ExamfX-final exam1

82. According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? (Choose from the following options) 1. 30 days 2. 60 days 3. 90 days 4. 120 days

2. 60 days

83. The protection of the insurer from adverse selection is provided in part by (Choose from the following options) 1. A reduction in coverage. 2. A profitable distribution of exposures. 3. Reducing costs. 4. A drop in applicants.

2. A profitable distribution of exposures.

17. Which one of the following is NOT an element of insurability? (Choose from the following options) 1. Loss must be expected 2. Risk of loss is speculative 3. Loss is calculable 4. Risk of loss must represent a financial hardship

2. Risk of loss is speculative

50. In addition to penalties, fines, and possible imprisonment for violating the provision relating to misrepresentation, the Commissioner may suspend the license of such person for a period up to (Choose from the following options) 1. 6 months. 2. 1 year. 3. 3 years. 4. 5 years.

3. 3 years.

100. The party to a surety or fidelity bond who promises to fulfill the obligation is the (Choose from the following options) 1. Custodian. 2. Surety. 3. Obligee. 4. Principal.

3. Obligee. Right Answer 4. Principal.

72. The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to (Choose from the following options) 1. $200,000. 2. $250,000. 3. $100,000. 4. $150,000.

4. $150,000. Right Answer 2. $250,000.

36. Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected? (Choose from the following options) 1. A homeowners policy can have no more than one insured. 2. The full limit applies to each insured individually. 3. No more than the per occurrence limit applies, no matter how many insureds are involved. 4. Pro rata liability applies.

3. No more than the per occurrence limit applies, no matter how many insureds are involved.

53. All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT (Choose from the following options) 1. Weight of ice, snow, or sleet. 2. Water damage. 3. Replacement cost. 4. Falling objects.

3. Replacement cost.

13. Business personal property coverage form covers all of the following EXCEPT (Choose from the following options) 1. Furniture and fixtures. 2. Machinery that is not permanently installed. 3. Stock. 4. Automobiles held for sale.

3. Stock. Right Answer 4. Automobiles held for sale.

59. Which of the following perils is covered by the HO-2 and HO-3? (Choose from the following options) 1. Flood 2. War 3. Sudden and accidental rupture of a heating system 4. Loss due to power interruption that occurs off the premises

3. Sudden and accidental rupture of a heating system

92. The Occurrence form trigger is based on which of the following? (Choose from the following options) 1. The amount of the insured's deductible 2. The amount of claims made during the policy period 3. The date when injury or damage occurs 4. The place where the injury or damage occurs

3. The date when injury or damage occurs

11. The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is (Choose from the following options) 1. Not liable for the damages in excess of his limits. 2. Required to post a bond for the amount of damages above his limits. 3. Considered uninsured. 4. Considered underinsured.

4. Considered underinsured.

1. A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be (Choose from the following options) 1. Criminally negligent. 2. Incompetent. 3. Negligent. 4. Improperly trained.

4. Improperly trained. Right answer 1. Criminally negligent.

98. Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? (Choose from the following options) 1. A residence where an insured is temporarily residing 2. A family cemetery plot 3. A lakeside cabin rented by the insured for vacation 4. Vacant farmland owned by the insured

4. Vacant farmland owned by the insured

10. According to California Insurance Code, all licensees must prominently display their individual license numbers on all of the following EXCEPT (Choose from the following options) 1. Motor club advertisements. 2. Marketing materials. 3. Printed advertisements. 4. Business cards.

1. Motor club advertisements.

54. The Standard Fire Policy would provide coverage in which of these cases? (Choose from the following options) 1. Insured's neglect 2. Fire 3. Acts of war 4. Theft

2. Fire

67. Losses caused by vandalism and malicious mischief are excluded under a homeowners policy if the dwelling had been vacant for more than (Choose from the following options) 1. 30 days. 2. 45 days. 3. 60 days. 4. 90 days.

3. 60 days.

61. A situation in which a person can only lose or have no change represents (Choose from the following options) 1. Speculative risk. 2. Adverse selection. 3. Hazard. 4. Pure risk.

4. Pure risk.

136. A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? (Choose from the following options) 1. $175,000 2. $180,000 3. $200,000 4. $100,000

1. $175,000

111. A state-established program that requires insurers who write property insurance to accept risks in economically depressed areas in the same proportion as their other business bears to the total property insurance market is called (Choose from the following options) 1. A fair access to insurance (FAIR) plan. 2. A shared and spread risk (SSR) plan. 3. An equitable risk option (ERO) plan. 4. Fair trades practice plan.

1. A fair access to insurance (FAIR) plan.

128. First aid costs for others injured on the insured's premises (Choose from the following options) 1. Apply only if the insured is legally liable. 2. Also cover injuries to the insured's family members. 3. Are deducted from the liability limit. 4. Are paid in addition to the liability limit.

1. Apply only if the insured is legally liable. Right Answer 4. Are paid in addition to the liability limit. First aid costs for others apply even if you are not legally liable and are in addition to the stated limits, but do not apply to those regularly at the location.

107. Which of the following is a method of claim settlement used when the insured and insurer cannot agree on how to settle a claim? (Choose from the following options) 1. Arbitration 2. Proof of Loss 3. Restoration 4. Appraisal

1. Arbitration

113. The risk management technique that is used to prevent a specific loss by not exposing yourself to that activity is called (Choose from the following options) 1. Avoidance. 2. Transfer. 3. Reduction. 4. Sharing.

1. Avoidance.

146. A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean? (Choose from the following options) 1. Coverage is automatic. 2. There is no coverage. 3. Coverage applies without premium. 4. This must be a misprint on the form.

