Insurance

what does advertising injury coverage of the Farm insurance forms cover?

"Advertising injury" would cover a farmer who unknowingly disparages the crops grown by another farmer when advertising his own crops. Intentional acts, advertising incorrect prices or descriptions are not covered.

Which of the following best describes when an aircraft is "in motion?"

"In motion" describes anytime the plane is moving under its own power or from momentum generated by its own power.

define nonconcurrency

"Nonconcurrency" is a situation where an underlying policy and an excess liability policy, have different inception and expiration dates, creating a situation where the underlying policy is not in force to trigger coverage under the excess liability policy.

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 is available under the standard policy for "towing and assistance".

The medical payments coverage of a Farm policy can be claimed for up to:

3 years

The liberalization clause of a Businessowners policy automatically applies favorable expansions of coverage, for which a premium is not charged if the changes are made during the policy period or within ______ prior to the effective date of the policy.

45 days

Complete records of transactions under the license of all licensees in Kentucky must be kept at the place of business for at least _____ after completion of the purpose for which it was created.

5 years

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

A custodian means the named insured, any of the insured's partners, or any employee, while having care and custody of the property inside the premises. It does not mean a watchman or a janitor.

A standard homeowners policy is best described as:

A package policy that provides both property and liability insurance

Which type of Crop insurance policy insures the entire acreage rather than an individual crop?

Adjusted gross revenue policy insures the revenue of a producer's entire farm, rather than an individual crop, by guaranteeing a percentage of gross farm revenue.

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a mutually agreeable settlement is known as:

An alternative dispute resolution (ADR) method by which disputing parties use a neutral outside party to examine the issues and develop a mutually agreeable settlement is known as mediation.

If an adjuster license is about to be renewed in an even numbered year, notification is required by the licensee's birth month based on

An individual licensee whose birth date is in an even-numbered year must submit the renewal request, continuing education course completion documentation, and fees to the Commissioner by the last day of the licensee's birth month in the next even-numbered year after the date the license is issued, and each subsequent even-numbered year thereafter.

What is the law of large numbers?

As the number of insured units increases, the ability to predict total and average losses increases. In order to be profitable, insurance companies must write a large number of risks and charge an adequate rate for the exposure being insured.

What does a Homeowners policy provide?

Both property and liability coverage

The hull physical damage deductible, in aircraft coverage, applies to which loss?

Collision, although other deductibles can be written if requested by the insured.

Which line of insurance listed below was covered under the Terrorism Risk Insurance Act of 2002, but was excluded with the passage of the Terrorism Risk Insurance Extension Act of 2015?

Commercial Auto insurance was excluded with the passage of the Terrorism Risk Insurance Extension Act of 2015.

What is comparative negligence?

Comparative negligence establishes the percentage of fault shared by each driver in an accident in which both contribute to causing the accident. Comparative negligence laws vary by state.

What does part D- other than collision coverage of the personal auto policy cover?

Comprehensive coverage provides theft coverage including damages that occur as a result of the theft. The corrosion is excluded as "wear and tear"

What does coverage F under the farm forms cover?

Coverage F covers unscheduled personal property on a blanket basis. One limit for all business personal property is stated. The items are not scheduled as they are under Coverage E.

Typically, how are defense costs handled under an aviation policy?

Defense costs and related expenses are usually handled as supplementary payments and do not affect the policy's applicable insurance limit.

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 should be purchased by a self-insured workers compensation plan to cover claims in excess of the self-insured limits of coverage.

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?

Flood is an excluded peril under all the dwelling forms unless fire ensues and then only the loss caused by fire is covered.

If the insured carries a DP-2 Dwelling form and insures the dwelling for 80% of its replacement cost value, what will he be paid if his 30-year-old roof sustains $10,000 in damages (disregarding any deductible)?

If the insured carries 80% to value he would be entitled to full replacement cost coverage for his damaged roof.

