P&C review test
In most states Worker's Compensation laws are
Compulsory
Susan and George have a plied for automobile insurance for their family with ABC auto insurers. They do not tell the agent that their son who lost his drivers license due to drunk driving uses one of their cars on a regular basis to drive to work. The company found out about their son after he had an accident and they denied the claim. What legal concept could be cited as the reason for claim denial
Concealment
A hardware store is insured under a business income coverage form with the basic causes of loss form. Which of the following perils would not be covered
Damage from the weight of ice, sleet, or snow
Which of the following would not generally be included in the supplementary payments portion of a liability policy
Damage to property owned by the insured
The purpose of insurance is to
Transfer financial risk
Trailer interchange coverage is a part of
Truckers Coverage Form
The physical damage section of the personal auto policy excludes
mechanical breakdown
Crime insurance that is written on a loss sustained form covers losses discovered either during the policy period or
up to one year after policy expires
Which of the following is not covered by a dwelling policy
war
Statements made on an application that are guaranteed to be true are
warranties
The insured has a $1 million personal umbrella policy with a retention limit of $1000. The insured suffers a $15,000 loss that is excluded by the underlying policy but not the umbrella. How much of this loss would be paid under the umbrella
$14,000
Nicole has a personal auto policy with limits of 10/20/10 for liability coverage. She causes an accident that result in $12,000 bodily injury damages to the other driver and $5000 in property damage to the other drivers car. How much would Nicole's policy pay for both the BI and PD losses
$15,000
It will cost Gary $5000 to put a new roof on his home to replace a roof destroyed in a windstorm. Assume that the original roof which Gary paid $3500 for 10 years ago depreciated $300 per year. What was the actual cash value of the roof that was destroyed
$2,000
An insurance policy has a $25,000 per occurrence limit. If the insured has a $5000 covered loss during the policy period How much coverage is available for other covered losses that occur during the remainder of the policy period
$25,000
The insured has $20,000 insurance With company a and $40,000 with company be. Assume both policies contain another insurance clause specifying pro writer. What would company a pay if there was a $24,000 loss
$8,000
The insured's home is covered by a DP-3 Two years ago the insured bought the home for $88,000. Today its replacement value is $100,000. How much coverage A does the insured need to qualify for replacement cost coverage
$80,000
According to the cancellation condition in the common policy conditions form if the insurance company is canceling a homeowners policy for any reason the insurance company must give 10 days written notice to the insured during the first
60 days of the policy term
A company that frequently rents autos and trucks for use in the business should include which symbol in the business auto policy declarations
8
Assume the following items were stolen from the insured's home. Which one of these losses would be fully covered under coverage see the homeowners policy assuming the loss was for the full value of the property described
A $2000 laptop computer the insured uses for her in-home accounting business
Which of the following personal property items is covered in coverage C of the dwelling policy
A 72-inch flat-screen television
And insured needs liability property and medical payments coverage for a 30 foot speedboat with a 75 hp engine. This boat could be covered under
A boat owners or watercraft package policy
Which of the following is a liability loss
A fire that was caused by the insured's negligence burns a neighboring building. The owner of the building sues the insured.
The named insured on a commercial general liability policy is sassy department store. Which of the following losses would be paid under the policies medical payments coverage
A mannequin tips over and injures a customer
Which of the following is not covered in the inland marine sign coverage form
A sign that breaks during installation
In a monopolistic state an employer purchases Worker's Compensation insurance from
A state fund
Which of the following is an example of adverse selection
A terminally ill person purchasing life insurance.
Which one of the following accidents would not be covered under the uninsured motorist coverage of the personal auto policy
An accident with a driver who carries the minimum liability limits required by law but his insurance is not adequate to cover the damages
An additional loss that results from a direct lost to property is called
An indirect/consequential loss
The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is
Appraisal condition
Each of the following kinds of property may be covered under a building and personal property coverage form except
Autos for sale
Under the business auto coverage form the insurance liability arising from which of the following situations would be covered
Bodily injury resulting from loading or unloading a covered auto
Widget Enterprises wants property insurance for a new warehouse it is building. Which it also wants the policies limit of insurance to gradually increase as the value of the building under construction increases. Which commercial property coverage form would best fit widgets needs
Builders risk reporting form
Which of the following forms as used to ensure private passenger and commercial auto exposures
Business auto coverage form
Of the four coverages provided under section 1 of the homeowners policy which one provides coverage against loss of use and indirect loss
Coverage D
What is the difference between the loss sustained and discovery versions of the commercial crime coverage forms
Coverage trigger
Furniture that is destroyed when a building burns down is an example of what kind of loss
Direct loss
A business can obtain coverage for liability arising out of discrimination and sexual harassment by purchasing
Employment Practices Liability Insurance
Which one of the following is not one of the required elements of a legal contract
Equal risk for all parties
Which of the following can be covered as business personal property under the business owners policy
Exterior building glass
Under the commercial package policy who may cancel the policy and writing and make changes to the policy with the consent of the insurer
First named insured
Which of the following would be covered under the building coverage of the building and personal property coverage form
Fixtures
Medical benefits under the Worker's Compensation policy are
Generally unlimited and do not contain deductibles
The homeowners form that provides special peril coverage on the dwelling and Broad coverage on personal property is
HO-3
Special open peril coverage for both the dwelling and personal property is provided by
HO-5
An individual who earns and lives in a condominium can obtain broad coverage for personal property in the condo under which homeowners form
HO-6
All of the following can be included in a commercial property policy except
