Guarantee Exam

Under employee theft coverage, when a covered employee is found to have participated in a dishonest act, the coverage for that employee will terminate when?

Immediately

In a DP-1, if the insured elects to apply Coverage B to a detached garage, how will that effect Coverage A?

It will reduce Coverage A by 10%. (does not reduce limit of liability)

Which of the following describes an insurer's responsibility for payment under a policy as stated in the common policy provisions?

Limits of liability

The insured fills a storage room is with combustible materials in front of the furnace. What type of hazard is this?

Morale

Which of the following losses meets the definition of flood and would be covered by a NFIP policy?: Windblown rain/sleet/snow, Landslides, Backup of sewers, or Mudflow and collapse?

Mudflow and collapse

What is the maximum time period the commissioner may revoke your agents license

No maximum time period

Which statement best describes agreement as it relates to insurance contracts

One party accepts the exact terms of the other party's offer.

Which of the following conditions is NOT required for becoming a nonresident producer in this state?

Passing the proper exams

Workers compensation rating is developed by applying a rating bureau job classification rate to which of the following

Payroll; workers comp applies a rating bureau classification rate to each $100 of payroll.

The CGL Coverage Part A - Bodily Injury and Property Damage provides coverage for which of the following: Premises, Hired autos, Employers, or Machinery?

Premises

Which of the following would not be covered under the directors and officers liability coverage: Reimbursement for fines and penalties, Wrongful acts while directors and officers are acting in an official capacity, or neglect and breach of duty?

Reimbursement for fines and penalties

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following: glass breakage, fire, riot, or vandalism?

Riot

An insurer's right to take possession of property after having paid for the loss is referred to as the right to

Salvage

What are the types of compensatory damages?

Special and general

When an insured's gardener was spraying weeds the wind blew the spray and destroyed the neighbors flower bed. The insured was found legally liable. What kind of liability is this an example of?

Vicarious

An individual's app was denied and he requested a hearing. How soon will it take place?

Within 30 days

An individual's application was denied and he requested a hearing, when will it take place?

Within 30 days.

medical payment under workers comp statutes are provided

Without limit

Which of the following would be considered a covered auto on your PAP: farm wagon being towed by your pickup, pickup being used for deliveries, farm tractor, or farm wagon being towed by your tractor?

Your farm wagon being towed by your pickup

Which of the following would be considered a covered auto on your personal auto policy?

Your farm wagon being towed by your pickup truck

Not a consideration when you travel to another state to work and get hurt

insurer's chartered location or domicile

All authorized property and casualty insurers must be members of all of these organizations except

the Texas department of insurance -- insurers are not members

An insurer may cancel a homeowners insurance policy that has been in effect for more than 60 days for any of the following reasons except

the insured submits a claim against the policy

If an individual willfully violated provisions of the Fair Credit Reporting Act, what is the max civil penalty?

$2,500

Licensees transacting surplus lines insurance must pay a recurring fee of what amount?

$50

The businessowners liability coverage form will cover medical expenses incurred and reported within what maximum time period after the accident?

1 year

How many days after an injury that results in a disability do income benefits begin to acrue

8 days

What is a bailee responsible for?

A bailee accepts another's property into his or her care and, for a price, will provide a specific service.

Which of the following would be eligible for Homeowners Coverage F - Medical Payments in the event of injury at the insured's premises

A full time maid; coverages do not apply to any insured or regular resident of the premises, except resident employees not covered by workers compensation.

In a personal auto policy (PAP) a covered auto includes all of the following except

A van used in the delivery business

Under a CGL, which is NOT considered mobile equipment

An auto used as a company car.

Disagree on the value of property

Appraisal

In order to receive transportation expenses under the personal auto policy following damage to an auto caused by collision, an insured must have

Collision coverage

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Concealment

An agent delivers a policy to an applicant who pays the initial premium but refuses to submit a statement of good health. Which of the following terms best describes what the applicant has violated

Consideration

The supplementary payments section of the CGL would cover

Court costs

Which of the following would NOT generally be included in the supplementary payments portion of a liability policy

Damage to property owned by the insurer

Which of the following is covered by auto other-than-collision (comprehensive) coverage?

