Hawaii Adjuster Exam

The special cause of loss form of a Commercial Property policy imposes a limitation on the amount of coverage for the theft of jewelry of:

$2,500

Under the Business Auto policy, what is the limit for transportation expenses when the insured has suffered a theft loss of a private passenger type vehicle?

$20 per day subject to a maximum payment of $600

The insured owns a one-family dwelling with a detached garage. The dwelling is insured for $200,000. How much coverage applies to the detached garage?

$20,000

If an insurance company intends to cancel a Workers Compensation policy in Hawaii, the insurer must give how many days prior notice to the insured?

10

All of the following are reasonable duties of care that are required of employers, EXCEPT:

Warn workers of obvious dangers

Supplementary payments on the CGL would provide which of the following?

Accrued interest on unpaid judgments.

Which of the following is not a covered peril under the Standard Fire policy?

Actions of war

All of the following are duties of a workers' compensation adjuster, EXCEPT:

Conducting arbitration on disputed claims

Any person who intentionally or knowingly violates, permits another person to violate, or aids another person in violating any provision of the Insurance Code, or any rule or order issued by the Hawaii Insurance Commissioner can be penalized. For the purposes of enforcing the Code, the Commissioner may do any of the following, EXCEPT:

Confiscate the records and assets of the offender as provided by a court order

Which of the following methods is specified by the standard NCCI workers' compensation policy to handle claims payments when other insurance, including self-insurance, covers the workers' compensation risk?

Contribution by equal shares

All of the following are covered under the "supplementary payments" section of a Commercial General Liability policy, EXCEPT:

Costs of repair service performed on personal property at the scene of the accident

Clauson Construction Company has a claims-made CGL policy with a 01/01/16 retroactive date, an effective date of 01/01/18, and an expiration date of 01/01/19. A construction accident allegedly occurred on 12/31/16, but the claim against Clauson was not made until 02/28/18. The insurer will likely:

Cover the claim

Homeowners policies provide personal liability coverage that follows an insured anywhere in the world under:

Coverage E

Which coverage of a Homeowners policy would pay for damage to a neighbor's window caused by the insured?

Coverage E (Coverage E - Personal Liability would pay for the property damage to others caused by the insured under a Homeowners policy)

Helena has not paid her insurance premium for a significant amount of time. Which of the following is likely to happen in this scenario?

Her policy will be cancelled

The coverage territory of the Business Auto form provides for "worldwide liability coverage" for private passenger autos that the insured:

Hires, leases, rents or borrows without a driver while outside the United States, its territories and possessions

A Commercial Package Policy (CPP) always includes: I. A single Declarations page common to all coverages. II. A single Conditions section common to all coverages. III. A single Exclusions section common to all coverages.

I and II only

Which of the following is covered property under the HO-3 form? I. Belongings of the insured's daughter, while she is away at college. II. The insured's pool table stored in the garage located under the bonus room of the insured dwelling. III. The insured's prize-winning show dog. IV. The personal property of a tenant who is renting the insured's bonus room.

I and II only

For the purpose of insurance coverage, the definition of "motorcycle" in Hawaii includes: I. A motor vehicle with not more than three wheels. II. A moped. III. A motor vehicle with a seat for the rider.

I and III only

Which of the following is true regarding consultations because the situation is life threatening or could cause serious harm?I. The attending physician will notify the employer as soon as possibleII. The consultant will provide a copy of the consultation report to the attending physicianIII. The copy of the consultation report must be given to the employer within 14 calendar days of the examination

I, II and III

All policies issued to employers in Hawaii for Workers Compensation insurance must separately disclose to employees the portion of the premium charged for: I. Medical Care II. Services & Supplies III. Wage Loss benefits

I, II, and III

Upon placement of Surplus Lines insurance in Hawaii, the licensed broker must deliver evidence of coverage to the insured and this evidence must contain which of the following: I. Policy number II. Policy form and edition III. Effective date of coverage IV. The amount of the taxes and fees to be collected.

I, III and IV

Joe enters into a contract with Martha to set fire to her house so she can collect on her insurance policy. Martha will pay Joe a portion of the insurance proceeds for his trouble. Which of the following parts of a valid contract is missing in this situation?

Legal purpose

In order for a contract to be binding in a court of law, it must be designed for:

Legal purposes

The Watercraft Endorsement to the Homeowners policy provides:

Liability and Medical Payments coverage that would otherwise be excluded under the Homeowners policy

All of the following are EXCLUDED under the Earthquake Endorsement to a Homeowners policy, EXCEPT:

Land shock waves

An insured purchases several different insurance policies that provide coverage in an amount that would allow him to make a profit from a covered loss. This is known as:

Overinsurance

Which insuring agreement of the Personal Auto policy would provide coverage for the damage caused to the other driver's car, when the insured was at fault in an accident?

Part A - Liability (Part A - Liability would provide coverage for the "property damage" caused by the insured)

The standard Personal Automobile policy provisions state that the insurance company has subrogation rights against any person permitted to use a covered auto, under all coverages, EXCEPT:

Part D (Part D - Physical Damage)

Medical Payments coverage excludes all of the following, EXCEPT:

Customers slipping on the insured's wet floor.

Bill may be negligent if he:

Fails to do what a reasonably prudent person would do in the same circumstance

All of the following statements are TRUE of the terms used in the standard workers' compensation policy, EXCEPT:

"State" means any state of the United States, the District of Columbia, and all territories and possessions

The insured has suffered a severe storm and some of his trees, shrubs, and plants are heavily damaged by the wind. How much coverage could the insured expect to receive for his claim under his DP-3 Dwelling policy?

$0 (The limit for this coverage is $500 for any one tree shrub or plant. However, the coverage applies for specified perils and wind is NOT included. The insured will not collect anything for this loss.)

Any person that knowingly violates the provisions concerning the handling of a Personal Injury Protection (PIP) motor vehicle insurance applications or the provisions concerning cancellation or nonrenewal of PIP insurance, will be subject to a civil penalty up to:

$1,000

The NAIC Model Unfair Claim Settlement Practice Act provides for a financial penalty of _________ for each violation of the Act.

$1,000

The National Flood Insurance Program will pay which of the following amounts to assist with moving of property to safety when there is imminent flood danger?

$1,000

The standard Businessowners policy extension of coverage for "Outdoor Property" provides ________ of coverage for any one tree, shrub, or plant that has been destroyed due to a covered cause of loss.

$1,000

Under a Personal Articles Floater, the total amount that will be paid for loss or damage to an unscheduled coin collection is:

$1,000

Steve has removed the rear seat in the company car and installed stereo equipment and two speakers. The maximum the physical damage coverage will pay for damage to the items in an accident is:

$1,000 because the equipment was permanently installed in a place where the auto maker would normally not have it put it minus deductible

Fly-By-Night Construction Company has a CGL policy with coverage dates of 03/01/17 to 03/01/18. The per occurrence limit is $500,000 and the general aggregate limit is $1,000,000. The maximum that can be paid during the policy period on the insured's behalf is:

$1,000,000

Collin suffered a work-related injury on the morning of June 2nd and was off work completely until he returned to work on full duty on June 20th. Collin had worked for his employer for four years and was paid $55,650 per year. Collin's state sets the TTD rate at 70% percent of the average weekly wage. The state sets the maximum compensation rate at $580 per week and the waiting period at 5 days retroactive after 7 days. Collin was not paid for working on February 5th. Collin's average weekly wage is approximately ____ and the amount of compensation benefits he will receive per week while off work is approximately ____.

$1,070 / $580 (Collins average weekly wage is $1,070 ($55,650 divided by 52 weeks). Then, we calculate 70% of $1,070 to determine 70% of Collins' AWW would be, which is $749. However, Collin's state sets TTD payment rates to a maximum limit of $580, therefore, Collin's compensation payments will be $580.)

A person injured in an automobile accident in Hawaii can collect up to _______, per month for their loss of wages under the provisions of PIP coverage.

$1,200

An insurer has violated the insurance laws of Hawaii. The Attorney General on behalf of the Insurance Commissioner seeks an action in forfeiture against the insurer. What is the penalty that can apply each day that the violation continues?

$10,000

The Hawaii Insurance Commissioner has issued a cease and desist order and imposed a fine against a licensee. The licensee continues to violate the law and is in direct violation of the cease and desist order. The licensee is subject to a monetary penalty of up to:

$10,000

What is the bond limit that is required for a public adjuster's license in Hawaii?

$10,000

When Hawaii employers purchase Workers Compensation insurance as a means of providing for the payment of compensable claims, and the employer wishes to have a deductible in the policy, what is the minimum deductible the employer can select?

$100 per claim

What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy?

$100,000

The insured has a CGL policy with a $600,000 aggregate limit and a $300,000 per occurrence limit. The insured has one claim for $400,000 and another separate claim for $200,000. After paying these two losses, how much of the aggregate limit will remain for future claims?

$100,000 (Even though the insured has incurred $600,000 in the two losses, the insurer will pay the occurrence limit of $300,000 on the first loss. This amount is subtracted from the $600,000 aggregate leaving a balance of $300,000. The second loss is within the occurrence limit and payable. After paying the second claim, the aggregate is now reduced to $100,000 for the remainder of the policy period.)

What is the bond requirement for a Surplus Lines broker license in Hawaii?

$100,000.

Under a standardized DP-2 or DP-3 policy, what is the maximum that would be paid for additional living expenses if Coverage A was $60,000?

$12,000

An insured with auto limits of 10/20/10 causes bodily injuries to a third party of $8,000. After losing in court he has defense costs of $5,000. What is the insurance company's responsibility to pay?

$13,000 (Defense costs are in addition to the limits of coverage. The insurer would be obligated to pay the $8,000 and the $5,000 in defense costs.)

Barry's insured watercraft is disabled while on the lake one Sunday afternoon. His motor completely stopped and will not start again. Barry calls George, a mechanic who rides out to the section of the lake where Barry and his boat are stranded. George brings a new starter for the engine and spends the next hour replacing it. When George is finished installing the new starter, the engine still sputters and will not start. Barry then calls a towing service to tow the boat back to the dock and into storage where George can take a closer look. Barry's Watercraft policy has a $250 deductible. The cost of the starter was $80 and the towing bill was $100. How much will Barry's standard Watercraft policy pay under the "Towing and Assistance Expense" coverage, assuming this is the only occurrence Barry has claimed during the current policy period?

