Indiana Test 3

An Employment Practices Liability policy

***A business that would like to purchase a policy to provide coverage in case of a lawsuit brought against it due to its hiring practices should buy:***

$40 / $90

***The resident and nonresident independent adjuster license application fees are:***

48 hours

A Commercial Property policy has the "Protective Safeguards endorsement attached indicating that the insured has protective safeguards installed such as a sprinkler system. Should the system become inoperative, how long does the insured have to report this fact to the insurer?

Outlines the special flood hazard areas and community flood zones

A Flood Insurance Rate Map:

4.42

A contractor needs to calculate the amount of concrete needed to pour a slab that is 10 inches thick over an area that is 12 feet by 12 feet square. How many cubic yards of concrete would be needed?

Coverage C.

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?

It does not take into consideration the specific circumstances of a claim.

A disadvantage to using the "formula method" to set claim reserves is:

Functional replacement cost

A method of replacing damaged property with something not exactly like the damaged item, but will perform in a similar fashion is known as:

The insured

A public adjuster's fiduciary responsibility is to:

No-fault

A type of insurance that permits an insured to collect from his/her own insurance company, without proving the negligence of a third-party, is known as:

To provide the insurer with the amount they expect to be paid for the claim submitted.

All of the following are duties of the insured after a loss, EXCEPT:

Corporations

All of the following are eligible for coverage under a personal automobile policy, EXCEPT:

Damage to jewelry stock by a fire caused by lightning

All of the following are exclusions under a jewelers' block policy, EXCEPT:

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

All of the following are functions of the standard mortgage clause in a property insurance policy, EXCEPT:

The defendant entered into a legal contract with the plaintiff.

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

A cerebral hemorrhage occurring at work and caused from years of high blood pressure

All of the following injuries occurring on the job would probably be deemed compensable, EXCEPT:

Outdoor furniture

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

Eric has insurable interest in the city's power transformer that supplies power to the homes on his street because damage to the transformer would leave Eric without power..

All of the following statements about insurable interest are true, EXCEPT:

A van being driven by Bill. The van is owned by Kathy Webster

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?

Adding an endorsement to the coverage part he would like to change

Billy has his commercial interests covered with a Commercial Package policy. He would like to modify one of his coverage parts. This change will be made by:

Direct response system

Binders Keepers, Inc. is selling their insurance products via telephone calls. Which of the following insurance marketing and distribution systems is being utilized by Binders Keepers?

14

Collin suffered a work-related injury on the morning of February 5th and was off work completely until he returned to work on full duty on February 19th. Collin had worked for his employer for four years and was paid $42,125 per year. Collin's state sets the TTD rate at 66 2/3rd percent of the average weekly wage. The state sets the maximum compensation rate at $420 per week and the waiting period at 3 days retroactive after 10 days. Collin was not paid for working on February 5th, so how many days of TTD compensation is Collin entitled to receive?

$30,000

Don is having a new home built. He has purchased a Dwelling policy to insured the home and has attached the Dwelling Under Construction endorsement. The policy limit for the completed dwelling is $200,000. Don's home is 15% complete when a covered loss occurs. How much of the coverage limit will apply to the loss?

Crop-Revenue

Due to decreased demand, the market price of romaine lettuce dropped dramatically during the most recent growing season. As a result, the sale of Joleen's crop of romaine did not make as much money as she expected based on her production history and the harvest-time futures. However, Joleen is insured for this type of loss. Which of the following types of crop coverage has Joleen purchased?

2.5%

Every insurer in Indiana that writes workers' compensation insurance or self-insures for that coverage must pay the Workers' Compensation Board a sum equal to ______ of the total amount of all workers' compensation benefits paid to injured employees or their beneficiaries for the preceding calendar year. This amount is used to fund the Second Injury Fund.

Damage to a grave marker in Bill's family cemetery on the farm premises..

Farmer Bill has his owned farm covered by a Farm Property policy with the special causes of loss. Which of the following would be covered under the Additional Coverages of Bill's policy?

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

Gottfried, an insurance agent, has posted information online in a 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?

16 yards

How many yards of carpeting would be needed for a 12 X 12 bedroom?

No less than $50 and not more than $10,000..

In addition to, or instead of, the suspension, revocation or refusal of an independent adjuster license, the Commissioner may impose of civil penalty of:

The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them

In which of the following situations would trees, shrubs, and other plants be covered by the Homeowners additional coverages?

Express / Implied

Insurance law recognizes two types of waivers. They are:

Her real property taxes have been delinquent for the past year..

