prop and casuality practice test
Losses caused by vandalism and malicious mischief are excluded under a homeowners policy if the dwelling had been vacant for more than (Choose from the following options) 1. 30 days. 2. 45 days. 3. 60 days. 4. 90 days.
60 days
40. Under additional coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? (Choose from the following options) 1. $500 2. $1,000 3. $5,000 4. Fire department service charges are not allowed.
$500
55. How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? (Choose from the following options) 1. $100 2. $500 3. $1,000 4. $5,000
$500
75. Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises? (Choose from the following options) 1. $250 2. $500 3. $1,000 4. $100
$500
If a liability policy had split limits of 100/300/100, what is the maximum amount that would be payable in the event of injury to a single person? (Choose from the following options) 1. $200,000 2. $300,000 3. $500,000 4. $100,000
100,000
102. Which of the following authorities is authorized to issue a temporary insurance producer's license? (Choose from the following options) 1. State Insurance Board 2. Commissioner 3. NAIC 4. Federal Insurance Licensing Association
commissioner
76. 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? (Choose from the following options) 1. $0 2. $200 3. $250 4. $750
$0
146. An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay (Choose from the following options) 1. $500. 2. $1,000. 3. $500 minus the deductible. 4. $1,000 minus the deductible.
$1,000 minus the deductible.
78. What is the civil penalty for violating a cease and desist order of the Commissioner? (Choose from the following options) 1. $1,000 2. $5,000 3. $10,000 4. $50,000
$10,000
46. Workers compensation rating is developed by applying a rating bureau job classification rate to each (Choose from the following options) 1. $250 of payroll. 2. $500 of payroll. 3. $1,000 of payroll. 4. $100 of payroll.
$100 of payroll.
138. An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? (Choose from the following options) 1. $5,000 minus the policy deductible 2. $14,000 3. $15,000 4. $5,000 maximum for the accident
$14,000
27. In order to satisfy the Pennsylvania Motor Vehicle Financial Responsibility Law, an auto liability policy issued for delivery in the state must have bodily injury and property damage limits not less than (Choose from the following options) 1. $10,000/$20,000/$10,000. 2. $10,000/$25,000/$10,000. 3. $25,000/$50,000/$25,000. 4. $15,000/$30,000/$5,000.
$15,000/$30,000/$5,000.
20. A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? (Choose from the following options) 1. $175,000 2. $180,000 3. $200,000 4. $100,000
$175,000
82. What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? (Choose from the following options) 1. $100 per violation 2. Revocation of license 3. $2,500 4. $1,000
$2,500
64. Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property? (Choose from the following options) 1. $15,000 2. $20,000 3. $25,000 4. $50,000
$25,000
59. A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss? (Choose from the following options) 1. $20,000 2. $30,000 3. $40,000 4. $60,000
$30,000
An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A" $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries? (Choose from the following options) 1. $50,000 2. $105,000 3. $25,000 4. $30,000
$50,000
All of the following are special personal property limits under a homeowners policy EXCEPT (Choose from the following options) 1. $2,500 for theft of firearms. 2. $500 for business personal property on the insured premises. 3. $1,500 for securities, accounts, deeds, and evidences of debt. 4. $1,500 for trailers not used with watercraft.
$500 for business personal property on the insured premises.
74. The standard property deductible per occurrence on a commercial package policy is (Choose from the following options) 1. $250. 2. $100. 3. $500. 4. $1,000.
$500.
109. An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? (Choose from the following options) 1. This would not be a covered loss. 2. $6,000 would be paid under other-than-collision coverage. 3. $3,000 would be paid under other-than-collision; $3,000 would be paid under collision coverage. 4. $6,000 would be paid under collision coverage.
$6,000 would be paid under other-than-collision coverage.
The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period? (Choose from the following options) 1. 90 days 2. 120 days 3. 1 year 4. 3 years
1 year
120. Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy? (Choose from the following options) 1. 5 days 2. 10 days 3. 15 days 4. 20 days
10 days
58. To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days? (Choose from the following options) 1. 10 days 2. 15 days 3. 30 days 4. 45 days
10 days
134. Under Federal Crop Insurance policies, an insured may select a coverage level that indemnifies the insured should the yield fall below one of the following percentage of the historic yield, EXCEPT (Choose from the following options) 1. 65%. 2. 75%. 3. 100%. 4. 50%.
100%.
17. Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective? (Choose from the following options) 1. 30 days after the application has been accepted 2. 12:01 pm on the 5th day after the endorsement request has been mailed 3. 5 days after the application and premium payment are mailed 4. 12:01 am the day after the application and premium payment are mailed
12:01 am the day after the application and premium payment are mailed
In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? (Choose from the following options) 1. 1st limit 2. 2nd limit 3. 3rd limit 4. 4th limit
1st limit
Prior to license renewal, all insurance producers must successfully complete a minimum of (Choose from the following options) 1. 24 credit hours of CE. 2. 18 credit hours of CE. 3. 20 credit hours of CE. 4. 12 credit hours of CE.
24 credit hours of CE.
Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license? (Choose from the following options) 1. 12 hours each annual period 2. Continuing Education is optional 3. Varies from insurer to insurer 4. 24 hours each licensing period
24 hours each licensing period
70. A producer has successfully completed 52 hours of CE. How many hours can the producer apply to her current reporting period, and how many hours can she carry forward to the next reporting period? (Choose from the following options) 1. 28 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. 2. 26 hours will be applied to the current reporting perio and the remaining 26 can be applied to the period immediately following. 3. Only 24 hours of the 52 earned may applied to this reporting period. 4. 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over.
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over.
141. What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement? (Choose from the following options) 1. $25 2. $50 3. $75 4. $100
25
133. Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? (Choose from the following options) 1. 3 days 2. 5 days 3. 10 days 4. 14 days
3 days
58. An insured's home is mortgaged by the local bank. He is required to carry insurance on the home showing the bank as the mortgagee. Which of the following is true if the home is damaged by a covered peril? (Choose from the following options) 1. The mortgagee must settle with the mortgagor in the event of a loss. 2. The additional premium required for the mortgage endorsement must be paid by the mortgagee. 3. Losses will be paid to the mortgagee and mortgagor as their interest appears. 4. Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness.
3. Losses will be paid to the mortgagee and mortgagor as their interest appears.
27. Assuming the insurer and the insured agree to the amount payable for a loss covered under a dwelling policy, how soon after the insurer has received proof of loss must it make payment? (Choose from the following options) 1. 30 days 2. 45 days 3. 60 days 4. 90 days
60 days
A loss has occurred before the first report has been filed on a value reporting coverage form. Which is NOT true? (Choose from the following options) 1. Full amount of loss up to the policy limit is paid if the loss occurs before the first report due date. 2. 75% of the loss is paid if the loss occurred after the first report due date. 3. Never more than 75% of the loss is paid. 4. Provisional premium is based on 75% of the full amount of coverage.
