Practice Exam questions

An insured owns a large dog. The first day he has to leave the dog home alone to go to work, the insured comes back to find his $400 couch torn apart, his $100 coffee table chewed up, his $50 window curtain shredded, and a $200 window pane shattered where his dog jumped through. The insured has personal property coverage under a special form dwelling policy. How much of this loss will the policy cover?

$0 damage that results from domestic animals is excluded

Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay

$100,000

what is the fee for a rating organization license

$25

What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000. Which today has a replacement value of $100,000?

$80,000

What is the amount of coverage that would be available for a detached garage under Coverage B -Other Structures of a homeowner's policy?

10% of Coverage A

what is the minimum age requirement for an insurance producer in this state

18

an insured is injured and has health insurance that will pay some of the medical expenses. The personal injury protection coverage will only pay initially how much

2,000

A licensee must also inform the Commissioner of change of address within

30 Days

an insurer recently canceled a motor vehicle policy/ shortly thereafter. the insured requested payment of all money she was due how long does the insurer have to comply with this request

30 days

how long is a waiting period on purchase of flood coverage through NFIP?

30 days

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

5 days

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is:

50% of the amount provided as Coverage A.

The declarations page of the homeowners policy provides all of the following information EXCEPT

A statement that the earthquake damage is not covered.

by definition An uninsured motorist vehicle under the Personal Auto Policy includes all of the following EXCEPT

A vehicle used for Public livery

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

Additional coverage

The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?

All volcanic eruptions within a 72-hour period will be considered one occurrence.

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who owns and lives on a commercial farm

Part 1: bodily injury to other in an auto liability policy issues in this state will cover which of the following losses?

An injury to another person using the covered auto with the insured consent

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

Ancestry

Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT..

Animals and birds

Which of the following types of agent authority is also called "perceived authority"?

Apparent

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principal do not agree is known as

Appraisal

First aid costs for others injured on the insured's premises

Are paid in addition to the liability limit

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized Insurer

Larry was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile?

Collision

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid?

Comprehensive

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is

Conditional

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is

Considered underinsured

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

Exclusions

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions

WHICH OF THE FOLLOWING ENTITIES IS NOT AN INSURER, BUT AN ORGANIZATION FORMED TO PROVIDE INSURANCE BENFITS FOR MEMBERS OF AN AFFILIATED LODGE OR RELIGIOUS ORGANIZATION?

FRATERNAL BENEFIT SOCIETY

Which of the following claims would be included under the dwelling policy?

Fire damage to the insured's rowboat stored in the attached garage

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign

The main difference between an HO-4 and an HO-6 is

HO-6 provides limit d coverage as well as contents coverage

events or conditions that increase the chances of an insured loss occurring are referred to as

Hazards

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement.

Which of the following would NOT be covered by HO liability insurance?

Intentional tort

Which of the following is true regarding a risk retention group?

It is a liability insurance company owned by its members.

when is liability coverage included in a homeowners policy

It is included automatically

in a dwelling policy which of the following is true regarding personal liability coverage

It must be added as a supplement or written as a separate policy

Which of the following statements is NOT true regarding a personal umbrella liability policy?

It provides errors and omissions coverage for an agency.

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

Land on which the property is located

Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?

Loss costs rating

which of the following is statements is true concerning massachusetts autmobile insurance policy?

Medical payments coverage applies per person, per accident.

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement?

Nothing

When would UM coverage apply?

Only when the other party is legally liable but has no insurance

All of the following statements regarding parts used in the repair of an insured vehicle are true EXCEPT

Parts used in the repair of an insured vehicle by other than the original manufacturer must use replacement parts from the manufacturer only.

An insured has a policy that set the amount for all claims that arise from a single incident at $50000. What type of limit of liability does this insured's policy have?

Per Occurence

who might receive dividends from a mutual insurer

Policyholders

The Federal Fair Credit Reporting Act

Regulates consumer reports

what method do insurers use to protect themselves against catastrophic losses?