Isabelle's house, located in Indiana, has been insured under a Homeowners policy for the past 3 years. When Isabelle receives a notice of cancellation for her Homeowners policy, she knows the reason may be for any of the following reasons, EXCEPT:

Extra Expense coverage

It is essential that operations at some businesses be continued regardless of circumstances. In the event of property damage to the main facilities, arrangements could be made for use of other facilities. What type of coverage would be most appropriate to protect this business against consequential losses?

Deny coverage for defense costs and damages awarded by a court because the policy specifically excludes coverage for this exposure

Larry owns and runs a political website that posts stories that are favorable to one political party and unfavorable to the other parties. Larry has a message board feature where he encourages his visitors to post their own negative opinions about the parties in which they do not agree. Many of these posts have gone beyond opinion and have sunk to the level of slander and Larry is sued. Larry's Commercial General Liability insurer will:

Among other items of damage, the front tires are blown out in a high- speed head-on collision.

Of the following physical damage losses, which would be covered by a BAP providing comprehensive and collision coverage?

A Commercial Inland Marine Contractors Equipment floater.

Physical damage to a contractor's bulldozer is best covered under which of the following?

State governments

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

The General Property form..

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

Locations owned by the named insured that are not described on the declarations page of the policy..

Section I of a Homeowners policy covers all of the following, EXCEPT:

That is not "claims-made"

The "claims-made" CGL policy is "excess" insurance over any other policy:

Unattached signs

The Builders' Risk form covers all of the following, EXCEPT:

The Building Additions and Alterations coverage extension of a Farm Property policy:

The Building Additions and Alterations coverage extension of a Farm Property policy:

Dispute the information contained in their credit report

The Fair Credit Reporting Act provides a credit or insurance applicant with the right to:

$300,000.

The Indiana Insurance Guaranty Association will pay up to ________ per covered claim.

$1,000

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

To collect a commission from the applicant for insurance..

The appointment contract provides the agent with the authority to perform all of the following duties, EXCEPT:

$0

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?

Copyright

Under a Commercial General Liability policy, "property damage" includes all of the following, EXCEPT:

60 days or 5 years..

Under a Commercial General Liability policy, how long is the extended reporting period that is made available automatically and free of premium charge?

Replacement cost

Under a Flood insurance RCBAP (residential condominium building association policy) will settle claims on what basis?

$800

Under a Personal Articles Floater, a pair of antique salt and pepper shakers is insured for $1,000. When one of the shakers is broken, the remaining shaker is worth only $200. How much will the insured receive for the loss without taking into account the deductible?

Actual cash value

Under the Commercial Building and Personal Property Coverage form, if no optional coverages are selected, loss valuation/settlement is based on:

Theft of outside lighting attached to the dwelling..

Under the DP-3 special form, which of the following would be covered?

Physical damage to a non-owned trailer is covered when the insured trucker is liable under a written interchange agreement.

When Symbol 48 is indicated on a Truckers form:

Overinsurance

When a person purchases several insurance policies to provide more coverage on a risk than the value of the possible loss, it is known as:

4, 6, or 8%

When an insured purchases the "Automatic Increase in Insurance" endorsement to their Dwelling policy, they can select which of the following percentages of increase?

Only with written consent of the insurer

When can an insured assign his or her insurance policy over to another party?

Bankruptcy

When the Personal Liability Supplement is purchased as a monoline policy, all of the following are required conditions, EXCEPT:

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

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

Business Income & Extra Expense

Which of the following insuring agreements of the standardized Cyber Liability policy would provide coverage for the insured's lost sales when his website goes offline after he does not meet the extortion demands made by a cyber terrorist?

Failing to acknowledge receipt of a claim within the time frame mandated by state law.

Which of the following is NOT a violation of 18 US Code 1033, 1034 Fraud and False Statements regulation?

Being sued when another company accuses the insured company of stealing their slogan and using it in their advertising

Which of the following is NOT an exclusion of Coverage B under a Commercial General Liability policy?

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

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

The loss to the plaintiff was caused intentionally by the defendant

Which of the following is generally not considered to be a legal defense against claims of negligence?

Contribution by equal shares

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?

Jettison

A voluntary act of destruction in which a ship's cargo is thrown overboard in order to save the ship is known as:

Coverage is most often written on a named peril basis

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

The endorsement excludes tornadoes and hurricane winds from the covered perils

All of the following statements are TRUE regarding the "Windstorm or Hail" endorsement to a Dwelling policy form, EXCEPT:

This provision requires the insurer to have the insured's approval on the amount that is settled on the claimant

All of the following statements are TRUE regarding the "consent to settle" provision of Professional Liability policies, EXCEPT:

Off-premises coverage can be purchased by the named insured for a tenant's personal property..

All of the following statements are TRUE regarding the Broad Theft coverage endorsement to a Dwelling policy, EXCEPT:

The facility cannot exceed more than 500 individual self-storage units.

