I NEED 120 QUESTION CORRECT TO PASS TEST WITH A 70

Which statement is true of Section I of a Homeowners Policy? $1,500 limit applies to a boat including the motor, trailer and equipment It provides coverage on owned golf carts and owned snowmobiles off premises It limits the coverage on utility trailers to $2,000 Theft of a boat while away from the premises is covered

$1,500 limit applies to a boat including the motor, trailer and equipment A limit of $1,500 applies to a boat, its trailer, motor and equipment.

Which of the following will be paid by Supplementary payments under Part A of the Personal Auto Policy? STUDY STUDY STUDY Medical expenses when the insured's daughter is injured in an auto accident $100 for bail bonds A judgment against the insured up to 10% above liability limits $1,000 for loss of earnings when the insured is disabled

$100 for bail bonds Of these choices, only bail bonds is a supplementary payment. The customary limit is $250.

A property purchased 10 years ago for $100,000 has a replacement value today of $200,000. It has depreciated 3% each year. What is today's actual cash value? $200,000 $140,000 $70,000 $100,000

$140,000 Current replacement cost of $200,000 minus 30% depreciation = $140,000.

Supplementary payments under Part A of the Personal Auto Policy will pay which of the following? Doctor bills when the insured is injured in an auto accident $250 for bail bonds A judgment against the insured in excess of liability limits Loss of earnings when the insured is disabled

$250 for bail bonds Of the items listed, only $250 for bail bonds is a supplementary payment.

Your home was purchased 5 years ago for $200,000 and today's replacement cost is $300,000. It has depreciated 3% each year. What is today's actual cash value? $170,000 $200,000 $255,000 $315,000

$255,000 3*5=15% 300,000*.15=45,000 300,000-45,000=255,000 Current replacement cost of $300,000 minus 15% depreciation = $255,000.

What is the total claim an HO-3 policy with Coverage B amount of $25,000 pay including debris removal? $1,250 $15,000 $25,000 $26,250

$26,250 The Coverage B total is $25,000, and the policy allows for an additional 5% for debris removal: $25,000 + 5% or $1,250 = $26,250.

In addition to his $200,000 home, the insured has a $7,000 fence, a $15,000 detached garage, a $25,000 in-ground swimming pool, and a $1,000 gazebo. How much does the policy's automatic Coverage B limit need to be increased by endorsement to provide adequate insurance on all other structures? $48,000 $28,000 $20,000 $15,000

$28,000 7,000+15,000+25,000+1,000=48,000 200,000*.10=20,000 48,000-20,000= 28,000 10% of Coverage A, or $20,000. $48,000 minus $20,000 = $28,000.

Bob insured his house for $200,000, and the mortgage company also insured his house for $100,000. Wind damaged Bob's roof resulting in $6,000 damage. How much will Bob's insurance company pay if loss conditions require payment on a pro rata basis? $3,000 $4,000 $6,000 None

$4,000 Pro rata loss payment requires each policy to pay no more than its share of the loss. The amount Bob's insurance company pays is calculated as follows: $200,000 + $100,000 = $300,000 total insurance available. $200,000 / $300,000 = 2/3 * $6,000 = $4,000.

What is the maximum Coverage the insured will have with the Water Back Up Endorsement added to his HO-3 policy for direct physical loss to property due to water backing up through the drains? $1,000 $2,500 $5,000 Coverage A amount

$5,000 The Endorsement provides up to $5,000 for overflow from a sump pump, even if caused by equipment breakdown.

Your neighbor called his agent to ask if he could get Coverage for water damage that backs up through the drain and causes structural and personal property damage. His agent told him he could endorse his policy for water back-up damage up to what amount? $500 $5,000 $10,000 5% of Coverage A

$5,000 The Water Back Up and Sump Discharge or Overflow Endorsement covers up to $5,000 for damage to property insured under Coverages A,B, and C.

With the Water Back Up endorsement, what is the maximum coverage the insured will have for direct physical loss to property due to water backing up through the drains? $1,000 $2,500 $5,000 Coverage A amount

$5,000 The endorsement provides up to $5,000 for overflow from a sump pump, even if caused by equipment breakdown

Which of the following claims is not subject to any of the Coverage E exclusions? Damage to the insured's property by a guest Damage to property rented to the insured while vacationing at a beach resort Bodily injury to someone receiving Workers' Compensation $500 damage caused by the insured to another person's property

$500 damage caused by the insured to another person's property Coverage for damage to the property of others, up to $1,000, is an Additional Coverage under the policy.

A Commercial Package Policy has a Products and Completed Operations Aggregate Limit of $100,000 with a $20,000 limit for each occurrence. There is an occurrence that results in $25,000 in damages and another occurrence that resulted in $15,000. How much of the aggregate remains for future occurrences? $65,000 $100,000 $20,000 $60,000

$65,000 $20,000 is paid by the policy on the $25,000 occurrence because the occurrence limit is $20,000. This reduces the Aggregate Limit to $80,000. $15,000 is paid on the $15,000 occurrence. This payment further reduces the Aggregate Limit to $65,000.

A building is insured for $80,000 and its replacement value is $150,000. If the commercial property policy insuring the building has an 80% coinsurance clause, how much will the insurer pay for a $12,000 covered loss? Disregard any deductible. $9,600 $12,000 $10,000 $8,000

$8,000 First, determine the amount of coverage there should have been ($150,000 x .8 = $120,000). Divide what was insured by what should have been ($80,000/120,000 = answer) times the amount of loss answer ($12,000) = $8,000.

An insured has an HO-3 Policy on her house which will pay how much for a tree totally damaged in a hail storm? The quiz is currently paused. 0% $250 $500 $1,000

0% The most paid for a covered tree is $500, but Coverage is not provided for windstorm or hail losses

The HO-3 Policy will pay how much for a furnished apartment in the basement of the insured's which was burglarized and $1,000 worth of the insured's furniture was stolen? 0% $250 $500 $1,000

0% Up to $2,500 is covered for landlord's furnishings in an attached apartment for the Coverage C perils, excluding theft.

What is the limit of insurance available on an HO-3 policy for a tree totally damaged in a hail storm? 0% $250 $500 $1,000

0% The most paid for a covered tree is $500 but coverage is not provided for windstorm or hail losses.

What is the minimum amount of notice an insurer must provide to a policyholder in advance of canceling a personal policy for nonpayment of premium? 10 days 15 days 30 days 45 days

10 days An insurer must provide at least 10 days' notice to a policyholder in advance of cancelling a personal policy for nonpayment of premium.

An insured tenant may use up to what percentage of Coverage C to improve the premises? 0% 5% 10% 20%.

10% This additional coverage in the DP-2 and DP-3 (included in the DP-1) can also be used for alterations and additions at the insured's expense for the named insured's premises

At what age is an unrelated resident of the named insured no longer an 'insured'? 24, if in the care of the named insured or a resident relative 16 18 21, if in the care of the named insured or a resident relative

21, if in the care of the named insured or a resident relative Unrelated residents, such as an exchange student, are covered to age 21. Note: resident relatives are insured to age 24.

After a fire to their office building covered under a Building and Personal Property Coverage Form, the Smith brothers called in the claim and immediately the adjuster hired a company to clear away the debris and that cost is covered up to what percent of the total loss? 5% 10% 15% 25%

25% The policy will pay up to a maximum of 25% of the coverage applying to the loss, and in the event of a total loss, the policy will pay up to an additional $10,000 for debris removal.

Brenda was injured when her car slid off the road and she bumped her head, and John, her agent, reminds her that she has how long to report this Medical Payments claim? 48 hours 6 months 1 year 3 years

3 years The insurer will pay reasonable expenses incurred for necessary medical or funeral services incurred within 3 years of the date of the accident.

Under the Personal Auto Policy, you must report a Medical Payments claim within ___________. The quiz is currently paused. 48 hours 6 months 1 year 3 years

3 years The insurer will pay reasonable expenses incurred for necessary medical or funeral services incurred within 3 years of the date of the accident.

The insurer may examine and audit the books and records at any time during the policy period and up to ___________. One year after policy expiration 5 years after policy expiration 3 years after policy expiration 7 years after policy expiration

3 years after policy expiration In the Businessowners Coverage Form Section III - Common Policy Condition, Examination of Your Books and Records, the insurer has the right to examine the insured's records because 1 year after policy expiration the information therein may be necessary to properly rate some exposures and to determine eligibility for the Businessowners Policy.

Under the Commercial Building and Personal Property Coverage Form, the building is considered vacant, unless at least ___________ or more of the square footage is rented or is used to conduct operations. 51% 41% for 60 days 31% 61%

31% Buildings under construction are not considered vacant. A building is considered vacant unless at least 31% or more of the total square footage is rented or is used to conduct operations.

Residential dwellings under the homeowners policy are eligible with no more than _____ residential units and no more than _____ roomers or boarders per family. 1 residential unit and 2 roomers or boarders 4 residential units and 5 roomers or boarders 2 residential units and 4 roomers or boarders 4 residential units and 2 roomers or boarders

4 residential unites and 2 roomers or boarders Residential dwellings eligible for the homeowners policy may contain one to four residential units and no more than 2 roomers or boarders per family.

Losses caused by vandalism are not covered under the Vacancy Clause of a Building and Personal Property Coverage Form if the property has been vacant for a period of ___________ days or more. 30 60 90 120

60 Because of the increase in risk of loss to vacant property, coverage is excluded for the perils of vandalism, glass breakage, water damage, and theft. The amount paid for damage by other perils is reduced by 15% during the period of vacancy.

All earth movements within ___________ are considered a single occurrence of earth movement. 24 hours 48 hours 60 hours 72 hours

72 hours The Earthquake endorsement covers earthquake, earth movement, tremors, land or mudslides, sinkhole, and shifting earth damage.

The percentage insured for Replacement cost is equal to at least of the replacement cost of the property insured. 70% 80% 90% 100%

80%

The Coverage A limit on the HO-3 policy must be written at ___________ of the dwelling's Replacement value? 50% 75% 80% 90%

80% If Coverage A is less than 80% at the time of a dwelling loss, a penalty will be applied to the partial dwelling loss claim payment.

During the 60-day underwriting period, what is the minimum amount of notice an insurer must provide to a policyholder in advance of canceling a professional liability policy? STUDY STUDY STUDY 10 days for other than nonpayment of premium 60 days for other than nonpayment of premium 30 days for nonpayment of premium 90 days for other than nonpayment of premium

90 days for other than nonpayment of premium During the 60-day underwriting period, an insurer must provide at least 90 days' notice to a policyholder in advance of cancelling a professional liability policy.

Larry owns a home covered under an HO-3 for $300,000 and asked his agent how much rent coverage does he have in case his basement apartment rented to a tenant becomes unlivable due to a fire, and his agent responded up to which of the following amounts? The quiz is currently paused. $30,000 $90,000 $150,000 $300,000

90,000 For a covered loss, the Coverage D limit for additional living expense, fair rental value, and civil authority prohibited use is up to 30% of Coverage A.

All of the following would be considered a covered resident under the Homeowners Policy, except: A 22-year-old exchange student The insured's relatives who are residents of the household A 20-year-old exchange student who is a resident of the household A 22-year-old relative enrolled in school full time that was a resident of the household before moving out to attend school

A 22-year-old exchange student The definition of insured includes certain relatives and persons in the care of the insured who are residents of the household.

All of the following are considered to be persons insured under a Homeowners Policy, except: A son or daughter while away at college, who is 23 A 79-year-old father-in-law who is living with an insured A 25-year-old friend who is living with an insured A friend's 14-year-old daughter who is living with an insured

A 25-year-old friend who is living with an insured The definition of insured does not include anyone over the age of 21 that is not a relative.

A time limitation on suits and arbitration claims of less than 3 years from the date on which the principal last performed work under the contract, is applicable to: A Construction Performance Bond A Fidelity or Surety Bond A Construction Payment Bond All other policies

A Construction Performance Bond A time limitation on suits and arbitration claims of less than 3 years from the date on which the principal last performed work under the contract, is applicable to a Construction Performance Bond.

Which of the following is eligible to receive medical payments under Section II of a Homeowners Policy? The named insured The named insured's spouse A tenant who lives in a portion of the insured's residence A residence employee

A Residence Employee Only the residence employee is eligible, (if injured in the course of employment).

In the insurance world, a potential for a loss is said to be: A hazard A peril A risk An insurable interest

A Risk Risk, simply defined, is uncertainty concerning a loss.

Which of the following is true with regard to binders? A binder is never valid A binder cannot exceed 60 days A binder cannot exceed 30 days A binder must be made in writing

A binder cannot exceed 60 days A binder is valid and cannot exceed 60 days. A binder may be made orally or in writing.

Which statement about insurance binders is incorrect? A binder lists the covered perils A binder specifies the effective date of coverage A binder specifies the premium amount A binder specifies the insurer providing the coverage

A binder specifies the premium amount A binder includes everything, except it does not specify the premium amount. The Declarations of an actual policy would include the premium.

Which of the following statements regarding flood insurance is not true? In order to qualify for a federal loan, the property owner must purchase Flood Insurance if located in a flood area A deductible only applies to loss of contents Under a Flood Policy, protection is provided to property that normally is on dry land The federal government is the reinsurer

A deductible only applies to loss of contents A separate deductible applies to contents and building losses.

Which is not required for recovery of a loss under the replacement cost extension? The value of the property is determined at the time of loss The property must be rebuilt on the same premises Coverage must equal 80% of the cost of replacement A deduction for depreciation is calculated

A deduction for depreciation is calculated When property is covered on a replacement cost basis, there is no deduction for depreciation

All of the following are requirements for recovery of a loss under replacement cost, except: The value of the property is determined at the time of loss The replacement is of like kind and quality Coverage must equal 80% of the cost of replacement A deduction for depreciation is calculated

A deduction for depreciation is calculated When property is covered on a replacement cost basis, there is no deduction for depreciation.

Which of the following is not covered by a Business Auto Policy covering the named insured's small business? The named insured leases a car to be used for sales calls Director of Sales who often rents vehicles A fellow employee injured while driving a covered auto A Manager's wife driving her husband's company car

A fellow employee injured while driving a covered auto Workers' Compensation insurance will cover the injuries of employees.

Which of the following vehicles would be excluded under the Personal Auto Policy? A conversion van A farm pickup A station wagon A motorcycle

A motorcycle A motorcycle would not be covered unless added by endorsement.

The Personal Auto Policy may be used to insure all of the following, except: A conversion van A farm pickup A station wagon A motorcycle

A motorcycle A motorcycle would not be covered unless added by endorsement

The Homeowners Policy provides coverage for all of the following, except: A riding lawn mower pulling a two-wheel garden trailer A motorized wheelchair An ATV on the insured's premises A motorized golf cart being driven to or from a golf facility

A motorized golf cart being driven to or from a golf facility The golf cart must be on a golf course for coverage to apply.

With respect to a reduction in Uninsured/Underinsured Motorist Coverage, which of the following is NOT correct? A named insured may request limits for bodily injury and death that are less than the minimum limits allowed No request for a lesser amount is effective unless the named insured has signed an informed consent form An automobile liability policy must provide uninsured/underinsured motorist coverage with limits for bodily injury and death equal to those to protect against loss resulting from the liability imposed by law The named insured will have a reduced premium

A named insured may request limits for bodily injury and death that are less than the minimum limits allowed A named insured is not permitted to request limits for bodily injury and death that are less than the minimum limits allowed.

The term General Average under Ocean Marine Insurance is described as: A. The average value per item of all the cargo on the ship B. A partial loss where jettison of cargo is necessary to save the ship and the loss is shared C. A partial loss where the loss is not shared D. The average freight charges on the entire cargo of the ship

A partial loss where jettison of cargo is necessary to save the ship and the loss is shared General Average refers to loss resulting from a voluntary sacrifice of any part of the vessel or cargo to safeguard the vessel and the rest of the cargo. When such a loss occurs, the ship owner and all cargo owners share the loss on a pro rata basis.

The term General Average under Ocean Marine Insurance is described as: The average value per item of all the cargo on the ship A partial loss where jettison of cargo is necessary to save the ship and the loss is shared A partial loss where the loss is not shared The average freight charges on the entire cargo of the ship

A partial loss where jettison of cargo is necessary to save the ship and the loss is shared General Average refers to loss resulting from a voluntary sacrifice of any part of the vessel or cargo to safeguard the vessel and the rest of the cargo. When such a loss occurs, the ship owner and all cargo owners share the loss on a pro rata basis.

If a sidewalk is icy, it is causing which type of hazard? A. A natural hazard. B. A moral hazard. C. A morale hazard. D. A physical hazard.

A physical hazard

Which of the following losses caused by water damage is covered? Driveway leaks water A plumbing failure discharges water Water accumulates below the surface of the ground Overflow of water from a sump pump

A plumbing failure discharges water Water damage is also excluded if caused by surface water, tidal water, and leakage through a building, foundation, or other structure.

Which of the following is the best answer about changes made to a property insurance policy? A change in the policy must be delivered by the insurer to the insured's postal address A policy change must be requested by the insured in writing Every change to a policy is subject to a 5-day waiting period for processing the change A property policy change is made by the insurer's written endorsement

A property policy change is made by the insurer's written endorsement

Which location is not an Insured Location under Section II of the Homeowners Policy? A secondary location that the insured uses for a business Any non-owned premises where the insured is temporarily residing Land owned by an insured where a residence is being built for the insured Any other premises used by the insured as a residence that is shown in the declarations

A secondary location that the insured uses for a business In general, any business property or activity is not covered under the Homeowners Liability Coverages.

