Automobile & Property

You have 10/20/10; neighbor has 10/20/10. You borrow neighbors car. Following damage occurs: Pedestrian injured $15,000 Parked sports car damaged $12,500. How much, if anything, is payable under the two policies? Select one: a. Neighbor's policy pays $10,000 B.I., $10,000 P.D. Yours pays nothing b. Neighbor's policy pays $10,000 B.I., $10,000 P.D. Your policy pays $5,000 B.I., $2,500 P.D. c. Your policy pays $10,000 B.I., $10,000 P.D. Neighbors $5,000 B.I., $2,500 P. D. d. Your policy pays $10,000 B.I., $10,000 P.D. Neighbor's policy pays nothing.

"Primary owned, excess non-owned" See "Scope of Coverage" in Basic Data, 3.6 in the manual, around the last paragraph. The correct answer is: Neighbor's policy pays $10,000 B.I., $10,000 P.D. Your policy pays $5,000 B.I., $2,500 P.D. (B)

An insured has $60,000 property coverage on a building purchased 2 years ago for $80,000. The coverage is written with an 80% coinsurance clause. If the insured suffers a $40,000 loss, how much will she recover if the value of her building at the time of the loss is $100,000: Select one: a. $30,000 b. $32,000 c. $40,000 d. $24,000

$60,000 property coverage on an $80,000 building. But wait! that was 2 years ago. She has 60,000 coverage on a 100,000 building. DID = 60,000 100,000 * 0.8 = 80,000 (80% of 100,000 is the minimum amount she should carry) SHOULD = 80,000 The insured suffers a 40,000 loss. LOSS = 40,000 Now, right here, STOP. Is the amount she "did" insure actually less than the amount she "should" insure? We only apply the coinsurance penalty if you are underinsured. In this case, yes, she is underinsured. She should have insured 80 but she did insure 60. Alas. DID / SHOULD * LOSS = 60,000 / 80,000 * 40,000 reduce... 6 / 8 * 40,000... 3 / 4 * 40,00 = 30,000. The biggest hint that you're doing it right is that the math will get easy. The biggest hint that you're doing something wrong will be that the math gets hard. If I accidentally used the 2-year-old value of the building, I would think "should" equals 64,000. Then I would end up having to figure out 15/16ths of 40,000... that's much more painful that 3/4ths of 40,000. The correct answer is: $30,000 (A)

An individual who is furnished an auto but does not own an auto can secure PIP through which endorsement? Select one: a. Named Individuals - Broadened PIP b. Additional PIP c. Named Nonowner Coverage d. Extended PIP

(A)

Mack collides with tree. Leaves his truck at scene. Goes to call tow truck. Returns to find 40 CD's missing. Damage to truck $2,500. CD's lost $400. $100 deductible on collision and comprehensive. B.A.P. paid: Select one: a. $2,800 b. $2,900 c. $2,500 d. $2,400

5.2, Section III tells you tapes and records are excluded. The correct answer is: $2,400 (D)

Insured has Section III GKI endorsed liable or not. 9 vehicles damaged $100 each by a vandal in 1 occurrence. GKI pays: Select one: a. $250 b. $900 c. $400 d. $500

5.4 Section III: "Standard deductibles of $100 per car, up to $500 deductible per occurrence apply to [vandalism]" The correct answer is: $400 (C)

Kim buys a DP-1 for a mobile home she keeps in a field next to some cows. Hurricane season is on the way, and the insurance company is now uncomfortable about the risk. If they cancel the policy, how many days notice must they give Kim? Select one: a. 120 b. 45 c. 60 d. 10

All residential property in Florida (personally owned, commercial-residential, or otherwise) gets 120 days notice for cancellation. The company is also obligated to notify the insured of renewal premium 45 days in advance. The number of days notice for cancellation is reduced to 10 days if the insured does not pay their premium. The correct answer is: 120 (A)

If commercial building has $100,000 coverage with $500 deductible, and has $110,000 fire loss what would be paid if there were no other coverage issues involved? Select one: a. $90,900 b. $100,000 c. $99,500 d. 97,000

If the policy limit is 100,000 it pays up to 100,000, simple as that. The correct answer is: $100,000 (B)

3 vehicles on the same P.A.P. Car A - 100/300 unstacked UM Car B - 100/300 unstacked UM Car C - No UM If car C involved in accident with uninsured motorist, coverage amount: Select one: a. 100/300 b. 10/20 c. 200/600 d. -0-

Notice the insured elected unstacked UM. The correct answer is: -0- (D)

P.A.P. insured has 3 autos. 10/20 non-stacked UM on each. How much will UM pay per occurrence. a. $10,000 all B.I. b. $20,000 all B.I. c. $60,000 all B.I. d. $10,000 B.I., $20,000 P.D.