$180 because the deductible does not apply to the coverage

Darla has her business covered by a standard Businessowners Policy that includes the "Personal Effects" coverage extension. Catherine, one of Darla's employees, has brought her brief case to work one day with her purse, make-up bag, tablet, and laptop computer inside. A fire breaks out in Darla's building and all of the contents of Catherine's briefcase, worth $2,000, are destroyed. How much will Darla's BOP pay for Catherine's lost "personal effects"?

$2,000

The supplementary payments of Section II - Liability of the Business Automobile policy covers the cost of a bail bond up to:

$2,000

Joan is covered for $10,000 under a personal articles floater for her jewelry. She acquires another piece of jewelry valued at $2,500. Under the automatic coverage provision for newly acquired property within the policy, how much coverage would apply to the newly acquired jewelry for 30 days?

$2,500

Parmelia is covered under two separate standardized Personal Automobile policies, with Part C limits under both policies set at $200,000. Parmelia is involved in an accident with an uninsured motorist and she sustains bodily injury damages for $262,320. How much will Parmelia receive when she submits a claim for these damages?

$200,000

Aaron purchases a Homeowners insurance policy for $700,000 with a 4% deductible. A few months later, a heavy hailstorm destroys his roof, porch, and windows, causing $50,000 in damages. How much should Aaron expect to receive from the insurance company to pay for the damages?

$22,000 (A 4% deductible is based on the coverage limit of $700,000. 4% of $700,000 is $28,000 which would be the deductible. Subtracting that from the $50,000 in damages, Aaron would receive a net of $22,000.)

What is the maximum amount payable for bail bonds under the "supplementary payments" provided by Part A of the Personal Auto policy?

$250

Under the standardized Homeowners forms, how much "additional coverage" is provided under Section II - Liability for loss of earnings by the insured to assist the insurer in the investigation or defense of a claim?

$250 per day

Henrietta has purchased a Personal Automobile policy and she sees the following under Part A: $25,000/$50,000/$30,000 Which of the following statements is TRUE regarding these numbers?

$30,000 represents the limit for property damage liability.

What is the maximum limit for any one claim that can be paid by the Hawaii Guaranty Association?

$300,000

Mr. Kessler has an auto policy with bodily injury limits of $15,000/$30,000. He injures two people in one accident. Mr. Brown receives injuries of $19,000. Mr. Jones receives injuries of $15,000. Legal expenses to defend Mr. Kessler total $10,000. How much is Mr. Kessler liable for after his insurance company makes its payment?

$4,000

Jim and Mary are celebrating their 50th wedding anniversary and are on a worldwide cruise. They carry a DP-3 policy with a personal property limit of $50,000. While off the coast of Africa the ship catches fire and their property is completely destroyed. How much, if anything, will they collect?

$5,000

The Builders' Risk form provides an extension of coverage for building materials within 100 feet of the building being constructed and belonging to others, but under the care, custody, and control of the insured for up to:

$5,000

What is the penalty in Hawaii for an employer or insurance carrier which fails to properly or timely pay disability benefits?

$5,000 per violation

Lawrence's business is covered by a Business Auto policy and carries the required liability limit for his state of $30,000 for bodily injury to all persons. Lawrence drives the truck to another state where the financial responsibility limit is $50,000 for bodily injury to all persons. While in the other state, Lawrence has an at-fault accident and injures 3 people who sue for $60,000 in total damages. How much will Lawrence's Business Auto policy pay on this claim?

$50,000 (Lawrence's policy will automatically pay the financial responsibility limit for the state in which Lawrence was driving, which would be $50,000. Lawrence would have to pay the remaining $10,000 out of pocket. This is due to the coverage extension that modify's the policy's liability coverage limit to meet another states' minimum required limits when the covered auto is being driven in that state.)

An insured has his home covered under Dwelling policies with three different insurance companies. Company A provides 50% of the coverage, Company B provides 45% of the coverage, and Company C provides 5% of the coverage. When settling a claim for $10,000 worth of damage to the dwelling, what will Company C pay?

$500

Sam's home is located in a rural area and is covered by a standardized DP-2 Dwelling form with a $500 deductible form attached. He experiences a fire at his home and has to call the local volunteer fire department to extinguish the fire. He receives a bill from the fire department in the amount of $800. How much of the bill will Sam's DP-2 form cover?

$500

The standard deductible in Section I of the Homeowners forms is:

$500

Which of the following is the amount of additional coverage on the standardized Homeowners forms for a Fire Department Service Charge?

$500

When a covered loss disables the insured watercraft, the standard Watercraft policy provides coverage for "towing and assistance" in the amount of:

$500 for a single event and $1,000 for the entire policy period

The ABC Corporation carries a Commercial General Liability policy with occurrence limits of $500,000 and a general aggregate of $2,000,000. The company is responsible for an accident that causes $400,000 property damage and $200,000 in bodily injury. The TOTAL amount collectible for this accident under the policy is?

$500,000

Nixon Construction Company carries a CGL policy that has a $500,000 per occurrence limit, $1,000,000 general aggregate limit and a per person medical payments limit of $25,000. Employees cause $200,000 property damage and $400,000 bodily injury when persons are injured and property is damaged in connection with a construction project. Two of the employees suffer medical expenses of $15,000 each. How much will the insurer pay on behalf of Nixon Construction?

$500,000 (The most the policy can pay is the occurrence limit of $500,000. The employees are not covered under medical payments. They would collect under workers compensation coverage. Remember that the policy cannot pay more than the per occurrence on any one claim. Therefore, in this question the insured would have to pay the remaining $100,000 of this claim because the insurer will only pay $500,000 of this $600,000 claim.)

An insured has a CGL policy written on an occurrence form with a $100,000 aggregate limit and a $25,000 per occurrence limit. The insured had one occurrence settled for $35,000 and a second occurrence, which took place during the same policy period, was settled for $20,000. How much of the aggregate limit remains for the payment of future claims?

$55,000

A covered commercial auto requires $700 in repairs because of damage done by a limb from a dead tree that fell on it. The auto's BAP physical damage coverage has a $100 comprehensive deducible and a $250 collision deductible. Assuming that the ACV and replacement cost of the vehicle is $700, the insurer will pay:

$600

When an HO-3 is issued with a $75,000 Coverage A limit on a one-family dwelling, what is the automatic amount of insurance for Coverage B?

$7,500 (Other Structures (Coverage B) are automatically covered for 10% of the Coverage A limit)

An insured is covered under a CGL policy with a "per occurrence" limit of $4 million and an aggregate limit of $8 million. The insured also has a Commercial Umbrella policy with a $5 million aggregate limit and a $100,000 SIR. Two covered claims are submitted, one for $4 million and one for $5 million. What amount is the retained limit that will trigger the Umbrella policy to pay on the claim?

$8 million

Under PIP, what is the limit for incurred expenses for substitute services for an injured person?

$800

Which of the following is NOT an example of an unfair claim settlement practice?

Failing to examine a claimant under oath

In regards to Workers Compensation insurance, which of the following experience modification factors would indicate that an insured has sustained a relatively high frequency and severity of losses in the recent past?

1.25

What is the limit of coverage provided under a Mobile Homeowners policy for detached structures?

10% of the Coverage A limit or $2,000 whichever is greater

Assume a Hawaii employee is injured in the course of work, and the employer later receives a report from the treating physician indicating that the employee is a candidate for vocational rehabilitation. In this instance, how many days from the date of injury must the employer provide information to the employee regarding his or her rights to vocational rehabilitation benefits?

120 days

If an employer of Hawaii employees neglects or fails to provide security for the payment of workers compensation claims (through the purchase of insurance or the arrangement of proper self-insurance), how soon after work began may the Director of Labor and Industry relations suspend the employer's operations or enjoin the employer from conducting business in Hawaii?

14 days

The NAIC Model Unfair Claim Settlement Practices Act specifies that the insurance company must provide the proper claim forms with a reasonable explanation of how to use them to the claimant within:

15 calendar days of the request

An insurer or licensee in Hawaii must issue a written response within ______ to any written inquiry made by the Commissioner regarding a claim or consumer complaint.

15 working days

Motels insured under an ISO Businessowners may not exceed how many stories?

3 stories

In case of cancellation or nonrenewal of a motor vehicle policy, the insurer must continue PIP coverage and any optional additional coverages until the date of expiration or for _____ days following notice, which ever date occurs first.

30

Employers must provide injured Hawaii employees with information on the employee's right to select a vocational rehab provider. Once an employee receives this information, how long does he or she have to make the selection?

30 days

Samantha, who is covered under a Standard Fire policy, has suffered a loss and submitted a claim. After the claim was paid, Samantha's insurance company has decided to take possession of the damaged property to sell it for its salvage value. The insurance company must provide Samantha with _______ notice.

30 days' notice

The BOP has limitations on the square footage in regard to eligible retail and service risks. What is the maximum square footage a building can contain and still be eligible for the policy?

35,000 square feet

To be eligible for coverage under a standardized Dwelling policy, the insured must not allow more than _______ boarders to live on the premises

5

Under a Business Auto policy, which coverage symbol indicates that a car is subject to mandatory no-fault insurance as required by state law?

5

The Earthquake Endorsement to a Homeowners policy will provide coverage to the dwelling and/or personal property with the deductible stated as:

5% of the limit that applies to all Section I coverages

An insured has an NFIP policy and suffers a direct loss due to flood. How many days does the insured have to submit a proof of loss?

60 days

When an insured obtains Surplus Lines coverage independently, and not by a licensed Surplus Lines broker in Hawaii, how long does the insured have to file a report with the Hawaii Insurance Commissioner?

60 days after the effective date

When a Hawaii employee sustains an injury requiring medical treatment beyond first aid, how long does the employer have to report the accident to the Director of Labor and Industry relations?

7 working days

The insured has sustained a loss of income from a covered peril under his Businessowners policy. What deductible applies to "loss of income" coverage?

A "time deductible" of 72-hours

A Personal Articles Floater (PAF) is designed to protect property owners from damage or losses to personal property while in the process of transport. Which of these statements about a PAF is FALSE?

A PAF only covers property in the continental United States

Which of the following is not a method of showing proof of financial responsibility in Hawaii?

A Property Financial Bond

The narrow range of compensation that a physician or hospital should be paid for providing the services indicated by a CPT code is known as:

A Relative Value Unit (RVU)

Which of the following would NOT have the capacity to enter into an insurance contract?