3. Never more than 75% of the loss is paid.
81. If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? (Choose from the following options) 1. 10 2. 30 3. 60 4. 90
30
92. If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days? (Choose from the following options) 1. 10 2. 30 3. 60 4. 90
30
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter? (Choose from the following options) 1. 10 2. 30 3. 60 4. 90
30
63. 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? (Choose from the following options) 1. 15 days 2. 30 days 3. 45 days 4. 10 days
30 days
99. Within how many days must a producer respond to an inquiry from the Commissioner? (Choose from the following options) 1. 3 days 2. 10 days 3. 15 days 4. 30 days
30 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? (Choose from the following options) 1. 5 days 2. 15 days 3. 30 days 4. 60 days
30 days
92. 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 (Choose from the following options) 1. 5 days. 2. 30 days. 3. 60 days. 4. 90 days.
30 days.
6. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? (Choose from the following options) 1. 5 days 2. 7 days 3. 10 days 4. 3 days
5 days
87. If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? (Choose from the following options) 1. 7 days 2. 10 days 3. 3 days 4. 5 days
5 days
130. For the purpose of examination by the department, insurers must keep a record of all financial files for at least (Choose from the following options) 1. 5 years. 2. 7 years. 3. 3 years. 4. 4 years.
5 years
A commercial property special form covers property in transit up to $5,000. ACV. $500. Full replacement cost.
5,000
#7. What is the maximum length of time that an employee who is partially disabled can receive loss of time benefits under Workers Compensation? a) 104 weeks b) 156 weeks c) 500 weeks d) 1 year
500 weeks
Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days? (Choose from the following options) 1. 30 2. 60 3. 100 4. 365
60
128. Coverage under the builders risk form will end in all of the following situations EXCEPT (Choose from the following options) 1. Construction has been abandoned. 2. 60 days after the building became occupied. 3. The insured has sold the property. 4. 60 days after the construction has ended.
60 days after the construction has ended.
7. What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property? (Choose from the following options) 1. 75% 2. 80% 3. 85% 4. 90%
80%
82. The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at least what percentage of replacement cost on the date of loss? (Choose from the following options) 1. 25% 2. 40% 3. 75% 4. 80%
80%
An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for? (Choose from the following options) 1. $32,000 2. 80% of the property's replacement cost or more 3. 100% of the market value 4. $400,000
80% of the property's replacement cost or more
95. Which of the following is eligible for a businessowners policy? (Choose from the following options) 1. A mercantile risk with gross sales of $4 million 2. A 6-story office building with less than 100,000 square feet total area 3. An 8-story office building 4. A convenience store with gas pumps with 60% of gross sales from gasoline sales
A 6-story office building with less than 100,000 square feet total area
143. An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover? (Choose from the following options) 1. A child trips over a toy in the driveway, cuts her knee, and requires stitches. 2. A child is playing in the insured's car, puts it in drive, and backs into the neighbor's mail box. 3. A child has bruises on her legs from receiving a spanking from the insured and must be seen by her pediatrician. 4. A child riding the insured's horse falls off, breaking his collar bone.
A child trips over a toy in the driveway, cuts her knee, and requires stitches.
77. Which of the following would be considered an unfair claims settlement practice? (Choose from the following options) 1. A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered 2. Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim 3. Requesting the insured swear under oath concerning the facts of the claim 4. The settlement of the claim is delayed for 30 days in order for the insured to conduct an investigation
A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
90. Professional photographers and musicians may insure their equipment with (Choose from the following options) 1. An installation floater. 2. A commercial articles floater. 3. A theatrical property coverage form. 4. A contractors equipment floater.
A commercial articles floater.
45. When Mary decided to sue her neighbor for damages to her yard, she was told to get a bond that would guarantee she would be able to pay court costs and resulting damages if she loses the case. What kind of bond is this? (Choose from the following options) 1. A bail bond 2. A cost bond 3. An appeal bond 4. A license and permit bond
A cost bond
36. Which of the following statements is INCORRECT? (Choose from the following options) 1. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. 2. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. 3. No insurance producer may charge a fee for the completion of an application for a contract of insurance. 4. The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided.
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
Which of the following statements is INCORRECT? A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. No insurance producer may charge a fee for the completion of an application for a contract of insurance. The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
24. When an insurance company uses a policy form that has been developed by an organization, such as ISO, what is usually required to be added to the form so that the policy will conform to the state's insurance regulation? (Choose from the following options) 1. A special provisions endorsement 2. A disclaimer 3. Nothing 4. A waiver
A special provisions endorsement
79. In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within (Choose from the following options) 1. 30 days. 2. A specified time. 3. 1 year. 4. 5 business days.
A specified time.
122. The declarations page of the homeowners policy provides all of the following information EXCEPT (Choose from the following options) 1. A statement that earthquake damage is not covered. 2. The amount of premium charged for each coverage. 3. The insured's address. 4. What deductible amount applies to each loss covered by the policy.
A statement that earthquake damage is not covered.
57. An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces? (Choose from the following options) 1. A third degree felony and a $10,000 fine 2. A second degree felony and a $10,000 fine 3. A third degree misdemeanor and a $1,000 fine 4. A second degree misdemeanor and a $1,000 fine
A third degree misdemeanor and a $1,000 fine
The personal injury liability endorsement to an HO policy applies to all the following EXCEPT (Choose from the following options) 1. Slander. 2. Invasion of privacy. 3. False arrest. 4. A third party breaks a leg when the insured knocks him down.
A third party breaks a leg when the insured knocks him down.
An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy? A two-wheeled trailer designed to be towed by the station wagon A farm pickup with 1,000-pound capacity A station wagon that is used personally A two-ton grain truck with a 6,500-pound capacity
A two-ton grain truck with a 6,500-pound capacity
95. A business income coverage form would cover all of the following situations EXCEPT (Choose from the following options) 1. A replacement part for necessary equipment is ordered with overnight delivery charges. 2. The building next door is damaged during a drug bust, and the area is barred from the public. 3. A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time. 4. A hurricane damages the insured's building; a temporary relocation to another building is necessary.
A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.
51. An uninsured motor vehicle includes all of the following EXCEPT (Choose from the following options) 1. A vehicle being used for public livery. 2. The accident was a hit-and-run. 3. The insurance company denies coverage. 4. The vehicle has no liability bond or insurance in force.
A vehicle being used for public livery.
