Guarantee Exam Missed Questions
An insured and his spouse were traveling down an icy road and hit a sign, accumulating $1350 damage to their car. They have a $250 deductible. They already collected on a $1500 claim earlier this year. How much will they collect on this claim?
$1100 Collison deductibles apply to every collision claim
Under coverage E - Scheduled Farm Personal Property, livestock that is not specifically insured to limited coverage limit of
$2000 per head
An insured has a commercial blanket bond in the amount of $25,000. Three identifiable employees steal $10,000 each in a single loss. How much will the bond pay?
$25,000
An insured was judged at fault in an automobile accident. He has the 100/300 bodily injury liability coverage. Three other individuals were injured in the vehicle hit by the insured. They were awarded damages of $150,000, $75,000, and $75,000. What amount , if any, was not covered by his insurance policy?
$50,000
Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?
1
An employer may purchase workers compensation coverage through the state Workers Compensation Assigned Risk if they were denied coverage by at least how many other insurers?
2
Under a commercial general liability policy, which of the following is NOT considered mobile equipment?
A automobile used as a company car by a real estate company
Which of the following risks would be eligible for coverage under a dwelling policy form?
A duplex that is occupied by two families, each of which have a bedroom rented to a boarder
If the ocean marine contract insures the property for an amount agreed to by the insured and insurer at the time of the contract is made, it is considered
A valued contract
After a covered loss on a homeowners policy, the insured must do all of the following EXCEPT
Abandon the property involved to the insurer
If an insurance policy prohibits the insured from relinquishing ownership of insured property that has been damaged, it is prohibiting
Abandonment
All are legal defenses against a claim of negligence EXCEPT
Absolute liability
Under Coverage B- Other structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage?
Any loss paid under Coverage B reduces the Coverage A limit of liability
You are at fault in an auto wreck out of state. How does your company adjust?
At least to the minimum required by that state
The equipment coverage form provides coverage for all of the following EXCEPT
Bodily Injury Liability
How is a professional liability policy written?
Claims-made
An insured believes that his insurer is not property fulfilling its obligations regarding his policy. What section of the policy will give the insured more information about specific duties of the insurer?
Conditions
Which coverage form insures the owner's personal property in condominiums?
Condominium unit-owners coverage form
The supplementary payments section of the commercial general liability policy would cover
Court costs assessed against the insured in a suit
Other-than-collision would cover financial losses due to
Damage to an insured's car caused by wind and hail
Which of the following would NOT generally be included in the supplementary payments portion of a liability policy
Damage to property owned by the insured
The commercial crime coverage would cover losses resulting from the theft of money, securities and other property by employee is
Employee theft
An executive is accused of sexual harassment. What type of coverage would respond?
Employment practices liability
Which of the following is covered under the dwelling policy?
Fire caused by an earthquake
Which homeowners form provides open peril coverage for a dwelling (Coverage A) and contents (Coverage C)?
HO-5
Which of the following duties is NOT required of the insured in the event of a loss?
Immediately notify the insurer when the insured has filed bankruptcy
Section 3 of the business auto policy provides physical damage coverage. All of the following are physicals damages that may be selected coverages EXCEPT
Limited peril coverage
Which of the following exposures is NOT covered under a homeowners policy?
Medical payments to an insured
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?
Misrepresentation
The owner and operator of a store discovers that a customer paid for a large order with forged paper money the day before during business hours. What crime coverage form would provide coverage for this loss?
Money orders and counterfeit paper
Which of the following would be covered under a building and personal property coverage form?
Outdoor sign
The commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for which of the following?
Premises
A policy contains a consent to settle a loss provision, which requires the insurer to obtain the consent of an insured before the settlement of a claim. Which this in mind, what kind of liability policy does the insured most likely have?
Professional liability
An insured has a personal auto policy with the following limits: 50/100/25. The number 25 refers to
Property damage coverage
When one insurer buys insurance from another company to minimize effects of catastrophic losses, they are
Reinsuring
If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?
Retention
For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following?
Riot
A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for all of the following named in the suit EXCEPT
Spouses of officers and stockholders
When an insurer acquires the insured's rights against a third party for the purposes of receiving indemnification for loss, this is called
Subrogation
The insured's guest cottage, which is insured under his farm policy, is being rented by a young couple. When one of the renters is injured in the rented property, the insured files a claim under his farm liability coverage. How will the coverage respond?
The claim will not be covered
In ocean marine coverages, which of the following describes the difference between the hull policy and P&I?
The hull policy covers the ship, and p&i is liability coverage
Which of the following statements is correct regarding the debris removal coverage under the business owners policy (BOP)?