A person who is under the influence of drugs at the time the agreement was made

Kyle owns a woodworking shop where he makes and sells custom furniture. One night, Kyle's shop is destroyed by a fire, and he files a claim with his insurance company. Which of the following items would be covered under Coverage A - Buildings of the Building and Personal Property Coverage form of Kyle's Commercial Property policy?

A bandsaw affixed to the floor

A document that temporarily obligates an insurance company to provide coverage while the issuance of a policy is pending is known as:

A binder

All of the following perils are covered for collapse under the Commercial Property additional coverage, EXCEPT:

A building that is in danger of collapsing

An "insured" under an unendorsed Homeowners policy can be all of the following, EXCEPT:

A childhood friend of the named insured who is visiting for a month from England

The standardized Personal Automobile policies contain all of the following, EXCEPT:

A common conditions page

All of the following would be considered a "non-residential building" under the National Flood Insurance Program, EXCEPT:

A condominium

The standard BOP policy will provide coverage for all of the following incidental occupancies in a covered apartment building, EXCEPT:

A contractor whose office occupies 20% of the floor area of the building (A contractor's office is not classified as a "incidental occupancy" for a covered apartment building if it occupies more than 15% of the total floor area of the building.)

An agent in Hawaii has been asked to insure an aircraft and does not have a market for the coverage. He has submitted an application to a surplus lines broker for a quote. What information is NOT required to be given the insured before the placement of coverage?

A copy of the policy and statement of any deductible that applies

Which of the following losses would be covered under a Commercial Property policy with the special cause of loss form attached?

A fire that breaks out in an office building and causes damage to two of the offices

The NFIP Dwelling form provides coverage for all of the following, EXCEPT:

A five-unit apartment building

The NFIP Dwelling form provides coverage for all of the following, EXCEPT:

A five-unit apartment building (The NFIP Dwelling form will cover residential structures up to four families or manufactured housing.)

The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as:

A foreign insurer

Which of the following businesses can cover their private passenger and commercial automobile exposures with a Business Auto policy?

A grocery store

Sierra's home is located in a flood zone. In insurance terms, the location of Sierra's home is considered:

A hazard

Which of the following buildings is considered to be vacant?

A house with no furnishings or occupants for over 60 days

Which of the following is NOT considered "your covered auto" under a standard Personal Auto policy?

A large truck used to transport manufactured goods for a corporation

All of the following are listed in the common declarations of a Commercial Package policy (CPP), EXCEPT:

A list of perils insured against

Any intentional misinformation provided by an applicant for an insurance policy that would have kept the insurance company from issuing the policy had that information been known is:

A material misrepresentation (This statement defines material misrepresentation, which is deliberately withholding an important fact that would have a bearing on the acceptability and/or pricing of the risk.)

Nathan owns an ice cream shop in a strip mall next door to Eli's Hot Dogs & More restaurant. Eli's restaurant is damaged by fire, and Nathan is denied access to his ice cream shop by the fire department because it is adjacent to the damaged restaurant. If Nathan's Commercial Property policy includes a Business Income coverage form, then the insurance company will cover Nathan's loss of business income for:

A maximum of four weeks

The "Part B - Medical Payments" coverage of a personal automobile policy covers injuries for all of the following, EXCEPT:

A passenger who is injured in another vehicle that is struck by the insured's vehicle in an accident

After a standard Personal Automobile policy has been in effect for more than 60 days, the insurer may cancel the policy for all of the following reasons, EXCEPT:

A regular operator of the vehicle has received a citation for speeding

Which of these statements best describes "the law of agency?"

A relationship in which someone is authorized by contract to represent another party

Which of the following is not eligible for coverage under any of the Homeowners forms?

A residence on a farm

Which of the following vehicles is NOT "mobile equipment" according to the CGL definitions?

A self-propelled snow plow

Which of the following is not "mobile equipment" under the business auto policy?

A self-propelled vehicle with permanently attached street-cleaning equipment

Which of the following serves as a deterrent for an insured to cancel an insurance policy before its expiration date?

A short-rate penalty deducted from the unearned premium

Under an Equipment Breakdown policy, which of the following statements is NOT TRUE regarding deductibles?

A single deductible applies to losses occurring under all coverages selected by the insured

Watercraft that are eligible for coverage under the Watercraft endorsement of the Homeowners policy, include all of the following, EXCEPT:

A small fishing boat powered by an outboard engine of 15 horsepower or less

Indemnify Insurance has been using a specific ISO Homeowners forms for several years in all the states where they are an admitted insurer. Indemnify Insurance has recently been admitted to an additional state, but the laws of that state contradict a few of the provisions in the ISO form. How is this situation likely to be handled?

A statutory form will be drawn up and attached to each Homeowners policy Indemnify Insurance writes in the state

An "admitted insurer" in any given state could include all of the following, EXCEPT:

A surplus lines insurer

Bill Walters is named in the "Drive Other Car" endorsement attached to the Business Auto policy of his brother, John Walters, and a premium is shown in the endorsement for liability coverage. Which of the following vehicles would be covered autos under the "Drive Other Car" endorsement?

A van being driven by Bill. The van is owned by Kathy Webster (Bill is covered while driving the van owned by Kathy Webster. He is specifically named on the endorsement. The purpose of this endorsement is to extend the Business Auto coverage for Bill while he is operating a non-owned auto for personal reasons.)

All of the following additions or modifications to the standard fire policy that are approved by the Hawaii Commissioner and the Hawaii insurance code, EXCEPT:

A written statement may be attached to the policy making clear that the policy does not cover damage by fire to the covered dwelling if the fire was caused by a volcanic eruption

Which of the following flood zones show a "flood depth" instead of a "base flood elevation" on a FIRM?

AO

No radio or television broadcast, nor published written communication in Hawaii may:

Advertise for any insurer that is not authorized to transact insurance in Hawaii

Ellen's automobile is stolen. The theft is properly reported to the police and the insurance company. She rents a car for two months. Which of the following would apply for the rental car?

After a waiting period of 48 hours, her policy will pay $20 per day up to a maximum of $600

In situations where the insured and the insurer could disagree on the value of an item, it would be best to insure that item on a(n) __________ basis

Agreed Value

In situations where the insured and the insurer could disagree on the value of an item, it would be best to insure that item on a(n) __________ basis.

Agreed Value

Loss to insured property caused by self-propelled missiles is covered under which of the following perils of the Homeowners form?

Aircraft

All of the following are included in the definition of "fungus" under the "Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria additional coverage of the Commercial Property cause of loss forms, EXCEPT:

Algae

To be covered under the "medical payments" coverage provided by the Commercial General Liability policy, bodily injury must be caused by:

An accident

All of the following circumstances are included in the definition of "one breakdown" in an Equipment Breakdown policy, EXCEPT:

All breakdowns may be the result of different causes

The common policy conditions apply to which coverage parts of a Commercial Package Policy?

All coverage parts of the policy

Which of the following NFIP policies is required to include the Increased Cost of Compliance (ICC) coverage?

An NFIP Dwelling policy under the Regular Program

Which of the following would be considered an "incidental occupancy" under a Homeowners policy?

An art studio located in the named insured's home, where she also holds occasional painting classes

Which of the following vehicles is considered a temporary substitute auto under a personal auto policy?

An auto loaned by the garage while the vehicle of the insured is being repaired

Cyber liability coverage provides all of the following, EXCEPT:

An employee intentionally downloading a program containing a virus onto the company computer which compromises customer information

Which of the following circumstances would NOT be an injury considered to "arise out of and in the course of" the employment?

An employee was injured during a lunch break in the factory parking lot

Which of the following is the type of policy that is written to cover the insured for occurrences in which they have become legally liable, but only for those exposures covered on their underlying liability policy?

An excess liability policy that is written on a follow-form basis

A fur coat that is insured by a Personal Articles Floater is damaged by a pet. Coverage for the coat would be provided because the policy is written on:

An open peril basis

Risk is best defined as:

An uncertainty of loss

An insured submits a claim to the insurer and their adjuster acknowledges receipt of the claim. The insured then hears nothing more after making repeated attempts to contact the adjuster. This is considered:

An unfair claims settlement practice

Sally's home is covered under an HO-3 policy. Coverage F of that policy will pay medical expenses for which of the following?

Anyone who is invited onto Sally's property and is injured while there

Adverse selection occurs when:

Applicants are accepted by the insurer with little or no attention given to underwriting

Any group that assists rating organizations or insurers to file their premium rates with the Hawaii Insurance Department are known as "advisory organizations". To become an advisory organization in Hawaii, all of the following must be filed with the Department, EXCEPT:

Any information the organization distributes to its members

The process of bringing a contract dispute before an objective third party for resolution is known as:

Arbitration

In Hawaii, additions or modifications to the 1943 New York Standard Fire Policy:

Are permitted but only if they are allowed or required by the Hawaii insurance code

How often may the Hawaii Commissioner of Insurance examine the accounts, records, or affairs of a producer?

As often as the commissioner deems necessary

Which of the following statements BEST describes the reason it was necessary to create a federal flood insurance program in 1968?

Because other property policies routinely exclude flood from coverage

An oral or written contract for temporary insurance is referred to as a

Binder

A producer working for Binders Keepers, Inc. has taken applications for Homeowners policies from two neighbors living next door to each other. Both neighbors' houses are very old and more prone to fire and crime than most of the insurance company's clients but neither of the houses would be considered a greater risk than the other. Binders Keepers' underwriters decide to approve the policies but with the stipulation that the first neighbor be charged a premium that is 12% higher than the second neighbor. Which of the following statements is TRUE with regard to this situation?

Binders Keepers is guilty of an unfair marketing practice because charging different premium rates to insureds whose risks are substantially identical is unfair discrimination

The Hawaii insurance code defines marine and transportation insurance as coverage for losses or damage to all of the following, EXCEPT:

Boathouses

All of the following are excluded under CGL coverage for bodily injury and property damage liability, EXCEPT:

Bodily Injury or Property Damage caused by the operation of mobile equipment

Which of the following would NOT be covered under a CGL policy?

Bodily injury caused by owned autos, off insured's premises is correct

Which of the following types of losses will NOT be excluded by Thomas Drug Company's CGL policy?

Bodily injury to a customer arising out of a forklift being used by the insured

Which of the following types of losses will NOT be excluded by Ace Building and Materials Company's CGL policy?

Bodily injury to a customer arising out of a forklift being used by the insured (The use of mobile equipment on or off the insured's premises is covered under the CGL policy. Property in the insured's care, custody or control is excluded. Pollution is also excluded as well as injuries to employees.)

