AD Banker Property and Casualty Comprehensive Exam
Non-admitted
An insurer that is not approved by the state Department of Insurance to transact insurance is called
H's liability policy has the following limits: $25,000 per person, $100,000 per occurrence, and $2,000,000 aggregate. This year, five separate claimants file in the amount $25,000 for injuries suffered in a single accident. How much will the policy pay?
$100,000. Because all five injuries arose from a single accident, the per-occurrence limit will cap the compensation at $100,000.
S carries a Personal Auto Policy with Liability limits of 50/100/25. What is the maximum the policy will pay if S struck another vehicle causing injury to the occupants as follows: Driver - $70,000; Passenger 1-$30,000; Passenger 2-$50,000 and property damage to the other vehicle - $20,000?
$120,000 Coverage is as follows: Driver - $50,000; Passenger 1 - $30,000; Passenger 2 - $20,000, since the policy will only pay $50,000 per person and a total of $100,000 per accident. The property damage is fully covered, totaling $120,000.
Policyholder N insures his owner-occupied home under a dwelling property policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what is the limit of insurance that will apply to Coverage E, Additional Living Expense?
$20,000 The Coverage E is 20% of Coverage A.
The respective minimum limits of auto liability must be at least:
$25,000/$50,000/ $25,000 The minimum limits of liability are $25,000 per person; $50,000 for 2 or more persons; and $25,000 for property damage.
The following qualifications are required for an agent or producer license, except:
A Be at least 21 years of age (*) at least 18 B Establish that he/she intends to hold himself/herself out in good faith C Complete the prelicensing education requirement D Establish financial responsibility
What is the name of the uniform document that common carriers are required to issue to the shipper of the goods being transported?
A Bill of Acceptance B Bill of Lading (*) C Shipping Receipt D Bill of Transportation
Which form responds to losses that occur while the policy is in force, regardless of when the claim is made?
A Claims-Made B Premises and Operations C Products D Occurrence (*) It doesn't matter when the loss is reported; what matters is when the loss occurred. The key in this form is the date the loss actually happened and if it happened when the policy was in effect.
After an employee of a service station failed to tighten the oil filter, the leaking oil caused $700 in damage to the engine. Section II of a Garage Coverage Form would pay:
A $700 only if the employee is proven negligent B Nothing C $700 less the $100 mandatory deductible (*) D $700 less the $250 mandatory deductible
Which type of cargo policy would cover a person who owns his/her own truck and hauls his/her own goods?
A A Bailee Policy B An Installation Floater Policy C The Motor Truck Cargo Truckers Form Policy D The Motor Truck Cargo Owners Form (*)
Which of the following is true with regard to binders?
A A binder is never valid B A binder cannot exceed 30 days C A binder cannot exceed 60 days (*) D A binder must be made in writing
Which of the following would not be eligible to purchase a Homeowners Policy?
A A person who owns and occupies a two-family dwelling B A person who owns and lives on a farm (*) C A person whose dwelling contains an accounting office D A person who provides daycare in their home
Which of the following are part of the legal responsibility of maintaining an insurance license?
A A producer must inform the Commissioner of any change in name or address within 10 days B A producer must inform the Commissioner of any change in name or address within 60 days C An agent must inform the Commissioner of any change in name or address within 90 days D A producer must inform the Commissioner of any change in name or address within 30 days
Which of the following is not considered an uninsured motorist vehicle under the Personal Auto Policy?
A A vehicle newly acquired by the named insured that has not been reported to the insurer (*) B A vehicle for which there is no liability policy C A hit and run vehicle D A vehicle insured by a bankrupt insurance company
Under the BOP, the additional coverage for preservation of property is covered in which of the following ways?
A Against open for 60 days B Against open perils for 30 days (*) C Against the broad perils for 60 days D Against the broad perils for 30 days
Which of the following is an accurate representation of an UGMA registration?
A Alice Doe, custodian, Harry Doe, legal guardian for Louis Doe, under UGMA B Alice Crow, custodian for the benefit of Louis Doe, UGMA - MI (*) C Louis Doe, UGMA D Louis Doe, minor, with Alice Doe as custodian
All the following injuries are covered under a Workers' Compensation policy, except:
A An employee injured because of unsafe working conditions B An employee who is injured despite the extensive safety measures of the employer C An employee whose injury results from intoxication (*) D An employee who is injured solely through his/her own negligence The employer can deny benefits to an employee who intentionally injures himself/herself or if injury results from intoxication.
Payments from the Second Injury Fund are made when:
A An employer becomes insolvent B An insurer becomes insolvent C An employee who has suffered a previous disability suffers from a second injury, or dies due to the second injury (*) D An employee sustains an injury due to the negligence of a fellow employee
Which of the following types of injuries would NOT be covered under Workers' Compensation?
A An injury to an employee that is causally connected with the employee's employment B Injuries sustained by an employee at a fitness club away from work (*) C Injuries sustained by Nation Guard personnel in the course of duties ordered by the governor D Injuries to employees of local or regional boards of education resulting from participation in a school-sponsored activity
An accounting firm discovers that someone has hacked into its records to steal the account numbers and routing numbers of its employees, and used these numbers to fraudulently draw funds from those accounts. Under which Commercial Crime insuring agreement would this loss be covered?
A Computer Fraud (*) B Forgery or Alteration C Inside the Premises Theft of Money and Securities D Money Orders and Counterfeit Money
When damages are reduced in proportion to the degree of negligence, this is an example of:
A Contributory Negligence B Absolute Negligence C Proportional Negligence D Comparative Negligence (*) Comparative negligence is a defense wherein damages are reduced in proportion to the degree of the claimant's negligence. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant may only recover 95% of damages.
All of the following are true, except:
A Coverage D of a Homeowners Policy covers additional living expenses B A Homeowners Policy will not cover theft of a boat away from premises C Home schooling is permitted under a Homeowners Policy D 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.
Which statement is false regarding the Farm Property Coverage Form?
A Coverage D provides coverage for loss of use B Coverage F includes unscheduled farm personal property C Exclusions include earth movement and intentional loss D Losses from nuclear damage are covered (*) Losses from nuclear damage are not covered.
Choose the false statement regarding the application of coverage under the Products Exposure Liability Coverage.
A Coverage applies to damage to the product itself (*) B Coverage applies to property damage the product causes C Coverage applies to bodily injury the product causes D Coverage applies to bodily injury occurring away from premises the insured owns or rents
Which statement is false regarding Supplementary Payments under the Commercial General Liability policy?
A Coverage only applies to Coverages A and B B Payments made under this section reduce the limits of the policy (*) C The cost of bail bonds is included up to $250 D Claim related expenses are included Payments for Supplementary Payments do not reduce the limits of the policy.
Which of the following claims would not be covered under Section II of a Homeowners Policy?
A Damage to property of others B Third-party bodily injury for which the insured is legally liable C Medical expenses of a guest D $500 a day for the insured's loss of earnings while defending a suit (*) Such claim related expenses are covered, but only up to $250 a day.
The abrupt falling down or caving in of a building disallowing it to be used for its intended purpose is the definition of:
A Earth movement B Settling C Collapse (*) D Defective planning
Who is not an insured under the Commercial General Liability policy?
