Insurance

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 Section II - Additional Coverages of Homeowners policies, damage to the property of others (whether or not in the insured's custody and regardless of fault) is covered up to:

$1,000 per occurrence

A vehicle rolled over exiting the interstate. The insured carries collision coverage with a $1,000 deductible and other than collision coverage with a $500 deductible. The damage to the vehicle is $2,000. What amount is the insurer responsible to pay?

$1,000..

The deductible that may be allowed under uninsured motorists property damage is:

$200

A producer who signs a blank application or policy of insurance will be fined up to _____ for each offense.

$200.

In South Carolina, uninsured motorists property damage coverage may include a deductible of:

$200.

Under the "Emergency Program" in all states except Alaska and Hawaii, the National Flood Insurance Program will insure a single-family residence for up to:

$35,000

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..

If a named insured obtains "newly acquired property" such as a new outboard motor after their Personal Watercraft policy period begins, that property is covered under the policy for a maximum of ____ days after the date it came into the insured's possession.

14

Following notification of a claim, a South Carolina insured/beneficiary can expect to receive claim forms from the insurer within:

20 days

A 2 to 4-Family Dwelling is covered under the NFIP for incidental occupancies if it occupies less than:

25% of the building's total floor area.

Any persons required to appear at a hearing at the request of the South Carolina Director of Insurance must be given at least ______ days notice.

30

The Dwelling endorsement for Broad Theft Coverage excludes losses to dwellings that have been vacant for more than _____ days immediately prior to the loss

30 days

The Dwelling endorsement for Broad Theft Coverage excludes losses to dwellings that have been vacant for more than _____ days immediately prior to the loss.

30 days

Under the Dwelling insurance program, an endorsement may be attached to the policy to cover dwellings during the course of construction. The insurance company must be advised when construction is completed, and within ______ after the insured takes occupancy of the dwelling.

30 days

Policies issued under the National Flood Insurance Program provide removal coverage for property which is moved to another location to protect it from a flood. This coverage applies for up to:

45 days.

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

If an insured takes precautionary measures to protect property from flood damage such as creating a retaining wall of sand bags, how much coverage if any, will be provided by a flood policy?

: $1,000 if the flood is imminent and the property is in danger of flooding

The "Medical Payments" section of the standard Yacht policy will provide coverage for all of the following, EXCEPT:

: A scuba diving accident when diving from the insured boat.

Which of the following is NOT covered by liability coverage under a Homeowner policy?

: A snowmobile in a park..

Which of the following would be found in a yacht policy?

: Liability coverage.

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

: The "Other Insurance" provision

A 36-foot ocean sailing vessel with auxiliary power would best be covered under which of the following types of policies?

A Yacht policy.

The Home Day Care Coverage endorsement of the Homeowners policy excludes coverage for all of the following, EXCEPT:

A child who is attending the daycare falls from the couch while watching TV and needs to be examined for a concussion.

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

A common conditions page

What is the "retained limit" of a Personal Umbrella policy that must be paid when the umbrella policy covers a claim that was excluded by the underlying policy?

A deductible that the insured must pay when the Personal Umbrella policy covers a claim that was excluded by the underlying liability policy.

In South Carolina, if an agent violates a cease and desist order, the penalty may be:

A fine of $50 for each day of violation. If the violation is willful, the fine may be assessed as $100.00 per day.

Which of the following would NOT be covered under the Identity Fraud Expense endorsement when attached to a Homeowners policy?

Additional living expenses

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 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..

Which of the following would be covered under a Personal Umbrella policy?

An insured who commits an intentional act of violence to protect his family

The Homeowners policies allow for the attachment of the Personal Injury endorsement. Which of the following exposures would be covered under this endorsement?

An insured's oral statements to others that harmed the reputation of another person

A Personal Umbrella policy will cover an insured for an "occurrence" or "offense" that occurs:

Anywhere in the world.

Which of the following plans provides insurance coverage to individuals who cannot obtain auto insurance through standard markets in South Carolina?

