Round 3 Exam Questions Part 1
B Standing by the car to see damage after an accident
A Personal Auto policy would consider all of the following to be examples of occupying a vehicle, except: A Jumping off the trunk B Standing by the car to see damage after an accident C Climbing onto the roof of the car D Closing a car door
A An insurance company owned by shareholders
A stock insurance company is: A An insurance company owned by shareholders B An insurance company owned by the policyholders C An insurance company incorporated in some other state, but having its executive or home office in this state D Any insurance company incorporated in and having its home office in this state
D Today's current price, minus depreciation
Actual cash value is best defined as which of the following? A Appraised value B Replacement cost, including depreciation C Market value, minus depreciation D Today's current price, minus depreciation
D Inflation Guard
All of the following are Coverage Extensions under the Building and Personal Property Coverage Form, except: A Newly Acquired or Constructed Property B Outdoor Property C Personal Effects and Property of Others D Inflation Guard
A Insolvency of the insured relieves the insurer of any obligations under the policy
All of the following are conditions of the insurance provided by a Commercial General Liability policy written on the Claims-Made Form, except: A Insolvency of the insured relieves the insurer of any obligations under the policy B Insurance applies as if each named insured were the only named insured, and separately to each insured against whom the claim is brought C The insured cannot sue the insurer until the insured has fully complied with all terms of the policy D The insured must maintain records necessary so the insurer may compute the premium
C Money and securities
All of the following are covered under a BOP, except: A Building fixtures, including outdoor fixtures B Outdoor furniture C Money and securities D Permanently installed machinery or equipment
C Examination of Your Books and Records
All of the following are loss conditions of the BAP, except: A Legal action against the insurer B Duties in the event of an accident C Examination of Your Books and Records D Transfer of rights of recovery
C They will cover damage to the insured's own property
All of the following are true of liability policies, except: A They will pay sums that the insured becomes legally liable to pay B They do not cover medical expenses incurred by the insured C They will cover damage to the insured's own property D They are designed to cover third party injuries or damages
D The Insuring Agreement personalizes the policy, specifying the exact property being insured
All of the following statements regarding a property policy are correct, except: A A deductible is a portion of a loss that an insured must bear B The Conditions describe the responsibilities and obligations of the insurer and the insured C An indirect loss is an additional loss that results from a direct loss D The Insuring Agreement personalizes the policy, specifying the exact property being insured
B Not more than 50% of the total volume of premiums per year is derived from controlled business
An agent is not considered to be holding a license for the purpose of controlled business as long as: A Not more than 25% of the total volume of premiums per year is derived from controlled business B Not more than 50% of the total volume of premiums per year is derived from controlled business C Not more than 30% of the total volume of premiums per year is derived from controlled business D Not more than 15% of the total volume of premiums per year is derived from controlled business
C $21,000
An insured has an HO-3 policy with a Coverage A limit of $200,000. What is the maximum amount the policy will pay if a detached garage burns down, including the amount provided for the cost of debris removal expenses? A $1,000 B $20,000 C $21,000 D $200,000
A The SERP must be purchased at the beginning of the policy period
An insured, who has a Commercial General Liability policy written on the Claims-Made Form, is considering adding a supplemental extended reporting period to their policy. All of the following statements about the SERP are correct, except: A The SERP must be purchased at the beginning of the policy period B The insured must request to add the SERP within 60 days after the end of the policy period C The SERP provides an unlimited period to report claims D The SERP does not increase the policy limits
D Failure of lateral loads of the structure
Catastrophic ground cover collapse in Florida must meet four requirements. Which of the following is NOT one of those requirements? A Depression in the ground cover clearly visible to the naked eye B Structural damage to the covered building C Abrupt collapse of the ground cover D Failure of lateral loads of the structure
B Liability arising out of the insured's operations
Commercial General Liability policies provide coverage for: A Professional liability coverages, such as Errors and Omissions insurance B Liability arising out of the insured's operations C Liability arising out of the escape of pollutants D Injuries to employees during the course of employment
C Freezing
Comprehensive coverage under the Business Auto Coverage Form protects covered autos against all of the following perils, except: A Earthquake B Falling objects C Freezing D Contact with a bird or animal
B $2,000