Under a Mobile Homeowners package policy, how is the mobile home itself covered in case of a total loss?

If the mobile home is insured for at least 80% to value, the insured is entitled to replacement cost coverage up to the limit of the policy.

The Builders' Risk coverage form includes an additional coverage that provides a limited amount of coverage for lawns, trees, shrubs, or plants when located outside of buildings. This limit is:

Lawns, trees, shrubs, or plants when outside of buildings are excluded under the Builders' Risk form, but a small amount of coverage is added back into coverage (as an additional coverage) for $1,000 but not more than $250 for any one tree, shrub, or plant.

Which of the following is true about a mobile home endorsement in terms of eligibility?

Mobile homes may be covered by an HO-2 or HO-3 form by attaching the mobile home endorsement. To be eligible, a mobile home must be designed for year-round living and be at least 10 feet wide and 40 feet long.

Is a county considered a "community" under the NFIP?

NO, A county is not considered a "community" by the NFIP.

Does an aircraft policy cover a loss involving an unapproved pilot operating an insured aircraft

No, a loss involving an unapproved pilot operating an insured aircraft is excluded.

what does part A of the Person auto policy cover?

Part A - Liability of the personal auto policy would cover the driver and passengers in the other car.

What is SIR

SIR is self-insured retention, which is the umbrella policy deductible. this contains a deductible for claims that are not covered by the underlying coverage but are covered under the umbrella policy

What coverage is provided under the BOP for a steam boiler explosion?

Steam boiler explosions are excluded under the Businessowners policy, unless the damage is the result of an explosion of gases or fuels within the object or flues.

How will the BOP pay if there is other coverage?

The BOP will pay on an excess basis if the other coverage doesn't provide adequate limits of coverage

Personal property normally kept at other residences owned or rented to the insured is covered under the Homeowners forms for

The Homeowners forms state the limit of coverage for personal property normally at other residences owned by, or rented to, the insured as 10% of the Coverage C limit or $1,000, whichever is greater.

What is the personal effects floater?

The Personal Effects Floater can be purchased either on a permanent basis for frequent travelers or for a single trip.

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)?

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

An insured has a vacation home covered under a Dwelling policy and he would like to add coverage to his policy for Personal Liability and Medical Payments. The insured purchased a Personal Liability Supplement with the minimum limits for Coverage M - Medical Payments. How much coverage for medical payments will the insured have for each person?

The coverage limit for Coverage M of the Personal Liability Supplement is $1,000 per person.

The base deductible of 5% under the Earthquake Endorsement can be converted to a specific dollar amount by:

The deductible for an Earthquake Endorsement is converted to a specific dollar amount by multiplying the greater of Coverage A or C limit of liability, by the deductible percentage.

Katrina has her commercial building covered by a Commercial Package policy. Which if the following is the section within her policy where she would see the dimensions of her building listed?

The dimensions of the insured commercial building would be found on the declarations page of the Commercial Property coverage part.

Dexter covers his dwelling under a DP-2 policy with $10,000 personal property (contents) coverage. He owns a canoe and stores it at a lake in a private garage that he does not own. Fire destroys the garage and Dexter's boat. How much coverage will Dexter's DP-2 form provide for his boat?

The extension of coverage that applies to personal property off the covered premises (world-wide coverage) does not extend to rowboats or canoes.

A fidelity bond is designed to protect the employer against:

The fidelity bond is designed to protect the employer from loss stemming from dishonest acts by his employees. The bond may be written to cover specific employees or positions (scheduled) or all employees (blanket).

What is the monetary penalty for failing to provider Workers' Compensation coverage in Kentucky?

The fine can be between $100 and $1,000 per employee. Furthermore, each day without coverage constitutes a separate violation

The "Business Income" additional coverage of the standard Businessowners policy provides coverage for "ordinary payroll coverage" for:

The insurance company pays for only the loss of business income sustained during the restoration period that takes place within 12 consecutive months after the date of the covered loss or damage. However, it pays for ordinary payroll expenses for only 60 days after the date of loss unless a higher number of days is on the declarations.