Choose the statement that is not included in the definition of an uninsured motorist vehicle under the Personal Auto Policy. A hit and run vehicle A vehicle for which there is no liability policy A vehicle newly acquired by the named insured that has not been reported to the insurer A vehicle insured by a bankrupt insurance company

A vehicle newly acquired by the named insured that has not been reported to the insurer A vehicle owned by the insured would not fit the definition of an uninsured vehicle.

The ___________ evaluates the stability of insurance companies by assigning rating codes to show financial strength or weakness. A.M. Best Company Insurance Financial Services Regional Investment Services RS Financial Services

A.M. Best Company

Your neighbor has a pet that is considered by most to be extremely dangerous. Another neighbor's son was teasing the pet, and the pet attacked the boy, who was taken to the hospital with serious injuries. After being sued by the boy's parents, the neighbor's insurance company claimed that the boy was injured knowing that the pet was dangerous, and therefore, the pet owner was not liable. The boy's lawyer claimed that the pet was so dangerous that it did not relieve the owner of liability, an example of which principle of law? Assumption of risk Last clear chance Respondeat Superior Absolute liability

Absolute liability Where there is a strong likelihood of harm to others when mishaps occur, the standard applied is Absolute Liability.

An unintended and unforeseen event from which a loss results is called which of the following? Proximate cause Risk Accident Occurrence

Accident Accident An accident is sudden, unforeseen, unintended, and unplanned.

In insurance, when the number of similar units increase, the predictability of the loss improves: Because of the similarity of units in large quantities According to the Law of Averages Because of accumulated experience According to the Law of Large Numbers

According to the Law of Large Numbers The Law of Large Numbers is an underlying principle of insurance. The larger the number of participants in a given arrangement, the more accurate the rate is to the exposure.

Debris removal, costs extracting pollutants from land or water, and fire department service charges under the Commercial Property Coverage Part of the CPP, are automatically included under: Additional Coverages Additional Conditions Causes of Loss-Broad Form Causes of Loss-Special Form

Additional Coverages These Additional Coverages are a part of the Building and Personal Property Coverage Form of the Commercial Property Coverage Part.

___________ coverage is not available under the Garage Coverage Form. Physical damage Garagekeepers Advertising liability Product liability

Advertising liability Other available coverages include premises liability and auto liability.

The ___________ limit in Liability Insurance is the maximum amount payable for loss per location and/or person from all occurrences within a policy period regardless of the number of occurrences. Aggregate Combined Single Per Occurrence Per Person

Aggregate The Aggregate Limit is reduced by the amount paid each time a claim is paid during the policy term.

Which term describes the maximum amount payable for loss from all occurrences within a policy period? Per occurrence limit Aggregate limit Split limit Single limit

Aggregate limit The aggregate limit is the most the policy will pay for all losses in the policy period.

Choose the false statement regarding a liability insurance policy. The quiz is currently paused. A primary policy pays first with respect to other policies The per person limit in a liability policy is the most the policy will pay to any one person regardless of overall policy limits Aggregate limits means each loss payment made under a per occurrence limit or per person limit increases the aggregate limit of liability Split limits means that the amount of insurance available for losses is divided between bodily injury and property damage

Aggregate limits means each loss payment made under a per occurrence limit or per person limit increases the aggregate limit of liability The aggregate limit is the most the policy will pay for all claims within the policy term.

___________ is not a method used to determine the value of a loss. Agreed profit Actual cash value Replacement cost Stated value

Agreed Profit Replacement value is the cost to replace property with property of like kind and quality.

All of the following are methods of loss valuation, except: Agreed profit Actual cash value Replacement cost Stated amount

Agreed profit There is no valuation called Agreed Profit

All of the following are covered under a Homeowners Policy, except: A garage that is rented to a neighbor for private garage purposes All living expenses that occurred elsewhere after a covered loss Property of guests and servants Equipment that is used to maintain the property

All living expenses that occurred elsewhere after a covered loss The policy does not cover all expenses, only the necessary increase or additional living expenses.

Which of the following statements is true with respect to assumed names? An agent may not transact business in Connecticut under an assumed name An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner within 30 days after using the assumed name An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner prior to using the assumed name An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner upon the first renewal of his/her agent license

An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner prior to using the assumed name An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner prior to using the assumed name.

Whenever any damaged motor vehicle has been declared to be a constructive total loss, the insurer must calculate the value of the vehicle for determining the settlement amount using: STUDY STUDY STUDY Actual cash value An average of the wholesale values from the National Automobile Dealers Association and one other industry source An average of the retail values from the National Automobile Dealers Association and one other industry source The Blue Book value

An average of the retail values from the National Automobile Dealers Association and one other industry source Whenever any damaged motor vehicle has been declared to be a constructive total loss, the insurer must calculate the value of the vehicle for determining the settlement amount using an average of the retail values from the National Automobile Dealers Association and one other industry source.

Of the following statements about property policies, which is correct? Replacement value is the cost to replace minus depreciation Actual cash value is the cost to replace property at current pricing without a deduction for depreciation An example of a consequential loss is an explosion that results in damage to property of others An example of a consequential loss is the loss of rent due to a fire in a buildings

An example of a consequential loss is the loss of rent due to a fire in a buildings Loss of rent after a covered loss would be a consequential loss or indirect loss.

Of the following fires, which is considered a hostile fire? A fireplace containing a roaring wood fire The fire in the firebox of one's furnace An uncontrolled campfire in the woods The fire in a trashcan being used to burn leaves

An uncontrolled campfire in the woods

Which of the following is not considered an insured under a BOP? Any person while acting as the named insured's real estate manager The legal representative, if the named insured dies Employees of the named insured, while acting within the scope of their employment Anyone driving the named insured's mobile equipment on

Anyone driving the named insured's mobile equipment on public roads, without the named insured's permission Anyone driving the named insured's mobile equipment on public roads with the named insured's permission, however, is an insured.

When the insured and the insurer do not agree on the recovery of damages or the amount recoverable by the insured, under Part C of the Personal Auto Policy ___________ is used to resolve the disagreement. Compromise Appraisal Subrogation Arbitration

Arbitration The policy allows arbitration of a disagreement between the insurer and the insured as to whether that insured is legally entitled to recover damages, or as to the amount of damages recoverable.

Non-owned Autos under the Business Auto Coverage Form includes: Any Auto not used in the insured's business Autos leased or hired by the insured Autos borrowed by the insured Auto's owned by the insured's employees or members of their households, but only while being used in the insured's business or personal affairs

Auto's owned by the insured's employees or members of their households, but only while being used in the insured's business or personal affairs Non-owned Autos Only Coverage, Symbol 9, provides coverage for only those autos the insured does not own, lease, hire, rent or borrow, which are used in connection with the insured's business. This includes autos owned by the employees or members of their household.

Of the Dwelling Policy Forms, which one does not cover Damage by Burglars? Basic Form (DP-1) Broad Form (DP-2) Special Form (DP-3) None of the Dwelling Policies cover Damage done by Burglars

Basic Form (DP-1) Damage by Burglars is covered only in the broader Forms DP-2 and DP-3.

Which of the following statements about payment of Workers' Compensation benefits is correct? Benefits must be paid to employees for their on-the-job injuries, regardless of negligence an anyone's part Benefits are paid only upon determination of negligence on the part of the employer Benefits are paid for injuries sustained on or off the job Benefits are paid only if there was no negligence on the part of the employee

Benefits must be paid to employees for their on-the-job injuries, regardless of negligence an anyone's part Workers' Compensation benefits are paid for on-the-job injuries regardless of whether there was negligence involved, or, if negligence was involved, the negligence was by the employer or the employee.

Personal Injury Liability Insurance includes all of the following, except: Malicious prosecution Libel and Slander False Arrest Bodily Injury

Bodily Injury Distinguished from bodily injury, personal injury relates to injury inflicted by way of false arrest, invasion of privacy, malicious prosecution, and so on.

Business Liability Coverage under the BOP includes coverage for: Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period Property Damage to impaired property Bodily Injury to an employee of the insured arising out of and in the course of employment by the insured The recall of products

Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period Property damage to impaired property, the recall of products, and bodily injury to employees are all exclusions under the Businessowners Coverage Form Section II - Liability.

___________ is covered as business personal property under the BOP. Permanently installed machinery Carpeting Built in bookcases installed by a tenant which cannot be removed upon termination of the lease Outdoor furniture

Built in bookcases installed by a tenant which cannot be removed upon termination of the lease Improvements and betterments include additions made a part of the building that the tenant occupies but does not own; including structures that the tenant made at their expense but cannot legally remove.

Which of the following best describes a direct loss? A. Loss of rents from a dwelling made uninhabitable because of fire A named peril policy Bursting of a water pipe that causes water damage A Proximate Cause

Bursting of a water pipe that causes water damage The direct loss to the property is the damage to the property caused by an insured peril.

Choose the correct statement about the BOP Hired Auto and Non-owned Auto endorsement. Business auto coverage for a vehicle the insured rents is added to the coverage Coverage changes from named peril to open peril for owned autos Coverage is limited to only Broad form perils on owned vehicles It includes personal use of a non-owned vehicle

Business auto coverage for a vehicle the insured rents is added to the coverage This endorsement adds business auto coverage to the BOP, but only for vehicles the insured hires, leases, and doesn't own.

Under Transit Coverage Forms, the Annual Transit Form is designed for which of the following? A. Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier B. Business firms that do not make regular shipments C. Business firms that desire coverage only on their shipments to others D. Business firms that desire coverage only on shipments received from others

Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier The Annual Transit Form is designed for firms that send or receive substantial amounts of shipments by common carrier.

Under Transit Coverage Forms, the Annual Transit Form is designed for which of the following? Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier Business firms that do not make regular shipments Business firms that desire coverage only on their shipments to others Business firms that desire coverage only on shipments received from others

Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier The Annual Transit Form is designed for firms that send or receive substantial amounts of shipments by common carrier.

An insured will purchase a Value Reporting Form in which of the following circumstances? Insuring property that has a relatively constant value Business personal property values fluctuate, and protection for the values actually at risk is needed Insuring buildings or structures only Concerned about the Ordinance or Law exclusion

Business personal property values fluctuate, and protection for the values actually at risk is needed With the Value Reporting Form, the insured makes either daily, monthly, or quarterly reports of the values at risk. The final policy premium is based on the average values reported, and the premium is adjusted at the end of the policy term.

Which of the following determines a loss ratio? A. Multiplying actual cash value of loss by the coinsurance factor. B. Dividing operating expenses by total premium. C. Dividing losses plus loss reserves by total earned premiums. D. Multiplying replacement cost by insurance premium.

C. Dividing losses plus loss reserves by total earned premiums

Which of the following is not a key component of the Commercial Package Policy? The Common Policy Conditions page Interline Endorsements Catastrophic Hazard Coverage Form The Common Policy Declarations page

Catastrophic Hazard Coverage Form There is no Catastrophic Hazard Coverage Form

Which of the following is not an element of an insurable risk? Catastrophic perils The ability to set a measurable value on it Accidental loss Large number of homogenous units

Catastrophic perils Insurers want to avoid catastrophic perils.

An insurer cannot cancel a personal auto policy after the first 60 days of coverage for which of the following reasons? Non-payment of premium Claims history Material misrepresentation Driver's license suspension

Claims history Claims history is often a reason for non-renewal of an automobile policy, but not for a mid-term cancellation.

All of the following are true, except: The purpose of coinsurance is to encourage one to carry insurance to value Named peril policies cover only stated perils Open peril policies cover all perils, except those excluded Coinsurance costs more

Coinsurance costs more Generally, the higher the coinsurance, the lower the rate.

The Nationwide Marine Definition specifies risks that may be written under Marine Insurance which does not include ___________. Domestic Shipments Bridges or Tunnels Commercial Buildings Imports and Exports

Commercial Buildings Inland Marine insurance is designed for property that is portable, or that is being shipped from place to place. Generally, fixed property is not eligible.

Which of the following is included in Section III of the Businessowners Coverage Form? Property related coverages Common Policy Conditions Liability related coverages Applicable endorsements

Common Policy Conditions Section III of the Businessowners Coverage Form includes the Common Policy Conditions.

A ___________ damage award is reduced in proportion to the amount of negligence. Comparative negligence Comparative risk Contributory negligence Contributory risk

Comparative negligence

All of the following are common law defenses that may be used when a claimant accuses an insured of negligence, except: Contributory negligence Intervening cause Assumption of risk Comparative negligence

Comparative negligence Comparative negligence is not a common law defense it is a statutory law.

An unendorsed BOP with no optional coverages covers which of the following properties? Automobiles used in the business Completed additions Money and Securities Motor trucks that deliver the insured's goodS

Completed Additions Completed additions, as well as additions under construction, including materials and supplies are covered if not otherwise insured under another policy.

An unendorsed BOP with no optional coverages covers which of the following properties? Automobiles used in the business Completed additions Money and Securities Motor trucks that deliver the insured's goods

Completed additions Completed additions, as well as additions under construction, including materials and supplies are covered if not otherwise insured under another policy.

All of the following are methods of writing property insurance limits, except: Specific coverage Scheduled coverage Concurrent coverage Blanket coverage

Concurrent coverage Specific, Scheduled and Blanket are all methods of writing property insurance limits.

In an insurance contract the ___________ is something of value that is exchanged by the parties to the contract. Offer Consideration Acceptance Condition

Consideration Consideration can take the form of money, such as the premium an insured pays, or a promise to do something, such as the promise by the insurance company to pay for covered losses.

In insurance, the insurer's promise to pay a covered loss and defend the insured in a lawsuit and the insured's payment of the first premium, are all examples of: Consideration Offer Acceptance Legal Purpose

Consideration Consideration is the term used to describe the rights, money, promises or property exchanged between the parties as part of a contract transaction.

Which of the following insurance forms is designed for the person who has the potential for a liability exposure caused by negligent acts of the contractor or subcontractor he hires to make repairs, construction, or alterations? Completed Operations Insurance Contractors Liability Insurance Contractual Liability Insurance Contingent Liability Insurance

Contingent Liability Insurance Contingent liability is liability imposed because of accidents caused by persons other than employees for whose acts an individual, partnership or corporation may be responsible. For example, an insured that hires an independent contractor can, in some cases, be held liable for his negligence.

The defense that prevents recovery for injuries caused by a negligent party if the claimant was also negligent is called: Comparative negligence Contributory negligence Gross negligence Absolute liability

Contributory Negligence The Contributory Negligence defense denies payment to an injured party if they were partly at fault.

After a strong wind blew a yard sculpture into the insured's living room window, he immediately covered the damaged window with leftover wood. The insurance company paid for the window repairs and also the wood up to what amount? $500 10% of Coverage A $1,000 Coverage A

Coverage A When the insured's property is damaged by a covered peril, Reasonable Repairs Coverage pays the reasonable costs by the named insured to take necessary measures to protect the property against further damage, and it is included in the Coverage that applies to the damaged property.

Under the Dwelling Forms, which coverage applies to the building described in the policy, including materials on premises intended for repair or alterations? Coverage E Coverage B Coverage C Coverage A

Coverage A Coverage A applies to the Dwelling at the described location; Coverage B, to Other Structures; Coverage C, to Personal Property; Coverage D, to Fair Rental Value, and Coverage E to Additional Living Expenses.

Detached structures on the insured premises are included in which coverage under a Dwelling Policy? Coverage A Coverage B Coverage C Coverage D

Coverage B Coverage B is the coverage for other structures on the Insured Location. The other structures must be set apart from the dwelling by clear space.

Under the Dwelling Policy, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under: Coverage A Coverage B Coverage C Coverage D

Coverage C Coverage C is the coverage for Personal Property. 10% of the Coverage C limits apply to the Insured's Personal Property away from the premises anywhere in the world.

Choose the false statement about the Homeowners Policy. Coverage D provides coverage for additional living expense Coverage C extends to animals, birds, or fish owned by the insured Motor vehicles do not meet the definition of contents Personal property owned and used by the insured in a vacation home would be covered

Coverage C extends to animals, birds or fish owned by the insured There is no coverage for exotic pets in a Homeowners Policy.

Which of the following statements is false about the Homeowners Policy? Home schooling is permitted under a Homeowners Policy Coverage D of a Homeowners Policy covers additional living expenses Coverage D of a Homeowners Policy includes loss of income from an incidental business A Homeowners Policy will not cover theft of a boat away from premises

Coverage D of a Homeowners Policy includes loss of income from an incidental business Coverage D does not cover loss of income from an incidental business.

All of the following are true, except: Coverage D of a Homeowners Policy covers additional living expenses Coverage D of a Homeowners Policy includes loss of income from an incidental business Home schooling would be permitted under a Homeowners Policy A Homeowners Policy will not cover theft of a boat away from premises

Coverage D of a Homeowners Policy includes loss of income from an incidental business Coverage D does not cover loss of income from an incidental business.