72. The Commissioner of Insurance is placed in office by which means? (Choose from the following options) 1. By NAIC nomination 2. An appointment by the Governor 3. An election at the same time that other state officials are selected 4. Through a bid process
An appointment by the Governor
41. 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? (Choose from the following options) 1. Insuring agreement 2. Additional coverage 3. Exclusions 4. Declarations
Additional coverage
52. Under the Insurance Fraud Protection Act, when can a person who has been convicted of a crime involving dishonesty or a breach of trust engage in the business of insurance? (Choose from the following options) 1. No sooner than 7 years after the conviction 2. After obtaining the consent of the Department of Insurance 3. Never; a person cannot be involved in the business of insurance after a conviction 4. After paying fines or serving a prison sentence
After obtaining the consent of the Department of Insurance
12. What documentation grants express authority to an agent? (Choose from the following options) 1. Agent's contract with the principal 2. Agent's insurance license 3. Fiduciary contract 4. State provisions
Agent's contract with the principal
21. Which of the following types of valuation works best for property whose value does not fluctuate much? (Choose from the following options) 1. Market value 2. Stated amount 3. Inflation guard 4. Agreed value
Agreed value
In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation? Replacement cost Stated amount Market value Agreed value
Agreed value
144. Which of the following would be named on the declarations page of a property or liability policy? (Choose from the following options) 1. Additional insureds 2. First named insured 3. Beneficiaries 4. All insureds
All insureds
An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured's sister has to stay at a motel. How much will the HO-3 form pay for these additional living expense? (Choose from the following options) 1. The cost of renting an apartment, but not the cost of the motel room 2. The cost of renting an apartment, and 50% of the cost of the motel 3. Nothing 4. All of the expense up to the Coverage D limit
All of the expense up to the Coverage D limit
110. Which of the following may be covered by electronic data processing coverage form under an inland marine policy? (Choose from the following options) 1. Computer hardware that is specifically scheduled. 2. Extra expense the insured incurs to continue the business following a loss. 3. Data processing media, including magnetic tapes or paper tapes, punch cards and discs 4. All of these are covered.
All of these are covered.
The inspections and surveys condition in a businessowners policy Guarantees that all working conditions are safe and healthful. Allows the insurer the right to inspect the insured's premises. Validates that the insured is in compliance with state and federal guidelines. Obligates the insurer to make annual safety inspections.
Allows the insurer the right to inspect the insured's premises.
75. What is reinsurance? (Choose from the following options) 1. An agreement between an insurer and an insured 2. An agreement between a ceding insurer an assuming insurer 3. An agreement between an originating insurer and a ceding insurer 4. An agreement between a domestic insurer and a foreign insurer
An agreement between a ceding insurer an assuming insurer
18. In Pennsylvania, all of the following classes of employees may be excluded from the requirement of being covered under Workers Compensation insurance coverage, EXCEPT (Choose from the following options) 1. A domestic servant working in a private home. 2. A licensed real estate producer who is compensated by commissions and files federal income taxes as an independent contractor. 3. A licensed insurance producer affiliated by a licensed insurance agency by a written contract and who is compensated only by commissions. 4. An employee engaged in seasonal agricultural labor that works 60 days in a calendar year.
An employee engaged in seasonal agricultural labor that works 60 days in a calendar year.
118. If the ocean marine contract pays the ACV of the property just prior to the loss, it is (Choose from the following options) 1. A replacement cost contract. 2. A demurrage contract. 3. A valued contract. 4. An indemnity contract.
An indemnity contract.
44. Employers liability insurance, Part Two of a standard workers compensation and employers liability (WC&EL) policy form, excludes (Choose from the following options) 1. Bodily injury caused by or aggravated by disease during the policy period. 2. An intentional act that is caused by the insured. 3. Liability to a third party for claims arising out of injury to an employee. 4. Bodily injury caused by accident when the injury occurs during the policy period.
An intentional act that is caused by the insured.
140. Which of the following describes contributory negligence? (Choose from the following options) 1. The voluntary assumption of exposure to risk 2. Any degree of negligence by the injured party may bar recovery. 3. The time period in which a claim must be filed 4. Negligence is apportioned between both parties in an accident.
Any degree of negligence by the injured party may bar recovery.
98. Which of the following is NOT covered under accounts receivable coverage form? (Choose from the following options) 1. Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs 2. Any loans required to offset uncollectible amounts 3. Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds 4. Sums due the insured that are uncollectible due to a covered loss
Any loans required to offset uncollectible amounts
4. Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? (Choose from the following options) 1. Any other state 2. Anywhere in the world 3. Mexico 4. Only in California
Any other state
Which of the following would be considered an insured under a business auto coverage form? (Choose from the following options) 1. Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business 2. A partner of the named insured for any covered auto owned by that person or a member of his or her household 3. Anyone while using, with permission, a covered auto owned by the named insured 4. The owner or anyone else from whom the named insured hires or borrows a covered auto
Anyone while using, with permission, a covered auto owned by the named insured
86. Which of the following describes the transfer of a legal right or interest in an insurance policy? (Choose from the following options) 1. Assignment 2. Abandonment 3. Obligation 4. Legal purpose
Assignment
38. Which of the following defenses attests that if a person recognizes and understands that there is danger involved in an activity and voluntarily chooses to encounter it, he or she may be barred from seeking recovery for injuries due to negligence? (Choose from the following options) 1. Comparative negligence 2. Intervening clause 3. Assumption of risk 4. Proximate cause
Assumption of risk
39. In equipment breakdown coverage, all accidents would be considered a single accident if they occur (Choose from the following options) 1. At all insured locations at the same time and from the same cause 2. At the same location within a 24-hour period 3. At the same location within a 48-hour period 4. At a single location at the same time and from the same cause
At a single location at the same time and from the same cause
65. Insurers are required to keep records. When may the Department examine these records? (Choose from the following options) 1. At any time 2. Never 3. Every 1 year 4. Every 5 years
At any time
When must application for coverage be made for Federal Crop Insurance? At any time before a loss has occurred All applications must be submitted by April 15th each calendar year At any time before the crop is harvested At or before a date established by the Federal Crop Insurance Corporation
At or before a date established by the Federal Crop Insurance Corporation
112. Insurable interest in the property covered in a policy must be proven (Choose from the following options) 1. At time of loss. 2. When a beneficiary is changed. 3. When a claim is paid. 4. At time of application.
At time of loss.
128. If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? (Choose from the following options) 1. Umbrella policy 2. Excess policy 3. General liability policy 4. Auto policy
Auto policy
73. Which of the following is an example of a protective safeguard in a businessowners policy? (Choose from the following options) 1. Errors and omissions insurance 2. Recordkeeping 3. Professional liability endorsement 4. Automatic sprinkler system
Automatic sprinkler system
60. The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called (Choose from the following options) 1. Sharing. 2. Avoidance. 3. Transfer. 4. Reduction.
