insurance test questions
the Broad theft coverage endorsement on the dwelling form specifies that these are some limitations.
$ 200 on money $ 1,500 on security's $ 1,500 on Jewelry $ 2,500 on silverware
An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay
$1,000 minus the deductible
whats the max penalty for habitual willful noncompliance with the fair credit reporting act?
$2,500
a $100,000 house insured on a policy with a 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 roof cost $4,000 when installed 5 years ago. it has been damaged by hail and must be replaced. the new roof will cost $6,000 at todays prices. the roof has been depreciating at $200 Per year and the insureds policy is written on acv how much will the policy pay for the insureds new roof?
$5,000
an insured owns a large dog. the first day he has to leave the dog alone to go to work the insured comes back to find his $400 couch torn apart his $100 coffee table chewed up and his $50 window curtain shredded and a $200 window pane shattered where his dog jumped through. the insured has personal property coverage under a special form dp how much will the policy cover?
0$ damage that results from a domestic animal is excluded under special form dp
an agent may hold how many resident licenses ?
1 only one resident licenses
any Licensed person whose activities affect the interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 YEARS
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
what is the minimum age when a person may purchase an insurance contract with the state of Idaho
15 years old
after a insurer receives an itemized bill related to a valid motor vehicle policy claim it must be paid within _ days
20 days
when canceling a auto policy how much advance notice must be given to the insured if the reason for cancelation is other than nonpayment of the premium
20 days
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained ?
3 days !!
all of the following are true about insurance EXCEPT 1 it is a social device spreading loss over large numbers of people 2 it involved the pooling of large numbers of individual risks 3 insurance is a form of gambling because it may or may not payoff 4 insurance transfers risk from one party to a group
3 insurance is a form of gambling because it may or may not payoff
the director issues an order to an insurer and immediately receives a request for changes to be reviewed in court. within what number of days MUST the hearing be held
30 DAYS
under the dwelling policy if an insurer chooses to repair or replace damaged property it must inform the insured within _ days of receiving proof of loss
30 days !!! ( 30 not 10 30 !!!! )
during a house fire an insured moves and antique chair listed on the policy to a storage unit. in the standard fire policy how many days will the chair be covered for?
5 DAYS !
each violation of insurance code can result in fines up to $1,000 or imprisonment for _ months
6 months and/ or fine of $1,000 or BOTH director may impose an administrative penalty of up to $15,000 upon anyone who transacts insurance in Idaho without a license
what is the type of valuation that works best for property whose value doesn't fluctuate much ?
AGREED value
the property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total LOSS is called ?
Abandonment
a beauty parlor burns to the ground what type of loss is this to the owner?
Direct loss
any individual guild of fraud is guilty of committing a _
FELONY!
what is an agreement between a insured and a insurer when the insurer agrees to indemnify the insured for specific losses in exchanged for a premium called?
Insurance contract
what effect does the terrorism risk insurance act of 2002 have on the war and military action exclusion with regard to property and casualty insurance
Nullifies the exclusion of certified acts of terrorism as covered by the act
what liability coverage MUST be added by endorsement to a homeowners policy in order to apply?
Personal Injury
Who might recieve dividends from a mutual insurer?
Policyholders
an insurance agent is NOT allowed to do :
Rebating: rebate some of his commission to the insured
what type of insurance is based on MUTUAL agreements among SUBSCRIBERS?
Reciprocal insurance
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
Respond to the consumers complaint
an insured owns several buildings each at a different location and insured on a seperate policy what type of coverage does the insured HAVE?
Specific coverage.
all of the following are perils covered under the BROAD form dwelling policy EXEPT collapse theft fire lightning
THEFT is not a peril named in the policy
producers are required to complete approved continuing education (CE) courses. who approved the ce courses available to producers in this state? (Idaho)
The Director
certain events may disrupt an insurance agents to transact business and could cause an agency to lose business temporary licenses may be issued in each of the following situations EXCEPT : upon death of an agent upon disability of an agent Upon an agent taking an extended vacation out of the country upon a agent entering active duty in the us armed forced
Upon an agent taking an extended vacation out of the country
what is a statement that is guaranteed to be true and if untrue may breach an insurance contract?
