Insurance Exam 4

A Personal Automobile policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr. Jones involves a $75,000 liability judgment to Mr. Allen for his injuries and $25,000 liability judgment for the damage to his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay: Answer Choices: $120,000. $25,000. $75,000. $100,000.

$120,000.

Coverage C of the Homeowners forms provide which of the following amounts for business personal property? Answer Choices: $2,500 on and off the premises. $2,500 off the premises and $500 on the premises. $2,500 on the premises and $1,500 off the premises. $2,500 anywhere in the world.

$2,500 on the premises and $1,500 off the premises.

What is the additional limit under the ISO standard BOP for debris removal in case the basic coverage is inadequate? Answer Choices: Select the Correct Answer $25,000 $20,000 $10,000 $15,000

$25,000

Camilla had an at-fault accident in her car and was sued for damages. Camilla is an executive with a major corporation and earns $2,500 per 5-day work week. Her insurance company has requested her appearance in court to defend herself against some of the damages claimed. She missed 2 days of work and will not be paid for that time. How much will Camilla's personal automobile policy pay her in total for the lost earnings? Answer Choices: $0 because she was at-fault in the accident. $1,000. $400. $500.

$400.

Jessica took an adjuster prelicensing course approved by the Texas Department of Insurance. She has received her certificate showing that she passed the state licensing exam as well. How long does Jessica have to submit her license application to the Department before she will be required to take the state licensing exam again? Answer Choices: 3 months from the date she passed her state licensing exam. 6 months from the date she completed her prelicensing course. 12 months from the date she passed her state licensing exam. 9 months from the date she completed her prelicensing course.

12 months from the date she passed her state licensing exam.

Collin suffered a work-related injury on the morning of February 5th and was off work completely until he returned to work on full duty on February 19th. Collin had worked for his employer for four years and was paid $42,125 per year. Collin's state sets the TTD rate at 66 2/3rd percent of the average weekly wage. The state sets the maximum compensation rate at $420 per week and the waiting period at 3 days retroactive after 10 days. Collin was not paid for working on February 5th, so how many days of TTD compensation is Collin entitled to receive? Answer Choices: 10 11 14 15

14

An employer in Texas whose workers compensation coverage is terminated or cancelled must notify each employee that the coverage has been terminated or cancelled not later than ____ after the coverage is terminated or cancelled. Answer Choices: 48 hours 10 days 15 days 30 days

15 days

Texas insurers must acknowledge receipt of a claim within: Answer Choices: 10 days. 15 days. 30 days. 20 days.

15 days.

Payment for a covered loss under the Standard Fire policy must be made within ____ days after a satisfactory proof of loss has been received by the insurer. Answer Choices: 30 90 60 45

60

Sierra's home is located in a flood zone. In insurance terms, the location of Sierra's home is considered: Answer Choices: A peril. A hazard. A risk. A proximate cause.

A Hazard

All of the following would be considered "uninsured motorists", EXCEPT: Answer Choices: A motorist driving without liability insurance. A motorist who Is covered for liability, but does not carry enough coverage to meet the state's financial responsibility requirements. A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident. A motorist with liability coverage with an insurance company that has become insolvent.

A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident.

Under an airport premises policy, all of the following are excluded, EXCEPT: Answer Choices: A passenger slips on ice on a step. Damage to the runway. Admitted liability. Rental of a replacement aircraft.

A passenger slips on ice on a step.

Vanessa states on an application for personal automobile insurance, that she has had no car accidents within the past three years. She later remembers an accident and corrects this statement to include an accident that occurred two years ago. Vanessa's original statement can be described as: Answer Choices: A representation. A warranty. Concealment. A misrepresentation.

A representation.

An insurer doing business in the United States, whose place of incorporation is Toronto, Canada would be identified as a(an): Answer Choices: Alien insurer. Non-admitted insurer. Foreign insurer. Domestic insurer.

Alien insurer.

An "uninsured motor vehicle" under a personal auto policy does not include: Answer Choices: An abandoned car used as a residence. A "hit and run" driver. A vehicle carrying liability insurance in an amount less than required by a state's financial responsibility law. A car whose bodily injury liability coverage has expired.