Pays 10,000 per person and 20,000 per accident. See "Limits" in 3.6 and see 3.8 in the manual. In Basic Data - Personal Auto see "Part C: Un - and Under Insured Motorist", and for a detailed discussion on split limits and UM see the Q&A at the end of the Basic Data section. The correct answer is: $20,000 all B.I. (B)

Susan has B.A.P. Liability 100/300/50. Truck carrying pesticides overturns, spilling contents into canal, polluting it, killing fish and plants. B.A.P. will: Select one: a. pay $350,000 b. pay nothing c. pay $100,000 d. pay $50,000

Pollution exclusion - many policies have it. This one is listed near the end of 5.2 Section II. The correct answer is: pay nothing (B)

Insured has B.A.P. and C.G.L. He has a load of sod on his 2 1/2 ton truck. The sod is being unloaded by a fork lift vehicle. The fork lift runs over a passerby. Which correctly states the way the mentioned policies will react: Select one: a. B.A.P. will be primary, C.G.L. excess b. None of the above c. C.G.L. and B.A.P. will pay on equal shares basis. d. C.G.L. pays - B.A.P. doesn't

Remember that a forklift is mobile equipment, not an auto. At least for purposes of the state exam, mobile equipment will always be covered by CGL and not BAP. The correct answer is: C.G.L. pays - B.A.P. doesn't (D)

Joe has B.A.P. Symbol 7 - Specifically Described Auto for physical damage. He replaces 1995 pickup with 1999 pickup. Automatic physical damage on new truck for which: Select one: a. 90 days b. until policy expiration c. 60 days d. 30 days

See 5.2, Section I - Covered Autos, in the column right next to Symbol 7. The correct answer is: 30 days (D)

Kim has B.A.P. At warehouse, unloading truck by handtruck, with help from warehouse employee. Bystander injured. How paid? Select one: a. covered under B.A.P. b. B.A.P. and CGL prorate c. covered only under CGL d. covered under W.C

See 5.2, Section II, under "Business Auto Section II does not apply to:", #5. Also take note of #4... it is a "give-back" exclusion. You DO have coverage for liability resulting from movement of property to the vehicle, and DURING its removal at final delivery. Then #5 restricts that saying "no mechanical devices" but then gives back "hand trucks." Watch for exclusionary language that actually grants coverage! The correct answer is: covered under B.A.P. (A)

An insured under Section II-Liability, Garage Coverage Form, has a claim where an accident caused $875 property damage resulting from work performed by the insured. The policy will pay: Select one: a. $875 b. $625 c. Nothing d. $775

See 5.4 in your study manual, especially the last paragraph under Section II - Liability. Also mentioned in the "Garage" part of Basic Data. $100 deductible applies in each accident resulting from property damage to an auto as a result of work performed by or on behalf of the insured. The correct answer is: $775 (D)

Garage coverage form - Section II - Liability is like a combination of which: Select one: a. CGL and P.A.P. b. B.A.P. and H.O. liability c. CGL and B.A.P. d. P.A.P. and H.O. liability

See 5.4, Section II in manual The correct answer is: CGL and B.A.P. (C)

GKI insured's employee returns to workplace after hours. Steals customers auto left for service. Wrecks it. GKI pays: Select one: a. Nothing at all b. Actual cost of replacement auto c. Replacement cost d. ACV

See 5.4, Section III, in the list of exclusions at the bottom. The correct answer is: Nothing at all (A)

GKI insured's mechanic runs into wall while test driving customers auto. GKI pays under: Select one: a. comprehensive b. none of them c. collision d. specified perils

See 5.4, Section III. Is the business legally liable as a result of the mechanic's collision? Yes. So it pays under collision. The correct answer is: collision (C)

Building covered under CP0010. Cause of Loss Special Form 10 30 applies. When building has been vacant 30 days, $10,000 vandalism damage to building occurs. Later, after building vacant 35 more days there is $5,000 glass damage done by vandals. Ignoring any deductibles, how paid? Select one: a. $15,000 b. $5,000 c. $8,500 d. $10,000

See 6.3 under vacancy conditions. What is the total number of vacancy days in this question? The correct answer is: $10,000 (D)

Under CP0010 fire department service charge limit is: Select one: a. $750 b. $2,500 c. $500 d. $1,000