A Employees other than executive officers, for acts within the scope of their employment B Executive officers, with respect to their duties as the insured's officers or directors C The spouse of a named insured D Members of a past partnership not listed in the Declarations. (*) There may be several insureds other than those named in the Declarations. However, only the current members of a partnership or LLC are considered insureds.
All of the following are covered under a Homeowners Policy, except:
A Equipment that is used to maintain the property B Property of guests and servants C All living expenses incurred when a dwelling becomes uninhabitable after a covered loss (*) D Vandalism to a dwelling that was vacant for less than 60 days The policy does not cover all living expenses, only necessary additional living expenses.
Which of the following is false regarding the Connecticut Insurance Guaranty Association?
A Every insurer admitted to transact property and casualty insurance in the state must be a member of the Association B The maximum amount the association will pay for a covered claim is $400,000 per claimant C Cover claims that exist before, and arise within, 90 days after the insurer becomes insolvent D Each admitted insurer is assessed amounts needed to pay the obligations of the Association
The Personal Injury Endorsement, HO 24 79 provides for of the following, except:
A Excludes personal injury arising out of publication of material, by or at the direction of the insured with knowledge of its falsity B Excludes personal injury arising out of a criminal act committed by or at the direction of the insured C Excludes personal injury arising out of publication of material whose first publication took place after the beginning of the policy period D Excludes personal injury caused by or at the direction of the insured with the knowledge that the act would violate the rights of another
Which of the following statements is false regarding hearings?
A Failure to comply with the Commissioner's requirements concerning a hearing allows the Commissioner to petition a superior court to issue an order for compliance B The Commissioner may revoke or suspend a license without an opportunity for a hearing(*) C The Commissioner may conduct investigations and hearings D Refusal of an order for compliance will result in contempt of court charges
Personal Article Floater claims are normally settled on a(n):
A Functional Replacement Cost basis B Replacement Cost basis C Market value basis D Actual cash value basis with some exceptions (*) The exception to actual cash value loss valuation basis is Agreed Value, used when insuring jewelry and fine arts.
Under the Limited Fungi, Wet/Dry Rot or Bacteria Coverage Endorsement, which of the following is not covered for loss due to fungi?
A Goods or products intended for consumption(*)Not include under Section II B Beneath floors C Within ceilings D Within walls
Collapse is not covered under which of the following property forms?
A HO-2 B Commercial Basic Cause of Loss Form (*) C DP-3 D Commercial Broad Cause of Loss Form The Basic Cause of Loss Form does not cover collapse. The Broad and Special Forms for all property policies covers collapse as an additional coverage.
T's office condominium is covered under a Condominium Commercial Unit-Owners Coverage Form. Which of the following is not covered on a primary basis?
A Improvements B Fixtures owned by the Association (*) C Furniture D Business personal property In the event both the unit-owner's policy and the association's policy cover the fixtures, the unit-owner's coverage will be excess.
Which of the following statements is true regarding the eligibility of flood insurance?
A In order to qualify for a federal loan, the property owner must purchase flood insurance if the property is located in a flood area (*) B All property located in a flood area must be insured against flood by law C Industrial buildings are not eligible for flood insurance D Banks and Savings and Loan Associations may exempt an individual from purchasing the flood insurance that is required for a federal loan
Section II (Liability) of the Garage Coverage Form covers which of the following?
A Injuries covered by Workers' Compensation B Property in the care and custody of the insured C Injuries to an employee that are caused by a fellow employee D Property damage for which the insured is legally responsible. (*) Section II covers property damage liability for which the insured is legally responsible.
Which of the following claims would be excluded under the Business Auto Policy?
A Injury to another motorist B Damage to property in the insured's care, custody, or control (*) C Bail bonds required after a covered accident D Bodily injury after a person is struck by a mechanical device attached to a covered truck Damage to property in the insured's care, custody, or control is excluded under the BAP.
Which of the following statements is NOT correct with respect to continuing education requirements?
A Instructors of approved continuing education courses earn the same number of credit hours for instructing as the students receive B Excess hours may be carried over to the next biennium (*)Not C Producers who fail to comply with the continuing education requirement may have their license suspended D All requirements must be completed by the producer's birthday every other year
Which statement regarding the purpose of Employers Liability Insurance is false?
A It includes coverage for consequential bodily injury B It covers claims that are not covered by Part I of the policy C It extends policy benefits to states not listed on the Declarations page.(*) D It protects the employer against tort claims Part II does not extend the coverage to other states. Other States Insurance is provided by Part III.
Policyholder J has a no-fault auto policy. Upon being hit by a driver that ran a stop light, J suffers a broken leg. Whose insurance company will pay for J's injury?
A J's insurer (*) B The insurer of the at-fault driver C J's and the negligent driver's insurer will share the loss D The court will determine which insurer is responsible Under no-fault insurance, the injured party collects insurance benefits from his/her own insurance as if it were first-party coverage, eliminating the need to determine negligence or legal liability.
Employee M was hired by ABC Jewelers to guard and protect store property during its hours of operation. Under the terms of the Commercial Crime policy, Employee M would be known as a(n):
A Janitor B Watchperson (*) C Messenger D Custodian A watchperson is defined as any person the insured retains specifically for the purpose of having care and custody of property inside the premises, and who has no other duties.
Which of the following is covered under Section II of a Homeowners Policy?
A Liability arising from a business pursuit B An injury to the insured's employee C An injury to the insured's 10-year-old son D An injury to a guest of the insured (*)
Which of the following provides coverage for commercial crime losses which occur during the policy period and are discovered within a specified time?
A Loss-Sustained Form (*) B Occurrence Form C Employee Theft D Discovery Form The loss sustained form covers losses that occur during the policy period and are discovered within 12 months of policy termination.
With regard to the Dwelling Endorsement, DP 01 06, which of the following statements is false?
A Losses are payable within 10 days of receipt of proof of loss. (*) B Civil union partners are added to the definition of 'the insured' C Losses are payable within 30 days of receipt of proof of loss D Cancellation, Renewal and Nonrenewal provisions are amended to conform to Connecticut law Under DP 01 06, losses are payable within 30 days of receipt of proof of loss.
Choose the physical damage claim that would be covered under the Personal Auto Policy.
A Malicious mischief to the tires (*) B Loss due to war C Mechanical breakdown D Loss due to radioactive contamination Malicious mischief is covered under Other Than Collision. The other items are excluded.
Which of the following coverages is not included in a standard Homeowners policy?
A Medical Payments B Personal Injury liability (*) C Property Damage liability D Bodily Injury liability
Workers' Compensation provides coverage for all of the following, except:
A Medical expenses B Death C Disability income D Pain and suffering (*)
Which of the following statements about medical payments is false?
A Medical payments cover personal injury (*) B Medical payments coverage is provided to discourage lawsuits C Specific damages compensate the injured party for actual damages D General damages compensate the injured party for pain and suffering Medical payments pays for bodily injury without regard as to fault by the insured. Personal injury expenses are not covered.
Which of the following is considered an insured's product?
A Merchandise held by the insured as inventory B Remodeled building C Goods sold by the insured at a trade show (*) D Goods shipped to a retailer to be sold A covered product is one manufactured and sold by the insured and transferred to the possession of a buyer.
