Insurance Exam 5

Under the Standard Fire Policy, how many days advance notice does the insurer have to give before cancelling a policy? Answer Choices: 5 days. 30 days. 45 days. 15 days.

5 days

Parmelia is covered under two separate standardized Personal Automobile policies, with Part C limits under both policies set at $200,000. Parmelia is involved in an accident with an uninsured motorist and she sustains bodily injury damages for $262,320. How much will Parmelia receive when she submits a claim for these damages? Answer Choices: Select the Correct Answer $262,320. $200,000. $400,000. It depends Permelia's percentage of fault in the accident.

$200,000.

The business personal property limits will be increased by what amount in order to cover seasonal variations in stock in the BOP? Answer Choices: 25% The current rate of inflation 8% 15% unless a different percentage amount is shown on the declarations page.

25%

A settlement in which the claimant receives payment in installments over a period of time instead of a lump sum is: Answer Choices: A Structured Settlement. Scheduled Payment Release. Full Release Settlement. Open-Ended Release

A Structured Settlement.

Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially generated electrical current"? Answer Choices: Loss to a computer as a result of an artificially generated electrical current will only apply if the computer was listed by name on the policy. A fire must be the result of the artificially generated electrical current for coverage to apply. Loss caused by an artificially generated electrical current only applies to home appliances, fixtures, and entertainment systems. Loss caused by an artificially generated electrical current provides coverage only when it is added by endorsement and an additional premium is paid.

A fire must be the result of the artificially generated electrical current for coverage to apply

Which of the following would be eligible for coverage under a Businessowners policy? Answer Choices: A family pub A funeral home An auto repair shop A credit union

A funeral Home

A standard Homeowners policy is best described as: Answer Choices: A property policy that offers optional liability insurance. A package policy that provides both property and liability insurance. A personal insurance policy for anyone who owns property. A personal insurance contract between the insured and the agent.

A package policy that provides both property and liability insurance.

Which of the following most closely describes a claim reserve? Answer Choices: An estimate of all losses paid to date on claims. An expectation of losses incurred but not yet reported. An amount expected to be ultimately paid on an open claim. An amount set aside to pay a claimant's attorney.

An amount expected to be ultimately paid on an open claim.

The chief deputy of the county auditor steals $2.5 million from the county and gambles it away. What bond if any would the county need to have in place in order to try and recoup this loss? Answer Choices: Employee dishonesty Blanket Public Official Bond Fiduciary bond Extortion-Commercial entities

Blanket Public Official Bond

Which of the following perils would NOT be covered by a Commercial Property policy with a Causes of Loss - Special Form attached to the Building and Personal Property Coverage form? Answer Choices: Carolyn's Fine Gifts must shut down for a month to repair flood damage. When a riot breaks out in the town square, Bonnie's Boutique is looted and vandalized in the commotion. A tornado whips through town, leveling a warehouse belonging to Johnson's Industries. Allen's Appliances loses an entire warehouse in a fire caused by a lightning strike at a nearby power plant.

Carolyn's Fine Gifts must shut down for a month to repair flood damage.

The "period of restoration" that applies to business income coverage under a Commercial Property form: Answer Choices: Ends on the date when the property should be repaired within reason. Starts on the first day reconstruction begins. Ends on the date the property is actually repaired. Ends upon expiration of the policy.

Ends on the date when the property should be repaired within reason.

A department store has a large inventory of costume jewelry and watches. No single item is valued for more than $100.00. A customer steals most of the items and flees the scene. What theft coverage would be provided by an unendorsed ISO standardized BOP policy? Answer Choices: $500 Full contents limit $2,500 No coverage for the theft of jewelry and watches

Full contents limit

A Commercial Package Policy (CPP) always includes: I. A single Declarations page common to all coverages. II. A single Conditions section common to all coverages. III. A single Exclusions section common to all coverages. Answer Choices: I only I, II and III I and II only II and III only

I and II only

The insured has several business locations and would like to insure both the structures, and the inventory (contents). His agent advises him to complete a statement of values form and issues a policy with one limit to cover all locations. This is an example of: Answer Choices: Insuring on a specific basis. Insuring on a reporting form basis. Insuring on a blanket basis. Insuring on a scheduled basis.

Insuring on a blanket basis.