An insured has purchased Coverage A and Coverage B of a standard Businessowners policy and the limit of insurance shown in the Declarations is 80% of the replacement cost value, how will losses be settled?

Both Coverage A and Coverage B will be settled on a replacement cost basis

Which of the following statements BEST DESCRIBES the main difference between a Commercial Umbrella policy and an Excess Liability policy?

Both Excess Lines policies and Commercial Umbrella policies increase the limits of the underlying policy but the Commercial Umbrella policy can also broaden and extend the coverages

Dusty had been working as a steam boiler repairman for the past 30 years. He went to his doctor because he was experiencing a chronic cough. His doctor indicated that his cough was caused by asbestos exposure on the job. Dusty filed a workers compensation claim for occupational disease in June of 2018. In his career, Dusty had worked for the following companies: -- Boyle's Boilers, Inc. August 2017 to June 2018. -- Thermo Boilers, Inc. May 1997 to July 2017. -- Industrial Boilers, Inc. May 1988 to May 1997. Dusty would have been exposed to asbestos in all three jobs, and he lives in a state where workers compensation coverage is triggered based on the "last day of last exposure" rule. Using this information, select the statement below that best describes how the compensation will be paid.

Boyle's Boilers is responsible for the entire claim

Which of the following is a coverage that may be selected on an Equipment Breakdown form by showing a limit of liability amount next to the coverage?

Brands and labels

Brian owns a home that is covered under a Dwelling policy. He rents this home to Taylor. Joe, the neighbor who lives next door to Brian's rental home, has been cooking methamphetamine for quite some time and selling it out of his house. One afternoon, Joe's "meth lab" exploded, spreading dangerous chemical to the houses around his. It also caused a fire that rendered the house unstable until it can be demolished. The civil authorities in the area have required that Taylor vacate her rental home, until the area next door can be cleaned up. Which of the following statements is true regarding how Brian will be compensated under his Dwelling policy for the loss of Taylor's rent during the time she must live elsewhere?

Brian will receive 20% of the Coverage A limit, for a maximum of 2 weeks

Section I of the Businessowners policy places limitations on coverage for certain losses if they are not caused by a specified cause of loss. All of the following are specified causes of loss under the policy, EXCEPT:

Building glass breakage

Which of the following is a TRUE statement regarding how bullion and manuscripts are covered under the 1943 New York Standard Fire policy?

Bullion or manuscripts may be covered, but only if they are specifically named in the policy

Coverage E -- Personal Liability of the standard Homeowners policies covers the insured for all of the following, EXCEPT:

Business activities

By what means may each member insurer of the Hawaii Insurance Guaranty Association recoup assessments they have paid?

By placing a surcharge on premiums

Calvin has a Business Automobile policy covering the automobiles he uses in his business. He acquires a new trailer with a load capacity of 1,000 pounds and he plans to attach it to a van he already owns. The van is scheduled on the policy with Symbol 7 listed beside it. Based on this information, how long does Calvin have to report his new trailer to the insurance company?

Calvin is required to report newly acquired vehicles to the insurance company within 30 days

A utilization review (UR) technique that identifies potentially serious health problems early in the claims process and coordinates patient care describes:

Case management

A new homeowner is being forced into purchasing insurance from a particular insurance company as a condition to receiving a mortgage. The lender is guilty of which of the following unfair trade practices?

Coercion

Indemnify Insurance and Mega Mortgage have struck a deal where Mega Mortgage requires mortgage clients to purchase Homeowners insurance through Indemnify Insurance. In return, Indemnify Insurance pays Mega Mortgage $500 for each new policy they refer. These two companies are practicing ______ with their clients.

Coercion

The Jones Act allows the crew of a ship to sue their employer for negligence that results in injury or death using the:

Comparative negligence standard

All of the following are examples of the types of exclusions found in professional liability insurance policies, EXCEPT:

Compensatory damages

The condition "Legal Action Against Us" in a CGL policy requires the insured to:

Comply with all of the terms of the policy

All of the following are a "cause of loss" form, EXCEPT:

Comprehensive

On a standard BOP policy, all of the following items have a limitation on the coverage amount if the cause of loss is theft, EXCEPT:

Computers

What is the type of utilization review that is conducted during the course of a patient's treatment?

Concurrent review

What is the type of utilization review that is conducted during the course of a patient's treatment?

Concurrent review (A concurrent review is one conducted during a patient's course of treatment. It is typically used for a long hospital stay and for outpatient services that continue over a considerable time.)

Pete's business is covered by a standard Businessowners policy. He has been accused by a customer of displaying inaccurate pricing on his website. Which of the following statements best describes how this claim would be handled by the BOP?

Coverage for any claim caused by a wrong description of the price of goods, products or services is excluded by the personal and advertising injury coverage of the BOP

Pete is adding Commercial Property coverage to his Commercial Package policy. Which of the following coverages CANNOT be added to a package policy using Commercial Property coverage forms?

Coverage for the negligence of the insured

All of the following statements are TRUE regarding a Commercial Inland Marine policy, EXCEPT:

Coverage is most often written on a named peril basis

Which of the following is the basis for insuring property under Section I of the Businessowners policy?

Coverage is written on an open peril basis

Each of the following is true about Builders Risk Coverage, EXCEPT:

Coverage terminates the day after construction is completed

Which of the following statements is TRUE regarding the coverage extension of the standard Businessowners policy for "Business Personal Property Temporarily in Portable Storage Units"?

Coverage will not apply if the storage unit has been on the insured premises for longer than 90 days, even if the business personal property has only been stored there for less than 90 days

In Crime insurance terminology, a salesperson having possession of the insured's property on-premises is known as a:

Custodian

Anywhere Computer Care provides computer and network administration services as well as backup services for its customers. Anywhere Computer Care needs which of the following as part of its insurance coverages to cover this exposure?

Cyber Liability

Which of the following dwelling forms provides broad perils coverage for personal property?

DP-2 and DP-3 only

Each of the following is a comprehensive loss under the physical damage coverage of a Business Auto policy, EXCEPT:

Damage caused when the auto overturned on a sharp curve

Which of the following is not an "additional coverage" under Homeowners Liability -- Section II coverage?

Damage to "property owned by the insured"

Personal Excess Liability policies provide coverage for all of the following, EXCEPT:

Damage to an insured's property due to fire.

Which of the following is covered under Part A of the Personal Auto policy?

Damage to the attached garage of a dwelling rented by the insured

Which of the following would be covered under Coverage A - Building of the Business and Personal Property coverage form if the damage was caused by a covered cause of loss?

Damage to the insured's lawn mower used by the company maintenance crew

A person who knowingly makes false and maliciously critical or derogatory statements about another person with the intent to cause injury is guilty of:

Defamation

Where in the insurance contract can an insured find the terms used throughout the policy and an explanation as to what they mean in the context of the policy?

Definitions

A business auto policy has a $100,000 limit of insurance for liability coverage. As a result of an automobile accident involving a covered auto, two people are injured. The first injured party sues the named insured and wins a $150,000 judgment. The insurer pays its limit of insurance. If the other injured party later sues the insured, the insurer will:

Deny further obligations to the insured as a result of the other injured party

The insured awoke and found that a water line on his side of the water meter has broken. Several thousand gallons of water have escaped. The water company bills the insured for the loss of the water, because the breakage in the waterline occurred on his side of the water meter. The insurance company will:

Deny the claim because water is excluded under Coverage C (The insurer will deny the claim because "water" is specifically excluded as personal property under Coverage C of the Homeowners policies.)

Before interviewing the injured worker who has filed a claim, the adjuster should:

Determine if the employee is represented by an attorney

Which of the following is NOT a method of determining causation of injuries under a workers' compensation claim?

Determining the proximate cause of the injury or illness

A claim is brought against the named insured under a CGL policy. Before settlement is made the insured files for bankruptcy. This action:

Does not relieve the insurance company from paying the claim

A claim is brought against the named insured under a CGL policy. Before settlement is made the insured files for bankruptcy. This action:

Does not relieve the insurance company from paying the claim. is correct

The Insurance Commissioner/Director/Superintendent of a given state is granted the power to oversee the business practices of insurance companies that are formed under the laws of that state. These companies are referred to as:

Domestic companies

The Hawaii Commissioner may suspend, revoke, or refuse to renew a producer or adjuster license for all the of the following reasons, EXCEPT:

Failing to pay credit card debt by the due date.

The NAIC Model Unfair Claim Settlement Practice Act DOES NOT apply to any of the following types of coverage, EXCEPT:

Dwelling insurance

When an insured has two or more Standard Fire policies covering the same property and a claim occurs, how will that claim be paid?

Each policy is required to contribute pro-rata to the payment of either the whole or partial loss

The perils most frequently covered by a Difference in Conditions policy are:

Earthquake and flood

Coverage C - Medical Payments under CGL policies include reimbursement for all of the following, EXCEPT:

Employee claims for on-the-job injuries

An insured who would like to cover an employee while driving their own car on company time would need which of the following endorsements?

Employees as Insureds endorsement

Which of the following is included in the Crime policy's definition of "securities"?

Evidences of debt

When an employer self-insures their workers' compensation risks, but would like to purchase insurance to cover claims that may exhaust their self-insured limits, what coverage should be purchased?

Excess coverage

The "Business Income" additional coverage under the standard Businessowners policy includes all of the following in its definition of "ordinary payroll expenses", EXCEPT:

Executive payroll

Andrew Daniels has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Andrew's home suffered damage. In this situation, both Andrew and his insurance company are required to perform certain duties because an insurance policy is a(n) ______ contract.

Executory.

If the Value Reporting Form Endorsement is attached to a Commercial Property policy, business personal property is covered at all of the following locations, EXCEPT:

Exhibition locations

Which of the following would be covered under any of the Homeowners forms?

Explosion of a hot water heater that damages carpeting

A business covered by a standard Businessowners policy is shut down due to the acts of a civil authority. Which of the following additional coverages would NOT be subject to a waiting period before coverage would apply?

Extra Expense

Coverage for all reasonable expenses incurred by an insured in order to continue as nearly as practicable the normal operation of his/her business after a loss is:

Extra Expense Coverage

Angie has suffered an automobile physical damage loss. All of the following are the insured's duties after a loss under Angie's Personal Automobile policy, EXCEPT:

Facilitate the repairs to the vehicle and submit the invoice to the insurer

Which of the following would be considered an Unfair Claim Settlement Practice?