The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount
All of the following are true about the cancellation provision of a commercial insurance policy EXCEPT
The insurer is required to provide proof that the insured received the cancellation notice prior to cancelling the policy
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
If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?
The insurer will be reimbursed for the excess cists by the NFIP
An insured has decided to never drive another vehicle and wants to transfer his auto policy to his wife. What does the insured need to transfer the policy?
The written consent of the insurer
When Symbol 7 is provided, which of the following statements is true with regards to newly acquired autos?
They are covered if they are used to replace previously owned autos with that coverage
What is the purpose of the ordinance or law coverage endorsement?
To remove the exclusion of losses resulting from ordinances or laws
Which of the following is a federal act that covers crews of ships the same as the railroad workers?
U.S. Longshore and Harbor Workers Compensation Act
When does the insurer's duty to defend a suit or claim end in a commercial general liability policy?
When loss payments equal the applicable limit of insurance
Coverage E (Personal Liability) and/or Coverage F (Medical Payment to Others) would respond to a claim arising from all of the following situations EXCEPT
an insured's 14 year old son was throwing rocks at the neighbor's house and broke several windows
Which of the following would NOT be covered under the directors and officers liability coverage?
Reimbursement for fines and penalties
The basis of insurance is sharing which of the following among the members of a large homogeneous group with similar exposure to loss?
Risk
A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim got bodily injury?
The appliance was manufactured in the United States
An agent 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
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as
Twisting
When can insureds obtain insurance through a surplus lines insurer?
When they are unable to procure insurance through an authorized insurer
What type of policy, which may be added by endorsement or purchased separately, may an insured purchase in order to provide coverage for other types of contracts?
A contractual liability policy
An automobile policy has limits of 100/300/50. The number 100 means
The maximum limit of bodily injury claims that can be paid for one person
Insurance ID cards in Alabama must include all of the following EXCEPT
The name and address of the company that financed the purchase of the vehicle
Which of the following is most likely INELIGIBLE for coverage under the business owners policy?
A bank
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
Misrepresentation
What coverage form in the farm policy insures equipment on an open peril basis?
Mobile agriculture machinery and equipment
Ajax Shipping has contracted to transport 10 crates of computer equipment from Washington state to Tijuana, Mexico, for a fee of $3800. Ajax has arranged for Calamity Ship Lines to pick up the crates at the dock in Puget Sound and to deliver the crates to the dock in Tijuana. To cover the possible with the crates being damaged or lost, Ajax should purchase
Prepaid freight insurance that will attach to the cargo policy
The owner of a rental dwelling, insured under a DP-2, turns off the heat in the insured dwelling during the winter months because the dwelling is not occupied. The building's water pipes freeze and break, causing damage. How will the policy react to this loss?
The loss is excluded from coverage
An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as an indirect loss
The loss of income for the time the diner was closed
A trucking company's truck is out of service for repairs. While making the delivery in a borrowed truck, the driver is responsible for an accident that causes $55,000 in property damage to other vehicles and injuries to 2 individuals . Under the commercial auto liability policy conditions, which policy pays for this loss?
The policy for the company that borrowed the truck will be primary, and the titled owner of the truck will be excess.
An audit revealed the administrator for a pension plan has made investments that were not consistent with the risk tolerance set forth in the plan for its members. The earnings for the past year are substantially below the average for comparable funds. The governing board wants to take action against the administrator. What type of commercial liability would the board need to provide for this risk?
Fiduciary liability policy paid by the pension fund
Lost Treasures has a guard dogs in a fenced lot to protect the salvage yard. The dog scared a passerby, who now claims that it was traumatic experience and that he now suffers from recurring nightmares A claim for personal injury of $5000 is filed against Lost Treasures. Why will the personal and advertising injury liability section (Coverage B) of the CGL policy cover this claim?
Mental anguish is a covered injury
An insured's child ran into a neighbor's planter on his bicycle and broke the planter and ruined the plants. The cost to replace the planter was $400, and the cost to replace the plants was $100. Which section of the insured's homeowners policy would pay?
Section 2 with no deductible
Which clause of a hull policy says that if the insured does not take immediate steps as soon as possible to minimize the loss and protect the property from further loss, the coverage may be invalidated?
Sue and Labor
In a liability policy with split limits of 25/50/25, which number is the maximum amount that would be payable in the event of damage to a person's property?
The amount of the third number, $25,000
All of the following are considerations in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state EXCEPT
The insurer's chartered location or domicile
Which of the following is NOT found in the common policy declarations of a commercial package policy?
Insuring agreement
Which of the following is NOT one of the independent rating services that publishes guides to insurance companies' financial integrity?
NAIC
