Simulated Exam questions

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision in his insurance policy , how much should he insure the property for? A. $32,000 B. 80% of the property's replacement cost or more C. 100% of the market value D. $400,000

80% of the property's replacement cost or more

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? A. Special B. Tort C. Normal D. General

A

Which of the following describes the transfer of a legal right or interest in an insurance policy? A. Obligation B. Legal Purpose C. Assignment D. Abandonment

Assignment

If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? A. Excess policy B. General liability policy C. Auto policy D. Umbrella policy

Auto policy

An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? A. Aggregate B. Per Occurrence C. Combined Single D. Split

C

The causes of loss insured against in an insurance policy are known as A. Risks B. Hazards C. Perils D. Losses

C

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto? A. A vehicle that is titled and insured by the named insured, but driven principally by the named insureds son who is a resident of the household B. A vehicle rented for the insured's personal use C. A vehicle that is titled to another person, but is being used with permission by an insured D. A vehicle leased to the named insured for 12 months by a leasing company

C

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? A. Consideration B. Good faith C. Representation D. Adhesion

Consideration

The part of a property policy that shows the amount of insurance, premium, and policy term is the A. Endorsements B. Declarations C. Insuring Clause D. Conditions

Declarations

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

Hazards

Which of the following is the basis for a claim against an insurance company? A. Material change B. hazard C. Misrepresentation D. Loss

Loss

What type of coverage is Coverage E in homeowners policy? A. Loss of use B. Personal property C. Personal liability D. Additional coverage

Personal liability