See 6.3, Additional Coverages The correct answer is: $1,000 (D)

CP0010 covered building vacant 90 consecutive days. $10,000 damage caused by fire. How paid? Select one: a. $10,000 b. $6,666 c. $8,500 d. nothing paid

See 6.3, Conditions The correct answer is: $8,500 (C) Reduced by 15%

Value Reporting form. 1st 3 monthly reports made. No further reports. Loss in 6th month. How paid? Select one: a. Pay up to amount last reported b. Amount of loss c. 75% paid d. Nothing paid

See 6.4, Optional Coverages, "Value Reporting." The correct answer is: Pay up to amount last reported (A)

Under Value Reporting Form. The coverage limit is known as: Select one: a. Provisional amount b. Capital sum c. Principal sum d. Face Amount

See 6.4, Optional Coverages, "Value Reporting." The correct answer is: Provisional amount (A)

Under Business Income Form the time from day of damage to day business should be repaired, replaced, restored is known as: Select one: a. Subrogation b. Period of restoration c. Extended business income d. Operations

See 6.5 The correct answer is: Period of restoration (B)

Under Business Income Form Monthly Limit of Indemnity option, the fractions of coverage limit that may be selected by insured include all except. Select one: a. 1/4 b. 1/6 c. 1/3 d. 1/2

See 6.5, Coverage Options The correct answer is: 1/2 (D)

Under Business Income Form with extra expense, the cost of avoiding the suspension of business is paid: Select one: a. Only if reduction of business income loss results b. Only if loss is due to perils of fire, wind or hail. c. Only if significant and measurable reduction of business income loss results d. Regardless of whether reduction of business income loss results

See 6.6 The correct answer is: Regardless of whether reduction of business income loss results (D)

10 year lease. 5 years left. Rent is $2,000 per month at present location, $5,000 per month at any other suitable location. Leasehold interest coverage needed is: Select one: a. $300,000 b. $180,000 c. $360,000 d. $3,000

See 6.7 in manual. Here's how to get the answer: Difference between old lease and new lease cost is 3,000 (5k - 2k). This is the increase in cost to the lessee if they lose the lease. There are 12 months in a year and 5 years left on the old lease, so multiply the increased cost by that: 3,000 * 12 months * 5 years = 180,000 The correct answer is: $180,000 (B)

Insured has Broad Form Products endorsement added to his Garage Coverage, Section II Liability. If there is a loss involving $500 damage to the insured's own product, the amount of recovery from insurer will be: Select one: a. Nothing b. $400 c. $500 d. $250

See study manual section 5.4 "Garage Insurance." At the end of that section the endorsements are listed. In the description of "Broad Form Products" endorsement, notice there is a $250 deductible for damage to "your product" or "your work." The correct answer is: $250 (D)

Bob has no insurance; as a potential customer he test drives one of ABC dealership's cars. Bob has at-fault accident. If ABC has $1,000,000 coverage Garage Coverage Form, Section II Liability, Bob has: Select one: a. $1,000,000 b. 10/20/10 c. $500,000 d. no coverage

See unit 5.4, Section II (around the 3rd to last paragraph) The correct answer is: 10/20/10 (B)

Theft of the air conditioning unit on a DP-3 would be: Select one: a. Covered under Coverage A, Building b. Covered under Coverage C, Contents c. Excluded unless Broad Theft endorsed d. Limited to $2,500

Something attached to the building, such as an air conditioning unit, is part of the building and covered under Coverage A. The DP-3 building coverage is special form, which means that any cause of direct damage is covered unless it is specifically excluded. There is no exclusion for theft of part of the building. The correct answer is: Covered under Coverage A, Building (A)

What is the coverage for trailers under PAP Part D - Damage to Your Auto? Select one: a. No coverage b. $500 all trailers c. $1,000 non-owned trailer d. $1,500 non-owned trailers

The correct answer is: $1,500 non-owned trailers (C)

Limit on Personal Property automatically covered at new location under CP0010 is? Select one: a. $200,000 b. $150,000 c. $100,000 d. $50,000

The correct answer is: $100,000 (C)

Wife buys $100,000 policy on building. Husband buys $200,000 policy on same building. $75,000 loss - how paid? Select one: a. $100,000 policy pays $25,000 - $200,000 policy pays $50,000 b. $100,000 policy was first. It is primary - $75,000 paid c. Each policy pays $37,500 d. Over insured - No coverage

The correct answer is: $100,000 policy pays $25,000 - $200,000 policy pays $50,000 (A)