The insured's neighbor, Peter, came over one summer weekend to help John build a new barn. While working on the roof of the barn, Peter fell off and broke his ankle. Which of the following is true about this claim? Coverage J - Medical Payments in the insured's Farm Policy will not cover Peter's medical expenses unless the insured's negligence caused the accident Coverage J - Medical Payments in the insured's Farm Policy is no-fault coverage and will pay for necessary medical expenses that Peter incurred regardless of negligence Peter was an employee of John, thus his medical expenses are only paid under Workers' Compensation insurance There would be no coverage under any part of John's Farm Policy for this accident

Coverage J - Medical Payments in the insured's Farm Policy is no-fault coverage and will pay for necessary medical expenses that Peter incurred regardless of negligence Peter is helping John, not an employee of John, so Medical Payments will apply.

Choose the incorrect statement regarding Medical Expenses coverage under the BOP. Payment of medical expenses is made regardless of who is at fault It pays medical expenses incurred within one year of the date of the accident Coverage excludes funeral expenses It covers accidents on premises the insured owns or rents, or due to the insured's operations

Coverage excludes funeral expenses Medical Expenses coverage pays necessary medical, surgical, x-ray and dental services, including prosthetic devices; and necessary ambulance, hospital, professional nursing and funeral expenses.

Which of the following is true regarding Extra Expense Coverage under a BOP? Extra Expense coverage is not available to commercial tenants There is a monthly limitation equal to 1/12th of the Property Limit of Insurance Extra Expense coverage is provided until the Property Limit of Insurance is exhausted Coverage is for 12 months after the direct loss

Coverage is for 12 months after the direct loss As with Business Income, there is no limit for coverage on Extra Expense that is incurred within 12 consecutive months of the date of the direct physical loss or damage.

Which of the following is true regarding Business Income Coverage under a BOP? Coverage is for 12 months after the direct loss, starting 24 hours after the direct loss The monthly limitation is 1/12th of the limit of insurance applying to Buildings and Business Personal Property The monthly limitation is 1/12th of the limit of insurance applying to Buildings Coverage is for up to 12 months after the direct loss, with no limit on the amount of monthly indemnification, and is not subject to the limits of insurance

Coverage is for up to 12 months after the direct loss, with no limit on the amount of monthly indemnification, and is not subject to the limits of insurance There is no monthly or total limit on the amount of Business Income Coverage and it applies in addition to the limits of insurance provided for direct damage coverages.

Select the correct statement concerning Section II of a Homeowners Policy. One year is the maximum that Section II of the Homeowners Policy will pay for medical payments Coverage is provided if an insured feels morally obligated after damaging the property of others but is not necessarily legally liable Medical payments Coverage under Section II of the Homeowners Policy is available for the insured and all relatives residing with the insured Medical payments Coverage under Section II of the Homeowners Policy is not available for a residence employee

Coverage is provided if an insured feels morally obligated after damaging the property of others but is not necessarily legally liable Damage to Property of Others pays up to $1,000 regardless of whether the insured is liable or not.

Which of the following is provided by the Additional Coverages part of a property insurance policy? The company will voluntarily waive the deductible The insured requests extra coverage be provided by endorsement The insured requests coverage to supplement the deductible Coverage supplements the Coverages set forth as basic Coverages

Coverage supplements the Coverages set forth as basic Coverages The Additional and Supplementary coverages are coverages for incidental expenses that often accompany the losses insured against by the policy

When a proper entry is made on the Declarations Page of a BOP, the optional coverage for outdoor signs would be: Covered for named perils only Covered on an open perils basis Covered on and away from premises Covered only if attached to the building

Covered on an open perils basis The Outdoor Signs Optional Coverage provides coverage on an open peril basis, for all outdoor signs at the described premises.

Which of the following statements is false with respect to the Businessowners Policy? Fungi, Wet Rot or Dry Rot; Virus or Bacteria; Electrical Apparatus, Consequential losses, steam apparatus, frozen plumbing, dishonesty, pollution, and neglect are excluded Covered property includes animals owned other than as stock The limit of insurance for Business Personal Property is changed to 8% Contractor businesses with total square footage of up to 35,000 is eligible

Covered property includes animals owned other than as stock Animals owned other than as stock are excluded.

Which of the following statements about the Special Dwelling Forms is true? Losses to the dwelling are paid on an actual cash value basis. It will automatically cover the theft of contents. Contents are covered on an actual cash value basis. It will cover the cracking of walls.

Cracking of walls and theft are exclusions to this policy. Furthermore, losses to the dwelling are paid on a replacement cost basis, while the contents are paid on an actual cash value basis.

The Businessowners Policy is ___________ insurance when there is other insurance on the same property. Contributing Primary Excess Proportional

Excess The Businessowners Policy is designed and intended to be the only insurance policy on the covered property. Where its coverage happens to overlap with other insurance, it acts only as excess insurance.

Under the Dwelling policies, which is correct regarding coverage of trees, shrubs or plants? The Limit of Liability is $1,000 for any tree, shrub, or plant Damage by wind, hail, weight of ice, snow or sleet is not covered Theft of shrubs and plants is covered All vehicle damage to trees, shrubs, or plants is covered

Damage by wind, hail, weight of ice, snow or sleet is not covered Damage to outdoor plants by forces of nature other than lightning are so common that such damage is considered uninsurable. Coverage for certain other perils is provided, with a limit of $500 for any one tree, shrub, or plant.

Employee Dishonesty Optional Coverage under the BOP, when activated with an entry on the Declarations Page, will cover which of the following? Dishonest acts of employees directed toward customers, such as giving incorrect change Damage or loss to business or personal property, including money and securities, resulting from dishonest acts of employees Misrepresentations of the insured's products or services made by employees Burglary of the insured's premises by employees

Damage or loss to business or personal property, including money and securities, resulting from dishonest acts of employees Employee Dishonesty Optional Coverage protects the insured from dishonest acts of employees acting alone, or in collusion with other employees.

Which loss is not included under Other Than Collision coverage? Damage caused by a painter who, while working on a building, sprayed paint on an insured vehicle A car that is stranded in a creek and damaged by rising water Damage caused by students standing on the hood during a football game Damage to the auto due to crashing into a tree

Damage to the auto due to crashing into a tree Crashing into a tree is collision damage.

Choose the use of an automobile that is not eligible for the Personal Auto Policy. Driving over 25,000 miles annually Delivery of pizza Sales calls Car pool

Delivery of Pizza Delivery or commercial use of an eligible vehicle is ineligible under the Personal Auto Policy and requires a business auto policy.

Choose the statement about direct or indirect losses that is incorrect. A direct loss is a loss resulting directly from a peril insured against An indirect loss is the same as a consequential loss Water damage done by firefighters is considered a direct loss Direct losses include additional living expenses

Direct losses include additional living expenses Additional Living Expense is an indirect loss, not a direct loss.

Water damage caused by which of the following is a covered loss? Overflow of water from a sump pump Discharge caused by a plumbing failure Leaks through a driveway Water below the surface of the ground

Discharge caused by a plumbing failure Water damage is also excluded if caused by surface water, tidal water, and leakage through a building, foundation, or other structure.

Which of the following is not included in the standardized policy structure for insurance policies? Insuring agreement Conditions Duties Exclusions

Duties The duties of the insured and the insurer are found in the policy conditions.

Which of the following is true regarding the Yacht Policy? Each policy has navigational limits that describe the area where the yacht is allowed to operate It is designed for larger boats that can be towed by automobiles It covers damage to the hull and fittings. Liability coverage may be attached by endorsement It is written on an Inland Marine form

Each policy has navigational limits that describe the area where the yacht is allowed to operate The Yacht policy is designed for larger vessels such as yachts, excursion vessels, etc. It is written on an Ocean Marine Form and includes Hull, Protection and Indemnity, Medical Payments and Jones Act coverages.

Choose the false statement about a Homeowners Policy. Trees, shrubs, and plants are covered up to $500 each Theft from a dwelling under construction is not included Earth movement is covered in all Homeowners policies Coverage C allows Coverage for loss due to theft of jewelry up to $1,500

Earth movement is covered in all Homeowners policies Earth movement is excluded from all Homeowners Policies.

Which of the following is not considered a covered peril under the Basic Cause of Loss Form? Sinkhole collapse Sprinkler leakage Earthquake, flood, power failure off insured's premises, government action, steam boiler explosion, ordinance, or law Volcanic action

Earthquake, flood, power failure off insured's premises, government action, steam boiler explosion, ordinance, or law The Basic Causes of Loss Form generally covers the same limited perils as the Basic Dwelling Form, with the addition of Sprinkler Leakage, Vandalism, and Sinkhole Collapse.

All of the following are covered under the Basic Causes of Loss to the Farm Property Coverage Form, except: Lightning loss to livestock Earthquake loss to livestock Flood loss to livestock Electrocution of Livestock

Electrocution of Livestock Electrocution of covered livestock is not covered under the Basic Form, but is covered under the Broad and Special Forms.

Which crime coverage form does Tom need in the event a couple of his bank employees plan and carry out the theft of money from a bank cash drawer? Theft of Money and Securities Robbery or Safe Burglary Employee Theft or Dishonesty Theft Collusion by Employees

Employee Theft or Dishonesty The Employee Theft or Dishonesty form includes the crime of stealing office supplies up to robbing the bank safe.

If not entered accurately on the BOP Declarations, which of the following is not covered? Exterior building glass Employee dishonesty Money Order and Counterfeit Paper Money Coverage Fire Department Service Charge

Employee dishonesty Employee dishonesty is one of four Optional Coverages. Optional Coverages apply only if there is an entry on the Declarations page indicating that one or more of them apply.

Which of the following IS a relationship that involves vicarious liability? Employer and employee Wholesaler and retailer Man and woman Teacher and student

Employer and employee Employers are always vicariously liable for their employees, however, the same cannot be said of the other choices.

Statutory Law Defenses are determined by which of the following? A. Judicial decisions. B. Executive decisions. C. Enactment of Legislatures. D. Administrative decisions.

Enactment of Legislatures When legislatures have felt that some Common Law Defenses are not adequate for the time or locale over which they have jurisdiction, they have replaced them with Statutory Defenses.

Under Commercial Crime Coverage, which of the following is not included in the definition of Money? Evidence of Debt Currency Bank Notes Travelers Checks

Evidence of Debt Money includes coins, currency, bank notes, travelers checks and money orders. Evidences of debt are not negotiable items.

Which of the following statement is false? A. Exclusive remedy prohibits the surviving spouse of a deceased employee whose death was caused by the employer's intentional act or omission or gross negligence from recovering damages B. The right that the injured employee has to benefits under Workers' Compensation due to an injury or death from injury caused by the negligence or wrong of a fellow employee, is the exclusive remedy of the injured employee C. No action may be brought against a fellow employee unless such wrong was willful or malicious D. No action may be brought against a fellow employee unless such wrong was based on the fellow employee's negligence

Exclusive remedy prohibits the surviving spouse of a deceased employee whose death was caused by the employer's intentional act or omission or gross negligence from recovering damages Exclusive remedy does not prohibit a surviving spouse of a deceased employee whose death was caused by the employer's intentional act or omission or gross negligence from recovering damages.

The Outdoor Property Extension under the Building and Personal Coverage Form includes the perils of fire, lightning, aircraft, and which additional perils? Windstorm, hail, riot, and civil commotion Riot, civil commotion, and vandalism Windstorm, hail, explosion, and vehicles Explosion, riot, and civil commotion

Explosion, riot, and civil commotion The most that is paid under the Outdoor Property Extension is $1,000 per Occurrence, but not more than $250 for any one tree, shrub, or plant. The perils covered by this extension are fire, lightning, explosion, riot or civil.

Choose the false statement regarding the purpose of Part II - Employers Liability Insurance. Cover claims that are not subject to compensation laws Protect the employer against common law claims Fill in gaps of compensation coverage Extend policy benefits to states not listed on the Declarations page

Extend policy benefits to states not listed on the Declarations page Part II does not extend the coverage to other states, Part III is Other States Insurance.

With respect to other crime coverage, the CR 04 03 form provides coverage for loss due to: Money laundering Forgery Extortion Burglary

Extortion The CR 04 03 form provides coverage for loss due to extortion.

All of the following are defined as insured locations in the Homeowners Policy, except: A non-owned premises where the insured is temporarily residing Farmland owned by the insured Cemetery plots Any premises named in the Declarations

Farmland owned by the insured Farmland owned by the insured is not covered.

Another general name for the commercial crime insurance category is: Criminal Liability Insurance Fidelity Insurance A Loss-Discovery Form Theft Insurance

Fidelity Insurance Fidelity insurance is another name for the category. Theft is a covered crime.

Rates are referred to as ___________ rates when the insurance company files the rates for approval and then implements the rates. File and Use Mandatory Prior Approval Open Competition

File and Use Rates must be filed with the state insurance department, but the insurance company can use the new rates once they are filed

Choose the most correct statement. A peril in insurance terminology is defined as a hazardous situation Coinsurance applies only in the event of a total loss Under the coinsurance principle, it is the responsibility of the insurer to maintain the requested percentage Fire damage to an insured residence is considered a direct loss

Fire damage to an insured residence is considered a direct loss The fire, any resulting smoke damage, or water damage done by the fire department in extinguishing the fire would all be a direct loss. Direct loss must be caused by an insured peril that set the loss in motion.

Tom buys an office condominium for his accounting business, which is covered under a Condominium Commercial Unit-Owners Coverage Form. Which of the following is not primarily covered? Furniture Improvements Fixtures owned by the Association Business personal property

Fixtures owned by the Association In the event both the unit-owner's policy and the association's policy cover the fixtures, the unit-owner's coverage will be excess.

An insurer organized in another state than the state in which it is authorized to do business is known as which type of insurer? A. Domestic. B. Admitted. C. Alien. D. Foreign.

Foreign

The producer owes the insured which of the following duties? Maintain a trust account Forward premiums to the insurer on a timely basis Report any material facts that might affect underwriting Negotiate insurance

Forward premiums to the insurer on a timely basis Forwarding premium on a timely basis to the insurer is a responsibility owed by the producer to the applicant or insured.

Hull Coverage and Cargo Coverage under Ocean Marine Insurance is generally written on which of the following basis? Replacement Cost Actual Cash Value Full valued basis Market Value

Full valued basis Cargo and Hull Insurance are written on a full valued basis. The valuation of the cargo includes the stated value of the invoice, import duties, and freight charges.

Under property insurance, when the policy states that a loss to the property will be replaced with less costly property that performs the same function with similar efficiency, the policy is written on which of the following basis? Agreed Amount Actual Cash Value Valued Policy Functional Replacement Cost

Functional Replacement Cost The Functional Replacement Cost valuation method is used when the property insured has unique or obsolete craftsmanship, as in old elaborate homes.

The ___________ insuring agreement covers the loss of money due to a fraudulent instruction to a bank to pay funds from the bank. Computer insurance Fund Transfer Fraud Computer fraud Fraud insurance

Fund Transfer Fraud This coverage form provides insurance when a financial institution transfers money or securities based on fraudulent documentation purported to have been sent by the insured's business.

Choose the true statement regarding the Nationwide Marine Definition. It defines the types of property that may be covered by marine insurance The purpose is to specify the types of insurers that write marine insurance The purpose is to explain the difference between ocean marine and inland marine It establishes that only import and export goods are insurable

It defines the types of property that may be covered by marine insurance The Nationwide Marine Definition lists what may be insured under marine policies.

All of the following are considered implied warranties, except: No Deviation in Voyage - The ship must sail the course that was filed with the insurer and can change course only to avoid a storm that might damage the ship or cargo, or to save human life Legality - The goods being shipped must be legal Seaworthiness - The ship is seaworthy and has a competent crew General Average - Refers to the loss resulting from a voluntary sacrifice of any part of the vessel or cargo to safeguard the vessel and the rest of the cargo

General Average - Refers to the loss resulting from a voluntary sacrifice of any part of the vessel or cargo to safeguard the vessel and the rest of the cargo Implied warranties aren't always written into the contract, but are generally understood by all parties and binding upon them. Examples of implied warranties include no deviation in voyage, legality, and seaworthiness

In bonding, the surety is also known as the ___________. Obligor Principal Guarantor Obligee

Guarantor The three main parties to a surety bond are the obligee -- the person who will be indemnified, the principal -- the person whose performance is being insured, and the surety -- the party that guarantees payment to the obligee if the principal fails to perform.

Gasoline stained clothes stored by a furnace are considered a ___________. A. Hazard. B. Risk. C. Severity. D. Adverse selection.

Hazard

Which of the following statements is not true with respect to surplus lines? When any policy of insurance is procured under the authority of surplus lines that does not appear on the current published list, the producer and the insured must execute affidavits showing that the insured and producer were unable to procure, from any authorized insurer or insurers, the full amount of insurance required If a line of coverage is not on the list maintained by the Commissioner, it cannot be written The Commissioner maintains a list of those lines of insurance for which coverage is generally unavailable from licensed insurers Any person may request that the Commissioner add or remove a line of insurance from the current list

If a line of coverage is not on the list maintained by the If a line of coverage is not on the list maintained by the Commissioner, it can be written provided the required affidavits are executed by the producer and the insured.

Which statement is true of a Dwelling Policy Special Form? If an insured dies, coverage continues for the insured's legal representatives Coverage is provided for collapse of a building There is coverage for structures used for commercial, manufacturing, or farming purposes Losses caused by power failure or by any ordinance or law are covered

If an insured dies, coverage continues for the insured's legal representatives The insured's legal representative is automatically covered in the event of the insured's death.