1. Coverage is automatic. Right Answer 2. There is no coverage.

110. Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy (Choose from the following options) 1. During the policy period and for up to 3 years after the termination of the policy. 2. Only during the policy period. 3. During the policy period and for up to 5 years after the termination of the policy. 4. Only after the policy period.

1. During the policy period and for up to 3 years after the termination of the policy.

126. Which of the following organizations has the primary responsibility forms for the standard market? (Choose from the following options) 1. Insurance Services Office 2. Office of Financial Services 3. National Association of Insurance Commissioners 4. Governor's Office

1. Insurance Services Office

147. Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim? (Choose from the following options) 1. Yes, because the claim is a result of Erroneous products and work. 2. No, because this event does not meet the definition of infringement. 3. No, because the claim results from copyright infringement and is not in an advertisement. 4. No, because there is no bodily injury or property damage.

1. Yes, because the claim is a result of Erroneous products and work. Right Answer 3. No, because the claim results from copyright infringement and is not in an advertisement.

135. Which of the following losses would NOT be covered by a homeowner's policy? (Choose from the following options) 1. A $800 outboard motor destroyed by hail 2. A coin collection valued at $500 lost in a fire 3. A $550 utility trailer blown away by a tornado 4. A stolen silver tea set worth $2,000

2. A coin collection valued at $500 lost in a fire

150. Even though the Standard Fire Policy is a named peril contract, under which of the following circumstances would the policy provide "all risk of loss" coverage on insured property? (Choose from the following options) 1. When the loss is to insured property that has be removed because of endangerment by a peril insured against under the policy 2. Always 3. Never 4. When the loss is caused by an "act of God"

2. Always Right Answer 1. When the loss is to insured property that has be removed because of endangerment by a peril insured against under the policy Property that has been removed to protect against a possible pending loss by a peril coverage by the policy is coverage for up to 5 days at another location for virtually any type of loss.

125. Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will (Choose from the following options) 1. Defend with the hopes of not paying damages. 2. Either pay or defend as it decides. 3. Pay the alleged damages. 4. Proceed according to your request.

2. Either pay or defend as it decides.

115. The major portion of the premium for an equipment breakdown policy pays (Choose from the following options) 1. Coverage for BI & PD of others. 2. For replacement parts. 3. For inspections and examinations. 4. Repair to prevent.

2. For replacement parts. Right Answer 3. For inspections and examinations. Inspecting the machinery to be insured is critical to the underwriting of equipment breakdown coverage. Finding flaws that could lead to losses and requiring corrective action is the purpose.

143. The term used to describe the cost and charges associated with the transfer of goods from one location to another is (Choose from the following options) 1. Shipping. 2. Freight. 3. Transfer. 4. Cargo.

2. Freight.

122. What type of property does a Personal Floaters policy cover? (Choose from the following options) 1. Movable personal property located in the insured's home, only 2. Movable personal property, wherever it may be located 3. Permanently attached property located on the insured's premises 4. None of these

2. Movable personal property, wherever it may be located

132. Pete wants to have separate insurance coverage for separate acreages. What kind of insurance should Pete get? (Choose from the following options) 1. Unit Insurance 2. Plot Insurance 3. There is no insurance of this kind. 4. Acre-by-acre Insurance

2. Plot Insurance Right Answer 1. Unit Insurance

101. Shipbuilders and repairers are covered by (Choose from the following options) 1. U.S. Longshore and Harbor Workers Compensation Act. 2. The Jones Act. 3. States' workers compensation laws 4. Federal Employers Liability Act.

2. The Jones Act. Right Answer 1. U.S. Longshore and Harbor Workers Compensation Act. is a fedral law offering works comp benefits for workers who are injured on navigable water who are normally not covered by state work comp laws.

120. All of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT (Choose from the following options) 1. This coverage provides an additional $2,500 amount of insurance. 2. This coverage limit pays in place of the limit of insurance shown in the declarations. 3. This coverage limit is payable in addition to the limit of insurance shown in the declarations. 4. This coverage is not subject to any deductible.

2. This coverage limit pays in place of the limit of insurance shown in the declarations.

106. What is the purpose of increased value and excess liability (IVEL) clauses? (Choose from the following options) 1. To protect the master and crew of a vessel from being sued 2. To provide extra coverage for the same losses covered by an underlining policy 3. To protect an assured from the errors and omissions of his or her insurance agent 4. To protect the insurer from inflation

2. To provide extra coverage for the same losses covered by an underlining policy

116. What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage? (Choose from the following options) 1. Underinsured motorist 2. Uninsured motorist 3. Disaster coverage 4. Calamity motor coverage

2. Uninsured motorist

129. If a liability policy had split limits of 100/300/100, what is the maximum amount that would be payable in the event of injury to a single person? (Choose from the following options) 1. $300,000 2. $500,000 3. $100,000 4. $200,000

3. $100,000

142. Which of the following types of valuation works best for property whose value does not fluctuate much? (Choose from the following options) 1. Stated amount 2. Inflation guard 3. Agreed value 4. Market value

3. Agreed value

121. The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will (Choose from the following options) 1. Pay only if the mother-in-law has no health insurance of her own. 2. Share equally in the cost with the mother-in-law's health insurance. 3. Apply to injuries of any guests or visitors. 4. Pay as excess over the mother-in-law's health insurance.

3. Apply to injuries of any guests or visitors.

108. Which of the following would be included in the farm liability coverage forms? (Choose from the following options) 1. Bodily injury to a residence employee 2. Any obligation of the insured under a workers compensation law 3. Bodily injury to any person who is an insured 4. Bodily injury to an employed farmhand

3. Bodily injury to any person who is an insured Right Answer 1. Bodily injury to a residence employee

137. Additional coverages in the liability section of a homeowners policy cover all the following EXCEPT (Choose from the following options) 1. Damage to the property of others. 2. Damage to a third party property for which the insured is legally liable. 3. Claims expense. 4. Expenses the insured incurs rendering first aid for bodily injury to third parties.