Warranty
the personal injury endorsement to a HO policy does NOT apply to
a 3rd party breaks a leg when insured knocks him down
which of the following would be considered as a unfair claim settlement practice? A claims adjuster advises the insured that if the claim goes to arbitration the insured would probably receive less than what is currently being offered The settlement of the claim is delayed for 30 days in order for the insurer to conduct an investigation Requesting the insured to swear under oath concerning the facts of a claim Requesting the insured to submit a proof of loss statement after the insured has already verbally advised the insurer of the claim
a claims adjuster advises the insured that if the claim goes to arbitration the insured would probably receive less than what is currently being offered
an insured couple owns a pontoon boat what situation would NOT be covered by their watercraft endorsement under their HP ?
a friend rents their boat and runs it into the neighbors dock
who is not eligible for coverage under HP?
an applicant who lives on a farm
an insurance company that obtains policy holders who own the company and share the company's profit and losses is :
an assessment mutual insurer
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
question on state something seaman in question answer is jones act
answer on state test is jones act
professional photographers and musicians may insure their equipment with what ?
article floater
what describes the transfer of legal right or interest in an insurance policy?
assignment
what is a true statement about flood and earthquake perils?
both flood and earthquake are EXCLUDED perils in ALL property policies
what is NOT INCLUDED in the basic form dwelling policy ? breakage of glass removal coverage personal property temp away from premises tenants improvements alterations and additions
breakage of glass ( it id included in dp 2 and 3 only)
a _ is proof that an insurance company can sell insurance in Idaho thru agents
certificate of authority
an insured is driving her car through a residential area when she losses control and crashes into a neighbors front porch. The neighbor who was sitting on the front porch is injured. The insureds liability policy has a limit of $500,000. this amount applies to the total of damages for ANY bodily injury and property damage resulting from ONE accident what type of limit liability does the insured have?
combined single Limit
all of the following are classes of inland marine risks EXCEPT bridges, tunnels and other instrumentalities of transportation and communication common carrier cargo liability domestic shipments and transportation risks
common carrier cargo liability 4 classes of inland marine include domestic shipments and transportation risks bridges tunnels ect
a builders risk form is most often written as
completed value form
Failure to disclose known facts when filling out of an insurance application is an act of
concealment
an insurer writes the policy language and the insured has a little or no control over the content any ambiguity in the wording is usually resolved in favor of the insured. this type of policy is
contracts of Adhesion
in dwelling policies automatic increase in insurance is :
coverage by endorsement
additional coverages in the liability section of the HP covers all the following EXEPT _ 1 damage of property of others 2 damaged to a 3rd party property for which insured is legally liable 3 claims expense 4 expenses the insured incurs rendering first aid for bodily injury to others
damaged to a 3rd party property for which insured is legally liable (this is primary coverage not additional coverage )
an insurers loss ratio is determined by :
dividing it's underwriting losses by total premiums
an insurance company under the laws of state in which it is operating is classified by the state as :
domestic insurer
an insurer formed under the laws of Idaho is a :
domestic insurer
whats a example of morale hazard?
driving recklessly sense its being careless
a direct writing insurance company sells policies through
employees of the company
what would modify the original insurance contracted by either adding or removing coverage
endorsements
what is true about do coverage?
exclusions apply to all three policy forms broad basic AND special
When would a misrepresentation on an insurance application be considered fraud?
if it is intentional and material
an insurance agency can be
individual, a sole proprietor, or a corporation
what is it called when an agreement between an insured and a insurer where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?
insurance contract
the part of insurance contract the 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 conditions commonly found in the insurance policy EXCEPT cancellation and non renewal subrogation appraisal insuring agreement
insuring agreement . it provides info on policies coverage conditions state legal obligation's and duties of the parties to the contract
what is true about fire dept service charge under the builders risk form?
it is an additional coverage
on a dwelling policy what is true regarding personal liability coverage?
it must be added as a supplement or written as a seperate policy
ALL of the following are TRUE of coverage B- Other structures EXEPT 1 the coverage is not applicable on the Ho-4 form 2 the amount of coverage provided by coverage b is an amount equal of 10% of coverage A 3 land where the other structures are located is not covered 4 it must be added as an endorsement
it must be added as an endorsement . u can increase the amount thru an endorsement but its already covered thru coverage B equal of 10% written as coverage A
what is a duty of the director?
