RETAKE 3
The Homeowners Policy excludes Coverage for which of the following? A. A motorized wheelchair for the insured's mother-in-law who lives with the insured B. An ATV driven on the insured's premises C. A riding lawn mower pulling a two-wheel garden trailer D. A motorized golf cart being driven to or from a golf facility on a public road
A motorized golf cart being driven to or from a golf facility on a public road The golf cart must be on a golf course or on a private road approved by the community for Coverage to apply.
All of the following are true regarding a nonresident license, except: A nonresident will be exempt from prelicense and examination requirements, if the licensee holds a license for the same line or lines of insurance in his/her home state A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state A person residing in another state may be licensed as a nonresident producer if the person is currently licensed in his/her home state If a nonresident does not hold an equivalent license in any other state, they must satisfy prelicensing course and examination requirements, and continuing education requirements
A nonresident licensee may be authorized for any line of insurance for which the licensee is not authorized in his/her home state A nonresident licensee may only be authorized for the line(s) of insurance for which the licensee is authorized in his/her home state.
Who among the following is not exempt from continuing education requirements? A. Certified Insurance Consultant B. A nonresident licensed producer who has fulfilled the continuing education requirements of their home state C. A personal lines producer D. Persons holding a limited authority license
A personal lines producer A personal lines producer is not exempt from continuing education requirements.
Which of the following residents in the insured's dwelling is eligible to receive medical payments under Section II of a Homeowners Policy? A. The named insured B. The named insured's spouse C. A tenant who lives in a portion of the insured's residence D. A residence employee
A residence employee Only the residence employee is eligible if injured in the course of employment.
Which of the following is the best description of the purpose of the insuring agreement? A. The location of insured property and the named insured's mailing address B. Perils that are not covered C. Perils that are covered D. Transfer of the rights of recovery
Perils that are covered The insuring agreement states the insurance company's promise to pay the insured. This promise is usually broad and the other sections of the policy restrict or limit the scope of coverage provided by the policy. Property insurance policies state in the insuring agreement what perils are covered.
The ___________ provides liability coverage under the Dwelling Policy Program. A. Comprehensive Liability Supplement B. Public Liability Endorsement C. Personal Liability Supplement D. Extra Liability Endorsement
Personal Liability Supplement The Personal Liability Supplement provides Liability coverage on the dwelling premises and the insured's non-business activities. It is similar to the Liability coverage of the Homeowners Policy.
The Boatowners Policy does not include ___________ coverage. A. Property B. Personal Property C. Hull D. Medical Payments
Personal Property Other coverages include watercraft liability coverage, uninsured boaters, and even towing is usually available.
Under Medical Expenses of the Businessowners Coverage Form Section II - Liability, how much time is allowed for medical expenses to incur and to be reported? 180 days 3 years 2 years 1 year Medical expenses incurred and reported to the insurer within 1 year of the date of the accident are covered.
1 year Medical expenses incurred and reported to the insurer within 1 year of the date of the accident are covered.
Motels may not be written under the Businessowners Policy if they exceed: 25,000 square feet 3 stories 100,000 square feet 2 stories
3 stories Motels are limited to three stories in height. They are not limited by area.
In insurance, a document that verifies how and when a loss happened and includes the cost of damages, is called: A Certificate of Insurance A Binder A Notice of Loss A Proof of Loss
A Proof of Loss The Proof of Loss, setting forth the date and circumstances of the loss (including the amount of the loss), is generally required by the insurer before the insurer will settle the claim.
Choose the false statement regarding a liability insurance policy. A. A primary policy pays first with respect to other policies B. The per person limit in a liability policy is the most the policy will pay to any one person regardless of overall policy limits C. Aggregate limits means each loss payment made under a per occurrence limit or per person limit increases the aggregate limit of liability D. Split limits means that the amount of insurance available for losses is divided between bodily injury and property damage
Aggregate limits means each loss payment made under a per occurrence limit or per person limit increases the aggregate limit of liability The aggregate limit is the most the policy will pay for all claims within the policy term.