Which of the following statements correctly applies to a named perils policy? Answer Choices: Only the perils described in the Declarations are covered. All direct damage to property is covered, unless the policy specifically excludes the peril. Only the perils listed by name in the policy are covered. All indirect damage to property is covered.

Only the perils listed by name in the policy are covered.

The insured's have a homeowner policy with a $5,000 loss deductible. The husband has purchased some expensive camera equipment to take on a cruise for recording their trip. Also special scuba gear and sportswear have been purchased for both. They are concerned about fire and theft. What coverage would you recommend? Answer Choices: Personal articles form Personal property form Personal effects form Reduce the homeowner deductible temporarily

Personal effects form

The insured is moving to a new primary residence. Coverage under a Homeowners policy for the personal property being moved between the old and new location is: Answer Choices: Provided for the coverage limit at the old residence. Provided on a pro-rata basis. Provided for the coverage amount the insured has selected for the new residence. No coverage would apply once the move commences.

Provided on a pro-rata basis.

The property insurance term "improvements and betterment" applies to: Answer Choices: Personal property (contents). Real property. Business contents. Personal property of others.

Real property.

Roger accidentally hits a tree in his owned vehicle and it is a total loss. His car was three years old and in pristine condition with an actual cash value of $12,250. To replace the car with a new one of the same make and model, it would cost $19,400. To purchase a used car of the same make and model that is also 3 years old with similar mileage, it would cost $11,200. Disregarding any deductible, how would Roger's claim be settled under Part D of his standard Personal Auto policy? Answer Choices: Roger would receive a check for $19,400 so he can purchased a new version of the covered auto. Roger will receive a check for the actual cash value of the vehicle at the time of the loss, which was $12,250. Roger will not receive any payment because the policy does not pay claims for accidents caused by the insured. Roger will receive a check for $11,200 to purchase a used car of like kind and quality to the vehicle that was wrecked.

Roger will receive a check for $11,200 to purchase a used car of like kind and quality to the vehicle that was wrecked

The insured carries a workers compensation policy that includes Part Two - Employer's Liability coverage. Which of the following is not covered by Part Two? Answer Choices: Statutory benefits set by state law. Suits brought by injured employees, in case of employer's gross negligence. Suits brought by spouses or dependent of injured workers. Legal defense costs.

Statutory benefits set by state law.

Part One of the NCCI standard workers' compensation policy specifies the: Answer Choices: The schedule showing the dollar limit of the policy coverage. Amount of coverage that federal programs will pay. Statutory provisions of the policy. The schedule showing the dollar amount paid for exemplary damages.

Statutory provisions of the policy.

Which of the following Commercial Property conditions is meant to prevent "over indemnification" of the insured? Answer Choices: The "Transfer of Rights of Recovery Against Other to Us" condition. The "Other Insurance" condition. The "Insurance Under Two or More Coverages" condition. The "Control of Property " condition.

The "Insurance Under Two or More Coverages" condition.

In which part of an insurance contract would you expect to find a description of the duties and obligations of the insured? Answer Choices: The Conditions. The Insuring Agreement. The Exclusions. The Declarations.

The Conditions.

Jordan's Jams purchases a standardized Commercial Property policy on August 15th from Binders Keepers, Inc. On September 20th, Binders Keepers adopted a form revision that provided broader coverage without additional premium, however Jordan's policy was written before the form revision was adopted. Which of the following statements is TRUE regarding how the broadened coverage would apply to Jordan's Jams? Answer Choices: The broadened coverage would apply to Jordan's Jams but only after a 45-day waiting period as specified by the Liberalization clause of the Commercial Property form. The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium. The broadened coverage would not apply to Jordan's Jams because the coverage was written before the form was revised. The broadened coverage would apply to Jordan's Jams but only on the date that Jordan's renews the policy, it would not apply during the current policy period.

The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium.

Which of the following statements is true regarding Businessowners policy forms? Answer Choices: There are two, the standard form that provides open perils/all risk coverage and the special form that provides named perils coverage. There are three, the basic, broad, and special that provides basic, broad and special perils coverage under each of the forms. There are two, the standard form that provides named perils coverage and the special form that provides open perils/all risk coverage. There is only one BOP form that provides open perils/all risk coverage on the building and personal property.

There are two, the standard form that provides named perils coverage and the special form that provides open perils/all risk coverage