AK Insurance Property Exam Prep Course- Web CE

Jill is an insurance agent who represents XYZ Ins company. With what authority does Jill's agency agreement with XYZ explicitly Permit her to perform certain functions?

Express authority

Within how many days must a licensee holding money in a fiduciary capacity return the money received as a premium deposit if coverage is not obtained? 7 working days 15 working days 10 working days 5 working days

10 days

For how long may the Director may suspend a producer's license? 6 months 12 months 3 months 9 months

12 months

For how long after a transaction has been completed must a licensee keep documents used to execute the advance of a premium? Two years Three years Five years Ten years

5 or 10 years for re- assurance

Tracey decides to cancel her marine insurance policy and notifies her insurer. The insurer may charge Tracey a cancellation fee of up to what amount of the unearned premium? 7.5 percent 5 percent 6.5 percent 9 percent

7.5 percent

Which incident that resulted in a liability claim against Aida did NOT involve "bodily injury" as defined in her homeowners insurance policy? A postal service employee broke his leg on Aida's broken porch step. A visiting child drowned in Aida's swimming pool. A neighbor's reputation was harmed by rumors Aida spread. Aida's dinner guest became sick.

A neighbor's reputation was harmed by rumors Aida spread.

Anna cannot obtain the commercial insurance coverage she needs from an authorized insurer in Alaska. Where might she be able to find coverage? A reinsurer A surplus lines insurer A guaranty fund A reciprocal insurer

A surplus lines insurer

As an insurance agent, Billy owes certain duties to the people he insures and those who apply for insurance. Which of the following is not one of those duties? Billy must disclose pertinent information concerning a policy he proposes to provide. Billy must propose the most expensive coverage the applicant can afford. Billy must provide the policies that were agreed on. Billy must place his clients' insurance with a solvent insurer.

Billy must propose the most expensive coverage the applicant can afford.

What must an insurance company have before it may transact insurance business in Alaska? Certificate of authority Certificate of creditable coverage Certificate of insurance Certificate of compliance

Certificate of authority

Dawn is the only person named in the declarations of her homeowners insurance policy. References to an "insured" in her policy do NOT include: Dawn Dawn's minor children living in her home Dawn's next-door neighbor a neighbor hired to walk Dawn's dog

Dawn's next-door neighbor

Davis Insurance Company was formed under the laws of Alaska. In Alaska, it would be considered a(n) Non-admitted insurer Domestic insurer Foreign insurer Alien insurer

Domestic insurer

Which of the following is NOT considered an unfair claims practice? Failing to promptly settle a claim for which the insurer is liable even though the insurer made a good faith effort to do so Making claim payments to insureds or beneficiaries without stating the coverage under which the payments were made Failing to acknowledge and respond to communications about claims promptly Failing to use reasonable standards to promptly investigate and settle claims

Failing to promptly settle a claim for which the insurer is liable even though the insurer made a good faith effort to do so

A person who intentionally collects as premium or charge for insurance a sum in excess of the premium or charge applicable to the insurance as specified in the policy by the insurer commits a(n) Unfair method of competition Unfair trade practice Fraudulent insurance act Criminal act

Fraudulent insurance act

Alex sold an insurance policy before his license lapsed and earned a commission on the sale. Which statement is correct about the commission paid for the renewal? He is not entitled to it because he is no longer licensed. He is not entitled to it because only one commission can be paid on a policy sale. He is entitled to it because he was licensed when the policy was sold. He is entitled to it because his license was not revoked or suspended.

He is entitled to it because he was licensed when the policy was sold.

David's job requires him to move from his suburban home to a distant city. He rents it to a couple in his absence. How can he maintain property insurance on the home now that he is leasing it to others? He should add an endorsement to the homeowners policy. He should replace the homeowners policy with a dwelling policy. He should continue to pay the premiums on the homeowners policy. He should require the tenants to insure the home.

He should replace the homeowners policy with a dwelling policy.

To qualify for an insurance producer's license, a person must have all of the following EXCEPT: Good reputation and character 18 years of age High school diploma Licensing fee

High school diploma

All the following are characteristics of a mobile home EXCEPT: It can be towed behind a family vehicle. It has water, sewer, electricity, and gas hookups. It is at least 12 feet wide and 30 feet long. It has wheels, axles, and brakes.

It can be towed behind a vehicle

Julia decided to cancel her homeowners policy half-way through the policy term. What action can her insurer take? It must charge her an early termination fee and a surcharge. It must charge her a cancellation fee. It may charge her a cancellation fee of up to 7.5 percent of the unearned premium. It may charge her a cancellation fee of up to 10 percent of the unearned premium.

It may charge her a cancellation fee of up to 7.5 percent of the unearned premium.

