Iowa Casualty Practice Exam questions (WEBCE)

All of the following statements are true about applying for a nonresident producers license in Iowa EXCEPT

An applicant must establish residency in IOWA

Justine's producer's license lapses when she fails to fulfill her continuing education requirement . One year later she decides to work as a producer again. Which of the following must she do first to reinstate her license.

Apply for a new license

How much advance notice must insurance company give its policyholder if it does not intend to renew a personal auto policy

At least 20 days

In a radio advertisement for her insurance agency, Jasmine knowingly makes statements that could deceive listeners about the products of a competitor. What has Jasmine committed

False Advertising

Jack a producer ignores the Insurance Commissioners cease and desist order and continues engaging in a prohibited practice. He is subject to all of the following disciplinary measures EXCEPT:

Imprisonment

Gina was the only employee in OK Convience Store at 3 a.m. when a gunman entered the store and made her give him all the money in the cash register . which of the following correctly describes the cause of loss?

Robbery

Which of the following is not a condition for licensing a business entity as a producer in Iowa?

filing business's articles of incorporation with the Insurance Commissioner

Which are typically NOT among the provisions of a typical property and casualty insurance policy

Waivers

Which of the following documents is required before an insurance company may transact insurance business in Iowa?

certificate of authority

Which of the following is NOT a qualification to be licensed as an insurance producer in Iowa?

college degree

An insured would be prudent to rely upon health insurance to cover injuries sustained in an auto accident because medical payments coverage under a personal auto policy. (PAP

has relatively low limits

May the named insured legally reject uninsured motor vehicle coverage or underinsured motor vehicle coverage offered by the insurer?

the insurer may reject uninsured or underinsured motor vehilce coverage

How long is an insurance producer's license valid

three years

LMN Insurance Company cancels Jakes automobile liability policy . LMN must notify Jake that he may be eligible for automobile liability coverage through the

Iowa Auto Insurance Plan

Janet was injured while working as a maid in her employers home. She has worked for this employer for the past ten months and has an annual salary $25,000 . Do workers compensation laws apply to her?

No, because she was not employed for at least 12 cosnetuive months for this employer

Private School's headmaster was distressed when he learned that agnes , a full time teacher helped students cheat on a college entry exam. he scolded Agnes privately but, to avoid a scandal, did nothing further. a few months later he Agnes stealing school equipment and made a claim under the schools employee dishonesty coverage. Is the loss covered?

No. because the coverage for Agnes ended when the headmaster learned of her first dishonest act.

Nathans car has a flat tire. his personal auto policy (PAP) has towing and labor costs coverage with a $50 limit. The towing company charges $40 to change the tire in Nathan's driveway. What will Nathan's insurer do ?

Reimburse Nathan $40 for the charge

Because Cassie's apartment is on the ground floor , she realizes it would be easy for a thief to enter her apartment through an open window, so she keeps her windows closed and locked at all times . What risk management technique did Cassie use?

Risk Prevention

Which of the following statements is correct about the selection of the Insurance Commissioner of Iowa?

The Commissioner is appointed for four years

Corrinne purchased her home with a 10 percent down payment and a 90 percent mortgage Sidney Bank. Why does Sidney Bank have an insurable interest in Corrine's house?

The bank faces the possibility of a loss if Corrines house is damaged or destroyed

In connection with an upcoming construction project in which it hopes to participate, a contractor furnishes a performance bond guaranteeing that:

The contractor will perform the work in accordance with the construction contract

A licensed insurance company that has a home office in wisonsin is what type of company in Florida

foreign insurer

Which of the following acts does not constitute insurance fraud in Iowa?

forgetting a list a prior illness on an insurance application

In most states when determining the exposure base for workers compensation insurance, payroll includes all of the following EXCEPT:

group insurance benefits

Underinsured motorists (UIM) coverage protects an insured in an accident caused by a motorist who:

has coverage limits that are lower than the insureds UM? UIM limits

Which of the following is not among the recognized approaches to handling risk?