Failing to deny coverage of a claim within a reasonable amount of time after concluding the investigation

Fernando is a railroad worker covered under the Federal Employers Liability Act (FELA). He has sustained an injury on the job, which of the following must be true in order for Fernando to collect on a claim?

Fernando must prove that his employer's negligence caused his injury

The requirements of the Employment Retirement Income Security Act compel employers to cover their professional liability exposure for honest errors and omissions regarding employee benefit plans by purchasing:

Fiduciary Liability

Under which of the following Professional Liability policies would "employee benefits and counseling errors and omissions" be covered?

Fiduciary liability

You purchase a new car and, as the terms of your auto policy require, you contact your agent and notify him of the purchase. He states to you, "No problem, you're covered." Two months later you are involved in an accident. When you report the claim to your agent he says, "Oh no, I forgot to notify the company! I'm afraid you're not covered." You can:

File a claim against the auto insurer and advise the agent that there is the possibility of an errors and omissions claim for failure to properly notify the insurer of the acquisition of an automobile

Which of the following "additional coverages" of the Building and Personal Property Coverage form is paid without the application of the policy deductible?

Fire Department Service Charge

How long are agents and adjusters required to maintain a record of all insurance transactions?

Five years

How long must a foreign or alien insurer have transacted business elsewhere in order to transact business in Hawaii?

Five years

Which of the following statements is TRUE regarding the definition of "mysterious disappearance" as it applies under a Crime insurance policy?

For "mysterious disappearance" to apply, theft of the property must be ruled out

Which of the following would be covered under the mobile equipment endorsement attached to a Commercial Auto policy?

Fork lift

Good 'Ole Boy Brewing acquires another brewery. Assuming there is no CGL in force for the newly acquired entity, how long will the new entity be automatically considered an insured under the current CGL for Good 'Ole Boy Brewing?

From the time of acquisition and up to 90 days thereafter

What coverage is used to cover damage to a customer's auto in the care and custody of a repair garage?

Garagekeeper's liability

Which of the garage policy coverages will pay for physical damage to a garage customer's auto regardless of legal liability?

Garagekeepers direct primary coverage

Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. Who would be covered for their injuries under Part B of Gavin's policy?

Gavin, Tabitha, and Tabitha's friends

All of the following are eligible risks for Commercial Inland Marine insurance, EXCEPT:

Goods manufactured in the United States for export to other countries

All of the following are eligible risks for Commercial Inland Marine insurance, EXCEPT:

Goods manufactured in the United States for export to other countries (Exports are NOT eligible risks for Commercial Inland Marine insurance, they would be covered under Ocean Marine insurance.)

Gottfried, an insurance agent, has posted information online in an forum for insurance professionals. This information stated that Greta's insurance agency has been engaging in rebating and her appointing insurer is about to file for bankruptcy. Gottfried knows this information is untrue, but he is angry that some of his clients have recently left his agency to place business with Greta. Which of the following statements is true of Gottfried's actions?

Gottfried has defamed both Greta and her appointing insurer, an unethical and illegal action

All of the following is a function of the standard mortgage clause in a property insurance policy, EXCEPT:

Guarantees that the mortgage payments will be made by an insurance policy, if the insured does not make the payments

The Part B - Medical Payments coverage of Dorinda's personal automobile policy has a limit of $5,000. Three of Dorinda's friends were injured in an accident that occurred while they were riding in Dorinda's car. The amount of medical expenses per person were as follows: Harvey - $1,500 Diane - $4,575 Thomas - $6,250

Harvey would receive $1,500, Diane would receive $4,575, and Thomas would receive $5,000

An object that is covered under Morton's Equipment Breakdown policy has been "red tagged". This means Morton's coverage is suspended until Morton takes certain steps. Which of the following statements is NOT one of the steps Morton must take before his Equipment Breakdown coverage can be reinstated?

He must have all of his equipment (even the objects that were not red tagged) by the insurer before the coverage can be reinstated

All of the following statements are true regarding the chief administrative officer of a state insurance department, EXCEPT:

He/She sets insurance rates within their state

Which of the following situations would NOT be considered an unfair claim settlement practice according to the NAIC Model Act?

Indemnify Insurance pays thousands of claims per year, but on two of those claims they failed to accept or deny the claim within the time frame required by state law

All of the following are methods used to control medical costs, EXCEPT:

Individual case method

All of the following would be covered under Part B - Medical Payments of the Personal Auto policy, EXCEPT:

Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store

When a state requires that all property policies within the state provide coverage equivalent or greater to the SFP with the EC perils attached, ______________ policies are exempt from this requirement.

Inland marine

Which of the following property insurance policies is exempt from the Hawaii standard fire policy regulations?

Inland marine

Many stationary objects, such as bridges, tunnels and power lines fall within the nationwide marine definition because they are considered to be:

Instrumentalities of transportation and communication

The perils insured against by a Homeowners policy are contained within the:

Insuring Agreements

The unendorsed standard Garage Coverage form includes all of the following, EXCEPT:

Medical payments coverage for the insured

A Fire policy issued by a mutual insurer in Hawaii is:

Is subject to the requirement of adding the total amount for which the insured may be liable, as required under the charter or articles governing the insurer, in the body of the policy

Which of the following statements is TRUE concerning the Part D coverage of a standardized Personal Auto policy?

It can cover owned and nonowned automobiles

Which of the following statements is TRUE regarding the DP-3 special form?

It provides open peril coverage on the structure and named peril coverage on the personal property

Chaz takes his girlfriend to an expensive restaurant for Valentine's Day. It is raining, so he decides to have the valet park his car, saving his girlfriend from getting wet. The valet is driving the car into the restaurant's parking garage, when he clips the side of the garage entrance with the front fender of Chaz's car. The garage wall needs to be repaired as well as the fender and headlight of Chaz's car. How would Part D of Chaz's Personal Automobile respond to this loss?

It would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage

Jack rents a home to Tanya and maintains a DP-3 policy on the dwelling. Tanya accidentally leaves the oven on all day while she is out, her Lasagna catches fire, burning Jack's house to the ground, along with all the contents located inside. Which of the following items would be covered under Coverage C of Jack's DP-3 policy?

Jack's appliances

All of the following "personal effects" would be covered by the Part D -- Additional Coverage of the Personal Watercraft, EXCEPT:

Jewelry.

All of the following statements are true of coverage under a commercial general liability policy, EXCEPT:

Liability on the part of the insured must be proven before an injured party may be paid medical expenses under the medical payments section of the policy

In a published interview, a local merchant charges that one of his competitors is guilty of unethical and illegal business practices. The competitor sues and is awarded $25,000 in damages. Under which definition of "personal injury" would the merchant have coverage for this claim under his CGL policy?

Libel, slander, defamation, invasion of privacy

All of the following statements regarding medical payments under the general liability policy are true, EXCEPT:

Loss of earnings as a result of injuries caused by a product of the named insured

Garagekeeper's liability coverage excludes all of the following losses, EXCEPT:

Loss to a high-value audio system permanently installed in a covered auto

Under a Business Auto policy, which of the following types of physical damage loss is not covered?

Loss to radar detection equipment

All of the following are examples of unfair claim practices, EXCEPT:

Making claim payments and stating the coverage under which payment is made

Manfred's Masonry is covered by a standard workers' compensation policy. One day Manfred is looking through his policy and he sees policy limits listed. He begins to worry that his employee's indemnity benefits will not be paid because of these limits. Which of the following statements is TRUE about Manfred's worries?

Manfred's worries are unfounded because the only liability limits shown in a workers' compensation policy are for Part Two - Employers' Liability

St. Michael's Church is having their annual rigatoni dinner. Mary is volunteering to serve the guests. Which of the following situations would be covered by the CGL for the church?

Mary spills hot coffee on a guest

In order to comply with the automobile laws of Hawaii, which of the following is OPTIONAL coverage and is NOT required?

Medical coverage

Which of the following would be considered "economic losses" that could result in compensatory damages being awarded in a negligence case?

Medical expense and lost wages

What coverage under the BOP automatically applies if a customer slips and falls on the named insured's premises, regardless of legal liability?

Medical expense coverage

A customer is injured on the insured's premises and the insured is not found legally liable. The insured carries a Commercial General Liability policy. Which of the following CGL coverages would apply to cover the customer's injuries?

Medical payments

The "per occurrence" limit under a Commercial General Liability policy also contains a sublimit for:

Medical payments

The insured carries a yacht policy and is pulling a water skier. The skier is a family member and is injured. What coverage might apply to this accident?

Medical payments coverage

A person takes bank deposits to the bank every day for a business. In Commercial Crime insurance terminology, this person is known as a:

Messenger (A messenger has custody of the insured's property outside the insured's premises.)

All of the following are included in the Businessowners policy coverage territory, EXCEPT:

Mexico

All of the following situations involve misrepresentation, EXCEPT:

Michael manages an insurance agency and posts the sales numbers of all agents publicly each month, to promote competition

"Twisting" always involves some type of:

Misrepresentation

For a workers' compensation claim to be compensable, the injury suffered by the employee must meet all of the following criteria, EXCEPT:

Must have occurred on the employer's premises

Any person who is about to engage in the business of insurance in Hawaii and who has been convicted of any felony:

Must obtain consent from the Insurance Commissioner

A physicians, surgeons, and dentists' professional policy would cover which of the following?

Negligent acts of a staff nurse or aide

Which of the following statements is TRUE regarding coverage under the NFIP for a building in violation of floodplain management ordinances?

Neither the building nor the contents are covered

What premiums are taxable for Property and Casualty policies written in Hawaii?

Net direct written premiums

Gloria's Garment Gallery is sued, and found to be liable for damages equal to Gloria's Commercial General Liability policy limits. In addition to the policy limit, the insurer will pay each of the following, EXCEPT:

New safety equipment for Gloria's Garment Gallery, costing $500, to avoid a future loss

Using the modified comparative negligence standard, a plaintiff in a lawsuit who is 60% at fault for her injuries will receive:

No award

Using the modified comparative negligence standard, a plaintiff in a lawsuit who is 60% at fault for her injuries will receive:

No award (The plaintiff will receive $0. Using the modified comparative negligence standard, if the plaintiff is 50% or more at fault for the injury or damage sustained, damages will not be awarded.)

An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for the missing inventory?