In Florida, how much property loss assessment coverage must a unit owner's residential property policy include? A $1,000 B $2,000 C $1,500 D $500
A Damage by a third party
In Florida, hurricane damage could include all of the following, except: A Damage by a third party B Damage to property inside a building C Damage to the interior of a building D Damage caused by rain, snow, sleet, hail, sand, or dust
B Potential for criminal activity
In Florida, unlicensed entities are a regulatory concern due to which of the following issues? A Federal funds will pay unpaid claims B Potential for criminal activity C Rates are higher D Unlicensed entities issue certificates of authority
D 3
Insurers in Florida must make a diligent effort to find coverage and must document the reasons why policies are rejected. For a home worth $250,000, how many rejections must be documented? A 4 B 1 C 2 D 3
B A non-owned golf cart
Liability coverage under a Personal Auto policy will cover which of the following vehicles? A An ATV B A non-owned golf cart C A cargo van used to deliver packages D A company car furnished to the named insured
D Open perils coverage for 30 days
On a Special Form Homeowners policy, which of the following coverages is provided under the Property Removed Additional Coverage? A Named perils coverage for 30 days B Open perils coverage for 10 days C Named perils coverage for 15 days D Open perils coverage for 30 days
C $120,000
P insures a home for $100,000 on a Special Form Homeowners policy. After a fire, the dwelling suffers a $60,000 loss, a detached garage has $15,000 worth of damages, and the home's contents sustain $20,000 in damage. P also incurs $35,000 in additional living expenses and loss of rental income while the dwelling is repaired. How much would the insurer pay? A $95,000 B $100,000 C $120,000 D $130,000
B Libel and slander
Personal injury liability includes which of the following? A Sickness and disease B Libel and slander C Medical payments D Theft
C Negligence
Q runs a stop sign, causing an oncoming vehicle to swerve and hit a tree. Q is guilty of: A Gross negligence B Strict liability C Negligence D A criminal violation
D Must be accompanied by a driver with a valid license and who is at least age 21 and sitting in the passenger seat
S, a driver with a learner's permit in Florida, would like to practice driving. Which of the following would be the correct way for S to practice? A May practice driving alone only during daylight hours after 3 months B May practice driving alone only during daylight hours C Must be accompanied by any driver with a valid license and who is sitting in the passenger seat D Must be accompanied by a driver with a valid license and who is at least age 21 and sitting in the passenger seat
B Bodily injury to a stranger, caused by an insured's activities while picnicking at a city park
Section II of a Homeowners policy may cover which of the following incidents? A The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat B Bodily injury to a stranger, caused by an insured's activities while picnicking at a city park C An insured's guest damages the stair railing during a visit D The homeowner's family dog bites their 2-year-old son
A 3 years
T, an agent in Florida, is issuing a contract to C, a consumer. Both of them must sign the contract, and T must retain it for how many years? A 3 years B 1 year C 4 years D 6 years
D Liability assumed under an insured contract
The Businessowners Coverage Form includes business liability coverage for the insured's: A Employers liability B Auto liability C Liquor liability D Liability assumed under an insured contract
A Damage to equipment during a breakdown test
The Equipment Breakdown Protection Coverage Form always excludes coverage for which of the following? A Damage to equipment during a breakdown test B Business income C Spoilage damage D Expediting expenses
C The insured dwelling is tenant-occupied
The Limited Theft Coverage Endorsement to the DP is used under which of the following circumstances? A Coverage is desired for off-premises property B The dwelling has been vacant for more than 60 days The Limited Theft Coverage Endorsement to the DP is used under which of the following circumstances? C The insured dwelling is tenant-occupied D The insured dwelling is owner-occupied
C Explosion, riot, and civil commotion
The Outdoor Property coverage extension under the Building and Personal Coverage Form insures against which of the following perils? A Riot, civil commotion, and vandalism B Windstorm, hail, riot, and civil commotion C Explosion, riot, and civil commotion D Windstorm, hail, explosion, and vehicles
D Firms in the business of transporting goods or commodities for hire
The Truckers Coverage Form is designed for: A Only those firms that own and operate tractor-trailer units B Any firms that operate trucks as a part of their business operation C Any firms that lease commercial vehicles from others D Firms in the business of transporting goods or commodities for hire
C Monopolistic states may be listed on the Information page
The Workers' Compensation policy's guidelines for providing other states coverage do not include which requirement? A The insurer must reimburse the insured for any payments the insurer is not allowed to pay B The insured must notify the insurer within 30 days when entering a state not listed on the policy C Monopolistic states may be listed on the Information page D If the insured begins work in a covered state after the effective date of the policy the other in force insurance, if any, applies
