TEST

If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by

25%.

The Mail Coverage Form is always written on a reporting form basis; after the end of each reporting period shown in the declarations, reports are due within

30 days

The Mail Coverage Form is always written on a reporting form basis; after the end of each reporting period shown in the declarations, reports are due within

30 days.

If the premiums for a policy will be increased by more than 15 percent, how much warning must the insured get?

45 days.

Authorized insurance companies are examined by the Commissioner at least once every

5 years.

Which of the following is covered under the Camera and Musical Instruments Dealers floater?

A customer's camera left at a camera shop for repair

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

In a personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault

Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program?

All of the above could be considered flood sources

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

Professional liability insurance

Before an insurer will pay any loss under a policy, what is usually required from the insured?

Proof of loss

All of the following are considered parts of the policy structure EXCEPT

Provisions.

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

Renewal dates

All of the following are factors in rating workers compensation insurance EXCEPT

Sales

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.

Which of the following would be covered under personal injury liability?

Slander

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.

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

Time element

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

Within 45 days.

The type of insurance used to cover goods for one specific trip is called

trip transit

Which of the following types of agent authority is also called "perceived authority"?

Apparent

Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners?

Bailee's customer policy

A builder's risk form is most often written as which of the following?

Completed value form

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions

The basic dwelling form (DP-1) provides all of the following coverages without endorsement EXCEPT

Coverage for additional living expense.

A unique feature in a bailee form is that it covers

Customers' property whether or not the insured has been negligent

A unique feature in a bailee form is that it covers

Customers' property whether or not the insured has been negligent.

Which type of workers are NOT covered under Workers Compensation?

Domestic workers

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

Experience modification factor

Which of the following are the authorities that an agent can hold?

Express and implied

An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?

False advertising

In insurance transactions, fiduciary responsibility means

Handling insurer funds in a trust capacity.

An agent commingled $500 of insurance premiums collected with new applications with his personal funds. The agent could be found guilty of a

Misdemeanor.

The extension of coverage under the Commercial Fine Arts Floater includes coverage for newly acquired property for a maximum of

$10,000

What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?

$10,000 for all expenses incurred during a 12-month period

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?

$14,000

How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?

$500

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?

1 year

What is the maximum period of time a temporary license can be in force?

15 months

Within how many years of a loss may an insured bring a lawsuit against an insurer, according to the dwelling policy?

2 years

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

Underwriting the contract

Which of the following is the closest term to an authorized insurer?

Admitted

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

Symbol 5

A binder is effective for a period of

90 days.

When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)?

Only if the insured does not have commercial auto coverage

Rental Reimbursement is only available if the policy includes which coverage?

Other Than Collision Coverage

Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy?

The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.

In insurance, an offer is usually made when

The completed application is submitted

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT

The injury or damage must occur within 90 days after the insured's work is completed.

What type of coverage is Coverage E in homeowners policies?

Personal liability

Who might receive dividends from a mutual insurer?

Policyholders

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

Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy?

Damage to the dwelling caused by ash or dust from a volcanic eruption

Replacement cost is defined as

Full replacement of property at its current cost, new and without reduction for depreciation.

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

Implied

Workers compensation coverage would NOT pay for which of the following?

In-home medical devices

CGL Coverage B (Personal and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product.

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

Indemnity.

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

Insured

n auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pay for damages? (Dollar amounts are rounded to the nearest hundred.)

Inventory at the time of the damage exceeded the reported inventory at the end of the previous month. Therefore, the insurer will pay only a portion of the total damages. Reported inventory = $500,000 + $200,000 = $700,000. $700,000 - $100,000 worth of cars sold = $600,000. Therefore, the insurer will pay $50,000 X 5/6 = $41,667 (or $41,700 rounded up).

All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT

It provides coverage for all employees, even those employees who were terminated in the past 90 days.

A worker who suffered catastrophic injuries on the job is entitled to

Lifetime medical benefits.

Which of the following limits, shown in the declarations of a policy, applies to medical expenses?

Per person

All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT

Personal injury

Under the limits of insurance provision found in the Physical Damage Coverage Form in a Commercial Auto policy, how much will an insurer pay to repair or replace a covered auto?

The lesser of the actual cash value or the cost to repair or replace a covered auto