Avoidance.
An insurance contract must contain all of the following to be considered legally binding EXCEPT (Choose from the following options) 1. Competent parties. 2. Beneficiary's consent. 3. Offer and acceptance. 4. Consideration.
Beneficiary's consent.
137. Workers compensation laws provide all of the following types of benefits EXCEPT (Choose from the following options) 1. Rehabilitation benefits. 2. Death benefits. 3. Compensatory benefits. 4. Medical benefits.
Compensatory benefits
Which of the following would be included in the farm liability coverage forms? Bodily injury to a residence employee Any obligation of the insured under a workers compensation law Bodily injury to any person who is an insured Bodily injury to an employed farmhand
Bodily injury to a residence employee
83. Under farm liability, Coverage H includes (Choose from the following options) 1. Other farm structures. 2. Bodily injury. 3. Loss of use. 4. Medical payments.
Bodily injury.
88. General-cargo ships are used to transport (Choose from the following options) 1. Coal, grain, phosphates, and other loose cargo. 2. Break-bulk cargo. 3. Motor vehicles. 4. Containerized cargo.
Break-bulk cargo.
34. The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT (Choose from the following options) 1. Insured's activities. 2. Bodily injury to the insured. 3. All business pursuits. 4. Business liability.
Business liability.
129. A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly? (Choose from the following options) 1. Products 2. Professional errors & omissions (E&O) 3. Completed operations 4. Medical payments
Completed operations
110. Which of the following would NOT be considered an exception to the National Do Not Call List? (Choose from the following options) 1. Calls by or on behalf of tax-exempt nonprofit organizations 2. Calls based from outside of the United States 3. Calls for which the consumer has given prior written permission 4. Calls which are not commercial or do not include unsolicited advertisements
Calls based from outside of the United States
53. Which of the following is an additional coverage that is covered by the broad causes of loss form? (Choose from the following options) 1. Lightning 2. Ordinance or law 3. Settling 4. Collapse
Collapse
90. An insured is driving her car through a residential area when 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? (Choose from the following options) 1. Combined single 2. Split 3. Aggregate 4. Per occurrence
Combined single
14. The insurance code identifies all of these as prohibited acts that can cause suspension, revocation or denial of an insurance producer license for a licensee or applicant, with the exception of (Choose from the following options) 1. Commission of any misdemeanor. 2. Failing to pay state income taxes. 3. Failing to pay child support obligations. 4. Commission of a felony or its equivalent.
Commission of any misdemeanor
All of the following are classes of inland marine risks EXCEPT Domestic shipments and transportation risks. Bridges, tunnels, and other instrumentalities of transportation and communication. Common carrier cargo liability. Commercial property floater risks.
Common carrier cargo liability
96. All of the following are classes of inland marine risks EXCEPT (Choose from the following options) 1. Bridges, tunnels, and other instrumentalities of transportation and communication. 2. Common carrier cargo liability. 3. Commercial property floater risks. 4. Domestic shipments and transportation risks.
Common carrier cargo liability.
129. In which of the following sections of a commercial auto policy will you find specific information about the policy period? (Choose from the following options) 1. Conditions 2. Additional coverages 3. Selected endorsements 4. Definitions
Conditions
Which of the following would be considered an illegal inducement to purchase insurance? (Choose from the following options) 1. Confirming future dividends in a life insurance proposal 2. Mailing an agency brochure to a prospective client 3. Listing the insurance companies the agency represents in a letter 4. Inviting prospective clients to the grand opening of the producer's new office
Confirming future dividends in a life insurance proposal
73. Which of the following includes information regarding a person's credit, character, reputation, and habits? (Choose from the following options) 1. Consumer history 2. Insurability report 3. Agent's report 4. Consumer report
Consumer report
91. An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? (Choose from the following options) 1. Contractors equipment floater 2. Bailee's customers form 3. Builders risk form 4. General property form
Contractors equipment floater
80. All of the following are supplemental payments found in liability policies EXCEPT (Choose from the following options) 1. Reasonable expenses incurred by the insured. 2. Limited amounts for bail bonds and other bonds related to a claim. 3. Costs the insured incurred in hiring an attorney. 4. All expenses and defense costs incurred by the insurer.
Costs the insured incurred in hiring an attorney.
60. 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? (Choose from the following options) 1. Coverage C limits will no longer apply to the jewelry insured by the endorsement. 2. The amount of coverage will be doubled. 3. The endorsement becomes excess coverage. 4. The endorsement becomes primary coverage and the HO contract is secondary.
Coverage C limits will no longer apply to the jewelry insured by the endorsement.
Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? (Choose from the following options) 1. Coverage B 2. Coverage C 3. Coverage D 4. Coverage A
Coverage D
68. The extra expense coverage form provides (Choose from the following options) 1. Payment for unforeseen expenses an insured may incur while the business is shut down following a property damage loss. 2. Coverage that will permit the insured to continue in business without interruption following a property damage loss. 3. Extra money for an insured whose accounts receivable records have been damaged. 4. Additional money to pay for property damage losses at a covered location.
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? (Choose from the following options) 1. Conditions 2. Covered Auto 3. Liability Coverage 4. Definitions
Covered Auto
121. Which of the following is a mandatory part of an insurance policy that varies with each individual policy? (Choose from the following options) 1. Exclusions 2. Insuring agreement 3. Declarations 4. Conditions
Declarations
71. 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? (Choose from the following options) 1. Defamation 2. Undercutting 3. Twisting 4. Slandering
Defamation
126. If an insurer appoints a producer, which authority must be notified? (Choose from the following options) 1. Department of Insurance 2. Federal Directory of Insurers 3. State Insurance Regulation Board 4. Commissioner
Department of Insurance
141. Which of the following authorities monitors the financial strength of insurers? (Choose from the following options) 1. Department of Insurance 2. National Association of Insurance Commissioners 3. Financial Industry Regulatory Authority 4. Insurance companies
Department of Insurance
104. Which of the following will NOT be considered unfair discrimination by insurers? (Choose from the following options) 1. Assigning different risk classifications to applicants based on gender identity 2. Discriminating in benefits and coverages based on the insured's habits and lifestyle 3. Charging applicants with similar health histories different premiums based on their ethnicity 4. Cancelling individual coverage based on the insured's marital status
Discriminating in benefits and coverages based on the insured's habits and lifestyle
145. All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT (Choose from the following options) 1. Stocks, securities, or bonds. 2. An offer to share in commissions generated by the sale. 3. Dividends from a mutual insurer. 4. An offer of employment.