Associated Auto Insurers Plan.

Part F of the standard Personal Automobile policy states that the policy can be terminated within the first 60 days for any reason other than non-payment of premium if:

At least 20-days' notice is provided to the insured.

A newly licensed South Carolinian has received his/her producer license, and has signed an agent's contract with an authorized insurer. When can this newly licensed producer begin transacting insurance as an agent for this insurer?

Before acting as an agent for an authorized insurer, the producer must be appointed as an agent of that insurer. The appointing insurer must file a notice of appointment within 15 days from the date the agency contract is executed or, the first application is submitted to the insurer.

The NAIC Unfair Claim Settlement Practices Act is intended to cover all of the following types of insurance claims, EXCEPT:

Boiler & Machinery (Equipment Breakdown) insurance claims.

A distinguishing difference between Umbrella policies and Excess policies is:

Both policies provide excess amount of insurance, but an Umbrella policy can also broaden the coverage..

The Part B - Medical Payments coverage under a standard Personal Auto policy will cover the insured if he/she is injured while a passenger on a:

Bus

If the "other insurance" clause in a policy specifies that more than one policy will share equally in the loss until the lowest policy limit is exhausted and continue in that fashion until all policy limits are exhausted. This is known as:

Contribution by equal shares.

Coverage L in a Personal Liability Supplement provides:

Coverage for both bodily injury and property damage to a third party for which the insured is legally liable.

Which of the following is excluded fro coverage under a Homeowners policy?

Damage caused by an automobile.

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

Damage to an insured's property due to fire..

An insurance contract must comply with the "Principle of Indemnity". Jarron's friend Nick, accidentally destroys Jarron's laptop computer. Nick pays Jarron for the damage, but Jarron also submits a claim to his insurance company for the laptop. The claim will be:

Denied because Jarron has already been paid for the damage..

The $1,000 coverage for reasonable expenses incurred to remove property to another location to protect it from flood damage is available on flood insurance:

For 45 days from the time it was removed

Watercraft liability, medical expenses and uninsured boaters are coverages provided under which of the following policies? I. Watercraft. II. Homeowners. III. Mariners.

I only

Under a watercraft policy, which of the following would be covered? I. Bodily Injury II. Property Damage III. Medical Payments to Others

I, II and III

James purchases an outboard motor boat. He will have automatic coverage for the boat under his homeowner policy under which of the following circumstances? I. He reports the purchase of the boat to his insurer within 60 days. II. The boat is in storage on his premises. III. He reports the purchase of the boat to his insurer within 45 days.

II and III only

The increased cost of compliance coverage on flood insurance provides: I. Policy limit coverage for ordinance and law changes. II. Coverage for flood plain management ordinance or law changes. III. $30,000 of coverage per building.

II and III only

If, after a hearing, the Director of Insurance determines that a licensee has willfully engaged in an unfair act or practice, the Director can:

Impose a fine of up to $5,000 and revoke the person's license .

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 true regarding the "Write Your Own" program of the NFIP, EXCEPT:

Insurers are required to participate in the program..

Which of the following would be considered "compensatory" or "special damages" paid to an injured party when the insured is negligent and causes the injury?

Lost wages.

Tony is sailing his 28-foot cabin cruiser on the lake. He runs into a neighbor's dock, destroying the structure and damaging Tony's boat. A crew member in the cabin of the boat is injured and a guest riding on the boat is also injured. All of the following policies below would provide coverage in this situation, EXCEPT:

Medical Payments coverage under Tony's Homeowner policy.

A NFIP policy has a policy period of:

One year term only..

Coverage under the National Flood Insurance Program may be written:

Only in eligible communities

The Limited Fungi, Wet or Dry Rot, or Bacteria Coverage endorsement to the Homeowners policy applies:

Only when the fungi or wet rot results from a covered cause of loss.

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 would be covered by the NFIP?

Reasonable expenses to protect the property when endangered by flood.