3. Claims expense. Right Answer 2. Damage to a third party property for which the insured is legally liable.

148. A person who is responsible for the administration of a decedent's estate would have a need for a(n) (Choose from the following options) 1. Fiduciary bond. 2. Attachment bond. 3. Decedent bond. 4. Bid bond

3. Decedent bond. Right Answer 1. Fiduciary bond.

118. All of the following are other coverages under the dwelling policy EXCEPT (Choose from the following options) 1. Debris removal. 2. Improvements, alterations, and additions. 3. Earth movement. 4. Other structures.

3. Earth movement.

119. Elaborate homes and those with detailed designs or decorative architecture with replacement costs greater than ACV or market value are insured on (Choose from the following options) 1. HO-3 with an HO-15 endorsement. 2. HO-8. 3. HO-8 with an inflation guard endorsement. 4. HO-3.

3. HO-8 with an inflation guard endorsement. Right Answer 2. HO-8. HO is used to insure houses with replacement cost more that market value and those built with irreplaceable materials . It is a modified HO1 and provides ACV coverage for Coverage A

131. Factual statements about the insured or the risk in an insurance policy are considered (Choose from the following options) 1. Express warranty. 2. Representations. 3. Implied warranty. 4. Material representations.

3. Implied warranty. Right Answer 1. Express warranty. Statements in a policy are considered express warranty.. It is part of the insurance contract. Implied warranty is the unwritten or unspoken guarantee presumen to be made based on the circumstance of a transaction

134. Under a dwelling policy, which of the following clauses applies if an insured has lost one of two matching silver candlesticks? (Choose from the following options) 1. Fractional loss 2. Portion loss 3. Pair or set 4. Sets coverage

3. Pair or set

139. All of the following statements regarding a Boatowners policy are true EXCEPT (Choose from the following options) 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required. 2. Watercraft liability coverage provides protection up to specified limits, for claims against a "covered person" for damages because of bodily injury caused by a watercraft occurrence. 3. Physical damage coverage is provided on an actual cash value (ACV) basis. 4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured.

3. Physical damage coverage is provided on an actual cash value (ACV) basis. Right Ansswer 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required.

144. Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim? (Choose from the following options) 1. General liability 2. Personal liability 3. Professional liability 4. Auto liability

3. Professional liability

130. The reduction, decrease, or disappearance of value of the person or property insured in a policy, by a peril insured against is known as (Choose from the following options) 1. Exposure. 2. Hazard. 3. Risk. 4. Loss

3. Risk. Right Answer 4. Loss Loss is the Reduction , decrease.....

127. The termination of an insurance contract with the premium charge being adjusted in proportion to the exact time the protection has been in force is considered a (Choose from the following options) 1. Pro rata cancellation. 2. Refund cancellation. 3. Short rate cancellation. 4. Flat rate cancellation.

3. Short rate cancellation. Right Answer 1. Pro rata cancellation.

105. In which of the following examples would a contract between an insurer and prospective insured be legal? (Choose from the following options) 1. The applicant is a 12-year-old student. 2. The applicant is under the influence of medication at the time of application. 3. The applicant has a prior felony conviction. 4. The applicant is intoxicated at the time of application.

3. The applicant has a prior felony conviction.

112. Which of the following is NOT a limitation under Mexico Coverage? (Choose from the following options) 1. It applies only if the insured is in Mexico for a trip of 10 days or less. 2. Suits may be brought by either U.S or Mexican citizens. 3. The insured must purchase separate coverage if they plan on driving in Mexico. 4. It applies only to accidents which occur within 25 miles of the U.S. border.

3. The insured must purchase separate coverage if they plan on driving in Mexico. Right answer 2. Suits may be brought by either U.S or Mexican citizens. Suits must be brought in the U.S. , but only by a US Citizen

47. A premium discount is the term that describes when an insured owes a total standard premium greater than (Choose from the following options) 1. $15,000. 2. $1,000. 3. $5,000. 4. $10,000.

4. $10,000. Right Answer 3. $5,000. Premium discount is when an insured owes a total standard premium greater than 5,000

138. Which of the following describes the transfer of a legal right or interest in an insurance policy? (Choose from the following options) 1. Abandonment 2. Obligation 3. Legal purpose 4. Assignment

4. Assignment

149. All of the following statements are FALSE regarding garage physical damage coverage EXCEPT (Choose from the following options) 1. Specific causes-of-loss coverage is not available for physical damage coverage. 2. No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations. 3. Collision coverage is provided only for dealers. 4. Autos held for sale by a dealer are listed individually in the policy.

4. Autos held for sale by a dealer are listed individually in the policy. Right Answer 2. No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations. collision coverage is not for any specific risk. Autos held for sale are covered when auto designation symbol 31 is shown on the declaration page. The Specific causes of loss coverage is available for physical damage coverage

17. Which of the following is NOT an element of negligence? (Choose from the following options) 1. Unbroken chain 2. Libel 3. Duty 4. Breach

4. Breach Right Answer 2. Libel There are four essential elements of negligent, Duty, Breach, injury and unbroken change. LIber is a type of Intentional tort

104. What list contains the names of all eligible surplus lines insurers? (Choose from the following options) 1. SLiAC (Surplus Lines insurers Approved by Commissioner) 2. SIL (Surplus Insurers List) 3. LESLI (List of Eligible Surplus Lines Insurers) 4. CLSLI (Commissioner's List of Surplus Lines Insurers)

4. CLSLI (Commissioner's List of Surplus Lines Insurers) Right Answer 3. LESLI (List of Eligible Surplus Lines Insurers) includes all insurere eligible to supply surplus lines of insurance and the date they became approved.

