Insurance Exam 19

The crew of a ship is guilty of fraud with the intention of reaping gains at the expense of the owner. In ocean marine coverage, what is this called? Answer Choices: Perils of the sea Jettison General average Barratry

Barratry

Which of the following is the BEST explanation as to the reason insurance policies are called "unilateral contracts"? Answer Choices: Because the insurance contract will only restore one party to the contract to his or her previously held financial position. Because insurance contract is based on the insured's personal insurable interest. Because the insured is the only party to the contract that is required to pay a premium. Because the insurance company is the only party to the contract that can be sued if they do not meet the terms.

Because the insurance company is the only party to the contract that can be sued if they do not meet the terms.

All of the following statements are true of liability insurance, EXCEPT: Answer Choices: Legal liability does not have to be determined by a court of law before an insurer will pay. Liability insurance only indemnifies third parties. Liability insurance protects the policyholder against damages he/she causes a third party. Liability insurance provides indemnification for the insured.

Liability insurance provides indemnification for the insured.

The selling of insurance products through the use of captive agents, independent agents, or insurance company employees in a call center are examples of: Answer Choices: Unfair trade practices. Fair trade practices in insurance. Monopolizing markets. Marketing distribution systems.

Marketing distribution systems.

Which of the following watercraft would be covered for liability under "Section II - Liability" of the Homeowners policy? Answer Choices: A 28 foot sailboat owned by an insured. A 100 HP jet ski rented to the insured. An outboard motor boat with a 50 horsepower motor. None of the responses listed are correct.

None of the responses listed are correct.

What are the unique features of the ISO standardized Businessowners policy form? Answer Choices: The BOP provides "Owned Auto" and "Ocean Marine" coverage. The BOP premium is adjustable, and is based on number of employees in the coverage business. The BOP provides "open peril" coverage for property. The BOP has fewer exclusions than other commercial property policies.

The BOP provides "open peril" coverage for property.

All of the following are reasons an independent adjuster may be hired, EXCEPT: Answer Choices: The insured may retain an independent adjuster if negotiations with their insurer are not progressing forward. An insurer may contract with an independent adjuster in a location where the insurer does not have claims offices set up. Due to a catastrophe, an insurer may not have enough adjusters on staff to process all of the claims, and would contract with additional independent adjusters temporarily. An insurer may contract with an independent adjuster who has special knowledge or expertise to adjust specialized claims.

The insured may retain an independent adjuster if negotiations with their insurer are not progressing forward.

An independent adjuster acts on behalf of his or her principal. Which of the following is the principal for an independent adjuster? Answer Choices: The court. The lawyer. The insurer. The insured.

The insurer.

All of the following statements are TRUE of the terms used in the standard workers' compensation policy, EXCEPT: Answer Choices: "The Policy" means the Information page and all endorsements and schedules listed there. "Locations" means all the workplaces listed on the Information page. "State" means any state of the United States, the District of Columbia, and all territories and possessions. "The Insured" is the employer named in item 1 of the Information page.

"State" means any state of the United States, the District of Columbia, and all territories and possessions. it doesn't refer to territories and possessions.

A "dual capacity" claim in workers' compensation is filed: Answer Choices: Against the employer claiming more than one injury. Against the employer and the manufacturer of equipment that caused the injury. Against an employer that was acting in a capacity "other than as an employer" at the time the injury occurred. Against an employer and a fellow employee because both of them contributed to the injury.

Against an employer that was acting in a capacity "other than as an employer" at the time the injury occurred.

In ocean marine, what is covered by protection and indemnity coverage? Answer Choices: Select the Correct Answer All of the responses are correct. Loss of life, injury and illness. Crew member burial expense. Damage to docks, buoys and other structures not owned, leased, or hired by the insured.

All of the responses are correct.

Which of the following conditions is not found in the commercial inland marine conditions form? Answer Choices: Appraisal Pair, Set or Parts No Benefit to Bailee Maintenance of Security Systems

Maintenance of Security Systems

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: Answer Choices: Within 1 year following a covered accident. Within 5 years following a covered accident. Within 3 years following a covered accident. Within the policy period.

Within 1 year following a covered accident.

Collin suffered a work-related injury on the morning of June 2nd and was off work completely until he returned to work on full duty on June 20th. Collin had worked for his employer for four years and was paid $55,650 per year. Collin's state sets the TTD rate at 70% percent of the average weekly wage. The state sets the maximum compensation rate at $580 per week and the waiting period at 5 days retroactive after 7 days. Collin was not paid for working on February 5th. Collin's average weekly wage is approximately ____ and the amount of compensation benefits he will receive per week while off work is approximately ____. Answer Choices: Select the Correct Answer $1,070 / $749 $1,070 / $580 $749 / $580 $580 / $580

$1,070 / $580

Rush is covered under a Standard Fire policy and suffers a loss to his home and personal property. The limit of liability listed on the policy itself is $120,000. The ACV of his loss is $55,000. To repair or replace the property with materials of like kind and quality would cost $72,000. Rush's insurable interest in the property is $42,000 as he has a mortgage and some liens on personal property. What is the amount of the claim settlement Rush will receive? Answer Choices: $120,000. $55,000. $42,000. $72,000.

$42,000

All Homeowners forms provide the "Property Removed" additional coverage for up to how many days? Answer Choices: 10 days 60 days 30 days 20 days

30 days

Adjusters in Texas are required to keep records of the continuing education courses they have taken to meet the license renewal requirement. How long are licensees required to keep these records? Answer Choices: 7 years. 4 years. 2 years. 5 years.

4 years.

