General Insurance In Class Quiz

What will NOT be covered under property damage? A. The neighbor's SUV B. Your fence C. A telephone pole D. A fence in the neighborhood

B

When a claim is disputed by a policyholder, and decided by a neutral 3rd party this is A. Liberalization B. Arbitration C. Subrogation D. Appraisal

B

24) When buying an auto policy which coverage is required? A. Bodily Injury B. Property Damage C. Medical Payments D. Liability

D

A change of modification to the policy: A. Declarations to the policy B. Insuring agreement C. Exclusions D. Endorsements

D

How many total CE credits are required by the TDI? A. 24 hours of CE every 2 years B. 2 hours of Ethics credit C. 36 hours every 3 year D. 12 hours of CE every year

A

If J has liability limits of 100/300/50, how much coverage does J have for property damage coverage? A. 50,000 B. 100,000 C. 300,000 D. 350,000

A

Truthful statements and paying premium best describes: A. Consideration B. Adhesion C. Unilateral D. Aleatory

A

Under insured Motorists Coverage provides protection to an insured after an accident in which of the following situations? A. The other driver has insufficient insurance and is negligent B. The other driver has no insurance but is not negligent C. The other driver has no insurance and is negligent D. The insured driver has insufficient limits and is negligent

A

Valid, cancellation and non-renewal notices issued under motor vehicle liability insurance policies must provide at least ______ days advance notice if the policy is being cancelled or non-renewed for nonpayment of premium. A. 10 B. 15 C. 30 D. 45

A

Where would D find her coverage limits while she is reviewing her policy? A. Declarations B. Exclusions C. Conditions D. Insuring agreement

A

Which is NOT negligence? A. An act of nature B. A breach of duty C. A careless act D. An act where a breach of duty occurs

A

Which of the following can be used to rate a policy? A. Sex B. Religion C. Race D. Disability

A

Which of the following is NOT covered under bodily injury? A. Slander B. Medical bills C. Death D. Pain and suffering

A

Which of the following is required under Duties After a Loss of the Personal Auto Policy? A. Allow an inspection and appraisal of the damage before it is repaired B. Give notice of the accident to the insurer within 5 days C. Immediately initiate repairs to the vehicle to protect it from further damage D. If the vehicle was stolen, contact the insurer for permission to report the theft to the police

A

Which part of the legal contract is initiated through the application being submitted to the insurer? A. Offer B. Consideration C. Conditions D. Legal purpose

A

Misrepresentation

A lie or false statement

A fire broke out in a shoe store. The fireman had to break windows the help put out the fire. The next day, the owner sees shoes damaged by the broken glass, puddles on the floor from the water and the walls are damaged by the smoke. This is a/an example of: A. Excluded loss B. Direct loss C. Indirect loss D. Physical loss

B

Actual cash value is best defined as: A. A value you receive with an appraisal B. Today's current price minus depreciation C. The cost to replace and old item with a new item D. Market value

B

All of the following are resident producer requirements EXCEPT: A. Be a resident in the state of Texas B. Be over 21 C. Be honest and trustworthy D. Take and pass the state exam

B

C had a Personal Auto Coverage Form with liability limits of 100/300/50. In an accident for which C was liable, there were BI claims in the amounts of $80,000; $105,000; $115,000; and PD claims of $20,000 and $35,000. How much will his policy pay? A. $300,000 BI and $50,000 PD B. $280,000 BI and $50,000 PD C. $280,000 BI and $50,000 PD, less the insurer claim expenses D. $300,000 BI and $50,000 PD, less the insurer claim expenses

B

Collision on an auto policy covers: A. Your car when you hit an animal B. Hit and run C. Damage to your car when sugar is put in your gas tank by vandals D. Your windshield repair when a truck drives by and rocks break your windshield while your car is parked and you aren't in the car

B

D brings his car to the mechanic. While k the mechanic is test driving the vehicle he hits another vehicle with D's car. D finds out his policy does not provide coverage because his auto was in K's care, custody or control. What is the name of this clause? A. Assignment clause B. No benefit to Bailee clause C. Liberalization clause D. Subrogation clause