When can the insurer examine an insured under oath?

The insurer can request an examination under oath at a time and place that is agreeable to both parties.

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.

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

The limit of Part B is $5,000 PER PERSON. However, each person will only receive the amount they spent in medical expenses, up to $5,000. Therefore, Harvey would receive $1,500, Diane would receive $4,575, and Thomas would receive $5,000.

does the named peril aviation policy cover flood?

The named peril policy would not cover the peril of flood.

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

The policy will pay up to $250 for the cost of bail bonds that may be required in case of an auto accident.

How is personal property of a dwelling covered under a farm policy?

The property is covered on an actual cash value basis. Like a homeowner policy, the replacement cost endorsement may be attached for an additional premium.

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

The territory is anywhere in the world; however, the claim must be brought in the United States. Most of these policies are written on a claims made form. In order for a claim to be covered the wrongful act must have occurred and the claim must be made during the coverage period or the extended reporting period.

Under the farm forms, theft of certain types of property has a theft coverage limitation. The theft limitation on firearms and other related equipment is:

The theft limitation on firearms and other related equipment is $3,000.

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?

The total claim is for $9, but the CGL policy's aggregate limit is $8, so this is the "retained limit" of the CGL policy that will trigger the Umbrella policy.

Under a Businessowners policy, the "Hired and Nonowned Auto Liability" endorsement would cover:

This endorsement is used with the BOP when the insured does not carry coverage for liability under a Commercial Auto policy.

What does "inside the premises - theft of money and securities" cover

This insuring agreement covers loss of "money" and "securities" (as defined in the form) resulting from theft, disappearance, or destruction. Theft by the insured and/or its partners, members, employees, managers, directors, and trustees is excluded.

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?

This is an "other than collision" loss (comprehensive). The coverage applies after a 48-hour waiting period and pays $20 per day up to a total of $600 for transportation expenses. After a waiting period of 48 hours, her policy will pay $20 per day up to a maximum of $600 in transportation costs

The Terrorism Risk Insurance Act and all of its extensions and re-authorizations is actually an agreement between:

This is an agreement between the Federal Government and insurance companies to provide coverage for acts of terrorism.

In Kentucky, if a worker's injury is considered to be a permanent partial disability with a disability rating of 25%, how long will benefits will be paid?

With a disability rating of 50% or less, benefit payments will extend to 425 weeks. Benefit payments extend to 520 weeks if the disability rating exceeds 50%.

What is not covered by the Federal Employee's Compensation Act (FECA)

Workers' compensation benefits are provided in exchange for the insured's right to sue. Damages are awarded if the insured sues, therefore this would be the benefits NOT covered by FECA.

what is liability loss?

a liability loss occurs when a person or entity is determined to have been responsible or legally liable for injury or loss to another person or liable for damage to another's property and the law requires them to make financial restitution

What is vicarious liability (imputed liability)

a situation when a person is held responsible for the negligent acts of another person. Example: a pizza delivery driver negligently causes an accident that injures a pedestrian. the employer becomes responsible for the negligence because the employee was a driving a company vehicle, and the accident occurred on company time

What is considered a "covered auto" under a standard ISO Auto Policy

a vehicle acquired and submitted within 14 days of purchase

what is half-head

an animal under one year of age, $1000 limit

what is a fidelity bond

covers loss resulting directly from dishonest or fraudulent acts committed by employees acting alone or in collusion with others

what is counterfeit currency bond

covers loss resulting directly from receipt by the insured, in good faith, of any counterfeit money

what has to happen for a liability policy to provide coverage?

for a liability insurance policy to provide coverage, the insured must be guilty of negligence

What is excess coverage?