ignoring ti

an insurance producer's actions performed in the course of the business which are not expressly written in the agency agreement but are generally accepted as a normal part of the job are an example of:

implied authority

A producer who disobeys a Commissioners order to cease and desist from illegal activity not subject to which of the following

imprisonment

Which of the following is not a remedy available to the Iowa Insurance commissioner when an unfair method of competition has occurred.

imprisonment

A commercial umbrella liability policy issued to a small business provides excess limits of coverage over and above the liability limits provided by all the following policies EXCEPT:

inland marine

acting on reliable information the commissioner decides to take immediate action against two insurance companies suspected of illegally fixing premium rates for a class of insureds. Which disciplinary measure will the Commissioner take first?

issue a cease and desist order

Which of the following statements is correct about an insurer who issues automobile liability policies to its insureds?

it must make available both uninsured and underinsured motorists coverage

Genevieve wants to renew her Iowa insurance producer license. Which pf the following is NOT a condition of renewal

report of insurance sales she made in the last two years

From a property insurance perspective which of the following is NOT a basic type of construction?

steel

Laura owns poisonous snakes on her property , which she uses for venom research purposes one of the snakes escaped and within hours bit a neighbor who sued Laura. Though Laura was not negligent in her ownership of the snakes the plaintiff easily win the suit based on the doctrine of

strict(absolute) liability

all of the following are perils EXCEPT

texting while driving

Which of the following correctly explains why insurance policies are contracts of adhesion?

the insurance company determines the wording of the policy

Fran's personal auto policy (PAP) lists her three autos. Each uninsured motorists coverage with a $50,000 limit. Fran is permanently disabled by injuries she receives while riding in a friends car that is struck by a hit and run drivers, How much can Fran expect to collect under her APP's uninsured motorists coverage

$50,000

if a persons license and registration or a nonresident operating privilege's has been suspended because of an automobile accident, how many months must pass after the accident occurred before the license or privilege's may be renewed?

12 months

Larry, Brian, Susan, and Jennifer just started working for AllPro Insurance Company in Texas. Based on their job descriptions below, which of them is NOT an agent?

Brian who is VP in AllPRos human resources department and does not receive commissions

When a meeting with a prospect to discuss insurance, agent Tyler makes disparaging comments about the financial stability and reputation of a competitor to dissuade the prospect from purchasing its policies . Which unfair trad practice has Tyler Committed?

Defamation

Nelson is the president of his company and has a company car. He does not have a personal auto policy because he does not own another vehicle. Which endorsement to his company's business auto policy (BAP) will protect him when he uses another vehicle

Drive other car (DOC) - Broadened Coverage For Named Individuals Endorsement

When the insurance policy provides crime coverage on a loss sustained basis, coverage is triggered by the loss that occurs

During the policy period and is discovered within one year after the policy period ends

Last year the board of directors of Laurence Corporation voted to sell pone of its subsidiaries, ELoy Inc, which had been operating at a loss to a competitor. soon after the sale Eloy's past research and development succeeded in launching a very profitable new product. Which of the following is most likely to happen?

Laurence Corporation shareholders might sue the directors and officers alleging a lack of due care in making the decision to sell the now-profitable subsidiary.

Ace bank lends Alice some money to buy a car, which Alice is paying back installments. To protect its interest until the loan has been paid off, Ace Bank should insist that Alice's insurance policy include an endorsement that names the bank as a

Loss payee

Overland Express Company is insured under a motor carrier policy. Which person is NOT insured under the policy's liability coverage?

Sunshine Fruit Farms, whose products are transported by Overland Express

What action will result if a driver willfully or negligently fails to report a traffic accident

Suspension of a resident's license or a nonresidents operating privilege's

In Iowa, which of the following persons is NOT required to have an insurance producers License

Sven , who administers employee benefits

Liability insurance basically involves

Tort law

Will is employed as a roofer for Shingle-Minded Roofing . While working one day , Will falls from a roof and injured. When he seeks to file workers compensation claim, he discovers that Shingle Minded failed to secure workers compensation insurance which is a violation of state law. In most states what should Will do?