103. All of the following are exclusions under farm property coverage EXCEPT (Choose from the following options) 1. Flood. 2. Loss of use. 3. Earth movement. 4. Ordinance or law.

4. Ordinance or law. Right Answer 2. Loss of use. Loss of use is provided under Coverage D of a Farm policy , the rest are exclusions

141. Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? (Choose from the following options) 1. Supplies used for repair of the dwelling 2. Theft of a renter's lawnmower used to service the premises 3. Fire damage to building material on the premises 4. Outdoor personal property of the insured

4. Outdoor personal property of the insured Right Answer 2. Theft of a renter's lawnmower used to service the premises

114. The endorsement that provides coverage for losses arising from sudden collapse of earth arising from underground limestone created by the action of water on rock formations is a/an (Choose from the following options) 1. Mine subsidence endorsement. 2. Earthquake endorsement. 3. Earth subsidence endorsement. 4. Sinkhole collapse endorsement.

4. Sinkhole collapse endorsement.

133. In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the (Choose from the following options) 1. Maritime and navigable waters test 2. Wharf and pier test 3. Loading and unloading test 4. Situs and status test

4. Situs and status test

123. Your accounts receivable records have been destroyed or damaged. Your loss may be covered with (Choose from the following options) 1. Commercial property insurance. 2. The commercial articles coverage form. 3. The valuable papers coverage form. 4. The accounts receivable coverage form.

4. The accounts receivable coverage form.

145. An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home is severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays at a motel while the repairs are made. How much will the HO-3 pay for their additional living expense? (Choose from the following options) 1. The cost of renting an apartment, and 50% of the cost of the motel 2. Nothing 3. All of the expense up to the Coverage D limit 4. The cost of renting an apartment, but not the cost of the motel room

4. The cost of renting an apartment, but not the cost of the motel room Right Answer 3. All of the expense up to the Coverage D limit

140. The conditions of the Standard Fire Policy addressing the rules, duties, and provisions of the insured and the insurer are found in (Choose from the following options) 1. The 165 lines of conditions. 2. The exclusions. 3. An endorsement. 4. The declarations.

4. The declarations. Right Answer 1. The 165 lines of conditions.

109. Which of the following information would NOT be included in property insurance policies? (Choose from the following options) 1. A list of policy provisions 2. A list of coverages 3. The insured's name 4. The insured's address

4. The insured's address

102. A dealership loans a car to its customer to use while the dealership is repairing the customer's car. If the dealership has business auto physical damage coverage and a customer's automobile insurance does not cover damages to loaner cars, which of the following is true? (Choose from the following options) 1. No coverage is provided. 2. Only coverage for damage to a third party's vehicle is provided. 3. The customer is personally liable. 4. The loaner vehicle is covered by the business auto policy.

4. The loaner vehicle is covered by the business auto policy.

124. A neighbor's tree has fallen into the insured's. The insured's homeowners policy will NOT pay to remove the tree UNLESS (Choose from the following options) 1. The damage is more than $1,000. 2. The neighbor has no homeowners insurance. 3. The tree has caused damage to the house. 4. The tree is blocking the driveway.

4. The tree is blocking the driveway.

32. Which of the following would NOT be considered an insured under a homeowners policy? (Choose from the following options) 1. Residents of the household that are blood relatives of the insured 2. An individual, under 21, in the care of but not related to the insured 3. Individuals named in the policy declarations 4. A divorced spouse living in another state

4. A divorced spouse living in another state

15. A businessowners policy is (Choose from the following options) 1. A special policy designed for large and small retail operations. 2. Part of a commercial package policy. 3. A monoline policy. 4. A self-contained prepackaged policy.

4. A self-contained prepackaged policy.

56. Which of the following would NOT be considered a form of direct response marketing? (Choose from the following options) 1. An ad in a newspaper 2. A circular mailed to a city's residents 3. An insurance company's TV commercial 4. A sign in an insurer's office

4. A sign in an insurer's office

4. Which of the following departments is responsible for developing mortality and morbidity tables? (Choose from the following options) 1. Marketing 2. Underwriting 3. Secretarial 4. Actuarial

4. Actuarial

9. An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the third passenger. How much will the policy pay under medical payments coverage? (Choose from the following options) 1. $14,000 2. $15,000 3. $5,000 maximum for the accident 4. $5,000 minus the policy deductible

1. $14,000

90. With regards to a homeowners policy, which coverage provides for indirect or consequential losses? (Choose from the following options) 1. Coverage C 2. Coverage D 3. Coverage A 4. Coverage B

1. Coverage C right Answer 2. Coverage D coverage D Provide for loss of use, Which is an indirect loss

41. Which of the following is a cancellation procedure in which the premium returned to the insured is NOT in direct proportion to the number of days remaining in the policy period? (Choose from the following options) 1. Flat rate 2. Proportional 3. Short rate 4. Pro rata

1. Flat rate Right Answer 3. Short rate Meaning of short rate

58. According to the California code, all of the following are TRUE regarding binding authority for excess and surplus lines insurance EXCEPT (Choose from the following options) 1. If more than one person is assuming the obligation, the risk will always be equally shared. 2. If more than one person shall share the risk, the policy shall contain a specification of how the risk is to be shared. 3. No person shall transact any insurance with nonadmitted insurers except through a licensed surplus lines broker. 4. Binding authority for excess risk coverage shall identify all persons assuming the risk.

