Insurance Exam

The limit of insurance for the standard Businessowners policy coverage extension for "Personal Property Off-Premises" that applies to "property in transit" is:

$10,000

Under the additional coverages of the standardized Businessowners policy, how much is the limit for "Pollutant Clean-Up and Removal" if caused by a covered loss?

$10,000 any 12 month period

How much coverage is provided under the Businessowners policy coverage extensions for newly acquired business personal property?

$100,000

What is the minimum limit for Coverage L of the Personal Liability Supplement that can be attached to a Dwelling Property policy?

$100,000

The NAIC Model Unfair Claim Settlement Practice Act provides for a financial penalty of _________ for each violation of the Act.

$1000

Indemnity Insurance, Inc. writes Ocean Marine policies using a deductible amount that is stated on the form and applies to any loss covered by the policy. This is known as:

An average deductible

The Texas code pertaining to unfair practices defines a "written communication" as all of the following, EXCEPT:

An encrypted email that must be transcribed in order to be read.

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..

In order to qualify for a surety bond there are times the principal must have another party sign the agreement. This party agrees to reimburse the surety if the principal defaults. This party is known as:

An indemnitor.

The Business Income from Dependent Properties -- Broad Form is a variation of the Business Income form as it:

Provides coverage for loss of income to the insured business hone direct physical damage has occurred at another business upon which the insured business spends in some way.

If an insurance company covered an excluded claim it may have to continue paying other such claims because of:

estoppel

Which of the following coverages would not be covered by the liability section of the Businessowners policy? Bodily Injury Medical expense PL Personal and advertising injury liability

Professional Liability

Which of the following coverage parts would be eligible for inclusion in a Commercial Package policy? Businessowners coverage PL coverage WC coverage D&O liability coverage

Professional liability coverage

Which of the following types of property can NOT be covered under a Commercial Inland Marine form?

Property being manufactured and shipped to Europe for sale.

The coverage C - uninsured motorist 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.

Which of the following lost or damaged property is not covered when the actual cash value endorsement is attached to an Equipment Breakdown policy?

Property that has reached obsolescence.

Which of the following lost or damaged property is NOT covered when the Actual Cash Value endorsement is attached to an Equipment Breakdown policy?

Property that has reached obsolescence..

All of the following would be covered under a builders Risk Policy, EXCEPT: Owner Sub-Contractor Contractor Prospective Buyer

Prospective Buyer

A ship owner that would like to be covered in the event that crew members bring liability suits for injuries sustained while working would purchase:

Protection and Indemnity coverage.

The "Valuable Papers and Records" coverage extension of the standard BOP policy:

Provides a maximum of $10,000 of coverage for all destroyed records at each location described in the policy.

All of the following statements about the HO-8 are correct, EXCEPT:

HO-8 covers the same named perils as the HO-2.

Coverage B of an unendorsed standard Businessowners policy provides how much coverage for theft of money & securities

$0

How much coverage is provided by the "Personal Property Off-Premises" coverage extension of the Businessowners policy for the loss of accounts receivable records off the insured premises?

$0 The "Property Off-Premises" coverage extension of the BOP does not provide ANY coverage for loss to accounts receivable off the premises.

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

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

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 A vehicle that rolls over and sustains damage is considered to be a collision claim versus an other than collision claim. The damage to the vehicle is $2,000 and the deductible is $1,000. Therefore, the insurer is liable for $1,000.

The standard Businessowners policy extension of coverage for "Outdoor Property" provides _____ of coverage for any one tree, shrub, or plant that has been destroyed due to a covered cause of loss

$1,000 The insured may extend the insurance provided by the policy to apply to their outdoor fences, radio and television antennas, signs (other than signs attached to buildings), trees, shrubs, and plants. The most the policy will pay is $2,500, but not more than $1000 for any one tree, shrub, or plant.

Joseph Jones purchased a new car stereo system from Dailey's Auto Enhancements. Daily's permanently installed the stereo system in the console area of the car, where he could access it easier while driving than the typical area in the dashboard. The cost of the new system, disregarding any installation costs, was $2,000. One year after installation, Joseph's car was broken into and the stereo was stolen. At this point, the ACV of the system had fallen to $1,700. Disregarding any deductible, how much will Joseph's policy pay on this claim?

$1,000.

The standard Businessowners policy extension of coverage for "Outdoor Property" provides ________ of coverage for any one tree, shrub, or plant that has been destroyed due to a covered cause of loss.

$1,000..

Steve has removed the rear seat in the company car and installed stereo equipment and two speakers. The maximum the physical damage coverage will pay for damage to the items in an accident is

$1000 because the equipment was permanently installed in a place where the auto maker would normally not have it put it minus deductible.

The additional coverage of the Commercial Property cause of loss forms known as the "limited coverage for Fungus, Wet Rot, Dry Rot, and Bacteria" provides:

$15,000 coverage for all occurrences within a 12-month period.

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?

$1500 The DP-3 only provides damage to covered property caused by the burglars. Theft is excluded under the DP-3 unless endorsed with the theft endorsement.

The named insured is aware that his BAP provides transportation expense in the event of total theft of an insured private passenger vehicle. Sales manager attends seminar and car stolen March 10. Police find car March 17 and insurance company pays for theft loss after March 20. Car burned=total loss. Rental costs $20/day for 11 days and mileage expense of 800 miles at 30 cents per mile. How much will insurance pay for these expenses?

$160

Mr. York had his pickup truck stolen while it was parked in a "no parking" zone outside his office. The value of the truck was $18,500. In addition, tools valued at $200, extra tires and hubcaps for the truck valued at $550 and a tarp worth $50 were in the truck. Mr. York has a collision deductible of $500 and a comprehensive deductible of $250. The insurance company will pay what amount?

$18,800

Darla has her business covered by a standard Businessowners Policy that includes the "Personal Effects" coverage extension. Catherine, one of Darla's employees, has brought her brief case to work one day with her purse, make-up bag, tablet, and laptop computer inside. A fire breaks out in Darla's building and all of the contents of Catherine's briefcase, worth $2,000, are destroyed. How much will Darla's BOP pay for Catherine's lost "personal effects"?

$2,000

The special cause of loss form of a Commercial Property policy imposes a limitation on the amount of coverage for the theft of jewelry of:

$2,500

Font Masters Printing Company has a printing press that suffers a covered total loss. The company paid $25,000 ten years ago for the press. Actual cash value is $40,000 and the replacement cost is $55,000. The company has had to cancel several contracts for printing due to the loss of the press and they are anxious to resume full production. Font Masters is covered under a Businessowner's Policy (BOP). How much will the insurer pay for this claim?

$55,000

Leland has two insurance policies covering his home. Indemnify Insurance carries a $120,000 limit of liability on the home, while Binders Keepers, Inc. carries a limit of $80,000. A fire breaks out in Leland's kitchen and causes $40,000 in damage. Remember, when there are two or more policies covering the same risk, the "other insurance clause", determines the method used to calculate each company's share of the claim. Leland's policy states that the pro-rata share method will be used. Which of the following is the correct amount that will be paid by Indemnify Insurance?

$24,000 Using the pro-rata share method, where we divide Indemnify Insurance's share of the loss by the total limit of both policies, multiplied by the loss, leaves Indemnify paying 60% of the loss. 60% of the $40,000 loss, is $24,000.

Which of the following is the additional limit provided by a standard Businessowners policy "Debris Removal" in the event that the policy limit is exhausted in paying the loss?

$25,000 The additional limit is $25,000 when the basic coverage provided by the policy is not enough. The basic coverage provides debris removal coverage up to 25% of the actual amount of the loss up to the policy limit. Sometimes the amount of the loss PLUS the debris cleanup will exhaust the limit and the company will pay up to an additional $25,000 for debris removal.

What is the maximum amount payable for bail bonds under the "supplementary payments" provided by Part A of the Personal Auto policy?

$250

Hannah must take time away from work to help assist in the investigation of a claim that was made against her BOP policy. The policy will pay for Hannah's actual loss of earnings up to: $150 per day $250 per day $200 per day $500 per day

$250 per day. EXPLANATION:The BOP policy will pay for actual loss of earnings, $250 per day, if the insured is asked by the insurance company to take time away from work to assist in the investigation and/or defense of a claim.

Rachel's home is worth $525,000. She has the home covered under a $500,000 Homeowners policy with a 1.5% deductible. When Rachel's husband sets their kitchen on fire while frying a turkey, he accidentally causes $36,000 in damages. How much can Rachel and her husband expect to receive in their settlement?

$28,500 A $500,000 policy limit with a 1.5% deductible would equal a deductible of $7,500 which would be subtracted from the $36,000 in damages leaving a settlement of $28,500.

Chuck's home is covered under a DP-1 policy with the EC perils attached, when his dwelling suffers significant damage due to a tornado. His Coverage A limit is $100,000 and this satisfies his coinsurance requirement. His policy does not have a deductible form attached. His dwelling is severely damaged and he submits a claim for $96,520 for the dwelling. How much coverage does Chuck have remaining on his policy to cover an appurtenant structure on his property that was also severely damaged.

$3,480

A standard Homeowners policy has been issued to cover a one-family structure with a coverage limit of $75,000 on the dwelling (Coverage A). What is the automatic amount of insurance coverage on personal property (Coverage C)?

$37,500 Personal property is automatically covered for 50% of the amount of the dwelling limit for one or two-family dwellings.

An insured is covered under an HO-2 form with a Coverage A limit of $125,000 and a Coverage C limit of $65,000. What amount will automatically be provided for Coverage D?

$37,500. An HO-2 form provides 30% of the Coverage A limit for Coverage D - Loss of Use. 30% of $125,000 is $37,500.

Camilla had an at-fault accident in her car and was sued for damages. Camilla is an executive with a major corporation and earns $2,500 per 5-day work week. Her insurance company has requested her appearance in court to defend herself against some of the damages claimed. She missed 2 days of work and will not be paid for that time. How much will Camilla's personal automobile policy pay her in total for the lost earnings?

$400

The additional coverage for debris removal under the building & personal property coverage form of a CPP, will pay to clean up the debris of other on the insured premises even if the insured has no damage to their own property. The maximum payable to remove this debris of others is:

$5,000

Under the Motor Carrier Act of 1980, a vehicle hauling excess oil, explosives or nitrous gases is required to carry a minimum liability limit of:

$5,000,000

The Builders' Risk form provides an extension of coverage for building materials within 100 feet of the building being constructed and belonging to others, but under the care, custody, and control of the insured for up to:

$5,000.

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 $1000 for the entire policy period.

The standardized Homeowners policy forms provide an additional coverage for loss of trees, shrubs and other plants. The maximum limit for this coverage is:

$500 for any one tree, shrub, or plant.

Mark owns a small 1-bedroom house that he covers under a DP-1. He has the house insured under Coverage A for $40,000. Mark also rents the house to tenants and his yearly rental income is $10,800. The house is severely damaged in a storm, and is uninhabitable by the tenant for 4 months. How much will Mark's DP-1 policy pay him for fair rental value?