In Mechanical Breakdown Insurance, the Rental Reimbursement provision provides: Select one: a. $15 a day/$75 max b. $10 a day/$75 max c. $15 a day/$450 max d. $10 a day/$300 max

The correct answer is: $15 a day/$75 max (A)

Joan has $5,000 Med Pay under P.A.P. Injured in auto accident. Reports $2,000 injury to carrier 2 years later. Ignoring P.I.P., how paid? Select one: a. $400 b. $2,000 - 15% c. $1,000 d. $2,000

The correct answer is: $2,000 (D)

Sally Smith has a covered loss under a Building and Personal Property Coverage form. The cost to replace the damaged property is $2,200 and actual cash value is $1,600. The loss will be paid: ignoring deductibles. Select one: a. $2,200 without any condition or option. b. $2,200 only if the replacement option is purchased. c. $2,200 if Sally is in compliance with the Coinsurance Condition d. $1,600

The correct answer is: $2,200 if Sally is in compliance with the Coinsurance Condition (C)

Horace has P.A.P. with $250 deductible collision, -0- deductible other than collision. He collides with cow. Damage to auto is $2,500. P.A.P. pays: Select one: a. $2,500 b. $2,250 c. $400 d. -0-

The correct answer is: $2,500 (A) Right - birds and animals are Other Than Collision so there is no deductible

Under CP0010 coverage for valuable papers and records is in amount of: Select one: a. $1,000 b. $1,500 c. $2,500 d. $5,000

The correct answer is: $2,500 (C)

Broad Theft and Limited Theft both cover which: Select one: a. $2,500 for firearms b. owner occupied dwellings c. All of the above d. Non-Owner occupied dwellings

The correct answer is: $2,500 for firearms (A)

Geoff's car lot has Garage Insurance With Section IV-Physical Damage limit of $100,000. If Geoff has a $33,000 covered loss, and his total values on hand at the time of the loss were $150,000, how much would be recovered? Select one: a. -0- b. $33,000 c. $11,000 d. $22,000

The correct answer is: $22,000 (D)

Sally and her friend Glenda are injured in an automobile accident in Sally's car. Sally was at fault. Sally has a Personal Auto Policy with medical payments of $2,000 per person. If Sally has $1,400 in injuries and Glenda has $2,200 in injuries, how much will the PAP pay? (Ignore PIP). Select one: a. -0- No coverage, Sally was at fault. b. $3,600 c. $3,400 d. $1,400

The correct answer is: $3,400 (C)

Ace Lawn Mower Sales sends one of its floor model riding mowers to Acme Lawn Mower Repair. While at Acme a cause of loss covered by Ace's Building and Personal Property Coverage form causes $4,100 damage to the mower. Ace's policy will provide coverage in the amount of: (ignore deductible). Select one: a. $1,000 b. $4,100 c. -0- d. $2,500

The correct answer is: $4,100 (B)

In the Special Cause of Loss Form, the Additional Coverage Extension for transit coverage is: Select one: a. $500 b. $5,000 c. $2,500 d. $1,000

The correct answer is: $5,000 (B)

Sam has a Business Auto Policy with Section IV- Physical Damage written with a $250 deductible on Comprehensive and a $500 deductible on Collision. Sam runs into a tree limb destroying his windshield. If the cost to replace the windshield is $670, his policy will pay: Select one: a. -0- b. $670 c. $170 d. $420

The correct answer is: $670 (B)

Value of Property $100,000; 80% coinsurance applies. Amount carried is $60,000. There is a $10,000 loss. Insured will recover: Remember: ( Did / Should ) * Loss = Recovery Select one: a. $8,500 b. $6,666 c. $7,500 d. $10,000

The correct answer is: $7,500 (C)

Sue buys a DP-3 for her rental dwelling. 7 years later, she forgets to pay the premium. How many days notice must the insurance company give her to cancel the policy? Select one: a. 45 b. 10 c. 120 d. 30

The correct answer is: 10 (B)

A Business Auto Policy extends automatic liability coverage to trailers with a maximum load capacity of: Select one: a. 2,000 lbs b. 500 lbs. c. 20,000 lbs d. No automatic coverage

The correct answer is: 2,000 lbs (A)

The suspension provision for certain perils under Building and Personal Property Coverage Form applies after: Select one: a. 60 days vacancy b. 30 days vacancy c. 90 days vacancy d. 120 days vacancy

The correct answer is: 60 days vacancy (A)

What are the ways that blanket coverage for Physical Damage on dealer's risks may be written? A. Reporting B. Schedule C. Non-reporting Select one: a. A, B b. B, C c. B only d. A, C