The meaning of the term "incidental" as it is used in the Permitted Incidental Occupancies endorsement of the Homeowners policy is:

That the business of the insured, is subordinate to the dwelling being used as a residence.

What endorsement may be used on the dwelling policy to keep values current with the replacement cost of the buildings?

The Automatic Increase Endorsement

Which of the following endorsements, when attached to a Homeowners policy, provides coverage for personal liability and medical payments claims that may arise while the insured is engaged in business activities, that are conducted in a business that is not owned by the insured?

The Business Pursuits Endorsement

Which of the following Dwelling forms may provide replacement cost coverage for the dwelling and other structures?

The DP-2 and DP-3

Which of the following Dwelling forms provides "open peril" coverage for dwellings and other structures?

The DP-3 special form

Bill Mathews works for a company that has provided him with a company car. He is permitted to use the vehicle for personal use. To be properly covered, what coverage should his agent add to his personal auto policy?

The Extended Non-owned Liability Coverage endorsement.

The broad evidence rule is used when:

The actual cash value of property is being determined.

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. Which of the following is true?

The application for coverage requires a 30-day waiting period before coverage applies.

Jerry is fishing from his 22-foot boat on Lake Norman when he is caught in a sudden hail storm. His boat suffers extensive hail damage. When he files a claim against his Homeowners policy, the most likely reason his claim is denied because:

The boat was not fully enclosed inside a building during the hail storm..

parts of a contract

The declarations page is usually the first page in an insurance policy. The conditions clause spells out the duties of the insured and insurer in case of a claim. The insuring agreement contains the promises of the insurer. Exclusions are items not covered in the policy.

Which of the following statements concerning the Limited Fungi, Wet or Dry Rot, or Bacteria Coverage Endorsement to the Homeowners policy is true?

The endorsement is used to add coverage to the property and/or liability sections of a Homeowners policy..

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

The insurance applies separately to each insured

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

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

The plumbing system of the covered building

All of the following statements are true regarding a Personal Umbrella policy, EXCEPT:

The policy can be written as a monoline policy.

All of the following statements are true regarding a Personal Liability Supplement, EXCEPT

The policy will cover watercraft liability

The insured is wearing a diamond ring while on vacation in Europe. Her ring is valued at $1,500 is stolen. What coverage would apply under her Homeowners policy?

The policy will pay the loss less the deductible..

What is the purpose of the South Carolina Property and Casualty Insurance Guaranty Association?

To pay covered claims of insolvent insurers. .

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

The NAIC Model Legislation governing the settling of insurance claims was created:

To set forth standards for the investigation and disposition of claims arising under policies or certificates of insurance..

A family takes their 50 horsepower power boat to the lake on a trailer towed behind their personal auto. The pleasure boat is adequately covered under which of the following policies?

Watercraft.

The "Medical Payments" coverage of the standard Yacht policy covers all medical expenses incurred by an insured, family members, invitees, or guests if a claim is submitted:

Within 1 year following a covered accident

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

X Zones

dwelling and other structures

dp-2 and 3

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

Other Structures (Coverage B) are automatically covered for _____ of the Coverage A limit.

10%

If an insured carries Coverage C under a Dwelling policy, how much coverage applies off the insured premises (world-wide basis)?

10% of the Coverage C limit

The insured is covered under a Watercraft policy and asks the agent about a lay-up period credit to get a reduction in the premium. The dates of the lay-up period are specified in the policy. There is an emergency and the insured must use his boat in a life saving event. The boat is damaged and sinks. Under what circumstances would coverage apply?

: Only if the insurance company is notified within 10 days of the emergency use

What is the penalty for any person who transacts insurance in South Carolina without a license?

A fine of up to $10,000, imprisonment for two years, or both.

Lightning strikes a 50-foot oak tree in an insured's yard splitting the tree in half. The tree falls hitting several small trees causing extensive damage to the trees and scattering debris in the yard. The HO-2 Homeowners Policy will pay:

A maximum of $500 per tree

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..