B

Encourging someone to cancel their current policy and purchase your policy, while your policy will be to their detriment is: A. Rebating B. Twisting C. Adverse selection D. Comingling

B

Of the following which would NOT be an example underwriting discrimination? A. Race B. Age C. Religion D. Country of origin

B

The insurance company's consideration can be found in which part of the insurance contract? A. Declarations B. Insuring agreement C. Conditions D. Exclusions

B

The insurer's capability to recover and sell or otherwise dispose of the insured property for which the insurer has paid a total loss is called: A. Subrogation B. Right of salvage C. Abandonment D. Indemnification

B

To maintain a license an agent needs to: A. Apply for a brokers license B. Complete a certain amount of continuing education C. Pay a reapplication fee once per year D. Be a non resident licensed agent in at least four states

B

W bought a homeowners policy for his older Victorian home and his agent explained to him if something happened to the stained glass windows he would only receive regular windows. Which loss valuation does this represent? A. Fair market value B. Functional replacement cost C. Replacement cost D. Actual cash value

B

What is the theft waiting period for transportation expense? A. 24 hours B. 48 hours C. 72 hours D. There isn't a waiting period for transportation expense

B

Which of the following describes risk? A. An increased chance of loss B. Being uncertain about a future outcome C. The cause of the loss D. A financial stake in property

B

Which of the following is NOT a common policy exclusion? A. Inherit vice B. Negligence C. Intentional loss D. Losses that another policy will cover

B

Which of the following is an example of a direct loss? A. Loss of income from your tenant after a tornado destroyed your home B. Tornado damage to your home C. Cost of using the laundromat to wash your clothes following the tornado D. The cost to rent an apartment while your house is being repaired following a tornado

B

Which term describes the unintentional decline, reduction in value or disappearance of an item? A. Peril B. Loss C. Hazard D. Risk

B

9) The Texas Department of Insurance examines anyone subject to TX insurance regulation a minimum of: A. Every 1 year B. Every 3 years C. Every 5 years D. Every 7 years

C

A false publication about another insurance company's financial status is called_____ A. False advertising B. Fraud C. Misrepresentation D. Unfair discrimination

C

Company XYZ received a certificate of authority. Which of the following is the reason why a certificate of authority is given? A. The company has not received any complaints from insureds B. The company is financially stable and has the ability to pay out on their claims C. The company is granted the right to do business in the state of Texas by the commissioner of insurance D. The company's agents has the authority to sell authorized insurers and unauthorized insuers

C

J's car has been vandalized. Which coverage would pay out for any repairs? A. Property Damage B. Collision C. Other than Collision D. Uninsured Motorist Property Damage

C

Making a false or malicious statement, which is intended to injure an insurer's reputation is an illegal practice known as: A. Coercion B. Misrepresentation C. Defamation D. Twisting

C

Material misrepresentation: A. A lie on an application for insurance B. Hiding information about a risk for insurance C. A lie that may impact the rate or cause the insurance company to reject the risk D. Information on an application that is true to the best of your knowledge

C

Replacement cost minus depreciation is the formula for which basis of recovery? A. Replacement cost B. Agreed value C. Actual cash value D. Functional replacement cost

C

The liberalization clause states: A. The premium will go up whenever coverage added to the policy B. The premium will go down whenever coverage added to the policy C. The premium will not increase/ decrease whenever coverage is added to the policy D. The premium can only change at renewal when coverage is added to the policy

C

When a Personal Auto Policy is being cancelled for reasons other than non payment after 60 days, how many days' notice is required by the insurance company to prevent estopple? A. 10 B. 15 C. 30 D. 45

C

Where in the policy would an insured be able to read more about the appraisal clause? A. Decelerations B. Insuring agreement C. Conditions D. Endorsement

C

Which of the following are associated with a 3rd party contract? A. The named insured and the insurance company B. The insurance company C. The insurance company, the named insured and the unknown 3rd party D. The named insured and the 3rd party

C

Which of the following is NOT true about medical payments under the Personal Auto Policy? A. Medical expenses of the insured and family members are included B. The coverage limit applies per person, per accident C. Coverage applies only for medical expenses incurred within one year of the accident D. Medical expenses of all persons occupying the insured auto are eligible

