Personal Lines Quiz

The federal government is not obligated under the TRIA to make payments for any portion of loss that exceed how much annually?

$100 billion

For willful violations of a cease and desist order given by the Commissioner of Insurance, the guilty party may be fined up to:

$11500 for each violation.

Any individual who violates Delaware Motorist Protection Act will be fined for the first offence between:

$1500 and $2000

Every insurer must present the option to purchase automobile liability coverage for personal injury or death at what limit?

$15000 per person and $30000 per accident

A motor vehicle policy must contain limits of at lest:

$15000 per person, $30000 per accident, and $10000 property damage.

How much will the personal auto policy pay for rental car if the insured vehicle is stolen?

$20 per day, up to $600 maximum

Which of the following penalties will apply to any licensee who fails to complete the minimum requirements of the Delaware continuing regulation?

$2000 fine and suspension of license

Rosita has the Towing and Labor Charges endorsement attached to her personal auto policy, indicating $50 coverage for her covered auto. When her car breaks down on the highway, she has it towed to a garage, where repairs are made. The towing changes is $25, and repair change is $50. How much will her insurance company pay?

$25

An automobile policy issued in Delaware provides coverage for funeral expenses up to:

$5000

Sue has a personal articles floater with $20,000 worth of jewelry coverage. She purchases a ring worth $6,000. The ring is stolen from her the following week. How much can she collect from her insurance carrier?

$5000

Bill and Marge suffer the following losses as the result of a severe storm: $3,900 wind damage to their roof; $1,000 loss of income because a boarder in their house had to move; $1,250 in repair costs to prevent further loss covered property; and $500 in medical expenses when Marge was hit by part of the falling roof. How much will their HO-3 policy pay for these, assuming all losses are within the applicable policy limits and ignoring any deductible that may apply?

$6150

A corporation that violates Delaware insurance law may be subject to a fine of no than:

$6900

The furniture Harold purchased 10 yrs ago was destroyed in a fire. The furniture cost $9000 when new and has depreciated by $5000. It would cost $1200 to replace this furniture today. What is the actual cash value of Harold's destroyed furniture?

$7000

An insured has an unendorsed $50000 special form (DP-3) dwelling policy. The insured's dog bites a child, and the parents sue the insured for $500 for the child's medical bills, $1000 for rabies shots, and $5000 for pain suffering. How much will the policy pay?

0

How many days is the waiting period that must be satisfied by an injured employee who is hospitalized, before workers' compensation benefits are paid?

0

All agent licensing exam score reports are valid for a period of how many months?

12

A temporary license may be issued for a period not to exceed:

180 days

An individual whose license has been revoked on how many occasions may not be licensed again under Delaware law?

2

Under the Delaware Motorist Protection Act, an injured person is compensation for reasonable and necessary incurred within how many years from the date of the accident?

2

Business records of any licensee must be retained and available for inspection by the Commissioner of Insurance for a period of how many years?

3

All insurance licensees are required to provide written notice of change of address to the Department of Insurance with in how many days after relocation?

30

When does flood insurance take effect?

30 days after the date of application and payment of premium

In the Dwelling Forms, damage from vandalism is not covered if the building has been vacant for more than

60 consecutive days

Benefits paid for inquires resulting in total disability under workers' compensation will not exceed:

60-2/3% of the insured's average weekly wages.

Under the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) the federal government's share of compensation that exceeds the insurer's TRIPRA deductible is

80%

Which of the following parties may share in my commissions paid to a licensed agent Delaware?

A licensed coworker

Which of the following parties acts or aids in any manner in the negotiating of contracts of insurance with an unauthorized insurer?

A surplus lines agent

Which of the following is an example of an insurable interest?

A women's interest in property that she hopes her uncle will leave to her in his will

An insured owns a pet lion that is caged on the homeowner's property. The owner takes great care to warn of the possible danger by posting signs, fencing the yard, and locking the cage at all times. When a neighbor's child manages to open the cage and is bitten, what type of liability would apply to the lion owner?

Absolute liability

The TRIA removes the exclusions of coverage for which of the following causes of loss?

Acts of terrorism

Physical damage losses under the personal auto policy are reimbursed on what basis?

Actual cash value or cost to repair or replace, whichever is less

Which of the following information is found on the declarations page of a policy?

Address of premises insured under the policy

Which of the following instances is a prohibited practice under Delaware law with regard to property and casualty insurance?

An insure in Delaware may decline a property insurance application solely if the prospective insured has been previously declined by another insurer.

All of the following are basic ways in which underwriters assign rates

Application rating

The liberalization provision will do which of the following?

Automatically broaden coverage without additional premium is a revision to the policy

Robert and Carolyn live in a busy city and describes this philosophy?

Avoidance

A bank or financial institution that requires a borrower to purchase insurance coverage from a particular agent before a loan will be approved, best describes which of the following?

