insurance exam

A commercial property special form covers property in transit up to

$5,000.

Dwelling coverage includes all of the following EXCEPT

Land on which the dwelling is located.

Who would participate in a Write Your Own (WYO) flood insurance program?

Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis

Producers must complete 24 continuing education hours prior to license renewal every

2 years.

An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover?

A child trips over a toy in the driveway, cuts her knee, and requires stitches.

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report

In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?

First named insured

Which of the following is defined as the cost to replace damaged property with less expensive and more modern construction or equipment?

Functional replacement cost

Which of the following homeowners forms is designed for individuals that own and reside in a condominium?

HO-6

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the

Insuring agreement.

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of

80%.

Which of the following terms best describes a trembling or shaking of the earth that is volcanic or seismic in origin?

Earthquake

A loss has occurred before the first report has been filed on a value reporting coverage form. Which is NOT true?

Never more than 75% of the loss is paid.

Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners?

Bailee's customer policy

Which of the following would be included in the farm liability coverage forms?

Bodily injury to a residence employee

Which of the following other coverages is NOT included in the basic form dwelling policy?

Breakage of glass

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

Deductible

The commercial property declarations page contains which of the following information?

Description of the property insured

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

All admitted insurance companies in this state are subject to fiscal examinations by the Commissioner

At least every 5 years.

In dwelling policies, automatic increase in insurance is

Coverage by endorsement.

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sale transactions until the conclusion of their next examination by the Insurance Department, or for the current calendar year plus

Three years.

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than

6 stories.

Which of the following would NOT be considered an insured under a homeowners policy?

A divorced spouse living in another state

In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation?

Agreed value

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer.

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal.

What will happen if a house covered by a standard mortgage clause is a total loss?

The insurer pays the mortgagee according to the mortgagee's interest in the property.

In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by

The insurer.

The difference in the contents coverage on an HO-3 and HO-5 is which of the following?

Contents are covered open peril on HO-5, and named peril on HO-3.

ates that are established based on the similarities of the risk with other risks are known as

Manual rates.

Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish?

Up to $1,000

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to

2 weeks.

Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?

Judgment

A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy, which is most likely?

Premiums would go down.

An apartment occupant's personal property would be insured under which homeowners form?

Tenant broad form (HO-4)

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

If a producer changes his or her residential address, the Commissioner must be notified of the change within how many days?

30

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60 days

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?

80% of the property's replacement cost or more

Which of the following is eligible for a businessowners policy?

A 6-story office building with less than 100,000 square feet total area

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry.

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Concealment

Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct?

Coverage C limits will no longer apply to the jewelry insured by the endorsement.

Which of the following is true of dwelling policy coverage?

Exclusions apply to all three policy forms.

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

Which of the following would be considered false advertising?

Implying that the agent is the insurer

Which of the following is the type of property NOT covered by the homeowners policy?

Land on which the property is located

Which of the following types of property would be covered in homeowners coverage forms?

Landlord furnishings in an on-premises apartment

According to the Nationwide Marine definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT

Large pleasure boats.

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?

Per occurrence

The causes of loss insured against in an insurance policy are known as

Perils

.The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

All of the following are considered parts of the policy structure EXCEPT

Provisions.

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

Rebating.

Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy?

Scheduled personal property endorsement

When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as

Stated amount.

Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?

30 days

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

How many days does an insurer have to file a notice of appointment for a producer?

15 days

All of the following are found in the declarations section of a policy EXCEPT the

Exclusions

Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance?

Monoline

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

The process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rates is known as

Underwriting.

If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply

Automatically.

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation.

Which of the following is true regarding the Difference in Conditions (DIC) policies?

Each DIC policy is an individually written contract that contains provisions unique to the particular risk that it covers.

Which of the following is the basis for a claim against an insurance policy?

Loss

For how many years must an insurance producer be licensed prior to adding surplus lines to their repertoire?

3 years

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

All of the following are special personal property limits under a homeowners policy EXCEPT

$500 for business personal property on the insured premises.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report

Must be informed of the source of the report.

Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms?

None

Which of the following risks is eligible for coverage under a businessowners policy?

Condominiums