All of the following statements regarding eligibility of self-storage facilities for a standard BOP policy are true, EXCEPT:

A hospital orderly who slips and injures his back while transporting the body of a deceased patient to the morgue

All of the following would be covered by a Hospital Professional Liability policy, EXCEPT:

The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits.

An insured is covered under a CGL policy. He would like to purchase another policy to increase the limits of insurance for his commercial liability exposures. Which of the following statements is correct regarding the insured's situation?

$13,000

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?

The Umbrella policy will not become primary when the insurer carrying the underlying insurance becomes insolvent, but will pay the $400,000 as if the underlying insurer had paid its $100,000 limit of liability

Cameron has his home covered under a Homeowners policy and his limit for bodily injury is $100,000. He also purchased a Personal Umbrella policy with a $1,000,000 limit of liability. Cameron is sued and a judgement was made against him for $500,000. To trigger his Umbrella policy, his Homeowners policy must pay $100,000, but he finds that the insurance company from which he purchased his Homeowners policy has become insolvent. How will the Umbrella insurer pay the claim (disregarding any retention limit)?

George's surgery after he breaks his leg when he trips over some stock left in the aisle while he is working as a stock person at the covered store

Coverage C of a Commercial General Liability policy pays for all of the following, EXCEPT:

$0. Flood is excluded on on Dwelling forms unless fire

Dan insures a home for adequate limits under a DP-2. If a flood causes $1,000 in damage, what is the maximum the insurer will pay, disregarding deductibles?

Draft authority.

Fred is an adjuster with Indemnify Insurance, Inc. He is authorized by the company to pay insureds or claimants up to $75,000 on Homeowners claims and up to $40,000 on health insurance claims. This is known as:

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

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

The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium.

Jordan's Jams purchases a standardized Commercial Property policy on August 15th from Binders Keepers, Inc. On September 20th, Binders Keepers adopted a form revision that provided broader coverage without additional premium, however Jordan's policy was written before the form revision was adopted. Which of the following statements is TRUE regarding how the broadened coverage would apply to Jordan's Jams?

A bandsaw affixed to the floor.

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?

Unfair discrimination

Making distinctions in the premium rates charged for insurance between insureds or property having similar risk characteristics is an example of:

Other Structures

Many states amend property insurance coverage additions and extensions by statute due to insufficient coverage amounts or time limits. All of the following are property insurance additions or extensions that are frequently amended by state statute, EXCEPT:

The insurer will not have to pay this claim.

Mr. Jones, an Indiana resident, has his car damaged by an unknown person who leaves the scene of the accident. He carries uninsured motorist property damage coverage. He does not carry collision coverage but does carry "other than collision" coverage. The hit-and-run driver cannot be identified. Which of the following would apply to this claim?

Replacement cost basis.

The Hull coverage of a Yacht policy provides settlement on a(n) ___________ for partial losses.

The individual has lived in the state of Indiana for a least 2 years

The Indiana Commissioner will approve an independent adjuster application upon finding all of the following, EXCEPT:

Domestic companies

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:

A foreign insurer

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

The "Other Insurance" provision.

Which of the following policy provisions or clauses is designed to prevent the violation of the principle of indemnity?

They can be written to broaden the coverage of the underlying liability policy.

Which of the following statements about Excess Liability insurance policies is FALSE?

25% of the policy limit or $10,000, whichever amount is less..

Which of the following statements best describes the loss settlement provision under the Commercial Inland Marine Commercial Articles form?

Medical payments coverage is automatically provided.

Which of the following statements is FALSE concerning coverage under the Business Auto policy?

The coverage includes split limits to cover more than one person, per accident..

Which of the following statements is NOT TRUE regarding Part B of the personal automobile policy?

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

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

They are used only with first-party claimants to protect the rights of insureds and insurers

Which of the following statements is TRUE regarding nonwaiver agreements and reservation of rights letters?

Coverage for fire damage liability applies only to the area of the building the insured rents and occupies and does not provide coverage to any other areas where the fire may spread.

Which of the following statements is TRUE regarding the "Damage to Premises Rented to You" coverage of a Commercial General Liability policy?

The HO-8 form specifies a limit of $1,000 for theft

Which of the following statements is TRUE regarding the peril of theft under the Homeowners policies?

A fire caused by earth movement..

Which of the following would NOT be excluded under the Commercial Property basic cause of loss form?

By using the contribution by equal shares method

Willie's Widgets carries two separate policies to provide Employers Liability coverage. When Willie's is sued by an employee for an injury not covered by state workers' compensation statutes, how will the claim be settled?

1.25

With regard 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?