Reinsurance

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? The two classes of compensatory damages that may be awarded are

Special

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

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

Tenant broad form (HO-4)

who is covered by an HO-4 policy

Tenants

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction.

Peril is most easily defined as

The cause of loss insured against.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises

The medical payments coverage in a Massachusetts automobile insurance policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home.

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

The proximate cause.

A repair facility used after-market parts in the repair of a customer's automobile, and did not notify the customer of this. Which of the following is true?

The repair facility has engaged in a unfair trade practice

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered

Vacant

the bankruptcy provision found in the Massachusetts automobile insurance policy states that

Will not relieve the insurer of its policy obligations.

An insurer or authorized representative of the insurer that terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the commissioner

Within 15 days of the notice

comprehensive coverage would cover financial losses due to

damage to your car caused by wind or hail.

which of the following is a mandatory part of an insurance policy that varies with each individual policy

declarations

a boatowners policy does not cover

nuclear hazards

The limited fungi, wet or dry rot, or bacteria coverage endorsement applies to which type of losses?

property and liability

how much coverage can be available for a watercraft damage in the homeowners policy

up to 1500

A nonresident producer who moves from one state to another state or a resident producer who moves from this state to another state shall file a change of address and provide certification from the new resident state

within thirty (30) days of the change of legal residence

an insured homeowners policy and is required to be a member of a homeowners association in her neighborhood. the associations community house has burned down and the insured has been assessed to 1200 for her share of the rebuilding cost. how much of the assessment will her homeowners policy pay?

$1,000

Every policy of motor vehicle liability insurance issued by an insurer to an owner residing in this stage will contain liability limits of at least

$20,000/$40,000/$5,000

coverage under part 6-medical payments in auto policies issued in this state is similar to which of the following

Accident insurance, because it pays medical expenses regardless of fault.

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT

Disputes regarding consumer report information

According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss?

Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers

Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy?

Loss or expense caused by the cancellation of a lease is covered

The Commissioner may delay the effective date of an insurer's rate plan which has been duly filed for not more than 30 additional days in order to

Properly examine the filing and any supporting information filed as requested or to permit a related hearing.

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

insuring agreement

limited fungi wet or dry rot or bacteria endorsement applies to which type of losses

property and liability

the part of the policy that clarifies terms in the policy is

Definitions

An insured is a member of the neighborhood association, and has become liable for damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay?

Up to $1000

All of the following are other coverages under dwelling policy EXCEPT?

Earth Movement

Which of the following would modify the original insurance contract by either adding or removing coverage?

Endorsements

Which would protect the owner of a mobile phone, laptop, tablet, or other similar device against the devices theft or malfunction?

Portable electronics insurance

Jane has an auto liability policy with limits of 25/50/25. Jane is involved in an accident caused by her negligence and is held liable for bodily injuries of three persons in the other auto as follow: Person A $15,000, Person B $30,000, Person C $35,000. How much will her insurer pay in total for all injuries?

$50,000

Under additional coverages for homeowners policies, what is the maximum amount that can be charged of the insured for fire department services?

$500

John has an automobile policy with limits of $50,000 per person and $100,000 per occurrence. An accident occurs and two people are injured, one with $25,000 in injuries and the other with $75,000 in injuries. If John is found responsible, what is the maximum amount his policy will pay for the injuries?

$75,000

under the massachusetts assigned risk plan insurance would be required to provide insurance to which of the following

A driver who has received a moving violation

Which of the following types of insurers must participate in the Massachusetts Joint Underwriting Association?

Authorized property insurance companies

With regards to a homeowners policy, which coverage provides for indirect or consequential losses?

Coverage D

Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss?

Coverage DCoverage D provides fair rental value coverage

Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises?

Permitted incidental occupancies

which of the following in massachusetts auto coverages would pay for damage to a covered auto due to colliding with a dear

comprehensive coverage

When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

defamation

an insured added the scheduled personal property endorsement to her HO policy to cover musical instruments. if the insured purchases a new musical instrument, when must the insurer be notified for the musical instrument to be covered?

within 30 days