Choose the false statement regarding the coverage of property under a Homeowners Policy.
A Money is covered up to $500 per occurrence (*) B The Scheduled Personal Property Endorsement provides open perils coverage C The Personal Property Replacement Cost Endorsement may be added to cover the contents on a replacement cost basis D Theft of silverware is covered up to $2,500 The limit on money is $200.
Which of the following crime forms requires the use of a Retroactive Date?
A Occurrence Form B Discovery Form (*) C Claims-made form D Loss Sustained Form The Discovery Form covers losses that are discovered during the policy period but did not necessarily occur during the policy period. Claims-made and occurrence forms are used with Commercial General Liability policies, not Commercial Crime.
Which of the following is false regarding the Broad Theft Endorsement under the Dwelling policy?
A Only on-premises coverage is available (*) B It applies only to owner-occupied structures C It includes vandalism resulting from theft D It may be added to any of the Dwelling forms On-premises and off-premises coverage is available.
Which of the following is true of the Towing coverage provided under Section III of the BAP?
A Only towing costs are covered B Labor must be performed at the place of disablement (*) C Coverage applies to all vehicle types D Towing coverage is only available for an added premium
Under Motor Truck Cargo Forms, the form that insures public truckers against their legal liability for loss or damage to cargo belonging to others in their possession, is called:
A Owner's Form B Transit Form C Trucker's Coverage Form (*) D Shipper's Form
The most a policy will pay for a loss arising out of any one accident regardless of overall policy limits, is known as the:
A Per person limit B Per occurrence limit (*) C Split limit D Aggregate limit
All of the following are types of Professional Liability Insurance, except:
A Physicians, surgeons and dentists liability insurance B Commercial umbrella insurance (*) C Fiduciary liability insurance D Errors and omissions insurance An umbrella typically does not cover professional liability.
If other insurance also applies to a loss covered by a policy, which of the following will establish the method for determining how the insurance companies will pay the loss?
A Pro rata liability (*) B Subrogation C Claim Settlement D Limit of Liability provides for claim settlement to be proportioned to the amount of other insurance.
Physical damage to the insured auto that is not covered under collision, and is not otherwise excluded, would be covered under:
A Property Damage Liability B Named perils C Transportation Expenses D Comprehensive (*) The Other than Collision coverage, also known as Comprehensive, provides coverage for damages not caused by collision and not excluded in the exclusions.
When filing a claim, the insured is required to do all of the following, except:
A Protect property from further damage B Cooperate with the insurance company C Hire an appraiser (*) D Give notice of loss as soon as possible An appraisal is only necessary when the insured and insurer disagree in the amount of the loss.
Under a PAP, liability resulting from the insured's use of a non-owned auto is:
A Provided on a primary basis B Provided on an excess basis (*) C Shared pro rata between the insured's policy and the policy on the vehicle D Not covered because of the Care, Custody and Control Clause The owner's coverage is primary and the driver's coverage is excess.
Which of the following Workers' Compensation benefits do not have a monetary limit?
A Scheduled injuries B Disability benefits C Medical benefits (*) D Death and survivor benefits Medical benefits are unlimited in most states. Other items have either dollar or percentage limits.
Which section of the BAP provides auto medical payments coverage?
A Section II B Section III C This coverage is available by endorsement only (*) D Section I
An agent has authority to do all of the following, except:
A Solicit applications on insurer's behalf B Countersign insurance contracts C Appoint a solicitor as his or her representative D Represent the insured's interest (*) An agent is primarily the representative of an insurer.
Which of the following is true regarding the Self-Insured Workers' Compensation Program?
A Sometimes large employers are attracted to self-insurance plans because losses can be predictable and benefits are capped by statute (*) B Self-insurance for Workers' Compensation is most generally used by smaller employers, who cannot afford to purchase Workers' Compensation insurance C Benefits under self-insurance differ from those provided by Workers' Compensation insurers D Self-insurance is allowed in all states
M has a liability policy insuring her flower shop. After M sells the shop, the buyer asks if she can transfer her liability policy as part of the sale. Which provision prevents M from making this transfer without the insurer's consent?
A Subrogation B Liberalization C Assumption of risk D Assignment (*) he assignment provision states a policyholder cannot transfer policy ownership without the insurer's written consent.
Which of the following is included in the Personal Auto Policy's coverage territory?
A The U.S. and its territories only B The U.S., its territories, Canada, Puerto Rico, and Mexico C Anywhere location worldwide D The U.S., its territories, Canada, and Puerto Rico (*)
The insuring agreement of a policy describes: The Insuring Agreement includes the perils insured against. The duties of the insured and the transfer of recovery rights (subrogation) would be included in the policy's conditions. Excluded perils would be listed in the Exclusions section.
A The duties of the insured in the event of a loss B Transfer of the rights of recovery C Perils that are not covered D Perils that are covered (*)
Which of the following regarding the value reporting form is true?
A The final premium is based on the values reported in the last report of the policy term B The Value Reporting Form contains an 80% coinsurance clause C Late reporting or under-reporting will result in a penalty in the event of a loss. (*) D The form may be attached to any Commercial Property Part coverage forms. This endorsement may be attached to the Building and Personal Property Form and the Condominium Commercial Unit-Owners Form. The insured is required to report 100% of values with each report. Late reporting or under-reporting will result in a penalty in the event of a loss.
Which statement about commercial property policies is not correct?
A The first named insured is the payee of any return premiums B The insurer may examine or audit the insured's books any time during the policy period, or within 3 years after the policy ends C Changes in the terms of the policy can be made only by endorsement issued by the insurer D The insurer has the obligation to inspect the property (*) NO obligation to inspect the property
Which person is not a covered resident under the Homeowners Policy?
A The insured's spouse B A 20-year-old exchange student who is a resident of the household C The insured's tenant (*) D A 22-year-old son enrolled in school full time away from home
In addition to the named insured in a property policy, coverage is automatically provided for:
A The insured's spouse (*) B Persons who appraise the property C Persons who purchase the insured's property D The insured's employer
All of the following are included in the Declarations of a property policy, except:
A The perils insured against (*) B The amount of coverage C The amount of premium D The named insured's mailing address The perils insured against are listed in the insuring agreement.
Which is true of the Personal Property of Others coverage provided by the Building and Personal Property Coverage Form?
A The policy covers the interest of others in property that the insured is purchasing on an installment plan B The policy covers the property of others against loss by theft C The policy covers property of others that is in the care, custody, and control of the insured. (*) D Property of others is covered at up to $5,000 per described location. Control for up to $2,500 at each described premises. Coverage does not include loss by theft.
All of the following are true about extended reporting periods, except:
A The supplemental tail requires an annual premium(*) B The basic extended reporting period allows a claim to be reported after the policy period for a specified number of days C The basic extended reporting period does not increase the policy limits D Under the supplemental tail, the insured must request coverage within 60 days after the end of the policy term The supplemental extended reporting period has a one-time premium.
Which of the following describes the coverage provided by a crime policy that included the insuring agreement for burglary?