B Sickness or disease
The definition of bodily injury in the Personal Auto policy includes which of the following? A Defamation of character B Sickness or disease C Physical damage to tangible property D False arrest
C Retention
The risk management technique of an insured who continues to have responsibility for a loss is known as: A Avoidance B Reduction C Retention D Transfer
D Cancellation
The termination of an insurance policy, by either the insured or the insurer, before the policy's expiration date is known as: A Nonrenewal B Lapse C Abandonment D Cancellation
A Subrogation
The transfer of the right of recovery from the insured to the insurance company is called: A Subrogation B Indemnity C Hold harmless D Assignment
D Explosion from a gas leak inside the dwelling
The unendorsed Basic Dwelling Form would include which coverage? A Contents coverage on an open perils basis B Windstorm loss to trees, shrubs, and plants C Theft coverage for personal property D Explosion from a gas leak inside the dwelling
B Used to insure individual personal property on an itemized or scheduled basis
Under Personal Inland Marine Insurance, the Personal Articles Floater is: A Used to insure personal property on a blanket basis B Used to insure individual personal property on an itemized or scheduled basis C Used to provide replacement cost coverage on personal property D Used to replace Coverage C of the Homeowners Policy
C Workers' Compensation is only available through a state fund
Under Workers' Compensation laws, which of the following concerning monopolistic states is correct? A Only one insurance company, chosen by the state, is allowed to provide coverage B All coverage is written through a pool of insurance companies C Workers' Compensation is only available through a state fund D Monopolistic states do not have Workers' Compensation statutes
A A newly acquired vehicle reported to the insurer 10 days after purchase
Under a Personal Auto policy, which is covered under Part D - Coverage for Damage to Your Auto? A A newly acquired vehicle reported to the insurer 10 days after purchase B Custom painting on a van C Road damage to tires D Radar and laser detection devices
C No deductible applies to loss of contents
Under flood insurance provided by the National Flood Insurance Program, which of the following statements regarding flood insurance is NOT correct? A Coverage is provided for direct losses to property caused by the inundation of normally dry land B The federal government is the reinsurer for all flood losses C No deductible applies to loss of contents D In order to qualify for a federal loan, a property owner located in a special flood hazard area must purchase flood insurance
D Examine the insured's records at any time, up to 5 years after policy expiration
Under the Common Policy Conditions of the Commercial Package policy, the insurer does not have the right to do which of the following? A Inspect the insured property at any time for underwriting purposes B Consent to policy changes requested by the first named insured C Cancel the policy for non payment of premium D Examine the insured's records at any time, up to 5 years after policy expiration
A Arbitration
Under the Personal Auto Policy, when the insured and the insurer do not agree on the insured's legal right to recovery of damages or the amount recoverable by the insured, what system is used to resolve the disagreement? A Arbitration B Financial Responsibility C Subrogation D Compromise
A 60
Under the Vacancy Clause of a Building and Personal Property Coverage Form, losses caused by vandalism are not covered if the damaged property has been vacant for how many days? A 60 B 90 C 30 D 120
D Adverse selection
What is it called when insureds with less desirable risks seek insurance coverage to a greater extent than insureds with average risks? A Law of Large Numbers B Estoppel C Sharing D Adverse selection
B Unoccupied
When a building has physical contents but no occupants, the building is said to be: A Uninhabited B Unoccupied C Deserted D Vacant
A Direct loss
When firefighters extinguish a house fire with water, the water damage is considered a(n): A Direct loss B Loss that will be subrogated to the fire department C Indirect loss D Consequential Loss
A Legal Action Against Us
Which condition states that a suit may not be filed by the insured against the insurer if the insured has not complied with policy terms? A Legal Action Against Us B Ordinance or Law C Loss Payment D Claim Settlement
D Fire-Resistive
Which construction classification uses materials that can withstand fire for at least 2 hours? A Noncombustible B Frame C Masonry D Fire-Resistive
B Medical benefits
Which of the following Workers' Compensation benefits typically do not have a monetary limit? A Death and survivor benefits B Medical benefits C Disability income benefits D Rehabilitation benefits
B The limits of the policy stated in the Declarations are the maximum amounts payable for the life of the policy
Which of the following about policy limits applicable to Commercial General Liability policies is not correct? A The general aggregate limit is the most the company will pay for payments under Coverages A, B, and C, except for damages for products and completed operations claims B The limits of the policy stated in the Declarations are the maximum amounts payable for the life of the policy C Section III describes the limits of insurance D The each occurrence limit is the most the company will pay for damages under Coverage A and Coverage C, arising out of any one occurrence