Electric equipment required for normal operation of the car

Which homeowners form insures both buildings and personal property on an open peril basis

HO5

Which of the following could not qualify for a Certificate of Authority: Fraternal insurance co, Managing general agent, domestic insurance co, or foreign insurance co

Managing General Agent

When does an adjuster's license expire?

May 31st

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 has extended coverage on her dwelling that includes coverage for vandalism and malicious mischief. One evening she is sitting in her living room when she hears a crash and sound of glass breaking. She runs to the door and discovers a brick has been thrown into her glass door. To inform her insurer of a possible claim, she fills out a form detailing the events of the loss. What is this form?

Notice of claim form

Prior to paying a claimant under a professional liability policy, the insurer must do what?

Obtain the consent of the insured

An insured is injured while driving in his car. Which coverage will pay for the loss?

Part B - medical payments

In reference to insurable interest, which of the following is NOT an element of insurable risk

Personal

The defendant being released on a surety bail bond is the: Obligee, Insured, Principal, or Surety?

Principal

Which of the following is a method of establishing a premium on large commercial accounts

Retrospective rating

Which of the following types of property would be covered under Coverage C - Personal Property in a dwelling policy?: Rowboats, 2-passenger aircrafts, personal watercrafts, motor vehicles

Rowboats

Which would NOT be covered by an insured's uninsured motorist coverage: The insured causes a head -on collision with the UIM, the insured's son is struck by a hit-and-run driver, or the insured's car is hit by someone whose auto insurer is insolvent.

The insured causes a head-on collision with the car of an uninsured motorist

What is the purpose of purchasing an umbrella liability policy?

To provide excess coverage over the primary liability policy

True or false: In a liability coverage of a business auto policy, the company will pay any interest accruing between the time of judgement and payment.

True

Insured and insurer cannot agree

arbitration

Loss valuation is best described as the process of

determining the premium charged and amount of insurance required on a specific property

NOT an element of insurable interest

personal

The businessowners policy (BOP) extension coverage form for personal property off premises is limited to

$10,000

The businessowners policy (BOP) extension coverage form for personal-property off premises is limited to

$10,000

How much notice is required for a hearing regarding an unfair trade practices?

10 days

Which of these would be covered by the medical payments coverage in a personal auto policy: 1. A runaway shopping cart in a mall parking lot knocks an insured down and breaks his leg OR 2. An insured slams a hand in his car door and breaks it.

2. An insured slams a hand in his car door and breaks it

Under a Business Personal Property Limit - Seasonal Increase, if no percentage is specified in the declarations, seasonal fluctuations will automatically increase the limit for business personal property by what percentage?

25%, unless otherwise specified in the declarations of the policy.

An insured has an automobile with limits 100/300/50 and a deductible of $1000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded $125,000 for his injuries and $25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1200. The total payment made under the insured's policy is

$125,200 -- coverage for the other drivers injuries is limited to $100,000, damage to drivers car is $25000 covered in full, damage to insured car is covered minus the deductible (1000), thus total payment is $125,200

Using the pro rata method, if a property is covered by Company A for $20k and Company B for $40k, what would Company A pay on a $24k loss?: $20k, $12k, $8k, or $0

$8,000; each policy pays a percentage of the loss based on the percentage of coverage the policy provides

If a producer decides to renew his license online, within how many days of license expiration can this be done?

60 days

An insured is the owner of a clothing boutique with a Floor Plan Merchandise Floater to cover the property. She noticed 3 dresses were stolen about a month ago but didn't file a report until recently. How much will the insurer pay for the loss? (What %)

90% of the limit written, if the insured has not filed a report at the time of loss, the insurer will be liable for only 90% of the written limit.

With regard to homeowners Section II, which of the following does NOT meet the definition of an insured location

A plot of farmland

For there to be negligent liability, all of the following must exist EXCEPT

A reasonable expectation that the act may cause injury or damage.

For there to be negligent liability, all of the following must exist EXCEPT: A breach of the legal duty which results in injury, A legal duty to act/not to act, or A reasonable expectation that the act may cause injury or damage?

A reasonable expectation that the act may cause injury or damage.