it provides higher limits on coverage already on effect. "adding an extra layer to the coverage that is already carried." DOES NOT PROVIDE BROADENED COVERAGE

what does "insured" mean under section 2 of the homeowners forms

w/ respect to animals or watercraft, any person or organization legally responsible for these animals or watercraft which are owned by an insured w/ respect to a motor vehicle insured means persons engaged in your or your relative's employ, or other persons using the vehicle on an "insured location" with your consent

Can an adjuster's oral Or written statements legally bind an insurer

yes

what does "insured" mean under section 1 of the homeowners forms

you and residents of your household; your relatives; persons < 21 and in the care of an insured; a student enrolled in school

what is absolute liability

Absolute liability is imposed by law on those participating in certain activities that are considered especially hazardous. most frequently applied to activities involving: dangerous materials hazardous operations dangerous animals

Why doesn't contract surety bonds guarantee the payment of certain taxes

Contract surety bonds are required by the owner for performance of a task as per the contracted agreement. The other bonds listed fall into the area of miscellaneous bonds and are required for the payment of various taxes, usually sales taxes to the state government.

Mr. Vickers lives close to a river that has, on occasion, flooded. On Friday morning he is watching the weather station and notes that there is a flood warning in his area. He calls his agent and asks the agent to bind flood coverage immediately.

Flood insurance requires a 30-day waiting period. The exception to this rule is when the insured is required to provide coverage required by a mortgagee.

What is the standard regarding the cancellation or non renewal of a property or casualty insurance policy in KY

Kentucky state law stipulates that a clearly defined reason for a cancellation must be given by the insurer as a part of the disclosure regulation. The reason given to an insured for declination, cancellation or nonrenewal of a policy must be stated clearly on the notice.

Can a farm's residence be covered under a homeowners policy if the farm has separate coverage?

No. The principal residence must be covered under a Farmowners policy. The Homeowners policy is not designed to cover farm property, even the residence.

When are nonwaiver and ROR ltrs used?

Nonwaiver and reservation of rights letters preserve the rights of insured's and the insurance company. Third parties do not have rights under an insurance contract, therefore nonwaiver and reservation of rights letters are NOT used with third parties.

For a loss under a personal auto policy what is the appraisers responsibility

Obtaining an appraisal of damaged property is not a required duty of the insured. Verification of the damage is the duty of the auto appraiser.

Statements that are true to the applicant's best knowledge and belief are:

Representations are statements that are true to the applicant's best knowledge and belief. They are not necessarily the absolute truth, but they are what the applicant believes to be true. In many states, a representation may be oral or written.

what two sections is the homeowners forms broken down to

Section 1: property coverages Section 2: liability coverages

What is the additional limit provided by a standard Businessowners policy "Debris Removal" in the event that the policy limit is exhausted in paying the loss?

The additional limit is $25,000 when the basic coverage provided by the policy is not enough. The basic coverage provides debris removal coverage up to 25% of the actual amount of the loss up to the policy limit. Sometimes the amount of the loss PLUS the debris cleanup will exhaust the limit and the company will pay up to an additional $25,000 for debris removal.

The Equipment Breakdown policy (formerly called Boiler & Machinery) provides for replacement cost coverage in case of a covered claim. Under what conditions would the insurer only pay actual cash value in case of a loss?

The valuation clause provides for replacement cost coverage on all property, except if repair or replacement is not made within 24 months of the date of the accident, actual cash value will be paid.

What does homeowner policies include that dwelling coverage does not

Theft and personal liability unlike dwelling which can only obtain those coverage through adding an endorsement

Vehicles which may be insured by a personal auto policy are described in the eligibility rules. Each of the following statements is true about vehicles eligible for personal auto policy (PAP) coverage, EXCEPT:

Vehicles with fewer than four wheels are NOT eligible. Therefore, motorcycles and some three wheel all terrain vehicles, are not eligible for the personal auto policy. A few insurance companies MAY make an exception for motorcycles by using an amendatory endorsement.

Which of the following terms means "liability through another person"?