1. If more than one person is assuming the obligation, the risk will always be equally shared.

34. A licensed insurance agent overhears a conversation that leads him to believe a person is committing workers compensation claim fraud. If the agent makes a written report to a law enforcement agency and the person is investigated, but it turns out that it was an erroneous accusation, the agent may be sued for (Choose from the following options) 1. Libel, a written untruth. 2. A misrepresentation. 3. Slander. 4. Nothing; the Code gives the agent legal immunity.

1. Libel, a written untruth. Right answer 4. Nothing; the Code gives the agent legal immunity. Every agent has a responsibility to combat fraud, the state grants immunity from lawsuits for an agents good faith report of suspected workers comp fraud. CIC 1877.5

26. Which of the following homeowners endorsements increases its limits each year by a selected percentage? (Choose from the following options) 1. Scheduled personal property 2. Inflation guard 3. Permitted incidental occupancies 4. Personal property replacement cost

1. Scheduled personal property Right Answer 2. Inflation guard endorsement is used to help maintain insurance to value requirements for replacement coase coverage. The Limit increases each year by a selected percentage.

60. In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called (Choose from the following options) 1. Self-insured retention. 2. Stop-loss. 3. Coinsurance. 4. Participation requirement.

1. Self-insured retention.

8. Which of the following would NOT be considered a flood? (Choose from the following options) 1. Sewer backup 2. Overflow of tidal waters 3. Mudslides 4. Runoff of surface waters

1. Sewer backup

55. What are the two types of compensatory damages? (Choose from the following options) 1. Special and general 2. Pure and speculative 3. Tort and general 4. Normal and punitive

1. Special and general

38. Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? (Choose from the following options) 1. Symbol 5 2. Symbol 6 3. Symbol 7 4. Symbol 9

1. Symbol 5

40. Under a dwelling policy, which of the following is NOT a factor in determining a loss? (Choose from the following options) 1. The amount negotiated by the insured 2. The policy limit 3. The amount reflecting the insured's interest in the property at the time of loss 4. The amount necessary to repair or replace the property

1. The amount negotiated by the insured

51. Under which of the following circumstances would an insurer be allowed to cancel a dwelling policy midterm? (Choose from the following options) 1. The insured knowingly lied about the year the property was constructed. 2. The insured's claims have exceeded the amount of coverage. 3. The insured wants to make suspicious increases to his or her coverage. 4. The insured reached his or her limit on the number of claims.

1. The insured knowingly lied about the year the property was constructed.

52. Increased value and excess liability clauses work like which of the following policies? (Choose from the following options) 1. Umbrella 2. Professional liability 3. Cargo 4. Errors and omissions

1. Umbrella

2. Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section? (Choose from the following options) 1. Up to $10,000 aggregate for the policy period 2. Up to $5,000 aggregate for the policy period 3. Up to $1,000 per occurrence 4. Up to $2,500 per occurrence

1. Up to $10,000 aggregate for the policy period Right Answer 3. Up to $1,000 per occurrence

49. When a parent is required to pay for damages caused by his or her children, this is an example of (Choose from the following options) 1. Vicarious liability. 2. Strict liability. 3. Intervening cause. 4. Assumption of risk.

1. Vicarious liability.

19. An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pay for damages? (Dollar amounts are rounded to the nearest hundred.) (Choose from the following options) 1. $35,700 2. $40,000 3. $41,700 4. $50,000

2. $40,000 Right Answer 3. $41,700 Inventory 500k+200k = 700k Less 100k cars sold 700k-100k= 600k 50,000 x5/6 =41,700

65. How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? (Choose from the following options) 1. $100 2. $500 3. $1,000 4. $5,000

2. $500

69. Which of the following coverages is included in an unendorsed homeowners policy? (Choose from the following options) 1. Medical payment to others 2. Personal property replacement coverage 3. Fungi, wet or dry rot, or bacteria 4. Earthquake

2. Personal property replacement coverage

95. When may a representation be withdrawn? (Choose from the following options) 1. Within the first 2 years of the policy 2. Prior to the issuance of the policy 3. At any time 4. After the policy is issued

2. Prior to the issuance of the policy

24. Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages? (Choose from the following options) 1. General 2. Special 3. Tort 4. Normal

2. Special

68. A driver with 10 years of experience driving an automobile has never had a traffic violation or a DUI. He is now applying for a separate motorcycle policy. He has obtained his motorcycle license 2 years ago. Which of the following is true? (Choose from the following options) 1. The Good Driver Discount will not apply to the motorcycle. 2. The driver will have to obtain a separate coverage for motorcycles. 3. The driver will qualify for the Good Driver Discount on a motorcycle. 4. Motorcycles are automatically included in a personal auto policy.

2. The driver will have to obtain a separate coverage for motorcycles. Right Answer The Good Driver Discount will not apply to the motorcycle IN Motorcycle policies or endorsements driving experiance means the years licensed to drive a motorcycle, notan automobile. Specially motorcycle coverage may be offered as a separate policy

25. Personal property coverage under a homeowners policy would cover (Choose from the following options) 1. A pet that the insured is temporarily keeping for a friend. 2. The insured's camera if it is stolen while the insured is on vacation. 3. A neighbor's fence if damaged by the insured. 4. Property moved to a newly acquired residence after 60 days.

2. The insured's camera if it is stolen while the insured is on vacation.

21. In California, the liability for bodily injury or death to one person has a financial responsibility liability limit of (Choose from the following options) 1. $30,000. 2. $20,000. 3. $15,000. 4. $5,000.

3. $15,000.

75. L's insurer has made all of the decisions regarding the provisions included in her policy. L finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe? (Choose from the following options) 1. Conditional 2. Personal 3. Adhesion 4. Unilateral

3. Adhesion

79. In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? (Choose from the following options) 1. Unilateral 2. Unidirectional 3. Aleatory 4. Conditional

3. Aleatory Right Answer 1. Unilateral Meaning of Unilater

94. With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT (Choose from the following options) 1. The insured's business products and work performed. 2. The insured's business income losses due to personal injury. 3. The insured's business premises. 4. The insured's business autos.

