Guaranteed Exams

A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler 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?

$175,000

How long is the waiting period in workers compensation benefits?

1 week

The maximum number of boarders per unit that would be allowed in the homeowners policy

2

Under a business owners policy, an insured can cancel the policy?

At any time by mailing a written notice of cancellation

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss

What would be true if a farm building or structure is vacant or unoccupied?

If for 120 consecutive days, the limits applicable to the building and its contents are reduced by 50%

Which person is eligible for a businessowners policy?

a 6-story office building with less than 100,000 square feet total area

Who would NOT be eligible for coverage under the dwelling policy

a house that has 5 residential units

the functional replacement cost refers to

a loss valuation method

What type of liability would a person who owns wild animals have?

absolute

What risk would NOT be eligible for coverage under a homeowners policy?

an applicant who owns and lives on a commercial farm

The designation symbols used in commercial auto policies can be found in which policy section?

Covered auto

Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period?

Discovery form

Which term refers to other insurance that is written on the same risk, but not on the same coverage basis?

Nonconcurrency

Which of the following risks is eligible for coverage under a BOP

condominiums

What entity is eligible for business owners policy?

convenience stores

In BOP's, which of the following additional coverages will require a deductible?

debris removal

The part of a property policy that shows the amount of insurance, premiums, and policy term is the...

declarations

the pro rata liability clause is designed to protect the principle of

indemnity

What is NOT a factory in the determination of actual cash value

insurance premium paid

When agents are acting within the scope of their contract, their actions will be assumed to be the acts of the

insurer

Burglary is defined as...

taking of property from within the premises leaving visible signs of forced entry

Which situation would NOT be covered by the basic causes of loss form under a commercial property policy?

the Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant

All of the following situations would be covered under a professional liability policy EXCEPT

the failure of an attorney to properly defend a client due to his personal dislike of the client

In personal auto policies, the term "you" refers to

the named insured

A grave marker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?

$3,000

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

$30,000

How much time does a licensee who fails to earn the required CE credits have to be considered for license reinstatement?

1 year

Within what time period after completing pre-licensing education must an applicant file a certificate of education completion with the Commissioner?

12 months

What is the maximum number of boarders per unit that would be allowed in the homeowners policy?

2

If it is believed that an employee died as a result of an occupational disease, within how many years must the dependents file a claim?

2 years

An insurance policy has been in force for over 55 days when it was terminated by the insurer. How many days of policy termination must the insurer mail or deliver a notice of termination to the named insured?

30 days

Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

As specified in the protective safeguard endorsement added to a business owners policy, if the automatic sprinkler system is shut down due to freezing conditions, the insured does not need to notify the insurance company as long as the system is restored within

48 hours

Benefits must be paid within how many days after the insurer receives proof of loss?

60

according to business property coverage form vacancy condition, if a policy is issued to the owner of a building, the building will be considered vacant if what portion of the square footage is unused?

69%

The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss?

80%

Which of the following would NOT be classified as personal property for insurance purposes?

A house

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?

Combined single

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential

A person covered under personal protection insurance had a terrible accident that impaired his ability to perform regular work duties for 5 years. For how long will the worker's personal protection insurance pay benefits for lost income?

First 3 years

The Essential Insurance Act established for home insurance, other than Inland Marine insurance, will be established on one or more factors, however, classification cannot be based on...

Gender of the named insured

What homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment?

HO-4

What business would be eligible for a businessowners policy

Hill & Morton Funeral Home

What best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

What type of property would NOT be covered under the dwelling policy special form Coverage A - Dwelling?

Land on which the dwelling is located

Which of the following lists all the required elements for establishing a charge of negligence?

Legal duty owed, standard of care, proximate cause, damages

Which method of loss valuation is contrary to the basic concept of indemnity?

Replacement cost

The claims-made trigger is based on which of the following?