Which of the following is correct regarding Other Insurance under Part A of the Personal Auto Policy? The Personal Auto Policy is the primary policy in all cases of duplicate coverage If there is other liability coverage applicable to the insured auto, the policy will share the loss with the other policy on an excess basis If there is other liability coverage applicable to the insured auto, the policy will pay the proportion that the Limit of Liability bears to the total of all limits There is no coverage for non-owned vehicles if there is other coverage applicable to such vehicles

If there is other liability coverage applicable to the insured auto, the policy will pay the proportion that the Limit of Liability bears to the total of all limits Coverage A of the Personal Auto Policy shares with other applicable liability insurance on a proportional basis. However, it is excess over other insurance on non-owned autos

A loss caused by a(n) ___________ is covered under the BOP. Earth movement Increased cost of construction Mechanical breakdown Off-premises power failure

Increased cost of construction The Increased Cost of Construction Additional Coverage provides $10,000 coverage for costs incurred to comply with an ordinance or law regulating repairing or replacing damaged building parts.

The insurance contract is a(n) ___________ contract because it is an agreement that one party pays on behalf of another party under specified circumstances, such as when a loss occurs. Aleatory Adhesion Valued Indemnity

Indemnity The insurance company pays for a claim covered by the indemnity contract on behalf of the insured.

The Personal Liability endorsement does not provide coverage for which of the following coverages? Defense costs First aid expenses Injury caused to a regular resident of the dwelling Medical payments to others

Injury caused to a regular resident of the dwelling Coverage does apply to expenses incurred by residence employees but not the named insured or regular residents of the named insured's household.

An individual faces the risk of economic loss in the event of property damage because of which of the following? Indemnity Limit of recovery Subrogation Insurable interest

Insurable interest Typically, if there is a risk of financial loss, there must be an insurable interest.

Under the Common Policy Conditions, the part on Examinations of Your Books and Records, states that the: A. Insurer may examine the insured's books and records any time during the policy period B. Insurer may examine the insured's books only upon permission by the insured C. Insurer may examine the books at any time during the policy period and up to three years afterward D. Insurer may examine the insured's books and records at any time during the policy period and during the insured's fiscal year immediately following policy expiration

Insurer may examine the books at any time during the policy period and up to three years afterward Many times the policy premium is based upon information contained in the insured's records, such as payroll, sales, admissions, etc. Often it is necessary to obtain this information after the policy expiration to be sure that the estimates upon which the premium was based were correct.

All of the following are true of negligence, except: It is a type of tort It does not include breach of contract It does not require a duty to be owed It is the failure to use ordinary care

It does not require a duty to be owed For an act to be negligent, the injured party must prove the alleged wrongdoer owed a duty to the injured party or to the public.

Which coverage is excluded under Section II of a Homeowners Policy? Damage to property of others Medical expense of a guest Medical expense of a boarder Third party property damage for which the insured is legally liable

Medical expense of a boarder Medical expense coverage for a boarder or regular resident is excluded.

Under the Common Policy Conditions, the part on Examinations of Your Books and Records, states that the: STUDY STUDY Insurer may examine the insured's books and records any time during the policy period Insurer may examine the insured's books only upon permission by the insured Insurer may examine the books at any time during the policy period and up to three years afterward Insurer may examine the insured's books and records at any time during the policy period and during the insured's fiscal year immediately following policy expiration

Insurer may examine the books at any time during the policy period and up to three years afterward Many times the policy premium is based upon information contained in the insured's records, such as payroll, sales, admissions, etc. Often it is necessary to obtain this information after the policy expiration to be sure that the estimates upon which the premium was based were correct.

Which of the following is not a condition found in an insurance policy? Liberalization Insuring Agreement Subrogation Assignment

Insuring Agreement The Insuring Agreement is a Section of the policy, separate and distinct from the Policy Conditions.

A disrupted chain of events, thus freeing the defendant from liability, defines: Intervening cause Proximate cause Lost cause Concurrent causation

Intervening cause Intervening cause breaks a natural and continuous sequence of events that are necessary to establish negligence.

The Mobile Agricultural Machinery and Equipment Coverage Form does not include coverage for ___________. Irrigation equipment Combines and cotton pickers that are specifically described with a limit of insurance for each Farm tractors Hay balers

Irrigation equipment Irrigation equipment is excluded from the Mobile Agricultural Machinery & Equipment Form.

A person may procure insurance with any insurance company that does not hold a Certificate of Authority if such insurance: Is limited lines insurance Is title insurance Is commercial lines Is with regard to the person's own property or person

Is with regard to the person's own property or person A person may procure insurance with any insurance company that does not hold a Certificate of Authority if such insurance is with regard to the person's own property or person.

Which of the following describes the Lay Up Warranty under the Yacht Policy? It is a limitation of coverage on the yacht that applies when the yacht is outside its navigational limits It is an additional coverage that applies when the yacht is being repaired or serviced It applies when the insured yacht is in storage and allows a return of premium due to the lower risk It states that coverage is suspended while the yacht is laid up

It applies when the insured yacht is in storage and allows a return of premium due to the lower risk The Lay Up Warranty allows a reduction of premium for the period during which the yacht is in storage. This reduction of premium reflects the reduced risk during lay up.

Which of the following is true regarding Personal Inland Marine Insurance? It is written only for policy terms of 3 years It is used to insure personal property being shipped by ocean going vessels It is used to insure personal property being shipped on inland waters It can be attached to Homeowner Policies or can be written as stand-alone policies

It can be attached to Homeowner Policies or can be written as stand-alone policies Originally written only in separate policies, Inland Marine coverages are now commonly provided by endorsement to the Homeowners Policy.

Which of the following is true regarding the Earthquake Causes of Loss Form? It includes coverage for earthquakes that start within 168 hours after the expiration of the policy It can be used only with another Causes of Loss Form It can be used by itself to provide a stand alone Earthquake policy It provides coverage for mudslides

It can be used only with another Causes of Loss Form The Earthquake Causes of Loss Form cannot be used alone to provide an Earthquake policy. It is intended only to add the Earthquake peril to the other Causes of Loss Forms.

Which of the following is correct regarding Uninsured Motorists Coverage under the Personal Auto Policy? It covers bodily injury (BI) of an insured due to an accident caused by the driver of an uninsured vehicle It covers bodily injury to the insured and property damage to the insured's property due to an accident caused by the driver of an uninsured vehicle It covers damage to the insured's vehicle due to an accident caused by the driver of an uninsured vehicle It provides coverage for the driver of an uninsured automobile that is involved in an accident with the insured automobile

It covers bodily injury (BI) of an insured due to an accident caused by the driver of an uninsured vehicle The purpose of Uninsured Motorists Coverage is to provide coverage for an insured injured in an accident that is the fault of the operator of an uninsured motor vehicle.

Which is the incorrect statement regarding Lawyer's Professional Liability Insurance? It covers bodily injury and property damage liability It protects against damages arising out of the improper performance of professional services It is a type of Errors and Omissions Insurance It does not cover dishonest or criminal acts of the insured

It covers bodily injury and property damage liability Professional Liability is not a bodily injury or property damage liability coverage. The legal professional needs Commercial General Liability Insurance to protect against bodily injury and property damage exposures.

The Collision or Running Down Clause in Ocean Marine Insurance covers: It covers damage to the insured vessel caused by running aground It covers collision damage to the insured vessel when it collides with a pier or fixed object It covers collision damage to another vessel when the shipper is liable It covers collision damage to the insured vessel when it collides with another vessel

It covers collision damage to another vessel when the shipper is liable A Collision and Running Down Provision is contained in the standard Hull Policy to cover liability incurred for damage to another vessel or structure.

Which statement is false regarding automobile physical damage Coverage D? It covers damage to the insured auto regardless of liability It covers damage to the insured auto and to another auto with which it collided Collision coverage usually is written with a deductible Damage to the insured auto that is caused by colliding with a deer would be covered under Other Than Collision Coverage

It covers damage to the insured auto and to another auto which it collided Automobile physical damage would not cover damage to the other vehicle. Damage to vehicles of others would be under liability coverage.

Which of the following is true regarding an unendorsed HO-4 (tenants form)? In includes Open Perils coverage on an actual cash value basis It includes the Broad Form Named Perils on an actual cash value basis It includes Open Perils coverage on a Replacement Cost basis In includes the Broad Form Named Perils on a replacement cost basis

It includes the Broad Form Named Perils on an actual cash value basis The HO-4 provides Broad Form Named Perils coverage on an Actual Cash Value basis. Replacement Cost coverage is available by endorsement, for an additional premium.

Which of the following best defines a hazard? It is a cause of loss It increases the risk or severity of loss It eliminates the chance of loss It increases the amount of loss

It increases the risk or severity of loss

Which of the following is not included in a description of the Yacht Policy? Lay up warranties are permitted Includes both property and liability coverage It is covered regardless of its territory Is written on an Ocean Marine form

It is covered regardless of its territory A yacht is not covered if it is navigated outside the territory.

Choose the true statement about BOP business personal property. It is covered only while within the building or an enclosed structure on the premises It is covered while in transit It is covered when located in or on the building at the described premises, or in the open (or in a vehicle) within 100 feet of the premises Coverage extends to property in vehicles within 500 feet of the premise

It is covered when located in or on the building at the described premises, or in the open (or in a vehicle) within 100 feet of the premises Business Personal property is covered while in or on the building at the described premises, or in the open (or in a vehicle) within 100 feet of the premises.

The Difference in Conditions Policy is a special form used to fill in gaps of a property policy. Which of the following is true regarding this policy? The Standard DIC form is developed and filed by the NAIC It is written with a Standard Deductible of $1,000 It is written with a minimum of 80% co-insurance It is generally written on an open peril basis, excluding losses by perils that are covered under standard property

It is generally written on an open peril basis, excluding losses by perils that are covered under standard property forms The Difference in Conditions Policy is designed to provide coverage for all perils not covered under standard property forms. Because of the very broad coverage at the DIC, each insurer writing this form develops its own policy form.

Concerning duties in the event of an occurrence, claim, or suit under the Liability and Medical Expenses General Conditions of the BOP, choose the correct statement. It is not necessary to send a sworn statement of loss immediately The insurer must immediately be notified in writing of an occurrence that may result in a claim The insurer must be notified within 10 days of an occurrence that may result in a claim If a claim is made or a suit is brought against any insured, the insured must immediately notify the insurer in writing

It is not necessary to send a sworn statement of loss immediately No reference is made to the Duties in the Event of Occurrence, Offense, Claim, or Suit to a sworn statement of loss. The insurer is to be notified as soon as practical of an occurrence or an offense that may result in a claim.

Choose the correct statement regarding the BOP Direct Damage of the Utility Services Endorsement. It pays for direct loss to covered property described in the schedule caused by interruption of service to the described premises It pays for loss to overhead transmission lines at the insured premises It pays for loss of business income caused by the interruption of utility services It pays the extra expenses incurred by the insured because of the interruption of utility services

It pays for direct loss to covered property described in the schedule caused by interruption of service to the described premises The property usually covered under this endorsement is property that may spoil or be adversely affected by the lack of power or water at the premises.

Which of the following is true regarding the Direct Damage of the Utility Services Endorsement under a BOP? A. It pays for loss to covered property described in the schedule caused by interruption of service to the described premises B. It pays for loss to overhead transmission lines at the insured premises C. It pays for loss of business income caused by the interruption of utility services D. It pays the extra expenses incurred by the insured because of the interruption of utility services

It pays for loss to covered property described in the schedule caused by interruption of service to the described premises The property usually covered under this endorsement is property that may spoil or be adversely affected by the lack of power or water at the premises.

Which of the following is the best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance? It provides coverage to employees that are not otherwise covered It provides coverage for unpaid volunteer workers It provides coverage for employees who option out of coverage under the standard Workers' Compensation policy It provides coverage for independent contractors

It provides coverage to employees that are not otherwise covered Employers who do not come under the Workers' Compensation law of their state may elect to provide Workers' Compensation coverage for their employees through the Voluntary Compensation Endorsement.

Choose the correct answer regarding Coverage F of the Farm Property Coverage Form. A. Each item of farm machinery to be covered must be scheduled B. It will cover farm machinery both on and away from described premises C. It covers farm buildings, including silos and fences, as well as home furnishings and office furniture in a home office D. It does not cover unscheduled livestock, but does cover show horses and ponies, if scheduled

It will cover farm machinery both on and away from described premises Coverage F is the Unscheduled Farm Personal Property, that covers machinery, livestock, tools, supplies, and other farm personal property on a blanket (unscheduled) basis. It does not include household or other items usual to a dwelling.

Which of the following situations is covered under Medical Payments coverage? Jean broke her foot getting out of the share-the-expense van pool vehicle Jim was injured while driving his company car Jane was injured while driving her car to take her company's mail to the post office Joe was injured when a taxi hit a light pole

Jean broke her foot getting out of the share-the-expense van pool vehicle Medical payments exclude coverage for regularly furnished company cars, used in the course of business, or while occupying a taxi.

Which of the following situations is covered under Medical Payments coverage? Jean broke her foot getting out of the share-the-expense van pool vehicle Jim was injured while driving his company car Jane was injured while driving her car to take her company's mail to the post office Joe was injured when a taxi hit a light pol

Jean broke her foot getting out of the share-the-expense van pool vehicle Medical payments exclude coverage for regularly furnished company cars, used in the course of business, or while occupying a taxi.

Common Law Defenses are determined by which of the following? Legislative decisions Judicial decisions Executive decisions Administrative decisions

Judicial decisions Common Law Defenses are those developed through the years by tradition and precedent from prior judicial decisions.

Under Coverage A of a Dwelling Policy, all of the following are included, except: Land, including the land on which the dwelling is located Materials for repairing the dwelling, located on the described location Outdoor equipment on the location used to service the dwelling Fire or lightning damage to outdoor television antennas

Land, including the land on which the dwelling is located Coverage A stipulates, 'We do not cover land, including land on which the dwelling is located.'

The property insurance condition that states that the insured may not file suit against the insurer unless all terms of the policy have been complied with, is: Ordinance or Law condition Legal Action Against Us Claim settlement condition Loss Payment condition

Legal Action Against Us An insured cannot ignore their responsibilities under the policy, then subsequently bring legal action against the insurer.

Which of the following Coverages is not found under Section I of the Homeowners Policy? Liability Additional Living Expense Other Structures Loss of Use

Liability Section I of the Homeowners Policy contains the Property Coverages. Liability Coverages are set forth in Section II of the Policy.

Bodily injury, property damage, personal injury, advertising injury, and ___________ are covered under the Businessowners Liability Coverage Form. Liquor Liability Liability assumed under an insured contract Employers Liability Mobile Equipment being transported on an auto owned or operated by an insured

Liability assumed under an insured contract There is a rather extensive definition of insured contract in the definitions section of the Businessowners Policy.

The Businessowners Liability Coverage Form includes coverage for bodily injury, property damage, personal injury and advertising injury to which coverage applies, plus: Liquor Liability Liability assumed under an insured contract Employers Liability Mobile Equipment being transported on an auto owned or operated by an insured

Liability assumed under an insured contract There is a rather extensive definition of insured contract in the definitions section of the Businessowners Policy.

Which of the following is covered under Aircraft Liability Insurance? A. The incidental automobile exposure of private pilots B. Owners of private, municipal, and commercial airports C. Legal liability of owners and operators of aircraft hangers and aircraft repair shops D. Liability claims arising from the ownership, maintenance or use of an aircraft

Liability claims arising from the ownership, maintenance or use of an aircraft Aviation Insurance Liability includes Aircraft Liability, Airport Liability and Hangerkeepers' Liability. Aircraft Liability insurance covers claims arising from the ownership, maintenance, or use of an aircraft.

Which of the following is covered under Aircraft Liability Insurance? The incidental automobile exposure of private pilots Owners of private, municipal, and commercial airports Legal liability of owners and operators of aircraft hangers and aircraft repair shops Liability claims arising from the ownership, maintenance or use of an aircraft

Liability claims arising from the ownership, maintenance or use of an aircraft Aviation Insurance Liability includes Aircraft Liability, Airport Liability and Hangerkeepers' Liability. Aircraft Liability insurance covers claims arising from the ownership, maintenance, or use of an aircraft.

Aircraft Liability Insurance is designed to cover which of the following? The incidental automobile exposure of private pilots Owners of private, municipal, and commercial airports Legal liability of owners and operators of aircraft hangers and aircraft repair shops Liability claims arising from the ownership, maintenance, or use of an aircraft

Liability claims arising from the ownership, maintenance, or use of an aircraft Aviation Insurance Liability includes Aircraft Liability, Airport Liability and Hangerkeepers' Liability. Aircraft Liability insurance covers claims arising from the ownership, maintenance, or use of an aircraft.

All of the following are true about 'liability', except: In the case of negligence, the prudent person standard is used Normally, the burden of proof is on the injured party to prove that the other party was negligent Liability policies pay costs incurred by the insured to sue negligent third parties A characteristic of occurrence is that the loss may take place over a period

Liability policies pay costs incurred by the insured to sue negligent third parties Liability policies pay the cost to defend the insured against suits by third parties.