C It provides payment for towing to a garage, or for labor that is performed at the site of a mechanical disablement
Which of the following best describes the Towing and Labor Costs endorsement to the Personal Auto Policy? A It provides coverage for labor costs incurred after being towed to a repair shop B It provides coverage for towing a covered auto involved in a collision C It provides payment for towing to a garage, or for labor that is performed at the site of a mechanical disablement D It provides coverage for towing charges incurred when towing a disabled vehicle to the insured's home
D Establishing privacy protection for consumers
Which of the following describes the purpose of the Gramm-Leach-Bliley Act? A Enforcement of fraudulent insurance acts B Regulating investment companies C Deregulating the trucking industry D Establishing privacy protection for consumers
C The U.S. Longshore and Harbor Workers' Compensation Act
Which of the following federal Workers' Compensation laws applies to non-crew ship workers who load, unload, build, or repair ships? A The Federal Employers Liability Act B The Jones Act C The U.S. Longshore and Harbor Workers' Compensation Act D The Federal Employees Compensation Act
D Attempted robbery of a custodian
Which of the following incidents is not covered under the Inside The Premises Theft of Money and Securities Form? A Disappearance of money by a customer B Damage to the bank itself caused during a theft C Damage to a locked safe D Attempted robbery of a custodian
B Dental lab
Which of the following is an eligible risk under the Businessowners Coverage Form? A Auto dealer B Dental lab C Savings and loan association D Manufacturer
B Surplus lines agents must make a diligent effort to procure insurance from an authorized insurer
Which of the following is correct with regard to surplus lines? A Surplus lines agents can offer rates lower than those of the majority of plans from authorized insurers B Surplus lines agents must make a diligent effort to procure insurance from an authorized insurer C Surplus lines agents do not need to research authorized insurers before offering a surplus line of insurance D The policy form under which the insurance is exported may be more favorable in coverage or rates to the insured than similar contracts in actual current use in Florida by the majority of authorized insurers
C Clean up costs
Which of the following is excluded under both the Limited Pollution Liability coverage form and Pollution Extension endorsement? A Threatened discharge of pollutants B Waste disposal leaks C Clean up costs D Escape of pollutants
A Only on-premises coverage is available
Which of the following is false regarding the Broad Theft Endorsement under the Dwelling Policy? A Only on-premises coverage is available B It includes vandalism resulting from theft C It may be added to any of the Dwelling forms D It applies only to owner-occupied structures
D Coverage H - Bodily Injury and Property Damage Liability
Which of the following is not a coverage under any Farm Property coverage form? A Coverage G - Other Farm Structures B Coverage E - Scheduled Farm Personal Property C Coverage C - Household Personal Property D Coverage H - Bodily Injury and Property Damage Liability
C Earthquake
Which of the following is not a named peril under the Causes of Loss - Basic Form applicable to commercial property policies? A Sinkhole collapse B Sprinkler leakage C Earthquake D Volcanic action
B The employee can work while recovering
Which of the following is not an element of a temporary total disability? A Retroactive benefits will be paid if disability exceeds the waiting period B The employee can work while recovering C The length of the disability must exceed the waiting period D The employee is expected to recover and return to work
D It provides protection in the event the insured's negligence causes bodily injury or property damage to others and the insured becomes legally obligated to pay damages
Which of the following is the best explanation of liability insurance? A It provides coverage for bodily injury or property damage to the insured and the insured's property B It provides coverage for bodily injury or property damage arising out of the insured's premises or operations regardless of fault or negligence C It provides coverage to any party for injury that is expected to happen D It provides protection in the event the insured's negligence causes bodily injury or property damage to others and the insured becomes legally obligated to pay damages
C The Special Form covers the building and other structures on an open perils basis
Which of the following is true of a Dwelling form? A The Basic Form covers the contents against theft B The Broad Form covers the cost to repair defective plumbing C The Special Form covers the building and other structures on an open perils basis D The Basic Form covers the contents on an open perils basis
A The promise to indemnify an insured for a covered cause of loss
Which of the following is true of the Insuring Agreement? A The promise to indemnify an insured for a covered cause of loss B It lists the policy premium amount C It provides the name and address of the insured and the name of the insurer D It provides the policy conditions
D Coverage applies to the bodily injury (BI) and property damage (PD) the product causes but not to the product itself