No coverage would apply (There is no coverage for missing property when there is no physical evidence to show the cause of loss)

Universal Foods buys the Chewy Cereal Company. After the purchase is completed, a well known actress sues Universal, claiming that her picture was used without her permission in a Chewy advertisement. The advertisement appeared some time before Universal acquired Chewy. Will Universal's Commercial General Liability policy cover this claim?

No. Personal injury coverage with respect to newly acquired organizations does not apply to offenses committed before the acquisition

The NAIC Model Unfair Claim Settlement Practices Act specifies that when a violation of the Act is suspected, a hearing must be held:

Not less than 30 days after notice has been provided to those involved

The NAIC Model Unfair Claim Settlement Practices Act specifies that when a violation of the Act is suspected, a hearing must be held:

Not less than 30 days after notice has been provided to those involved. is correct.

When an insurer is called upon to defend a suit under a CGL policy, the amount that can be paid for the defense costs is:

Not limited

The insured has a barn on his premises. The dwelling is insured for $200,000 under a DP-2 dwelling policy. How much coverage applies to the barn?

Nothing (Farm property, including farm dwellings are not eligible under the dwelling policy. The barn is farm property and cannot be covered. Farm property forms must be used)

The "occurrence" form of a CGL policy provides coverage for bodily injury and property damage that:

Occurs during the policy period regardless of when the claim is made

Spencer is covered under a standard Personal Automobile policy with a policy inception date of October 15th. Additionally, the policy will expire on October 15th of the current year. Spencer contacts his agent on October 7th and asks to have an new endorsement added to his policy. The agent agrees, adds the coverage the same day, and informs Spencer that there will be an additional premium of $20 per month charged. When will the adjustment of premium be effective for Spencer?

October 7th

The Mobile Home endorsement to a Homeowners policy provides for loss settlement:

On a replacement cost basis if the insurance-to-value (coinsurance) requirement is met

Which of the following is covered by the NFIP?

Overflow of inland or tidal water

Which of the following is covered by the NFIP?

Overflow of inland or tidal water (Overflow of inland or tidal water is the prime coverage under the NFIP. Mudflow is also covered, mudslides are not.)

Which of the following statements is true regarding the business auto policy?

One or more of ten symbols triggers coverage

With regard to workers' compensation coverage, a "competitive" state is:

One where both private and government insurers write workers' compensation policies that compete against one another

Which of the following would require an adjuster license in Hawaii?

One who acts solely on behalf of either the insurer or the insured and who investigates for, reports to, or adjusts claims arising under insurance contracts

Under the provisions of the 1943 New York Standard Fire Policy, an insured may file a suit to recover for a loss, only if all of the required duties have been met and the period of limitation tolled is ________ from the date of the loss.

One year

A NFIP policy has a policy period of:

One year term only

The insured is covered under a standard HO-5 policy. What coverage does the insured have for personal property?

Open perils

All of the following items have a special limit of liability for Coverage C of the Homeowners forms, EXCEPT:

Outdoor furniture

The Building & Personal Property coverage form provides:

Outdoor signs, whether attached to the building or not, for up to $2,500 if damaged by a peril insured against

A Flood Insurance Rate Map:

Outlines the special flood hazard areas and community flood zones

If the insured, covered under a Homeowners policy, suffers the loss of an article that is part of a pair or set. All of the following are options for the insurer to settle the loss, EXCEPT:

Pay for the replacement cost of the entire pair or set

The insured has her fur coat specifically covered under a Personal Articles policy. It has been stored in a plastic garment bag in her closet during the summer months. She decides to take the coat out and hang it outside to freshen up. The next door neighbor's dog sees the coat and attacks it and ruins the garment. The insurer will:

Pay the claim because the loss is not excluded

Which of the following describes the purpose of the Hawaii Insurance Guaranty Association?

Pay the covered claims of insolvent insurers on behalf of its policyholders

In case of injury arising out of a motor vehicle accident, the insurer must pay, without regard to fault, to the following persons the amount of PIP benefits that the person is entitled to recover as a result of an accident, EXCEPT:

Payments to blood relatives that suffer mental anguish as a result of the insured being injured

Which of the following endorsements permits the insured under a Commercial Property policy to increase their business personal property coverage amount for specified periods of time when inventory may be higher than usual?

Peak Season Endorsement

The MCS-90 endorsement provides coverage for all of the following, EXCEPT:

Personal injury

A landlord has wrongfully evicted a tenant. A lawsuit is brought by the tenant against the landlord. The landlord would need:

Personal injury coverage

Adjusters should organize the medical information in the workers compensation claim file using which of the following methods?

Placed in chronological order by the dates of medical treatments and procedures

Underground gasoline tanks on an insured's property leak damaging the property next door. Which policy would pay for clean up?

Pollution Liability endorsement

Which of the following is NOT covered on the Commercial Property basic cause of loss form?

Pollution clean up

Which of the following coverages is not provided under a Commercial General Liability policy?

Pollution liability

While examining a hand saw at Elmer's Hardware, a customer accidentally cuts her hand. Elmers' liability exposure would be addressed by which of the following coverages of his CGL policy?

Premises and Operations Liability coverage

In an insurance contract, "consideration" from both parties is comprised of:

Premiums from the insured and the promise to pay from the insurer

Investment consultants should purchase which of the following policies to protect themselves from errors and omissions?

Professional Liability

All of the following are covered under the definition of money in commercial crime insurance, EXCEPT:

Proof of debt

Which of the following types of property can NOT be covered under a Commercial Inland Marine form?

Property being manufactured and shipped to Europe for sale

Which of the following is NOT one of the three main (general) coverages of the Building & Personal Property coverage form?

Property damage liability coverage

Which of the following lost or damaged property is NOT covered when the Actual Cash Value endorsement is attached to an Equipment Breakdown policy?

Property that has reached obsolescence

Hawaii requires that all property policies issued in the state provide coverage that meets or exceeds the coverage:

Provided by the 1943 New York Standard Fire policy

Producer Robert has offered insurance prospect Joan a portion of his commission if she would purchase an insurance policy. Robert is guilty of:

Rebating

Producer Robert has offered insurance prospect Joan a portion of his commission if she would purchase an insurance policy. Robert is guilty of:

Rebating (Offering a financial inducement to an applicant to purchase insurance is considered rebating)

If an agent offers an inducement to a perspective client in an attempt to write his or her insurance, this is called:

Rebating (This is called rebating which is considered to be an illegal inducement. The agent cannot share commissions or give anything of value to the client to encourage them to purchase insurance.)

If an agent offers an inducement to a perspective client in an attempt to write his or her insurance, this is called:

Rebating.

In Hawaii, all premiums and return premiums received or collected by an insurance producer, he or she must:

Remit premiums, less commissions, to the insurer within 30 days of receipt

Which of the following is considered an Unfair Claim Settlement Practice?

Requiring a claimant to submit a preliminary claim report before moving forward on the claim

The per occurrence liability limit is ____________ for each claim submitted

Restored

The per occurrence liability limit is ____________ for each claim submitted

Restored (The occurrence limit is the most the policy will pay out for each claim submitted. The limit is restored back to the original amount for each new claim.)

The claims-made form of the CGL is designed to cover losses that are reported during the policy period. In order to limit the insurer's exposure to events that happened prior to the inception of the current policy, a ______ is used to exclude coverage for occurrences prior to that point.

Retroactive date

Under a claims made CGL form, the earliest date an occurrence can take place and be covered is the:

Retroactive date

Which of the following statements about risk is the most accurate?

Risk can be retained, shared, transferred, avoided, or reduced

Brianna owns a large Flea Market and she rents space to many different vendors. Brianna requires each vendor to carry liability insurance in case someone is injured in their rented space. Brianna is practicing:

Risk reduction

Horatio is a business owner who is part of a business owners group that are buying old commercial buildings in their small city and refurbishing them. Horatio has bought a beautiful historical building made mostly of wood. He installs a sprinkler system right away to prevent a fire. What risk management strategy is Horatio using?

Risk reduction

Sam has his current business locations covered under a standard Businessowners policy. He purchases a new building to add another business location. Which of the following statements best describes how coverage will apply for Sam's newly acquired property?

Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first

Which section of the modern property insurance policies such as a Homeowners policy, will the language and coverage of the 1943 New York Standard Fire policy be found?

Section I

Which of the following statements is TRUE regarding the sections of a Homeowners policy?

Section I coverages vary greatly between the different HO forms

Which of the following best demonstrates the meaning of "contract of adhesion?"

Since the insurance company formulates the policy language, the courts usually will resolve any ambiguities in the insured's favor

If an applicant for an insurance license in Hawaii fails the same licensing examination on two occasions, before permitting that applicant to take the state exam again, the Commissioner may require a waiting period of up to:

Six months

An office building is limited in the number of stories it may contain and still be eligible for coverage under a standard Businessowners Policy. This number is:

Six stories

Sondra, who is covered under a Standard Fire policy, has a fire break out in her house. She begins moving all the property that she can, outside into the yard. After the fire department extinguishes the flames and things have calmed down on the scene, she discovers that some of her personal property that she moved to her lawn is missing. Which of the following statements is TRUE in this scenario?

Sondra's property will be covered because the peril of "removal" can result in theft or disappearance of property

Regulation of the insurance industry in the United States is primarily left to:

State governments

The common conditions of a Commercial Package policy:

States that to properly rate the policy, the insurer has the right to examine the books and records of the insured company

What type of liability is imposed by law without regard to fault on those participating in certain activities or owning certain things that are considered especially hazardous?

Strict/Absolute

After paying a claim an insurance company may have the right to pursue legal action against the negligent party. This is known as:

Subrogation

Which of the following types of insurance companies must charge a premium tax to be remitted to the state each time a policy is sold?

Surplus Lines company (Surplus lines companies, as non-admitted companies, must charge a premium tax to insureds and remit that money to the state.)

After completing an inspection of an insured's pressure equipment and fire suppression systems, the inspector determines that the pressure equipment needs to be repaired and the suppression systems have not been cleaned and inspected in the time frame required by the policy. The insurer will:

Suspend coverage immediately by red tagging the items until they are repaired, cleaned and pass reinspection

Which Garage Coverage form symbol is used to indicate that the covered automobile(s) is/are subject to a compulsory "no-fault" law?

Symbol 25

Which of the following Business Automobile policy symbols permits the insured to purchase coverage for both liability and physical damage?