Choose the incorrect answer regarding liability insurance. In the case of negligence, the prudent person standard is used Normally, the burden of proof is on the injured party to prove that the other party was negligent Liability policies pay costs incurred by the insured to sue negligent third parties A characteristic of occurrence is that the loss may take place over a period of time

Liability policies pay costs incurred by the insured to sue negligent third parties Liability policies pay the cost to defend the insured against suits by third parties.

Which clause allows the insurer to broaden coverage with no increase in premium and no endorsement? Assignment Liberalization Endorsement Changes

Liberalization The Liberalization clause specifies that the broadening of coverage will apply to existing policies without the need for an endorsement.

Which clause allows the insurer to broaden coverage with no increase in premium and no endorsement? Assignment Liberalization Endorsement Changes

Liberalization The Liberalization clause specifies that the broadening of coverage will apply to existing policies without the need for an endorsement.

All of the following are true of Section II of a Homeowners Policy, except: Medical payments coverage would apply if the family dog were to bite someone 3 blocks from home First aid expenses are automatically included Loss assessment charges against the insured by a property owner's association are excluded Medical payments include guests

Loss assessment charges against the insured by a property owner's association are excluded Loss assessment charges against the insured by a property owner's association are covered up to $1,000.

Which of the following is not covered under Medical Payments in Section II of the Homeowners Policy? Medical and surgical expenses Loss of Income of an injured person Dental expenses Cost of prosthetic devices

Loss of Income of an injured person Coverage F (Medical Payments to Others) pays necessary medical expenses incurred within three years from the date of an accident. This may include surgical, dental, hospital, ambulance, professional nursing and similar expenses.

Which statement is true? Loss of rent due to a fire would be considered a direct loss Food spoilage after loss of electricity due to a covered peril is a direct loss An explosion that results in damage to property of others would be considered a consequential loss Loss of rent due to a fire would be considered a consequential or indirect loss

Loss of rent due to a fire would be considered a consequential or indirect loss Loss of rent after a covered loss would be a consequential loss or indirect loss.

Regarding a Farm Property Coverage Form, choose the statement that is false. Exclusions include earth movement and intentional loss Losses from nuclear damage are included Coverage D includes loss of use Coverage F includes unscheduled farm personal property

Losses from nuclear damage are included Losses from nuclear damage are not covered.

The insured's Farm Liability Policy does not cover which of the following accidents? A.While visiting the neighbor's farm, the insured's son accidently started a fire that burned down a shed B. The insured's daughter sells pecans in a farm stand at the end of the farm driveway and the pecans caused food poisoning C. Medical expenses up to 4 years from the accident date to his neighbor who accidently was hurt on the insured's farm D. The insured was sued by his neighbor when he falsely told others that his neighbor's livestock was seriously diseased

Medical expenses up to 4 years from the accident date to his neighbor who accidently was hurt on the insured's farm Coverage J - Medical Payments provides third-party payments, regardless of fault, for medical expenses due to an accident, if the expenses are incurred and reported within 3 years of the accident date.

The insured's Farm Liability Policy does not cover which of the following accidents? STUDY STUDY STUDY A. While visiting the neighbor's farm, the insured's son accidently started a fire that burned down a shed B. The insured's daughter sells pecans in a farm stand at the end of the farm driveway and the pecans caused food poisoning C. Medical expenses up to 4 years from the accident date to his neighbor who accidently was hurt on the insured's farm D. The insured was sued by his neighbor when he falsely told others that his neighbor's livestock was seriously diseased

Medical expenses up to 4 years from the accident date to his neighbor who accidently was hurt on the insured's farm Coverage J - Medical Payments provides third-party payments, regardless of fault, for medical expenses due to an accident, if the expenses are incurred and reported within 3 years of the accident date.

Choose the true statement concerning the Homeowners policy. Medical payments under a Homeowners Policy will cover the insured Medical payments under a Homeowners Policy will cover funeral expenses The Homeowners Policy will provide protection for the insured's use of a vehicle that is used for nonbusiness purposes Medical payments include personal injury

Medical payments under a Homeowners Policy will cover funeral expenses Funeral expenses are covered expenses under Homeowners Policy Section II.

Tom's lead bank teller, as a ___________, has the responsibility of taking bank securities to a sister bank every morning. Watchperson Custodian Trustee Messenger

Messenger A messenger could be the insured, partners, or employees who have the care and custody of property outside the premises.

A ___________ describes the person that has care and custody of insured property outside the insured premises? Messenger Custodian Watchperson Employee

Messenger The term Messenger is used to describe a person who has custody of property outside the premises.

Which of the following correctly describes the practice of Twisting? A. Offering anything of value to a client that is not already a part of the policy, as an incentive to purchase insurance B. Misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment C. Entering into any agreement to commit an act of boycott, coercion, or intimidation resulting in an unreasonable restraint of the business of insurance D. Representing to the applicant that a specific coverage or product is required by law in conjunction with the purchase of insurance when such coverage or product is not required

Misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment (Offering anything of value to a client that is not already a part of the policy, as an incentive to purchase insurance) describes Rebating. (Entering into any agreement to commit an act of boycott, coercion, or intimidation resulting in an unreasonable restraint of the business of insurance) describes Boycott, Coercion, and Intimidation.

A ___________ construction material has a fire-resistance rating between one and two hours for walls, floors and roofs. Fire Resistive Modified fire-resistive Non-Combustible Joisted Masonry

Modified fire-resistive The class of construction of a building greatly influences its insurance rate and insurability. Classes range from Framed Construction to Non-Combustible Construction. Modified Fire Resistive is defined as the materials used in the walls, floors, and roof of a structure must have a fire resistive rating of at least 1 hour, but less than 2 hours.

Dishonest tendencies that increase the probability of loss, such as hiring someone to steal your property, are which of the following? STUDY STUDY STUDY Risk Pure risk Morale hazard Moral hazard

Moral hazard Certain characteristics and dishonest behaviors of people increase the probability of loss, such as an insured who burns down his house to collect the insurance payout.

Which of the following statements regarding Multi-Peril Crop Insurance is correct: Multi-peril crop insurance is reinsured by the federal government by FCIC Multi-peril crop insurance is not reinsured by the federal government, but through CHIAA Insects and plant disease are excluded from coverage Multi-peril crop insurance protects against the perils of lightning, wind, and pollution

Multi-peril crop insurance is reinsured by the federal government by FCIC The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC).

Which of the following is false regarding financial requirements applicable to insurers in Connecticut? Stock life insurers must have $1,000,000 in capital and $2,000,000 in surplus Mutual life Insurers must have $2,000,000 in surplus Stock health insurers must have $500,000 in capital and $500,000 in surplus Mutual health insurers must have $1,000,000 in surplus

Mutual life Insurers must have $2,000,000 in surplus Mutual life insurers must have $3,000,000 in surplus.

NADA is an acronym for

National Automobile Dealers Association

___________ specifies that coverage in the event of a claim will not benefit a person who is moving the insured's property for a fee. Limit of Liability Claim Settlement Assignment No Benefit to Bailee

No Benefit to Bailee This provision makes clear that the insurer has no obligation to a bailee, even if the bailment is to the benefit of the insured.

A ___________ auto is any private passenger auto, pickup, van, or trailer, not owned by or furnished for regular use by the named insured or a family member while being used by the named insured or a family member, under the Personal Auto Policy. Non-owned Newly Acquired Covered Substitute

Non-owned Part D of the Personal Auto Policy covers non-owned autos, as well as the insured's covered autos.

Liability coverage is provided in which of the following situations? Company car Non-owned golf cart Uninsured owned vehicle Motorcycle

Non-owned golf cart Vehicles designed mainly for use off public roads are excluded, except for non-owned golf carts.

Which term describes the situation that occurs when two policies covering the same property contain different policy periods? Coinsurance Concurrent causation Nonconcurrency Blanket coverage

Nonconcurrency Nonconcurrency means not the same.

The ___________ is the third party to whom the surety is answerable in Surety bonding. Guarantor Obligee Obligor Surety The Obligee is the party for whose benefit the bond is written.

Obligee The Obligee is the party for whose benefit the bond is written.

Which of the following forms responds to losses that occur while the policy is in force and provides a defense and payment of claims for which the insured is legally liable, regardless of when the claim is made against the insured as long as the loss occurred during the policy term? Claims-Made Form Occurrence Form Products Form Premises and Operations Form

Occurrence Form There is no Products Form, or Premises and Operations Form. These are areas of exposure covered in Commercial General Liability Insurance.

An agent told a policyholder that a newly acquired building purchased on September 1 is automatically covered until ___________. September 10 September 21 October 1 November 1

October 1 Newly acquired or constructed Property is a policy coverage extension covering each new building up to $250,000 for up to 30 days, and business personal property at each building is covered for up to $100,000 for up to 30 days.

Which of the following is not an exclusion under a property policy? Ordinance or law Neglect Governmental action On-premises utility failure

On-premises utility failure Off-premises utility failure is a common exclusion in property policies.

All of the following are correct regarding the Broad Theft Endorsement on a Dwelling policy, except: It may be added to any of the Dwelling forms It applies only to owner-occupied structures It also includes vandalism resulting from theft Only on-premises coverage is available

Only on-premises coverage is available The Broad Form Theft endorsement is attached to owner-occupied Dwelling policies to provide theft coverage for the owner-occupant's Personal Property. On-premises and off-premises coverage is available.

Choose the incorrect answer regarding the Broad Theft Endorsement on a Dwelling policy. It may be added to any of the Dwelling forms It applies only to owner-occupied structures It also includes vandalism resulting from theft Only on-premises coverage is available

Only on-premises coverage is available The Broad Form Theft endorsement is attached to owner-occupied Dwelling policies to provide theft coverage for the owner-occupant's Personal Property. On-premises and off-premises coverage is available.

Which of the following is not true about the Home Business endorsement? Only property damage is covered Business must be owned by the insured Includes advertising injury coverage Professional services are excluded

Only property damage is covered The endorsement provides both business property and liability coverages for an eligible home business.

The HO-3 dwelling and other structures Coverages are insured on a(n) ___________ basis. Named Peril Open Peril Actual cash Functional Replacement Cost Value

Open Peril Coverages A and B are insured on an Open Peril basis in which all perils are insured unless specifically excluded.

Which of the following coverages is provided under the HO-3 Additional Coverage of Property Removed? Open peril coverage for 30 days Named peril coverage for 30 days Open peril coverage for 10 days Named peril coverage for 15 days

Open peril coverage for 30 days. When property is removed because it is endangered by a covered peril, the coverage is open peril for 30 days.

Which statement is false? Named peril policies cover only perils that are stated in the insuring agreement Open peril policies cover only those perils that are stated in the Declarations Co-insurance results in a reduced rate An extension is coverage that is included beyond the face amount

Open peril policies cover only those perils that are stated in the Declarations Open peril policies cover risks of direct physical loss, and the perils are not named.

___________ is not excluded under bodily injury and property damage liability of the Commercial General Liability Coverage Part of the CPP. Discrimination Operation of mobile equipment Damage to insured's work Product recall

Operation of mobile equipment The operation of mobile equipment is covered, but not its transportation to or from a job site.

All of the following are considered liability assumed under insured contracts, except: A lease of premises Ordinance or Law Sidetrack agreements Elevator maintenance agreements

Ordinance or Law Simply put, ordinances or laws are not contracts.

Each of the following is an example of special damages, except: Loss of earnings Expenses Repair costs Pain

Pain Special damages are paid for tangible loss or damage, and general damages are paid when losses cannot be calculated objectively.

All of the following are false concerning the National Flood Insurance Program, except: STUDY STUDY STUDY When coverage is on dwelling property, it is extended to include trees, shrubs, and plants Flood policies are available only from the National Flood Insurance Program Agents may bind flood insurance for up to 15 days prior to submitting the final application Payment for losses are made by the federal government

Payment for losses are made by the federal government Although private insurers sell and service flood insurance in addition to that provided by the National Flood Insurance Program, the federal government 100% reinsures all flood insurance.

In Liability Insurance policies, Medical Payments Coverage include: Payment of medical, surgical, and nursing expenses caused by illness manifesting itself on the insured's premises Payment of necessary medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, and funeral expenses incurred by invitees, and licensees on the insured's premises Payment of medical, surgical, and nursing expenses incurred by persons who occupy the premises Payment of medical, surgical, and nursing expenses incurred by an insured while at work on the premises

Payment of necessary medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, and funeral expenses incurred by invitees, and licensees on the insured's premises Coverage is not intended for insureds, employees, or residents of the premises. Coverage is for bodily injury caused by accident.

In explaining Medical Payments under Commercial General Liability Insurance, which statement should not be used? The quiz is currently paused. Payments are made regardless of fault Payments are made only if the insured is determined to be legally liable Payments are made for expenses incurred and reported within one year of the accident Medical expenses for bodily injury suffered in an accident on the insured's premises or because of the insured's operations are covered

Payments are made only if the insured is determined to be legally liable Medical Payments provides coverage for the insured's customers and members of the public. Excluded from coverage are the insured and the insured's employees.

All of the following are correct concerning Medical Payments under Commercial General Liability Insurance, except: A. Payments are made regardless of fault B. Payments are made only if the insured is determined to be legally liable C. Payments are made for expenses incurred and reported within one year of the accident D. Covered is medical expense for bodily injury caused by an accident on the insured's premises or because of the insured's operations

Payments are made only if the insured is determined to be legally liable Medical Payments provides coverage for the insured's customers and members of the public. Excluded from coverage are the insured and the insured's employees.

All of the following are false of medical payments, except: They do not allow further action for recovery after medical payments have been accepted Payments are made without regard to negligence The insured must be legally liable for payment to apply They replace bodily injury coverage

Payments are made without regard to negligence Payments up to the limit are made without regard to fault.

Which of the following is not an additional coverage under the Building and Personal Property coverage form? Peak season Fire department service charge Preservation of property Debris removal

Peak season Peak Season is an available coverage that has to be added by endorsement.

In Liability Insurance, the ___________ is the most coverage will pay for a loss arising out of any one occurrence regardless of overall policy limits. Aggregate Limit Per Occurrence Limit Per Person Limit Punitive Limit

Per Occurrence Limit In split limits policies, there is a Per Occurrence limit for bodily injury coverage and a separate Per Occurrence limit for property damage coverage. In Combined Single Limits policies, there is one Per Occurrence limit applying to both bodily injury and property damage.

The insuring clause (agreement) section of a policy describes: The duties of the insured in the event of a loss Perils that are not covered Perils that are covered Transfer of the rights of recovery

Perils that are covered The Insuring Agreement includes the perils covered.

The Workers' Compensation Insurance Schedule of Benefits applies to: Permanent Partial disabilities Temporary Total disabilities Temporary Partial disabilities Permanent Total disabilities

Permanent Partial disabilities The Schedule of Benefits applies for specific Permanent Partial disabilities such as the loss of an eye, hand, limb, etc. These benefits are usually paid in addition to other income benefits.

Which of the following endorsements to the Homeowners Policy adds coverage for injury resulting from libel, slander, false arrest, defamation, invasion of privacy and other such offenses that could result in a personal liability suit? Personal Injury Endorsement Business Pursuits Endorsement Permitted Incidental Occupancies Endorsement Additional Residence Rented to Others Endorsement

Personal Injury Endorsement The Personal Injury Endorsement provides coverage for injuries to others that are not physical injuries.

Which of the following is the false statement about the Commercial Umbrella Liability Policies? Commercial Umbrella policies are excess policies Policies generally cover first-party claims If the Umbrella Policy provides broader coverage than the underlying policy, the umbrella will cover the entire loss, less a retention Specific minimum limits for underlying coverage are required

Policies generally cover first-party claims Umbrella policies are excess liability policies and cover third-party claims. They normally require high limits of liability in the underlying primary policy(ies).

Which of the following pollution forms will an agent recommend to an insured whose business requires protection for pollution liability and clean up costs? Pollution Extension Endorsement Pollution Liability Coverage Form (Designated Sites) Limited Pollution Liability Coverage Form (Designated Sites) Limited Pollution Extension Endorsement

Pollution Liability Coverage Form (Designated Sites) Only the Pollution Liability Form includes coverage for pollution-related clean up costs.

Which of the following is not a contingent liability exposure? STUDY STUDY Liability exposure of insured's sub-contractors Premises liability exposure Owners and Contractors Protective liability exposure Contractual liability exposure

Premises liability exposure Contingent liability exposures exist when the insured is held liable for the actions or failure of actions of others. Premises liability is not a contingent liability exposure.

Which of the following is not a contingent liability exposure? STUDY STUDY STUDY Liability exposure of insured's sub-contractors Premises liability exposure Owners and Contractors Protective liability exposure Contractual liability exposure

Premises liability exposure Contingent liability exposures exist when the insured is held liable for the actions or failure of actions of others. Premises liability is not a contingent liability exposure.

The Condominium Association policy will be ___________ if the unit-owner of a condominium insures the same part of the building. Excess Proportionate 0% Primary

Primary The Condominium Association Coverage Form covers buildings and fixtures if the Association Agreement requires the Form insure the property.

All of the following definitions are true of a Homeowners Policy, except: Bodily injury -- Bodily harm, sickness or disease, including required care, loss of services and death that results Occurrence -- An accident, including exposure to conditions that result during the policy period in bodily injury or property damage Residence employee -- An employee of an insured whose duties are related to the maintenance or use of the residence premises Property damage -- Physical injury to tangible property, but does not include loss of use of that property

Property Damage --Physical injury to tangible property, but does not include loss of use of that property. Property Damage does include loss of use of the property.