Coercion

The procedure for resolving a disagreement between an insured and an insurance company about loss is described in which of the following parts of an insurance policy?

Conditions

The amounts of coverage and limits of liability are found in which of the following sections of a policy?

Declarations

Which one of the following components of an insurance contains information about the risk, the effective date of coverage, deductible, premium amounts, coinsurance percentage, and location of the insured property?

Declarations page

Which of the following is a source of information important to an underwriter?

Employer reference

What is the purpose of the coinsurance clause?

Ensure that property is insured to a certain value

Ralph asks his insurance agent to explain how the homeowners policy covers stolen jewelry. The agent spends some time explaining how, when, where, and what jewelry theft coverage exists in the policy. As a result, Ralph believes that his $5,000 watch is covered in full under the basic policy. After the watch is stolen, Ralph is surprised to learn that he has only limited coverage. What legal doctrine might Ralph rely upon to get full coverage for his loss?

Estoppel

Which one of the following requires that insurance applicants be advised that a consumer report may be requested on them and the scope of the any investigations resulting from the application?

Fair Credit Reporting Act

Which one of the following types of property is not covered by a dwelling policy?

Farm dwelling

All states have financial responsibility laws that require each driver to prove that he can pay for bodily or property damage liability losses arising out of the auto accidents. These are also known as

Financial responsibility laws

Joan and Steven have applied for automobile insurance with ABC Auto Insurers. When the agent asks if anyone else drives the car, they lie and do not tell him that their neighbor, George, who lost his driver's license due to drunk driving, uses one of their cars on a basis to drive to work. Once the company found out about George after he had an accident, they denied the claim, citing what legal concept as the reason?

Fraud

Which of the following under police provides open perils coverage on Coverage C-Personal Property?

HO-3

Tammy was struck by a hit-and-run driver and suffered injuries to her neck. Which part of her personal auto policy, if any, will cover this loss?

Her uninsured motorists coverage pays her medical bills.

For an insurance contract to be legally binding, both parties to the contract must be considered competent. Which of the following would be used to determine competency?

Individual is of legal age; not under the influence of drugs or alcohol; mentally competent.

An auto is sold for salvage value following payment of a loss. Who receives the proceeds?

Insurance company

Delaware law mandates that all authorized insures in Delaware writing automobile insurance must provide which of the following to insureds?

Insurance identification cad

Which of the following amount is the maximum that an insurer will pay in case of a loss?

Limit of liability

An insurance company may measure its underwriting profitability by using which of the following ratios?

Loss ratio

Janes insures her car with ABC Insurers. Which of the following individuals best describes a family member on Jane's policy?

Maggie, her older sister, who lives with Jane

In which of the following areas would PAP coverage typically not extend?

Mexico

In order to hold a license to transact in Delaware, an agent or broker must meet which of the following requirements?

Must file an appointment from with the Commissioner.

The legislation that governs the collection, retention, and disclosure of personal information contained in government records is know as:

Privacy Act of 1974

When an insurance company cancels a policy, what is the method used to determine the premium due?

Pro rata

Which of the following classes of property are not specifically excluded from coverage C-personal property?

Property away from the residence

Which of the following methods of canceling a policy is used when a policy before it reaches its natural expiration?

Short-rate

Which of the following is correcting with regard to the Delaware FAIR Plan?

Stabilizes the property insurance market in Delaware.

An insured of agent may terminate an agency at any time. If termination is by the insurer, it must promptly provide written notice of termination and the effective date of such action to which of the following?

The agent and the Commissioner.

Stephanie is an agent in a local insurance agency. While visiting a client in his home, Stephanie accidentally leaves a coffee cup on an antique coffee table, damaging the wood surface. She asks her sales manager whether she has coverage under her homeowners policy. Which of the following is the best advice given to Stephanie?

The business pursuits endorsement should be added to your homeowner policy to protect you if you personally damage property while conducting business

Which one of the following statements about the standard mortgage clause is correct?

The mortgagee can only collect from the policy with the prior written consent of the policyowner.

Which of the following parties have the responsibility of paying for any expenses incurred during an Insurance Department audit or examination?

The party being examined.

Which of the following statements regarding Part D- coverage for damage to your car is correct?

This coverage pays for direct and indirect loss to the named insured's rental or borrowed cars; is commonly known as physical damage coverage.

Which of the following is the property purpose of the Delaware Guaranty Association?

To assist in the detection and prevention of insurer insolvencies.

A form of misrepresentation where an agent or broker unfairly compares policies to persuade a prospective insured to lapse his current plan best describes which of the following?

Twisting

Jennifer and David signed a homeowners insurance application for coverage on their home. They did not divulge that last year their garage burned down after their 16-year-old son left a cigarette burning. The agent sent in the application and a policy was issued. When another fire occurred 2 months after the policy was issued, the company voided the policy because the agent would not have sent in the application if he had known of the prior loss. Which contract principle does this situation describe?