Health and disability insurance
Which of the following losses would be covered by a flood policy
Heavy rains cause a lake to overflow and flood the basement and first floor of a house
The principle that states that an insured should be restored to approximately the same financial position after a loss as before is known as
Indemnity
Which type of insurance covers exposures that involve property and merchandise while in transit or floating
Inland marine insurance
Which commercial property coverage form covers damage to the property of others in the insureds care custody or control but only if the insured is legally liable
Legal Liability Coverage Form
Which personal auto coverage reimburses the insured for reasonable expenses incurred within three years of the date of injury without regard to fault
Medical Payments Coverage
All of the following are included under section one of the homeowners policy except
Medical bills
What covers a carriers liability for loss or damage of cargo while it is being transported in a truck
Motor Truck Cargo Policy
The type of insurance company in which the policyholder is considered an owner and also shares in the profit is
Mutual company
The insured has a personal auto policy with all cars insured by one company. He sells one of the cars and buys a new one to replace it. Must the insurer take any action for the liability portion of his current policy to apply to the replacement vehicle
No the insured does not have to do anything liability coverage for a replacement vehicle is automatic
In the business auto coverage form employers that want to cover employees use of their own cars in the employers business should opt to have liability coverage applied to which of the following groups of autos
Nonowned
The personal auto policy's medical payments coverage would not provide protection for which one of the following
Occupants of a car that was struck by the insured
Which one of the following types of benefits is generally not provided by a states Workers Compensation law
Pain and suffering
Coverage for sums an employer becomes legally obligated to pay under common law as a result of a work related injury to an employee is provided by
Part two- Employers liability section of the Workers Comp policy
Coverage L provides coverage for damages that the insured becomes legally obligated to pay because an occurrence caused bodily injury or property damage. This coverage is also known as
Personal Liability Supplement
Which one of the following is not a type of inland marine coverage form
Personal items coverage form
What is a common name for a part D of the personal auto policy
Physical Damage Coverage
Under the commercial general liability policy a separate aggregate limit applies to
Products and completed operations
Insurance arising out of rendering or failing to render services of a professional nature that was developed for positions surgeons dentist lawyers insurance agents directors and accountants is known as
Professional liability insurance
The business owners policy
Provides a prepackaged policy of property and liability coverages for certain types of small businesses
Which of the following broad perils is covered by the HO-2 and HO-3
Sudden and accidental rupture of a heating system
Who of the following would be considered an insured for liability coverage under the personal auto policy
The named insured's son, who lives with the insured, while driving a neighbor's car.
The party to a surety bond he promises to do or not do a specific thing is
The principal
An insured is driving her car to work swerves into the next lane and causes an accident. The accident occurred because of the insurance negligence while driving. This caused the accident is known as
The proximate cause
Which one of the following is not one of the common policy conditions in a commercial package policy
The refund of premium condition
In a liability lost the person to whom the insured cause damage is referred to as
The third party
Which of the following is an available coverage option under the equipment breakdown protection coverage form
Utility interruption
Which of these losses would be covered under the personal auto policy is liability coverage
Will falls asleep at the wheel of his car and strikes and injures a pedestrian
Most flood insurance coverage is provided by
a federal government program
If a building insured under the building and personal property coverage form was vacant for 90 days
a vandalism loss would not be covered
The builders risk reporting form insures a building under construction for
an amount that increases at intervals to correspond with the increasing value of the building
A morale hazard
carelessness or indifference to a loss because of the existence of insurance
Which of the elements of a legal contract does an insurance premium payment represent
consideration
Garagekeepers coverage insures against
damage to autos of others that are in the care, custody, or control of the insured
According to the nationwide definition imports and exports are
eligible for ocean marine insurance
An insurance agent who needs liability coverage for her professional liability exposure can obtain it by purchasing
errors and omissions insurance
The authority specifically given to an agent in a written agency agreement by the principal is called
express authority
Additional living expense coverage that is included under the broad in special dwelling forms protects the insured against
extra living costs incurred when the home becomes uninhabitable due to damage by a peril insured against
Each of the following business occupancies would be permitted in a dwelling insured under a dwelling form except
farm
Which of the following describes an insurance company doing business in a state other than the one where it is incorporated
foreign
What type of ocean marine insurance provides physical damage coverage for the ship while it is in transit
hull
Which of the following is not eligible for commercial inland marine insurance
imports > exports
Each of the following is a primary coverage provided under the commercial general liability policy except
intentional injury
Which one of the following lists all the required elements for establishing a charge of negligence
legal duty owed, breach of legal duty owed, proximate cause, damages
The primary purpose of the business income coverage forms is to reimburse the insured for
loss of income resulting from property damage at the insured's property
What kind of insurance company is owned by its policy owners
mutual
In fidelity bonds the party to whom the promise is made in for whose protection the bond is written is
obligee
The cause of loss is called
peril
Which of the following is not an element of a legal contract
premium payment
The purpose of a binder is to
provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires
The extra expense coverage form provides
reimbursement for addtl costs an insured incurs to avoid or minimize suspending business ops
Under the claims made commercial general liability coverage form the first date that a loss may occur and still be covered under the policy is
retroactive date
Which of the following is covered under a business owners policy
small business
In a commercial liability policy coverage under a claims made form is triggered when
the claim is first made against the insured