$667.00 each month for the four months that the dwelling was uninhabitable.

Covered Autos - Two symbols that are unique to the Truckers Coverage Form:

- Symbol 48: Trailers borrowed or leased by the named insured for which liability for loss has been assumed under a written trailer interchange agreement; applies to comprehensive, specified causes of loss or collision coverage's of trailer interchange coverage only.- Symbol 49: Trailers owned or hired by the named insured while the trailers are in someone else's possessions under a written trailer interchange agreement.

Covered Under Coverage A-Buildings

-completed additions-permanently installed machinery and equipment -fixtures including outdoor fixtures, such as lawnmowers, garden hoses, and snow removal equipment-Personal property used to maintain or service buildings, structures, or the premises, including portable fire extinguishing equipment, outdoor furniture, floor coverings, and appliances used for refrigerating, ventilating, cooking, dishwashing, or laundering-Personal property furnished by the insured in apartments, rooms, or common areas that are rented to others. Valuable papers and records are not covered.

1. The property Off-Premises provides coverage for up to, 2. The limit of the extension of coverage, 3. If a single tree, shrub, or plant is damaged by lightning, 4. The business PP temporarily in Portable Storage Units,

1. $10,000 2. for a non-owned detached trillers is $5,000 3. the extensions of coverage under the Building & PP coverage form will provide $250 coverage. 4. Applies for 90 days.

If an insured carries Coverage C under a Dwelling policy, how much coverage applies off the insured premises (world-wide basis)?Answer Choices: Select the Correct Answer10% of the Coverage C limit. 25% of the Coverage C limit. 40% of the Coverage C limit. 50% of the Coverage C limit.

10% of the Coverage C limit

Which of the following represents the amount of coverage a Homeowners policy will provide for personal property located in a self-storage facility?

10% of the Coverage C limit or $1,000, whichever is greater.

Under an HO-6 form, the additional coverage for damage to trees, shrubs and other plants is provided at:

10% of the Coverage C limit, or a maximum of $500 for any one tree, shrub, or other plant.

To be eligible for a standardized Watercraft policy, the insured watercraft must be used on inland or coastal waters within:

12 miles of the shore or in the Great Lakes.

Jessica took an adjuster prelicensing course approved by the Texas Department of Insurance. She has received her certificate showing that she passed the state licensing exam as well. How long does Jessica have to submit her license application to the Department before she will be required to take the state licensing exam again? Texas

12 months from the date she passed her state licensing exam

The standardized Dwelling forms allow the insured to bring legal action against the insurer if they have complied with all policy provisions and the action is brought within:

2 years after the date of the loss.

Wholesalers can be covered by the BOP if no more than _____ of their total floor area is open to the public.

25%

Which of the following statements best describes the loss settlement provision under the Commercial Inland Marine Commercial Articles form?

25% of the policy limit or $10,000, whichever amount is less.

Part B of the personal auto policy provides coverage, regardless of fault, for necessary medical and funeral expenses incurred within how many years of the date of injury?

3 years.

If the insured purchases a new aircraft to replace a scheduled aircraft, there is automatic coverage provided the insurance company is notified within ______ days of the purchase and premium payment is made.

30 If the insured purchases a new aircraft to replace a scheduled aircraft, there is automatic coverage provided the insurance company is notified within 30 days of the purchase and premium payment is made. The coverage is the same as on the scheduled aircraft. If the insured purchases an additional aircraft, there is automatic coverage provided the insurance company currently insures all of the insured's owned aircraft. The insured must notify the insurance company within 30 days of the acquisition. The coverage is the same as another aircraft with similar passenger capacity. The physical damage limit is the actual amount the insured paid for the aircraft.

Nina has the "Preservation of Property" additional coverage included in her standard Business owners policy. How many days from the day the property was first moved does coverage apply while the property is being stored at another location?

30 days from the day the property was first moved.

A Commercial Property Policy includes a protective safeguard endorsement indicating there are protective safeguards installed in the risk such as a sprinkler system. Should the system become inoperative, how long does the insured have to report this fact to the insurer?

48 hours Explanation:If repairs cannot be completed within 48 hours, the insurer must be notified in order to comply with the conditions of the form.

A commercial property policy has the "Protective Safeguards endorsement attached indicating that the insured has protective safeguards installed such as a sprinkler system. Should the system become inoperative, how long does the insured have to report this to the insurer?

48 hours.

If Commercial Property coverage is written on the Building and Personal Property coverage form and a loss occurs, the insured must furnish a signed statement of loss within:

60 days after the request of the insurer

The "Business Income" additional coverage of the standard Businessowners policy provides coverage for "ordinary payroll coverage" for:

60 days unless the insured selects and schedules a different amount. The insurance company pays for only the loss of business income sustained during the restoration period that takes place within 12 consecutive months after the date of the covered loss or damage. However, it pays for ordinary payroll expenses for only 60 days after the date of loss unless a higher number of days is on the declarations.

For restaurants to be eligible for coverage by the standard BOP policy, they cannot exceed _________ in total floor area.

7,500 square feet

A Personal Articles Floater (PAF) is designed to protect property owners from damage or losses to personal property while in the process of transport. Which of these statements about a PAF is FALSE?

A PAF only covers property in the continental United States.

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

A Yacht Policy

Kyle owns a woodworking shop where he makes and sells custom furniture. One night, Kyle's shop is destroyed by a fire, and he files a claim with his insurance company. Which of the following items would be covered under Coverage A - Buildings and Structures of the Building and Personal Property Coverage form of Kyle's Commercial Property policy? Answer Choices: Select the Correct AnswerA kitchen table that Kyle has completed. A bandsaw affixed to the floor. Kyle's personal laptop he left in the shop overnight. A hand-held circular saw.

A bandsaw affixed to the floor EXPLANATION:"Building" by definition is the structure and anything permanently attached to it. The bandsaw is affixed to the floor. The other choices are all personal property and not part of the building.

All of the following perils are covered for collapse under the Commercial Property additional coverage, EXCEPT: Use of defective construction materials that causes a collapse while the construction is in progress. A building that abruptly caves in and becomes unusable. Hidden insect or vermin damage. A building that is in danger of collapsing.

A building that is in danger of collapsing.

Drew's agent is putting together a Commercial Property policy for him. The declarations page, the conditions page and several endorsements have been included. Which of the following must still be included to complete the policy?

A cause of loss form.

Commercial Package Policy can include:

A commercial package policy (CPP) is a means of providing property insurance for a larger business or organization. A businessowner can select from such coverages as commercial property, commercial general liability, crime, inland marine, boiler and machinery, commercial auto, and farm. Personal auto is not one of the available coverages.

The standard BOP policy will provide coverage for all of the following incidental occupancies in a covered apartment building, except:

A contractor whose office occupies 20% of the floor area of the building.

Which of the following types of property would be covered by Coverage B of a standard, unendorsed Businessowners policy?

A copy machine that is leased by the covered business.

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.

When insurance is written on a Dwelling form, each of the following types of property would be insured under Coverage A, EXCEPT:

A detached garage.

The "Part B - Med Payments" coverage of a personal auto policy covers injuries for all the following, except:

A passenger who is injured in another vehicle that is struck by the insured's vehicle in an accident.

Diamond & Tiaras, Inc. is covered by a jewelers' block policy with both the show windows and money optional coverages. Which of the following losses would NOT be covered under D & T's policy? Damage caused by fire to the insured premises that damages several pieces of expensive jewelry. A diamond necklace that disappears form he show window with no sign of forced entry. The theft of a diamond ring that has been purchased by a client but was still on the premises awaiting delivery. Money that is missing from he vault after it is opened as usual on a business morning.

A diamond necklace that disappears from the show window with no sign of forced entry.

Dwelling forms may be used to cover all of the following, EXCEPT:

A farm house

Which of the following would NOT be excluded under the Commercial Property basic cause of loss form? Military action. Earth movement. Ordinance or law. A fire caused by earth movement.

A fire caused by earth movement

Which of the following is TRUE regarding the DP-2 Broad Form coverage for "artificially generated electrical current"?

A fire must be the result of the artificially generated electrical current for coverage to apply.

Which of the following losses would be covered under a Commercial Property policy with the special cause of loss form attached? Dishonest acts of an employee of a business A fire that breaks out in an office building and causes damage to two of the offices. The mechanical breakdown of machinery in a manufacturing company. Damage cause to the framing of a commercial building by termites.

A fire that breaks out in an office building and causes damage to two of the offices.

The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as:

A foreign insurer.

A surety bond is:

A form of credit.

Which of the following losses would be covered by Part D of a standard Personal Auto policy providing both "other than collision" (comprehensive) and "Collision" coverage?

A front tire blows out in a high-speed head-on collision, which also causes extensive damage to the vehicle.

Which of the following represents an indirect loss?

A kitchen fire made a house untenable, causing the occupants to incur hotel charges. An indirect loss is the temporary loss of use caused by a direct property loss. A kitchen fire is a direct loss. If that loss is severe enough to make the house unfit to be used, the insured will need to temporarily find an alternative place to live in until repairs to the house are completed. The cost of that temporary replacement - the hotel charge - is the indirect loss.

A coverage extension included on the Building and Personal Property coverage form provides coverage for business personal property temporarily stored in a detached trailer within 100 feet of the insured building for:

A limit of $10,000 unless higher limits are purchased.

Which of the following would be considered a Part D - Other Than Collision claim under a Personal Automobile claim?

A load of bricks falling from an apartment building onto the car.

An additional coverage provided by Part D of the Personal Watercraft policy includes coverage for "salvage liability". This is best described as:

A maritime law requiring watercraft owners to recover items that have gone overboard.

All of the following are exempt from the Texas adjuster continuing education requirement, EXCEPT:

A military service member not serving in a combat theater during the continuing education reporting period. A military service member who did not serve in a combat theater during the continuing education reporting period would be provided an additional two years to complete their continuing education requirements, but they would not be exempt from them.

All of the following would be eligible as "your covered auto" under a standard personal automobile policy, EXCEPT:

A motorcycle owned by the insured.

All of the following would be considered "uninsured motorists", EXCEPT:

A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident.

Coverage would be provided for trees, shrubs, or other plants under the additional coverages of the standard Homeowners policies in which of the following situations?

A neighbor, driving his own vehicle, accidentally runs over the insured's holly tree when he runs off his own driveway and into the insured's yard.

After a standard Personal Auto policy has been in effect for more than 60 days, the insurer may cancel the policy for all of the following reasons, Except:

A regular operator of the vehicle has received a citation for speeding.

After a standard Personal Automobile Policy has been in effect for more Than 60 days, the insurer may cancel the policy for all of the following reasons, Except:

A regular operator of the vehicle has received a citation for speeding.

Which of the following vehicles is considered "your covered auto" under a personal auto policy?