Dividends from a mutual insurer.
35. States with monopolistic state workers compensation funds (Choose from the following options) 1. Provide workers compensation insurance through managed risk plans 2. Require all employers in their state to purchase workers compensation insurance regardless of their financial capacity. 3. Sell workers compensation insurance through private insurers that are in the state and receive a kickback for all policies sold on an annual basis. 4. Do not allow private insurers to be licensed to write workers compensation coverage
Do not allow private insurers to be licensed to write workers compensation coverage
38. Which of the following best describes an insurance company that has been formed under the laws of this state? (Choose from the following options) 1. Sovereign 2. Alien 3. Foreign 4. Domestic
Domestic
123. 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? (Choose from the following options) 1. Drive other car coverage 2. Bobtail coverage 3. Rental car coverage 4. Personal injury protection
Drive other car coverage
108. 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? (Choose from the following options) 1. The parties must pursue a lawsuit. 2. The policyholder is allowed to hire an appraiser, and the insurer will pay the amount determined. 3. Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers. 4. The insured is required to accept what the insurer is willing to pay.
Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers.
66. The Subsequent Injury Fund was established to (Choose from the following options) 1. Encourage partially disabled workers to seek employment. 2. Avoid discrimination suits. 3. Lower the premium rate for Workers Compensation insurance. 4. Encourage employers to hire workers who had suffered prior compensable injuries.
Encourage employers to hire workers who had suffered prior compensable injuries.
55. Professional liability coverage protects the insured against legal liability resulting from (Choose from the following options) 1. Liability assumed under a contract. 2. Dishonest acts. 3. The unprofessional conduct of an employee. 4. Errors and omissions.
Errors and omissions.
114. Which of the following claims would be included under the dwelling policy? (Choose from the following options) 1. Theft of the insured's auto from the detached garage 2. Death to the insured's pet caused by smoke inhalation 3. Fire damage to the insured's rowboat stored in the attached garage 4. Fire damage to a garage located on the insured premises used as an auto repair shop
Fire damage to the insured's rowboat stored in the attached garage
130. The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called (Choose from the following options) 1. Exclusive remedy. 2. Waiver of indemnification. 3. Voluntary negligence assumption. 4. No loss-no gain regulation.
Exclusive remedy.
54. The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called (Choose from the following options) 1. Exclusive remedy. 2. Waiver of indemnification. 3. Voluntary negligence assumption. 4. No loss-no gain regulation.
Exclusive remedy.
126. What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations? (Choose from the following options) 1. Arbitration plan 2. Experience modification factor 3. Workers classification factor 4. Merit rating plan
Experience modification factor
107. Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance? (Choose from the following options) 1. Hazard 2. Risk 3. Exposure 4. Loss
Exposure
Which of the following is an example of an unfair claims settlement practice? (Choose from the following options) 1. Failure to promptly settle a claim when liability has been clearly established 2. Denying coverage after a reasonable investigation has been conducted 3. Making claims payments which clearly indicate under which coverage payment has been made 4. Using arbitration when the insured and insurer cannot reach agreement
Failure to promptly settle a claim when liability has been clearly established
105. FAIR Plans are state insurance pools that provide property insurance to high risks areas, such as neighborhoods that have deteriorated or are in urban decay. What does the acronym FAIR stand for? (Choose from the following options) 1. Fundamental Access to Insurance Regulations 2. Fair Access to Insurance Requirements 3. Federal Association of Insurance Regulators 4. Free Assistance for Insured Residents
Fair Access to Insurance Requirements
31. Which of the following statements would be an example of a product liability claim? (Choose from the following options) 1. Someone tampers with the insured's product causing the insured to have to recall all products that are on the shelf. 2. The insured's product has to be recalled because of an expiration date. 3. Faulty packaging of a cereal caused spoilage that resulted in someone getting sick. 4. An insured, while delivering product to a customer, hits another car with the delivery truck causing bodily injury and property damage.
Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.
Which of the following is the federal body that regulates truckers who travel across state lines? Truckers and Trade Commission Federal Trade Commission Federal Motor Carrier Safety Administration Motor Carriers Commerce Agency
Federal Motor Carrier Safety Administration
96. If an insurer changes a form that it uses to transact insurance, it must do which of the following? (Choose from the following options) 1. Submit it to the Department of Insurance so it can be kept in the insurer's official records 2. Nothing, as long as the insurer has a Certificate of Qualification. 3. File the form with the Commissioner for approval 4. File the form with the NAIC for approval
File the form with the Commissioner for approval
78. 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? (Choose from the following options) 1. Defamation 2. Unfair discrimination 3. Errors and omissions 4. Fraud
Fraud
33. Which of the following policies does NOT contain an automatic reinstatement provision? (Choose from the following options) 1. Homeowners 2. General liability written with an aggregate limit 3. Business automobile liability 4. Personal automobile liability with split limits
General liability written with an aggregate limit
20. Which of the following homeowners forms is designed to provide named peril coverage for personal property to individuals who rent an apartment? (Choose from the following options) 1. HO-6 2. HO-2 3. HO-3 4. HO-4
HO-4
The main difference between an HO-4 and an HO-6 is HO-4 does not cover additional living expenses. HO-6 does not cover additional living expenses. HO-4 provides limited dwelling coverage as well as contents coverage. HO-6 provides limited dwelling coverage as well as contents coverage.
HO-6 provides limited dwelling coverage as well as contents coverage
22. The main difference between an HO-4 and an HO-6 is (Choose from the following options) 1. HO-6 provides limited dwelling coverage as well as contents coverage. 2. HO-4 does not cover additional living expenses. 3. HO-6 does not cover additional living expenses. 4. HO-4 provides limited dwelling coverage as well as contents coverage.
HO-6 provides limited dwelling coverage as well as contents coverage.