Who signs the Declarations page on an Equipment Breakdown policy? Answer Choices: An Authorized Representative The Named Insured Two officers of the company An Authorized Inspector

An Authorized Representative

Difference-in-Conditions insurance: Answer Choices: Must be written in conjunction with other commercial property coverage. Is only written for risks with large premiums. Is usually written on a no-deductible basis. Is written on a standardized form.

Must be written in conjunction with other commercial property coverage.

The penalty for failure to satisfy a coinsurance requirement of a property insurance policy is: Answer Choices: Only a portion of a partial loss will be paid. No coverage will be in effect in the event of a total loss. There will be no coverage in the event of a partial loss. Only a portion of the policy limit will be paid if there is a total loss.

Only a portion of a partial loss will be paid.

Which of the following statements is TRUE regarding Coverage F - Medical Payments to Others on the Homeowners policies? Answer Choices: Pays the medical expenses of others without regard to whether or not the insured was negligent. Covers injuries sustained by the insured. Covers injuries sustained by tenants in the insured's residence. Does not cover invitees to the insured's home.

Pays the medical expenses of others without regard to whether or not the insured was negligent.

The Coverage C - Uninsured Motorists coverage of a standard, unendorsed Personal Automobile policy applies to all of the following, EXCEPT: Answer Choices: Bodily injury sustained by an insured or occupants of the insured vehicle. The vehicle that is responsible for the bodily injury sustained must meet the definition of an uninsured vehicle. The insured or occupants of the insured vehicle must be legally entitled to recover damages for bodily injury. Property damage sustained by the insured vehicle by an uninsured vehicle.

Property damage sustained by the insured vehicle by an uninsured vehicle.

The covered territory for aircraft coverage does not apply to which of the following? Answer Choices: Puerto Rico United States Canada Mexico

Puerto Rico

Which of the following sections of an insurance policy contains language to assist an insurance company in managing moral and morale hazards? Answer Choices: The Conditions. The Exclusions. The Declarations. The Insuring Agreement.

The Exclusions.

Ocean marine coverage for losses to the insured vessel caused by bursting boilers, latent defects in the vessel and negligence of the master or crew members are addressed by which of the following? Answer Choices: The Inchmaree clause. Protection and indemnity coverage. Hull coverage. Barratry.

The Inchmaree clause.

Axel Jamison contacts an insurance agent to purchase a Homeowners policy. The agent advises Axel that he will stop by later that day to inspect the home and take the policy application. Before the agent arrives, Axel hides his collection of venomous snakes and does not disclose them on his policy application. The Homeowners policy, with personal liability coverage is issued later that week, and the next day a snake escapes and bites a neighbor. How will the adjuster handle this claim? Answer Choices: The claim will be paid because the policy provides personal liability coverage. The claim will be denied based upon soft fraud. The claim will be denied because Axel is guilty of concealment. A reservations of rights letter will be issued to the insured while the adjuster continues the claims investigation.

The claim will be denied because Axel is guilty of concealment.

Marty has full coverage under a standard Personal Auto policy for the three cars he owns. He and the members of his household are covered as insureds under the policy. Marty's 16-year-old son Gordy, spends the weekend at his friend Steve's home and during the visit, drives one of Steve's family's cars with permission. Gordy has an accident and he is at-fault for bodily injury to others. Which of the following statements best describes how this claim will be paid? Answer Choices: Part A - Liability of both Marty's and Steve's family's policy will pay for their portion of the claim "pro-rata". Marty will have to pay for the claims out-of-pocket because Gordy is not covered under Marty's policy or Steve's family's policy. Part A - Liability of Steve's family's policy will pay the claim. Part A - Liability of Marty's policy will pay the claim.

Part A - Liability of Marty's policy will pay the claim.

The insured is moving to a new primary residence. Coverage under a Homeowners policy for the personal property being moved between the old and new location is: Answer Choices: Provided for the coverage limit at the old residence. Provided on a pro-rata basis. Provided for the coverage amount the insured has selected for the new residence. No coverage would apply once the move commences.

Provided on a pro-rata basis.

All of the following are covered under the Equipment Breakdown coverage form, EXCEPT: Answer Choices: The breakdown of any structure or materials supporting the equipment. A structure. Business personal property. Personal property of others.

The breakdown of any structure or materials supporting the equipment.

Charles' wife Mary has a company car furnished to her through her job. One day, Charles runs out of the wax he is using to polish his boat and he decides to go out to the store and get more. Mary's company car is parked behind Charles' car in the driveway, so he grabs Mary's keys and drives her car to the store. On the way back home, Charles has an accident in which he is at fault, and bodily injury and property damage are the result. Which of the following statements is TRUE regarding how this claim will be settled? Answer Choices: Mary's company policy will pay first, and Charles' policy will also pay, but on an excess basis. Mary's company policy will pay the entire claim, Charles' policy would not pay because he was not driving the covered auto on the policy. Charles must pay the claim out-of-pocket because his own auto policy will not pay because he was not driving the automobile named in the declarations and Mary's company policy will not pay because Mary is the only insured who is covered. Charles' policy will pay the entire claim because he was the driver who caused the accident.

Mary's company policy will pay first, and Charles' policy will also pay, but on an excess basis.

The insured owns an expensive rare painting. He has it appraised by an art dealer and has it insured for $50,000 under a personal articles floater. There is a market decline for this item. It is destroyed in a fire at his office. The company offers him $40,000, the current market value. How will the loss be handled? Answer Choices: The item is not covered because it was away from the insured's residence at the time of the loss. The insurance company will cover the item for the full $50,000 amount. The insurance company is correct in offering fair market value at the time of the loss. The insurance company will ask for a reevaluation of the item based on records and documentation of the price paid, the current market value and the appraised value.

The insurance company will cover the item for the full $50,000 amount.