Property and Casualty

What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy?

$1,000

the maximum penalty that may be assessed for a single nonwillful violation of the insurance code is

$1,000

Coverage for water backup or sump pump overflow is excluded from the Dwelling Policy. However, with the purchase of the water backup and sump pump overflow endorsement, coverage for up to $5,000 in loss or damage can be provided for an additional premium. What is the deductible associated with this coverage?

$250

An insured's 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 today's prices. If the roof has been depreciating at $200 per year and the insured's policy is written on the actual cash value(ACV), how much will the policy pay toward the insured's new roof?

$5,000

An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A" $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries?

$50,000

If an agent changes his residence address, within how many days must the agent notify the Commissioner of the change?

30 days

Under workers compensation laws, injured workers are entitled to how many weeks of treatment from the date of the accident?

400 weeks

Rates for private passenger motor vehicle insurance on file with the Commissioner are considered approved after

45 Days

The insured with a claims-made commercial general liability policy may request in writing claim and occurrence in the time of up to 60 days after the policy period ends. the insurer must provide the information.

45 days.

Agents, subagents, and counselors are required to maintain records of all insurance transactions for what time period?

5 years

A binder is effective for a period of

90 days

Which of the following losses would NOT be covered by a homeowners policy?

A coin collection valued at $500 lost in a fire

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover

A share of the loss.

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the

Additional insured.

Which of the following is another term for an authorized insurer?

Admitted

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur?

Aggregate limit

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree on the value of a property loss is known as

Appraisal.

Georgia requires that all owners and operators of motor vehicles in the state carry which type of auto insurance as evidence of security in complying with the state's financial responsibility law?

Auto liability coverage

In return for premium, an insurance company must

Be fair in underwriting and pay covered losses.

An insurance contract must contain all of the following to be considered legally binding EXCEPT

Beneficiary's consent.

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation.

To legally transact insurance in this state, an insurer must obtain which of the following?

Certificate of Authority

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Conditions.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss?

Coverage E

The part of a property policy that shows the amount of insurance, premium, and policy term is the

Declarations

Which of the following is a mandatory part of an insurance policy that varies with each individual policy?

Declarations

The part of a policy that clarifies terms in the policy is the

Definitions.

A beauty parlor burns to the ground. What type of loss is this to the owner?

Direct

An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000, and each has the pro rata liability other insurance clause. In the event of a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss

which of the following would modify the original insurance contract y either adding or removing coverage?

Endorsement

Professional liability coverage protects against legal liability resulting from

Errors and omissions.

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

an insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. This is an example of

False Advertising

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.

The pro rata liability clause is designed to protect the principle of

Indemnity

All of the following are factors in the determination of actual cash value EXCEPT

Insurance premium paid.

which of the following best describes a misrepresentation

Issuing sales material with exaggerated statements about policy benefits

the process of determining the premium charged and how much insurance is required for a particular loss is called.

Loss valuation

Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence.

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which of the following liability policies is usually written on a "claims-made" form?

Professional liability insurance

The risk of loss may be classified as

Pure risk and speculative risk.

What type of information would be found in a policy's insuring agreement?

Renewal dates

In property insurance, actual cash value is defined as which of the following?

Replacement cost at the time of the loss, less depreciation

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

Special

An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?

Specific

Under the commercial property coverage program, the basic causes of loss form insures against loss caused by

Sprinkler leakage.

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as

Stated amount.

A driver whose license is suspended for violating financial responsibility laws must

Surrender their driver's license.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?

The endorsement is available for additional premium

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention.

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

Under a business owners policy, the inspections and surveys condition specifies all of the following EXCEPT

The insurer does not have the right to inspect the insured's property and operations.

An insured is driving her auto and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair?

This loss is not covered

Which of the following best expresses the purpose of a stated value contract?

To pre-establish the amount of coverage available for property items that are difficult to value

which of the following is NOT a responsibility of an insurance agent?

Underwriting the contract

A building is insure, but no one has lived or worked in it for 10 years. The building is completely empty. For an insurance standpoint this building is...

Vacant

in forming an insurance contract, when does acceptance usually occur

When an insured underwriter approves coverage.

When would uninsured motorist coverage apply?

When the other party is legally liable but has no insurance

with respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto

a vehicle rented for the insured's personal use

a producer who fails to sperate premium monies from his own personal funds is guilty of

commingling

Which of the following is an example of a producer being involved in an unfair trade practice of rebating?

deposit premium audit

In addition to the coverages built into the property coverage form, insurers may offer other endorsements that can further expand the coverage provided in the policy

for an additional premium

What type of compensatory damages will pay for pain and suffering and disfigurement?

general

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

indemnity

Which of the following is the basis for a claim against an insurance policy?

loss

Transacting insurance without a license in this state is considered a(n)

misdemeanor

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT

physical damage

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called

pro rata liability

Duties of the insurer found in property policy conditions include all of the following EXCEPT

return any premiums to the insured

What are the two types of compensatory damages?

special and general

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

What type of liability would a person who owns wild animals have?

strict liability

The transfer of an insureds right to seek damages from a negligent party to the insurer is found in which of the following.

subrogation

All fo teh following are unfair claims settlement practices EXCEPT

suggesting negotiations in settling the claim

A company has a business owners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?

the coinsurance formula would apply

in terms of parties to a contract, which of the following does NOT describe a competent party

the person must have at least completed secondary education

Prior to state-directed workers compensation statues being enacted, employees had

to sue an employer for the "loss" and prove that the employer was at fault.

which of the following statements that is guaranteed to be true and if untrue, may breach an insurance contract

warranty