A replacement car purchased by the insured a week ago, but not yet reported to the insurance company.

When a Personal Umbrella policy covers a loss that the underlying policy excludes, there is an amount the insured must pay before the Umbrella policy is triggered. This amount is known as:

A self-insured retention.

Under an Equipment breakdown policy, which of the following statements is NOT TRUE regarding deductibles? There are separate deductibles for each coverage selected by the insured under the policy. Each coverage deductible applies separately for each coverage unless more than on "object" of covered equipment is involved in one breakdown, then only the highest deductible will apply

A single deductible applies to losses occurring under all coverages selected by the insured.

Which of the following would be eligible for coverage under a Businessowners policy?

A small retail store.

Binders Keepers Insurance Company has a policy of closing claims within 30 days. Brian, a claims representative for the company, has been investigating a claim for 32 days and he will probably need a few more days to complete the claim. Which of the following is the report Brian should submit to the company?

A status report

Which of the following property would be excluded from coverage for loss under Coverage C of the Homeowners policies? A valuable baseball card collection owned by the named insured's son that is covered under a separate personal articles floater. A suitcase full of clothes while the named insured is vacationing in Russia. A suitcase, belonging to a guest, that is full of personal items located in the insured's residence. A valuable baseball card collection that the named insured's young son owns, but the insurer is not aware it exists.

A suitcase, belonging to a guest, that is full of personal items located in the insured's residence.

An insured's car is damaged in an auto accident. while it is being repaired, the body shop loans the insured a replacement. From a coverage standpoint, this replacement vehicle is known as:

A temporary substitute

Which of the following would be covered for physical damage under an Aviation policy?

A temporary substitute aircraft.

Which of the following would be eligible for coverage under a standard BOP policy?

A two-story apartment building with 15 units.

Which of the following is NOT an uninsured vehicle as defined by Part C of the personal auto policy?

A vehicle owned or operated by a governmental unit or agency.

Which of the following is NOT an uninsured vehicle as defined by Part C of the personal automobile policy? A vehicle owned or operated by a governmental unit or agency. A vehicle that is not covered by liability insurance at the time of the accident. A vehicle driven by a hit-and-run driver that strikes the insured or a family member while driving the insured vehicle. A vehicle covered for liability insurance with a company that has become insolvent.

A vehicle owned or operated by a governmental unit or agency.

Which of the following statements is NOT TRUE regarding the actual cash value endorsement to an equipment breakdown policy?

ACV payment will be higher than the cost to repair or replace the damaged property with property of like kind.

Which of the following vehicles is considered a temporary substitute auto under a personal auto policy?

An auto loaned by the garage while the vehicle of the insured is being repaired.

Adverse selection occurs when:

A: Applicants are accepted by the insurer with little or no attention given to underwriting

All of the following are duties conducted by insurance professionals who must be licensed before "transacting insurance", EXCEPT:

An attorney who oversees the adjustment of claims..

Under the Commercial Building and Personal Property Coverage form, if no optional coverages are selected, loss valuation/settlement is based on:

Actual cash value.

Under the comprehensive coverage of a BAP, which of the following would not be a covered loss?

After sliding on an icy pavement, a driver hits a guard rail.

Bill, a business owner, has experienced a physical damage loss to one of his commercial vehicles. All of the business vehicles are covered by the Business Auto Policy. Bill and his insurance company disagree on the amount of the settlement, so Bill hires an appraiser. Insurance hires their own. Which statement is true regarding appraisal process?

After the appraisal process is complete, the insurance company still has the right to deny the claim if it is warranted.

The extended business income additional coverage for the business income form covers the first 60 days after the loss for reimbursement of earnings for the insured business:

After the repairs have been made to the insured property.

Lara is moving to Europe for two years in order to take advantage of a promotion at her job. She will not take her 4-seat propeller plane with her. What type of Aviation policy would be best for Lara to purchase for coverage on her plane while it is in storage and she is in Europe?

All Risks - Not in Motion.

All of the following circumstances are included in the definition of "one breakdown" in an Equipment Breakdown policy, EXCEPT:

All breakdowns may be the result of different causes..

part d of the personal auto policy provides coverage for all of the following except:

All direct losses to the insured's covered auto.

All of the following statements are TRUE if Builders' Risk coverage is written on a completed value basis, EXCEPT: The insured is required to meet a 100% coinsurance requirement. The insured is required to cover the risk for the full completed value of the building being constructed. If the insured does not have the required amount of insurance at the time of a loss, they will be penalized. All premiums must be paid up front before construction can begin.

All premiums must be paid up front before construction can begin.

The Commercial Building and Personal Property coverage form provides extensions of coverage, but only if:

An 80% or higher coinsurance percentage is shown on the Declarations page, and the property amount of coverage, based on that percentage, is purchased.

An insured sells mobile agriculture and construction equipment and needs coverage for this equipment while it is in stock for sale. Which of the following coverage forms would provide the insured with the coverage he needs?

An Equipment Dealer's form.

Indemnify Insurance, Inc. is deploying adjusters to an area recently hit by a hurricane. The company has 25 employee adjuster who are ready to deploy but they need 25 more. Carol is licensed adjuster who signs a contract with Indemnify Insurance, Inc. to work on their behalf during this deployment. Carol is acting as:

An Independent adjuster.

All of the following are Texas adjusters who are not permitted by law to adjust a loss related to roofing damage on behalf of an insurance company, EXCEPT:

An adjuster that has taken roofing classes and is capable of repairing a damaged roof An adjuster that has taken roofing classes and is capable of repairing a damaged roof is not prohibited from adjusting roof damage claims. All of the other answer choices list adjusters that ARE PROHIBITED from adjusting roofing losses.

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. There is an exception to the exclusion for "intentional acts" committed by an insured to protect persons or property. Therefore, an insured who commits an intentional act of violence to protect his family would be covered.

Estoppel is best exemplified by which of the following?

An insurer is prohibited from denying a claim because its appointed producer advised the insured the claim covered.

In most states, which of the following most accurately describes an "admitted insurer"?

An insurer that can transact insurance in the state under a certificate of authority..

Under the BOP Part III - Conditions section, all of the following would be considered unoccupied, EXCEPT: A 100-unit apartment building of which 70 units are not rented. An office building containing two empty units and these two empty suites represent 25% of the total floor space. A mercantile building with a print shop on the ground floor but the second and third floors are not being utilized. A new building with 8,000 square feet of floor area and 5,200 square feet is not being used.

An office building containing two empty units and these two empty suites represent 25% of the total floor space.

Anna is walking through the park one day while unwrapping an ice cream sandwich. It was a windy day, and the ice cream wrapper was covered with partially melted ice cream. Anna doesn't want to look for a trash can to throw away the wrapper so she simply throws it down. The wind takes the wrapper across the park and drops it to the ground just in time for Ulysses to ride onto it with his unicycle. The melted ice cream on the wrapper causes Ulysses' unicycle to slip out from under him and he falls backward, striking his head on the pavement. Several witnesses saw Anna throw the ice cream wrapper into the wind, so Ulysses sues her for his medical bills. Ultimately, Anna was not proven to be negligent and her insurance company did not have to pay damages to Ulysses. What is the most likely reason for the court's finding?

Anna could not have foreseen that the act of throwing her ice cream wrapper into the wind would have resulted in the bodily injuries to Ulysses.

Morton's Millinery is covered by a Commercial Property policy with a broad cause of loss form attached. Morton's closes up their covered building for a long holiday break. When they return, a loss has occurred. Which of the following loss scenarios would NOT be covered? A) Over the holiday break a heavy snowstorm occurred and the weight of that snow caused the roof to collapse. B) Water damage has occurred from a cracked water heater that allowed the water to escape and damage the floors of the building. C) Damage caused by frozen pipes that burst and leaked for several days while the business was closed for the holiday break because Morton turned the building thermostat very low to save on heating costs. D) Damage from water that had been seeping from an automatic sprinkler system behind the walls of the building for several weeks before and during the holiday break.

Answer: C) Damage caused by frozen pipes that burst and leaked for several days while the business was closed for the holiday break because Morton turned the building thermostat very low to save on heating costs. EXPLANATION:Loss caused by freezing is not covered under the broad cause of loss form of the Commercial Property policy, unless PRECAUTIONS were taken to PREVENT freezing. Turning the thermostat down low enough that the pipes would freeze is definitely not taking precautions to prevent freezing.

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

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

All of the following are defined as "your covered auto" in a personal automobile policy, EXCEPT:

Any auto or trailer owned by the insured and used as a permanent substitute vehicle.

Natalie assumes that her adjuster has the authority to settle her claim on behalf of her insurance company. This is an example of the adjuster's:

Apparent authority

Monique lives in Texas. NC - April 1st TX - April 15th NM - April 20th CA - April 30th

April 15th, because when a company broadens their coverage with no additional premium charge, it takes effect on the date it is implemented in an insured's state of residence.

Uninsured motorist coverage and medical payments coverage under a business automobile policy:

Are not covered by the policy unless added by endorsement.

A structure made of modified fire resistive materials has a fire resistive rating of:

At least 1 hour.

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.

Of the following businesses, which one is NOT eligible for coverage under a Businessowners policy? An auto dealership with $1 million in gross annual sales. Barbershop with 2 chairs. A hair salon with 7,000 square feet of floor space. A pizza joint with a seating capacity of 30.

Auto Dealerships Businesses operating in the sale, servicing, or storage of automobiles are not eligible for a Businessowners Policy.

All of the following statements are true regarding the flood coverage endorsement to the commercial property policy, except: Destabilization of land caused by flooding of subsurface land areas is not covered. The cost to remove debris of covered property is included in the endorsement's limit of liability and is not an additional amount of insurance. There is no coverage for loss caused by a flood that begins before or within 72 hours after the inception date of the endorsement. Back-up or overflow of a were or drain is covered if that overflow occurs within 48 hours after the flood recedes and the overflow was caused by the flood.

Back-up or overflow of a were or drain is covered if that overflow occurs within 48 hours after the flood recedes and the overflow was caused by the flood.

When the Personal Liability Supplement is purchased as a monoline policy, all of the following are required conditions, Except:

Bankruptcy

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?

Barratry

Which of the following is the BEST explanation as to the reason insurance policies are called "unilateral contracts"?

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

Philip has several vehicles that are all covered under Personal Auto policies. He has several acres of land with a barn and chicken coup on the property. To drive around not eh acreage, Philip has a very old truck that is not licensed or insured. One afternoon, Philip is driving out to check on his cows when he hits a rut and his head slams down on the steering wheel, injuring him severely. How will Part B - Medical Payments provide coverage for Philip's injuries?

Bodily injury sustained while occupying an uninsured auto owned by the insured is excluded under Part B, therefore no coverage would apply.

The limit of a bond is known as its:

Bond Penalty

Which of the following statements BEST DESCRIBES the main difference between a Commercial Umbrella policy and an Excess Liability policy?