3. The insured's business premises. Right Answer 2. The insured's business income losses due to personal injury. The Garage Coverage Form does NOT cover personal injury and loss of wages from those injuries. Such Coverage would be provided by a CGL policy

43. An insured has a standard HO-4 policy with a $30,000 limit of coverage for personal property. While he was traveling, a fire in his hotel destroys clothes and luggage with a replacement value of $10,000, and jewelry with a replacement value of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has occurred in both properties, what amount is the insurer obligated to pay? (Choose from the following options) 1. $16,000 2. $20,000 3. $30,000 4. $11,000

1. $16,000

80. 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 (Choose from the following options) 1. Claims-made form. 2. BI/PD form. 3. Occurrence form. 4. Premises coverage.

1. Claims-made form.

37. In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? (Choose from the following options) 1. 1st limit 2. 2nd limit 3. 3rd limit 4. 4th limit

2. 2nd limit Right answer 1. 1st limit Split limit coverage uses 3 dollar amounts. The First limit indicates the maximum amount the policy will pay for BI for each person

91. Which of the following dwelling policy forms insures a structure on an actual cash value basis? (Choose from the following options) 1. DP-1 2. DP-2 3. DP-3 4. All DP forms

4. All DP forms Right answer 1. DP-1 DP1 insured the Structure on an ACV basis, DP2 and DP3 insure the structure on a replacement cost basis

12. A Boatowners policy covers (Choose from the following options) 1. Damage to the boat and trailer. 2. Liability. 3. Medical payments. 4. All of these.

4. All of these.

64. Following the holiday season, an insured decides to store his decorations in the attic for the summer. While moving the decorations, he accidentally drops a heavy box that crashes through the ceiling and damages a table and lamp in the dining room causing $1,000 of damage to them. His HO 00 03 will pay (Choose from the following options) 1. $1,000 less the deductible. 2. The market value of the damaged property. 3. Nothing. 4. $1,000.

1. $1,000 less the deductible. Right Answer 3. Nothing. The peril falling objests does not include loss to property contained in a building unless the roof or an outside wall of the builddin gis first damaged by a falling object. Damage to the falling object is not included.

89. A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss? (Choose from the following options) 1. $20,000 2. $30,000 3. $40,000 4. $60,000

1. $20,000 Right Answer 2. $30,000 For the total amount of partial loss to be paid, a house must be insured for at leat 80%. In dis case, because the house is insurad for only $60k ( 75% of the minimum requiremetn) , the policy will pay only 45% of the loss. or 30k

46. While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? (Choose from the following options) 1. Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair 2. Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle 3. Any auto furnished for the insured's regular use, but not named on the policy 4. Any vehicle while located inside a racing facility for the purpose of racing

1. Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair

96. An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have? (Choose from the following options) 1. Coverage D - Fair Rental Value 2. Coverage E - Additional Living Expense 3. Coverage A - Dwelling 4. Coverage B - Other Structures

1. Coverage D - Fair Rental Value Right Answer 2. Coverage E - Additional Living Expense Coverage E is a broad or special form under the DP that pays for additional living expenses while the insured's dwelling is being repaired

16. Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time? (Choose from the following options) 1. Provision rating 2. Profit rating 3. Components rating 4. Loss costs rating

1. Provision rating Right Answer 4. Loss costs rating

44. What will happen if a house covered by a standard mortgage clause is a total loss? (Choose from the following options) 1. The insurer pays the mortgagee according to the mortgagee's interest in the property. 2. The mortgagee retains no rights to any contracts involving the policy. 3. The insured receives the full benefit and passes the mortgagee's share to the mortgagee. 4. The mortgagee receives the full benefit and passes the insured's share to the insured.

1. The insurer pays the mortgagee according to the mortgagee's interest in the property.

7. With respect to auto insurance, the term owned autos includes all of the following EXCEPT (Choose from the following options) 1. Any private passenger auto leased to the named insured for a period of more than 6 months. 2. A pickup or van titled to and used in the named insured's business. 3. Any private passenger auto titled to the named insured. 4. A pickup or van acquired by the named insured during the policy period.

2. A pickup or van titled to and used in the named insured's business.

22. If you are called upon to handle the estate of a deceased, the court will require you to post which bond? (Choose from the following options) 1. Guardian 2. Administer 3. Executor 4. Fiduciary

2. Administer Right Answer 4. Fiduciary Fiduciary has the legal right to act as another's personal repsrestatie and are often appointed by the court. A Fiduciary Bond guarantees the fiduciary duties.

87. The inspections and surveys condition in a businessowners policy (Choose from the following options) 1. Guarantees that all working conditions are safe and healthful. 2. Allows the insurer the right to inspect the insured's premises. 3. Validates that the insured is in compliance with state and federal guidelines. 4. Obligates the insurer to make annual safety inspections.

2. Allows the insurer the right to inspect the insured's premises.

63. If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply (Choose from the following options) 1. Within 60 days. 2. Automatically. 3. When the new policy is written. 4. When the policy is up for renewal.

2. Automatically.

30. An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe? (Choose from the following options) 1. Retention 2. Avoidance 3. Reduction 4. Sharing

2. Avoidance

66. All of the following are additional liability coverages automatically provided in a homeowners policy, EXCEPT (Choose from the following options) 1. Personal injury protection. 2. Claims expenses. 3. Damage to the property of others. 4. Loss assessment coverage.

2. Claims expenses. right Answer 1. Personal injury protection. Personal injury may be added

74. 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? (Choose from the following options) 1. Coverage C 2. Coverage E 3. Coverage A 4. Coverage B

2. Coverage E

45. When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of (Choose from the following options) 1. Nothing, unless the remarks were in writing 2. Defamation. 3. Misrepresentation. 4. Discrimination.

