Practice test

What type of information would be found in a policy's insuring agreement?

Renewal dates

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

Coercion.

What is a Certificate of Insurance?

A written document showing the types and amounts of insurance that have been issued to the insured

Once it has been reasonably proven that a person has knowingly violated the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of

$5,000 for each violation.

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000.

To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?

10 days

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.

When an auto insurance policy is cancelled by the insurer for an allowable reason other than nonpayment of the premium, how much prior notice must be given to the named insured?

30 days

An insured with a homeowners policy has removed property from the insured location to protect it from loss that could be caused by a covered peril. The removal coverage applies for

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

Which of the following would be considered an unfair claims settlement practice?

Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation?

Attachment bond

In which of the following sections of a commercial auto policy will you find specific information about the policy period?

Conditions

Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct?

Coverage C limits will no longer apply to the jewelry insured by the endorsement.

In dwelling policies, automatic increase in insurance is

Coverage by endorsement.

The Subsequent Injury Fund was established to

Encourage employers to hire workers who had suffered prior compensable injuries.

Which of the following are the authorities that an agent can hold?

Express and implied

Under which of the following conditions can broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling

CGL Coverage B (Personal and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

Under the dwelling policy, Coverage C - Personal Property is

Limited to covering a servant's property while at the insured location.

Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included?

Loss resulting from acts of employee dishonesty

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

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

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

The transit clause does which of the following?

Names the points of the voyage

When an insurer cancels an auto policy for an allowable reason, they must give notice to the named insured of possible eligibility for coverage through the Pennsylvania Auto Insurance Plan, unless the reason for cancellation is

Nonpayment of premium.

Jim owns and operates the "No-tell Motel". He wishes to purchase a crime coverage that will pay for the loss of a customer's property left in the motel's safe for safe-keeping, whether or not the motel is legally responsible for such loss. He should purchase

Safe Depository or Direct Loss.

When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property?

The carrier

Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish?

Up to $1,000

Under the coverage of damage to docks, buoys, and other structures, after the limit of liability for a covered loss,

the P&I policy will provide excess coverage.

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll.

Crime insurance is usually written on what basis?

All-risk

Which of the following is true regarding the Difference in Conditions (DIC) policies?

Each DIC policy is an individually written contract that contains provisions unique to the particular risk that it covers.

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?

Liability coverage

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is

Provided by the insured's policy on an excess basis.

Under the commercial property coverage program, the basic causes of loss form insures against loss caused by

Sprinkler leakage.

A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid?

The coinsurance formula would apply

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.

In order for a Protection and Indemnity policy to cover a loss which of the following must be TRUE?

The insured must be legally liable for the loss.

Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?

No, because the claim results from copyright infringement and is not in an advertisement.

Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services?

Physicians, surgeons and dentists malpractice

Which of the following is classified as a "coarse grain"?

Soy beans

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy?

The insured would be responsible for the amount required as underlying limits in the event of a claim.

If the underwriters direct a vessel to proceed to a particular port for repair, who pays the expenses, including wages and maintenance, of doing so?

The insurer

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if

The tree is blocking the driveway.