Both Excess Lines policies and Commercial Umbrella policies increase the limits of the underlying policy but the Commercial Umbrella policy can also broaden and extend the coverages.

Which of the following is a coverage that may be selected on an Equipment Breakdown form by showing a limit of liability amount next to the coverage?

Brands and labels

What is generally excluded on the Condominium Commercial Unit-Owners form?

Building Coverage

What is generally excluded on the Condominium Commercial Unit-Owners form? Building Coverage Hostile fire damage Inside appliances and fixtures. The improvements and betterments of the unit owner.

Building Coverage

Section I of the Businessowners policy places limitations on coverage for certain losses if they are not caused by a specified cause of loss. All of the following are specified causes of loss under the policy, EXCEPT: Fire or lightning. Sinkhole collapse. Water damage. Building glass breakage.

Building glass breakage.

Someone breaks down the door to a store and steals merchandise. This loss is known as:

Burglary

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. The coverage applies to vehicles with 4 wheels.

The ACV settlement under a property insurance policy may be determined using "broad evidence rule", which means that the loss is valued:

By establishing the value of the property using any evidence a court finds relevant.

Under a commercial property policy, all of the following types of outdoor property are covered under the additional coverage for collapse if they are damaged directly by the collapsed building, except A. A satellite dish. B. Awnings, gutters and downspouts. C. A septic system for the insured commercial building. D. A fence around the building.

C. A septic system for the insured commercial building.

Which of the following statements concerning the Earthquake and Volcanic Eruption Endorsement to a Commercial Property policy is not true? a. the endorsement is written to include earthquake and volcanic eruption as a covered cause of loss b. the endorsement can be written to cover only sprinkler leakage that is caused by an earthquake or volcanic eruption c. if the policy expires before the end of the 168 hour period, coverage will not apply to the time period following the expiration date of the policy d. the endorsement will treat all earthquake shocks or volcanic eruptions that occur in any 168 hour period as a single earthquake or volcanic eruption

C. if the policy expires before the end of the 168 hour period, coverage will not apply to the time period following the expiration date of the policy

Inland Marine insurance was developed to provide coverage for:

Cargo traveling over land.

AN insured may purchase a Commercial Umbrella policy to broaden and extend all of the following types of commercial lines liability policies, EXCEPT: Commercial General Liability Business Auto Liability Commercial Automobile Physical damage Employer's liability

Commercial Automobile Physical damage.

Which of the following statements is TRUE regarding Commercial Property coverage?

Commercial property coverage can be written as both a monoline policy and as part of a package policy.

Which coverage of a Homeowners policy would pay for damage to a neighbor's window caused by the insured?

Coverage E Coverage E - Personal Liability would pay for the property damage to others caused by the insured under a Homeowners policy.

Which of the following types of coverage are included in the standardized Business owners policy?

Coverage for business personal property.

"Pete" is adding Commercial Property coverage to his commercial package policy. Which of the following coverage CANNOT be added to a package policy using Commercial Property coverage forms

Coverage for the negligence of the insured

All of the following statements are TRUE regarding a Commercial Inland Marine policy, EXCEPT:

Coverage is most often written on a named peril basis.

Which of the following is not true of coverage for Business Personal Property and Personal Property of Others in a Commercial property policy

Coverage is provided while the property is located within a covered vehicle at any location as long as the vehicle is owned by the insured business.

Which of the following is the basis for insuring property under Section I of the Businessowners policy?

Coverage is written on an open peril basis.

Each of the following is true about Builders Risk Coverage, Except: Land, lawns and trees are not covered. The amount at risk increases over time. In effect, the coverage has a 100% coinsurance requirement. Coverage terminates the day after construction is completed.

Coverage terminates the day after construction is completed.

All of the following statements are TRUE regarding the Commercial Inland Marine Sign Coverage form, EXCEPT: A customer's fluorescent sign that was in the insured's care, custody, or control of the insured at the time it was damaged would be covered. Coverage under this form is in addition to any coverage that is paid for signs under a commercial property form. The insured's mechanical sign that is attached to the building. The insured's neon sign that is not attached to the building.

Coverage under this form is in addition to any coverage that is paid for signs under a commercial property form.

Bob and Pete's Used Cars has purchased a Garage policy with dealer's physical damage coverage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases a vehicle and drives it back to the dealership. If Pete suffers a physical damage loss during this trip:

Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage policy.

Which of the following statements is TRUE regarding the coverage extension of the standard Businessowners policy for "Business Personal Property Temporarily in Portable Storage Units"?

Coverage will not apply if the storage unit has been on the insured premises for longer than 90 days, even if the business personal property has only been stored there for less than 90 days

All of the following statements are true regarding Difference in Conditions insurance (DIC), EXCEPT:

Covers losses due to windstorm.

All of the following statements are true regarding Difference in Conditions insurance (DIC), EXCEPT: Covers losses due to windstorm. This coverage does not apply to damage cause by riot. Covers any cause of loss that leaves the property in a different condition that it was prior to the loss, up to a limit specified. This coverage does not apply to fire losses.

Covers losses due to windstorm.

Morton's Millinery is covered by a Commercial Property policy with a broad cause of loss form attached. Morton's closes up their covered building for a long holiday break. When they return, a loss has occurred. Which of the following loss scenarios would NOT be covered?

Damage caused by frozen pipes that burst and leaked for several days while the business was closed for the holiday break because Morton turned the building thermostat very low to save on heating costs

Each of the following is a comprehensive loss under the physical damage coverage of a Business Auto policy, except:

Damage caused when the auto overturned on a sharp curve. Comprehensive Coverage under the Business Auto Coverage Form is a broad open perils coverage that covers damage from perils not excluded. Collision is excluded under the policy.

Which of the following is not an "additional coverage" under Homeowners Liability -- Section II coverage?

Damage to "property owned by the insured".

Which of the following is covered under Part A of the Personal Auto policy?

Damage to the attached garage of a dwelling rented by the insured. Liability coverage is not provided for: Damage to property owned, being transported, or in the care of the insured

The four main sections of a Standard Fire Policy are:

Declarations, Insuring Agreement, Conditions, and Exclusions.

Sean is covered under a standard, unendorsed Personal Auto policy. He has an external hard drive connected to the manufacturer-installed stereo system of the car, with thousands of digital music files stored there. The vehicle is broken into and the hard drive is stolen. How will the insurance company handle the claim for the hard drive?

Deny the claim in full because this loss is excluded by Part D of the policy.

Which of the following is a "broad form" peril of a Homeowners policy?

Discharge of water or steam.

Which of the following is the provision in a liability policy that allows an insured to report incidents or circumstances that result in claims being filed in the future? Defense Within Limits provision. Other Insurance provision. Supplementary Payments provision. Discovery provision.

Discovery Provision

An adjuster has procured a photograph of the scene of an accident on a claim that he/she is adjusting. This photograph is placed into the claims file as which of the following types of evidence?

Documentary

Which of the following losses would NOT be covered under the Signs coverage form of a Commercial Inland Marine policy?

During installation, several tubes in the insured's fluorescent sign are damaged.

The perils most frequently covered by a Difference in Conditions policy are:

Earthquake and flood.

A written modification of an insurance policy is known as a(n):

Endorsement form.

Flood coverage can be added to a Commercial Property policy by attaching the Flood Coverage Endorsement. If the endorsement is purchased and the property is already covered under a flood policy from the National Flood Insurance Program, then the coverage under this endorsement is considered to be:

Excess over the NFIP maximum limits.

The "Business Income" additional coverage under the standard Businessowners policy includes all of the following in its definition of "ordinary payroll expenses", EXCEPT:

Executive payroll is not considered part of the "ordinary payroll expenses".

If the value reporting form endorsement is attached to a commercial property policy, business personal preoprty is covered at all of the following locations, except: Incidental locations Reported locations Exhibition locations Acquired locations

Exhibition locations

It is essential that operations at some businesses be continued regardless of circumstances. In the event of property damage to the main facilities, arrangements could be made for use of other facilities. What type of coverage would be most appropriate to protect this business against consequential losses?

Extra Expense Coverage Some businesses cannot shut down. Hospitals, dairies and banks are a few examples. This coverage will pay for expenses needed to decrease the amount of time the insured's business is interrupted.

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.

An adjuster is engaged in the unauthorized practice of law if they perform any of the following duties, EXCEPT:

Filling in the blanks of a form with factual data..

Which of the following "additional coverages" of the Building and Personal Property Coverage form is paid without the application of the policy deductible?

Fire Dept Service Charge

Under which of the following Aviation physical damage losses would a deductible apply?

Fire caused by a collision EXPLANATION: The deductible does not apply to losses from fire, lightning, explosion, transportation, theft, robbery, or pilferage. However, the "in-motion" deductible does apply to losses from fire or explosion that occurs as a result of the collision of the aircraft.

UM coverage claims are

First-party claims

Uninsured Motorist (UM) coverage claims are:

First-party claims.

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

The optional coverage for "money and securities" under a standard businessowners policy provides for the loss of moeny and secruities used in the insured's business as a result of all the following, EXCPEPT: Fraud Theft Disappearance Destruction

Fraud.

Part D of the personal auto policy does NOT cover:

Freezing No coverage for wear and tear; freezing; mechanical or electrical breakdown or failure; road damage to tires; radioactive contamination; discharge of any nuclear weapon; War; No coverage for electronic equipment designed for the reproduction of sound.

A department store has a large inventory of costume jewelry and watches. No single item is valued for more than $100.00. A customer steals most of the items and flees the scene. What theft coverage would be provided by an unendorsed standardized BOP policy?

Full limit of Coverage B

Which of the garage policy coverages will pay for physical damage to a garage customer's auto regardless of legal liability?

Garagekeepers direct primary coverage..

Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. Who would be covered for their injuries under Part B of Gavin's policy?

Gavin, Tabitha, and Tabitha's friends.. The injuries to Gavin, Tabitha and Tabitha's friends would be the only ones covered by Part B of the Personal Auto policy.

each of the following is considered to be an implied warranty in an ocean marine insurance policy, except: Condition of Cargo Seaworthiness General Average Legality of the Voyage

General Average.

Which of the following would not be covered under the specified cause of loss physical damage coverage under a BAP?

Glass Breakage

Generally, losses that are covered under the "collision" coverage of a Personal Automobile policy are NOT covered under the "other than collision" coverage. Which of the following would be an exception to this general rule, allowing a claim to be paid under EITHER coverage?

Glass breakage that is due to an upset or rollover of a covered auto..

A lost instrument bond is used to:

Guarantee that if the financial institution issues a replacement, they will not have to honor the original document if it is found later.

The Part B - Med payments coverage of Dorinda's personal auto 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. Med expenses per person: Harvey - $1500 Dian - $4575 Thomas - $6250

H would receive $1500, D $4575, and T $5000

A company that repairs customers' aircraft may need which of the following coverages to pay for the accidental damage to the customers' aircraft while it is in the insured's care, custody, or control?