Symbol 3

Insurance companies often outsource a large percentage of their processes to Third Party Administrators (TPAs). All of the following facts about TPAs are true, EXCEPT:

TPAs assume the risk on the policies they handle

Which of the following workers' compensation scheduled disability classifications would allow the injured worker to perform "light duty" work while recovering?

Temporary partial disability.

The retroactive date on a claims-made CGL form specifies:

That losses occurring before the date will not be covered by the policy

All of the following statements regarding the Motor Carrier Act of 1980 are correct, EXCEPT:

The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to nonowned trailers being used under a written Trailer Interchange agreement

Gino owns a pizza restaurant and has hired drivers to deliver pizzas to customer's homes in their own vehicles. His restaurant carries a standard Businessowners policy and a Commercial Automobile policy. One evening, one of Gino's hired drivers has an accident and injures other people. Those who were injured in the accident sue Gino's Pizza for damages. Which of the following statements best indicates how the claim will be handled?

The Commercial Automobile policy will respond to the claim

Which of the following statements is NOT TRUE regarding the "Extended Period of Indemnity" option of the Business Income form?

The coverage applies for 120 days following the period of restoration

The major difference between a Commercial Crime policy and a Government Crime policy is:

The coverage for Employee Theft under a Government Crime form can be applied on either a "per occurrence" basis or a "per employee" basis

In which part of an insurance contract would you expect to find a description of the duties and obligations of the insured?

The Conditions

All of the following statements are TRUE regarding the standard Businessowners policy coverage extension for "Business Personal Property Temporarily in Portable Storage Units", EXCEPT:

The coverage is provided for rented storage units away from the insured premises

When an insurance agent is writing a CGL policy and he/she has a choice of using an "occurrence" form or a "claims-made" form, he/she should be aware that the main difference between the two forms is:

The coverage trigger

If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured:

The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid

Residential condominiums in the emergency program of the NFIP are covered by which of the following forms?

The General Property form

Hannah is attending college and her family carries an HO-4 policy with $50,000 contents coverage. Hannah has about $15,000 of personal belongings consisting of clothing, musical instruments, electronic equipment, some appliances and other personal items in her dorm room. Which of the following statements is correct regarding coverage for Hannah's belongings?

The HO-4 form carried by Hannah's family would not provide enough coverage for Hannah's property, therefore a personal property floater should be purchased

Each of the following is true about Homeowners Coverage C - Personal Property coverage, EXCEPT:

The HO-8 does not include coverage for personal property

Each non-resident producer licensed in Hawaii must appoint _________ as his or her agent in order to receive service of legal process issued against that producer.

The Hawaii Commissioner

No credit will be given to any Hawaii producer for any continuing education course unless that course has received an approval code from:

The Hawaii Insurance Commissioner.

The insured has a Homeowners policy with a $5,000 loss deductible. He has purchased some expensive camera equipment, scuba gear, and clothing to take on a 2-week cruise and is concerned about theft of his newly purchased property. What coverage would be recommended?

The Personal Effects Floater

Which of the following statements is true about the Standard Fire Policy?

The Standard Fire Policy is no longer used in its original format

Under employment practices liability, the coverage territory is worldwide as long as the suit is brought in:

The United States

Jones Manufacturing produces a product for resale. They sell all of the items during the 2014 calendar year. During the year 2014 they are insured by ABC Insurance Company. In 2015 they change coverage to XYZ Insurance Company. Late in 2015, a consumer is injured because of a defect in the insured's product. Who is responsible for the claim?

The XYZ Insurance Company as Jones' liability carrier

Tara's hair salon was already having a bad year when a client slipped and broke her arm on a worn out piece of flooring, and sued the salon for $500,000. Tara had recently purchased an Excess Liability policy and she was hoping that she could cover the claim with the new "excess" policy, leaving her underlying CGL policy untouched. This is not possible because:

The coverage under an Excess Liability policy are only triggered when the underlying policy's limits have been exhausted

Which of the following would NOT be excluded under Part A of a standard Personal Automobile policy?

The covered auto while being used to transport passengers to work as part of a share-the-expense carpool

An insurance agent/producer in Hawaii has allowed his license to expire. Which of the following statements is true regarding the procedure for him to have his license reinstated?

The agent/producer may reinstate the license within 24 months if he completes any outstanding continuing education credits and pays an additional fee

Which of the following is NOT a factor in the reserving of a workers' compensation claim?

The amount of Life insurance the injured worker carries

Which of the following is the PRIMARY source of information used by insurance companies during the underwriting process?

The application for insurance

The estimated annual premium for a workers' compensation policy will be based on all of the following, EXCEPT:

The average premium of insureds in the same area working in the same industry

All of the following claims would be excluded under the Homeowners Watercraft Endorsement, EXCEPT:

The bodily injury suffered by the insured while he was operating the covered watercraft, loses his balance and hits his head on the floor of the boat

Jim and Tina are a married couple that enjoy the outdoors. They have their motor home and pick-up truck covered by a standard Personal Automobile policy and both vehicles are listed on the declarations page of the policy. They attend a Camping & RV show on May 1st and purchase a small camper to use when camping near their home that summer. Jim calls the insurance agent on May 10th and adds the camper to the policy. On May 24th, Jim and Tina are pulling their new camper with their pick-up truck on their way to a nearby camp site. Jim is driving and turns a tight corner, clipping a street lamp with the side of the camper. How will Jim and Tina's Personal Auto policy cover the body damage to their camper?

The body damage will be covered by Part D of the policy because Jim reported the new camper to the insurance agent within the required 14 days

Axel Jamison contacts an insurance agent to purchase a Homeowners policy. The agent advises Axel that he will stop by later that day to inspect the home and take the policy application. Before the agent arrives, Axel hides his collection of venomous snakes and does not disclose them on his policy application. The Homeowners policy, with personal liability coverage is issued later that week, and the next day a snake escapes and bites a neighbor. How will the adjuster handle this claim?

The claim will be denied because Axel is guilty of concealment

The Standard Fire policy (SFP) contains an assignment clause. Which of the following statements is true regarding the assignment clause?

The clause states that assignment is permitted with the written consent of the insurer

Which of the following statements is TRUE regarding how the standard Businessowners policy additional coverage of "Collapse" becomes payable?

The collapse must be such that the building cannot be used as intended

The 165 numbered lines on page 2 of the Standard Fire policy covers:

The conditions and exclusions of the policy

The 165 numbered lines on page 2 of the Standard Fire policy covers:

The conditions and exclusions of the policy.

A typical directors and officers liability policy covers each of the following, EXCEPT:

The corporation for suits brought against it because of the actions of the officers and directors

All of the following would be covered under the Products Liability coverage of the CGL policy, EXCEPT:

The cost to recall defective products

Gordon's Carpentry built a garage for a client. Two weeks after the work was completed, the garage collapsed and damaged the client's car, equipment in the garage, and caused bodily injury to the client. Gordon's CGL policy would not cover:

The damage to the garage

An insured is covered under an HO-3 form. If the insured hits his own house and also damages the garage and the attached fence with his vehicle, which of the damages would be covered?

The damage to the house, garage and the fence would all be covered

All of the following describe one of the four elements of a negligent act, EXCEPT:

The defendant entered into a legal contract with the plaintiff

Which of the following statements regarding Commercial Auto coverage is NOT TRUE?

The definition of "trucker" and "motor carrier" are the same in both the Truckers form and the Motor Carrier form

The most significant change that occurs when a Mobile Home endorsement is added to a Homeowners policy is that:

The description of covered property is changed

There are three criteria for a Business Income coverage to pay in case of a loss. Which of the following is NOT one of those criteria?

The direct physical loss suffered by the business must have been caused by a third party

It is possible that medical care benefits to an injured Hawaii employee may be suspended. Which of the following would cause such a suspension?

The employee refuses to accept or obstructs the services of a properly-selected physician

The Business Auto policy liability exclusion pertaining to pollution removes coverage for each of the following, EXCEPT:

The escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto

The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella policy to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this claim likely be settled?

The insured would pay $10,000 and the Umbrella policy would pay $790,000

Which of the following would be covered under the personal property (contents) coverage of an NFIP policy?

The insured's riding lawn mower kept inside an attached garage..

All of the following statements are correct regarding the insurer's right to "examine under oath" as specified in the Building and Personal Property coverage form, EXCEPT:

The insurer has the right to examine any insured under oath, but only if the claimant has brought a lawsuit against the insurer.

The time period after the policy inception and before the policy expiration is known as:

The policy period

Which of the following statements is NOT TRUE of the Builders' Risk coverage form?

The form allows for vacancy of 60 days before coverage will no longer apply

Which of the following would be covered under a Builders' Risk form?

The foundation of the building under construction.

Under the Equipment Breakdown Protection form that covers boilers and machinery, what is considered to be one loss event?

The initial breakdown that causes other breakdowns

Which of the following would be information an IME physician would require from the workers' compensation adjuster in order to complete the IME report?

The injured workers detailed job description provided by the employer that is now part of the claims file

In insurance terms, the phrase "severability of insurance" means:

The insurance applies separately to each insured

Widgets Warehouse has submitted a First Report of Injury to their workers' compensation insurance company for an injury sustained by one of their employees. After an investigation, the insurer has decided to deny the claim. Which of the following is true in this situation?

The insurance company must forward to the injured employee an official written notice of denial

An insured carries a liability policy and an umbrella policy. The verdict in a personal injury liability suit was higher than the insured's underlying liability policy's limit of insurance. In this situation:

The insurance company providing the insured's umbrella liability policy can appeal the case at its own expense even if the insured and the company providing the underlying policy do not appeal

Gerald owns an expensive and rare painting. He has it appraised by an art dealer and insures it for $50,000 under a Personal Articles Floater. A year later, several other rare paintings similar to Gerald's and painted by the same artist are discovered, causing the value of Gerald's painting to be reduced to $40,000. Soon after this development, the painting is destroyed in a fire at Gerald's place of business. After ruling out fraud, how will the insurance company settle the loss?

The insurance company will cover the item for the full $50,000 amount

Which of the following losses would be considered a "Collision" claim under Part D of the Personal Auto policy?

The insured is going around a curve and hits a large boulder in the road

Which of the following statements is TRUE if an insured would like to include Commercial Inland Marine forms to a Commercial Package Policy?