The correct answer is: A, C (D)

Insured under Flood Policy has cottage at sea coast. Lives there 30% of the time. Losses would be paid under: Select one: a. ACV b. Replacement cost c. Valued policy d. 80% coinsurance

The correct answer is: ACV (A)

Which coverage listed below is found in a DP-3, and not in a DP-1? Select one: a. Additional Living Expenses b. Personal Property c. Fair Rental Value d. Other Structures

The correct answer is: Additional Living Expenses (A)

If the Condominium Association Coverage form and the Condominium Unit-Owners Coverage form apply to the same loss, the policies pay as follows: Select one: a. Association primary/Unit-owners excess b. Unit-Owners form only c. Unit-Owners primary/Association excess d. Association form only

The correct answer is: Association primary/Unit-owners excess (A)

If financial responsibility requirements not met at the time of an accident, all of the following conditions must be met to avoid penalties EXCEPT: Select one: a. Attend a 40 hour safe driving program b. Satisfy all legally valid claims up to 10/20/10 c. Certify compliance with financial responsibility using an SR-22 d. Maintain proof of Financial Responsibility or 3 years

The correct answer is: Attend a 40 hour safe driving program (A)

What Business Income coverage provides the insured with protection for loss of income due to a covered loss at a location other than the insureds upon which the insured relies for materials or services? Select one: a. Extra Expense Coverage Form b. Business Income From Dependent Properties Form. c. Legal Liability Coverage Form d. Off Premises Power Failure

The correct answer is: Business Income From Dependent Properties Form. (B)

By law, which peril must all property insurers offer? Select one: a. Hail b. Wind c. Catastrophic Ground Cover Collapse (sinkhole) d. Collapse

The correct answer is: Catastrophic Ground Cover Collapse (sinkhole) (C)

How does the Value Reporting Form treat losses where no report has been made and a report is past due? Select one: a. Company pays 90% of what would have been paid if report made. b. Company pays 85% of loss. c. There is no coverage d. Company pays 75% of what would have been paid if report made.

The correct answer is: Company pays 75% of what would have been paid if report made. (D)

All of the following are "additional coverages" in the Building and Personal Property Coverage Form "EXCEPT" Select one: a. Cost of a watchperson b. $1,000 Fire Department Service charge c. 30 days coverage at new location afterremoval d. Removal of debris

The correct answer is: Cost of a watchperson (A)

A Broad Form Products Endorsement to a Garage Insurance Policy provides: Select one: a. Coverage for the insured's product being damaged by someone else's negligence. b. Coverage if the insured's product is dam aged by the insured's negligence. c. Coverage if the customer's product is damaged by the insured's negligence. d. None of these choices.

The correct answer is: Coverage if the insured's product is damaged by the insured's negligence. (B)

Employer asks secretary to run errand in her own car. While on errand she runs over the police chief. Which of the following correctly describes the way employees P.A.P. applies? Select one: a. Covers employee and employer for his contingent liability b. Covers employee only c. No coverage under P.A.P. for business use d. Employees policy is excess to any coverage employer may have

The correct answer is: Covers employee and employer for his contingent liability (A)

Florida Financial Responsibility Law regulated by: Select one: a. Department of State b. Department of HRS c. Department of Highway Safety d. Department of Insurance

The correct answer is: Department of Highway Safety (C)

The ways that the protection of Garagekeepers Insurance may be written are all EXCEPT: Select one: a. Legal liability b. Direct (liable or not) excess over "customer's" coverage c. Direct (liable or not) primary coverage d. Direct (liable or not) prorating

The correct answer is: Direct (liable or not) prorating (D)

If a community has not been approved for flood coverage, but has applied for admittance, they come under: Select one: a. Special program b. McCarren Furguson Act c. Emergency program d. Regular program

The correct answer is: Emergency program (C)

Under Farm Program Coverage G, may cover all except: Select one: a. Barn b. Fence c. Silo d. Farmhouse

The correct answer is: Farmhouse (D)

Which would not bring one under Florida Financial Responsibility Law? Select one: a. Fender bender where there were no autos towed from scene b. Driver convicted of transporting contraband in auto. c. No accident but driver was legally above alcohol limit when tested. d. 6 car pile-up where one person had B.I.