Hangarkeeper's liability coverage.

A church has had the woodwork in the building refinished and new stain and varnish has been applied. The workers placed the rags and brushes that were used to apply the varnish in a small closet and closed the door, creating the possibility of spontaneous combustion. Which of the following terms best describes this condition?

Hazard

An object that is covered under Morton's Equipment Breakdown policy has been "red tagged". This means Morton's coverage is suspended until Morton takes certain steps. Which of the following statements is NOT one of the steps Morton must take before his Equipment Breakdown coverage can be reinstated?

He must have all of his equipment (even the objects that were not red tagged) by the insurer before the coverage can be reinstated.

Samantha is the named insured on her personal automobile policy. When Samantha's husband moves out of the house as part of a legal separation that will precede their divorce, it becomes necessary for him to purchase his own automobile policy. Which of the following statements is not true regarding the period of time Samantha's husband will be afforded to purchase his own policy?

He will be covered indefinitely until Samantha contacts the insurer and has her husband removed as an insured under the policy.

Which of the following would be covered under Business Auto Symbol 7?

Hired autos only

All of the following statements are TRUE regarding the cancellation clause of the New York Standard Fire policy, EXCEPT:

If the insured cancels the policy, there is no financial penalty assessed on the unearned premium.

The business auto uses Symbol 7 to cover "specifically described autos" identified in the decelerations. An auto acquired during the policy period will only be covered:

If the insured insures all of their vehicles with the company or it replaces a covered auto.

When an insurer takes no action upon realizing material changes in a contract, this is called:

Implied Waiver

Which of the following claims certification courses is not likely to be approved by the Texas Department for continuing education credit?

Income Streams for Adjusters as Independent Contractors.

The term "time-element" is another way of saying:

Indirect Loss

Economic loss that is the consequence of a direct loss is known as:

Indirect loss

All of the following would be covered under Part B - Medical Payments of the Personal Auto policy, Except:

Injuries sustained by an elderly man riding in the insured vehicle after having paid the insured to take him to the grocery store.

Which of the following is covered under Part A of the Personal Auto policy?Injuries to the insured that are sustained in an auto accident where he/she is at fault.Injuries to a pedestrian struck by the insured while driving the covered auto.Injuries to a member of the insured's family that are sustained in an auto accident where the named insured is at fault.Damage to personal property being transported by the named insured in the covered auto.

Injuries to a pedestrian struck by the insured while driving the covered auto.

Which type of surety bond is required of those appointed to receive remaining assets and protect creditors?

Insolvency bond.

All license application and state licensing exam fees in Texas are deposited:

Into the Texas Department of Insurance operating account.

A auto physical damage "diminution in value / diminished value" claim:

Is a claim that is submitted in the amount that the value of a vehicle is reduced after repairs have been made.

The "Pollution Clean-Up and Removal" coverage under the Building and Personal Property coverage form of a CPP:

Is an additional coverage

Holden is a staff adjuster for Binders Keepers, Inc., an insurance company. He has been engaged in an investigation of a third-party claim against an insured. Holden has advised his principal, Binders Keepers, Inc. that while performing the investigation, he found that it is very likely that the insured was not negligent and probably would not be found liable for the claim if the third-party decided to bring a lawsuit. Holden:

Is engaging in the unauthorized practice of law.

Recovery under the Standard Fire policy may be limited by the "pro rata" liability clause. All of the following statements are true about this clause, EXCEPT:

It allows the insured to collect the full limit of liability under all policies covering the damaged property, in case of a loss. The purpose of insurance is to indemnify and not permit an insured to collect more than the loss in case of multiple policies covering the same risk.

All of the following statements are true regarding an interline endorsement used in a Commercial Package policy (CPP), EXCEPT:

It can apply to one or more coverage parts.

Which of the following statements is TRUE concerning the Part D coverage of a standardized Personal Auto policy?

It can cover owned and non owned automobiles.

Which of the following statements is NOT TRUE regarding Trailer interchange coverage?

It covers damage to a trailer under the policy of the trucker who owns the trailer but was not in possession of that trailer at the time of the loss.

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

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

Which of the following statements is TRUE regarding the DP-3 special form?

It provides open peril coverage on the structure and named peril coverage on the personal property. The DP-3 special form provides open peril coverage on the structure and named peril coverage on the personal property.

An insured is covered under a COmmercial property policy with the special cause of loss form attached. The insured sufferes a loss to some valuable papers and records pertinent to his business. Which of the following statements is correct about how this loss will be covered?

It will be covered if the loss was caused by on the of the broad form perils.

An insured is covered under a Commercial Property policy with the special cause of loss form attached. The insured suffers a loss to some valuable papers and records pertinent to his business. Which of the following statements is correct about how this loss will be covered?

It will be covered if the loss was caused by one of the broad form perils.

The insured's store is covered under a jewlers' block policy. The owner's wife removes an expensive piece of jewelry from the store's showroom and wears it to a party where it is stole. How will the insurer handle this claim?

It will be denied because of an exclusion.

Chaz takes his girlfriend to an expensive restaurant for Valentine's Day. It is raining, so he decides to have the valet park his car, saving his girlfriend from getting wet. The valet is driving the car into the restaurant's parking garage, when he clips the side of the garage entrance with the front fender of Chaz's car. The garage wall needs to be repaired as well as the fender and headlight of Chaz's car. How would Part D of Chaz's Personal Automobile respond to this loss?

It would cover the loss to Chaz's car because it is the insured automobile, but would not cover the damage to the garage.

The "Free of Particular Average" clause of an Ocean Marine policy eliminates all coverage for partial losses to cargo unless caused by all of the following, EXCEPT:

Jettison The "Free of Particular Average" clause of an Ocean Marine policy will not cover partial losses to cargo unless caused by stranding, sinking, fire, or collision. A partial loss to cargo by "jettison" would be covered, even if the FPA clause is attached to the policy. Topic covered in the Ocean Marine chapter of the course.

All of the following "personal effects" would be covered by the Part D -- Additional Coverage of the Personal Watercraft, EXCEPT:

Jewelry Jewelry is the only item listed in the answer choices that is NOT covered by the Personal Effects additional coverage of Part D of the Personal Watercraft policy.

Which of the following would provide coverage for the physical damage of a ship while it is being transported by truck over land?

Land transit coverage

Aircraft liability coverage is very similar to auto insurance coverage with which of following exceptions?

Liability to passengers is treated as a separate exposure.

Section I of a Homeowners policy covers all of the following, EXCEPT:

Locations owned by the named insured that are not described on the declarations page of the policy.

The focus of Equipment Breakdown coverage is:

Loss prevention

A loss reserving method that establishes aggregate reserves for all claims for a single line of insurance is known as:

Loss ratio method..

Garagekeeper's liability coverage excludes all of the following losses, EXCEPT:

Loss to a high-value audio system permanently installed in a covered auto.

All of the following losses are excluded by the Earthquake & Volcanic Eruption Endorsement of a Commercial Property policy, EXCEPT: Loss to stucco on a covered building when it is damaged or lost due to earthquake or volcanic eruption. Beach erosion caused by tsunami resulting from an earthquake. Loss to a building caused by a tidal wave started by an earthquake Loss to masonry veneer on a covered building when 20% of the total outside walls are masonry veneer and it is damage due to earthquake or volcanic eruption.

Loss to stucco on a covered building when it is damaged or lost due to earthquake or volcanic eruption.

All of the following may be covered by a probate bond, EXCEPT: Paying debts Inventory of Property Distributing assets Lost financial instruments.

Lost financial instruments.

All of the following are included in the definition of "auto" under the Business Auto policy, EXCEPT:

Mobile equipment.

Truckers Coverage Form

Modified version of the business auto coverage form that takes into consideration the special practices and regulations that apply to the trucking industry. Because the business auto coverage form specifically excludes businesses that set themselves out for hire to haul the goods of others truckers have to obtain this coverage for their vehicles. Includes three coverage's:- Liability- Trailer interchange - Physical Damage

Rick lives in a major metropolitan city and does not own a car because he takes public transportation. However, when Rick leaves the city to visit his friend Bob, he often drives Bob's car. Rick feels he should have some type of liability insurance to provide coverage when he is driving. Rick should purchase:

Named nonowner coverage

James owns a sedan, a truck, and an SUV. He carries Part C -- Uninsured Motorist Coverage on his SUV, but does not carry it on his sedan or truck. James' son driving the truck on afternoon

No Coverage applies

An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Business owners policy. What coverage is provided by the BOP for the missing inventory?

No coverage would apply.

David has received a cancellation notice in the mail for the standard Personal Automobile policy be purchased 10 days ago. The notice informs David that his policy will be cancelled 10-days from the date the notice was mailed. What was the reason his policy was cancelled?

Non-payment of premium.

A home is insured under an HO-3 policy. One of the "other structures" on the same property is used by the insured for his business. The building burns in a fire. It would:

Not be covered because buildings used for business purposes are excluded.

The insured has a barn on his premises. The dwelling is insured for $200,000 under a DP-2 dwelling policy. How much coverage applies to the barn?

Nothing

The importance of an "Insured or Witness Investigation" is that:

Obtaining their statements is very important in determining who is liable.

Products being imported from Great Britain into the United States would be covered by:

Ocean Marine Policy

Which of the following statements is TRUE of Ocean Marine insurance? Ocean marine premium rates are highly regulated by the federal government. Insurers must have their ocean marine policy forms approved by the state insurance department of any state where this insurance will be offered. Ocean marine insurance policy forms are not standardized. Insurers must have their ocean marine premium rates approved by the state insurance department of any state where this insurance will be offered.

Ocean marine insurance policy forms are not standardized.

Spencer is covered under a standard Personal Automobile policy with a policy inception date of October 15th. Additionally, the policy will expire on October 15th of the current year. Spencer contacts his agent on October 7th and asks to have an new endorsement added to his policy. The agent agrees, adds the coverage the same day, and informs Spencer that there will be an additional premium of $20 per month charged. When will the adjustment of premium be effective for Spencer?

October 7

Under a standard equipment breakdown policy, the loss settlement is

On a replacement cost coverage, if the repair or replacement, is made within 24 months of the loss.

The "Medical Expense" coverage of Section II of the Businessowners policy will pay the reasonable expenses for first aid, medical services, and funeral services, within:

One year from the date of the accident.

The Part A - Liability section of the Personal Auto policy will cover all of the following, except:

Only damages to the insured's automobile in the accident.

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.

In ocean marine insurance, each of the following is true about the term "general average", EXCEPT: The loss is shared by all interests involved in the voyage. Only the party having an interest in the lost property suffered a loss. It involves a deliberate sacrifice of property. It refers to partial losses to save the ship.

Only the party having an interest in the lost property suffered a loss.

Which of the following statements correctly applies to a named perils policy?

Only the perils listed by name are covered under the policy.