The date the claim is first made

Which of the following types of agent authority is also called the "perceived authority"?

apparent

the loss ratio compares...

earned premium to losses

A business using its own trucks to move its own cargo would insure the cargo using...

motor truck cargo - owners form

If a policy is terminated by the insurer within the first 55 days after the initial issuance of the policy, when can the termination be made effective?

no sooner than 20 days after the mailing of the notice

In th elast 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?

onw

Section | of a boatowners policy covers

physical damage

Who might receive dividends from a mutual insurer?

policyholders

Who would participate in a Write Your Own (WYO) flood insurance program?

private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis

what is the term which best describes when a person develops a formal program identifying, evaluating, and funding its losses?

self-insuring

The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rates known as

underwriting

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?

unilateral

What is not an essential element of a commercial package policy

valuations and/or settlement provisions

An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of...

vicarious liability

If an insured aquires new works of art, when must the insurer be notified for the new works of art to be covered under the scheduled personal property endorsement

within 90 days

Which of the following would be required to be licensed as an insurance producer?

A salaried employee who advertises and solicits insurance

What coverage form is covered in DP-2 and DP-3 but not DP-1

Coverage E - additional living expenses

Which of the following statements is INCORRECT with regard to surplus lines insurance?

Policies written by a surplus lines insurer typically contain standard coverages and forms

Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement applies to which type of losses?

Property liability

To legally transact insurance in this state, an insurer must obtain which of the following?

certificate of authority

Which of the following defenses attest that if a person recognizes and understands that there is danger involved in an activity and voluntarily chooses to encounter it, he or she may be barred from seeking recovery for injuries due to negligence?

assumption of risk

Coverage for drones, remotely piloted aircraft systems, is usually broken up into what two parts?

liability and hull damage

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises

What is an incorrect statement concerning the replacement cost endorsement

The insured need not actually make repairs in order to collect the replacement cost amount

What provision in a property policy applies when the insurer broadens coverage but does not increase the premium?

liberalization clause

The members of a limited liability company are insureds under a businessowners policy if

The limited liability company is designated as the named insured

A small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true?

business auto coverage form may apply

an insurance company receives an application with some information missing and issues the policy anyway. What is this called?

Waiver

Which type of agent authority is also called "perceived authority"?

apparent

The insured's mother-in-law broke her leg falling down down the front steps of the insured's premises. The insured's homeowners medical payments coverage will

apply to injuries of any guest or visitors

the transfer of a legal right or interest in an insurance policy is called

assignment

An insurance producer did not renew her license when it was due, so the license lapsed. Two months prior to that, the producer sold several insurance policies and was still awaiting commissions. Now that the producer is no longer licensed, what would be true regarding the commissions from the sale of insurance policies?

deferred commissions may be paid to the producer for policies sold while the producer was licensed

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act?

direct response marketing

Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will./..

either pay or defend as it decides

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?

equipment breakdown

Events or conditions that increase the chances of an insured loss occurring are referred to as...

hazards

All of the following are conditions commonly found in the insurance policy EXCEPT

insuring agreement

All of the following statements describe the concept of strict liability EXCEPT

it is imposed on defendants engaged in hazardous activities

What is FALSE about the Coverage B - Other Structures in homeowners policies

it must be added by endorsement to a homeowners policy

An insurance producer licensed to represent one or more insurers must, as a condition of licensure,

provide each eligible person seeking insurance the lowest available premium quotation for the form or type of insurance coverage offered by the insurers represented

The risk of loss may be classified as

pure risk and speculative risk

What type of information would be found in a policy's insuring agreement?

renewal dates

an insurance agent's responsibilities does NOT include..

represent the client

What peril is EXCLUDED from coverage under HO-4?

sewer water backup

When the condominium association coverage form and the condominium commercial unit-owners form both cover the same loss,

the association coverage form will be considered primary and pay the loss

a parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?

the damage occurred when the concrete fell

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

the insured expects to extend operations to that state

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three- other states' insurance of the workers compensation and employers liability policy when

the insured expects to extend operations to that state

What will happen if a house covered by a standard mortgage clause is a total loss?

the insurer pays the mortgagee according to the mortgagee's interest in the property

A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire...

the loss is payable to the insured and the martgagee

In addition to the effective date of termination of coverage, a termination notice must contain...

the specific reason(s) for the termination

What is not a requirement of an applicant for an insurance license in Michigan?

two letters of recommendation attesting to trustworthiness, reliability, and good reputation