steam boilers c. Ordinance or law coverage d. Business interruption

b. Explosion of steam boilers

Which of the following Is NOT a benefit provided by workers compensation policies? a. Rehabilitation Benefit b. Punitive damages benefit c. Medical benefit d. Death Benfefit

b. Punitive damages benefit

What is the monetary limit for medical benefits under the workers compensation laws? a. 5000 per injury b. There is no limit c. 66 2/3% of the employees wages d. 100% of there employees wages

b. There is no limit

The declarations page of the homeowners policy provides all of the following information EXCEPT a. What deductible amount applies to each loss covered by the policy b. The amount of premium charged for each coverage c. A statement that earthquake damage is not covered d. The insureds address

c. A statement that earthquake damage is not covered

A producer licensed in another state wants to become a non-resident producer in Indiana. The other state gives the same privileges to Indiana producers as it does its own producers. Indiana, therefore, extends licensing privileges to the prospective producer of the other state. What is this called? a. Residency privilege b. Uniform application c. Reciprocity d. Fair exchange

c. Reciprocity

What type of information would be found in a policys insuring agreement? a. Policy limits b. Insurers address c. Renewal dates d. location of premises

c. Renewal dates

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as a. Actual cash value b. Specified insurance c. Stated amount d. Replacement cost

c. Stated amount

Which of the following IS considered a work-related injury/occupational disease under the Workers Compensation law? a. Mary falls down a flight of stairs at her officer building; ash the hospital, it is discovered that she is intoxicated b. Mike works for Ace Construction Company he is walking through the job site without a hard hat and is struck on the head by a falling brick c. Tom works as a painter in a auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days d. Greg is injured in a car accident while driving to work at 7 am

c. Tom works as a painter in a auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days

Which of the following would NOT qualify as a hired auto? a. an auto leased from a commercial rental company b. an auto leased from a commercial rental company c. an auto borrowed from an employee d. an auto hired by an employer

c. an auto borrowed from an employee

Under which circumstances can a producer receive commission and a consultants fee for the same transaction? a. When a producer holds a valid consultants license b. When the transaction is approved by the Commissioner c. Under no circumstances: producers cannot be consultants d. A producer makes a disclosure about the compensation arrangements prior to the transaction.

d. A producer makes a disclosure about the compensation arrangements prior to the transaction.

Which of the following would be considered an unfair claims settlement practice? a. Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim b. Requesting the insured swear under oath concerning facts of the claim c. Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation d. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

d. Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? a. Split b. Aggregate c. Per occurrence d. Combined single

d. Combined single

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a. Consideration b. Legal Purpose c. Offer and Acceptance d. Conditions

d. Conditions

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? a. Legal purpose b. Contract of adhesion c. Acceptance d. Consideration

d. Consideration

Which of the following is covered under the Mail floater of a Commercial Inland Marine policy ONLY if it is sentry registered mail? a. Postage and revenue stamps b. Money orders, checks, drafts, notes c. Bonds, stocks, stock certificates, coupons attached to bonds d. Currency and unsold travelers checks

d. Currency and unsold travelers checks

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured's books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy? a. Excess liability coverage b. Contract bond c. Errors and omissions insurance d. Deposit premium audit

d. Deposit premium audit

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? a. Defamation b. Unfair discrimination c. Errors and omissions d. Fraud

d. Fraud

Events or conditions that increase the chances of an insured loss are referred to as a. Exposures b. Risks c. Perils d. Hazards

d. Hazards

Which of the following types of licenses is most suitable for an individual or corporation who, for a fee, offers advice concerning insurance contracts? a. Surplus lines insurance producer b. Temporary producer c. Insurance producer d. Insurance consultant

d. Insurance consultant

For a contract to be enforceable by law, the purpose of the contract must be a. For financial gain b. For the benefit of the general public c. Of pure intent d. Legal and not against public policy

d. Legal and not against public policy

Which of the following is NOT true concerning the fear rental value coverage provided in a dwelling policy? a. It pays for the loss of rent you would have collected less any expenses that would not have continued b. Coverage continues until repairs are completed c. The period of time to repair or replace is not limited by the expiration date of the policy d. Loss or expense caused by the cancellation of a lease is covered

d. Loss or expense caused by the cancellation of a lease is covered

The Physicians and Surgeons Equipment Floater in NOT intended for which of the following? a. Surgeons supplies located in the surgeons office b. Waiting room furniture in a doctor's office c. Office equipment located in the dentist's office d. Medical supplies located in a hospital

d. Medical supplies located in a hospital

Which of the following is NOT correct regarding false statements by person engaged in the business of insurance? a. Omissions of material facts on insurance application are fraud b. False statements about financial condition of an insurer are unlawful c. Statements made with the intent to deceive are unlawful d. Only written statements can be considered fraud

d. Only written statements can be considered fraud

Under the workers compensation laws, the indemnity of the worker is partial, what does that mean? a. The worker has personal and financial interest in being compensated for the injury b. The indemnity is exclusively provided by workers compensation c. Workers compensation will only pay one part of the cost of injuries d. The indemnity is limited to the benefit amount established by workers compensation

d. The indemnity is limited to the benefit amount established by workers compensation

Supplementary payments on a CGL provide all of the following EXCEPT a. $100 in gasoline costs by the insured driving a witness to and from court b. Pre-judgement and post-judgment interest c. The cost of bonds to release attachment d. Up to $500 a day for lose earning and $2000 for the cost of bail bonds

d. Up to $500 a day for lose earning and $2000 for the cost of bail bonds

Which of the following would be named on the declarations page of a property or liability policy? a. First named insured b. Beneficiaries c. All insureds d. Additional insureds

a. First named insured

Full replacement is defined as a. Full replacement of property at its current cost, new and without reduction for depreciation b. The market value of property of like kind and quality c. Full replacement of property with like kind and quality, less an allowance for physical deterioration and depreciation d. Payment of the full policy limits in the even of a total loss

a. Full replacement of property at its current cost, new and without reduction for depreciation

Under the conditions of a Film Coverage Form, how long must the insured maintain records of each production? a. 5 years after the policy expires b. 7 years after the production completion c. 1 year after production completion d. 3 years after the policy expires

d. 3 years after the policy expires

In the event an insurer decides to cancel a commercial policy because of an increase in hazard, how many days notice must it provide the insured? a. 10 b. 20 c. 30 d. 45

d. 45