P&C Missed Questions
A commercial property special form covers property in transit up to
$5,000
Terrorism risk insurance program reauthorization act of 2015 has extended the TRIA to the year
2020
How many hours of continuing education is each producer required to complete during each 2 year licensing period?
24 hours
Coverage F (medical payments) under a homeowners policy would cover
A residence employee who is injured on the job
What is a material misrepresentation?
A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
Which part of an insurance policy covers claims related expenses, reasonable expenses incurred to protect damaged property from further loss, or defense expenses?
Additional coverage
When an insurer cancels a policy, it must do all of the following except
Advise the insured of possible eligibility for coverage through the assigned risk plan
A producer just completed a continuing education course. When would the producer be allowed to repeat the same course as part of his CE requirement?
After 3 years
Records that just be kept by an agent must include all of the following info except
Amount of any deductibles or copayment
If an insurance company makes a statement that it's policies are guaranteed by the existence of the insurance guaranty association, that would be considered
An unfair trade practice
Which of the following would be considered an insured under a business auto coverage form?
Anyone while using, with permission, a covered auto owned by the named insured
What term best describes the act of withholding material information that would be crucial to an underwriting decision?
Concealment
Which of the following is not considered to constitute an act of transacting insurance?
Filing forms with the department
What is surplus lines insurance
Insurance placed with an unauthorized insurer
All of the following are true of coverage B-other structures except
It must be added by endorsement to a HO policy
Dwelling coverage includes all of the following except
Land on which the dwelling is located
Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending tons future point in time?
Loss cost rating
All of the following are parts of a personal auto policy except
Physical damage coverage
All of the following are examples of risk retention except
Premiums
The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called
Pro rata liability
A producer has established a separate account for premiums collected on life insurance policies sold by the producer. Who is entitled to the interest earned on the deposits in the separate account?
Producer
The purpose of insurance regulation is to
Promote the public welfare
When an insurer cancels a policy, what is it required to do?
Provide written notice and return unearned premiums pro rata
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
Reasonable expectations
All of the following are additional causes of loss included in the broad form of a commercial property policy except
Replacement cost
At the time of the loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following except
Replacing the property with other property of a lesser kind or quality
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage
All of the following are true statements regarding the supplementary payments of a commercial general liability policy except
They pay defense costs even after the aggregate limit has been reached
If a producer has been found guilty of any violations of the provisions of the Insurance Code, in addition to or instead of the suspension, revocation, or refusal to renew a producer's license, the Commissioner may levy a fine upon the licensee, up to
$1,000 per offense.
When an insured's auto is damaged by collision with an at-fault underinsured motorist, what is the maximum deductible amount that may be applied to the loss paid under underinsured motorist property damage?
$100
The insured purchased a $200,000 extra expense policy. If the percentages applying to the limit of insurance are 40%, 80%, 100%, what would be the max payable for a 47 day loss?
$160,000 (between 30 and 60 days - 80% applies)
Under additional coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services?
$500
How long after the effective date of the termination must the terminating insurer permit the renewal of the policies in the agent's book of business?
1 year
A temporary license in this state is valid for
180 days
The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?
30 days
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?
60 days
Assuming the insurer and the insured agree to the amount payable for a loss under a dwelling policy, how soon after the insurer has received proof of loss must it make payment?
60 days
Losses caused by vandalism and malicious mischief are excluded under a HO policy if the dwelling had been vacant for more than
60 days
In earthquake coverage provided by endorsement in a homeowners form, one or more earthquake shocks would be considered a single earthquake if they occur within what time period?
72 hours
How long does any person receiving written notification of the Commissioner's order have to respond and request a hearing?
90 days
The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to
90 days
Which of the following losses would NOT be covered by a homeowners policy?
A coin collection valued at $500 lost in a fire
Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is
A mutual insurer
An uninsured motor vehicle includes all of the following EXCEPT
A vehicle being used for public livery.
The property condition that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called
Abandonment.
Which of the following is the closest term to an authorized insurer?
Admitted
Which of the following types of valuation works best for property whose value does not fluctuate much?
Agreed value
Which of the following would NOT qualify as a hired auto?
An auto borrowed from an employee
First aid costs for others injured on the insured's premises
Are paid in addition to the liability limit.
If a loss occurs, the insured with a homeowners policy is required to do the following EXCEPT
Arrange for an appraisal by an unbiased third party.
All agents, brokers, and adjusters must keep a record of all transactions that occur under their license. These records must be kept
At the address listed on the license
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized.