The insured is covered under a standard HO-5 policy. What coverage does the insured have for personal property?

Open perils.

George, an expert witness, is called to testify when a claim is being litigated. What type of evidence is George's testimony to the court?

Oral Evidence

Which of the following is NOT a coverage extensions on the Building and Personal Property coverage form? Newly acquired or constructed property up to $250,000 for 30 days. Non-owned detached trailers for up to a limit of $5,000. Business Personal Property temporarily in portable storage units for 90 days or less.

Outdoor property up to a maximum of $500

The following are types of auto ownership eligible for a Personal Auto policy, except: A. Owned jointly by a married couple B. Owned Jointly by two or more related persons whether or not they are living together. C. Owned by an individual. D. Owned jointly by person who are unrelated whether or not they live together.

Owned jointly by person who are unrelated whether or not they live together.

All of the following would be advantages to an insured or an insurer for purchasing or writing a Commercial Package policy, except:

Packaging monoline policies together can provide broader coverage under each coverage part than purchasing the policies separately.

All of the following are correct statements regarding the limits of liability under Part A of a Personal Auto policy, except:

Part A

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

Which part of the Personal Automobile policy is automatically expanded to provide limits to meet the limits required if the insured is driving and has an accident in another state?

Part A Part A - Liability of the Personal Automobile policy is expanded automatically to provide the required liability limits of the states where the accident occurred, if that state has higher limits than the state where the policy was issued. This includes "no-fault" and "PIP" coverage.

Morton loses control of his car and hits Jordan's car that was parked legally along the street where Morton was driving. The damage to Jordan's car is covered by which coverage of Morton's personal automobile policy?

Part A -- Liability

When WC benefits are payable after an auto accident, how will Part B of the Personal auto policy be applied?

Part B is excluded if WC benefits are payable.

George Wilson has a personal auto policy. Select the coverage that would apply when a deer leaps onto Mr. Wilson's car and causes extensive damage?

Part D - Other than Collision (Comprehensive)

Which of the following types of bonds guarantees that all project materials will be paid in full by the contractor upon completion of the project?

Payment Bond A payment bond guarantees that all project materials will be paid in full by the contractor upon completion of the project. Performance bond guarantees the contractor will complete a project to the satisfaction of the project owner.

Under Part A of a Personal Automobile policy, "supplementary payments" refer to which of the following?

Payment of defense and other expenses by the insurance company beyond the limits of liability.

Which of the following endorsements permits the insured under a commercial property policy to increase their busienss personal property coverage amount for specified periods of time when inventory may be higher than usual?

Peak Season Endorsement

All of the following sections are included on the Business and Personal Property coverage form except:

Perils Insured Against

Which of the following types of bonds is NOT a judicial bond? Permit Fiduciary Court Litigation

Permit bonds.

If an insured covers his home with a standard unendorsed HO-5 form and purchases a Coverage A limit that meets the coinsurance requirement, which of the following would NOT be covered on a replacement cost basis?

Personal Property Replacement cost coverage does not apply to Coverage C - Personal Property unless purchased by endorsement.

The insured has a Homeowners policy with a $5,000 loss deductible. He has purchased some expensive camera equipment, scuba gear, and clothing to take on a 2-week cruise and is concerned about theft of his newly purchased property. What coverage would be recommended?

Personal effects floater

Personal Effects Floater is property worn or carried by an individual under the heading of personal effects. What does this include?

Personal effects, luggage, clothes, cameras, and sporting equipment.

When symbol "48" is indicated on a Truckers form:

Physical damage to a non-owned trailer is covered when the insured trucker is liable under a written interchange agreement.

All of the following are "Perils of the Sea" under an Ocean Marine policy, EXCEPT: Stranding Wind Pirates Collision

Pirates

Which of the following is not covered on the commercial property basic cause of loss form? Sinkhole collapse Pollution Clean up Accidental Sprinkler leakage Volcanic Action

Pollution clean up.

Which of the following "additional coverages" under the Building & Personal Property coverage form does not increase the limit of liability of the policy?

Preservation of Property

Which of the following would be considered a "breakdown" as defined in an equipment breakdown policy?

Pressure or vacuum equipment failure

Sally Roe's vehicle is rear-ended by John Doe. Sally and John are good friends. Sally tells John not to worry about the damage. She says she has insurance and will tell her insurance company to pay for the damage. She will waive her subrogation right so that John won't have to pay anything. Her insurer will:

Proceed with subrogation against John Doe and will not honor the waiver.

All of the following statements are TRUE regarding Section II - Liability of the Garage Coverage form, EXCEPT:

Provides coverage when an employee causes damage to a customer's vehicle. Section II - Liability does NOT provide coverage when an employee causes damage to a customer's vehicle. That type of loss is covered by the Garagekeepers Liability section of the form.

A person, firm, or corporation that, for compensation acts on behalf of an insured in negotiating the settlement of certain claims for loss or damage to property is known as a/an:

Public adjuster.

Replacement cost coverage is best defined as:

Replacement cost without deduction for depreciation.

What type of insurance is usually provided or subsidized by the state or federal government because it is not ordinarily available from private insurers?

Residual market insurance..

Blake has been planning to quit his job as a clerk in a United States Court House and open an antique store. After doing some research and finding that antiques do not sell well, he decides to abandon the plan and stay on at the court house. Blake is practicing:

Risk avoidance.

Roger accidentally hits a tree in his owned vehicle and it is a total loss. 3 year old car in pristine condition with ACV of 12,250. Replace cost 19,400. Purchase same at $11,200. Disregarding deductible how much will Roger get?

Roger will receive a check for $11,200 to purchase a used car of like kind and quality to the vehicle that was wrecked.

Sam has his current business locations covered under a standard business owners policy. He purchased a new building to add another business location. Which of the following statements best describes how coverage will apply for Sam's newly acquired property?

Sam will have $250,000 of coverage for 30 days or until he reports his newly acquired property to the insurer, whichever comes first.

What does an insurer do when the insured has possibly waived his or her rights in a liability claim?

Send a ROR letter

Which of the following is NOT covered under the basic cause of loss form of a Commercial Property policy? Explosion. Damage caused by vehicles. Smoke from industrial operations. Windstorm.

Smoke from industrial operations.

Which of the following statements defines a "bailee"?

Someone, other than the insured, to whom the insured property is entrusted temporarily.

Which of the following statements regarding uncontrolled Commercial Inland Marine forms is NOT TRUE?

The forms can be used as part of a Commercial Package policy.

Sondra, who is covered under a Standard Fire policy, has a fire break out in her house. She begins moving all the property that she can, outside into the yard. After the fire department extinguishes the flames and things have calmed down on the scene, she discovers that some of her personal property that she moved to her lawn is missing. Which of the following statements is TRUE in this scenario?

Sondra's property will be covered because the peril of "removal" can result in theft or disappearance of property. Sondra's property will be covered because the peril of "removal" can result in theft or disappearance of property. "Removal" is a covered peril under the SFP.

Soraya is a company adjuster who is investigating a third-party claim submitted by Chris. Soraya is a new adjuster and wants to be sure she does not waive any of the insurer's rights under the policy so she sends a reservation of rights letter to Chris. Which of the following statements is true in this situation?

Soraya should not have taken this action because a third-party claimant has no rights or obligations under the policy.

Regulation of the insurance industry in the United States is primarily left to:

State Government

The "control of property" condition of the Commercial property policy:

States that a negligent act of someone beyond the insured's direction or control will not affect the coverage.

What coverage is provided under the BOP for a steam boiler explosion?

Steam boiler explosion is excluded under the the BOP.

The type of claims investigation that looks at the possibility of a third-party being responsible for the loss is known as:

Subrogation

Which of the following statements regarding the supplementary payments of Section II of the standard Businessowners policy is not correct?

Supplementary payments do not cover expenses that the insurance company occurs.

Which Garage Coverage form symbol is used to indicate that the covered automobile(s) is/are subject to a compulsory "no-fault" law?

Symbol 25.

Which of the following Business Auto symbols permits the insured to purchase coverage for both liability and physical damage?

Symbol 3

Which of the following coverage symbols would be designated on the Declarations of a Commercial Auto policy to cover a customer's auto left with the insured to be serviced?

Symbol 30

The insured auto dealer has opted to include Part IV - Garage Physical Damage coverage to her policy. Which of the following symbols must be indicated on the Declarations page of the policy for physical damage coverage to apply?

Symbol 31 Symbol 31 indicates that physical damage coverage will be provided for the auto dealers' vehicles including owned autos, autos held for sale, and autos held on consignment, or trailer dealers.

A trailer owned by the named insured but in the possession of someone else, will be covered for liability under a written trailer interchange agreement on their Truckers form by using:

Symbol 49

Mandatory No-Fault

Symbol 5

A trailer in the possession of the insured under a written Trailer Interchange Agreement would have coverage under their Motor Carrier form by using:

Symbol 69.

What symbol is used for a non-owned auto under Business Auto policy?

Symbol 9

The optional coverage for "Employee Dishonesty" under a standard Businessowners policy provides a "discovery period" for the insured to discover the dishonest act and have coverage still apply. Which of the following statements best describes the "discovery period" for this optional coverage?

The "discover period" is one year from the end of the policy period.

All of the following statements regarding the Motor Carrier Act of 1980 are correct, EXCEPT:

The Act requires truckers to certify that they are able to meet financial obligations arising from physical damage to non owned trailers being used under a written Trailer Interchange agreement.

If a condominium Association policy and a Condominium Unit-Owners policy are in force on the same property, how would the claim be handled?

The Condominium Association form is primary.

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

The DP-3 special form The DP-3 special form is the only Dwelling form that provides "open peril" coverage on the dwelling and other structures. The DP-1 and DP-2 are "named peril" forms.

Bruce works for Better Burger, Inc. As part of his compensation package, he is supplied with a company vehicle which he is allowed to take home each evening. Bruce wants to make sure that the liability coverage under his personal auto policy covers him while driving the company car. What endorsement should Bruce have added to his policy?

The Extended Nonowned Liability Coverage Endorsement

Which of the following statements is correct regarding the differences in coverage between an HO-3 and an HO-5?

The HO-3 covers personal property on a named peril basis, while personal property under an HO-5 is covered on an open peril basis.

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 articles floater should be purchased.

Which of the following Commercial Property coverage forms provides coverage when the insured is negligent and causes damage to property that was in their care, custody and control?

The Legal Liability form.

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

The Part D limit for physical damage coverage to non-owned trailers is $1,500.

The Building & Personal Property Coverage form of the Commercial Property program includes some optional coverages. Which of the following is the optional coverage that changes the standard valuation condition of the form, but keeps the coinsurance provision in place?

The Replacement Cost Valuation optional coverage. The Replacement Cost Valuation optional coverage changes the standard ACV valuation condition to RCV but subject to the same coinsurance condition.

Which of the following statements is true about the Standard Fire Policy?

The Standard Fire policy is no longer used in its original format.