2. Defamation.

39. Jim and Janet's house is an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the wall replaced with drywall that is just as functional, but costs less than lath and plaster. Which loss valuation allows the insurance company to have plaster replaced with drywall? (Choose from the following options) 1. Actual cash value 2. Functional replacement cost 3. Replacement cost 4. Market value

2. Functional replacement cost

71. What insurance concept is associated with the words "Weiss" and "Fitch"? (Choose from the following options) 1. Index used by stock companies 2. Guides describing company financial integrity 3. Policy dividends 4. Types of mutual companies

2. Guides describing company financial integrity

27. Tim's home is mortgaged by the local bank. Tim is required to carry insurance on the home showing the bank as the mortgagee. Which of the following is true if the home is damaged by a covered peril? (Choose from the following options) 1. The additional premium required for the mortgage endorsement must be paid by the mortgagee. 2. Losses will be paid to the mortgagee and mortgagor as their interest appears. 3. Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness. 4. The mortgagee must settle with the mortgagor in the event of a loss.

2. Losses will be paid to the mortgagee and mortgagor as their interest appears.

29. Wilber's house is located 1 mile from the county's new landfill and across the road from the entrance of a rock quarry. To rebuild the house if something happened to it would cost $150,000. But when Wilber tried to sell it, the best offer he received was $80,000. His insurance company will insure the house for only $80,000. How is Wilber's house insured? (Choose from the following options) 1. Functional replacement cost 2. Market value 3. Actual cost value 4. Replacement cost

2. Market value

33. Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective? (Choose from the following options) 1. 12:01 pm on the 5th day after the endorsement request has been mailed 2. 5 days after the application and premium payment are mailed 3. 12:01 am the day after the application and premium payment are mailed 4. 30 days after the application has been accepted

3. 12:01 am the day after the application and premium payment are mailed

42. All of the following are insurable events as defined in the Insurance Code EXCEPT (Choose from the following options) 1. An insured goes to the hospital for a broken arm. 2. An insured is sued for libel and slander. 3. An insured loses a large sum in a poker game. 4. A guest trips and breaks his leg in the insured's house.

3. An insured loses a large sum in a poker game.

57. All of the following are eligibility criteria for applicants in the CAARP EXCEPT (Choose from the following options) 1. Can state (via Eligibility Certification Statement on back of application) that they attempted to secure insurance through the voluntary market and were denied coverage is eligible for participation in the program. 2. The vehicle to be insured must be registered in the state of California. 3. Anyone who has a valid driver's license. 4. Anyone who does not owe money on any automobile insurance policy within the last 18 months.

3. Anyone who has a valid driver's license. Right Answer 4. Anyone who does not owe money on any automobile insurance policy within the last 18 months.

5. In order to become an admitted, authorized insurer, what is the primary body of law about which an applicant company must be concerned? (Choose from the following options) 1. California Penal Code 2. California Constitution 3. California Insurance Code 4. California Business Code

3. California Insurance Code

81. Which of the following property coverages would provide protection to contents damaged by fire? (Choose from the following options) 1. Coverage C 2. Coverage D 3. Coverage A 4. Coverage B

3. Coverage A Right Answer 1. Coverage C Personal property provides coverage for the content of an insured dwelling

62. What type of liability would a person who owns a swimming pool have? (Choose from the following options) 1. Vicarious 2. Implied 3. Direct 4. Absolute

3. Direct Right Answer 4. Absolute Any conduct that is inherently dangerous imposes absolute liability. The claimant does not have to prove anything

84. A common extension of property insurance coverage that goes beyond the coverage for fire and lightning is known as (Choose from the following options) 1. Basic coverage. 2. Seasonal increases. 3. Extended coverage. 4. Vandalism and malicious mischief coverage.

3. Extended coverage.

93. Leo, an employee of the local "Shop A Lot" grocery store, suspects Betty of shoplifting. Leo escorts Betty through the crowded store to the back office and calls the local police. It is later determined that the Betty has not stolen any merchandise. Leo is guilty of (Choose from the following options) 1. Assault. 2. Battery. 3. False Arrest. 4. Invasion of Privacy.

3. False Arrest.

31. The homeowners policy covers collapse caused by all of the following EXCEPT (Choose from the following options) 1. Foundation cracks. 2. Weight of snow. 3. Hidden insect or vermin damage. 4. Weight of too many people attending en event hosted in the house.

3. Hidden insect or vermin damage. Right Answer Foundation Cracks Collapse must be caused by some sudden unexpected reason. The foundation cracks would take years to cause collapse, meaning there would be plenty of time to find and repair them.

97. All of the following are characteristics of the dwelling policy EXCEPT (Choose from the following options) 1. The dwelling must be owner-occupied. 2. Coverage includes the dwelling only, contents only, or both. 3. Incidental occupancy of limited service-type exposure is permitted. 4. Dwellings up to four family units are eligible.

3. Incidental occupancy of limited service-type exposure is permitted. Right Answer 1. The dwelling must be owner-occupied. Dwelling policies insure residential exposure with only limited service type business exposure allowed. The Dwelling can be completed or under construction and can be owner or tenant occupied. The dwelling policy can insure the dwelling only , content only or both.

77. While cutting grass in your yard with your brother's borrowed lawnmower, the fuel line ruptures and the lawnmower is destroyed in the fire. How will your HO liability react? (Choose from the following options) 1. It will pay your brother's property insurance deductible. 2. Your HO liability and your brother's property coverage will share on a prorated basis. 3. It will cover the damage. 4. It will not cover the damage because you are not liable.