Will should seek statutory workers compensation benefits and sue his employer for negligence if allowed by statue.

Maureen is an insurance agent who represents an insurance company she represents

a principal

Hazels store has an automatic sprinkler system that will be activated by a fire. In exchange for a reduced fire insurance premium , she signs a document stating that the automatic sprinkler system will always be in operating condition. What is the statement?

a warranty

The difference between the Pollution Liability Coverage (CG 00 39) and the Pollution Liability coverage Form (CG 00 40) is that the Limited Coverage Form

does not clean up cover cleanup costs

Dewitt Brothers insures its workers compensation liabilities under a standard workers compensation insurance policy . Luther, an employee is injured on a job site by a falling brick. What component of the state workers compensation act precludes Luther from filing a lawsuit against Dewitt for his injury ?

exclusive remedy provision

Martha's home has an insurable value of $500,000, which she has insured for $300,000 under a property insurance policy with an 80 percent coinsurance clause. Ignoring any deductible that might apply, if the building sustains $20,000 in damage due to a covered peril, how much will the insurer pay?

less than $20,000

Megan is injured while attempting to steal a computer from her place of employment. Is she eligible for workers compensation?

no because her injury was a result of her committing a crime

Acme Insurance and Apogee Insurance agree to offer different premium rates for persons of equal risk within a particular class. They also agree to limit benefits paid to insured within this class if the insureds libe in certain counties of Iowa. What Acme and Apogee engaing in ?

unfair and prohibited business practices

Sandy and Cindy are healthy, 45 years old, and have similar life expectancies. Though they are insured by the same company, Sandy's life insurance premiums are considerably lower than Cindy's. What may this indicate a case of?

unfair discrimination

John let his 17-year-old daughter Ashley use his motorboat, knowing she was normally a responsible operator. On this evening, while fooling around, she collided with another boat causing injuries and property damage. Though John was not in the boat, he was found to be responsible for damages based on the doctrine of:

vicarious liability

An insurer that has a history of accepting premiums up to five days beyond their due date cannot deny a claim for a loss occurring the day after a premium was due for which of the following reasons?

waiver and estoppel

The right of an employee to benefits under workers compensation laws does not exist if the injury..

was willfully caused , such as one that was intentionally self inflicted

Mandy is injured in a collision with a motorist who has no insurance coverage. However she and her insurer cannot agree on the amount of compensation she is entitled to receive . The policy's arbitration provison will enable them to resolve their dispute over

whether Mandy is entitled to damages and the amount of the damages

Which of the following is not a power granted to the Iowa Commissioner of Insurance?

writing insurance law

In Iowa, what is the minimum required limit in auto insurance policy for coverage of bodily injury ?

$20,000

Gordon a producer licensed in Iowa, moves to Des Moines to Chicago, Illinois. Within how many days must he notify the Iowa Commisoner of his new residence

30 days

Compensation for an employee's injury will be allowed only if the employer knew about the injury or was notified of it within how many days after the injury contract

90 days after the injury occurred

Which of the following incidents would be covered under the Terrorism Risk Insurance Act?

A U.S. manufacturing plant is sabotaged resulting in a loss of $220 million

When applying for workers compensation insurance Catalinas Corporation's owner overstated its expected payroll and paid premium based on this inflated estimate .What will happen at the end of the policy period when the insurer discovers the lower payroll figures?

The insurer will owe Catalina a refund

What does the "No Benefit to Bailee" provision in a property and casualty policy make clear?

The policy doe snot cover bailees

What is the purpose of the symbols listed in a business auto policy (BAP)

They indicate the coverages that apply to the insured vehicle

Which of the following is NOT a category of workers compensation benefits payable to an injured workers or his or her dependents?

Unemployment

Which of the following best explains why war is generally excluded from coverage in most insurance policies?