11. An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay? (Choose from the following options) 1. Only the limits specified in the policy 2. Higher limits 3. Lower limits 4. The insurer will not pay for out-of-state accidents
Higher limits
42. Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? (Choose from the following options) 1. Whenever it is requested by the Commissioner 2. Under no circumstances; nonpublic personal financial information cannot be shared with third parties 3. If a consumer decides to opt out 4. If a consumer does not sign and return the notice of disclosure within 30 days
If a consumer does not sign and return the notice of disclosure within 30 days
9. When an insured has multiple autos insured, what effect does the stacking of UM and UIM coverage have in terms of the benefits available? (Choose from the following options) 1. Increases the limit of bodily injury coverage available to an insured to a total equal to the sum of the bodily injury available on all autos insured 2. Decreases the limit of bodily injury coverage available to an insured to minimum amounts required by law 3. Increases the property damage liability coverage only, but does not change the bodily injury limits 4. None
Increases the limit of bodily injury coverage available to an insured to a total equal to the sum of the bodily injury available on all autos insured
148. Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? (Choose from the following options) 1. Hired autos specified as covered autos you own 2. Individual named insured 3. Drive other car 4. Additional insured - lessor
Individual named insured
89. Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something? (Choose from the following options) 1. Bail bonds 2. Attachment bonds 3. Injunction bonds 4. Appeal bonds
Injunction bonds
86. Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries? (Choose from the following options) 1. Injury incurred while attempting to elude apprehension by a law enforcement official 2. Injury incurred during the commission of a felony 3. Injury that was intentionally self-inflicted 4. Injury incurred while the person was under the influence of drugs or alcohol
Injury incurred while the person was under the influence of drugs or alcohol
50. Which statement regarding insurable risks is NOT correct? (Choose from the following options) 1. Insurance cannot be mandatory. 2. The insurable risk needs to be statistically predictable. 3. An insurable risk must involve a loss that is definite as to cause, time, place and amount. 4. Insureds cannot be randomly selected.
Insureds cannot be randomly selected.
117. A deliberate act that causes harm to another person, regardless of whether the harm is intended is called a(n) (Choose from the following options) 1. Tortfeasor. 2. Vicarious tort. 3. Intentional tort. 4. Absolute liability.
Intentional tort
84. A basic dwelling policy automatically provides coverage against fire, lightning, and (Choose from the following options) 1. Internal explosion. 2. Smoke. 3. Riot. 4. Windstorm.
Internal explosion.
124. After a storm dumps several inches of snow, an insured spends several hours clearing his sidewalk and driveway. Later that night it begins to sleet. Before the insured can clear his walks again, his neighbor slips and falls while walking past the insured's house, breaking his arm. Which defense will reduce recovery for the neighbor's injury? (Choose from the following options) 1. Intervening cause 2. Contributory negligence 3. Comparative negligence 4. Statute of limitations
Intervening cause
10. State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT (Choose from the following options) 1. Offering benefit certificates or securities in return for purchasing insurance. 2. Inviting prospective clients to the grand opening of the company's new office. 3. Issuing or delivering insurance company stock in return for purchasing insurance. 4. Promising returns and profits from the purchase of insurance.
Inviting prospective clients to the grand opening of the company's new office.
132. The insurer may suspect that a moral hazard exists if the policyholder (Choose from the following options) 1. Is not honest about his health on an application for insurance. 2. Is prone to depression. 3. Is indifferent to activities that may be dangerous. 4. Always drives over the speed limit.
Is not honest about his health on an application for insurance.
87. All of the following statements describe the concept of strict liability EXCEPT (Choose from the following options) 1. It is applied in product liability cases. 2. It is imposed on defendants engaged in hazardous activities. 3. Claimants may need to provide proof that a product defect caused an injury. 4. It is imposed regardless of fault.
It is imposed on defendants engaged in hazardous activities.
52. In which of the following situations is it legal to limit coverage based on marital status? (Choose from the following options) 1. Divorce within the last six months of applying for insurance 2. It is never legal to limit coverage based on marital status. 3. Excessive number of divorces, as defined by the Insurance Code 4. Legal separation during the application process
It is never legal to limit coverage based on marital status.
150. Which of the following is defined as a covered cause of loss in businessowners property coverage? (Choose from the following options) 1. Rain 2. Smoke from agricultural smudging 3. Pollution 4. Leakage from fire-extinguishing equipment
Leakage from fire-extinguishing equipment
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? (Choose from the following options) 1. Liability coverage 2. Medical payments 3. Comprehensive coverage 4. Collision coverage
Liability coverage
22. A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true? (Choose from the following options) 1. Loss by theft is covered. 2. Loss by vandalism and malicious mischief is excluded. 3. Glass breakage as a result of vandalism is covered. 4. Damage to glass building blocks is not covered.
Loss by vandalism and malicious mischief is excluded.
3. 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? (Choose from the following options) 1. Loss costs rating 2. Provision rating 3. Profit rating 4. Components rating
Loss costs rating
What losses are considered when computing individual FMHA emergency loan eligibility? Losses on any crop will be considered Losses on crops that are not insurable will be considered Losses on crops which the farmer chose to insure will be considered Losses on all insurable crops will be considered
Losses on crops which the farmer chose to insure will be considered
143. An insured purchases a Difference in Conditions policy. It may contain all of the following characteristics EXCEPT (Choose from the following options) 1. No coinsurance clause. 2. Flood and earthquake coverage. 3. Exclusion for named perils. 4. Low deductible.
Low deductible
According to the doctrine of contributory negligence, when an individual is found to have contributed to his or her own loss in any way, another party (Choose from the following options) 1. May be held liable for full damages despite the other party's negligence. 2. May be held liable only in the case of vicarious liability. 3. May not be held liable. 4. May be held liable, but to a reduced extent.
May not be held liable.
A common exclusion found under physical damage to your auto includes (Choose from the following options) 1. Towing and labor. 2. Mechanical breakdown. 3. Glass breakage. 4. Riot or civil commotion.
Mechanical breakdown.
15. Which of the following coverages is included in an unendorsed homeowners policy? (Choose from the following options) 1. Earthquake 2. Medical payment to others 3. Personal property replacement coverage 4. Fungi, wet or dry rot, or bacteria
Medical payment to others
72. All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT (Choose from the following options) 1. First aid when the accident occurred. 2. Mental health counseling. 3. Ambulance services. 4. X-ray services.
Mental health counseling.
81. Which of the following is the term used when a person in a fiduciary position has used assets in manner for which they were not intended such as the wrongful taking or use of money belonging to another? (Choose from the following options) 1. Rebating 2. Fiduciary capacity 3. Misappropriation of funds 4. Fraud
Misappropriation of funds
109. ABC trucking company recently purchased XYZ manufacturing company. ABC wants to transport the new company's freight with their trucking division. The company also wants to continue to haul freight for the clients it has served for many years. In regard to coverage, which of the following is true? (Choose from the following options) 1. The company must choose between being a private carrier and a common or contract carrier. 2. Truckers coverage form is needed. 3. A truckers coverage form is needed along with the business auto coverage form. 4. Motor carrier coverage is needed.
Motor carrier coverage is needed.
70. Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? (Choose from the following options) 1. Motor truck cargo policy - truckers form 2. Motor truck cargo policy - owners form 3. Trip transit policy 4. Truckers coverage form
Motor truck cargo policy - truckers form
85. The transit clause does which of the following? (Choose from the following options) 1. Requires the owner of the vessel to pay additional premiums 2. Allows the coverage to remain in effect until the adventure is terminated 3. Names the points of the voyage 4. Allows the adventure to be terminated at other than the named destination provided prompt notice is given to the insurer
Names the points of the voyage
21. Which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis? (Choose from the following options) 1. Primary and excess 2. Pro rata 3. Contribution by equal shares 4. Nonconcurrency
Nonconcurrency
112. 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 (Choose from the following options) 1. Driving record. 2. Misrepresentation on the application. 3. Fraudulent claim. 4. Nonpayment of premium.
Nonpayment of premium.
ABC Insurance Company wishes to begin transacting business in Pennsylvania. Before it can do so, it must do which of the following? (Choose from the following options) 1. Receive permission from the Governor of Pennsylvania 2. Receive a letter of clearance from ABC's home state 3. Obtain approval of each of its corporate officers and executives 4. Obtain a certificate of authority
Obtain a certificate of authority
19. A producer has become disabled. In order to keep his business going, what may his designee do? (Choose from the following options) 1. File for federal aid designed for this situation 2. Hire a temporary producer to run the business during the producer's absence 3. Obtain a temporary license 4. Suspend operations
Obtain a temporary license
91. All of the following would be considered an insurance transaction EXCEPT (Choose from the following options) 1. Negotiating coverage. 2. Obtaining an insurance license. 3. Soliciting a policy. 4. Advising a policyholder regarding a claim.
Obtaining an insurance license
105. Losses caused by continuous or repeated exposure to conditions resulting in injury persons or damage to property that is neither intended nor expected is the definition of which of the following terms? (Choose from the following options) 1. Peril 2. Hazard 3. Accident 4. Occurrence
Occurrence
132. Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? (Choose from the following options) 1. False statements about financial condition of an insurer are unlawful. 2. Statements made with the intent to deceive are unlawful. 3. Only written statements can be considered fraud. 4. Omissions of material fact on insurance application are fraud.
Only written statements can be considered fraud.
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? (Choose from the following options) 1. Liability 2. Uninsured motorist 3. Collision 4. Other-than-collision
Other-than-collision
19. Which coverage would a business owner need in a crime policy to cover money that may be stolen from a messenger? (Choose from the following options) 1. Outside the premises 2. Fidelity bond 3. Commercial general liability 4. Safe burglary
Outside the premises
88. Which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery? (Choose from the following options) 1. Inside the premises 2. Outside the premises 3. Forgery or alteration 4. Robbery and safe burglary
Outside the premises
3. The Insurance Consultation Services Exemption Act protects insurers from liability actions resulting from (Choose from the following options) 1. Performing or failing to perform services. 2. Services performed as part of a written service contract that is not incidental to an insurance policy. 3. Injury resulting from actual malice. 4. Gross negligence.
Performing or failing to perform services.
When ABC Appliance's marketing stated that its 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? (Choose from the following options) 1. Premises and operations 2. Product liability 3. Personal and advertising injury liability 4. This claim would not be covered.
Personal and advertising injury liability
45. What type of coverage is Coverage E in homeowners policies? (Choose from the following options) 1. Personal liability 2. Additional coverage 3. Loss of use 4. Personal property
Personal liability
69. All of the following are parts of a personal auto policy EXCEPT (Choose from the following options) 1. Duties after an accident or loss. 2. Liability coverage. 3. Physical damage coverage. 4. Medical payments coverage.
Physical damage coverage.
All of the following are parts of a personal auto policy EXCEPT (Choose from the following options) 1. Duties after an accident or loss. 2. Liability coverage. 3. Physical damage coverage. 4. Medical payments coverage.
Physical damage coverage.
13. A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy, which is most likely? (Choose from the following options) 1. Premiums would be unchanged. 2. Coinsurance would be necessary. 3. Premiums would go down. 4. Premiums would go up.
Premiums would go down
40. FAIR plans are provided by (Choose from the following options) 1. The NAIC. 2. Private insurers. 3. The federal government. 4. The State.
Private insurers.
61. While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? (Choose from the following options) 1. Property damage liability 2. Collision coverage 3. Other-than-collision coverage 4. This loss would not be covered.
Property damage liability
34. The Gramm-Leach-Bliley Act was passed to (Choose from the following options) 1. Allow consumers access to credit and private consumer reports. 2. Allow insurance companies access to medical information for underwriting purposes. 3. Protect private customer information filed with a financial institution. 4. Define insurance as interstate commerce.
Protect private customer information filed with a financial institution.
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. Not covered. Shared on a pro rata basis. Provided by the insured's policy on a primary basis.
Provided by the insured's policy on an excess basis.
All of the following are true regarding rebates EXCEPT (Choose from the following options) 1. Rebates are allowed if it's in the best interest of the client. 2. Rebates are only allowed if specifically stated in the policy. 3. Rebating can be anything of economic value, given as an inducement to buy. 4. Dividends are not considered to be rebates.
Rebates are allowed if it's in the best interest of the client.
67. Which of the following insurance options would be considered a risk-sharing arrangement? (Choose from the following options) 1. Surplus lines 2. Reciprocal 3. Stock 4. Mutual
Reciprocal
68. All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT (Choose from the following options) 1. Falling objects. 2. Weight of ice, snow, or sleet. 3. Water damage. 4. Replacement cost.
Replacement cost.
12. Which of the following persons may be covered under farm Coverage J? (Choose from the following options) 1. Resident employees 2. First named insured 3. Additional insureds 4. Farm employees
Resident employees
146. If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the (Choose from the following options) 1. Blanket personal property endorsement. 2. Scheduled personal property endorsement. 3. Special limits of liability endorsement. 4. Personal property replacement cost endorsement.
Scheduled personal property endorsement.
A company wants its cargo policy to provide coverage for losses caused by crew members. Which of the following is a clause that would NOT provide this type of coverage? (Choose from the following options) 1. Malicious damage 2. Dangerous drugs 3. Seaworthiness admitted 4. Theft, pilferage, and nondelivery
Seaworthiness admitted
76. In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called (Choose from the following options) 1. Stop-loss. 2. Coinsurance. 3. Participation requirement. 4. Self-insured retention.
Self-insured retention.
56. Which of the following is covered under the physical damage coverage of a personal auto policy? (Choose from the following options) 1. A covered auto seized and destroyed by a government authority 2. A cellular phone in a locked vehicle 3. Custom furnishings or equipment in a pick up or van 4. Sound reproduction equipment permanently installed in the covered auto
Sound reproduction equipment permanently installed in the covered auto
24. Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called (Choose from the following options) 1. Described coverage. 2. Specific coverage. 3. Schedule coverage. 4. Blanket coverage.
Specific coverage.
