Insurance

In property and casualty insurance what is the term for the amount of a loss that the insured must cover out of pocket and the insurer will only pay for the additional amount of loss above the limit

Deductible

payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

special

The pollutant cleanup and removal coverage in the businessowners policy has a limit of

$10,000 in any 12 month period

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

The insured purchased a $200,000 extra expense policy. If the percentage applying to the limit of insurance are 40%, 80%, and 100%, what would be the maximum payable for a 47-day loss?

$160,000

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

equipment breakdown coverage is written with a single limit of insurance per accident. what is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

A dwelling policy has a standard deductible that applies to all property coverage except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

$250

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage. The owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

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

$30,000

What is the minimum civil penalty for willfully and knowingly violating a cease and desist order?

$50,000 per violation

an insured has a personal auto policy with both comprehensive(other-than-collision) and collision coverage. his car is stolen and recovered five days later. if the insured claims transportation expenses of $20 per day, how much will his policy pay?

$60($20 a day after 48 hours, not exceeding 30 days)

An insured is involved in a motor accident, resulting in a medical expense of $125,000. It's determined that the other driver was at fault. If the insured has underinsured motorist limits of $100,000 and the at-fault driver has bodily injury limits of $50,000/$100,000, how much would the insured's policy pay for medical expenses?

$75,000

Liability imposed on one party as a result of the actions of another person is known as

Vicarious liability

which of the following would be considered a cause for flood conditions covered by the National Flood Insurance Program? A. mudflow B. snow C. landslides D. sewer backup

A. mudflow

How much notice must an insurer provide when cancelling a commercial property policy due to material misrepresentation on an application?

20 days

The Indiana Property and Casualty Insurance Association is divided into how many separate accounts?

3

if an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply to a pro rata basis at both locations for

30 days

State law prohibits use of after-market parts in the repair of vehicles damaged in auto accidents. However, this provision only applies to vehicles that are less than

5 years old

To be eligible for businessowners policy coverage, an office building CANNOT be higher than

6 stories

the Employee Theft crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

Most fidelity bonds have a period of time in which losses which occurred while the bond was in force are covered even though not found until after the coverage has terminated. This is known as

A discovery period

What is a material misrepresentation?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

What's the difference between a fidelity bond and a surety bond?

A surety bond guarantees something will happen, a fidelity bond guarantees something will not happen

John Sims and Steve Becker have formed a partnership known as the Sims and Becker Insurance Agency. After a serious car accident, one of the partners was deceased and the other became totally disabled. To finish servicing the company's existing accounts, the Commissioner could grant a temporary license to all of the following EXCEPT A. The partnership itself B. The partners' spouses C. A court appointed representative D. The company's compliance officer

A. The partnership itself

which of the following coverages is NOT included in the basic form dwelling policy? A. additional living expense. B. dwelling coverage. C. other structures. D. loss of fair rental value.

A. additional living expense

which of the following risks would NOT be eligible for coverage under a homeowners policy? A. an applicant who owns and lives on a commercial farm. B. an applicant who lives in a duplex that she does not own. C. an applicant who owns and lives in a duplex. D. an applicant who owns and lives in a single-family dwelling that also contains incidental business activities.

A. an applicant who owns and lives on a commercial farm

When a parent is required to pay for damages caused by their children, this is an example of

Vicarious liability

under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT A. the insurer does not have the right to inspect the insured's property and operations. B. the insurer does not make safety inspections for the insured. C. the insurer does not guarantee that conditions are safe or healthful. D. the insurer does not guarantee that the insured is meeting all required safety regulations.

A. the insurer does not have the right to inspect the insured's property and operations.

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

Absolute

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault

Which of the following types of valuation works best for property whose value does not fluctuate much?

Agreed value

Who is required to join the Workers Compensation Rating Bureau of Indiana?

All insurers that write workers compensation policies in Indiana

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guarantee Association, that would be considered

An unfair trade practice

Which coverage form would provide coverage for all incoming and outgoing shipments?

Annual transit

An insured insists that the insurer owes him $10,000 for liability damages, while the insurer asserts that they owe no more than $7,000. Which of the following would most likely describe the type of claim settlement that the insured and the insurer might pursue?

Arbitration

Insurable interest in a property policy must be proven

At the time of loss

Which of the following is an example of a protective safeguard in a businessowners policy?