Vicarious means "through or in place of another person." There are times when a person may be held responsible for the negligent acts of another person. This is known as vicarious or imputed liability.

what is in transit bond

covers loss of property from robbery, common-law or statutory larceny, theft, misplacement, mysterious unexplainable disappearance, being lost r made away with, or damage or destruction while the property is in transit anywhere in the custody of a natural person acting as a messenger, or in the custody of a transportation company

what is on premises bond

covers loss of property resulting directly from robbery, burglary, misplacement, mysterious unexplained disappearance, damage or destruction; or theft, false pretenses, common-law or statutory larceny, committed by a person present in an office or on the premises of the insured

What are the 4 elements of negligence

duty of care: a department store has a duty to take reasonable care to keep their premises safe for customers; one party has a legal obligation to act in a certain manner toward the other breach of duty: a surgeon amputates the wrong leg, leaving the patient w/o a functioning leg; failing to take reasonable care in fulfilling the duty causation: the breach of duty of care must be the legal cause of the harm that was suffered by the injured person. actual(direct)/proximate damages: the compensation for causing loss or injury through negligence or a deliberate act. May also be an estimate or award by a court as a fine for breach of duty

What is an actual cause in a liability claim

example: a truck drives into a house and the ceiling falls and crushes someones' leg. actual cause of the injury is the ceiling falling

Personal umbrella coverage

excess limits and broadened coverage in the personal liability insurance provided in a homeowner policy and personal automobile

Cargo liability protects against

legal liability for loss or damage to cargo or baggage.

what peril does the BOP policy include without endorsement?

open peril coverage

premises and operations liability

premises covers occurrences taking place in or on: premises designated on the dec page; premises alienated by the name insured; newly acquired property if the insurer is notified w/in 90 days acquisition; ways immediately adjoining the insured premises. operations deals w operations occurring away from the insured's principal place of business while "operations" are being performed for the covered business.

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

Crop insurance policy limits are usually written as a:

When an insured loss occurs, the policies will pay the determined percentage reduction in yield times the amount of insurance per acre, regardless of the actual crop value.

What coverage is provided by the Farm Employers Liability and Farm Employees Medical Payments insurance endorsement?

This endorsement offers farm employers liability coverage and farm employees medical payments insurance. It can be attached to FL 00 20 or to the CGL form. FL 04 65 offers to pay those sums that the insured becomes legally obligated to pay as damages because of BI sustained by a farm employee arising out of and in the course of employment by the insured. And, the endorsement offers to pay to or for each farm employee who sustains BI caused by an accident, all reasonable medical expenses to which the insurance applies. FL 04 65 basically combines the employers liability coverage from a workers comp policy with med pay coverage. This endorsement does not provide statutory workers compensation benefits.

Under Part B- Medical payments of a Personal Auto policy, reasonable medical and funeral expenses will be paid if they are submitted within how long of the date of accident?

Three years

what is the aggregate limit

the limit stated in the policy representing the total amount for all claims paid during the policy period. once the aggregate limit has been met the insured is without coverage

Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay?

One could argue that this was caused by neglect, but the damage cannot be tied to the neglect exclusion. This exclusion applies post-loss and not before a loss has occurred. The company would have to prove intent on the part of the insured to damage his own property. Even if the furnace caused a fire, the company would have to prove an intentional act such as arson. Water is not considered covered property so the value of its loss (the water bill) is not covered.

The parties to a bond include the surety, the principal, and:

There are three parties to a surety or fidelity bond: the principal, whose performance is being guaranteed by the surety; the obligee, to whom the principal makes a promise to perform or to be honest, and the surety, which guarantees the principal's performance. If the principal fails, the surety will indemnify the obligee, up to the face amount.

what is the proximate cause in a liability claim

example: a truck drives into a house and the ceiling falls and crushes someones' leg. the proximate cause of the injury is the truck driving into the building

commercial umbrella coverage

excess and broadened coverage over the coverage of commercial policies