A The taking of property from inside the premises by a person who hid inside a storeroom during the day and broke a window to get out at night (*) B The taking of property from inside the premises by a person who has caused or threatened bodily harm C The taking of property from inside the premises by a person who has entered through an unlocked window D The mysterious disappearance of property
The Employee Theft insuring agreement would cover:
A The theft of money from the insured's sales employee by a customer B A messenger robbed while transporting company funds C An attempt to extort money by kidnapping an employee D A cashier taking money from the insured's cash register (*) The Theft Disappearance or Destruction of Money and Securities insuring agreement covers non-employee theft which occurs on the insured premises.
Which of the following losses would be covered by a commercial crime policy?
A Vandalism occurring in the course of a burglary(*) B A 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 vandalism Commercial crime insuring agreements provide coverage for property damage associated with a theft, robbery, or burglary. Vandalism not associated with a theft is not covered. Fire losses are excluded, even when resulting directly from a covered theft.
Which of the following would not be covered under Coverage A of the CGL?
A While working at a trade show, an insured's employee started a small fire B An insured was visiting a client in Canada, who was injured after he tripped over the insured's briefcase C An insured's client was injured when she slipped on a loose rug on the insured's premises D An insured's employee is injured when a bookcase in the office falls on her. (*) Workers' Compensation insurance will cover the injuries to an employee arising out of work activities.
An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a flood destroying the wood flooring. The policy will pay:
A $1,500 B $1,000 C Zero (*) D $1,250 Flood is a Section I exclusion and is not covered.
J has a personal auto policy with Liability limits of 50/100/25, UM/UIM limits of 50/100, a Medical Payment limit of $5,000 and Comprehensive and Collision deductibles of $500. J's vehicle slides on ice and hits a guardrail causing $9,500 in damage to the vehicle and $11,000 damage to the guardrail. J also sustains $1,000 in injuries. How much will the policy pay for all damages?
A $11,000 B $9,500 C $21,000 D $21,500 The policy will pay $11,000 in property damage under liability, $1,000 for injuries under medical payments, and $9,000 for physical damage after the deductible is met, totaling $21,000.
A mandatory deductible of what amount applies to completed operations claims under Section II of the Garage Coverage Form?
A $250 B $1,000 C $100 (*) D $500
Under a Mobile Home policy, if the mobile home is insured under Coverage A for $70,000, how much coverage would ordinarily apply to personal property under Coverage C?
A $42,000 B $35,000 C $28,000 (*) D $30,000 Under the Mobile Homeowners Policy, Coverage C (Personal Property) is generally written at 40% of Coverage A, instead of 50% under the Homeowners Policy. 40% of $70,000 = $28,000.
An HO-3 Policy will pay how much for a tree damaged in a hail storm?
A $500 B 0% C $250 D $1,000 The most paid for a covered tree is $500, but coverage is not provided for windstorm or hail losses.
Under a BOP, the insurer may examine and audit the insured's books and records at any time during the policy period and up to what duration after policy expiration? *
A 3 years (*) B 7 years C 1 year D 5 years The insurer may examine and audit the books and records as they relate to the policy during the policy period and up to 3 years afterward.
The Businessowners Protective Safeguards endorsement requires the insured to notify the insurer if an automatic sprinkler system is off for how long?
A 48 hours (*) B 72 hours C 24 hours D 96 hours
All of the following statements is correct about a Homeowners Policy, except:
A A Homeowners Policy will not cover theft of a boat away from premises. 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 Home schooling is covered under a Homeowners Policy.
Which of the following would NOT be considered an Occupational Disease?
A A disease peculiar to the occupation in which the employee was engaged B A disease due to causes in excess of the ordinary hazards of employment C Influenza contracted from a fellow employee at work (*) D A disease due to exposure to any radioactive material by an employee in the course of his/her employment
Which of the following property is covered under the Homeowners Policy?
A A hovercraft B A model airplane (*) C A speaker system installed in the insured's car D A show dog A model or hobby aircraft is covered unless it is designed to carry people or cargo.
With respect to a reduction in Uninsured/Underinsured Motorist Coverage, which of the following is NOT correct?
A A named insured may request limits for bodily injury and death that are less than the minimum limits allowed (*) B No request for a lesser amount is effective unless the named insured has signed an informed consent form C The named insured will have a reduced premium D An automobile liability policy must provide uninsured/underinsured motorist coverage with limits for bodily injury and death equal to those to protect against loss resulting from the liability imposed by law
Who among the following is not exempt from continuing education requirements?
A A nonresident licensed producer who has fulfilled the continuing education requirements of their home state B Certified Insurance Consultant C A personal lines producer (*) D Persons holding a limited authority license
Which vehicle would not be eligible for a Business Auto Coverage Form?
A A private passenger auto that is used in the business B A forklift used in the business (*) C A van that is used by a delivery firm D A trailer that is used to carry a backhoe Being mobile equipment, a forklift is not eligible for auto coverage, other than by endorsement.
With respect to failure to remit premiums, which of the following statements is false?
A An insurer must report to the Commissioner a failure on the part of a producer to remit premiums within 30 days following the due date B When a producer's check is returned and remains outstanding 30 days following receipt of such return, the insurer must report to the Commissioner (*) C Failure to remit premiums may result in the revocation of the producer's license D Failure to remit premiums may result in the suspension of the producer's license
Personal injury liability insurance does not cover which of the following?
A Bodily Injury (*) B Libel and Slander C False Arrest D Malicious prosecution Personal injury is a type of loss that injures a person's reputation, emotional well-being, or other non-physical attributes, as distinct from bodily harm or property damage.
Which coverage always contains an occurrence limit?
A Bodily injury and property damage (*) B Advertising injury C Strict liability D Personal injury
Which statement is false regarding Section II of the Businessowners Coverage Form?
A Bodily injury or property damage expected or intended by the insured is excluded B Medical expenses incurred within 1 year of the accident are covered C Medical expenses include bodily injury to an insured or a person hired to do work. (*) D The definition of insured product does not include vending machines used to distribute the product. Medical Expenses payments do not apply to persons hired to work, or an insured.
Which of the following is not included in the definition of mobile equipment?
A Bulldozer B 3/4 ton pickup (*) C Forklift D Vehicle on crawler treads Mobile equipment includes land vehicles used mainly off public roads including those with attached machinery or equipment.
Which of the following statements is NOT correct concerning Endorsement, PP 01 54?
A Cancellation, Renewal and Nonrenewal provisions are amended to conform to Connecticut law B The policy will pay up to $100 for the cost of all bail bonds required because of an accident or traffic law violation C The Right to Recover Payment provision applies to Medical Payments (*) D 'Minimum limits' are defined as per Connecticut law
Which of the following statements about the CPP is incorrect? The insurer has the right, but not the obligation, to inspect the property. These surveys are for underwriting and rating purposes, not safety inspections.
A Changes in the terms of the policy can be made only by an endorsement issued by the insurer B The insurer has the obligation to perform safety inspections (*) C The insurer may examine or audit the insured's books any time during the policy period, or within 3 years after the policy ends D The first named insured is the payee of any return premiums
Which of the following statements about the Commercial Umbrella Liability policies is false?
A Commercial Umbrella policies are excess policies B If the Umbrella Policy provides broader coverage than the underlying policy, the umbrella will cover the entire loss, less a retention C Specific minimum limits for underlying coverage are required D Policies generally cover first-party claims (*)
Which of the following workers would be eligible for Workers' Compensation?