3. It will cover the damage.

20. What losses are considered when computing individual FMHA emergency loan eligibility? (Choose from the following options) 1. Losses on any crop will be considered 2. Losses on crops that are not insurable will be considered 3. Losses on crops which the farmer chose to insure will be considered 4. Losses on all insurable crops will be considered

3. Losses on crops which the farmer chose to insure will be considered

70. Which of the following liability coverages must be added by endorsement to a homeowners policy in order to apply? (Choose from the following options) 1. Bodily injury 2. Property damage liability 3. Medical payments to others 4. Personal injury

3. Medical payments to others Right Answer 4. Personal injury applies only if added by endorsement and an additional premium is paid

48. Replacement cost coverage is provided in both the broad and special form dwelling policies when (Choose from the following options) 1. The amount of insurance on the dwelling is at least 90% of its replacement cost when the policy is written. 2. The dwelling is insured for 100% of its replacement cost at the time of a loss. 3. The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss. 4. The amount of insurance on both the dwelling and personal property is at least 80% of its replacement cost when the policy is written.

3. The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss.

14. If more than one person has an insurable interest in the property covered under a dwelling policy, (Choose from the following options) 1. All involved insurers must decide which one will be liable for the loss. 2. All insureds must decide which one will be liable for the loss. 3. The insurer will be liable for only the insured's interest in the damaged property. 4. Liability will be split evenly among all people who have insurable interest.

3. The insurer will be liable for only the insured's interest in the damaged property.

28. Which of the following statements is true regarding the premium computation for workers compensation insurance? (Choose from the following options) 1. The premium base for workers compensation insurance varies by the type of industry in which the insured is involved. 2. The insured pays a guaranteed premium based on an estimated value of the annual income received. 3. The premium is set at the beginning of the policy period and will not change. 4. A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

3. The premium is set at the beginning of the policy period and will not change. Right Answer 4. A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

85. When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? (Choose from the following options) 1. They do not change. 2. They do not apply. 3. They increase based on the state law. 4. They decrease based on the state law.

3. They increase based on the state law. Right Answer 1. They do not change. The minimum liability limits do not change when a vehicle travels from state to state, and remain the same regardless o the state the vehicle is in.

99. Which would be considered a single accident in equipment breakdown coverage? (Choose from the following options) 1. All accidents at all insured locations at same time by same cause 2. All accidents at same location within a 24-hour period 3. All accidents at same location within a 48-hour period 4. All accidents at single location at same time by same cause

4. All accidents at single location at same time by same cause

23. Loss of yield cause by any of the following events would be covered under a Federal Crop Insurance policy, except: (Choose from the following options) 1. Mismanagement by the insured 2. Theft of crops by the insured 3. Loss of yield because of failure by the insured to use approved farming practices for the area 4. All are exceptions to coverage

4. All are exceptions to coverage

88. Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? (Choose from the following options) 1. Damage to the dwelling caused by ash or dust from a volcanic eruption 2. Damage to the dwelling caused by the insured when moving furniture 3. Accidental scorching caused when a hot iron is placed upon a built-in counter top 4. Interior damage caused by water seeping under the shingles on the roof

4. Interior damage caused by water seeping under the shingles on the roof Right Answer 1. Damage to the dwelling caused by ash or dust from a volcanic eruption HO 3 cover losses on a open peril basis. An HO2 covers losses on a named peril basis. Both forms cover damage to the dwelling cause by ash or dust from a volcanic eruption

3. Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use? (Choose from the following options) 1. Class 2. Schedule 3. Merit 4. Judgment

4. Judgment

78. A property with which of the following deficiencies would be eligible for the California FAIR Plan? (Choose from the following options) 1. Faulty wiring 2. Windows poorly installed 3. Heating system in poor condition 4. Located in a designated hazardous brush area

4. Located in a designated hazardous brush area

18. How many vehicles per person can be covered by the California low-cost auto insurance program? (Choose from the following options) 1. All the vehicles in the household 2. Unlimited amount 3. Only one 4. No more than 2

4. No more than 2

86. Annual transit policies are written on a(n) (Choose from the following options) 1. Automatic basis. 2. Named peril basis. 3. Temporary basis. 4. Open-peril basis.

4. Open-peril basis. Right Answer 2. Named peril basis. Annual Transit policies are used by business that ship goods on a regular basis. Coverage can be written for various types of shipments. These policies are written on name peril basis

35. How are surety bonds different from insurance? (Choose from the following options) 1. Insurance guarantees specific duties or obligations will be fulfilled; surety bonds pay for losses. 2. Surety bonds guarantee that losses will be paid; insurance pays for obligations to be fulfilled. 3. Surety bonds are issued by the government; insurance is issued by private companies. 4. Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses.

4. Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses.

6. All of the following statements concerning coinsurance are true, EXCEPT (Choose from the following options) 1. It is used to help adequacy and equity in rates. 2. The insured agrees to maintain insurance equal to some specified percentage of the value of the property. 3. If the insurance carried is less than required, the insurance may not cover the whole loss. 4. The coinsurance formula also will be applied to total losses.

4. The coinsurance formula also will be applied to total losses.

76. In order for a Protection and Indemnity policy to cover a loss which of the following must be TRUE? (Choose from the following options) 1. The insured must have been the person operating the vessel 2. The insurer must conduct an investigation into the loss. 3. The loss must total. 4. The insured must be legally liable for the loss.

4. The insured must be legally liable for the loss.

73. When would uninsured motorists coverage apply? (Choose from the following options) 1. When the insured drives an uninsured car 2. When the insured is legally liable, but does not have sufficient coverage 3. When the insured is legally liable 4. When the other party is legally liable but has no insurance

4. When the other party is legally liable but has no insurance