C

A homeowner doesn't realize the vent to the dryer is clogged. If this doesn't get cleaned out, this will increase the chance of a fire. This is an example of: A. Accident B. Peril C. Occurrence D. Hazard

D

A riot in the town square broke the windows and set the insured's house on fire. The proximate cause of the loss is the: A. Civil authority B. Fire C. Glass breakage D. Riot

D

Lightning hits a power line causing it to fall on a tree. The burning tree falls on your home making it uninhabitable. You have to buy new clothes and stay at the Residence Inn while the repairs are being made. Which of the following is the indirect loss? A. The burning tree B. Buying clothes and shoes C. The burning house D. Staying in the Residence Inn

D

Limits on an auto policy can be split limits or A. Aggregate limits B. Per person limits C. Per occurrence limits D. Combined single limits

D

Long term harmful exposure that was unexpected due to a peril describes: A. Accident B. Loss C. Risk D. Occurrence

D

Unequal transfer of value between the insurer and the names insured is know as: A. The insurance policy is a policy of consideration B. The insurance policy is a contract of adhesion C. The insurance policy is an indemnity contract D. The insurance policy is an aleatory contract

D

What are the two types of compensatory damages? A. Punitive and general B. Punitive and special C. Punitive and compensatory D. General and special

D

Which of the following is true regarding unearned premium? A. Pro rata is returned when the insured cancels B. A short rate is returned when the insurance company cancels C. A flat rate is returned when the insurance company cancels D. A short rate is returned when the insured cancels

D

Concealment

Failure to disclose or hiding the truth

Warranty

The absolute truth

Representation

To the best of my knowledge

Avoiding over payment of claims describes: A. Choosing a deductible B. Insurance C. The principle of indemnity D. Paying a premium

c

B wants insurance to replace her wood floors with a newer version if they were damaged due to a covered claim. B is requesting which loss valuation? A. Market Value B. ACV C. Replacement Cost D. Depreciated Cost

c

Personal injury pays for: A. Any 3rd party injury or doctor bill B. Any 1st party or 3rd party injury C. Injuries suffered by the named insured or family members who are insured by a personal lines policy D. 1st party offenses such as libel, slander, invasion of privacy and false arrest committed against a 3rd part

D

Selecting, classifying, pricing and insuring a risk is known as: A. An aleatory contract B. Underwriting a contract C. The law of large numbers D. A unilateral contract

D

The insurance commissioner is empowered to: A. Pass state laws relating to insurance B. Set rates for all insurance companies C. Write policy forms for mandatory insurance coverage D. Enforce state laws relating to insurance

D

What is NOT required to establish negligence? A. Proximate cause B. Duty to protect and breach of duty C. Damages D. Willful action

D

Which is true about The Fair Credit Reporting Act? A. Credit reports can never be used for underwriting B. The insurer must advise the applicant of the credit report at the time of the application C. The insurer must update inaccuracies D. The insurer does not have to advise the applicant of the credit report at the time of the application

D

Which of the following is NOT an eligible vehicle for coverage under the Personal Auto Policy? A. A Car that weighs 8,000 pounds B. An SUV C. Van D. A motorcycle

D

Which of the following would NOT be covered under Uninsured Motorists? A. An accident with someone who does not have auto liability insurance B. An accident with someone that does not meet financial responsibility guidelines and hits your car because they failed to stop for a stop sign C. An insured injured in an accident by a hit and run driver D. An accident when someone does not have enough coverage for the 1st party's injuries

D

The Texas Division of Insurance cannot: A. Regulate all companies doing business in Texas B. Issue rules and regulations C. Issue a certificate of authority to insurers D. Enforce insurance laws

A

To give anything of value to encourage someone to purchase insurance and the value is not listed in the insurance contract: A. Rebating B. Fiduciary C. Record retention D. Defamation

A

Which of the following reflects a parent or employer being held responsible for the actions of their children or employees? A. Vicarious liability B. Strict liability C. Assumption of risk D. Contributory fault