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 insured suffers a partial fire loss to his residence. Under an HO-3 policy what insuring agreement is available to pay for temporary, alternate living quarters?

Coverage D.

Which of the following statements is NOT TRUE regarding the Home Day Care Business endorsement to a Homeowners policy?

Coverage for corporal punishment is limited.

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..

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 is NOT an example of an unfair claim settlement practice?

Failing to examine a claimant under oath.

If the insured has a home day care covered under the Home Day Care Business Endorsement and conducts the business in a separate structure on the residence premises:

For coverage to apply a limit of liability for the "other structure" must be scheduled on the endorsement.

Monique's house is covered in brick veneer. Monique's house is which of the following types of construction that insurers use to set insurance premiums?

Frame

Which of the following is TRUE regarding the "Towing and Labor Costs" endorsement to the personal auto policy?

It covers mechanic's charges for work performed at the scene of a breakdown.

In addition to the criminal penalties for violation of the South Carolina Insurance Fraud Act, a person convicted must be ordered to:

Make full restitution to a victim..

A Personal Umbrella liability policy:

May cover risks that are excluded by the underlying policy

All of the following statements are TRUE regarding newly acquired property under a Personal Articles Floater, EXCEPT:

Newly acquired property is not required to be of the same class that is already covered by the policy to be covered.

Under a Personal Watercraft, Boatowners or Yacht policy, how are physical damage claims settled?

On an actual cash value (ACV) basis

The Scheduled Personal Property endorsement to a Homeowners form covers personal property:

On an open perils basis

The insured is transporting his yacht on its trailer and pulling it with his truck. The trailer separates from the truck hitch and the boat strikes another vehicle. There is property damage and bodily injury to a third party. The yacht and trailer are a total loss. What coverage would apply under the yacht policy?

Only the damage to the yacht and trailer

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

Only with written consent of the insurer

The DP-3 standard Dwelling form provides:

Open peril coverage on the dwelling and other structures and broad form peril coverage on contents.

A Flood Insurance Rate Map:

Outlines the special flood hazard areas and community flood zones

State "financial responsibility" laws determine the amount of coverage that must be purchased and how insureds must prove coverage under which of the following Personal Automobile insuring agreements?

Part A

The Coverage C - Uninsured Motorists coverage of a standard, unendorsed Personal Automobile policy applies to all of the following, EXCEPT:

Property damage sustained by the insured vehicle by an uninsured vehicle

Replacement cost coverage is best defined as:

Replacement cost without deduction for depreciation

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.

In South Carolina, another name for a state agent is a:

Special agent.

Which of the following standardized Dwelling insurance forms provides coverage for loss of rental income (fair rental value)?

The DP-1, DP-2, and DP-3 forms

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..

What is the penalty for a South Carolina producer who is found guilty of the unlawful practice of misappropriation of funds?

The producer will be charged with a misdemeanor and will be fined at the discretion of the court or imprisoned for up to two years.

A requirement that a plaintiff file a lawsuit within a specific period of time after the cause of the lawsuit has occurred, which is oftentimes when the injury occurred or was discovered is known as:

The statute of limitations

Which of the following statements is NOT TRUE concerning Assigned Risk Plans?

These plans were created to randomly assign all auto policies written in a state to admitted insurers, to be sure all insurance companies can write a proportional amount of business..

Which of the following terms is used to describe a contract where the insurance company is the only party to the contract that is legally bound to perform its part of the agreement?

Unilateral

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

binder

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?

$1,000.

What is the Part D limit of liability for damage to a non-owned trailer under the Personal Auto policy?

$1,500

A non-residential building in Iowa in a community that was admitted to the NFIP Emergency Program would be provided _______ of coverage for the building.