Under Workers' Compensation, all the following injuries are covered, except: An employee injured because of unsafe working conditions An employee who is injured solely through his/her own negligence An employee who is injured despite the extensive safety measures of the employer An employee who intentionally injures himself/herself or if the injury resulted from intoxication
An employee who intentionally injures himself/herself or if the injury resulted from intoxication The employer can deny benefits to an employee who intentionally injures himself/herself or if injury results from intoxication.
Under Marine Policies, the term uncontrolled means forms that: A. Are not approved by the National Association of Insurance Commissioners B. Are filed with the State Insurance Department by insurers C. Are not standardized by any rating bureau D. Must be tailored to the individual insured by endorsement
Are not standardized by any rating bureau The Uncontrolled forms are developed by individual companies to meet the needs of the company and its target market. The Uncontrolled forms will normally differ from insurer to insurer.
Personal Injury Coverage includes all of the following, except: A. False Arrest B. Libel and Slander C. Bodily Injury from eviction D. Malicious prosecution
Bodily Injury from eviction Personal Injury, as distinguished from Bodily Injury, includes false arrest, invasion of privacy, malicious prosecution, and so on.
Since persons contracting with contractors or subcontractors to make repairs, construction, or alterations have possible contingent exposure because of negligent acts of the contractor or subcontractor, they should purchase: A. Completed Operations Insurance B. Contractors Liability Insurance C. Contractual Liability Insurance D. Contingent Liability Insurance
Contingent Liability Insurance Contingent liability is liability imposed because of accidents caused by persons other than employees for whose acts an individual, partnership or corporation may be responsible. For example, an insured that hires an independent contractor, can in some cases, be held liable for his negligence.
Which of the following statements is false about the Homeowners Policy? A. Home schooling is permitted under a Homeowners Policy B. Coverage D of a Homeowners Policy covers additional living expenses C. Coverage D of a Homeowners Policy includes loss of income from an incidental business D. A Homeowners Policy will not cover theft of a boat away from premises
Coverage D of a Homeowners Policy includes loss of income from an incidental business Coverage D does not cover loss of income from an incidental business.
What type of property is not covered under Protection and Indemnity insurance? Lost cargo when a seaman employed by the captain threw it overboard Damage to the personal property of passengers onboard when the vessel is damaged by collision Damage to another vessel caused by collision when the insured's vessel was going through a narrow channel Injury to a seaman while working in the boiler room
Damage to another vessel caused by collision when the insured's vessel was going through a narrow channel Protection and Indemnity coverage also covers damage to other property, including fixed objects, such as wharves, docks, and other vessels, when not caused by collision, and injuries to seamen caused by the vessel's lack of seaworthiness, and general damages subject to the Jones Act caused by negligence.
Collision Coverage under Part D of the Personal Auto Policy would cover which of the following? A. Damage to the insured auto's bumper when the auto crashed into a tree B. Breakage of the windshield caused by collision with a stone or other missile C. Damage to the auto caused by collision with an animal on the roadway D. Damage to the auto caused by objects blown into it during a severe windstorm or tornado
Damage to the insured auto's bumper when the auto crashed into a tree Part D of the policy specifically stipulates certain causes of loss that are not considered collision. They include missiles or falling objects, fire, theft, explosion, windstorm, contact with a bird or animal, among others.
All of the following about Products Exposure Liability Coverage are correct, except: A. Coverage applies to bodily injury occurring away from premises the insured owns or rents B. Coverage applies to bodily injury the product causes C. Coverage applies to property damage the product causes D. Damage to the product itself is covered
Damage to the product itself is covered Products Liability Coverage as relates to Commercial General Liability Insurance covers damage or injuries caused by the product, but does not include damage to the product itself.
The Business Auto Coverage Form is used: For owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers that are used by businesses For only owned, leased, hired or borrowed trucks, trailers and semi-trailers that are used by businesses For only owned, leased, or hired trucks, trailers and semi-trailers that are used by businesses For only owned, leased, hired or borrowed private passenger autos that are used by businesses
For owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers that are used by businesses The Business Auto Coverage Form is used for insuring owned, leased, hired or borrowed private passenger autos, trucks, trailers and semi-trailers used in the business of the insured.