All of the following definitions are true of a Homeowners Policy, except: Bodily injury -- Bodily harm, sickness or disease, including required care, loss of services and death that results Occurrence -- An accident, including exposure to conditions that result during the policy period in bodily injury or property damage Residence employee -- An employee of an insured whose duties are related to the maintenance or use of the residence premises Property damage -- Physical injury to tangible property, but does not include loss of use of that property

Property Damage — Physical injury to tangible property but does not include loss of use of that property Property Damage does include loss of use of the property.

Which of the following is not covered under Section II of the Homeowners Policy? The insured's liability for damages to property of others Property of the insured The insured's liability for bodily injury to others Medical expenses for an accident arising out of the premises or non-business activities of an insured

Property of the insured Section II is Liability Coverage, not Property Coverage. Section I would cover property of the insured.

Of the following statements concerning Homeowners policies, which is correct? A. Coverage is not provided to a garage rented for private garage purposes B. Coverage is provided to property of boarders not related to the insured C. Property that has been borrowed meets the definition of contents D. Dwellings under construction are covered for theft

Property that has been borrowed meets the definition of contents Coverage C covers property owned or used by the insured, including property owned by others.

Of the following statements concerning Homeowners policies, which is correct? Coverage is not provided to a garage rented for private garage purposes Coverage is provided to property of boarders not related to the insured Property that has been borrowed meets the definition of contents Dwellings under construction are covered for theft

Property that has been borrowed meets the definition of contents Coverage C covers property owned or used by the insured, including property owned by others.

A motorcycle is eligible for coverage if the Miscellaneous Type Vehicle Endorsement is attached to a Personal Auto Policy because the endorsement does which of the following? Provides a new definition of covered auto Specifically names it in the Declarations Alters the four-wheel requirement Adds motorcycles to the list of eligible vehicles

Provides a new definition of covered auto The endorsement amends the definition of covered vehicle to include motorcycles

Which of the following is correct regarding medical expenses under a Businessowners Policy? Pays the sums for which the insured is legally liable Written in place of bodily injury Once the payment is accepted, further action for recovery is prohibited Provides coverage regardless of negligence

Provides coverage regardless of negligence Medical Expense payments are made without regard to fault.

Insurance is designed to provide protection against which of the following? Involuntary risk Speculative risk Pure Risk Certain Risk

Pure Risk In Pure Risk, the only consideration is the possibility of loss or no loss. The contrast is Speculative risk, which entails a chance of gain as well as a chance of loss.

A ___________ is allowed to charge a subscriber more for a pro rata share of losses. Lloyd's Insurer Stock Insurance Company Reciprocal Insurer Fraternal Insurer

Reciprocal Insurer

The ___________ bill of lading is less expensive than the straight bill of lading. STUDY STUDY STUDY Released Carrier Cargo Waiver

Released A released bill of lading is issued when the carrier and shipper agree that the carrier's responsibility is limited to the value stated on the bill of lading.

Which does not qualify FOR a temporary substitute? Owned car Recently purchased van Owned trailer Rental car

Rental car A temporary substitute vehicle must be used for any other vehicle described as 'your covered auto'.

Losses to a building are paid on a(n) ___________ basis under the Dwelling Broad Form. The quiz is currently paused. Functional Replacement Cost Actual Cash Value Agreed Value Replacement Cost

Replacement Cost The Dwelling Broad Form provides for building losses to be paid on a replacement cost basis, if the amount of insurance carried is equal to at least 80% of the replacement cost of the property insured.

A client with an HO-3 policy does not want her personal property covered for Actual Cash Value, so her agent suggested an Endorsement to change that Actual Cash Value to which of the following? Agreed value Stated Value Replacement Cost Functional Replacement Cost

Replacement Cost The Personal Property Replacement Cost Endorsement meets her needs, but does not pay Replacement Cost for antiques, fine arts, paintings, and any articles whose age or history affects the value.

Actual Cash Value in property insurance is best defined as which of the following? Replacement cost at the time of loss, minus depreciation Market Value Appraised Value Property replacement cost

Replacement cost at the time of loss, minus depreciation Actual Cash Value valuation provides that the policy will pay the cost to repair or replace the damaged property at the time of loss, less a depreciation factor based upon the age of the property.

Where can Sam find insurance coverage after he was rejected by Insurer A due to his claims history? Reinsurance Risk Retention insurance Lloyd's of London Residual market

Residual Market

No-fault liability is described as each of the following, except: Typically applies to auto insurance Restricts the rights of the injured party to sue for any amount of damage Injured party collects from own insurance Negligence is not determined

Restricts the rights of the injured party to sue for any amount of damage Most no-fault laws restrict the rights of the injured party to sue unless the injuries are severe, such as paralysis or death, and meet a threshold

The Umbrella policy will drop down and cover the entire loss, less a ___________, when the coverage in the Umbrella policy is broader than the underlying policy. Deductible Penalty Retention Copayment

Retention A retention is like a deductible and is the amount not paid by the insurer when the umbrella coverage is broader than the underlying.

The owner of a large apartment building decides to insure the building himself through the accumulation of rent. This is considered which type of risk management? Transfer Retention Reduction Avoidance

Retention Self-insurance is an example of retaining the risk

A(n) ___________ is the likelihood that a loss can occur. Hazard Peril Risk Insurable interest

Risk Risk, simply defined, is uncertainty concerning a loss.

The Builder's Risk Coverage Form will not cover which of the following? Fixtures that will be attached Roof antenna not yet attached Building materials within 100 feet Service equipment

Roof antenna not yet attached Coverage does not include land, lawns, trees, shrubs, plants, and outside antennas or signs that are not attached to the structure.

Choose the item that is not covered under the BOP. Customer's property in the insured's control Leased property Insured's property located in common areas Satellite dish located on the premises

Satellite dish located on the premises Outdoor fences, radio or television antennas, satellite dishes, and its lead-in wiring, masts or towers are excluded under the BOP.

The Personal Articles Floater is similar to the ___________ endorsement. Special Personal Property Scheduled Personal Property Personal Property - Replacement Cost Guaranteed Replacement Cost

Scheduled Personal Property The PAF and the Scheduled Personal Property Endorsement to the Homeowners Policy are nearly identical. Some companies do not write the endorsement.

Regarding Section II of the Homeowners Policy Forms, which of the following Coverage statements is correct? Section II is the same in all Homeowners Forms Section II of the HO-3 (Special Form) has broader Coverage than Section II of the HO-2 (Broad Form) Section II of the HO-4 (Tenants Form) is modified to adapt to the tenant's exposures Section II of the HO-6 is modified to adapt to the exposures of the condominium unit owner

Section II is the same in all Homeowners Forms Since the non-business exposures of individuals and families have little to do with their mode of residence, Section II, Liability, is the same in all Homeowners Policy Forms.

Choose the false statement about Section II of the Homeowners Policy. Damage to Property of Others pays up to $1,000 per occurrence Individual and family cemetery plots qualify as an insured location Property damage to the neighbor's wheelchair caused by the insured is covered Section II losses are subject to a standard $250 deductible

Section II losses are subject to a standard $250 deductible. Section II losses are not subject to a deductible. All remaining responses are true.

Where are the Common Policy Conditions found in the Businessowners Coverage Form? Section III of the Businessowners Coverage Form Section II of the Businessowners Coverage Form Section I of the Businessowners Coverage Form On the Businessowners Policy Declarations Page

Section III of the Businessowners Coverage Form The Common Policy Conditions are found in Section III of the Businessowners Coverage Form, and relate both to Section I - Property, and Section II - Liability.

Elizabeth and Frank who have a personal umbrella policy with Insure+ notified them that a claim was filed against them for slander, and the insurer advised them that which of the following would be paid by the insured? 5% of the total loss Underlying coverage would pay it all Self-insured retention Defense costs

Self-insured retention The only time the insured must pay a self-insured retention is when the umbrella drops down, meaning there is no underlying policy covering personal injury coverage and the insured must share the cost.

___________ is insurance that applies separately to each insured. Other Insurance Payment of Claim Severability Suitability

Severability Severability does not increase the Limit of Liability per any one occurrence.

Which of the following vehicles is not excluded under Part B - Medical Payments of the personal auto policy? 3-wheel vehicle Share-the-expense vehicle Vehicle used as a residence Family member's company car

Share the expense vehicle A share-the-expense vehicle is not considered a public or livery conveyance which is excluded.

Which of the following is automatically covered under the Businessowners Policy? The quiz is currently paused. Off-premises power failure Mechanical breakdown of pressure systems and air conditioners Preservation of property up to 60 days Signs attached to the building

Signs attached to the building Signs attached to the building are covered, but the limit of insurance on these signs is $1,000.

Which of the following is true regarding Personal Inland Marine Insurance? STUDY STUDY STUDY It covers direct and indirect loss arising from damage to, or loss of, personal property Since moveable property is also known as floating property, the policies are sometimes known as floater policies It provides replacement cost coverage on personal property It is written in lieu of Coverage C of the Homeowners Policy

Since moveable property is also known as floating property, the policies are sometimes known as floater policies For the Inland Marine underwriter the term floating property simply means property that moves about.

All of the following perils are included under the Dwelling Broad Form, except: Volcanic Eruption Falling Objects Smoke damage from industrial operations Burglary Damage

Smoke damage from industrial operations Smoke damage is a covered peril of the Dwelling Broad Form. However, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.

In insurance, which of the following best describes an occurrence? STUDY STUDY A sudden and unexpected event that causes damage or injury Someone takes blood pressure medicine and over time develops a rash An act of nature that causes damage or injury An accident, the cause of which cannot be determined

Someone takes blood pressure medicine and over time develops a rash An event that results in a loss. An occurrence may be an accident, but may also be a continued and repeated exposure over a period to conditions that cause bodily injury or property damage.

Which of the following best describes a hazard? A. Something that increases the chance of a loss. B. A reduction in, decrease in, or disappearance of, value. C. The possibility of a loss. D. The loss itself.

Something that increases the chance of a loss

Which of the following is true regarding the Self-Insured Workers' Compensation Program? A. Sometimes large employers are attracted to self-insurance plans because losses can be predictable and benefits are capped by statute B. Self-insurance for Workers' Compensation is most generally used by smaller employers, who cannot afford to purchase Workers' Compensation insurance C. Self-insurance is allowed in all states D. Benefits under self-insurance differ from those provided by Workers' Compensation insurers

Sometimes large employers are attracted to self-insurance plans because losses can be predictable and benefits are capped by statute Self-Insurance is most attractive to larger employers, particularly those in hazardous industries, who feel that they can pay and administer benefits for less than the cost of purchasing insurance.

Under the Personal Property Replacement Cost Loss Settlement endorsement, which of the following would continue to be settled for actual cash value? Outdoor equipment Appliances Souvenirs Carpeting

Souvenirs Property that cannot be replaced, such as souvenirs, antiques, and paintings are not eligible for the replacement cost coverage.

Kevin owns several buildings at several locations. He has them insured each on a separate policy and with separate amounts. Kevin has them insured on which of the following methods of writing insurance? Agreed Value Blanket Scheduled Specific Limit

Specific Limit Providing Specific insurance means providing a separate policy on each property. Scheduled and Blanket insurance covers more than one property per policy.

Choose the false statement about the commercial auto coverage. STUDY STUDY STUDY A Garage Coverage Form will cover legal liability from completed operations Under the Endorsement for Motor Carrier Policies of Insurance for Public Liability, if the insurer is required to pay an excluded loss, it may seek reimbursement from the insured Specified Peril Coverage pays for damage to an insured vehicle from almost any cause except collision Garagekeepers Insurance provides coverage for damage to a customer's car

Specified Peril Coverage pays for damage to an insured vehicle from almost any cause except collision Specified Peril Coverage provides coverage only for certain named perils such as fire.

Which type of risk involves the possibility of loss or gain? A. Pure. B. Speculative. C. Insurable. D. Stable.

Speculative

The Basic Cause of Loss Form under the Commercial Property Coverage Part will cover losses caused by: Falling Objects Sprinkler leakage Weight of Ice, Snow or Sleet Water Damage Caused by Accidental Discharge of Water

Sprinkler leakage Sprinkler Leakage is a peril included in the Basic Causes of Loss Form because it is a hazard frequently encountered in commercial property.

The following are all correct, except: Coinsurance applies only in the event of a partial loss The stated amount would be the loss valuation method used to insure agricultural products The Declarations contain statements made by the insured on the application The insuring agreement describes the perils that are covered under the policy

Stated amount would be the loss valuation method used to insure agricultural products Market value in the loss valuation method used to insure goods and commodities whose value fluctuates with market conditions such as agricultural products.

An adjuster determining the value of damage to fine arts and antiques would use which of the following loss valuation methods? Stated value basis Replacement cost basis Market value basis Actual cash basis

Stated value basis Fine arts are typically insured on an stated amount basis, whereby the insured and insurer agree, at time of insuring, on an amount of insurance to be paid in the event of a loss.

A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? Direct Contingent Absolute Strict

Strict The doctrine of Strict Liability applies to products and their manufacturers. It holds that the manufacturer can be held responsible for an injury caused by a product, even if the product is not defective.

When a claimant can prove that a product caused the injury, the fact that the manufacturer will be held liable regardless of whether the product was defective or not, is considered which of the following? Contingent Liability Direct Liability Absolute Liability Strict Liability

Strict liability The doctrine of Strict Liability applies to products and their manufacturers. It holds that the manufacturer can be held responsible for an injury caused by a product, even if the product is not defective.

All of the following are options for dealing with risk, except: Avoiding the risk Transferring the risk Subrogating the risk Retaining the risk

Subrogating the risk

Which of the following is an optional reporting period of unlimited duration that may be purchased by endorsement to a Claims-Made Form, if requested within 60 days of the end of the policy term? Basic Extended Reporting Period Mini-Tail Midi-Tail Supplemental Extended Reporting Period

Supplemental Extended Reporting Period The Supplemental Extended Reporting Period is purchased whenever the insured is discontinuing liability insurance coverage for any reason, such as when the insured changes to an Occurrence Form, goes out of business, or discontinues certain operations.

Which of the following is an optional reporting period of unlimited duration that may be purchased by endorsement to a Claims-Made Form, if requested within 60 days of the end of the policy term? The quiz is currently paused. Basic Extended Reporting Period Mini-Tail Midi-Tail Supplemental Extended Reporting Period

Supplemental Extended Reporting Period The Supplemental Extended Reporting Period is purchased whenever the insured is discontinuing liability insurance coverage for any reason, such as when the insured changes to an Occurrence Form, goes out of business, or discontinues certain operations.

An insurance agent explained Supplementary Payments in the CGL to a client and did not include which of the following statements because it is incorrect? The quiz is currently paused. Included are the insurer's claim-related expenses The cost of bail bonds is included up to $250 Supplementary Payments apply to all Section I coverage They do not reduce the Limit of Liability

Supplementary Payments apply to all Section I coverage Supplementary Payments only apply to Coverages A and B, not C.

Employers Liability Insurance will not pay Susan's claim if which of the following occurred? A. Susan's daughter is claiming mental anguish because she is so upset about her mother's injury caused by a defective machine B. Susan must hire transportation to take her daughter to school since she can't drive due to her injury C. Susan was injured by a defective machine and after paying benefits to Susan, her boss filed a claim against the machine manufacturer D. Susan is injured while attending a company picnic at a nearly park

Susan is injured while attending a company picnic at a nearly park In order for the Employers Liability policy to pay, the insured must be legally liable for injuries and damages sustained by an employee that are not addressed by Workers' Compensation statute or that are sustained by third parties or dependents of the injured worker, but the injury must arise out of actual employment.

Choose the false statement about the Building and Personal Property Coverage Form. A. Personal property owned and used to service the building is included in the building coverage B. Tenant's improvements that are not legally removable are included in the Personal Property of Others Coverage C. Building Coverage includes the building structure, completed additions, permanently installed fixtures, machinery and equipment D. Personal property of others that is in the insured's care, custody, and control is automatically included up to $2,500 under coverage extensions

Tenant's improvements that are not legally removable are included in the Personal Property of Others Coverage Tenants Improvements & Betterments are covered under Business Personal Property, not Personal Property of Others Coverage.

Choose the true statement about the Basic Dwelling Form. The Basic Form covers contents on an open peril basis The Basic Form automatically covers contents for theft The Basic Form covers loss to trees, shrubs and plants The Basic Form covers internal explosion

The Basic Form covers internal explosion The Basic Form is written on a named perils basis and does not cover theft, or loss to trees, shrubs, and plants.

Which statement concerning the Dwelling Special Form is true? Coverages A through D are provided Open Perils coverage on an Actual Cash Value basis The Dwelling and other structures are provided Open Perils coverage on a Replacement Cost basis Contents are provided Open Perils coverage on an Actual Cash Value basis Contents are provided Open Perils coverage on a Replacement Cost basis

The Dwelling and other structures are provided Open Perils coverage on a Replacement Cost basis In the Dwelling Special Form, the dwelling and other structures are provided Open Perils coverage on a replacement cost basis, but the Personal Property coverage remains as Broad Perils coverage on an Actual Cash Value basis.