Utmost good faith

Which of the following entities is not required to possess a license in order to negotiate or solicit contracts of insurance in Delaware?

a clerk in an agency.

Emily owns a 2-bedroom home that she rents to another family. She wants both property and liability insurance on this rental property. Emily should purchase?

a dwelling policy and the personal liability supplement

Luis just purchased a new home. As a homeowner, there is a possibility that visitors to his home may be injured on the premises and sue Luis to recover damages for medical expenses. The uncertainty that Luis will be responsible for the accidents that occur at his home is an example of

a risk

The insured has a named peril policy that covers hail, fire, wind, and lightning. Which one of the following events would be covered?

a roof that is damaged in an electrical storm

A person who stands in a special relationship of trust to another person is

a surety

All of the following parties are exempted from taking and passing a written examination in Delaware in order to transact insurance business

a temporary licensee; every application for a nonresident license who resides in another state that has a reciprocal agreement with Delaware; every applicant for a license as an agent for title insurance who is an attorney.

Howard borrows his neighbor's car because his car is in the body show after his oldest son had an accident on a trip home from college. Under Howard's automobile policy, his neighbors car is considered?

a temporary substitute automobile

All of the following entities are eligible to be licensed as an agent

an advertiser of an agency.

A policy under which the insured and insurer agree on the property value in the policy is known as

an agreed value policy

Jeffery bought a car yesterday for his daughters to drive to school and her job. Under Jeffery's automobile policy, this car is considered

an owned automobile

Delaware workers' compensation laws apply to:

any household worker who earns $750 or more in a 3-month period from one household.

Jordan is attending the NBA playoffs and has front row seats. One of the players attempts to make a basket and the ball bonces off the court, hitting Jordan in the face. The defense that will most probably used is

assumption of risk

All of the following are property coverage forms

basic, broad, & special

An agreement that provides temporary coverage, which may be either written or oral, is known as a:

binder

In describing the concept of subrogation, the insurer claims the right to

collect from a negligent third party

Depending on the circumstances, a person injured in an automobile accident may be able to recover under all the following coverages

collision

All of the following are basic parts of an insurance contract

conditions, declarations, & exclusions

The Insurance Commissioner is:

elected for a term of 4yrs

The process utilized by a surplus lines broker to place coverage with an unauthorized insurer is known as:

exporting

Rates of the Delaware Auto Insurance Plan are:

higher than the rates of the voluntary market

The attempt to restore the policy holder to the same financial condition enjoyed before a loss is called

indemnification

All of the following are exclusions under a liability policy

injuries or damage caused unintentionally by the insured

Common exclusions with a liability policy would typically include all of the following

injuries or damages caused unintentionally by the insured

The coverages offered by an insurance policy are described in the

insuring agreement

The scheduled personal property endorsement provides a separate schedule of insurance for all of the following categories

jewelry, camera equipment, musical instruments

The purpose of the conditions section of an insurance policy is to

list the obligations of the insured and the insurance company

Liability polices provide certain supplementary payments that are

paid in additions to the policy's regular limit of liability

Each of the following is a covered benefit under Delaware Worker's Compensation law

pain and suffering loss

A property that is vacant is described as having an absence of

people and property

The insuring agreement section of a policy describes

perils insured against

Any person knowingly testifying falsely under oath or making false affirmation as to any matter material to an examination conducted by the Insurance Department may be guilty of:

prejury

An agreement by which an insured or prospective insured promises to pay to an insurance premium financing company the amount advanced or to be advanced under the agreement best describes which the following?

premium financing agreement

All of the following are the insured's duties following a loss

protecting the property from further damage; completing a detailed proof of loss; giving prompt notice of claim to the agent or insurer

A group of individuals who agree to share other's losses s know as a

reciprocal company

Which of the following property may be insured under a flood policy issued by the NFIP?

silo

Andre's spouse is killed in an accident caused by drunk driver. The negligent driver's insurance company pays $5000 for funeral expenses arising out of the accident. The funeral expenses are an example of

special damages

Which of the following are permissible reasons for the cancelation of policy insurance contacts in Delaware after a contact has been in effect for more that 60 days:

suspended or revoked operator's license

An insurance binder is best described as

temporary short-term evidence of coverage

An insured fails to pay his homeowners insurance premium. The mortgagee becomes aware of this fact and remits the premium to the insurance company. Shortly thereafter, the insured sets fire to his home in an attempt to receive payment for the loss. Any loss payment settlement would be made to

the mortgagee

In insurance, a wavier is best considered as

the voluntary surrender of a known right

Liability insurance covers

third party losses

Why do insurance policies usually define who is considered under the policy?

to specify who is not insured

An insurance producer license remains in effect:

unless revoked or suspended

An employee is delivering packages for her employer but is using her own vehicle. The employee hits a pedestrian. The employer may be liable because of the doctrine of

vicarious liability

Which of the following events is considered an occurrence for insurance purposes?

wearing out clothing