Stan called his agent and told him that he wanted the best homeowner coverage available for his new home, and his agent recommended which policy? HO-2 HO-3 HO-5 HO-8
HO-5 The HO-5 Comprehensive Form provides the broadest coverage of any of the homeowners forms as the dwelling, other structures, and personal property are all covered on an open peril basis.
The Reasonable Expectations Doctrine states that the insured: A. Must fully cooperate with the insurer during the investigation of a claim in order to determine coverage for a loss B. May reasonably expect that all claims submitted will be paid C. Is entitled to coverage that a reasonable and prudent buyer can expect D. May expect the insurer to be reasonable in its consideration of a claim
Is entitled to coverage that a reasonable and prudent buyer can expect Reasonable Expectations doctrine is 'What a reasonable and prudent policyowner would expect. The reasonable expectations of policyowners are honored by he Courts although the strict terms of the policy may not support these expectations.'
John is Jane's automobile insurance agent and advises her that a temporary substitute is covered if used for which of the following reasons? A. Jane get a dealer demo while her car needs servicing B. Jane's husband rents a van to pick up a new refrigerator C. While Jane is sick, her neighbor borrows her car to take the kids to school D. Jane's daughter takes her Dad's car to go shopping
Jane get a dealer demo while her car needs servicing A temporary substitute is a covered auto as long as an owned car is out of normal use due to breakdown, repair, servicing, loss, or destruction.
___________ is not a common policy condition on a commercial property policy? A. Inspection and surveys B. Liberalization C. Premiums D. Transfer of Rights and Duties
Liberalization Liberalization is a condition of the Property section, but not a common policy condition.
In addition to conducting accounting business in his office condo, Tom also goes to client's offices and homes for appointments, which represents which type of exposure? A. Product B. Completed Operations C. Contingent Liability D. Premises and Operations
Premises and Operations The CGL coverage is provided for Tom's legal liability for bodily injury or property damage arising out of his office premises or his operations.
Hannah was disappointed that her policy only covered her personal property for actual cash value, so her agent suggested an endorsement to change that actual cash value to which of the following? Agreed value Replacement cost Stated Value Functional replacement cost
Replacement cost The Personal Property Replacement Cost endorsement meets Hannah's needs, but does not pay replacement cost for antiques, fine arts, paintings, and any articles whose age or history affects the value.
With regard to aftermarket parts regulation, which of the following statements is false? A. Replacement parts to be used that are not manufactured by the original manufacturer may not be used B. Replacement parts to be used that are not manufactured by the original manufacturer must clearly identified by the insurer C. Any violation of this regulation is an unfair or deceptive practice D. A written estimate must identify each aftermarket part
Replacement parts to be used that are not manufactured by the original manufacturer may not be used Replacement parts to be used that are not manufactured by the original manufacturer may be used, provided they are clearly identified by the insurer.
Most of Hannah's jewelry is covered under the Coverage C special limits except for her $10,000 necklace inherited from her mother, so her agent added which of the following endorsements? A. Open Peril Personal Property B. Personal Property Replacement Cost C. Increased Limits - Coverage C D. Scheduled Personal Property
Scheduled Personal Property The Scheduled Personal Property covers certain classes of property, such as jewelry, fine arts, and coins, for a specific amount on an open peril basis.
In respect to Section II of a Homeowners Policy, all of the following are true, except: A. Bodily injury or property damage arising from a vehicle used to assist the handicapped, such as a wheelchair, is covered B. Individual and family cemetery plots qualify as an insured location C. Damage to Property of Others pays up to $1,000 per occurrence D. Section II losses are subject to a standard $250 deductible
Section II losses are subject to a standard $250 deductible Section II losses are not subject to a deductible. All remaining responses are true.
In insurance, the person specifically designated in the policy as the one protected, and the person with whom the contract of insurance has been made, is considered to be: The Named Insured The Contingent Insured The Additional Insured The Contract Insured
The Named Insured The Named Insured is the entity protected and with whom the insurance contract is made. When there is more than one entity designated as Named Insured in the policy, then contractual obligations are transacted with the first one designated, known as the First Named Insured.