A Domestic employees B Part-time worker (*) C Casual laborer D Farm laborer
Which of the following properties is ineligible to be insured under a Dwelling Policy?
A Dwellings with any type of business in them B Dwellings containing three apartment units C Mobile homes D Farms (*) Dwellings located on farms are not eligible. Dwellings must be used principally for residential dwelling purposes and cannot have more than 4 dwelling units. Incidental business occupancies, such as schools, studios, and offices, are permitted if the primary use of the dwelling is as a personal residence.
Which of the following would not be covered under an Installation Floater?
A Electrical equipment B Carpeting C Construction equipment ( Not Covered )(*) D Elevators
All of the following are powers and duties of the Commissioner, except:
A Executing state insurance laws B Issuing insurance licenses C Issuing Certificates of Authority D Performing all duties in the best interest of independent insurance agents (*)
Choose the statement that is false about the FAIR plan.
A FAIR means Fair Access to Insurance Requirements B It provides basic property coverage to those who have been rejected in the standard market C It provides property coverage to both residential and farm dwellings (Farm property is not eligible)(*) D Agents cannot bind FAIR plan coverage
Which of the following statements is false with regard to employment covered?
A Firefighters and police officers are not covered (*) B Firefighters and police officers are covered en route from their home to their place of work and return to their home C Dept. of Corrections employees are covered en route from their home to their place of work and return to their home subject to specific conditions D Labor performed in the course of an employee's duties for an employer is eligible for coverage under Workers' Compensation
The transfer of the right of recovery from the insured to the insurance company is called:
A Indemnity B Subrogation (*) C Assignment D Hold harmless Subrogation allows the insurer to take legal action against the negligent third party.
All of the following are excluded under Part A of the Personal Auto Policy, except:
A Intentional damage caused by the insured B A vehicle driven by an unlicensed driver (*) C Use of a non-owned vehicle without permission D Damage caused by a vehicle designed mainly for off road use
The Building and Personal Property Coverage Form does not cover which of the following?
A Liability (*) B Personal property of others C Business personal property D Buildings Liability is not covered under this form, but is covered under the Commercial General Liability policy.
Personal Injury includes all of the following, except:
A Libel B Bodily Injury (*) C False Arrest D Slander Personal Injury is non-bodily injury to a person arising from wrongful conduct.
The maximum amount a policy will pay in the event of a loss, regardless of the number of insureds, claims made, lawsuits filed, or parties making claims is the:
A Limit of liability (*) B Premium C Deductible D Split limit The limit of liability, or limits of insurance, are shown on the policy declarations page and are the most paid by the policy regardless of the number of insureds, claims made, lawsuits filed, or parties making claims or filing lawsuits.
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 Listed B Scheduled C Unified D Blanket (*) Blanket insurance covers more than one item of property on one policy for a single amount of insurance, which applies to each item as needed.
Choose the false statement regarding the Businessowners Policy.
A Manufacturers are eligible for coverage (*) B Watercraft and associated equipment while afloat are not covered C Pollution clean up and removal are covered as an Additional Coverage D Named perils coverage is available by endorsement Manufacturers are ineligible for coverage under the BOP.
Valuable Papers and Records Floater
A Maps B Blueprints C Securities (Money and securities are not covered under the Valuable Papers and Records Floater.)(*) D Mortgages
Which statement regarding medical payments under a homeowners policy is true?
A Medical payments include personal injury B Medical payments under a Homeowners Policy will cover the insured's injuries C Medical payments are provided by Coverage E D Medical payments under a Homeowners Policy will cover funeral expenses. (*) Funeral expenses are covered expenses under Coverage F, Medical Payments.
Which of the following is not automatically included in a Garage Coverage Form?
A Premises liability B Mandatory $100 deductible for Completed Operations losses C Garagekeepers Coverage (*) D Contractual Liability The Garage Coverage Form provides liability coverage for Premises and Operations, Products, and Completed Operations Liability, but not for Contractual Liability.
The Boatowners Policy does not cover which of the following?
A Property B Medical Payments C Personal Property (*) D Hull Section I of the policy provides open perils coverage for the hull, motor, trailer, equipment, and accessories manufactured for marine use. Section II provides Watercraft Liability, Medical Payments for passengers, and Uninsured Boaters coverages.
The Watercraft Liability endorsement provides which coverage?
A Property damage arising out of motorboat being operated in a race B Property damage arising out of the racing of sailing vessels. (*) C Bodily injury and property damage arising out of the ownership and use of boats rented to others D Bodily injury sustained by an employee in the course of employment
Which of the following would be eligible for a Businessowners policy?
A RV Storage Facility B Credit Union C Go-Cart Racing Facility D Funeral Home (*) A funeral home is included as an eligible risk as a service business.
What is the term for a cause of loss, such as the theft of a car?
A Risk B A peril (*) C Accident D Hazard Property insurance insures against perils. A peril is a cause of potential loss to property such as fire, windstorm, hail, flood, theft of a Car etc.
The Commercial basic Cause of Loss Form does not cover which of the following perils?
A Sinkhole collapse B Sprinkler leakage C Smoke D Earth Movement ( Not Covered )(*)
__________ is not covered by the CGL Coverage B - Personal and Advertising Injury.
A Slander B Infringement of copyright C Breach of contract (*) D Malicious prosecution Also covered are false arrest, detention, or imprisonment, wrongful eviction, libel, violation of privacy, and stealing another person's idea in an advertisement.
All of the following are true of the Occurrence Form, except:
A Supplementary payments are automatically included B The length of the retroactive date will depend upon the insurer (*) C For coverage to apply, the injury or damage must occur during the policy period D As long as the injury or damage occurred during the policy period, the claim date is immaterial
The Homeowners Special Provisions Endorsement, HO 01 06, provides for the following, except:
A The Renewal provision is amended to conform to Connecticut law. B Water and steam are added to the list of personal property covered. (*) C Losses are payable within 30 days of receipt of proof of loss. D The Cancellation and Nonrenewal provisions are amended to conform to Connecticut law.
All of the following are Causes of Loss forms under the Commercial Property Coverage Part, except: There are three Causes of Loss Forms: the Basic Form, the Broad Form, and the Special Form.
A The Standard Form (*) B The Broad Form C The Basic Form D The Special Form
Theft is specifically defined as:
A The loss of property when the cause is unknown B Malicious vandalism C Threatening bodily harm to a bailee D Any act of stealing (*)
For which of the following persons is the Drive Other Car endorsement intended?
A The officers and directors of a corporation B Truckers and motor carriers C Owners of school buses D Individuals who do not own an auto (*)
Which of the following is not included in the Declarations of a Property Policy?
A The perils that are not insured against (*) B The amount of premium C The amount of coverage D The expiration date of the policy The perils not covered are listed in the Exclusions.
The policy limit
A total loss under a valued policy is payable based on the policy limit listed on the declarations page. An insured owns a home with a replacement cost of $300,000 and a market value of $250,000. What is the most a valued policy will pay in the event of a total loss without a deductible( is an example )
Which of the following coverages under the Personal Auto Policy protects the insured against drivers who do not have adequate auto liability insurance limits?
A Underinsured Motorist Coverage (*) B Liability Coverage C Medical Payments Coverage D Uninsured Motorist Coverage
Supplementary Payment under Part A of the Personal Auto Policy?