The HO-2 is falsely described by which of the following? The HO-2 pays for losses to the dwelling on a Replacement Cost basis The HO-2 covers owner-occupied dwellings The HO-2 covers the Broad Form Perils The HO-2 pays for losses on an Open Peril basis

The HO-2 pays for losses on an Open Peril basis The HO-2 pays all losses on a broad form (Named Perils) basis.

All of the following are true of the HO-2, except: The HO-2 covers the broad form perils The HO-2 covers owner-occupied dwellings The HO-2 pays for losses to the dwelling on a replacement cost basis The HO-2 pays for losses on an open peril basis

The HO-2 pays for losses on an open peril basis The HO-2 pays all losses on a broad form (Named Perils) basis.

Choose the answer that is true regarding the Homeowner HO-4 and HO-6 Forms. The amount of insurance on the condominium containing the personal property is 10% of the Coverage C amount of insurance Losses are paid on a Replacement Cost basis Both provide Open Perils Coverage on the personal property The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself

The HO-4 is used to insure the personal property and personal liability of the insured, but does not include the structure itself Since the insured under the HO-4 Form does not own the structure, there is no Coverage on the building.

In Liability Insurance, the restriction that the policy places on the dollar amount of coverage, is called: Designated Insurance The Limit of Liability The Premium Designated Premium

The Limit of Liability The Limit of Liability may be set forth in several different ways, and there are often two or more limits on a policy that apply differently, depending upon the circumstances of the occurrence.

Which of the following best describes the restriction that the liability insurance policy places on the dollar amount of coverage? Designated Insurance The Limit of Liability The Premium Designated Premium

The Limit of Liability The Limit of Liability may be set forth in several different ways, and there are often two or more limits on a policy that apply differently, depending upon the circumstances of the occurrence.

Which of the following is true concerning the Limit of Liability under the Business Auto Coverage Form? A. The Limit of Liability is the amount available for each claim made under the policy B. The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident C. The Limit of Liability is determined by the number of vehicles scheduled on the policy D. The Limit of Liability is determined by the number of the insured's vehicles involved in the accident

The Limit of Liability is the most the policy will pay regardless of the number of autos, insureds, premiums paid, claims made, or vehicles involved in the accident The Limit of Liability is the most the policy will pay resulting from any one accident, and it is indicated in the Declarations as the Limit of Insurance for Liability Coverage.

Which of the following is a false statement about the two forms included in the CGL policy? The Claims-Made form covers losses that occur after the retroactive date and before the policy expiration date Coverage is triggered when an occurrence takes place during the policy period The Occurrence form is based on when the loss is reported The Retroactive Date is unique to the Claims-Made form

The Occurrence form is based on when the loss is reported With the Occurrence form it doesn't matter when the loss is reported, but the date the loss occurred must be during the policy period.

In Liability Insurance, which of the following is the maximum amount that the coverage will pay for loss to any one person regardless of overall policy limits? The Split Limit The Per Occurrence Limit The Aggregate Limit The Per Person Limit

The Per Person Limit The Per Person Limit is the amount of coverage available for each person that sustains bodily injuries in an occurrence.

In surety bonding, what is the party called whose obligation is guaranteed? The Surety The Principal The Obligee The Guarantor

The Principal The Principal is the party whose obligation is guaranteed. The Principal might be a contractor, an administrator, a guardian, or a business subject to municipal or other laws and regulations.

Which of the following is reinforced by the pro rata liability provision? The Per Occurrence Limit The Principle of Indemnity The Insurable interest of the Named Insured The aggregate Limit Clause

The Principle of Indemnity The principle of indemnity does not allow the insured to profit from a loss. Instead, it restores the insured to the same financial or economic condition that existed prior to the loss.

Choose the true statement concerning Homeowners Policies. The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement Section I limits coverage on utility trailers up to $500 The HO-4 provides open peril Coverage on both the dwelling and contents Section I limits Coverage on fire department service charge to $100

The Section I deductible does not apply to property covered under the Scheduled The Scheduled Personal Property Endorsement has no deductible.

Choose the true statement concerning Homeowners Policies. A. The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement B. Section I limits coverage on utility trailers up to $500 C. The HO-4 provides open peril Coverage on both the dwelling and contents D. Section I limits Coverage on fire department service charge to $100

The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement The Scheduled Personal Property Endorsement has no deductible.

Which statement is true concerning Homeowners policies? The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement Section I limits coverage on utility trailers up to $500 The HO-4 provides open peril coverage on both the dwelling and contents Section I limits coverage on fire department service charge to $100

The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement. The Scheduled Personal Property Endorsement has no deductible.

Which Cause of Loss form for the Commercial Property Coverage Part will cover loss of sales merchandise due to a burglary? There is no Burglary coverage in the Property Policy The Broad Form The Broad Form and The Special Form The Special Form

The Special Form The perils of Burglary and Theft are not excluded in the Open Perils Special Form.

All of the following are Causes of Loss under the Commercial Property Coverage Part, except: The Special Causes of Loss Form The Standard Cause of Loss Form The Basic Causes of Loss Form The Broad Causes of Loss Form

The Standard Cause of Loss Form There are three Causes of Loss Forms: the Basic Form covering basic named perils; the Broad Form covering broad named perils; and the Special Form, which is an open perils form.

All of the following are Causes of Loss under the Commercial Property Coverage Part, except: STUDY STUDY STUDY The Special Causes of Loss Form The Standard Cause of Loss Form The Basic Causes of Loss Form The Broad Causes of Loss Form

The Standard Cause of Loss Form There are three Causes of Loss Forms: the Basic Form covering basic named perils; the Broad Form covering broad named perils; and the Special Form, which is an open perils form.

Under the Voluntary Compensation Endorsement to a Workers' Compensation Policy, when an employer desires to provide Workers' Compensation Coverage to the employees, even though the law does not require the employer to provide coverage, he/she must provide which of the following: STUDY STUDY STUDY The designated beneficiary The class of employees to be covered The number of years the business has had employees The benefits of the designated State's Workers' Compensation law

The class of employees to be covered The same information is needed for obtaining the Voluntary Compensation Endorsement as is needed for obtaining coverage required by law.

What is the difference between the Commercial General Liability 'Occurrence' and 'Claims-Made' Forms? The coverage trigger point The Occurrence Form covers occurrences and the Claims-Made Form covers accidents The Claims-Made Form contains a deductible on both bodily injury and property damage coverages The Occurrence Form contains a deductible on both bodily injury and property damage coverages

The coverage trigger point In Liability Insurance, the trigger is the event that brings coverage into play. It may be an occurrence either of bodily injury or property damage; or, in a form with a Claims-Made trigger, the formal making of a claim.

What is the difference between the Commercial General Liability 'Occurrence' and 'Claims-Made' Forms? The quiz is currently paused. The coverage trigger point The Occurrence Form covers occurrences and the Claims-Made Form covers accidents The Claims-Made Form contains a deductible on both bodily injury and property damage coverages The Occurrence Form contains a deductible on both bodily injury and property damage coverages

The coverage trigger point In Liability Insurance, the trigger is the event that brings coverage into play. It may be an occurrence either of bodily injury or property damage; or, in a form with a Claims-Made trigger, the formal making of a claim.

Which of the following is true regarding Completed Operations Coverage? If faulty work, negligently performed, causes damage to other property of the claimant, then coverage extends to include the faulty work Coverage applies only during the period that the insured has custody and control of the work deemed faulty or inadequately performed The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss Bodily injury arising from negligent or faulty work of the insured is not covered if it occurs after the work is completed and turned over to its owner

The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss It pays for the resulting bodily injury and/or property damage resulting from the negligent or faulty work. Completed Operations Coverage does not pay for the work that was faultily performed.

What best explains the difference between the Commercial General Liability 'Occurrence' and 'Claims-Made' Forms? The date when a claim must be presented The Occurrence Form covers occurrences and the Claims-Made Form covers accidents The Claims-Made Form contains a deductible on both bodily injury and property damage coverages The Occurrence Form contains a deductible on both bodily injury and property damage coverages

The date when a claim must be presented In Liability Insurance, the trigger is the event that brings coverage into play. It may be an occurrence either of bodily injury or property damage; or, in a form with a Claims-Made trigger, the formal making of a claim.

Which of the following is true regarding the HO-3 (Special Form)? A. The dwelling and other structures (Coverages A and B) are written on an Open Peril Basis B. The contents (Coverage C) are written on an Open Peril Basis C. The dwelling and other structures (Coverages A and B) are written on a Broad Form Perils Basis D. Coverages A, B, and C are all written on a Replacement Cost Basis

The dwelling and other structures (Coverages A and B) are written on an Open Peril Basis The HO-3 (Special Form) provides the broadest coverage available on structures: Open Perils (or all-risk) coverage.

A good example of Risk Avoidance is which of the following? When one takes action to minimize the severity of a potential loss The transfer of the risk to an insurance company The elimination of the exposure to a specific risk Insuring only those risks that threaten the financial stability of the insured

The elimination of the exposure to a specific risk Risk avoidance is elimination of the risk by avoiding the activity that might result in a loss.

Which of the following statements is correct about the world of insurance? The actuarial department of an insurance company is responsible for the underwriting of individual policies and risks A loss ratio is determined by dividing operating expenses by total premium The first named insured is shown in the Declarations The terms of a policy cannot be changed as of the renewal date of the policy

The first named insured is shown in the Declarations The first named insured is shown in the Declarations and is responsible for all premium payments and will be paid any return premiums.

Which of the following is true regarding the Medical Payments Coverage of the Business Auto Coverage Form? Medical Payments Coverage is designed to provide medical payments coverage for employees The form does not automatically include Medical Payments Coverage Coverage is limited to medical expenses incurred in the first year after the accident Medical Payments Coverage also pays loss of income during disability arising from a covered accident

The form does not automatically include Medical Payments Coverage Medical Payments Coverage is available by endorsement to the Business Coverage Form. The coverage is not automatically included in the commercial auto forms.

Which statement is correct concerning the Optional Coverage - Agreed Value under the Building and Personal Property Coverage Form? Agreed Value Coverage eliminates the deductible in loss payment The Agreed Value is the amount of loss agreed upon by the insurer and the insured Agreed Value Coverage requires coinsurance of at least 90% The insured and the insurer agree on the value of the property for a period of time specified on the Declaration Page

The insured and the insurer agree on the value of the property for a period of time specified on the Declaration Page The Agreed Value Optional Coverage is used when insuring rare or unusual property, the value of which is difficult or impossible to determine.

Under which of the following circumstances would the Limited Theft Coverage endorsement be used? The insured dwelling is tenant occupied Coverage is desired for off-premises property The insured dwelling is owner occupied No VMM coverage applies for a dwelling vacant more than 60 days

The insured dwelling is tenant occupied The Limited Theft Coverage endorsement must be used if the dwelling is tenant occupied.

Which of the following is not true, regarding the Value Reporting Form? The insured pays an advance premium at the beginning of the policy period Late reporting or under-reporting will result in a penalty in the event of a loss The insured is only required to report up to 80% of value of the property The insured is required to report 100% of values with each report

The insured is only required to report up to 80% of value of the property Reporting of 100% of values is required to guarantee that adequate insurance is being provided and charged.

Assignment in the Conditions of a property policy is best described as: The requirements placed upon the insured regarding legal action The insured may not transfer ownership of the policy without the insurer's written permission The insured's responsibility to give prompt loss notice to the company The naming of parties other than the insured on loss payment checks

The insured may not transfer ownership of the policy without the insurer's written permission If the insured wishes to assign the policy to another party, such as a new owner of the property, written permission of the company is necessary. This permission is in the form of an endorsement to the policy.

Which of the following is considered the most accurate concerning Notice of Loss? Either oral or written notice or claim or suit is permissible The insured must notify the insurer within 5 business days The insured must notify the insurer as soon as practical The insured must notify the insurer in writing within 5 business days

The insured must notify the insurer as soon as practical Typically, policies state that the insured must notify the insurer in writing, as soon as practical of any loss or occurrence.

Which of the following is correct regarding pro rata cancellation? The insured will receive back 90% of the unearned premium The premium is fully earned by the insurance company The insured will receive back the entire unearned premium without any penalty The insured will receive back 75% of the unearned premium

The insured will receive back the entire unearned premium without any penalty In pro rata cancellations, the premium refund is directly proportional to the unused portion of the policy term.

Which of the following is correct about the right of salvage? The insurer has the right to take possession of damaged property after payment of a loss The insurer is required to take possession of damaged property after a loss The insured has the right to keep damaged property after payment of a loss Neither the insured nor the insurer has the right to take possession of damaged property. It must be disposed of after a loss.

The insurer has the right to take possession of damaged property after payment of a loss After payment for loss, the insurer has the right to the salvage.

Which of the following is not correct about the insurance policy? An indirect loss is an additional loss that results from a direct loss The conditions describe the responsibilities and obligations of the insured and the insurer The insuring clause personalizes the policy as to who and what are insured A deductible is a specified amount that an insurer will not pay

The insuring clause personalizes the policy as to who and what are insured The Declarations personalize the policy. Conditions and Insuring Agreement are standard.

Choose the statement concerning the Voluntary Compensation Endorsement that is false. The State in which coverage is to be provided must be stipulated The coverage is the same as in the standard Workers' Compensation Policy Benefits are provided for employees not required to be covered under the Workers' Compensation Law The law states that the employer must provide his federal tax ID number

The law states that the employer must provide his federal tax ID number The Voluntary Compensation Endorsement is available for employers who do not fall under the Workers' Compensation law of their state, but who wish to provide Workers' Compensation benefits for their employees.

All of the following are true concerning the Voluntary Compensation Endorsement, except: The State in which coverage is to be provided must be stipulated The coverage is the same as in the standard Workers' Compensation Policy Benefits are provided for employees not required to be covered under the Workers' Compensation Law The law states that the employer must provide his/her federal tax ID number

The law states that the employer must provide his/her federal tax ID number The Voluntary Compensation Endorsement is available for employers who do not fall under the Workers' Compensation law of their state, but who wish to provide Workers' Compensation benefits for their employees.

Which of the following is true regarding Medical Payments of the Personal Auto Policy? The liability limit shown in the Declarations is the maximum the policy will pay each person injured in any one accident The liability limit shown in the Declarations is the maximum the policy will pay for all persons injured in any one accident The liability limit shown in the Declarations is the maximum the policy will pay for all claims during the policy term The liability limit shown in the Declarations is the maximum the policy will pay for each person during the policy term

The liability limit shown in the Declarations is the maximum the policy will pay each person injured in any one accident The Medical Payments limit is a per person limit that applies to each accident.

Which of the following is false about the CGL policy form? A. Section III of the Commercial General Liability Coverage Forms describes the limits of insurance B. The general aggregate limit is the most the company will pay for all damages under Coverage A, Coverage B, and medical payments under Coverage C, except for products and completed operations claims C. The each occurrence limit is the most the company will pay for damages under Coverage A and Coverage C, arising out of any one occurrence D. The limits of the policy stated in the Declarations are the maximum amounts payable for the life of the policy

The limits of the policy stated in the Declarations are the maximum amounts payable for the life of the policy The limits stated in the policy apply separately to each claim (and/or aggregate) within a policy period.

The insured's bank crime insurance policy is written with a Discovery Form covering which of the following losses? The loss was reported after the policy termination The loss had to occur during the policy period and be reported during the policy period The loss occurred prior to the policy period but was reported during the policy period The loss took place during the policy period and discovered within one year after the termination of the policy period

The loss occurred prior to the policy period but was reported during the policy period The Discovery Form provides coverage for losses discovered during the policy period but did not necessarily occur during the policy period.

In describing the Business Auto Coverage Form, which of the following statements should you include? The main distinction between a hired auto and a non-owned auto is whether or not the auto is owned by an employee Non-owned Autos Coverage covers autos leased for a term of 12 months or more by the insured Non-owned Autos Coverage covers autos hired for specific purposes by the insured Non-owned Autos Coverage covers rented private passenger type vehicle

The main distinction between a hired auto and a non-owned auto is whether or not the auto is owned by an employee The primary use of Symbol 9, Non-owned Autos Only Coverage is to protect the insured when employees use their autos in the insured business

Which statement is false? Primary coverage pays first with respect to other policies An excess coverage policy pays only after a primary policy has been exhausted Pro rata is the distribution of liability among insurers that have policies on the same risk The per occurrence limit is the greatest amount recoverable during the policy period

The per occurrence limit is the greatest amount recoverable during the policy period The occurrence limit is the most that will be paid for any one occurrence.

Which of the following is not included in the Declarations of a Property Policy? The terms of the policy The perils that are not covered The amount of coverage The amount of premium

The perils that are not covered The perils not covered are in the Exclusions.

Which of the following is not correct about Thomas' Crop/Hail policy? Thomas' crops are covered for fire, lightning, freezing, drought, insects, and disease The policy coverage begins at 12:01 a.m. just before the crop breaks through the ground If Thomas fails to harvest a mature crop, it is not covered under the policy The payment of a loss to Thomas reduces the total amount of available insurance

The policy coverage begins at 12:01 a.m. just before the crop breaks through the ground The policy coverage can begin at 12:01 a.m. the day after the application is signed as long as the crop is clearly visible above the ground.