Who of the following would be able to buy insurance to cover their potential losses from the activity described? Darryl, who buys land as a speculative investment Suzanne, who trades stocks online Judith, who has just purchased an automobile Jimmy, who places bets on horse races

Judith, who has just purchased an automobile

What type of insurance insures against loss or damage to piers, wharves, bridges, and tunnels? Surety Marine Surplus lines Fidelity

Marine

When can an insurer refuse to renew a personal insurance policy? By January 1 each year By December 31 each year At any time during the year Only on the policy's annual anniversary date

Only on the policy's annual anniversary date

Abby lives in Washington, where she is licensed as an insurance producer. She wants to apply for a nonresident license in Alaska. Which of the following conditions must she satisfy? She must be sponsored by a producer licensed in Alaska. She must move to Alaska. She must surrender her Washington license. She must show that her Washington license is in good standing.

She must be in good standing with Washington.

An incorporated insurer owned by stockholders, who hold shares of stock as evidence of ownership is called an?

Stock Insurer

Carol owns a sports car and has received numerous traffic citations for exceeding the speed limit. She submits applications to buy auto insurance from several auto insurance companies, but none has accepted her application because: The car is exposed to specified perils. The law of large numbers prohibits it. The applicant is demonstrating adverse selection. It is a speculative risk.

The applicant is demonstrating adverse selection.

Corinne purchased her home with a 10 percent down payment and a 90 percent mortgage from Sidney Bank. Why does Sidney Bank have an insurable interest in Corinne's house? The bank faces the possibility of a loss if Corinne's house is damaged or destroyed. Corinne cannot afford to make mortgage payments on her own. The mortgage holder (bank) is responsible for paying insurance premiums on a mortgaged house. The mortgage documents Corinne signed make the bank a coinsured.

The bank faces the possibility of a loss if Corinne's house is damaged or destroyed.

John let his 17-year-old daughter Ashley use his motorboat, knowing she was normally a responsible operator. On this evening, while fooling around, she collided with another boat causing injuries and property damage. Though John was not in the boat, he was found to be responsible for damages based on the doctrine of: comparative negligence strict (absolute) liability assumption of risk vicarious liability

Vicarious Liability

Because Celina had three auto accidents during the past nine months, ABC Insurance Company does not want to provide coverage after the current policy expires. What will ABC send Celina to notify her of its decision? a cancellation notice a bill for the next year's premium a nonrenewal notice an expiration notice

a non renewal notice

When determining whether a commercial property policy covers a particular peril, the insured should first look at the declarations page to see which form applies to the property and then look at the: -commercial property conditions form -common policy conditions form -causes of loss form interline endorsement

cause of loss form

A fire damages Millard's house. Because Coverage A of his homeowners policy covers dwelling property at replacement cost, Millard wants all of the damaged property to be treated as part of the dwelling. Which one of the following damaged items is considered part of the dwelling? power lawn mower unattached tool shed central air-conditioning system Oriental rug in Millard's family room

central air-conditioning system

Which peril covered under the Dwelling Property 2-Broad Form cannot be covered by the Dwelling Property 1-Basic Form? smoke volcanic eruption falling objects riot or civil commotion

falling objects

Zenith Insurance Company issues a policy to Best Manufacturing Company. A dispute arises between Zenith and Best on the meaning of an ambiguous clause in their contract. The matter goes to court, which can be expected to interpret the clause in a manner that: favors Best Manufacturing favors Zenith Insurance favors both parties equally favors the public

favors Best Manufacturing

Emory and a number of other members of his church buy insurance from a church-related organization that provides insurance to members of a particular religious body. What kind of organization is it? county mutual fraternal benefit society reciprocal insurer purchasing group

fraternal benefit society

Because Jasper's homeowners insurance policy includes sublimits on certain types of property, he buys a scheduled personal property endorsement. With this, he can specifically cover all the following items EXCEPT: his coin collection his violin his golf clubs his gun collection

his gun collection

A benefit of the extra expense additional coverage in a businessowners policy is that it: applies no matter how long repairs take applies when property is damaged by any cause requires a minor coinsurance payment is not subject to the limits of insurance

is not subject to the limits of insurance

Which of the following terms describes an insurance company that is not licensed to conduct insurance business in Alaska though it is licensed in another state? unlicensed insurance company non-admitted insurance company reciprocal licensed insurance company admitted insurance company

non-admitted insurance company

A mutual insurance company is owned by its: board of directors policyholders stockholders members

policyholders

From a property insurance perspective, which of the following is NOT a basic type of construction? steel masonry frame superior

steel

Making sure a recommended insurance product matches a customer's needs and circumstances means determining the product's: credibility suitability marketability portability

suitability

As a result of flood damage to his store, Burt was out of business for several months, lost income, and incurred additional expenses to comply with a floodplain management ordinance requiring him to relocate the store to a higher elevation. Under some circumstances, Burt's NFIP policy might pay or reimburse him for: the increased cost of complying with floodplain management ordinance Burt's loss of business income Burt's loss of profits that would have been earned had the business remained open the loss of use of Burt's covered building

the increased cost of complying with floodplain management ordinance

The doctrine of concurrent causation holds that if a loss involves more than one peril, and the insurance policy covers at least one of the perils, then the insurance policy covers the loss caused by the greatest peril. the insurance policy covers the loss caused by the least peril. the insurance policy covers only the loss caused by a single peril. the insurance policy covers the entire loss.

the insurance policy covers the entire loss.