license insurance companies producers and brokers enforce violations of insurance codes regulate insurance rates
an insurance company owned by its policyholder who receive a share of profits in the form of policy dividends is called a :
mutual company
an appointment is the authorization given to an agent to transact business for a company. upon termination the company must
notify the director of termination notify the agent of termination give reasons for termination if requested b the DOI
the HO-3 HP provides
open peril coverage on the dwelling and broad form coverage on personal property
what liability coverage must be added by an endorsement in a HP in order to apply?
personal injury
all of the following are examples of risk retention EXCEPT copayments self-insurance premiums deductibles
premiums is not a risk retention method
a contractor who builds homes has never made a claim on his business insurance policy. his agent discovers his policy is written on a scheduled rating. if the contractor changes to an experienced rating policy it is most likely
premiums would go down
in what way can a agent demonstrate a high standard of ethics?
putting a clients best interests before their own
all of the following is TRUE regarding rebates EXCEPT dividends are not considered rebates rebates are allowed if its in best interest of the client rebates are only allowing if specifically stated in the policy rebating can be anything economic value given as an inducement to buy
rebates are allowed if its in best interest of the client its only allowed if states in policy
unfair trade practices include
rebating defamation boycott
in dwelling policy what other structures would be covered?
rented to a neighbor for use as a private garage
which method of loss valuation is contrary to the basic concept of indemnity ?
replacement cost
in property insurance acv is defined as
replacement cost at the time of the loss less depreciation
if the insured owns a watch valued at $10,000 full coverage can be provided on a HP by purchasing the
scheduled personal property endorsement
each of the following elements is necessary to create a legal contract EXCEPT 1 consideration 2 signatures of each party 3 agreement 4 a fraternal insurer
signatures of each party
property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called
specific coverage
when the amount of insurance written in a property policy is not subject to any coinsurance provision and the amount is paid in the even of a covered loss the coverage is said to be written as
stated amount
all the following people would be considered insureds under the liability section of the HP EXEPT 15 year old foster child residing on premises the mother of insured who is residing in house the legal rep. of a deceased insured the 22 year old niece of the insured who is visiting
the 22 year old insured of ANY AGE are considered insureds only if they are residents of the house.
each of the following is true about an independent insurance agent EXCEPT the agent is not owned or controlled by any insurer the agent is employed by any insurer the agent is free to represent additional insurers the agents business records are the property of the agent
the agent is employed by any insurer
in order to purchase marine insurance which condition must exist
the applicant must have an insurable interest in the property to be insured
what is NOT in the consideration of a policy?
the application given to a prospective insured
A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely?
the homeowner will need to get a written consent from the insurer before the policy can be reassigned.
Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS
the insured had drained the plumbing system
under the provisions of the business income coverage form all of the following are true EXCEPT The insured is reimbursed for payroll that continues after the loss begins The insured us reimbursed for the loss from the date of loss to the date of restoration or policy expiration date which ever comes first if the insured and insurer are unable to come to a agreement as to the value of the loss either party may make a written demand for an appraisal
the insured us reimbursed for the loss from the date of loss to the date of restoration or policy expiration date which ever comes first this is false business income will pay beyond the expiration date of a policy it will pay until the business is restored or limits of coverage are exhausted
if an insurance premium is paid by the policyowners to the agent, and the agent fails to remit that premium to the insurer what is true about this
the policy would not lapse since payment to the agent is the same as a payment to the insurer
on a DP-3 Dwelling policy special form the coverage provided for personal property is :
the same provided on the DP-2 Broad form again the BROAD FORM
what is NOT a goal of risk retention to reduce expenses and improve cash flow to minimize the insureds level of liability in the event of a loss to increase control of claim reserving and claims settlements to fund losses that cannot be insured
to minimize the insureds level of liability in the event of a loss . retention usually results from 3 basic desires of the insured.
the insurer must be able to rely on statements in the application and the insured must be able to rely on the insurer to pay valid claim in the forming of an insurance contract is referred to as
utmost good faith
in forming an insurance contract when does acceptance normally occur?
when an underwriter approves the coverage
a policy holder provides a check to the producer for her initial premium how soon from receiving the check must the produce remit to the insurer
within 21 days
If there is a criminal prosecution taken against a producer in another jurisdiction, when must the producer report that to the Director?
within 30 DAYS of the INITAL PRETRIAL hearing date
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
without receiving written consent from an insurance regulatory authority
