Insurance Exam 1

What is the limit of insurance that applies to property in transit in the BOP? Answer Choices: $1,000 $2,500 $5,000 $10,000

10k

The NAIC Unfair Claim Settlement Practices Act is intended to cover all of the following types of insurance claims, EXCEPT: Answer Choices: Health insurance claims. Dwelling and Homeowners insurance claims. Automobile liability claims. Boiler & Machinery (Equipment Breakdown) insurance claims.

Boiler & Machinery (Equipment Breakdown) insurance claims.

Which of the following coverages may be added by endorsement to an Equipment Breakdown policy? Answer Choices: Business income. Expediting expenses. Property damage liability. Damage to property of the insured.

Business income.

The NAIC Model Unfair Claim Settlement Practice Act DOES NOT apply to any of the following types of coverage, EXCEPT: Answer Choices: Workers' Compensation. Surety bonding. Dwelling insurance. Equipment Breakdown (Boiler & Machinery).

Dwelling Insurance

All of the following statements are TRUE regarding Part D - Other Than Collision coverage, EXCEPT: Answer Choices: Covers damage to the insured vehicle from fire. Covers damage to the insured vehicle from vandalism. It is "property" coverage. It covers property damage the insured causes to others.

It covers property damage the insured causes to others.

The 1943 New York Standard Fire policy specifically excludes all of the following, EXCEPT: Answer Choices: Currency. Deeds. Evidences of debt. Manuscripts.

Manuscripts

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. Answer Choices: One year. Two years. Three years. Four years.

One Year

Which of the following statements is TRUE regarding the Homeowners "additional coverage" known as Landlord's Furnishings? Answer Choices: Extends Coverage A. Provides up to $2,000 to cover landlord's furnishings such as appliances, carpeting and other household furnishings. This additional coverage includes the theft of the landlord's furnishings. The coverage is not additional insurance and does not increase the limits of the policy.

The coverage is not additional insurance and does not increase the limits of the policy.

The hull coverage in an aircraft policy does not cover which of the following? Answer Choices: Instruments Engines Transporting devices Autopilots

Transporting devices

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? Answer Choices: The damage to the house and garage only. The damage to the fence only. None of the damages would be covered because the insured's vehicle caused the damage. the damage to the house, garage and the fence would all be covered

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

When is a passenger first covered under an aircraft policy? Answer Choices: When Entering the Aircraft When in an airport with a ticket for a flight. While on the Runway While walking down the passenger walkway.

When Entering the Aircraft

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? Answer Choices: Select the Correct Answer Any property that is excluded from coverage. A description of the property being covered by the policy. The number of buildings the insured owns that are not covered by the policy. Any deductible that applies to the policy.

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

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: Answer Choices: $1,500 per occurrence $5,000 per occurrence $1,000 per occurrence $2,500 per occurrence

$1,000 per occurrence

Alex has his SUV covered under a standard Personal Automobile policy. He has borrowed a trailer from his friend Josh, hitched it to his SUV, and begins moving some boxes from his house to a new house he recently purchased. After he has unloaded the trailer, he is driving back to his house and loses control of his vehicle, wrapping Josh's trailer around a tree. There is no other insurance covering Josh's trailer and Alex's Part D deductible for "Collision" is $250. His deductible for "Other Than Collision" is $300. Before the accident, the ACV of the trailer was $2,000. The cost to repair or replace the trailer with like kind and quality is $1,800. How much coverage would Alex's policy provide? Answer Choices: $1,800. $1,550. $1,500. $2,000.

$1,500

A standard Homeowners policy has been issued with a $300,000 limit to cover a four-family dwelling. What is the automatic amount that will be provided for Coverage C? Answer Choices: $150,000 $90,000 $75,000 $30,000

$75,000

Which of the following best describes the "statutory MMI" under a worker's compensation claim in Texas? Answer Choices: The MMI that is imposed on an injured worker as a result of litigation. 104 weeks of income benefits have been accrued and the injured worker has not already received MMI status as determined by the treating physician. The extension of time that the Commissioner has provided an injured worker to reach MMI beyond 104 weeks. The amount of time prescribed by the NAIC on all states to allow an injured worker to reach MMI.

104 weeks of income benefits have been accrued and the injured worker has not already received MMI status as determined by the treating physician.

Which of the following represents an indirect loss? Answer Choices: A tree fell on a house, causing a hole in the roof, which later allowed rain to enter Rain entered a house after a tree fell onto it, later causing mold to develop Mold developed in a house, later causing the occupants to become very ill A kitchen fire made a house untenable, causing the occupants to incur hotel charges

A kitchen fire made a house untenable, causing the occupants to incur hotel charges

Sam the shopkeeper mops the floor of his store and forgets to set the "Caution Wet Floor" sign in the area to warn his customers. Sarah walks through the store a few moments later, slips on the floor and injures her arm and leg. This is an example of: Answer Choices: An intentional tort. Vicarious liability. Absolute liability. A negligent tort.

A negligent tort.

Under which of the following claims settlements are the claim invoices presented and paid with no attempt to obtain a separate release? Answer Choices A partial release. A walk-away release. An open-end release. Structured settlement.

A walk-away release.

To prove negligence, the "proximate or legal cause" of the injury or loss, includes what important feature? Answer Choices: An unbroken chain of events lead to the bodily injury or property damage. The cause of the loss is not relevant if the defendant is proven to be legally liable. An intervening cause must have broken the chain of events before the proximate cause can be proven. The direct cause of the loss must also be the proximate (legal) cause of the loss.