Which of the following would NOT be covered under the liability section of a personal auto policy?
Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.
Which of the following statements regarding coverage for the flood and earthquake perils is true?
Both flood and earthquake are excluded perils in all property policies.
Under the HO-4 and HO-6 homeowners policy forms, property is insured against
Broad form perils.
The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT
Business liability.
What is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent?
Comparative negligence
All of the following are supplemental payments found in liability policies EXCEPT
Costs the insured incurred in hiring an attorney
Which of the following statements is true concerning the special form dwelling policy?
Coverage A is for all-risk perils, and Coverage C is for the broad form perils.
Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT
Damage to a third-party property for which the insured is legally liable.
Essential property insurance includes coverage against
Direct damage to property under construction
Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity?
Directors and officers liability
Which of the following would modify the original insurance contract by either adding or removing coverage?
Endorsements
Professional liability coverage protects against legal liability resulting from
Errors and omissions.
All of the following are excluded in the equipment breakdown basic policy EXCEPT
Explosion of steam boilers.
Which of the following are the authorities that an agent can hold?
Express and implied
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of?
False advertising
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
CGL Coverage B (Personal and Advertising Injury) will cover
Inadvertent injury to others caused in the course of advertising the insured's product.
The pro rata liability clause is designed to protect the principle of
Indemnity.
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
In which of the following situations is it legal to limit coverage based on marital status?
It is never legal to limit coverage based on marital status.
Which of the following is NOT an element of negligence?
Libel
All of the following are exclusions under farm property coverage EXCEPT
Loss of use.
Which of the following best describes the unfair trade practice of defamation?
Making derogatory oral statements about another insurer's financial condition
Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?
Motor truck cargo policy - truckers form
When does a property's fair value determined?
On the effective date of the policy
A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. This endorsement will cover all of the following expenses EXCEPT
Ordinance with which the insured was required to comply prior to the loss.
If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?
Personal and advertising injury liability
All of the following are considered parts of the policy structure EXCEPT
Provisions.
Which of the following kinds of property would be covered under a dwelling policy?
Rowboats
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called
Self-insured retention.
Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?
Special
What are the two types of compensatory damages?
Special and general
Events in which a person has both the chance of winning or losing are classified as
Speculative risk.
Under the commercial property coverage program, the basic causes of loss form insures against loss caused by
Sprinkler leakage
The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called
Subrogation.
Which of the following is an example of apparent authority of an agent appointed by an insurer?
The agent accepts a premium payment after the end of the grace period.
When an agent receives premium money when purporting to bind coverage, the receipt must state all of the following, EXCEPT
The amount of premium.
All of the following statements concerning coinsurance are true EXCEPT
The coinsurance formula will also be applied to total losses.
Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?
The coverage is considered good will because payments are made without regard to fault.
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT
The insured is injured while exiting a friend's mobile home.
A producer has been convicted of a felony. How will that affect the producers license?
The license may be revoked immediately
A mortgage company is named as a loss payee on the insured's HO policy, under the standard mortgage clause. If the insured suffers a loss to a fire, which of the following is true?
The loss is payable to the insured and the mortgagee
A mortgage company is named as a loss payer on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true?
The loss is payable to the insured and the mortgagee
Who is not an insured for liability on a BAP
The owner of the car the insured borrows
What is the business auto coverage territory for?
United States and its territories, Canada, or worldwide for private passenger hired autos
Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy?
Vacant farmland owned by the insured
A type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured property has been destroyed is called a(n)
Valued policy.
An insured's 9 year old son threw a ball accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of
Vicarious liability
Every insurance agent, broker, adjuster, or other person licensed under the Washington Code must promptly reply to an inquiry of the Commissioner regarding the business of insurance
Within 15 days.
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information
Within 45 days.
When a notice of nonrenewal is furnished to an insured, how soon a copy of the notice must be provided to the insured's agent?
Within 5 business days
A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT
Workers compensation coverage
The standard property deductible per occurrence on a commercial package policy is
$500
Business personal property coverage form covers all of the following except
Automobiles held for sale
Which of the following would not be considered a misrepresentation on the part of the insurer?
Backdating policies to secure a lower premium for the insured
The document that indicates that an insurer has been approved and is authorized to transact insurance in a particular state is known as
Certificate of authority
What type of violation is transacting insurance without a license?
Class B felony
Which of the following is an additional coverage that is covered by the broad causes of loss form?
Collapse
Which crime coverage form is used to cover securities held in trust by another party as collateral for some obligation?