War involves the potential for catastrophic loss that simultaneously affects many policyholders.

Which of the following is the most important duty an insurance producer owes the customer?

act in the customers bes tinterest

Kendrick's car is insured with a personals auto policy (PAP). how can he have the policy also cover his new motorcycle?

add the miscellaneous type vehicle endorsement to the PAP

The relationship between an insurance company and the producer it appoints to represent its products is defined by the

agency agreement

Which of the following is NOT a requirement to obtain a resident producer's license?

appointment by at least two insurers

If an Insurance applicant is entitled to obtain an automobile liability policy but is unable to do so through ordinary methods the applicant may seek coverage through an

assigned risk plan

If a group of insureds are rated by class, they will

be charged the same premium rate

In connection with an upcoming construction project which it hopes to participate , a construction firm is required to furnish a contact bond guaranteeing that it will do the job at the quoted price if the contract is awarded to it what kind of bond is this ?

bid bond

FAIR plans (Fair Access to Insurance Requirements) provide insurance coverage that is not available from insurers in the regular market. Which of the following types of coverage is NOT generally available from a FAIR plan?

business income coverage

The motor Carrier act of 1980 requires some motor carriers to

carry liability insurance with minimum coverage limits that depend on their cargo

Butch's Meat Market loses electrical power during a flood. The business closes for several days, during which time there is no refrigeration and a large quantity of meat spoils. The loss of the meat is what type of loss?

consequential

Physicians professional liability insurance is designed to cover all the following exposures a medical practitioner faces EXCEPT

failing to meet continuing education requirements

The Insurance commissioner cannot suspend or revoke an insurers certificate of authority for which of the following reasons?

failing to meet projected profits

Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in IOWA?

failing to promptly settle a claim for which liability is uncertain

An employee's thumb was crushed in a printing press accident while working for his employer, Print Shop. The accident was a direct result of a design defect in a printing press recently bought from L&M Co. Which of the following statements accurately describes how Print Shop's workers compensation insurer will handle this cae?

it will pay benefits to the employee and subrogate against L&M Co.

Sally's employer obeyed her kidnappers instructions to deliver $250,000 to the kidnapper. The kidnapper then released her without harm. Which coverage of the employers kidnap/ransom and extortion policy will reimburse the employer for its $250,000 loss

kidnap/ransom and extortion direct losss

When does compensation begin for a covered injury (excluding injurioes resulting in perminent partial disability?

on the fourth day of disability

The Insurance Commissioner can take all of the following actions against a party believed to have violated the insurance code EXCEPT:

order the arrest of the party

Felix owns a 80 year old apartment building with narrow stairways .if his building is seriously damaged, Felix will not be permitted to rebuild it unless he makes the stairways wide enough to meet the current building code. His property insurance will NOT cover the extra cost of such an alteration if the policy contains a typical

ordinance or law exclusion

Which of the following persons would not qualify for a temporary producers license in Iowa?

part time producer of a licensed agency

Mutual Insurance Companies are owned by their policyholders through which of the following?

participating policies

Melanie sells an insuranc epolicy from Outlier Insurance , which is not authorized to transact insurance in her state. Her client later files a claim that Outlier wrongfully refuses to pay. Melanie may be required to

pay the amount of unpaid claim

The complete personal auto policy combines coverage for

property and liability insurance

Which of the following is not a power granted to the Iowa Insurance Commisoner?

prosecuting individuals for violating the insurance laws

The purpose of uninsured motorists coverage is to :

protect insureds from drivers who have no auto liability insurance

Stephanie keeps valuable hobby supplies in self-storage warehouse. The policy was just renewed and the new policy imposed new limits for property in a self storage facility which Stephanie's agent did not point out to her if a fire destroys the warehouse Stephanie might be able to collect in full under what doctrine

reasonable expectations

The Iowa Division of Insurance does all the following EXCEPT

recommend insurance products to the public

Why does an underwriter guard against adverse selection ?

to minimize insuring persons with the most risk