When is an owner of a property or casualty insurance policy required to have an insurable interest in the insured risk? when the loss occurs when the policy is applied for when the policy is purchased when the policy is delivered

when the loss occurs

Which of the following would NOT be considered controlled business? Allen received commissions only on insurance written on family members and his employer during the past year. Allen received commissions on insurance written on family members that equaled 45% of his aggregate commissions during a 12-month period. Allen received commissions on insurance written on family member that exceeded 65% of his aggregate commissions during a 12-month period. Allen received commissions on insurance written on family members that exceeded 55% of his aggregate commissions during a 12-month period.

Allen received commissions on insurance written on family members that equaled 45% of his aggregate commissions during a 12-month period.

Which of the following provides temporary insurance coverage pending the issuance of a policy? Attestation Endorsement Binder Codicil

Binder

Surplus lines coverage may be written for which type of policy in Alaska? Life insurance Wet marine and transportation insurance Commercial property insurance Reinsurance

Commercial property insurance

Which method can an insurer use to notify an insured that it is cancelling a personal property insurance policy? By U.S. mail only Orally By fax or U.S. mail only Electronically, if the insurer can obtain an electronic confirmation of receipt

Electronically, if the insurer can obtain an electronic confirmation of receipt

Ivy's personal auto policy provides primary liability coverage with a $100,000 limit, while her personal umbrella policy provides excess coverage with a $1 million limit. If Ivy must pay $55,000 in damages because she is responsible for an auto accident: her personal auto policy and her umbrella policy will both pay $27,500 her personal umbrella policy will pay $55,000 her personal auto policy will pay $55,000 her personal auto policy will pay $5,000 and her personal umbrella policy will pay $50,000

Her personal will pay $55K

If a group of insureds are rated by class, they will experience the same losses be charged the same premium rate file the same claims be exposed to the same risks

be charged the same premium rate

Leroy owns an apartment building with 12 tenants. The apartments are unfurnished but Leroy provides refrigerators, dishwashers, and laundry appliances. His building and these appliances will be covered by a building and personal property coverage form with which category? building property builders' risks personal property of others business personal property

building property

With a named perils policy, which of the following statements correctly describes the burden of proof with respect to covering a loss? To deny coverage, the insurer has the burden of proof to show the loss was caused by an excluded peril. To cover the loss, the policyholder has the burden of proof to show the loss was caused by a covered peril. To deny coverage, the insurer has the burden of proof to show the loss was not caused by a covered peril. To cover the loss, the policyholder has the burden of proof to show the loss was not caused by an excluded peril.

To cover the loss the policy owner has the burden of proof to show the loss was caused by a covered peril.

When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. Melanie has engaged in Defamation Unfair discrimination Twisting Rebating

Twisting

When Devon sells his boat to Pat, he offers to include not only the boat trailer but also his boatowners insurance policy. If Pat accepts the offer and subsequently submits a claim to the insurer, the insurer will deny the claim because: a property insurance policy is a contract of adhesion a property insurance policy is a unilateral contract a property insurance policy is a personal contract a property insurance policy is an aleatory contract

a property insurance policy is a personal contract

Insuring a new restaurant against business failure is not possible because business success or failure is: impossible to predict a pure risk a speculative risk not measurable

a speculative risk

Which of the following policy provisions generally prohibits the transfer of property and casualty insurance policy ownership from one person to another? cancellation provision liberalization provision no benefit to bailee provision assignment provision

assignment provision

What kind of authority does an agency agreement grant a producer to act on behalf of an insurance company? implied authority apparent authority constructive authority express authority

express authority

Regarding the Farm Property-Farm Dwellings, Appurtenant Structure, and Household Personal Property Coverage Form (FP 00 12) policy, what does Coverage C-Household Personal Property of that form cover? the insured owner's household personal property, but not farming supplies neither the insured owner's household personal property nor farming supplies the insured owner's household personal property and farming supplies farming supplies, but not the insured owner's household personal property

the insured owner's household personal property, but not farming supplies

Because he doesn't own an airplane, Lanny thinks it silly that his homeowners insurance policy contains several exclusions that apply to aircraft. What is the purpose of these exclusions? to reduce the incentive to create losses and provide an incentive to prevent losses to remove coverage for uninsurable risks to eliminate or reduce overlapping coverage to remove coverage not needed by a typical insured

to remove coverage not needed by a typical insured