Automatic sprinkler system

According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties

Automatically transfer to a legal representative

All of the following are factors in rating workers compensation insurance EXCEPT A. Job classification B. Sales C. Payroll D. Loss experience

B. Sales

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT A. The injury or damage must occur after the insured has released physical possession of the product to another B. The injury or damage must occur within 90 days after the insured's work is completed C. The injury or damage must occur away from the insured's premises D. The injury or damage must arise out of the insured's product or work

B. The injury or damage must occur within 90 days after the insured's work is completed

an insurance contract must contain all of the following to be considered legally binding EXCEPT A. competent parties. B. beneficiary's consent. C. offer and acceptance. D. consideration.

B. beneficiary's consent

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?

Damage to the dwelling caused by lava or dust from a volcanic eruption

which of the following statements is true concerning the special form dwelling policy? A. coverage A is for all-risk perils, and coverage C is for basic perils only. B. coverage A is for all-risk perils, and coverage C is for the broad form perils. C. both coverage A and coverage C are provided on an all-risk basis. D. both coverage A and coverage C are provided for the broad form perils.

B. coverage A is for all-risk perils, and coverage C is for the broad form perils.

directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. with regard to the coverage provided, wrongful acts include any of the following EXCEPT A. breach of duty B. embezzlement C. misstatements D. neglect

B. embezzlement

all of the following statements describe the concept of strict liability EXCEPT A. it is applied in product liability causes. B. it is imposed on defendants engaged in hazardous activities. C. claimants may need to provide proof that a product defect caused an injury. D. it is imposed regardless of fault.

B. it is imposed on defendants engaged in hazardous activities.

workers compensation will pay under which of the following situations? A. only when an employee is at fault. B. paid without consideration of fault or negligence on the part of either employee or employer. C. only when the employee is engaging in a negligent act. D. only when the employer is engaging in a negligent act.

B. paid without consideration of fault or negligence on the part of either employee or employer.

all of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT A. this coverage provides an additional $2,500 amount of insurance. B. this coverage limit pays in place of the limit of insurance shown in the declarations. C. this coverage limit is payable in addition to the limit of insurance shown in the declarations. D. this coverage is not subject to any deductible.

B. this coverage limit pays in place of the limit of insurance shown in the declarations.

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT A. Legal purpose B. Offer and acceptance C. Conditions D. Consideration

C. Consideration

which of the following terms refers to the minimum amount of insurance required to operate a motor vehicle in Indiana? A. Underinsured Motorists Coverage B. Indiana Auto Insurance Plan C. Financial Responsibility Law D. Uninsured Motorists Coverage

C. Financial Responsibility Law

All of the following could be reasons for issuing a temporary producers license EXCEPT A. Servicing of the existing accounts until the producer returns from the Armed Forces B. The sale of the insurance business due to the death of the producer C. Licensing of new insurance producers after the business has been transferred D. Training of new personnel after the producer becomes disabled

C. Licensing of new insurance producers after the business has been transferred

All of the following statements concerning coinsurance are true EXCEPT A. The insured agrees to maintain insurance equal to some specified percentage of the value of the property B. If the insurance carried is less than required, the insurance may not cover the whole loss C. The coinsurance formula will also be applied to total loss D. It is used to help adequacy and equity in rates

C. The coinsurance formula will also be applied to total loss

All of the following are true regarding physical damage coverage EXCEPT A. The policy will pay up to $20 per day up to a maximum of $600 for rental transportation B. The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible C. The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle D. Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limited to $1,500

C. The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT A. Premiums on appeal bonds in any suit the insurer defends B. Up to $250 for bail bonds required because of a covered accident C. Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident D. Up to $200 a day for loss of earnings due to attendance at hearings or trials

C. Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident

which of the following statements is true regarding the premium computation for workers compensation insurance? A. the insured pays a guaranteed premium based on an estimated value of the annual income received. B. the premium is set at the beginning of the policy period and will not change. C. a premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. D. the premium basis for workers compensation insurance varies by the type of industry in which the insured is involved.

C. a premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

Which of the following conditions are NOT necessary for becoming a nonresident producer in indiana? A. being licensed as a resident producer. B. paying an appropriate fee. C. passing the proper examination. D. being a resident producer in good standing in the home state.

C. passing the proper examination

All of the following are supplemental payments found in liability policies except a.) reasonable expenses incurred by the insured b.) limited amounts for bail bonds and other bonds related to a claim c.) costs the insured incurred in hiring an attorney d.) all expenses and defense costs incurred by the insurer

C.) costs insured in hiring an attorney

If a company transacts any business of insurance without a certificate of authority, what is the maximum penalty that can be charged to the director of that company?