The insured must select controlled Commercial Inland Marine forms to add to a Commercial Package Policy

A Standard Fire policy frequently insures both a mortgagee and an insured under the same policy. All of the following statements are true regarding how a property loss will be paid under an SFP when there is a mortgage on the property, EXCEPT:

The insured receives payment from the insurance company for the entire loss and the insured is responsible for paying the mortgagee their portion of the payment

The additional coverage for debris removal under the standardized Building and Personal Property coverage form will only be paid if:

The insured reports the debris removal expenses to the insurance company in writing within 180 days of the loss

An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $500,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary underlying liability policy or the Umbrella policy. How will this loss likely be settled?

The insured will be liable for the full $100,000 loss

The Homeowners policy on Dylan's $110,000 home is voided when he intentionally burns the house to the ground. Consequently, he does not receive the settlement check he was hoping to when he committed the arson, but he still has an outstanding mortgage balance of $76,000. How does this event affect the mortgage lender?

The insurer pays the mortgage lender $76,000

Mary intentionally trips her neighbor while the neighbor is trespassing on the insured's property. Although the neighbor is not injured, Mary gives the neighbor $500 in cash to settle any potential liability claim. How will Mary's insurance company most likely respond in this situation?

The insurer will deny liability coverage because Mary's action was intentional

An insured does not carry enough insurance to comply with the coinsurance clause of his Homeowners policy. If this insured would have a loss to his covered home, how will the insurer settle the loss?

The insurer will either settle the loss at ACV, or pay the proportion of the cost to repair or replace the part of the building that was damaged, based on the amount of insurance the insured carried

A 40-year old commercial building is insured with a limit on the building of $300,000 and has suffered a partial loss as a result of a hot water heater explosion. It will cost $17,000 for the increased cost of construction to comply with the building codes and $20,000 for all other covered damages. The building is covered under a standardized Building and Personal Property coverage form, with the special cause of loss form attached. The insured submits the proof of loss for all of the repairs, including the increased costs to comply with the new building codes. Which of the following describes how this claim will be paid?

The insurer will pay $10,000 for the increased cost of construction, plus $20,000 for the cost of all other covered damages

When loss settlement under a policy is the "agreed value", which of the following is true?

The insurer will pay the value that was agreed upon and scheduled in the policy

Which of the following statements is TRUE regarding the deductible of the Earthquake Endorsement to a Homeowners policy?

The minimum deductible offered for the earthquake endorsement is $500

Julius has selected the "Maximum Period of Indemnity" optional coverage of the Business Income form. Which of the following statements is TRUE regarding how a loss will be paid if this option is selected?

The most the insurer will pay for the total loss of business income and extra expense is the amount of the loss sustained during the 120 days immediately following the period of restoration or the limit scheduled on the declarations page, whichever is less

The Declarations section of an insurance policy contains:

The name and address of the insured and the duration of the policy

Which of the following claims would NOT be covered under Section II -- Liability of a Homeowners policy?

The named insured files a claim for damage to his house caused by his dog

Which of the following statements is TRUE regarding a Government Crime policy?

The policy permits the limit for employee theft to apply on either a "per occurrence" or "per employee" basis

A named insured in a Personal Umbrella policy has died. Which of the following is true regarding how the policy will be "assigned" following the death?

The policy will be continue to cover the spouse or any member of the deceased insured's household, but only while residing in the residence premises and only until the end of the policy period

There are several different Commercial Property coverage forms that can be added to a Commercial Package policy. Which of the following is NOT described on a Commercial Property coverage form?

The number of buildings the insured owns that are not covered by the policy

Which of the following is TRUE regarding nuclear energy loss coverage under a Personal Automobile policy?

The personal automobile policy will not provide coverage for bodily injury or property damage caused by the insured's nuclear energy losses

Which of the following would be covered under the building coverage of an NFIP policy?

The plumbing system of the covered building.

The insured is liable for $500,000 in damages for a personal injury claim that is covered under the insured's primary liability policy. The primary liability policy has a $300,000 limit per occurrence. The insured also has a $1 million Umbrella policy with a $3,000 self-insured retention limit. How would this claim likely be settled?

The primary policy would pay $300,000 and the Umbrella policy would pay $200,000

Trevor purchases a condemned house in a run-down neighborhood that is scheduled for demolition by the city. He paid $10,000 for the house and wants to protect his financial investment by purchasing insurance. Which of the following statements is true?

The property is not insurable because the loss is expected

The EC peril of "smoke" under the standard DP-1 form covers which of the following?

The release of soot from a furnace that damages the walls of the living room in the covered dwelling

Which of the following statements is NOT true concerning the Law of Large numbers?

The size of the sample group is not relevant to the accuracy of the results

One of the Unfair Claim Settlement Practices is "failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims". How is the length of time that is considered "reasonable" decided?

The state legislatures set the reasonable time period by statute

A shopper in the supermarket drops a bottle of salad oil and it breaks open on the floor in the aisle. An employee begins to clean up the spill. Halfway through the clean up he realizes that it is time for his break and he proceeds to the break room, intending to finish the clean up after his break. During his absence a customer slips on the oil that has not yet been cleaned up and is injured. Is the store liable?

The store is liable because they had notice of a dangerous condition and failed to remedy it

All of the following are situations where a Commercial Umbrella policy would be triggered to provide coverage, EXCEPT:

The underlying liability policy limits are sufficient to pay the entire claim

Which of the following best describes how the peril of "theft" is covered under the 1943 New York Standard Fire policy?

Theft is a covered peril under the removal coverage

Which of the following is TRUE regarding deductibles that pertain to Part D of the standardized Personal Automobile policy?

There are separate deductible amounts, chosen by the insured, for the "Collision" coverage and the "Other Than Collision" coverage

Every insurance contract or certificate procured and delivered as Surplus Lines insurance in Hawaii must bear the name and address of the surplus lines broker who procured it, and have stamped or written on the first page which of the following?

This insurance contract is issued by an insurer which is not licensed by the state of Hawaii and is not subject to its regulation or examination. If the insurer is found insolvent, claims under this contract are not covered by any guaranty fund of the state of Hawaii

A policy has been issued in Hawaii by a Surplus Lines insurer. What must be stamped on the face of the policy?

This insurance contract is issued by an insurer which is not licensed in the state of Hawaii and is not subject to its regulation or examination. If the insurer is found insolvent, claims under the contract are not covered by any guaranty fund of the state of Hawaii..

What is the purpose of the Hawaii Property Insurance Association?

To assure the availability of basic property insurance

What is the purpose of the Hawaii Property Insurance Association?

To assure the availability of basic property insurance.

Which of the following is NOT the purpose of managed care coverage under a health insurance or workers compensation insurance policy?

To lower policy premiums

The purpose of the Expediting Expenses coverage of a standard Equipment Breakdown policy is:

To pay for the extra expense of having equipment repairs performed faster to get the insured back in business quickly

All of the following are reasons the federal government encouraged private insurance carriers to participate in the WYO program, EXCEPT:

To provide federal government jobs to insurance agents who would be in charge of selling the WYO policies

Jane has purchased a Homeowners policy to cover her new home. Which of the following best describes Jane's actions?

Transfer of Risk

Which of the following would be covered by the Earthquake Endorsement to a Homeowners policy?

Tremors that accompany a volcanic eruption

The definition of "occupying" in the personal auto definitions means all of the following, EXCEPT:

Under a vehicle

An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:

Unfair discrimination

Which of the following is not a prohibited practice as specified in the NAIC Unfair Practices article?

Unfair employment practices

An insured's boat is struck by another boat. He and his family are injured. His boat sinks because of the damage. An investigation determines that the party that caused the accident is not insured. If the insured carries a watercraft policy, what coverages would apply?

Uninsured boater's coverage and hull insurance

Since the parties to an insurance policy rely on the honesty of the other, an insurance contract is considered to be based on:

Utmost good faith

Property with no occupants or contents is considered to be _______ whereas property with no occupants but with contents is considered to be _______.

Vacant/Unoccupied

Under the definitions section of the CGL policy, the term "your product" does not include:

Vending machines rented to or located for use by others

Maggie Mae is a cleaning professional who works for Maid My Day household cleaning services. Maggie Mae is traveling in her own vehicle, to a client's home when she strikes and hits a pedestrian. Maggie Mae is liable as the owner and operator of the vehicle, but Maid My Day could be held _______ liable, because Maggie Mae was acting on their behalf.

Vicariously

The MCS-90 Endorsement to a Truckers or Motor Carrier Coverage form can be cancelled:

With 35-days notice if either the insured or the insurer cancels

In Hawaii, Overinsurance of property is deemed to exist in each of the following cases, EXCEPT:

When coverage is written on a replacement cost basis

Under a Crime insurance discovery form, a loss is "discovered":

When the insured first becomes aware that a loss has occurred or gives notice of an actual claim of a covered loss

Under a Loss Sustained Commercial Crime form, coverage applies:

While the policy is in force and for up to one year after the policy expires

When the Hawaii Commissioner deems that current rates may be excessive and mandates that insurers submit new rate filings, when must the new filings be submitted?

Within 120 days of the mandate

When an insured submits a claim under a Commercial Inland Marine policy, the insurer must pay the claim:

Within 30 days of reaching an agreement with the insured

The standardized Building and Personal Property Coverage form requires the insured to submit a signed, sworn proof of loss statement:

Within 60 days of the insurance company's request

Commercial inland marine policies require the insured to submit a signed, sworn statement of loss:

Within 60 days of the insurer requesting it

Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. How long do Tabitha's friends have to submit their medical expense claims for coverage under Part B of Gavin's standardized Personal Auto policy?

Within three years of the date of the accident

Under Coverage F - Medical Payments in Section II of the standard Homeowners policies, medical expenses for the injured party will be paid as long as the claim is submitted:

Within three years of the date of the accident

Which of the following zones is not expected to flood during the "base flood"?

X zones

A burglar apprehended in Smith's Jewelry Store by Mr. Smith, the owner, puts up a fight and suffers a broken jaw as a consequence. The burglar sues Smith's Jewelry Store for bodily injury. Will the store's CGL policy provide defense of the suit?

Yes. Although intentional, the injury was committed by Mr. Smith to protect himself and his property and is therefore covered

Section II of the Business Auto policy provides the details of the insurer's "duty to defend" the insured in a lawsuit. This duty is more broad than the insurer's responsibility to pay any damages for which the insured is liable. Which of the following describes this broadened duty on the BAP?

he BAP "duty to defend" extends to providing a defense against fraudulent claims

The state licensing examination scores for a license application in Hawaii, are valid for _____ from the date of the examination.

two years