Which of the following is covered under the Businessowners Coverage Form - Section II? Medical payments to volunteer workers Employers Liability Professional Liability Watercraft Liability

The policy does not exclude medical payments to a volunteer. The policy does not exclude medical payments to a volunteer.

Choose the correct answer regarding Coverage A under the Dwelling Policy. Coverage A includes a detached carport Outdoor equipment is not covered Coverage on land is restricted to the land upon which the dwelling is sitting The policy does not include coverage for wind loss of television antennas

The policy does not include coverage for wind loss of television antennas Wind loss of television antennas is so common the coverage is available only through attachment of an endorsement providing this coverage for an additional premium.

A ___________ is a condition in an insurance policy or application to which the policyholder is bound under penalty of voiding the policy. Parol evidence rule Warranty Waiver Guarantee

Warranty The insured must abide by the warranty or coverage will be void.

Choose the incorrect statement about the insured's Crop/Hail policy. The crops are covered for fire, lightning, freezing, drought, insects, and disease The policy may be applied for at any time, but coverage does not begin until 12:01 a.m. the day before the crop first breaks through the ground If the insured fails to harvest a mature crop, it is not covered under the policy The payment of a loss to the insured reduces the total amount of available insurance

The policy may be applied for at any time, but coverage does not begin until 12:01 a.m. the day before the crop first breaks through the ground The policy coverage can begin at 12:01 a.m. the day after the application is signed as long as the crop is clearly visible above the ground.

Homeowners policies contain a section called Additional Coverages, one of which is debris removal. Which of the following best describes the Debris Removal coverage? Coverage is limited to 10% of the Coverage A Limit Debris Removal applies only to loss by fire, lightning, and windstorm The policy will pay the insured's removing debris from a covered loss The debris must be removed within 30 days of the loss

The policy will pay the insured's removing debris from a covered loss Debris removal provides payment of the named insured's reasonable expenses for the removal of debris of covered property if a covered loss occurs.

Select the false statement regarding the Fire Department Service Charge. This is additional insurance. Coverage is not provided if the premises is within the city limits. The policy deductible does not apply. The policy will pay up to $1,000.

The policy will pay up to $1,000. Under each of the dwelling forms, the policy will pay up to $500 for liability assumed for fire department charges when the fire department is called to save or protect covered property from an insured peril.

Which is true about the Law of Large Numbers? It relates to the determination of the probability of loss in any size group The prediction of individual losses is based exclusively upon past experience There is an increased degree of error in predicting losses of large groups The prediction of group loss is based upon past experience

The prediction of group loss is based upon past experience The Law of Large Numbers gives predictability to losses of homogeneous groups, not to individual losses.

Under Ocean Marine Insurance, Hull Coverage includes: The quiz is currently paused. Only the ship hull--that portion of the ship that rides the sea and is topped by the deck The ship hull, deck, and superstructure The ship superstructure, cabins, masts, and spars

The ship itself, including permanent fixtures of the vessel The hull, for insurance purposes, essentially includes the entire ship, excluding cargo.

Which of the following describes the implied warranty, Seaworthiness? The ship must be seaworthy and have a competent crew The ship must have undergone a comprehensive inspection by the insurer The ship has a full complement of emergency navigation equipment The crewmembers are all certified

The ship must be seaworthy and have a competent crew Of course, seaworthiness is of critical importance to the marine underwriter and violation of the implied warranty of Seaworthiness will void the marine insurance.

Choose the spouse who is an insured on the CGL policy. Spouse of LLC members Spouse of volunteer worker Spouse of a partner Trustee's spouse

The spouse of any individual, partner, or other organization designated on the Declarations is also an insured.

Which of the following describes the coverage provided by a Burglary Policy? A. The taking of property from inside the premises by a person who has entered through an unlocked window B. The taking of property from inside the premises by a person who hid inside a storeroom during the day and broke a window to get out at night C. The taking of property from inside the premises by a person who has caused or threatened bodily harm D. The mysterious disappearance of property

The taking of property from inside the premises by a person who hid inside a storeroom during the day and broke a window to get out at night Burglary must include forcible entry or exit. An unlocked window does not constitute forced entry.

Choose the correct statement regarding Umbrella Liability policies. The umbrella provides an additional layer of insurance protection above the limits in the underlying primary policies Their coverage is identical to the underlying policy The Umbrella Liability Policy territory is the same as that of the underlying policy They provide excellent coverage for the Aircraft Liability exposure

The umbrella provides an additional layer of insurance protection above the limits in the underlying primary policies Umbrella Liability policies are generally broader in coverage than the underlying policies, and they often provide worldwide coverage. Umbrella policies are not intended as primary insurance.

Under the Broad Form Dwelling Policy (DP-2), which peril is not included for coverage without an endorsement? Damage to appliances by artificially generated electricity Theft Falling Objects Volcanic Eruption

Theft Theft Coverage for the Broad Form Dwelling Policy (DP-2) is available only through attachment of the Limited Theft or the Broad Theft endorsements.

Choose the claim that is not covered under the Dwelling Broad Form (DP-2). Glass that is a part of a building, storm door, or window breaks Damage caused by burglars Accidental discharge or overflow of water from a household appliance Theft of personal property at the insured premises

Theft of personal property at the insured premises There is no theft coverage in a dwelling policy.

Choose the true statement regarding the Difference in Conditions Policy coverage. There is no coinsurance clause or pro rata clause, and it may be written for a different amount from the policy it complements The minimum coinsurance allowed under the DIC form is 90% coinsurance The Standard Deductible is $10,000 The DIC policy provides excess amounts of insurance above the primary property policies

There is no coinsurance clause or pro rata clause, and it may be written for a different amount from the policy it complements The DIC policy is not an excess layer of insurance. Rather, it provides coverage for perils not insured against under standard property policy forms.

Which statement is false concerning a Homeowners Policy? The HO-4 is sometimes called a Tenants Form The HO-4 covers the dwelling for the Broad Form (named) Perils The HO-3 covers the dwelling on an Open Peril basis The HO-3 covers the contents for the Broad Form (named) Perils

There is no coverage for the dwelling under a HO-4, only contents coverage.

Which of the following is a false statement about the National Flood Insurance Program? It covers direct loss from mudslides caused by the accumulation of water There is no deductible The federal government administers the program It covers direct loss from overflow of inland or tidal waters

There is no deductible There is a deductible on the building and a separate deductible on the contents.

Regarding Commercial Ocean Marine Insurance, which of the following statements is true? There is no standard Ocean Marine Policy Rates are regulated by the International Association of Marine Insurers (IAMI) Ocean Marine insurance forms were adapted from Inland Marine coverages Ocean Marine coverage is limited to cargo on board of sea-going vessels

There is no standard Ocean Marine Policy Insurers or underwriters that issue Ocean Marine policies design them. The underwriters determine the rates.

Choose the true statement regarding Supplementary Payments under Part A of the Personal Auto Policy. They are paid in addition to the liability limits of the policy Any payments made reduce the liability limits by a like amount They are paid as supplementary benefits only after the Limit of Liability is exhausted They are paid only once during the policy term

They are paid in addition to the liability limits of the policy The Supplementary Payments of the Personal Auto Policy provide payment in addition to the Limit of Liability for the incidental expenses commonly associated with Liability claims.

Which of the following is true regarding Supplementary Payments under Part A of the Personal Auto Policy? They are paid in addition to the liability limits of the policy Any payments made reduce the liability limits by a like amount They are paid as supplementary benefits only after the Limit of Liability is exhausted They are paid only once during the policy term

They are paid in addition to the liability limits of the policy The Supplementary Payments of the Personal Auto Policy provide payment, in addition to the Limit of Liability, of the incidental expenses commonly associated with Liability claims.

Which of the following is true regarding HO-4 and HO-6 forms? The amount of insurance on the dwelling or condominium containing the personal property is 10% of the Coverage C amount of insurance Losses are paid on a Replacement Cost basis They provide Open Perils coverage on the personal property They are used to insure the personal property and personal liability of the insured, but do not include the structure itself

They are used to insure the personal property and personal liability of the insured, but do not include the structure itself Since the insured under the HO-4 and HO-6 forms does not have an insurable interest in the dwelling, the coverage on the structure is limited.

A Surplus Lines Broker is best described as which of the following? They are brokers that deal with admitted carriers only They place risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers They are brokers who deal with direct writing companies only They are brokers who accept business only from non-resident agents

They place risks with nonadmitted insurers when coverage cannot be placed with admitted insurer carriers States regulate the procurement of business from nonadmitted carriers by regulating the brokers who place business with these carriers. These brokers are known as Surplus Lines Brokers.

All of the following are true of liability policies, except: They will pay sums that the insured becomes legally liable to pay They do not cover medical expenses incurred by the insured They will cover damage to the insured's own property They are designed to cover third party injuries or damages

They will cover damage to the insured's own property A liability policy does not cover damage to the insured's property, it covers damage to property of a third party.

Actual cash value is described as which of the following? Today's cost to replace or repair, minus depreciation Cost to replace or repair the property valued at original purchase price, minus depreciation Cost to replace or repair the property at today's value The depreciated value only

Today's cost to replace or repair, minus depreciation Actual Cash Value is replacement cost at the time of loss, minus depreciation.

Which of the following is not covered under the CGL Coverage A - Bodily Injury and Property Damage Liability? Tom's employee is injured when a bookcase in the office falls on her Tom was visiting a client in Canada and the client tripped over Tom's briefcase One of Tom's clients was injured when she slipped on a loose rug While working at a trade show, Tom's employee started a small fire

Tom's employee is injured when a bookcase in the office falls on her Workers' Compensation insurance will cover the injuries of Tom's employees.

Which of the following is not included on the Common Policy Declarations for commercial insurance? Name and address of the named insured The policy period Transfer of rights and duties List of all cause of loss forms included

Transfer of rights and duties Transfer of Rights and Duties is in the Conditions part of the policy.

Under Motor Truck Cargo Forms, the form that insures public truckers against their legal liability for loss or damage to cargo belonging to others in their possession, is called: Shipper's Form Trucker's Coverage Form Owner's Form Transit Form

Trucker's Coverage Form The Trucker's Form insures public truckers for their legal liability for loss or damage to cargo belonging to others in their possession.

All of the following are true of a Homeowners Policy, Coverage F, except: Under Coverage F, a covered accident may occur during the policy period Under Coverage F, coverage does not apply to injuries of the named insured or any regular resident of the insured's household Under Coverage F, coverage applies to persons that are on the insured location with permission Under Coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year

Under coverage F, payments apply to necessary medical expenses incurred within a maximum of 1 year Coverage F will pay for expenses incurred up to three years after the accident.

In insurance, to determine acceptable risks is the primary responsibility of the: STUDY STUDY STUDY Producer Underwriter Adjuster Auditor

Underwriter The selection of risk is the primary responsibility of the underwriter, who protects the insurer by selecting risks that fall into the normal range of expected losses.

Under Aleatory contracts the exchange of values may be: Indefinite Unequal Equal Waived

Unequal An Aleatory contract is a contract where the monetary values of the parties' performance are unequal. An insurance policy is an Aleatory contract because the insurer's obligation to pay a loss depends on uncertain events, while the insured must pay a fixed premium during the policy period.

Choose the incorrect information about Uninsured Motorist Coverage. A. Uninsured motorist coverage provides payments for bodily injury to the insured B. Uninsured motorist coverage also provides payments for bodily injury to any person in the insured's car C. Uninsured motorist coverage applies if an individual does not have insurance but is injured in an accident D. The other party in the accident must be at fault

Uninsured motorist coverage applies if an individual does not have insurance but is injured in an accident Uninsured motorist coverage is for losses caused by third parties, not first party losses.

The purpose of the Auto Loan/Lease Gap Coverage endorsement is to pay which of the following? Auto loan payments Moving traffic violations Auto insurance premiums Unpaid amount due on a loan

Unpaid amount due on a loan This endorsement pays the difference between ACV and the amount outstanding on a loan or lease contract in the event of a total loss. It does not cover overdue payments, security deposits, high-mileage penalties, or other add-on expenses.

The Coverage Extension, Outdoor Property, will NOT pay for which of the following? Outdoor fences, radio, and television antennas Signs that are not attached to buildings Up to $2,500 but not more than $1,000 for any one tree, shrub, or plant Up to $10,000 but not more than $5,000 for any one tree, shrub, or plant

Up to $10,000 but not more than $5,000 for any one tree, shrub, or plant Coverage may be extended to outdoor fences, radio and television antennas, and signs that are not attached to buildings. The limit of coverage is $2,500, however the maximum amount paid for any one tree, shrub, or plant is $1,000.

Choose the claim that is covered under the DP-3. VMM to a dwelling vacant for 30 days before the loss Theft to a dwelling under construction Wind damage to TV antennas Freezing of an air conditioning unit

VMM to a dwelling vacant for 30 days before the loss Vandalism and malicious mischief and any ensuing loss is excluded if the dwelling has been vacant for more than 60 consecutive days immediately before a loss.

The Special Provisions Endorsement, HO 01 06, provides for the following, except: Losses are payable within 30 days of receipt of proof of loss The Cancellation and Nonrenewal provisions are amended to conform to Connecticut law Water and steam are added to the list of personal property covered The Renewal provision is amended to conform to Connecticut law

Water and steam are added to the list of personal property covered Water and steam are deleted from the list of personal property not covered.

Ray was involved in an accident when he hit another car and the insurance must decide if he was negligent, but would not use which of the following elements? What was the time of day? Under what circumstances did Ray hit the other car? Was Ray wrong when he hit the other car? When Ray hit the car, did it cause damage or injury?

What was the time of day? The four elements are if a duty was owed, if the duty was violated, if the violation of that duty was the proximate cause of the accident, and the last, whether it was foreseeable that under the circumstances the action would have occurred.

Which of the following statements is false with respect to when a notice of information practices must be provided? STUDY STUDY STUDY When a policy is renewed, the notice must be provided within 24 months after the renewal date When an applicant provides information for an application, the notice must be provided no later than at the time of policy delivery When personal information for an insurance application is provided from a source other than the applicant or public records, the notice must be provided at the time the collection of personal information is initiated When a policy is going to be reinstated, the notice must be provided by the time the request for reinstatement is received by the insurer

When a policy is renewed, the notice must be provided within 24 months after the renewal date When a policy is renewed, the notice must be provided by no later than the renewal date.

With respect to failure to remit premiums, which of the following statements is false? Failure to remit premiums may result in the suspension of the producer's license An insurer must report to the Commissioner a failure on the part of a producer to remit premiums within 30 days following the due date Failure to remit premiums may result in the revocation of the producer's license When a producer's check is returned and remains outstanding 30 days following receipt of such return, the insurer must report to the Commissioner

When a producer's check is returned and remains outstanding 30 days following receipt of such return, the insurer must report to the Commissioner When a producer's check is returned and remains outstanding 15 days following receipt of such return, the insurer must report to the Commissioner.

What is the notice requirement if an insurer is not renewing an auto policy? At least 15 days At least 30 days At least 60 days At least 45 days

When an insurer is not renewing an auto policy, the insurer must provide at least 60 days' written notice.

Under Part F of the Personal Auto Policy, which of the following is correct when there are two or more auto policies on the same auto? Each policy will pay the loss independently of the other Each policy will share equally in the loss When issued by the same insurer, and all policies cover the same accident, the maximum that will be paid is equal to the policy with the highest limit This policy will be excess if the other policy is in a different insurer

When issued by the same insurer, and all policies cover the same accident, the maximum that will be paid is equal to the policy with the highest limit The Two or More Auto Policies provision of the Personal Auto Policy is intended to prevent the stacking of limits if more than one policy issued by the insurer applies to the same accident.

Coverage E of the Dwelling Policy includes: Property removed to a newly acquired principle residence When the dwelling is owner occupied, the policy will pay additional living expenses incurred after a covered direct loss Other Structures Removal of debris of damaged covered property

When the dwelling is owner occupied, the policy will pay additional living expenses incurred after a covered direct loss The additional living expenses incurred by the insured while the insured's home is uninhabitable because of a direct loss are an indirect loss, which is covered by Coverage E.

Which of the following statements about policy cancellation is not correct? When the first named insured cancels the policy, any unearned premium will be returned pro rata For nonpayment of premium, the company may cancel the policy by mailing to the first named insured written notice of cancellation at least 10 days before the cancellation date For any reason other than nonpayment of premium, the company must give at least 20 days written notice to the first named insured The company will mail a cancellation notice to the first named insured's last mailing address

When the first named insured cancels the policy, any unearned premium will be returned pro rata When the first named insured cancels, the insurer may cancel the policy short rate.

Advertising Injury Coverage includes all of the following, except: Infringement of copyright Wrongful entry Violation of copyright, title or slogan Misappropriation of advertising ideas or style of doing business

Wrongful entry Advertising injury arises out of slander, libel, copyright infringement, or misappropriation of advertising ideas. Wrongful entry would constitute Personal Injury.

Your insurance agent is John, and who is the principal in this agency relationship? A. None. B. Your insurance company. C. Your insurance agent. D. You.

Your insurance company Your insurance company authorizes your agent to do business with you.

Your basement is flooded when water backed up through your drains and damaged the walls, carpeting, and furniture. Your homeowner policy paid what amount? Zero $1,000 $5,000 Up to the policy limits

Zero Water damage caused by water backing up through sewers, drains, or from a sump pump is excluded under the homeowner policies.