A

5) The Commissioner of Insurance cannot: A. Incarcerate a producer B. Inspect insurers C. Issue a certificate of authority to insurers D. Enforce insurance laws

A

A company owned by its shareholders is which type of company A. Stock company B. Mutual C. Direct insurer D. Surplus lines

A

If an agent is exaggerating the benefits of their insurance company to gain business it is called_____ A. False advertising B. Unfair comparision C. Defamation D. Coersion

A

In which part of the policy would the insured find the policy deductible? A. Declarations page B. Insuring agreement C. Conditions D. Exclusions

A

Medical Payments through an auto policy will pay for: A. Your passengers injuries in an auto accident B. The 3rd party in the other car that hits you C. A pedestrian you hit with your car accidently D. Your neighbor's injuries when he hits you with his car

A

A property is insured for $100,00. The policyholder has a total loss of $80,000. What principle would be violated if the insurance company paid the policyholder $100,000? A. Transfer risk B. Indemnity C. Insurance D. Deductibles

B

Surplus lines insurers sell A. Insurance for providers that are authorized B. Insurance for providers that are admitted C. Insurance for providers that are unauthorized D. Insurance for providers that are illegal in the state of Texas

C

What is the limit for defense costs when a liability court case occurs? A. The insurance company pays up to policy limits B. The insurance company pays above and beyond policy limits C. The policyholder pays out of pocket for defense costs D. The insurance company pays only for the attorney fees

B

My insurance company and I had a disagreement about coverage on a property loss. The court indicted that the policy was ambiguous as to coverage for the loss and ordered the insuring company to indemnify me. This was an example of: A. Contract of adhesion B. Unilateral contract C. Condition contract D. Utmost good faith

A

What is the law allowing the consideration between financial institutions and insurance companies as well as ensuring consumers private information is protected? A. Gramm-Leach-Bliley Act B. McCarran Ferguson Act C. Privacy protection act D. Fair credit reporting act

A

Which of the following would be considered a peril? A. Hail damage B. Wet leaves on a side walk C. Ice on the sidewalk D. The chance of loss

A

Which of the following would be covered by an auto policy? A. Using your car as a carpool with a co-work and their spouse B. Using your car for delivery C. Driving an ATV D. Using your car as a taxi on the weekends in your free time

A

Which statement is false regarding uninsured motorist coverage under a Personal Auto Policy? A. Coverage includes someone using the vehicle without permission B. A covered person means the named insured, family members and any other person occupying the covered auto C. Coverage does not apply to any vehicle being used to carry property or persons for a fee D. Coverage does not apply to a vehicle used primarily for use off public roads

A

A contract created with someone before the policy is issued A. Offer B. Binder C. Verbal agreement D. Certificate of insurance

B

Age 18 and of sound mind and body is considered to be which element of a contract? A. Consideration B. Competent parties C. Agreement D. Legal purpose

B

An increase in the chance of a loss due to laziness or carelessness: A. Moral hazard B. Morale hazard C. Physical hazard D. An exclusion

B

An insurer who's domicile is in in the US but outside of Texas is which type of insurer? A. Domestic B. Foreign C. Alien D. Standard territorial

B

H has limits of 30/60/25. What does the 60 represent? A. Bodily Injury - 60 per person B. Bodily Injury- 60 per occurence C. Property Damage- 60 per person D. Property Damage- 60 per occurence

B

Insurance is defined as: A. Avoid the risk B. Transfer of risk C. Speculative risk D. Retaining the risk

B

M wants to give her policy to the person who's buying her car. This is in violation of which clause? A. Condition B. Assignment C. Subrogation D. Liberalization

B

Which is the purpose of the Texas Automobile Insurance Plan A. Help a driver get insurance for their vehicle when the driver is unable to get insurance through a surplus lines insurer B. Help a driver get insurance for their vehicle when the driver is unable to get insurance through 2 voluntary auto insurers C. Help an insured get insurance for their home when they are unable to get insurance through a voluntary insurers D. Help a driver get insurance for their vehicle when insurance is too expensive for their vehicle