An unbroken chain of events lead to the bodily injury or property damage

People applying for an adjuster license must demonstrate that they are trustworthy and competent. Which of the following is the method most often utilized to demonstrate competence? Answer Choices: By reaching the age of 21, as reaching the age of 18 is not considered to be "adulthood" by most Insurance Departments. By reaching the age of 18, proving that competent adulthood has been attained. By passing the prescribed state licensing examination. By receiving a high school diploma or GED equivalent.

By passing the prescribed state licensing examination.

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? Answer Choices: Pro-rata share. Contribution by equal shares. Apportionment. Primary policy pays until the limit of liability is exhausted.

Contribution by equal shares.

Which of the following statements is correct regarding pollution caused by smoke released from an industrial operation covered under the Commercial Property Policy? Answer Choices: Always covered A gradual release of pollution from industrial operations is not covered Covered on an "excess basis" Covered if caused by a covered cause of loss peril

Covered if caused by a covered cause of loss peril

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. Answer Choices: Aleatory Unilateral Executory Bi-lateral

Executory

All of the following statements are true regarding a Personal Liability Supplement, EXCEPT: Answer Choices: The policy can be written as a monoline policy. The policy will cover watercraft liability. It provides Coverage L - Personal Liability coverage at $100,000 per occurrence. If the insured would like to obtain the Loss Assessment coverage, it must be added to the Personal Liability Supplement by endorsement.

The policy will cover watercraft liability.

The standard Equipment Breakdown policy provides automatic coverage to equipment in use, or connected for use, at newly acquired or existing locations for ______ if the insured reports it to the insurer in writing. Answer Choices: 120 days 30 days 90 days 60 days

90 days

Which of the following contractors would be eligible for a Businessowners policy? Answer Choices: A carpenter doing all of his own work building kitchen cabinets in people's homes and earns $75,000 per year. A general contractor. A roofing contractor with an annual payroll of $400,000. A tree removal service.

A carpenter doing all of his own work building kitchen cabinets in people's homes and earns $75,000 per year.

he 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 Answer Choices: Each of the three people would receive $1,667.00 ($5,000 divided by 3) to apply to their medical expenses. Harvey would receive $1,500, Diane would receive $4,575, and Thomas would receive $6,250. Harvey would receive $1,500, Diane would receive $4,575, and Thomas would receive $5,000. The injured parties would each receive $5,000, the limit of Dorinda's policy, per person.

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

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

I only

Employers are responsible to make payments to the injured worker, in excess of the benefits regularly provided by workers' compensation law for all of the following, EXCEPT: Answer Choices: Knowingly employing an illegal worker. Failing to comply with a health or safety law or regulation. If the employer contributed to the injury in any way. Discharging or discriminating against any employee in violation of workers' compensation law.

If the employer contributed to the injury in any way

Which of the following best characterizes the difference between captive agents and independent agents? Answer Choices: Select the Correct Answer Independent agents can represent more than one insurer, whereas captive agents represent only one insurer. Captive agents only solicit applicants, while independent agents can also collect the premium and negotiate coverages. Captive agents have strict sales quotas, while independent agents do not. Independent agents are free to write any line of insurance they desire, while captive agents are restricted to certain lines.

Independent agents can represent more than one insurer, whereas captive agents represent only one insurer

A covered loss has damaged the property belonging to the owner. Property belonging to a customer is also damaged. The customer brings suit against the insured for this damage. The insurer may do which of the following? Answer Choices: Pay the defense costs incurred in the suit against the insured Negotiate the settlement of the property of others directly with the owners of that property Negotiate the settlement of the property of others directly with the owners of that property and pay the defense costs incurred in the suit against the insured Only pay the expense cost and not negotiate a settlement

Negotiate the settlement of the property of others directly with the owners of that property and pay the defense costs incurred in the suit against the insured

The Texas Commissioner reasonably believes that a person has violated a cease and desist order. All of the following penalties may be imposed by the Commissioner, EXCEPT: Answer Choices: An administrative penalty of $25,000 for each act. Order of complete restitution to all injured parties. A monetary penalty of $25,000 for each act and order complete restitution to all injured parties. A jail term of 30 days.

A jail term of 30 days

An insured has a diamond ring scheduled on a Personal Articles floater for $8,000 under a Personal Inland Marine policy. She also has a Homeowner's policy with the same insurance company. The ring is stolen on vacation and the cost to replace the ring is $9,000. What will be the outcome of this loss? Answer Choices: The insurer will pay the $9,000 replacement cost since the insured had a replacement cost endorsement under the Homeowner policy. The insurer will pay $8,000 from the Personal Articles floater under the Personal Inland Marine policy and the remaining $1,000 from the Homeowner policy. The insurer will pay $8,000 from the Personal Articles floater of the Personal Inland Marine policy and nothing under the Homeowner policy. The insurer will pay $1,500 which is the theft limit on jewelry under the Homeowner policy.

The insurer will pay $8,000 from the Personal Articles floater of the Personal Inland Marine policy and nothing under the Homeowner policy

Which of the following perils is covered for earth movement under the DP-2 Dwelling form? Answer Choices: Earthquake Subsidence Landslide There are no perils covered for earth movement under the Dwelling forms.

There are no perils covered for earth movement under the Dwelling forms.