The correct answer is: Fender bender where there were no autos towed from scene (A)

Under Farm Program Coverage E may cover all except: Select one: a. Growing crops b. Cattle c. Machinery d. Poultry

The correct answer is: Growing crops (A)

Eligible building under flood coverage must have all except: Select one: a. Walls and roof b. 50% above ground c. Be permanent site d. Have approved storm doors and windows

The correct answer is: Have approved storm doors and windows (D)

The policy provision that gives the insured benefit for any broadened coverage in a new form issued within 45 days of inception of the current policy at no premium increase is called: Select one: a. Coverage extension b. Subrogation c. Demurrage d. Liberalization

The correct answer is: Liberalization (D)

A Dwelling Policy Basic Form can be characterized as: Select one: a. Limited named perils/ACV b. Broad named perils/ACV c. Limited named perils/Replacement Cost d. Broad named perils/Replacement Cost

The correct answer is: Limited named perils/ACV (A)

The Business Income Coverage form with Extra Expense will pay All of the following items if the insured has a covered loss EXCEPT: Select one: a. Loss of profits b. Continuing expenses c. Loss of goodwill d. Cost of staying in business even if no savings result.

The correct answer is: Loss of goodwill (C)

The provision in the Builders Risk Coverage Form that penalizes the insured for underinsurance is called: Select one: a. Full reporting b. Need for adequate insurance clause c. Coinsurance d. Agreed value

The correct answer is: Need for adequate insurance clause (B)

John is a 15-year-old. He lives with his parents. Parents have P.I.P. covering auto. John is injured in motorcycle accident. P.I.P. will: Select one: a. John's P.I.P. primary, parents excess b. Covered under parents P.I.P. as resident of their household c. Not cover; motorcycles not under P.I.P. d. John covered under his own P.I.P.

The correct answer is: Not cover; motorcycles not under P.I.P. (C)

Under the Building and Personal Property Coverage Form, tenants improvements and betterments not replaced after loss are valued based on: Select one: a. Replacement Cost b. Reproduction Cost c. Original cost d. ACV

The correct answer is: Original cost (C)

John takes a test drive in a vehicle that belongs to Don's New Cars, Inc. John has a PAP with 50/100/25 limits and Don's Garage Liability limit is $1,000,000. If John has an at fault accident, his liability protection will be: Select one: a. Garage primary/PAP excess b. Garage 10/20/10/PAP excess c. Garage only d. PAP only

The correct answer is: PAP only (D)

What endorsement provides specific increased property limits for a period of time specified on the endorsement? Select one: a. Peak season b. Blanket coverage c. Schedule coverage d. Value reporting form

The correct answer is: Peak season (A)

P.A.P. covers which: Select one: a. Private passenger autos and vans or pickups with gross vehicle weight under 15,000 pounds. b. Private passenger autos and vans or pickups with gross vehicle weight under 20,000 pounds. c. Private passenger autos and vans or pickups which have gross vehicle weight under 10,000 pounds d. Any motor vehicle owned by the insured

The correct answer is: Private passenger autos and vans or pickups which have gross vehicle weight under 10,000 pounds (C)

Under Flood Program the loss settlement that usually applies to one's principle residence is: Select one: a. Replacement Cost b. ACV c. Valued policy d. 80% coinsurance

The correct answer is: Replacement Cost (A)

To what extent does Part D - Damage to Your Auto, cover non-owned autos? Select one: a. Same as broadest of your covered auto's on excess basis over that on non-owned. b. Same as coverage on owned auto if insured is not using it c. Same as broadest coverage on "your covered auto" on primary bisis. d. No coverage, Covered under Part A

The correct answer is: Same as broadest of your covered auto's on excess basis over that on non-owned. (A)

All of the following would be covered under an insured's P.A.P. except: Select one: a. Neighbor who borrows car b. Live-in brother-in-law c. Insured's teen age son d. Thief

The correct answer is: Thief (D)

What is the appropriate order for which the following policies would pay, if all applied to a single injury? Select one: a. WC, MP, PIP b. MP, PIP, WC c. PIP, WC, MP d. WC, PIP, MP

The correct answer is: WC, PIP, MP (D)

Most exclusions to P.A.P. Part D pertain to: Select one: a. missiles and falling objects b. equipment c. floods d. birds & animals

The correct answer is: equipment (B)

PAP Part D - Damage To Your Auto exclusions apply primarily to: Select one: a. loss of use b. equipment c. persons d. none of these choices

The correct answer is: equipment (B)

P.A.P. Part D does not exclude: Select one: a. special equipment installed in van b. factory installed radio c. disc player plugged into lighter socket d. tapes

The correct answer is: factory installed radio (B)

