Guarantee Exam

If a contractor does damage on a neighbors property, who pays for the damage?

The Contractor

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10% of coverage C anywhere in the US and Canada

How many people must sustain death or serious physical injury before the War or Terrorism Exclusion in a Businessowners policy applies.

50

A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of

Coerion

Which of the following authorities determines whether a prospective producer will receive his or her producer's license?

Commissioner

If a fire erupts in the kitchen and spreads to the upstairs bedroom, resulting in the destruction of furniture, what type of loss has occurred?

Direct

Producers possess several different types of authority. Which type is found in the producers contracts?

Express

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

What kind of coverage does form DP-3 provide

Open peril

Which of the following is true regarding a producer's ability to bind coverage?

Producers are not authorized to bind coverage

The equipment breakdown coverage form values loss on a

Replacement cost basis

A person may request a hearing by the commissioner. What are the requirements for requesting a hearing?

The application must be in writing and within 90 days after the violation has occurred.

Which of the following best depicts the law of large numbers?

The larger the pool of risks under study, the more accurate the predictions will be

When surplus lines insurance goes into effect, the broker must execute an affidavit to the commissioner

with 30 days

A couple has been married for 45 years. For their anniversary, they decided to take a trip to Europe. During their trip, one of them losses a watch. Which floater under their homeowners policy would cover the loss?

Personal Effects

Which floater under a homeowner policy offers coverage on a worldwide basis and is written on an unscheduled basis?

Personal Property Floater

The business owners policy extension coverage form for personal property off-premises is limited to

$10,000

Which of the following is most likely INELIGIBLE for coverage under the businessowners policy?

A bank

With respect to the commercial package policy, an interline endorsement is one that

May apply to more than one line of insurance that is included in the package.

An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the three weeks required to repair the fire damage, the insured pays $900 in rent for a short-term apartment, and the renter is forced to find another accomodation. Disregarding any extra expense for meals, how much would an Ho-3 pay under Coverage D?

$1,050

Notice of an insure's intention not to renew a property policy must be give to the insured at least

30 days before the end of the policy period

An insured is the owner of a clothing boutique. She has a floor plan merchandise floater to cover the property that is financed until it is sold. At the time of closing a month later, she noticed that 3 very expensive dresses had been stolen. However, she did not file a report to her insurance company until recently. How much will her insurer pay?

90% of the limit written

What two policy components are part of every commercial package policy?

Common policy declarations and common policy conditions

On an annual basis, each surplus lines broker must file with the commissioner a verified statement of all surplus lines insurance transacted by him or her during the preceding calendar year, on or before

March 1

Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?

Occupation

What is the purpose of the Guaranty Association

To provide benefits to insureds whose insurers have become insolvent

An agaent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be slightly lower. The policy, however, would not offer either one of these things. What type of misrepresentation is being committed?

Twisting

Instead of examining a foreign insurer, what may the commission do instead?

Accept an examination prepared by the insurance department in the insurer's domicile state

Any insured believes that his insurer is not properly fulfilling its obligations regarding his policy. What section of the policy will give the insured more information about specific duties of the insurer?

Conditions

The Exact, direct, uninterrupted cause of a loss is

Proximate cause

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their application. Their answer is considered to be a

Representation

Which of the following statements is CORRECT regarding business income coverage under the businessowners policy?

The business income losses are for 12 consecutive months following the occurrence.