A Up to $250 for the cost of bail bonds B Payment for lost earnings up to $200/day C Medical payments for an occupant of an insured vehicle (Not included)(*) D Reasonable expenses incurred at the insurer's request
Which of the following is not considered a type of advertising injury?
A Violation of copyright B Extortion C Infringement of copyright D Misappropriation of advertising ideas Criminal acts are excluded under the CGL.
Which of the following perils is not covered under the Extended Coverage Endorsement to the DP-1?
A Volcanic eruption B Weight of ice, snow or sleet (*) C Explosion D Smoke Weight of ice, snow or sleet is not part of the Extended Coverage perils.
Which of the following statements is false with respect to when a notice of information practices must be provided?
A When an applicant provides information for an application, the notice must be provided no later than at the time of policy delivery B When a policy is renewed, the notice must be provided within 24 months after the renewal date(*) C When a policy is going to be reinstated, the notice must be provided by the time the request for reinstatement is received by the insurer D When personal information for an insurance application is provided from a source other than the applicant or public records, the notice must be provided at the time the collection of personal information is initiated
Vandalism and malicious mischief losses are excluded under the Homeowners Policy:
A When cemetery plots or burial vaults of an insured are damaged B During times of riot or civil disorder C While the insured is on vacation and away from the premises D When the property has been vacant for 60 consecutive days (*)
All of the following are covered perils under the Extended Coverage Endorsement to the DP-1, except:
A Windstorm B Vehicles C Volcanic eruption D Weight of ice, snow or sleet (*)
When his client's homeowners policy application is rejected by an insurance company due to underwriting rules, an insurance agent may request coverage under which of the following?
A Write Your Own Homeowners Program B FAIR Plan (*) C Assigned Risk Plan D Joint Underwriting Association
Which of the following statements is correct concerning certified insurance consultants?
A certified insurance consultant must have a written agreement with the client that specifies the fee and what advice is to be given.
Section II of a Homeowners Policy covers which of the following for medical payments?
A guest would be eligible for medical payments. The residence employee would not be covered unless working in the course of employment by the insured.
A leased auto is an eligible vehicle if the lease contract is for a continuous period of at least how many months?
A leased vehicle under a contract for a continuous period of at least 6 months by the insured is an eligible vehicle.
The Commercial Property policy applies a limit of what dollar amount for business personal property temporarily away from the premises?
A limit of $10,000 of coverage is extended for the insured's covered property (other than stock) while it is temporarily at a location the insured does not own, lease, or operate. A $2,500 B $5,000 C $15,000 D $10,000
A Trip Transit Form
A person wanting to insure a single shipment would use: The Trip Transit Form is used for those who do not make regular shipments.
A physical hazard
A physical condition that increases the chance of loss. Wet leaves on a sidewalk are considered a Physical Hazard.
Under the PAP, a temporary substitute would be covered if used:
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.
Under Equipment Breakdown Insurance, which of the following is considered 'one breakdown'?
All breakdowns are covered as one breakdown if (1) they occur at any one premises, (2) they manifest themselves at the same time, and (3) they are the result of the same cause.
Which of the following terms includes pain and suffering, disfigurement, and mental anguish?
All of these items are classified as General Damages. A Specific damages B General damages (*) C Loss of consortium D Strict Liability
Which of the following statements is true with respect to assumed names?
An agent who will be transacting business in Connecticut under an assumed name must notify the Commissioner prior to using the assumed name
Occurrence
An event that happens An occurrence form provides coverage for losses that take place during the policy period. It doesn't matter when the loss is reported; what matters is when the loss occurred. The key in this form is the date the loss actually happened and if it happened when the policy was in effect.
Errors and Omissions
An insurance policy that protects an insurance producer is known as. Errors and Omissions coverage (E&O) is a professional liability policy written to cover agent negligence or inadequacy.
Under a dwelling policy, an insured tenant may use up to what percentage of the Coverage C limit of insurance for a covered loss to improvements, alterations, and additions made at the insured's expense to that part of the described location occupied by the named insured?
An insured tenant may use up to 10% of the Coverage C limit for a covered loss to improvements, alterations, and additions made at the insured's expense to that part of the described location occupied by the named insured.
Which of the following statements is false with respect to license renewals?
An insurer appointment is required for a producer license to continue in force. An insurer must provide the commissioner the names of its appointed agents prior to May 1st, biennially.
Which of the following statements is true concerning the availability of insurance on real property?
An insurer may cancel insurance for reasons that apply to all persons of the same marital status, sex, race, color, religion, or national origin.
Which of the following is not covered under the Limited Pollution Liability coverage and Pollution Extension endorsement?
Clean up costs Government imposed clean up costs incurred from environmental damage caused by a pollution incident are excluded under this endorsement, but coverage is available under the Pollution Liability Coverage Form.
Section III of the Businessowners Coverage Form includes:
Common Policy Conditions
Comparative Negligence When damages are reduced in proportion to the degree of negligence, this is an example
Comparative negligence is a defense wherein damages are reduced in proportion to the degree of the claimant's negligence. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant may only recover 95% of damages.
A loss caused by which of the following would be covered under a BOP?
Cost of Construction The Increased Cost of Construction Additional Coverage provides $10,000 coverage for costs incurred to comply with an ordinance or law regulating repairing or replacing damaged building parts.
Damaged household and personal property in transit between the insured's old and new residences is covered by the Dwelling Policy under:
Coverage C is the coverage for Personal Property. 10% of the Coverage C limits apply to the Insured's Personal Property away from the premises anywhere in the world.
Under the Dwelling Policy, household and personal property, including property in transit between the insured's old and new residences, are covered under:
Coverage C is the coverage for Personal Property. 10% of the Coverage C limits apply to the Insured's Personal Property away from the premises anywhere in the world.
Under the Homeowners policy, which coverage provides indirect loss coverage?
Coverage D provides for the insured's additional living expenses necessitated by damage to the dwelling, an example of indirect loss.
In the event an apartment attached to the insured's home is damaged and unlivable, what percentage of Coverage A does the HO-3 provide for the rental value?
Coverage D will pay up to 30% of Coverage A on the HO-3 for the fair rental value, less continuing expenses, of the apartment.
Absolute liability Some activities are so inherently dangerous that they are bound by the principle of Absolute Liability, which states that no degree of care taken by the insured can defend against a charge of negligence. Even though the owner of the snake was not negligent, he/she is still legally liable for the injury.
D's neighbor H keeps a venomous snake as a pet. D's son is bitten after teasing the snake with a stick. After being sued by D's parents, H's insurance company claimed that the boy was acting negligently, and therefore, H was not liable. The boy's lawyer claimed that the pet was so dangerous that it did not relieve the owner of liability, an example
Under the Dwelling policy, which is correct regarding coverage of trees, shrubs or plants?
Damage by wind, hail, weight of ice, snow or sleet is not covered. Damage to outdoor plants by forces of nature other than lightning are so common that such damage is considered uninsurable. Coverage for certain other perils is provided, with a limit of $500 for any one tree, shrub, or plant.
The Personal Umbrella Policy does not provide coverage for which of the following?
Damage to property in the insured's care, custody, or control is excluded under the policy.