The dwelling form of Flood Coverage covers detached garages: Select one: a. for 10% of the dwelling amount within the dwelling limit b. for 10% of the dwelling amount as additional insurance c. detached garages are not eligible d. under a separate policy

The correct answer is: for 10% of the dwelling amount within the dwelling limit (A)

Under the Business Auto Policy, transportation expense reimbursement for vehicles insured for physical damage is: Select one: a. not included in the policy b. included for private passenger autos c. included only for auto designated by a symbol d. included for all covered autos

The correct answer is: included for private passenger autos (B)

In the Personal Auto Policy, the basic dollar limit on Part D - Damage to Your Auto is: Select one: a. $5,000 b. $10,000 c. no dollar limit (ACV.) d. $25,000

The correct answer is: no dollar limit (ACV.) (C)

For contents to be covered by a Flood Policy the requirements are all EXCEPT: Select one: a. building in eligible community b. not be in the basement c. be tied down if building open sided d. be in an eligible building

The correct answer is: not be in the basement (B)

Under the mortgage holder's condition all of the following are rights granted to the lender except: Select one: a. submit proof of loss if insured does not b. receive rights of insured after company pays his claim c. pay premiums if insured does not d. remain covered if acts of insured suspend his coverage

The correct answer is: receive rights of insured after company pays his claim (B)

All may be written under a single Flood Dwelling Policy except: Select one: a. shed b. dwelling c. contents d. detached garage

The correct answer is: shed (A)

Flood Coverage applies on an RCV basis if: Select one: a. the insured resides in the residence at least 50% of the year and carries insurance equal to Replacement Cost b. the insured resides in the residence most of the time c. the Replacement Cost option is purchased d. the insured resides in the residence at least 80% of the year and carries insurance greater than or equal to 80% of Replacement Cost

The correct answer is: the insured resides in the residence at least 80% of the year and carries insurance greater than or equal to 80% of Replacement Cost (D)

All of the following vehicles are eligible for coverage under a Personal Auto Policy EXCEPT: Select one: a. pickup not used in business b. owned by the insured c. 4 wheel drive private passenger type sports-utility vehicle d. under lease for 4 months

The correct answer is: under lease for 4 months (D)

B.A.P. typically written for all except: Select one: a. pickup b. truck crane c. semi trailer d. panel van

The key phrase is "typically written." Everything except the the truck crane is at home on a Business Auto Policy. The truck crane may or may not be "mobile equipment," depending on whether it is designed to be licensed for road use. See the last sentence under Section I , Unit 5.2 in the manual. You may see this question on the state exam. The correct answer is: truck crane (B) Yes. Though the name of the vehicle may be ambiguous, the state exam will categorize it as "mobile equipment" rather than a road vehicle.

Insured has a Basic Form DP-1 with no EC coverage (DP-1 Fire). A helicopter flying on a windy day crashes into the dwelling, causing much damage. Which statement best describes how the DP-1 will respond? Select one: a. DP-1 will pay all damages. Wind is the proximate cause of the loss, and is a covered peril on the policy. b. DP-1 will pay all damages. Damage by aircraft is one of the basic perils included in the policy. c. DP-1 will pay nothing. Wind is the proximate cause of the loss, and coverage for wind must be purchased by endorsement. d. DP-1 will pay nothing. Damage by aircraft is only covered if 'EC' perils are purchased.

The proximate cause is 'aircraft.' Without EC perils, the DP-1 will only cover fire, lightning, internal explosion, and sinkhole. Adding 'EC' gives it coverage for windstorm, aircraft, and others (WC SHAVER). Reference "perils insured against" in section 4.7 of the manual. The correct answer is: DP-1 will pay nothing. Damage by aircraft is only covered if 'EC' perils are purchased. (D)

An individual injured in an automobile accident has PIP with a $1,000 deductible. If the individual is injured by an at-fault driver and suffers $8,000 in medical expenses, how much could they seek to recover in a tort claim? Select one: a. $2,600 b. $8,000 c. -0- d. $2,400

The questions is how much they can recover in tort, not how much the insurance company pays. In tort, assuming no threshold was pierced, you can recover economic losses. The total loss is 8,000. After deductible of 1,000, the insurance company pays 80% of 7,000. The policyholder can recover the rest (deductible and the other 20% of 7k) in a tort suit for economic losses. The correct answer is: $2,400 (D)

Joe injured in auto accident by Andy. Andy at fault. Joe, who has no permanent injuries, suffers $30,000 in medical costs. Joe's P.I.P. expired last week. If Andy has 100/300/50 liability limits, how much will Andy's policy pay? Select one: a. -0- b. $30,000 c. $10,000 d. $20,000