Which of the following sections of an Ocean Marine policy is very similar to the "Duties of the Insured" in other property policies?

The Sue and Labor clause.

Cameron has his home covered under a Homeowners policy and his limit for bodily injury is $100,000. He also purchased a Personal Umbrella policy with a $1,000,000 limit of liability. Cameron is sued and a judgement was made against him for $500,000. To trigger his Umbrella policy, his Homeowners policy must pay $100,000, but he finds that the insurance company from which he purchased his Homeowners policy has become insolvent. How will the Umbrella insurer pay the claim (disregarding any retention limit)?

The Umbrella policy will not become primary when the insurer carrying the underlying insurance becomes insolvent, but will pay the $400,000 as if the underlying insurer had paid its $100,000 limit of liability.

Selena would like to select an optional coverage for her standard Businessowners policy to cover a large outdoor business sign, not attached to her building, that she owns. Which of the following statements is CORRECT regarding his optional coverage?

The amount of the optional coverage for outdoor signs is selected by the insured and scheduled on the Businessowners policy.

Which of the following Commercial Property cause of loss forms include the additional coverage for "Fungus, Wet Rot, Dry Rot, and Bacterial"

The basic, broad, and special cause of loss forms.

Which of the following would be covered by Section I of the Businessowners policy?

The seizure of the insured's building by the civil authorities in order to stop the spread of fire.

Which of the following statements is TRUE regarding how the standard Businessowners policy additional coverage of "Collapse" becomes payable?

The collapse must be such that the building cannot be used as intended.

Coverage B of the Ordinance or Law Endorsement to a Commercial Property policy covers:

The cost to demolish and remove the undamaged portion of the building, if that destruction must occur because of an ordinance or law requirement.

Which of the following statements is NOT TRUE regarding the "Extended Period of Indmenity" option of the Business Income form? With this coverage option, a monthly limit of insurance is selected, expressed as a fraction, and scheduled on the form. If this coverage is selected, the coinsurance requirement is waived. This coverage option only applies to the loss of business income and not to any extra expense coverage. The coverage applies for 120 days following the period of restoration.

The coverage applies for 120 days following the period of restoration.

Which of the following statements is NOT TRUE regarding Part B of the personal automobile policy?

The coverage includes split limits to cover more than one person, per accident.

All of the following statements are TRUE regarding the standard Businessowners policy coverage extension for "Business Personal Property Temporarily in Portable Storage Units", EXCEPT: The coverage is provided for 90 days. The coverage extension provides $10,000 of coverage. The term "portable storage unit" can include "detached trailers". The coverage is provided for rented storage units away from the insured premises.

The coverage is provided for rented storage units away from the insured premises.

Mr. Thompson carries the minimum auto liability limits in his state. He drives his car to NY which requires bodily injury limits of $25/50 and a wrongful death limit of $50/100 and no-fault coverage. If he has an accident in NY what coverage would he have?

The coverage will automatically be modified to comply with the NY requirements.

Which of the following would NOT be excluded under Part A of a standard Personal Automobile policy?

The covered auto while being used to transport passengers to work as part of a share-the-expense carpool

Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. Who would be covered for their injuries under Part A of Gavin's policy?

The driver and passengers in the other car.

Henry is furnished a company vehicle. He carries auto coverage on his owned vehicles. What coverage might Henry purchase to provide additional coverage on the furnished company vehicle?

The extended non-owner coverage endorsement should be purchased.

Talia is a licensed adjuster in Texas. She has been so busy adjusting claims over the past two years, that she realizes a month before her license is scheduled to expire that she hasn't taken any continuing education courses. She applies to the Texas Department for an extension to obtain her CE credits citing her busy work schedule. Which of the following statements best describes how the Texas Department will likely answer Talia's request?

The extension will likely be denied because the Texas Department does not grant extensions to obtain CE credit based on business reasons

Which of the following statements is NOT TRUE of the Builders' Risk coverage form? The form settles all losses at ACV. The form allows for vacancy of 60 days before coverage will no longer apply. The form does not include a coinsurance clause. Coverage under this form is written for a period of one year.

The form allows for vacancy of 60 days before coverage will no longer apply.

The definition of "occupying" in the personal auto definitions means all of the following, EXCEPT:

Under a vehicle.

Which of the following would be covered under a Builders' Risk form? A large tv antenna that will be installed on the roof of the building when construction is complete. Foundation of the building under construction. The land on which the building is being constructed. The neon sign installed at the entrance of the parking lot at the completion of the building's construction.

The foundation of the building under construction.

Which of the following losses would be covered under the standard Dwelling policy optional coverage Vandalism & Malicious Mischief (V&MM)?

The graffiti painted on the siding caused by a gang in the neighborhood while the insured was out for the evening.

Which of the following statements is NOT TRUE regarding the implied warranties of an Ocean Marine policy? The implied warranties are attached to the policy as an endorsement. Implied warranties are understood, not actually written, by the parties to the contract. If the insured does not comply with the implied warranties, the policy will be void. Implied warranties are binding.

The implied warranties are attached to the policy as an endorsement.

Which of the following would NOT be covered under the HO-2 form?

The insured hits and damages the fence with his car.

An insured is covered under a CGL policy. He would like to purchase another policy to increase the limits of insurance for his commercial liability exposures. Which of the following statements is correct regarding the insured's situation?

The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits.

An insured is covered under a CGL policy. He would like to purchase another policy to increase the limits of insurance for his commercial liability exposures. Which of the following statements is correct regarding the isnrued's situation?

The insured may purchase either a Commercial Umbrella or an Excess Liability policy to increase his liability insurance limits.

All of the following are duties of the insured under the business auto policy in case of a loss to a covered auto or its equipment (a physical damage loss), except:

The insured must have the covered auto repaired and submit the receipt to the insurer for reimbursement to prevent fraud

The Medical Expense coverage for a standardized Businessowners policy will pay for all of the following, EXCEPT:

The insured when injured while working in their business.

The medical expense coverage for a standard Businessowners policy will pay for all of the following, Except: The insured when injured while working in their business. Visit to ER for the injured person after a covered accident. First aid at the time fo the accident for the client who is injured on the business premises. Funeral services for a customer who is injured while shopping at the singed business and later dies from those injuries.

The insured when injured while working in their business.

An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $500,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary underlying liability policy or the Umbrella policy. How will this loss likely be settled?

The insured will pay the full $100,000 loss.

The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this case likely be settled?

The insured would pay $10,000 and the Umbrella policy would pay $790,000.

All of the following statements are true regarding Public Law 15 (The McCarren-Ferguson Act), EXCEPT:

Under the law, the federal government retains the right to approve insurance forms.

In which of the following situations would trees, shrubs, and other plants be covered by the Homeowners additional coverages?

The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them. The perils of wind, hail, and the weight of ice and snow are excluded under the Homeowners additional coverage for trees, shrubs and other plants. Therefore, the only situation that would be covered is: "The insured's fruit trees are destroyed when an ember from a nearby brush fire lands on them and burns them".

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.

The Homeowners policy on Dylan's $110,000 home is voided when he intentionally burns the house to the ground. Consequently, he does not receive the settlement check he was hoping to when he committed the arson, but he still has an outstanding mortgage balance of $76,000. How does this event affect the mortgage lender?

The insurer pays the mortgage lender $76,000. The insured cannot intentionally jeopardize the mortgage lender's rights. Therefore, the insurer will pay the mortgage lender the $76,000 mortgage balance.

Jeff has his 1974 Pontiac Firebird Trans-Am SD-455 covered under a standardized personal automobile policy. He has had a full restoration done to both the interior and exterior of his muscle car and he can't wait to show it off. When Jeff's buddy Dale sees the car, he challenges Jeff to race against him in his 1971 Chevy Camaro SS350. Jeff accepts the challenge and the two men set a date for the following week. The following week, many people find out about the race and come out to watch on race day. Shortly after the race begins, Jeff loses control of his car when a tire blows out and he swerves into the crowd of people watching the race, injuring several. He is sued for bodily injury. Which of the following statements best describes how Part A of Jeff's personal auto policy will cover the costs to defend the claims against Jeff?

The insurer will not defend against the claim because it is not covered under the policy. Part A - Liability excludes coverage for vehicles used in prearranged racing or speed contests, and the insurer has no duty to defend or settle claims for bodily injury or property damage that are not covered under the policy.

A 40-year old commercial building is insured for $300,000 and has suffered a partial loss as a result of a hot water heater explosion. It will cost $17,000 for the increased cost of construction to comply with the building codes and $20,000 for all other covered damages. The building is covered under a standard Commercial Property policy, with the special cause of loss form attached. The insured submits the proof of loss for all of the repairs, including the increased costs to comply with the new building codes. Which of the following describes how this claim will be paid?

The insurer will pay $10,000 because this is the limit of liability specified in the additional coverage, for the "Increased Cost of Construction", plus the $20,000 for the cost of all other covered damages is covered under the policy.

Which of the following statements is TRUE regarding how the Building and Personal Property Coverage form would handle a loss to a party wall when the other party decides not to repair or replace the damage?

The insurer will pay the full value to repair or replace the party wall for the insured when the other party decides not to repair or replace.

Adrianna owns a dwelling that is covered under a DP-3 form and located in a rural area close to a small wooded area. While grazing outside of Adrianna's picture window one day, a deer sees its own reflection and jumps through the picture window to scare off the "other" deer. Once inside the dwelling, the deer realizes he is trapped and causes significant damage to the walls, floor and furniture. Adrianna is covered for $100,000 under Coverage A and for $50,000 under Coverage C. Which of the following statements is TRUE regarding this loss?

The insurer would deny the claim for the personal property and pay the loss to the dwelling on an RCV basis.

Ocean marine insurance contracts rely heavily on the principle of utmost good faith because:

The insurer's underwriters are not usually in a position to thoroughly investigate the risk.

An independent adjuster acts on behalf of his or her principal. Which of the following is the principal for an independent adjuster?

The insurer.

The record of complaints that all insurers in Texas must maintain must indicate all of the following, EXCEPT:

The license number of the person within the insurance company that generated the complaint from the client.

The medical payments coverage of an Aircraft Liability policy provided coverage for bodily injury expenses incurred by accident:

Within one year of the accident.

Limits of Liability under the Motor Carrier Act of 1980

The limits required affect vehicles that have a gross vehicle weight of 10,000 pounds or more. The required limits are divided into three categories, depending on the kind of hazardous cargo hauled:- $750,000 for interstate cargo transportation of nonhazardous property- $5,000,000 for interstate or intrastate transportation of large quantities of certain hazardous materials, such as compressed gas, radioactive materials, explosives, or oil - $1,000,000 for interstate or intrastate transportation of oil or other hazardous wastes Vehicles that have a gross weight of less than 10,000 pounds must comply with the financial responsibility limit of $5,000,000 if the vehicle hauls explosives, any quantity of poison gas, or large quantities of radio active materials.