Which of the following is true regarding the Products exposure of the CGL? A Products Liability Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises B Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises C Products liability Coverage includes Liquor Liability and Dram Shop Liability insurance D Coverage applies to the bodily injury (BI) and property damage (PD) the product causes but not to the product itself
B A model airplane
Which of the following items of property is covered under the Homeowners policies? A A hovercraft B A model airplane C A speaker system permanently installed in the insured's car D A show dog
A Vandalism to the building, occurring in the course of a burglary
Which of the following losses could be covered by the Inside the Premises - Theft of Money and Securities Insuring Agreement under a Commercial Crime policy? A Vandalism to the building, occurring in the course of a burglary B A building fire resulting from the aftermath of a robbery C The mysterious disappearance of important papers previously stored in a safe D Damage to company computers due to an act of malicious mischief
D Blanket
Which of the following methods of writing insurance is used to provide insurance on properties at different locations, using a single policy, and a single limit of insurance? A Unified B Listed C Scheduled D Blanket
B A residence employee injured while performing work duties
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's roommate, who is not related to the named insured B A residence employee injured while performing work duties C The named insured's 20-year-old child visiting from college D A tenant who lives in a rental structure at the back of the premises
A Contents are covered on an actual cash value basis
Which of the following statements about the Dwelling Special Form is true? A Contents are covered on an actual cash value basis B It will automatically cover the theft of contents C Losses to the dwelling are paid on an actual cash value basis D It will cover the cracking of walls
C The insurer must renew the policy to a stated age, but may increase the premium in the underwriting class
Which of the following statements correctly describes a Guaranteed Renewable health insurance policy? A The insurer may nonrenew the policy upon its expiration B The insurer can refuse to renew the policy only under certain circumstances listed in the policy C The insurer must renew the policy to a stated age, but may increase the premium in the underwriting class D The insurer cannot increase the premium amount and must renew the policy at the option of the insured
B Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse
Which of the following statements is correct concerning coverage for a catastrophic ground cover collapse in Florida? A The coverage includes all damage from any earthquake B Every insurer authorized to transact property insurance in Florida must provide coverage for a catastrophic ground cover collapse C The insurer may not restrict catastrophic ground cover collapse and sinkhole loss coverage just to the principal building D The contents of personal property is not covered pursuant to a catastrophic ground cover collapse
B When the insurer receives a notice of claim, the insurer must provide the claimant forms for filing proof of loss within 15 days
Which of the following statements is correct concerning proof of loss requirements in Florida? A Claimants must find forms for filing proof of loss online B When the insurer receives a notice of claim, the insurer must provide the claimant forms for filing proof of loss within 15 days C Written proof of loss must be filed with the insurer within 20 days after the loss D If the forms for filing proof of loss are not given to the claimant within 15 days, the claimant will need to wait to file proof of loss
A Employers are liable for injuries occurring outside the course of employment
Which of the following statements regarding Workers' Compensation laws is NOT correct? A Employers are liable for injuries occurring outside the course of employment B An employee may not refuse Workers' Compensation benefits in order to sue the employer for a larger award C The employer assumes absolute liability for injuries that arise out of and in the course of employment D Benefits are paid for on-the-job injuries, regardless of negligence
A Most insurance losses are settled on an actual cash value basis
Which statement is false regarding the Businessowners Policy? A Most insurance losses are settled on an actual cash value basis B Optional coverage for money and securities is available C A motel of 3 stories in height is eligible D Optional coverage for employee dishonesty coverage is available
A Payments are made to insureds or people the insured hires to do work
Which statement regarding medical expenses coverage under Section II of the Businessowners Coverage Form is not correct? A Payments are made to insureds or people the insured hires to do work B Payments are made regardless of fault C Medical expenses incurred and reported within 1 year of the accident are covered D Expected or intended bodily injury or property damage is excluded
C Punitive
Which type of damages is ordered by the courts to punish a negligent party? A Specific B Special C Punitive D General
B 30
Within how many days after an insured acquires new business property must the property be added to the BOP policy? A 20 B 30 C 60 D 45