A house insured with a homeowners policy has been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal?

An additional 5% of the policy limit may be paid for debris removal

Coverage E (personal liability) and/or coverage F (medical payments to others) would respond to a claim arising from all of the following situations except

An insured's 14 year old son throwing rocks at neighbors house and breaks windows --- INTENTIONAL

Under Cov B, a HO policy provides coverage for other structures on the residence. Which of the following is NOT true of this coverage? 1. A detached garage may be covered if rented. or 2. Any loss paid under Cov B reduces the Cov A limit of liability?

Any loss paid under Cov B reduces the Cov A limit of liability

In order to receive transportation expenses under the personal auto policy following damage to your auto or collision you must have

Collision coverage

Other than perils, the difference in the three DP forms is in the coverage provided. Which of the following options is covered by the DP-2 and DP-3 only: Cov D (Fair Rental Value), Cov E (Addtl Living Expense), or Cov B (Other Structures)?

Cov E - Addt'l Living Expenses

Which of the following statements does NOT describe endorsements

Endorsements may only add coverage to a current policy, not remove --- CAN delete coverage

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?

Equipment breakdown --- high pressure systems

All of the following are the functions of the MS State Rating Bureau EXCEPT

Establish adequate market for fire coverage in this state

True or False: Coverage E (personal liability) and/or Coverage F (medical payments) would respond to a claim arising from an insured's 14-year old son throwing rocks at the neighbors house.

False, intentional damage is not covered.

True or False: An HO policy would consider a strawberry patch owned by the insured as an insured property.

False; insured locations cannot be farmland or used for business purposes

True or false: In a liability coverage of a business auto policy, the company will reimburse the insured for all loss of earnings.

False; only a limited amount of lost earning per day will be paid

What federal act provided more favorable benefits for interstate railroad workers by allowing the injured worker to sue the employer for negligence?

Federal Employers Liability Act (FELA)

To have insurable interest, what risk must the policyowner face?

Financial loss

Which of the following liability coverages in a general liability policy is NOT subject to the aggregate limit

Fire legal liability

Under the common policy conditions, who is authorized to make changes to a commercial policy?

First named insured --- you do not need permission from all the insureds

Possible consequences of not carrying workers comp

Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage

Which HO form provides open peril coverage for dwelling and contents (Coverages A and C)?

Form 5

A homeowner has misplaces some of her insured personal property and has no idea what may have happened to it. Which HO form would cover this loss?

HO5 covers misplacement/losing as a theft loss

A corporation is insured under a CGL policy and is named in a lawsuit to recover expenses for BI and PD from a claim. The insurance co. is obligated to provide coverage for all of the following EXCEPT

Spouses of officers/stockholders

Coverage B - Personal and Advertising Injury Liability responds to claims arising from

Suits alleging infringement of a copyright.

Which of the following statements is correct regarding business income coverage under the businessowners policy (BOP)?

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

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The glass is paid for by

The golfer's homeowners liability covg

Which of the following statements is true regarding personal injury protection (PIP) coverage in auto liability policies issued in this state

The insured may reject this coverage in writing

Under the common policy conditions of a policy, all of the following are TRUE about changes in a policy EXCEPT

The insurer must obtain permission from all named insureds to make a change

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

The insuring agreement

An insured suffered a fire loss along with water damage and consequential loss of business income for four weeks while repairs were being done. The policy includes direct and indirect loss, what part of the loss would be paid as indirect?

The loss of business income.

True or False: The business income losses are payable under a BOP for 12 consecutive months following the occurrence.

True

True or False: The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount regarding the debris removal coverage under the BOP.

True

True or False: In a BOP, replacement cost coverages have an 80% insurance-to-value requirement is in place.

True; the insurance-to-value requirement is nearly the same as that of HO insurance-to-value.

An agent who knowingly misrepresents material information for the purpose of inducing

Twisting

A liability policy that provides increased limits and expanded coverage over underlying casualty coverages is called what?

Umbrella policy

The broad cause of loss form in the commercial property policy contains three perils in addition to the basic form perils. Which of the following is NOT one of those three perils: Utility services, Water damage, Weight of snow/ice/sleet, or Falling object

Utility services