Coverage J - securities deposited with others
The extra expense coverage form provides
Coverage that will permit the insured to continue in business without interruption following a property damage loss
The designation symbols used in commercial auto policies can be found in which policy section?
Covered auto
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance
Defamation
An employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?
Drive other car coverage
An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000 and each has the pro rats insurance clause. In the event of a total loss to the building, what would each insurer pay?
Each policy will pay $25,000 of the loss
Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will
Either pay or defend as it decides
Which of the following is the federal body that regulates truckers who travel accords state lines?
Federal motor carrier safety administration
An insured paid her auto insurance premium for 6 months. After two months, she discovers that she qualifies for a better rate with another company. Which one of the following is true?
Her present carrier will issue a premium refund
A ranchowners policy is more similar to which of the following?
Homeowners
The policy conditions define
How parties to the contract must act following a loss
If a farm building or structure is vacant or unoccupied, which is true?
If for 120 consecutive Days, the limits applicable to the building and it's contents are reduced by 50%
B&B market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?
Personal and advertising injury liability
When ABC appliance's marketing stated that it's mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and garden. ABC's coverage would come from which part of its general liability coverage?
Personal and advertising injury liability
All of the following property is insured under Coverage A of a farm policy except
Personal lawn mower of a tenant used to service the described location
During policy delivery, insurance producers are allowed to do all of the following except
Retain the policy for safekeeping
Which of the following endorsements is used to insure coverage C (personal property) for values beyond the limitations of the HO policy?
Scheduled personal property endorsement
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?
Specific
If an insurance agent issues a binder without being given binding authority by the insurer, the commissioner may
Suspend or revoke the agent's license
Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?
Symbol 5
Which of the following may not be included in an insurance company's advertisement?
That it's policies are covered by a state guaranty association
A homeowner sells his house to his friend. The friend wants to keep the homeowners current policy in effect. Under the assignment provision, which of the following is most likely?
The homeowner will need to go get written consent from the insurer before the policy can be reassigned
Which of the following entities helps applicants obtain property insurance
The industry placement facility
All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy except
The injury or damage must occur within 90 days after the insured's work is completed
Which of the following is an agreement between an insured and an insurer, where the insurer agrees to indemnify the insured for specific losses in exchange for a premium?
The insurance contract
The insured had violated the contract without the knowledge of the mortgage holder. After a loss
The insured cannot collect but the mortgage holder will still be paid
The abandonment provision in property insurance policies states that
The insured may not relinquish ownership of damaged property to claim a total loss, but must protect damaged property from further loss
Which of the following is not a goal of risk retention?
To minimize the insured's level of liability in the event of the loss
Agents who persuade insurers to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Twisting
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?
Up to $2,000
Supplementary payments on a commercial general liability provide all of the following except
Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds
Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?
Warranty
Which of the following is the correct formula for computing a loss ratio?
(Incurred losses+loss adjusting expense) / earned premium
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
Insurance agents who Place risk with the industry placement facility receive a commission of
10%
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties
Automatically transfer to a legal representative
Insurance is the transfer of
Risk
An insured is driving her car through a residential area where she loses control and crashes into a neighbor's front porch. The neighbor who was sitting on the porch is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have?
Combined single
The method used in paying back the insured who cancels a policy before its expiration is called
Short rate
An insured's accounts receivable records have been damaged. The loss may be covered with
The accounts receivable coverage form
The WA the financial responsibility law requires that a driver or owner of a vehicle show proof of the ability to
Pay for judgements resulting from motor vehicle accidents in the future
The term "producer" refers to any person appointed by an insurer to
Solicit applications for insurance on its behalf
Which of the following is not the consideration in a policy?
The application given to a prospective insured
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Which of the following is a mandatory part of an insurance policy that varies with each individual policy?
Declarations
Which of the following coverages is included in an I endorsed homeowners policy?
Medical payments to others
The occurrence form trigger is basked in which of the following?
The date when injury or damage occurs
When an insured makes truthful statements on the application for the insurance and pays the required premium, this is known as which of the following?
Consideration
Which of the following provides coverage for a farmers remodeling materials?
Coverage A
All of the following are optional coverages that may be attached to an HO3 policy except
Dwelling replacement cost
According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss?
Mortgagee
When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a
Non renewal
Under what circumstance may an insurer use a 20 day notice to increase premium amounts by changing rates?
On a one-time basis in connection with the renewal of the policy
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?
Per occurance