Property damage covered by a liability policy includes which of the following?
Damage to tangible property, including loss of use of that property caused by the insured's negligence.
After a personal policy has been in effect for 60 days, the policy may not be cancelled:
Due to the insured changing his/her occupation
Which of the equipment is covered under the Equipment Breakdown Protection Coverage Form?
Electrical and mechanical equipment used in the utilization of energy.(*) Catalysts insulating and refractory material, and equipment manufactured by the insured for sale are not included as covered equipment.
Interline endorsements
Endorsements that coordinate CPP coverages to avoid duplication are called:
Which of the following statements is false?
Exclusive remedy prohibits the surviving spouse of a deceased employee whose death was caused by the employer's intentional act or omission or gross negligence from recovering damages.
Which statement is true of medical payments in a Personal Auto Policy?
Expenses for medical services sustained by the insured are covered. Coverage applies to any occupant of the insured vehicle and also to members of the insured's household as pedestrians when struck by a motor vehicle or as an occupant of another person's vehicle.
Which of the following powers describes the authority stated in an agent's agency contract?
Express The agency contract, which exists between an insurer and a producer, sets forth the powers that are granted to the producer. These powers are referred to as express because they are directly stated in the contract.
Which of the following is an eligible risk under the BOP?
Fast-food and limited cooking restaurants are eligible for coverage.
Fine arts and antiques are classes of property insured on a:
Fine arts are typically insured on a valued basis, whereby the insured and insurer agree, at time of insuring, on an amount of insurance to be paid in the event of a loss.
Which of the following losses would be covered under the Dwelling Policy?
Fire damage to building materials on the insured premises. Coverage A includes materials and supplies located on or next to the Described Location used to construct, alter, or repair the dwelling on the Location.
Ocean marine Hull Coverage and Cargo Coverage are written on which basis?
Full valued basis The valuation of the cargo includes the stated value of the invoice, import duties, and freight charges.
The Commissioner may revoke, suspend, or refuse to renew a license
If a licensee issues insufficient coverage to an individual through apparent authority, this is not grounds for license suspension, non-renewal or revocation. Being convicted of a felony, having a license suspended or revoked in another state and failing to pay income taxes are all grounds for license suspension, non-renewal or revocation.
If appraisal is required under the standard fire policy, the appraisers must be selected within:
If appraisal is required under the standard fire policy, the appraisers must be selected within 20 days.
Appraisal
If the insured and insurer do not agree on the value of a property loss, An appraisal is a dispute resolution method used when the insured and insurer do not agree on the amount of the loss.
Which of the following is true concerning monopolistic states regarding Workers' Compensation insurance?
In Monopolistic states, Workers' Compensation coverage is provided by a state fund rather than the insurance industry, and benefits are administered by the state.
Temporary Total Disability may be described as:
Inability to return to any employment while recovering
An admitted
Insurer has a Certificate of Authority issued by the Department or Division of Insurance to transact insurance.
Which of the following statements is true with respect to Uninsured/Underinsured Motorist Coverage?
Insurers must offer uninsured/underinsured motorist coverage with limits twice those of the bodily injury coverage of the policy.
Which of the following is true of Employers Liability insurance?
It covers actions brought against the insured in a capacity other than as an employer.
What type of policy can broaden coverage and increase the limits of the underlying insurance?
Legal Liability Coverage B Difference in Conditions C Umbrella (*) D Contingent Liability
Under Part F of the Personal Auto Policy, the Legal Action Against Us provision states that:
Legal action may not be brought against the insurer until the insured has complied with all the terms of the policy
Which of the following is covered under Aircraft Liability Insurance?
Liability claims arising from the ownership, maintenance or use of an aircraft. Aviation Insurance Liability includes Aircraft Liability, Airport Liability and Hangerkeepers' Liability. Aircraft Liability insurance covers claims arising from the ownership, maintenance, or use of an aircraft.
Which statement is false regarding the Farm Liability Coverage Form?
Medical payments cover injuries even if the insured is not liable. A neighbor with whom the insured is exchanging help, without remuneration, would be covered under medical payments.
Which of the following correctly describes the practice of Twisting?
Misleading and convincing an insured to surrender, lapse or exchange an existing policy for a different one, to the insured's detriment
A producer must report to the Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency no later than:
No later than 30 days after the final disposition of the matter.
What is the term for continuous exposure to the same harmful conditions?
Occurrence An occurrence is an accident that includes continuous or repeated exposure to the same general harmful conditions.
Supplementary payments under Part A of the Personal Auto Policy
Only bail bonds is a supplementary payment. The policy limit is $250. $100 for bail bonds
A HO-3 policy provides coverage on which basis?
Open perils coverage on the dwelling and broad form coverage on the personal property
Under the Equipment Breakdown Coverage Form, which of the following describes expediting expenses?
Payment for repairs which accelerate the period of restoration. By getting the business up to speed more quickly, these expenses are offset by the ability to generate revenue sooner.
Contributory Negligence
Prevents recovery for damages caused by a negligent party if the claimant was negligent to any extent. For example, if the claimant is 5% negligent and the wrongdoer is 95% negligent, the claimant is not permitted to collect damages.
All of the following are true of a Homeowners Policy, except:
Section II provides coverage for damage to the insured's property. Coverage for the insured's property is provided in Section I
Which of the following is an example of Special Damages?
Special damages are an award to an injured party for actual and known expenses such as bills, loss of earnings, and the costs of repairing or replacing damaged property. Special damages are paid for tangible loss or damage.
When a claimant can prove that a product caused an injury, the fact that the manufacturer will be held liable regardless of whether the product was defective or not, is considered which of the following?
Strict Liability. The doctrine of strict liability applies to products and their manufacturers. It holds that the manufacturer can be held responsible for an injury caused by a product, even if the product is not defective.
Supplementary Payments under the CGL
Supplementary Payments only apply losses insured under Coverages A and B. They are not applied to no fault Medical Payments, since these are issued without involvement of a suit. The insurer's claim-related expenses are included Payments do not reduce the Limit of Liability The cost of bail bonds is included up to $250
Damage to a building insured under the Businessowners Policy is valued on which basis?
The Businessowners Policy covers both building and contents on a Replacement Cost basis.
Which of the following statements is true regarding examinations by the Commissioner?
The Commissioner may subpoena an insurer's books and records. The Commissioner must examine every insurer at least once every 5 years.
The concealment and fraud condition in a property insurance policy states:
The Concealment or Fraud condition voids coverage in cases of concealment, false statements, misrepresentation, and fraudulent conduct.
All of the following are true of the HO-2, except:
The HO-2 pays all losses on a broad form (Named Perils) basis.
The Lay Up Warranty under the Yacht Policy is best described by which of the following?
The Lay Up Warranty allows a reduction of premium for the period during which the yacht is in storage. This reduction of premium reflects the reduced risk during lay up.
Coverage for injury resulting from invasion of privacy is covered under which Endorsement?
The Personal Injury endorsement provides Coverage for non-physical injuries to others, such as libel, slander, false arrest, defamation, invasion of privacy and other such offenses.
All of the following are true about the Limits of Liability under Section II of the BOP, except:
The Products and Completed Operations aggregate limit is twice the Liability and Medical Expense limit.