B

Which is true about coverage D? A. It covers both damage to the insured's auto and to another auto with which it collided B. Collision coverage is usually written with a deductible C. It covers damage to the vehicle the insured hit in an intersection D. It covers injuries to the driver the insured rear ended at a stop sign

B

Which of the following defines a tort? A. An unforeseen event from which damage results B. A wrongful act C. Liability assigned to one party for the conduct of another D. An award to an injured party

B

Which of the following is NOT an insured under a Personal Auto Policy? A. A spouse living in the same household B. A friend living in an apartment household C. The resident teenage son of the insured who drives the vehicle without a license D. A foreign exchange student living with the insured for the school year

B

Which of the following is NOT necessary to make a contract legal? A. Both parties must be competant B. Conditions C. Consideration D. Offer of acceptance

B

Which statement is false regarding Personal Injury Protection under a Personal Auto Policy? A. The limits of the coverage are $2,500 up to $10,000 per person B. When purchasing a personal auto policy, Personal Injury Protection must be included on the policy C. When purchasing a personal auto policy, Personal Injury Protection must be offered to the insured prior to initiating the policy D. When purchasing a personal auto policy, Personal Injury Protection includes a funeral expense with a maximum limit of $2500

B

Which of the following statements is true about the Texas Automobile Insurance Plan? A. An insurance agent designates the insurance company for a specific insured B. A number of insurance companies share the losses incurred by a bankrupt insurer C. The maximum term is 12 months D. The insured designates a specific insurance company to pay his claim

C

All of the following will NOT receive benefits from Terrorism Risk Act, EXCEPT: A. Health Insurance losses B. Auto policy losses C. Commercial losses D. Homeowners insurance

C

An insured making a response to a question to the best of their knowledge is a: A. Material fact B. Concealment C. Representation D. Material misrepresentation

C

The fair credit reporting act is obligated to all of the following except: A. Advise the applicant a credit report was obtained, but only if company placement was affected B. Provide information on where the credit report was obtained C. Responsible for correcting inaccuracies D. Not responsible for correcting inaccuracies, but must advise how the applicant can correct anything that may be inaccurate

C

The term describing an act exchanged for a promise obligation only one party in a contract is called: A. Indemnity B. Aleatory C. Unilateral D. Conditional

C

Which of the following is NOT a duty following a loss? A. Call the police when ever a theft occurs B. Allow the insurance company to inspect the damaged property C. Call the insurance company with-in two hours of the incident D. Submit proof of loss

C

Which of the following is NOT one of the legal elements of a contractor A. Must be of a legal nature B. Offer C. Every producer must be licensed D. Consideration

C

Which would NOT be covered through supplemental payments? A. Loss of earnings to testify in court B. The cost of appeal and attachment bonds C. The insured's medical bills D. Expenses incurred in investigating or settling a claim

C

Who will never be paid under a casualty contract? A. Your neighbor B. Your friend C. You D. A pedestrian that you hit with your car

C

Your insured sustained a large amount of damage to their living room from a candle that was accidentally knocked over by the cat and caught the drapes on fire. Would be considered a/an: A. Exposure B. Hazard C. Peril D. Risk

C

All of the following are true of supplementary payments under Part A of the Personal Auto Policy except: A. Pays for bail bonds. B. It pays a daily limit for lost earnings to testify and assist with your defense C. It will pay other reasonable expenses incurred at the insurer's request D. Payments are deducted from other limits of liability

D

B wants one policy to insure multiple properties at different locations. Which type of limit would B need? A. Aggregate limit B. Per person limit C. Specific limit D. Blanket limit

D

B wants rental reimbursement. What coverage must she have on her policy? A. Collision B. Other than Collison C. Property Damage D. Physical Damage

D

Of the following why was the Texas property and casualty insurance guaranty association created? A. To provide consumers auto insurance that are unable to get auto insurance in the voluntary market B. To provide consumers auto insurance that are unable to get home insurance in the voluntary market C. To provide better claims service for all companies D. To provide coverage for unpaid claims when an insurance company becomes insolvent

D

The part of the policy that specifically leaves out certain risks. A. The declarations B. The insuring agreement C. The conditions D. The exclusions

D