quizlet for exam

Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value?

They are automatically provided with replacement cost coverage. (Single-family dwellings are automatically provided with replacement cost coverage if insured to at least 80% of the replacement value, or the maximum allowed under the regular flood insurance program.)

an insured covered under a mobile homeowners Policy wants to move the location of the covered mobile home. Which of the following must the insured obtain from the insurer ?

Transportation/permission to move endorsement

an individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it ?

contractors equipment floater

which of the following statements is true concerning the special form dwelling policy

coverage A - dwelling = all risks coverage C - personal property= broad form perils

if an insured cover under mobile homeowners policy moves the mobile home to protect it from a covered peril , the policy will pay up to

$500

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?

(Professional liability) (Because the reputation of the professional, as well as the monetary amount is at risk, if the insured feels certain that they are not at fault, even though it might be less expensive to pay the amount of loss sought, they can require the insurer to defend the claim. Usually there is a significant discount of premium to the insured if they will give up this right.)

additional coverages in the liability section of homeowners policy cover all of the following

-Claims expense -expenses the insured incurs rendering first aid for bodily -injury to third parties damage to property of others

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

A coin collection valued at $500 lost in a fire (An HO policy will pay up to $2,500 for silverware by theft, $1,500 for boats, motors, trailers, $1,500 for loss of trailers not used with boats, but no more than $200 for coins.)

Which of the following policies will help an auto dealership cover most of its liability exposures?

A garage liability coverage(The garage liability coverage form provides liability protection for the insured's premises, autos, products, and work performed.)

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business.(For eligibility, the personal auto policy will insure as covered autos those vehicles owned by the named insured and not used primarily for a business, other than farming. Vehicles leased to the named insured for periods of 6 months or longer also are classified as owned for insurance purposes.)

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold (Although a cold could have been caught as a result of the working environment, it is not specific enough to that environment for it to be considered causal)

For the purpose of insurance, risk is defined as

An event that increases the amount of loss. (Risk, or the chance of loss occurring, is the basic reason for buying insurance.)

Which of the following is an example of a protective safeguard in a businessowners policy?

Automatic sprinkler system (The protective safeguards endorsement adds a policy condition requiring the insured to maintain protective safeguards (automatic sprinkler system, fire alarm, etc.) as a condition for coverage.)

The authority granted to an agent through the agent's contract is referred to as

Express authority (Express powers are written into the contract between the insurer and the agent.)

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

General (General compensatory damages are for intangible elements that cannot be specifically measured in terms of dollars.)

An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay?

Higher (According to the out-of-state coverage provision in the personal auto policy (PAP), if the state or province has a financial responsibility law specifying limits of liability higher than the limits shown in the declarations, the insured's policy will provide the higher specified limits.)

Who is responsible for filling out a notice of claim form?

Insured (Notice of claim is a form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred.)

The Physicians and Surgeons Equipment Floater in NOT intended for which of the following?

Medical supplies located in a hospital (This coverage form protects individuals in the medical or dental profession for loss to valuable medical and dental equipment, materials and supplies, including office equipment and furniture, and similar property of others. Coverage is not intended for hospitals, schools or other institutions.)

An agent license can be issued

Only to individuals. (Licenses can be issued only to individuals (natural persons). The term "person" includes business entities.)

After a loss, an insured covered by a business property coverage is NOT required to

Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation.(Although the insured is required provide a description of how, when, and where the loss or damage occurred, there is no demand for a timeline leading up to the loss.)

in addition to the common policy conditions, all of the following conditions apply to LIABILITY COVERAGE

Separation of insured, Legal action against insurer, bankruptcy. Exclude: Employers liability

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT

Workers compensation coverage (Workers compensation is not available through the commercial package policy (CPP).)

which of the following statements concerning the builders risk coverage form is correct ?

it may be written on a reporting form for the completed value on the structure

in a dwelling policy, which of the following other structures would be covered

rented to a neighbor for use as a private garage

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(The two classes of compensatory damages that may be awarded are special and general damages. Special damages are tangible damages that can be specifically measured in dollar amounts (such as out-of-pocket expenses for medical, miscellaneous expenses, and loss of wages))

An insured is applying for a casualty insurance policy. One of the conditions of the policy allows the insurance company to inspect the insured's books at the end of the policy term to make sure sufficient premium has been collected for the exposure she plans to insure. Which condition is part of the insured's policy?

