Guarantee Exam Missed Questions

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 other accommodations. Disregarding any extra expense for meals, how much would an HO-3 will pay under Coverage D?

$1,050

An insured was traveling down an icy road and hit a sign, causing $1,350 damage to the car. The policy requires a $250 deductible. The insured already collected on a $1,500 claim earlier this year. How much will the insured collect on this claim?

$1,100

To qualify for a certificate of authority, what minimum capital stock or surplus must an insurer have?

$1.5 million

An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?

$10,000

A trucking company has a $1 million umbrella policy in place. The business owner agrees to maintain a 200/500/100 limit on auto liability and a personal liability of $400,000. after a car accident, the business is sued. It turned out that the business actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?

$100,000

An insured has $5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are $8,000. The first passenger's total $4,000; the second $6,500; the third $1,200. How much will the policy pay under the medical payments coverage?

$15,200

An insured was judged at fault in an automobile accident. He has the 100/300 liability coverage. Three 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?

$50,000

Georgia drivers must keep proof of financial responsibility for...?

1 year

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

1 year

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

10% of Coverage C anywhere in the world

How long does the Commissioner have to disapprove a private passenger auto insurance rate once filed?

100 days

When a hearing regarding an insurance matter is requested, all parties must receive...?

15 days' notice

How many hours of continuing education must licensees complete every renewal period on the subject of ethics?

3

In addition to completing an approved course, drivers wanting to qualify for a defensive driving discount must not have committed any traffic violations or had any insurance claims against them in the last...?

3 years

What is the maximum period for a temporary license in this state?

6 months

According to the business property coverage form vacancy condition, if a policy is issued to the owner of a building, the building will be considered vacant if what portion of the square footage is unused and not rented?

69%

In business owners policies, how soon does the period of restoration for business income coverage begin after direct loss?

72 hours

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 closing time a month ago, she noticed that 3 very expensive dresses had been stolen. However, she did not file a report to her insurance until very recently. How much will her insurer pay for this loss?

90% of the written limit

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

The limited theft endorsement designed for a landlord excludes all of the following except...?

A lawnmower the landlord owns and keeps at rented premises

A stock insurer is defined as...?

An insurer owned by its stockholders

A personal umbrella policy may act as excess over any of the following insurance coverage policies except...?

Auto collision coverage

Two men are partners in a moving company. They have two trucks used to move the property of others. They should insure their trucks under a...?

Business auto policy

If the Insurance Commissioner believes that an insurer has engaged in an unfair method of competition, what may the Commissioner issue?

Cease and desist order

When an individual obtains an insurance license for the primary purpose of writing insurance on themselves, or for members of their immediate family or business, this is called...?

Controlled business

The supplementary payments section of the commercial general liability policy would cover...?

Court costs assessed against the insured in a suit

Which of the following perils is not covered by the DP-2?

Damage to pets, birds, or fish

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

All of the following are optional endorsements that may be added to the standard equipment breakdown coverage form except...?

Debris removal

What are the two types of utility service endorsements?

Direct damage and time element

The commercial crime coverage that would cover losses resulting from the theft of money, securities, and other property by employees is...?

Employee theft

What is the primary duty of the Commissioner of Insurance?

Enforce the provisions of the Insurance Code

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

Equipment breakdown

To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policy owner face?

Financial loss

Which of the following duties is not required of the insured in the event of loss?

Immediately notify the insurer when the insured has filed for bankruptcy

Which of the following provisions is usually found in homeowners policies and provides a replacement cost settlement to policyholders who carry adequate insurance?

Insurance to value

Which of the following is not true regarding the automatic increase in insurance endorsement in dwelling policies?

It does not require additional premium

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

Limit of liability

Coverage D, additional living expenses, is intended to allow the family to...?

Maintain their normal standard of living

Which of the following is the other major coverage provided by the business owners liability coverage form?

Medical payments

An example of an alien insurer doing business in this state is one formed under the laws of...?

Mexico

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

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

Misrepresentation

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 the sound of glass breaking. She runs to the door and. discovers a brick has been thrown through her glass door. To inform her insurer of a possible claim, she fills out a form detailing the events leading to the loss. What is the name of the form?

Notice of claim form

How is the premium paid for the business owners policy?

One indivisible premium

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

Other insurance

Which of the following would be covered under a building and personal property coverage form?

Outdoor sign

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

Personal

The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing, or storing automobiles. Which of the following coverages are not included in a garage policy?

Physical damage on a customer's auto

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the...?

Policy

All of the following statements about mutual insurance companies are correct except...?

Policy dividends issued by mutual companies are guaranteed and not taxable

Businessowners liability coverage automatically includes all of the following liability coverages except...?

Pollution

Which of the following is not available in a package policy?

Professional liability

The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of what?

Protective safeguards endorsement

The equipment breakdown coverage form values loss on a/an...?

Replacement cost basis

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

Which of the following is not a classification of a hazard?

Speculative

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies

Homeowners policies consider all of the following insured locations except a...?

Strawberry patch owned by the insured

Who may extend the length of a binder issued in Georgia?

The Commissioner

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

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 for bodily injury?

The appliance was manufactured in the US

Which of the following statements is correct regarding business income coverage under the bop?

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

Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. Which of the following is true?

The coinsurance penalty applies

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that it was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. Who pays for this damage?

The contractor

Which of the following entities is considered the principal?

The insurer issuing a policy

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 costs by the NFIP

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 best depicts the law of large numbers?

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

An insurer's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the 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 indirect loss?

The loss of income for the time the diner was closed

All of the following are considered insured under the hired and non owned auto liability endorsement added to a bop except...?

The owner of a non owned vehicle

Under an hO-2 policy, the insurer will pay no more than the ACV of the property damage until...?

The property repair or replacement is complete

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

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?

This loss is excluded from coverage

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

Time element

What is the purpose of the Terrorism Risk Insurance Act?

To share risk of loss from terrorist attacks with the insurance industry

The insured's product under a commercial general liability policy does not include which of the following?

Vending machines rented to others

When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flowerbed. The insured was found to be legally liable for this damage. This is an example of...?

Vicarious liability

When does the federal emergency flood insurance program go into effect?

When a community applies for the program

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

When is the company responsible for the actions of the agent?

Whenever the agent is acting within the conditions of the contract

Your friend's dog that you are keeping while the friend is out of town bit a visitor in your home. Does your homeowners liability coverage apply?

Yes, the coverage would apply for any animal in your care