Civil penalty of $25,000

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

Combined single

Which employee fidelity bond pays no more than its limit of liability for each separate occurrence no matter that several separately identifiable employees were involved in a single loss?

Commercial blanket position

In dwelling policies, automatic increase in insurance is

Coverage by endorsement

Employee fidelity may be written in all of the following EXCEPT A. Individual B. Name schedule C. Position schedule D. Location schedule

D. Location schedule

All of the following are essential elements of a commercial package policy EXCEPT A. Interline endorsements B. Declarations page C. Policy conditions D. Valuations and/or settlement provisions

D. Valuation and/or settlement provisions

because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT A. consideration B. legal purpose C. offer and acceptance D. conditions

D. conditions

which of the following types of licenses is most suitable for an individual or corporation who, for a fee, offers advise concerning insurance contracts? A. insurance agent B. temporary producer C. insurance producer D. insurance consultant

D. insurance consultant

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factors

A person who knowingly and with intent to defraud an insurer files a statement of claim containing any false, incomplete, or misleading information can be found guilty of committing a

Felony

Elaborate homes and those with detailed designs or decorative architecture with replacement costs greater than ACV or market value are insured on

HO-8

persons covered under an insurance policy, whether named or not, are known as the

Insureds

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement

All of the following are true regarding deposit premium EXCEPT

It is 50% of the actual premium

Which of the following coverages in dwelling and homeowners policies is for indirect losses?

Loss of use

Coverage A- Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence

Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?

Motor truck cargo policy- carriers form

In which of the following situations would a common carrier be legally liable for damage to property being transported?

Property is stolen as a result of a driver leaving a vehicle unlocked

Insurance is the transfer of

Risk

Under the commercial property coverage program, the basic causes of loss form insures against loss caused by

Sprinkler damage

Which of the following acts created a federal program that would share the risk of loss from potential terrorist attacks with the insurance industry?

TRIA

An insured's accounts receivable records have been damaged. The loss may be covered with

The accounts receivable coverage form

Which of the following would NOT be considered a source of insurability information by an insurer?

The applicants marital status

Surety bonds are written for a definite limit called

The bond penalty

Under the workers compensation laws, the indemnity of the worker is partial. What does that mean?

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

If a covered auto is involved in an auto accident in another state, what happens to the limits of policy liability in a personal auto policy?

They adjust to at least the minimum limits of the other state

Which of the following best expresses the purpose of a stated value contract?

To pre-establish the amount of coverage available for property items that are difficult to value

Supplementary payments on a CGL provide all of the following EXCEPT

Up to $500 a day for lost earnings and $200,000 for the cost of bail bonds

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? a.) any other state b.) anywhere in the world c.) Mexico d.) only in California

a.) any other state

The Physicians and Surgeons Equipment Floater is NOT intended for which of the following a.) medical supplies located in a hospital b.) Surgeons supplies located in the surgeons office c.) waiting room furniture in a doctors office d.) office equipment located in a dentist office

a.) medical supplies located in the hospital

a business entity may be licensed as an insurance producer if

an employee who holds a producer's license is designated as a compliance officer.

homeowners policies provide coverage for

business property while on the residence premises

Which of the following is true of dwelling policy coverage a.) exclusions only apply to broad policy forms b.) there are no exclusions in basic forms c.) special forms only have special exclusions d.) exclusions apply to all three policy forms

d.) exclusions apply to all three policy forms

an insured is involved in an auto accident in another state. the state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. what amount will the insured's policy pay?

higher limits

the part of the insurance contract that describes the covered perils and the nature of the coverage of the contractual agreement between the insurer and the insured is called the

insuring agreement

when is a hired and nonowned auto liabilty endorsement available in a businessowners policy?

only if the insured does not have commercial auto coverage

who would participate in a Write Your Own flood insurance program?

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

while an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. what part of the insured's auto policy would pay for the damage to the store?

property damage liabilty

the Federal Fair Credit Reporting Act

regulates consumer reports

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

renewal dates

insurance is the transfer of

risk

which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

transfer of rights and duties under the policy

Insurance producers who willfully violate the Indiana Insurance Code are committing a Class A misdemeanor. What is the maximum punishment they may be subjected to?

up to 365 days in jail