Deposit premium audit(Deposit premium audit is a condition that allows an insurer to inspect the insured's books at the end of the policy term to make sure sufficient payment has been collected for the exposure.)

in which of the following situations would the jewelers block extension cover a loss ?

a jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives. It has been damaged

Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective ?

12:01 am the day after the application and premium payment are mailed.

a policy holder has an equipment breakdown policy with a $200,000 limit. if a boiler explosion causes $100,000 damage to the boiler itself; $50,000 damage to the insured's building, and $30,000 expediting expenses, how much will the insured collect under the policy

175,000 because the expediting expenses cannot exceed $25,000

A dwelling policy has a standard deductible that applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

250 (A standard deductible of $250 applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge.)

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is

50% of the amount provided as Coverage A. (Under the HO forms, Coverage C is automatically provided as equal to 50% of the amount provided in Coverage A.)

Which of the following statements is true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. (Because the initial premium calculation is based on estimated payrolls, a premium auditor may inspect actual payrolls paid to ensure that adequate premiums are being paid.)

What type of liability would a person who owns a swimming pool have?

Absolute (Any conduct that is inherently dangerous (swimming pools, using explosives, keeping wild animals) imposes absolute liability. The claimant does not have to prove anything.)

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential(Consequential loss, also known as indirect loss, is a second financial loss caused by a covered direct loss.)

Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT

Embezzlement.(Embezzlement is a criminal act. There is no "standard" director and officers policy; however, most policies specifically exclude coverage for defense or payment of claims resulting in fines or penalties resulting from criminal acts, nor will they pay punitive damages.)

Events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards (Hazards are conditions or situations that increase the probability of an insured loss occurring.)

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

Indemnity.(If more than one policy is in force on the same property at the same time covering the same perils, this is concurrent coverage. The intent of insurance is that after a loss, the insured is restored to the condition he or she was in before the loss (indemnified). Each policy pays a percentage of a loss directly related to the amount of insurance it provides compared to the total amount of coverage.)

On a DP-3 Dwelling Property special form, for personal property is

Named and specified peril ONLY

Which of the following liability exposures is most likely for a small specialty clothing retail boutique?

Premises liability exposure(The premises liability exposure exists when there is use of the premises. Operations liability exposure relates to activities in addition to use. Product liability exposure is the possibility that the public might be injured by the product. Completed operations liability refers to liability for work already performed or completed. For a boutique retail store, the only possible liability would arise from customer injury while on the premises.)

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client. (A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.)

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

Renewal dates(An Insuring Agreement establishes the obligation of the insurance company to provide the insurance coverages as stated in the policy. The insuring agreement lists the parties to the contract, effective and renewal dates, the description of coverage provided, and perils (among other things). Location of premises, policy limits, supplemental representations, and insurer's name and address can all be found in the Declarations.)

In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within

Specified time(In the event of a loss covered by the policy, the named insured is required to submit to the insurer a signed sworn proof of loss within the allotted time (usually 60 days, but may vary))

Which of the following perils is covered by the HO-2 and HO-3?

Sudden and accidental rupture of a heating system (Off-premises power failure, flood, and war are excluded from all DP and HO policies.)