An abandoned car used as a residence

A commercial umbrella liability policy with a supplemental reporting period extends the period for reporting claims to: Answer Choices: A period specified in the policy. 60 days following expiration of the policy. Five years or inception of a new policy, whichever comes first. An unlimited period following expiration of the policy.

An unlimited period following expiration of the policy.

The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? Answer Choices: Select the Correct Answer Perils of the sea Jettison General average Barratry

Barratry

n item is covered on a personal articles floater. Under which of the following circumstances would the item be covered? Answer Choices: Wear and tear Inherent vice Breakage Deterioration

Breakage

The NAIC Model Unfair Claim Settlement Practice Act DOES NOT apply to any of the following types of coverage, EXCEPT: Answer Choices: Workers' Compensation. Surety bonding. Dwelling insurance. Equipment Breakdown (Boiler & Machinery).

Dwelling Insurance

Which of the following is included in the Supplementary Payments under a standardized Personal Automobile policy? Answer Choices: Loss of earnings of 80%, with a daily limit of $50 per day. Interest accruing after a judgement is entered (post-judgement interest). Up to $500 for the cost of bail bonds necessary in defense of a claim. Up to $20 per day, for transportation expenses, not to exceed an aggregate limit of $600.

Interest accruing after a judgement is entered (post-judgement interest)

Which of the following are the Texas Workers' Compensation benefits that are increased by a cost-of-living adjustment (COLAs)? Answer Choices: Supplemental Income Benefits (SIBs) only. Lifetime Income Benefits (LIBs) only. Lifetime Income Benefits and Supplemental Income Benefits (LIBs and SIBs) only. Impairment Income Benefits (IIBs) and Supplemental Income Benefits (SIBs) only.

Lifetime Income Benefits (LIBs) only

A type of insurance that permits an insured to collect from his/her own insurance company, without proving the negligence of a third-party, is known as: Answer Choices: Intentional negligence. All-risk. No-fault. Non-negligence.

No-fault.

A claim is made on an excess liability policy. It is discovered during the claims investigation, that the underlying liability policy and the excess liability policy have different inception and expiration dates. The adjuster finds that the different dates has created a situation where the underlying policy was not in effect at the time of the occurrence, and therefore cannot trigger the excess liability policy to pay the claim. This situation is known as: Answer Choices: Contribution by Equal Shares. Nonconcurrency Liability Discrepancy. Split Limits.

Nonconcurrency

Under the provisions of the 1943 New York Standard Fire Policy, an insured may file a suit to recover for a loss, only if all of the required duties have been met and the period of limitation tolled is ________ from the date of the loss. Answer Choices: One year. Two years. Three years. Four years.

One Year

A surety that provides a bid bond to a contractor might also provide another bond if the contractor is awarded the contract. The bond that is purchased after a contract is awarded is: Answer Choices: Performance bond. Completion bond. Financial Guarantee bond. Labor and Material bond.

Performance Bond

With a work-related injury, the loss of a finger would be characterized as what type of disability? Answer Choices: Permanent total Permanent partial Temporary total Temporary partial

Permanent partial

Risk retention and purchasing groups are used to provide which of the following types of coverage? Answer Choices: Inland Marine coverage. Dwelling and Homeowners insurance. Workers' Compensation coverage. Products Liability insurance.

Products Liability insurance.

Which of the following is not an implied warranty under an ocean marine policy? Answer Choices: Seaworthiness of the vessel Legality No deviation in the voyage Protection and indemnity

Protection and indemnity

Under the provisions of the standard BOP policy, what happens when an insured fails to advise the insurance company that the insured's sprinkler system is inoperative beyond a 48 hour period? Answer Choices: Coverage for fire losses will be excluded. Smoke damage is excluded. The insured will be billed an additional premium. The policy will be cancelled by the insurer for violation of a warranty.

Smoke damage is excluded.

nsurance companies often outsource a large percentage of their processes to Third Party Administrators (TPAs). All of the following facts about TPAs are true, EXCEPT: Answer Choices: TPAs can collect premiums from insureds. TPAs must be licensed and renew their licenses annually. TPAs can adjust and process claims. TPAs assume the risk on the policies they handle.

TPAs assume the risk on the policies they handle.

