Insurance Exam 11

Which of the following coverages would NOT be included in the liability section of the Businessowners policy? Answer Choices: Bodily injury liability. Professional liability. Personal and advertising injury liability. Medical expense.

Medical expense.

A standard commercial inland marine form is not available for which of the following? Answer Choices: Equipment dealers Accounts receivable Valuable papers Release bill of lading

Release bill of lading

Which of the following is NOT a hazard? Answer Choices: Oily rags left by the hot water heater. Matches within reach of a small child. Wet leaves on the sidewalk. A fire started in a waste basket.

A fire started in a waste basket. (ITS A PERIL)

The insured carries an unendorsed DP-3 dwelling policy on his home and personal contents. While traveling abroad someone broke into the home and stole $200 in cash, a shotgun valued at $1,000, and other household items valued at $2,000. Damage caused by the burglars is $1,500. Assuming no deductible applies to their coverage how much would be paid? Answer Choices: $3,200 $4,500 $1,500 $2,000

$1,500 (ONLY DAMAGE)

The insured is covered under a Businessowners Policy. He has several computers and the electronic data is corrupted as a result of lightning. The loss is $20,000. How much will the policy pay for the damaged data? Answer Choices: $10,000 $20,000 Nothing $2,500

$10,000

The deductible on a standard Businessowners policy for property coverage is: Answer Choices:r $100. $250. $200. $500.

500

Which of the following would be eligible to purchase a BOP? Answer Choices: A movie theater. An automobile repair shop. A six-unit apartment building. A credit union.

A six-unit apartment building

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.

he limit of a bond is known as its: Answer Choices: Bond penalty. Face amount. Bond limit. Goal.

Bond penalty.

Which of the following is the principal in a bond? Answer Choices: Contractor doing the work Owner of the job The insurance company The surety

Contractor doing the work

Which sections of the Standard Fire policy are found on the first page of the policy? Answer Choices: The Insuring Agreement and the Exclusions. The Declarations and the Conditions. The Declarations page and the Insuring Agreement. The Conditions and the Exclusions.

The Declarations page and the Insuring Agreement.

How are losses settled under a typical inland marine policy? Answer Choices: Actual Cash Value Replacement Cost Functional Replacement Cost Cost to repair only basis

Actual Cash Value

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: Answer Choices: Paid, the fact that Jarron has already been paid for the damage has no bearing on the insurance company's obligation to pay. Denied because Jarron has already been paid for the damage. Paid, but only at 50% of the limit of liability. Denied because the damage was caused by a friend and not the insured.

Denied because Jarron has already been paid for the damage.

Which of the following types of insurance companies is known as a "nonparticipating company" because they do not pay their policyholders a dividend? Answer Choices: A domestic insurance company. A mutual insurance company. A stock insurance company. A reciprocal exchange.

A stock insurance company.

Which of the following would be covered under an aviation policy? Answer Choices: Operation of the aircraft by pilots not named on the declarations page Planes flown out of the coverage territory A temporary substitute aircraft An aircraft requiring a special waiver even if it is issued by the FAA

A temporary substitute aircraft

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? Answer Choices: Pain and suffering. Loss of services. Lost wages. Disfigurement.

Lost wages.

When can an insured assign his or her insurance policy over to another party? Answer Choices: 30 days after notifying the insurer. Any time during the first 30 days of the policy period. Only with written consent of the insurer. When the first named insured made a material misrepresentation on the application, and the policy will be voided if it is not assigned.

Only with written consent of the insurer

A commercial umbrella liability policy would usually cover which of the following situations? Answer Choices: The insured claimed in a TV ad that the company's product will allow dieters to lose five pounds per week for four weeks without changing their eating habits. Several dissatisfied customers sued the insured when the product did not cause weight loss. The insured was sued for knowingly allowing its advertising agency to make untrue statements about a competitor in an advertisement for the insured's product. The insured owns and rents out a number of subsidized housing units. Feeling justified that he has the right to know what goes on in the rented units, he regularly uses a passkey to let himself in and look around the units. One day he did this while a tenant was sleeping. The tenant woke up, saw the insured and ordered him to leave. The insured refused. Later, the tenant sued the insured for wrongful entry. The insured borrowed a bulldozer from a friend and damaged it while using the machine.

The insured owns and rents out a number of subsidized housing units. Feeling justified that he has the right to know what goes on in the rented units, he regularly uses a passkey to let himself in and look around the units. One day he did this while a tenant was sleeping. The tenant woke up, saw the insured and ordered him to leave. The insured refused. Later, the tenant sued the insured for wrongful entry

Elizabeth injured her back on the job in Texas. She has been receiving income benefits for 90 weeks but has not reached MMI. Elizabeth will be declared as reaching MMI at week 104, even though her treating doctor now recommends spinal surgery. Elizabeth knows that if she has spinal surgery now (at 90 weeks), she will need income benefits that extend beyond the 104th week. Elizabeth plans to apply to the Commissioner for an extension of the 104-week time limit. The Commissioner is required to make a ruling on Elizabeth's application by: Answer Choices: Six months prior to the 104-week expiration date. By the 92nd week that income benefits have been received. Within 12 weeks following the 104-week expiration date. By the 100th week that income benefits have been received.

By the 92nd week that income benefits have been received.

An insured has her dwelling covered by an HO-3 form, with a $500,000 limit of liability for Coverage A. A fire breaks out and the dwelling is a total loss. The entire $500,000 limit is used to cover the direct physical damage to the dwelling. However, there is a large amount of debris from the burned structure covering the insured's property that will need to be removed. In this situation, how will the cost of the debris removal be paid? Answer Choices: 5% of the Coverage A limit is set aside to cover debris removal. This means that the insured must pay $25,000 out-of-pocket to cover the direct physical damage to the dwelling itself. When the entire Coverage A limit is used to cover the direct physical damage to the dwelling, an additional 5% of the Coverage A limit will be added to cover debris removal. The policy will only pay its Coverage A limit and the insured must pay for the debris removal out-of-pocket. An unlimited additional amount of insurance is covered on all of the Homeowners forms for debris removal because the insured cannot begin to rebuild until the debris is removed.

When the entire Coverage A limit is used to cover the direct physical damage to the dwelling, an additional 5% of the Coverage A limit will be added to cover debris removal.