The reason his policy only owes 20,000 is because Joe had a legal responsibility to buy PIP, which would have covered 10,000 of his injury (and would have been primary insurance). Since Joe failed to meet that responsibility, he's stuck paying it out of pocket and Andy's insurance has no obligation to pay it. The correct answer is: $20,000 (D)

Ms. Rhinehart has a Personal Auto Policy with liability limits of $100,000. If she has an accident and is found to be negligent, how much would her policy pay if there was a $120,000 judgement and $32,000 in defense costs? Select one: a. $100,000 b. $ 82,000 c. $132,000 d. $152,000

There is no limit for defense on the PAP. The insurance company pays up to the policy limit, plus defense costs. The correct answer is: $132,000 (C)

Under Farm Coverage Form the special internal limit for Animal Collision is: Select one: a. $500 b. $400 c. $250 d. $1,000

This detail is only in the Basic Data. See the section on Farm Policies. The correct answer is: $400 (B)

Joe borrows Carl's mini van to go on vacation. Joe has P.A.P. with Collision and OTC) Carl has no physical damage on van. To provide collision on Carl's van Joe needs to add which: Select one: a. named non owner end. b. nothing needs to be added c. extended non-owned end d. Drive other Cars end.

This question is about "Primary owned, excess non-owned." The Primary (Carl) does not have PD coverage. So the primary coverage is "nothing." When Joe borrows the van, Joe's coverage becomes excess (coverage for non-owned vehicles s excess). It's excess over "nothing" since Carl as no PD coverage. But the fact remains that Joe's policy will pay for PD of Carl's van, without Joe needing to do anything. The correct answer is: nothing needs to be added (B)

Under Garage Coverage Form Physical Damage exclusions that apply to dealer's blanket coverage are all EXCEPT: Select one: a. Expected profits b. Collision damage to auto driven more than 40 road miles from insured location. c. Loss due to trick or scheme. d. Loss at new, undeclared location after 45 days

This question is double negative - all are exclusions except. In other words, which one *is* covered by PD under Garage Coverage. The answer is "Collision damage to auto driven more than 40 road miles from insured location" is covered under Garage Coverage. If the damage happened when the car was driven over 50 miles, then it would not be covered. The correct answer is: Collision damage to auto driven more than 40 road miles from insured location. (B)

John has B.A.P. Liability symbol 1 - any auto; physical damage symbol 2 - Owned autos only. If he has at-fault accident which will be covered: a. other parties' wrecked car b. contents of other parties' car c. John's wrecked car d. contents of John's car Select one: a. a and c b. a, b and c c. b, c and d d. c and d

This question is really testing whether you understand liability. If John has liability coverage for his car, it doesn't matter which symbol he's insured under - it could be symbol 7 (specifically described autos) and the policy will still pay claims for damage John does to others. The symbols only determine whether or not he has liability coverage while driving a given vehicle. With Symbol 1, he has liability coverage while driving "any" auto. The correct answer is: a, b and c (B)

An insured under Garage Coverage Form, Section III-Garagekeepers has a customer's auto hit by lightning. Damage is $15,750. Insured's policy shows $500 deductible collision and no endorsement. The policy will pay: Select one: a. $15,650 b. $15,750 c. $15,250 d. Nothing

Without an endorsement, garagekeepers legal liability (GKLL) will only pay for the policyholder's liability - which means they must be negligent. However, lightning is an "act of God" which means no one is negligent. Since there is no liability, the policy doesn't pay. Study manual 5.4, page 90 - see paragraph 3 under "Section III - Garagekeepers" The correct answer is: Nothing (D)

Debbie's Garage has Garage Insurance with $500,000 in liability coverage. Todd, one of Debbie's mechanics repairs the brakes on a customer's car. The brakes fail as a result of Todd's negligence & the following damages result: Repair brakes ... $500 Customer's auto ... $4,700 Auto struck customer ... $6,400 Passenger in other auto ... $9,000 How much will Debbie's Garage Policy Pay? Select one: a. $15,400 b. $4,700 c. $20,100 d. $20,000

You need to know two things to answer this question. 1: Without an endorsement, the insurance will not pay for a new brake job. The reason is that it doesn't pay for "damage to insured's product or his work that has been performed." So we don't cover the $500 brake job. 2: We do cover the other damage, but there is a $100 deductible on the policy by default. See section 5.3 in the manual (toward the end of that section) and/or the Garage part of Basic Data. The correct answer is: $20,000 (D)