Which of the following is NOT a reason to purchase a Dwelling policy instead of a Homeowners policy? Answer Choices: The limits of liability under a Dwelling policy are lower than under a Homeowners policy, permitting the insured to purchase coverage for a low-value dwelling. The Dwelling policy does not require the dwelling to be owner-occupied (unless its a mobile home) and the Homeowners policy does required the covered dwelling to be owner-occupied. The Dwelling policy provides higher limits of liability than the Homeowners policy. Dwellings that may not meet the Homeowners policy's strict underwriting requirements can be insured under a Dwelling policy.

The Dwelling policy provides higher limits of liability than the Homeowners policy.

Which of the following best describes "no release or walk-away" release? Answer Choices: A form of advanced payment to the claimant. A structured settlement. The bills are paid and no attempt to obtain a separate release is made. The insurer agrees to waive its right to subrogation against a third party who caused the damage.

The bills are paid and no attempt to obtain a separate release is made.

The insured is covered under an HO-6 form. The Coverage A limit is $500,000. The insured also owns a separate three-car garage adjacent to the condominium building worth $100,000. Which of the following statements is true regarding coverage for the garage? Answer Choices: The garage is not covered under the HO-6 form. The garage is covered under Coverage B - Other Structures. The garage is covered for 10% of the $500,000 limit as an additional amount of insurance. The garage is covered as part of the $500,000 Coverage A limit.

The garage is covered as part of the $500,000 Coverage A limit.

If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured: Answer Choices: No action needs to be taken unless the breach is ongoing for more than 30 days. No action is necessary at all. The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid. The insurer must be notified within 10 days after the breach and no additional premium is assessed.

The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid.

Sebastian throws a roast in the oven and decides to go to the movies, thinking that he has plenty of time before roast will be fully cooked. After the movie, he is caught behind a car accident and it takes him several hours to get home. When Sebastian finally arrives home, the roast is completely blackened and the contents of his home are thoroughly covered in soot from the smoke. Which of the following statements is true regarding how this claim would be handled under a Homeowners policy? Answer Choices: The loss would be covered under the peril of fire. The loss would not covered because the peril of smoke is excluded. The loss would be covered under the peril of smoke. The smoke was not caused by an unfriendly fire and therefore, the loss is excluded.

The loss would be covered under the peril of smoke.

When a loss occurs and coverage is provided by a reciprocal exchange, which of the following is responsible to cover the loss? Answer Choices: Select the Correct Answer The "name". The reinsurer. The member insurers. The attorney-in-fact.

The member insurers.

The Equipment Breakdown policy (formerly called Boiler & Machinery) provides for replacement cost coverage in case of a covered claim. Under what conditions would the insurer only pay actual cash value in case of a loss? Answer Choices: Only if the policy is endorsed to provide ACV coverage The policy pays replacement only if the repairs are made within twenty four months of the accident. The policy will pay replacement cost as long as the repairs are expedited regardless of a time limit. The policy always provides replacement cost coverage in case of a covered claim.

The policy pays replacement only if the repairs are made within twenty four months of the accident

Which of the following correctly describes "Included Operations" as it relates to Automobile Physical Damage claims? Answer Choices: The separate sections of the unibody frame that needed to be repaired, and the repair costs for each. The separate tasks that are included as part of a repair procedure, and the labor cost to perform these procedures. The separate tasks to repair an automobile are grouped into "included operations" and the labor costs for each group of tasks is listed on the repair estimate. The number of bolted parts that must be removed from a conventional body frame in order for repairs to be made, and the labor costs to remove them.

The separate tasks that are included as part of a repair procedure, and the labor cost to perform these procedures

The insured is a CPA and has the accounting tax records of several clients on the premises. If the records were suddenly destroyed by fire, what inland marine form would cover the cost to reproduce them? Answer Choices: Valuable papers and records Accounts Receivable Coverage EDP Coverage A Bailee Form

Valuable papers and records

Third-party provisions allow for an entity that lends money to an insured to purchase property, to be named on the insurance for that property. In property insurance, this is known as a "standard mortgage clause." In auto insurance, it is known as: Answer Choices: Loss payable clause. Lender's clause. Full coverage. Reimbursement clause.

Loss payable clause.