In Liability Insurance, the maximum amount that the coverage will pay for loss to any one person regardless of overall policy limits, is known as: A. The Split Limit B. The Per Occurrence Limit C. The Aggregate Limit D. The Per Person Limit
The Per Person Limit The Per Person Limit is the amount of coverage available for each person that sustains bodily injuries in an occurrence.
Choose the correct answer regarding the coverage of the contents under the Dwelling Special Form. A. The contents are covered for the Broad Form (named) perils on an Actual Cash Value basis B. The contents are covered for the Broad Form (named) perils on a Replacement Cost basis C. The contents are covered for Open Perils coverage on a Replacement Cost basis D. The contents are covered for Open Perils coverage on an Actual Cash Value basis
The contents are covered for the Broad Form (named) perils on an Actual Cash Value basis Although the Dwelling Special Form provides Open Perils Coverage for structures, it retains Broad Form Perils coverage on Coverage C, Personal Property.
Under the U.S. Longshoremen and Harbor Workers' Compensation Act, all of the following are included, except: Workers who build ships Workers who load and unload ships The crew of the ship Workers who repair ships
The crew of the ship The United States Longshoremen and Harbor Workers' Compensation Act is a federal law that is replaced by the state Workers' Compensation laws for certain maritime employments.
Which statement is correct concerning the Optional Coverage - Agreed Value under the Building and Personal Property Coverage Form? A. Agreed Value Coverage eliminates the deductible in loss payment B. The Agreed Value is the amount of loss agreed upon by the insurer and the insured C. Agreed Value Coverage requires coinsurance of at least 90% D. The insured and the insurer agree on the value of the property for a period of time specified on the Declaration Page
The insured and the insurer agree on the value of the property for a period of time specified on the Declaration Page The Agreed Value Optional Coverage is used when insuring rare or unusual property, the value of which is difficult or impossible to determine.
The Personal Auto Policy provides payment for losses under collision coverage to which of the following? To your car, regardless of liability To your car only if you are legally liable To your car and the car you run into To the car you run into, regardless of liability
To your car, regardless of liability Collision only applies to a vehicle of the insured and is applied regardless of fault.
The Transfer of Your Rights and Duties Condition under the Common Policy Conditions is best described as: A. The insured's rights may not be transferred without written consent of the insurer, unless the insured dies, then rights are automatically transferred to the insured's legal representative B. The insured's rights may not be transferred to others C. The insured's rights may be transferred by written request of the First Named Insured D. The insured's rights may be transferred by written request of any insured
The insured's rights may not be transferred without written consent of the insurer, unless the insured dies, then rights are automatically transferred to the insured's legal representative Any transfer of the insured's rights and duties must be with the written consent of the insurer. The policy specifically states that if the insured dies, the insured's right and duties will be transferred to the insured's legal representative.
Under the Dwelling Under Construction Endorsement of a Dwelling Policy, which of the following is true? A. Insurance applies to the Dwelling under Coverage A and to other structures under Coverage B B. The premium is based upon the average amount of insurance during construction C. The amount of insurance at any time is the provisional amount stated in the Declarations D. The insured had up to 90 days to notify the company that the dwelling is occupied
The premium is based upon the average amount of insurance during construction The limit of liability for Coverage A is provisional and is based on the building's value upon completion. The limit of insurance in place at any time prior to completion is a percentage of the Coverage A limit that equals the proportion the actual value bears to the value on the date of completion.
An insured should not profit from an insurance transaction. This describes which of the following principles? A. The principle of subrogation B. The principle of utmost good faith C. The principle of personal aspect D. The principle of indemnity
The principle of indemnity Indemnity is restoring the insured to the same financial condition as before the loss, i.e., no profit.
Choose the false statement regarding the Dwelling Policy Forms. A. Normally property insurance policies will cover loss of property away from premises subject to sublimits. B. Under a Dwelling Basic Form without Extended Coverage, the damage to the insured's fence by a neighbor's car would be covered. C. The Dwelling Broad Form will cover trees, shrubs and plants up to $500 each. D. A Special Dwelling Form will cover damage to the building caused by a vehicle.
Under a Dwelling Basic Form without Extended Coverage, the damage to the insured's fence by a neighbor's car would be covered. The Basic Dwelling Form does not cover damage by non-owned vehicles unless the Extended Coverage has been added.