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

Telling a client that his first premium will be waived if he purchased the insurance policy today (Rebating is defined as offering any inducement in the sale of insurance products that is not specified in the policy, including money, reductions in commissions, promises, and personal services. Both the offer and acceptance of a rebate are illegal.)

which of the following losses would NOT be covered by the dwelling policy if the dwelling is vacant for over 60 DAYS

Vandalism

what are common carriers required to issue to every shipper tat it transports good for

a uniform bill of lading

Which of the following would be covered under the Film Coverage Form?

a) Deterioration of a film b) Exposure of a negative film to light c) Electrical erasure of a tape d) None of these are covered. (D) The all-risk coverage form excludes the following additional causes of loss: deterioration, atmospheric dampness or changes in temperature; exposure of negative film to light; use of developing chemicals; developing, cutting, or printing of film or other laboratory work; electrical or magnetic injury, disturbance or erasure.

which coverage form would provide coverage for all incoming and outgoing shipments

annual transit

under a business-owners policy, an insured can cancel the policy

at anytime by mailing a written notice of cancellation

limit for the forgery or alteration coverage in the business-owners policy

coverage up to $2500

how does mobile home endorsement affect the other coverage of law or ordinance in a homeowners policy

it removes the coverage

what type of property does a personal floaters policy cover

movable personal property, whenever it may be located

an insured's accounts receivable records have been damaged. The loss may be covered with

the accounts receivable coverage form

which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value

they are automatically provided with REPLACEMENT COST COVERAGE

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

30,000(This insured only carried 75% of the amount of insurance he had agreed to carry ($120,000 of the agreed $160,000), so the insurer will pay only 75% of the loss, or $30,000. If the insured had carried the required amount of insurance, partial losses would be paid in full. In the event of a total loss, the face of the policy would be paid. If the full amount is not carried, divide the actual amount carried by the amount that should be carried (the coinsurance amount), and multiply it by the loss.)

a Plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly

completed operations

Which of the following would be considered an insured under a business auto coverage form?

Anyone while using, with permission, a covered auto owned by the named insured (The business auto coverage form provides coverage on covered autos while used by the insured or employees of the insured (or others using the covered auto with permission) but does not cover the exposure of other autos not owned, hired, or leased by the named insured.)

Who will transport the property of anyone who hires them?

Common carriers (Common carriers transport the property of anyone who hires them)

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation. (Claims arising because of intentional acts of the insured are not covered.)

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer. (Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.)

Individuals in the business of selling construction equipment and mobile equipment should insure with a/an

Equipment dealers coverage form. (An equipment dealer's coverage form covers a dealer's stock in trade consisting primarily of mobile agricultural equipment and construction equipment. It also covers property of others in the dealer's care, custody, or control. It excludes coverage for autos, motorcycles, aircraft, and watercraft.)

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 experience modification factor is developed by a rating bureau. The calculations relate an employer's losses, payroll, and premiums, segregated according to classifications of operations, all as reported to the bureau by the employer's insurance company. )

What is the function of a certificate of authority?

It allows an insurer to transact insurance in Georgia. (No person can act as an insurer, and no insurer can transact insurance in Georgia, unless properly authorized by a current and valid certificate of authority issued by the Commissioner, except for transactions expressly otherwise provided for in the Insurance Code.)

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger(According to the law of large numbers, the larger a group becomes, the easier it is to predict losses. Insurers use this law in order to predict certain types of losses and set appropriate premiums.)

Which of the following coverages in dwelling and homeowners policies is for indirect losses?

Loss of use(Loss of use coverage applies only after a direct loss caused by a covered peril has occurred.)

The purpose of the Georgia Automobile Insurance Plan is to

Make automobile insurance available for insureds who are unable to purchase coverage in the voluntary market. (This plan makes automobile insurance available for insureds who are unable to purchase coverage in the voluntary market.)

The endorsement that provides coverage for losses arising from sudden collapse of earth arising from underground limestone created by the action of water on rock formations is a/an

Sinkhole collapse endorsement. (The sinkhole collapse endorsement will provide coverage for sinkhole collapse, which means a sudden settlement or collapse of the earth supporting the property resulting from an underground hole caused by water on limestone or other rock formations.)