Practice Questions

A driver who has an auto policy with limits of liability lower that required by state law would be considered

An uninsured motorist

In a DP 1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

Be reduced by 10%

Which of the following exclusions would specifically fall under Coverage E in HO insurance

Contractual liability

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?

Riot

Under Coverage E - Scheduled Farm Personal Property, livestock that is not specifically insured is limited to a coverage limit of

$2,000 per head

A commercial building insured on an 80% coinsurance policy is valued at $500k. To avoid a coinsurance penalty, at the time of a partial loss, the building would need to be insured at least

$400k (the amount of insurance must be equal to 80% of the total value at the time of loss)

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10% of Coverage C anywhere in the world

What is the waiting period for transportation expenses for a loss other than theft of a covered vehicle

24 hours for other than theft 48 hours for theft

Which of the following statements does NOT describe endorsements

Endorsements may only add coverage to a current policy, not remove

A producer's license must be renewed

Every 2 years

An insured just purchased an auto policy for his new car. He wants to understand what perils are not insured against. Which section of his policy should the insured check?

Exclusions

Which of the following covers the interest of a secured lender in personal property

Loss payable clause

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico - Alien insurer is chartered outside the US and its territories

Insurance contracts are unilateral in nature. What does that mean

Only one party make a promise.

The individual named insured endorsement offers liability coverage to the sole proprietor of a business and his or her family members. Which coverage is also provided under the individual named insured endorsement of a commercial auto policy for owned passenger vehicles and nonowned autos

Physical damage coverage

Which of the following is not available in a package policy?

Professional liability

Which of the following symbols in a business auto policy indicated that coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured

Symbol 7

The owner of a rental dwelling, turns off the heat in the insured dwelling during the winder months because the dwelling is not occupied. The building water pipes freeze and break. How will the policy react to this loss?

The loss is excluded from coverage (freezing and breaking pipes is not covered unless the insured maintain heat in the building)

Under an HO-2 policy, the insurer will pay no more than the actual cash value of the property damage until

The property repair or replacement is complete.

What is an insured contract?

Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

According to business property coverage for vacancy condition, if a policy is issued to the owner of a building, the building will be considered vacant if what portion of the sq ft is unused and not rented

69%

How soon does the period of restoration for business income coverage begin after the direct loss?

72 hours

Which of the following risks would be eligible for coverage under a dwelling policy form

A duplex that is occupied by two families, each of which have a bedroom rented to a boarder

Which of the following would NOT be eligible for coverage under a personal auto policy

A vehicle purchased 90 days ago (a covered auto includes auto listed in declarations and newly acquired autos (30 days)

For negligent liability to exist, which is NOT a requirement

An intervening cause (if there is intervening cause, then something has changed the course of events, so negligent liability cannot exist)

The federal act that provided more favorable benefits for interstate railroad workers by allowing the injured worker to sue the employer for negligence is the

Federal Employers Liability Act (FELA)

Which of the following is covered under a dwelling policy

Fire caused by earthquake

Which of the following would NOT be covered under the directors and officers liability coverage?

Reimbursement for fines and penalties

What types of injuries could incur additional penalties and/or increased benefits paid by the employer

The employers willful failure to provide required safety goggles. (or injuries that occurred to a minor who is illegally employed)

Although a business owners policy will cover fire damage legal liability, which of the following statements is true?

The general aggregate does not apply to fire damage legal liability

All of the following are true about the cancellation provision of a commercial insurance policy EXCEPT

The insurer is required to provide proof that the insured received the cancellation notice prior to cancelling the policy

All of the following are considerations in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state EXCEPT

The insurer's chartered location or domicile. (The insurer's location is irrelevant to the processing of workers comp. claims)

Which of the following would be considered a covered auto on your personal auto policy?

Your farm wagon being towed by your pick up truck