$100,000

An insured purchases a $1 million umbrella policy with a $1,000 self-insured retention (SIR) and agrees to maintain the following underlying limits: auto liability - $100/300/50 and personal liability limits of $300,000. The insured is involved in an at-fault auto accident and the claimant is awarded $200,000 for his bodily injuries. What will the umbrella pay if the insured only carries $50/100/50 auto limits?

$100,000

Personal property that is covered under the Personal Property Replacement Cost Endorsement is damaged and a claim has been filed. The replacement cost of the property at the time of the loss is $2,500. The full cost to repair the property is $2,000. The Coverage C limit of the Homeowners policy is $8,000. No special limits apply to this property and there is no limit applied to the type of property being claimed. Which of the following is the amount that will be paid under the endorsement?

$2,000

Under the "Regular Program" of the NFIP a single-family residence is insured for up to:

$250,000

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

In addition to any criminal liability, civil penalties may also apply to any person violating any provisions of the South Carolina Insurance Fraud Act. What is the additional penalty that could apply to a first offender?

$5,000

The standard ISO Identity Fraud Expense endorsement requires a deductible of:

$500

Fred owns two commercial buildings and carries NFIP coverage on them. The area where the buildings are located is a full-risk zone in the Regular Program. Both buildings are 30 years old and when they are damaged by flood, Fred finds that the cost to comply with the new Floodplain Management Ordinance will be quite expensive. What is the total amount of coverage Fred could receive for the Increased Cost of Compliance?

$60,000

What is the penalty for any person who transacts insurance in South Carolina without a license?

A fine of up to $10,000, imprisonment for two years, or both

Which of the following people does NOT have an insurable interest in an insured property?

A home owner's interest in the local town's water pipes that deliver water to his home.

In the event a resident producer of this state of South Carolina become disable or has died, the surviving spouse or court appointed designee of the disabled or deceased producer may apply to the Director for a temporary producer license. How long after issue, will the temporary license remain in effect?

A temporary license will be issued for a term of not more than 180 days or until the business of the disabled or decedent producer is sold whichever occurs first..

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..

The examination of insurers is a very serious responsibility assumed by the South Carolina Department of Insurance, and particularly the Director of Insurance. How often must insurers submit to a financial examination by the Department of Insurance?

Every insurer licensed in South Carolina must be examined at least once every five years.

The insured carries a yacht policy. One of the crew members is injured while performing a work related task. What coverage must be added under the policy that would respond to cover the crew member's injuries?

Jones Act (crew coverage)

Uninsured motorist coverage in South Carolina:

May not be rejected by the insured. .

All of the following statements are TRUE regarding automobile "no-fault" laws, EXCEPT:

Medical payments and physical damage claims are paid by the state without assigning fault to any party in the accident..

The insured owns a motor home that is not covered by the insured's personal auto policy. This vehicle can be added to the policy by using which of the following endorsements?

Miscellaneous Type Vehicle endorsement.

An insured carries a Personal Property Replacement Cost endorsement attached to his Homeowners policy. He has suffered a loss to his personal property. He submits a claim for actual cash value (ACV) at the time of the loss, but notifies the insurer that he intends to make a claim for replacement cost later. The insurer will honor the insured's request, but only if the cost to repair or replace the property is:

More than $500.

All of the following items are given a "special limit of liability" under Coverage C of the Homeowners policies, EXCEPT:

Motorized land

Losses caused by all of the following are covered under the National Flood Insurance Program, EXCEPT:

Mudslide

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

Multiplying the greater of Coverage A or C, by the deductible percentage scheduled on the policy.

Which of the following is NOT a duty or power of the South Carolina Director of Insurance?

The Director of Insurance cannot impose criminal penalties, they must report alleged criminal activities to the state Attorney General or to law enforcement.

Which of the following NFIP forms provides replacement cost coverage if the building meets the other eligibility requirements for RCV?

The Dwelling and RCBAP forms only

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

The Watercraft Endorsement to the Homeowners policy provides

The Watercraft Endorsement provides Liability and Medical Payments coverage that would otherwise be excluded under the Homeowners policy for watercraft.

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.