The Residence Premises Under Section II of the Homeowners Policy
The Residence Premises is either a 1, 2, 3, or 4 family dwelling in which the named insured resides. The residence premises also includes other structures and the grounds at that location, such as the 5 acres upon which the insured sits, including the barn, detached garage, and swimming pool.
Which statement is not correct about the Right to Recover Payment under the PAP?
The Right to Recover is an insured's right. The Right to Recover is a right given by the insured to the insurer after the insurer paid a claim.
A commercial crime policy form written with the Robbery or Safe Burglary of Other Property insuring agreement would cover which of the following?
The Robbery or Safe Burglary of Other Property insuring agreement does not cover cash, or losses outside the insured premises. Employee theft of any kind would be covered under the Employee Theft and Dishonesty insuring agreement. Jewelry store windows and glass display cases are destroyed during a burglary is an example.
The Scheduled Articles Floater provides which of the following coverages to described property?
The Scheduled Articles Floater is written on open perils basis, with very few exclusions.
Livestock is not eligible for coverage on which Farm policy?
The Special Cause of Loss Form specifically excludes coverage for livestock. The Basic form covers flood and earthquake loss to livestock and the Broad form covers electrocution of covered livestock.
The amount of insurance provided to cover personal property of a Homeowners Policy is what percentage of Coverage A?
The basic amount of Coverage C insurance is 50% of the Coverage A Limit.
The principle of indemnity
The concept that the insured should not profit from an insurance transaction is called. Indemnity is the restoration of the insured to the same financial condition as before the loss.
Which of the following is true regarding the HO-3 (Special Form)?
The dwelling and other structures (Coverages A and B) are written on an open perils basis. The HO-3 (Special Form) provides the broadest coverage available on structures: open perils (or all-risk) coverage.
When an auto has two auto policies with the same insurer, the insurer's liability would not exceed:
The highest limit of the two policies Coverage will not be duplicated, so the policy with the highest limit applies.
The first named insured
The individual whose name appears first on the policy's declaration. In the newer forms, the insurer may satisfy contractual duties by notice to the first named insured, rather than requiring notice to all named insureds.
Which of the following is not true about an insurance policy?
The insuring agreement includes the name of the insured
Aircraft All Risk coverage includes which of the following levels?
The most comprehensive aircraft hull coverage is all risk, which provides coverage when on the ground, during taxi, and in flight.
In which section of the Workers' Compensation and Employer Liability policy would the policy conditions be found?
The policy Workers' Compensation contains the following parts: General Section, Part One - Workers' Compensation Insurance, Part Two - Employers Liability Insurance, Part Three - Other States Insurance, Part Four - Your Duties if Injury Occurs, Part Five - Premium, Part Six - (Conditions).
preservation of property under the Building and Personal Property Coverage Form?
The policy provides open perils coverage for 30 days on insured property that is being moved or temporarily stored at another location because of the endangerment of a covered peril
Which of the following is correct regarding preservation of property under the Building and Personal Property Coverage Form?
The policy provides open perils coverage for 30 days on insured property that is being moved or temporarily stored at another location because of the endangerment of a covered peril.
Policyholder L has a DP-1 with a Coverage A amount of $300,000. Following a severe storm, she suffers a covered loss to the dwelling of $275,000 and a covered loss to a detached swimming pool of $30,000. How much will L's policy pay?
The pool is covered under Coverage B, which pays up to 10% of Coverage A, or $30,000. However, because L's policy is written on the DP-1 form, the Coverage B limit is included in, not additional to, the Coverage A limit. Therefore, the most the policy will pay is $300,000.
Which of the following is true of the Insuring Agreement?
The promise to indemnify an insured for a covered cause of loss. The insuring agreement is the company's commitment (promise) of protection to the insured. It specifies the types of property covered, and the perils insured against.
Under the Commercial Property policy, vacancy is allowed for how many days before the peril of vandalism coverage is suspended?
The risk of loss by vandalism increases greatly in vacant property. Therefore, insurance policies end coverage for vandalism losses after 60 days of vacancy, unless special arrangements are made with the company.
An insured under the CGL policy
The spouse of any individual or partner designated on the Declarations is also an insured.
The unendorsed Businessowners Policy will pay no more than what amount for the theft of jewelry?
The theft of jewelry, watches, pearls, precious and semi-precious stones, bullion, gold, silver, platinum, and other precious alloys or metals is limited to $2,500 in any one loss.
Homeowners policies cover:
Theft of furs and jewelry up to $1,500 The limit for loss by theft of jewelry and furs is $1,500.
Which of the following is true regarding the Difference in Conditions Policy?
There is no coinsurance clause or pro rata clause and it may be written for a different amount from the policy it complements
Which of the following is true about specialty or professional liability insurance?
They are written on non-standard forms. Is available for businesses with a higher than average exposure for being legally liable for a loss. These policies are written on non-standard forms with unique policy provisions and conditions. Executive officers and directors, stockholders and trustees, and volunteer workers and employees are included as insureds named in the declarations.
Under the BOP, what is the insurer's obligation following a loss when other insurance is written with exactly the same basis?
To pay only after the other insurance coverage is exhausted. The Other Insurance Condition of the Businessowners Policy states that the policy will pay only for the amount of covered loss or damage in excess of the amount due from the other insurance.
Which statement about the Umbrella Liability Policy is false?
Umbrella policies pay as soon as the primary policy is exhausted. There is no deductible.
Contribution by equal shares
Under a contribution by equal shares provision, each insurer pays an equal amount to the loss settlement until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first.
What is the cancellation notice requirement if an insurer is cancelling an auto policy for other than nonpayment of premium or material misrepresentation?
When an insurer cancels an auto policy for other than nonpayment of premium or material misrepresentation, the insurer must provide at least 45 days' written notice of cancellation.
What is the notice requirement if an insurer is not renewing an auto policy?
When an insurer is not renewing an auto policy, the insurer must provide at least 60 days' written notice.
Pure Risk Insurance is designed to provide protection against which of the following?
With pure risk, the only consideration is the possibility of loss or no loss. By contrast, speculative entails a chance of gain as well as a chance of loss.
Subrogation Clause Subrogation rights apply when negligent third party is the cause of a loss.
X's neighbor shoots off fireworks on July 4th and puts the shells in X's trash can, causing a fire and damaging X's garage. X's company pays the loss and contacts the neighbor for reimbursement. This is an example of Subrogation.
Underinsured Motorist Coverage
coverage protects the insured against drivers who do not have auto liability insurance limits adequate to cover a loss.
Employee theft or dishonesty a commercial crime policy
covers loss of, or damage to, money, securities, and other property committed by an employee, whether acting alone or in collusion with others, that results directly from theft. After noticing the disappearance of office supplies from within a private office facility is an example.
Custodian
keeper, guardian, conservator The custodian is the insured or any of the insured's partners or employees, while having care and custody of covered property inside the premises, excluding any person acting as a watchperson or janitor.
Peril
serious and immediate danger. A potential cause of loss, such as fire, explosion, flood, or theft is considered to be a(n):
The Other Insurance condition
specifies the process to be followed when more than one policy covers the same loss. For property insurance, losses are settled on a pro rata basis, where each policy pays no more than its pro rata share of the loss.