Under the "business income from dependent properties -- Broad Form", to qualify as a "manufacturing location":

The location must be under contract with the insured's business to provide components that are essential to the insured's business production

Mrs. Vincent is covered under a standard PAP that covers her 2016 Ford SUV. She carries liability and full physical damage coverage. Her neighbor owns a 2002 Chevrolet pick-up truck with liability coverage only. Mrs. Vincent borrows the truck to pick up lawn furniture, parks the truck at the store, and leaves the keys in the ignition. The truck is stolen and later found wrecked. Which of the following would apply?

The loss is covered under Mrs. Vincent's "other than collision" coverage.

Martika is covered under an unendorsed, standard HO-3 policy and suffers a loss to an awning that covers her deck. The cost to purchase a new awning is $900, however the awning can be repaired for $300. The actual cash value of the awning is $750. Which of the following statements is correct regarding how this claim will be settled with the insurance company?Answer Choices:Select the Correct AnswerThe loss will be settled at $750.The loss will be settled at $300.The loss will be settled at $900.The loss will be settled at $0, because awnings are not covered under an HO-3 policy.

The loss will be settled at $300.

Martika is covered under an unendorsed, standard HO-3 policy and suffers a loss to an awning that covers her deck. The cost to purchase a new awning is $900, however the awning can be repaired for $300. The actual cash value of the awning is $750. Which of the following statements is correct regarding how this claim will be settled with the insurance company?

The loss will be settled at $300. Claims for an awning under Coverage C of the policy will be settled at actual cash value, but not more than the cost to repair or replace it. Therefore, the loss would be covered for the cost to repair it at $300.

Manny is purchasing a Commercial Property policy with a Business Income form included. Manny can select from any of the following as a method to provide coverage, while avoiding the coinsurance requirement, EXCEPT

The maximum monthly limit of indemnity optional coverage.

There are several different Commercial Property coverage forms that can be added to Commercial Package policy. Which of the following is NOT described on a Commercial Property form?

The number of buildings the insured owned that are not covered by the policy.

All of the following are true concerning Commercial Package policy modification factors, EXCEPT:

The numerical figure used as a modification is set within each coverage part of the standard policies that make up the package.

Under a surety bond, the party that is guaranteed that the principal will perform is known as:

The obligee

Underinsured motorist coverage provides first-party protection to an insured after an accident in which of the following situations?

The other driver has insufficient liability limits and is "at-fault".

Medical payments coverage of an Aircraft Liability policy does not cover the following:

The passenger has slipped and fallen on a wet floor inside the airport, breaking a leg.

The "alterations new buildings" coverage fo the business income form pays for losses to new buildings and their additions being constructed for business operations. Which of the following best describes the "period of restoration" when a loss occurs under this additional coverage?

The period of restoration only applies under this additional coverage if the loss delays the start of business operations in the new location and begins on the date business operations would have begun had the loss not occurred.

Which of the following is true regarding nuclear energy loss coverage under a personal auto policy?

The personal auto policy will not provide coverage for bodily injury or property damage caused by the insured's nuclear energy losses.

Trevor purchases a condemned house in a run-down neighborhood that is scheduled for demolition by the city. He paid $10,000 for the house and wants to protect his financial investment by purchasing insurance. Which of the following statements is true?

The property is not insurable because the loss is expected.

An insured has his dwelling covered under a DP-2 policy. A 100-year snow storm hit the area where his covered dwelling is located and the weight of the ice and snow caused the roof to cave in. This caused extensive damage to the roof, the personal property inside the dwelling, the foundation of the home, the walkway leading to the outdoor swimming pool, and the pool itself. Which of damaged property would be covered by the policy?

The roof and the personal property located inside the covered dwelling.

All of the following would be covered under Coverage B of a Homeowners policy, EXCEPT:

The roof of the covered dwelling.

The cancellation and nonrenewal provisions in property policies are two of the policy provisions that are most frequently subject to statutory amendments by the states. All of the following statements is correct regarding the cancellation and no-renewal provisions in the standardized Commercial Policy coverage form, EXCEPT: 30-days notice of non-renewal must be provided to be first named insured and any mortgagee 10-days notice of cancellation must be provided to the insured for non-payment of premium. 30-days notice of cancellation must be provided to the first named insured and any mortgagee.

The standardized Commercial property forms do not contain cancelation and on-renewal provisions bc they are almost always amended by statute.

If an insured is covered under an HO-2 policy, damage caused by wind to his/her personal property would be covered if:

The wind created an opening in the structure, allowing the wind to damage the personal property inside.

Which of the following is TRUE regarding deductibles that pertain to Part D of the standardized Personal Automobile policy?

There are separate deductible amounts, chosen by the insured, for the "Collision" coverage and the "Other Than Collision" coverage.

Which of the following statements is TRUE regarding controlled commercial inland marine forms?

These forms are usually issued according to published rules and rates.

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. The answer choice that is NOT TRUE is: "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." The other answer choices are true concerning Assigned Risk Plans.

Which of the following is NOT TRUE regarding surety bonds?

They are an agreement that in exchange for a premium, the surety will indemnify the obligee. The answer choice that is NOT TRUE regarding surety bonds is: "They are an agreement that in exchange for a premium, the surety will indemnify the obligee."

Under Coverage B of the BOP, how are exterior signs covered?

They are listed as "property not covered" but they can be covered if they are scheduled on the policy.

Jamie has submitted a claim against Ron's insurance policy for a loss he has legitimately suffered. This claim is a:

Third-party liability

Which of the following statements is TRUE with regard to Admitted Aircraft Liability coverage (Guest Voluntary Settlement)?

This coverage pays the costs associated with the injuries to a non-ticketed guest on an airplane without the necessity to prove negligence against the insured.

The appointment contract provides the agent with the authority to perform all of the following duties, EXCEPT:

To collect a commission from the applicant for insurance.

All of the following are duties of the insurer in case of a loss as specified by insurance policies, EXCEPT:

To pay amounts to the insured or a third-party claimant that are at least as high as the national average of similar claim settlements.

The purpose of the Expediting Expenses coverage of a standard Equipment Breakdown policy is:

To pay for the extra expense of having equipment repairs performed faster to get the insured back in business quickly.

A FAIR Plan is created in a state:

To provide coverage in the standard insurance market for insureds who are considered to be "high risk".

A tornado blows over a wall of a barn which, in turn, knocks over a lamp and starts a fire. What is the proximate cause of loss? a. Tornado b. Smoke c. Fire d. Water Damage

Tornado

Policy territory in the standard Personal Auto policy.

US, its territories and possessions, PR, and CA PAP coverage applies to occurrences that take place within the United States, its territories and possessions (including Puerto Rico,) and Canada. The PAP generally does not provide coverage for vehicles operated in Mexico (although some insurers offer coverage for vehicles operating a short distance within the Mexican border).

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. The standard watercraft policy provides uninsured boaters coverage. This coverage only pays for the bodily injuries of the insured and his family. The damage to the insured's boat must be covered under the hull insurance.

Which of the following endorsements must be attached to a standard Businessowners policy for coverage to apply to a business freezer that was damaged by the interruption of a power source?

Utility Services - Direct Damage endorsement

Under a Businessowners policy, the "Hired and Nonowned Auto Liability" endorsement would cover:

Vehicles borrowed by the insured.

If an insured intentionally conceals a material fact on an application for insurance, the coverage may be:

Voided

All of the following would be excluded by the basic cause of loss form under a Commercial Property policy, EXCEPT: Damage to flooring that occurs when water seeps from the dishwasher in the corporate kitchen for several months. Water leaks from the sprinkler system in the building, causing wall and floor damage. Damage caused to the covered buildings, electrical system by a power surge. A water pipe that bursts and damages the interior of the building.

Water leaks from the sprinkler system in the building, causing wall and floor damage.

All of the following are correct statements regarding the limits of liability under Part A of a Personal Auto policy, except:

When the Part A limits are exhausted, any limits for Uninsured Motorists coverage can be used to pay the entire claim.

The freight charge is paid by the shipper to the carrier:

When the cargo has been delivered to its destination point.

Which of the following best describes when an aircraft is "in motion?"

When the plane is moving under its own power or from momentum generated from its own power

When would the Personal Auto policy respond to a loss with an all-terrain three-wheeled vehicle?

When used in an emergency situation.

The MCS-90 Endorsement to a Truckers or Motor Carrier Coverage form can be cancelled:

With 35-days notice if either the insured or the insurer cancels.

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. The claim for the injuries must be submitted within 1 year following a covered accident. This should not be confused with the Watercraft/Boatowners policy that provides for the claim to be submitted within 3 years following the covered accident.

The "Part B - Medical Payments" section of the standard Watercraft or Boatowners policy covers all necessary medical expenses if they are claimed:

Within 3 years following a covered accident.

When an insured submits a claim under a Commercial Inland Marine policy, the insurer must pay the claim:

Within 30 days of reaching an agreement with the insured.

All of the following are "Duties of the Insured" in case of a loss under the 1943 New York Standard Fire policy, EXCEPT:

Within 30 days submit a signed proof of loss stating the time and origin of the loss. 60 days would make it true.

Commercial inland marine policies require the insured to submit a signed, sworn statement of loss:

Within 60 days of the insurer requesting it

Personal property normally kept at other residences owned or rented to the insured is covered under the Homeowners forms for:

Your answer: 10% of the Coverage C limit or $1,000, whichever amount is larger.. is correct.

Personal Excess Liability coverage provides all of the following, EXCEPT: Answer Choices: Select the Correct AnswerInjuries sustained by a third party on the insured's property. Personal injury or property damage sustained by a third party due to an at-fault accident by the insured. Damage to an insured's property due to fire. Injuries to a neighbor while riding in the insured's covered boat.

Your answer: Damage to an insured's property due to fire.

Which of the following businesses can cover their private passenger and commercial auto exposures with a Business Auto policy?

a grocery store

All of the following are eligible risks for Commercial Inland Marine insurance, EXCEPT:

a. goods manufactured in the United States for export to other countries

All of the following statements are TRUE regarding the Commercial Articles coverage form of an Inland Marine policy, EXCEPT: Newly acquired property is covered for up to 30 days if similar property is already scheduled on the form. Losses are settled at 25% of the policy limit or $10,000, whichever is less. It is an uncontrolled form. It can cover photographic equipment.

it is an uncontrolled form.

Because a Homeowners policy provides both property and liability coverage in a single policy, the policy is called:

multi-line policy

The insured and her 18 year old son who lives in the insured's household are crossing the street when both of them are struck by a drunk driver. The Part B - Medical Payments coverage of the insured's personal auto policy will:

provide coverage for both the insured and her son

Which of the following is NOT one of the four major coverages of an Ocean Marine policy?

seaworthiness

Which of the following statements is NOT TRUE regarding the "period of restoration" for Business Income and Extra Expense coverage?

the period of restoration ends when the policy period ends..