13. Events in which a person has both the chance of winning or losing are classified as (Choose from the following options) 1. Speculative risk. 2. Insurable. 3. Pure risk. 4. Retained risk.
Speculative risk
11. Under the commercial property coverage program, the basic causes of loss form insures against loss caused by (Choose from the following options) 1. Power failure off the premises. 2. Sprinkler leakage. 3. Earth movement. 4. Nuclear hazard.
Sprinkler leakage
28. The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called (Choose from the following options) 1. Appraisal. 2. Subrogation. 3. Consent to settle loss. 4. Right of salvage.
Subrogation.
hich of the following perils is covered by the HO-2 and HO-3? (Choose from the following options) 1. Flood 2. War 3. Sudden and accidental rupture of a heating system 4. Loss due to power interruption that occurs off the premises
Sudden and accidental rupture of a heating system
25. An insured's accounts receivable records have been damaged. The loss may be covered with (Choose from the following options) 1. The accounts receivable coverage form. 2. Commercial property insurance. 3. The commercial articles coverage form. 4. The valuable papers coverage form.
The accounts receivable coverage form.
Which one of the following symbols used in business auto coverage is correctly described? (Choose from the following options) 1. Symbol 2 - owned autos subject to no-fault 2. Symbol 7 - hired autos only 3. Symbol 9 - nonowned autos only 4. Symbol 1 - owned auto only
Symbol 9 - nonowned autos only
61. The National Do Not Call Registry was created to regulate (Choose from the following options) 1. Telemarketers. 2. Field underwriters. 3. Insurers. 4. Insurance solicitors.
Telemarketers.
104. Which of the following is an example of a producer being involved in an unfair trade practice of rebating? (Choose from the following options) 1. Telling a client that his first premium will be waived if he purchased the insurance policy today 2. Inducing the insured to drop a policy in favor of another one when it's not in the insured's best interest 3. Charging a client a higher premium for the same policy as another client in the same insuring class 4. Making deceptive statements about a competitor
Telling a client that his first premium will be waived if he purchased the insurance policy today
124. Which of the following terms refers to a person's total inability to work for a temporary amount of time? (Choose from the following options) 1. Temporary total disability 2. Temporary partial disability 3. Permanent partial disability 4. Permanent total disability
Temporary total disability
116. When Commercial Crime Coverage Form M - Safe Depository Liability is written, what must be attached to the policy? (Choose from the following options) 1. The Robbery and Safe Burglary Provisions 2. The General Provisions 3. The Safe Depository General Provisions 4. The Safe Depository Direct Loss Provisions
The Safe Depository General Provisions
138. Which of the following would determine minimum and maximum limits for FAIR plan rates? (Choose from the following options) 1. Individual insurers 2. The State 3. The federal government 4. The NAIC
The State
15. Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy? (Choose from the following options) 1. Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone. 2. The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant. 3. Piccolo Pete's Café has its door broken by vandals trying to get inside. 4. The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store.
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.
147. Which of the following is an example of apparent authority of an agent appointed by an insurer? (Choose from the following options) 1. The agent accepts a premium payment during the grace period. 2. The agent has business cards and stationery printed. 3. The agent puts up a sign with the insurer's logo without express permission. 4. The agent accepts a premium payment after the end of the grace period.
The agent accepts a premium payment after the end of the grace period.
Replacement cost coverage is provided in both the broad and special form dwelling policies when (Choose from the following options) 1. The amount of insurance on both the dwelling and personal property is at least 80% of its replacement cost when the policy is written. 2. The amount of insurance on the dwelling is at least 90% of its replacement cost when the policy is written. 3. The dwelling is insured for 100% of its replacement cost at the time of a loss. 4. The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss
The amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss
111. Which of the following is NOT the consideration in a policy? (Choose from the following options) 1. The premium amount paid at the time of application 2. The promise to pay covered losses 3. The application given to a prospective insured 4. Something of value exchanged between parties
The application given to a prospective insured
144. Who is responsible for paying producer appointment fees? (Choose from the following options) 1. The Commissioner's office 2. The Department of Insurance 3. The producer 4. The appointing insurer
The appointing insurer
106. When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property? (Choose from the following options) 1. The carrier 2. The person to whom the goods are being shipped 3. The shipper 4. The driver of the truck
The carrier
103. Peril is most easily defined as (Choose from the following options) 1. An unhealthy attitude about safety. 2. The chance of a loss occurring. 3. Something that increases the chance of loss. 4. The cause of loss insured against.
The cause of loss insured against.
#30. If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? a) The change must be reported to the Commissioner. b) The change must be reported to the Federal Producer's Directory. c) The licensee must obtain a new license. d) It is illegal to transact insurance under any name other than the one listed on the license.
The change must be reported to the Commissioner.
If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur? The change must be reported to the Commissioner. The change must be reported to the Federal Producer's Directory. The licensee must obtain a new license. It is illegal to transact insurance under any name other than the one listed on the license.
The change must be reported to the Commissioner.
140. All of the following statements concerning coinsurance are true EXCEPT (Choose from the following options) 1. The coinsurance formula will also be applied to total losses. 2. It is used to help adequacy and equity in rates. 3. The insured agrees to maintain insurance equal to some specified percentage of the value of the property. 4. If the insurance carried is less than required, the insurance may not cover the whole loss.
The coinsurance formula will also be applied to total losses
98. According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means (Choose from the following options) 1. The consumer gives the licensee an unconditional right to share the consumer's nonpublic financial information with a third party. 2. The consumer has chosen not to participate in insurance contracts with the insurer. 3. The consumer has declined the nonforfeiture options available in the policy. 4. The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party.
The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party.
A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? (Choose from the following options) 1. The driver's policy would be primary. 2. The driver's policy will act in excess of the passenger's policy. 3. The passenger's policy would be primary. 4. Both policies will share equally in the loss.
The driver's policy would be primary.
103. Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies? (Choose from the following options) 1. The endorsement is automatic. 2. Liability coverage is not provided on equipment that is being towed. 3. Mobile equipment is covered for property insurance. 4. The endorsement is available for additional premium.
The endorsement is available for additional premium.
18. Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies? (Choose from the following options) 1. The endorsement is automatic. 2. Liability coverage is not provided on equipment that is being towed. 3. Mobile equipment is covered for property insurance. 4. The endorsement is available for additional premium.
The endorsement is available for additional premium.
64. When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays (Choose from the following options) 1. The excess over the self-insured retention. 2. The amount specified in the policy under the additional coverage provisions. 3. The amount in excess of the underlying policy deductible. 4. A percentage of the loss as described on the declarations.
The excess over the self-insured retention.
133. All of the following situations would be covered under a professional liability policy EXCEPT (Choose from the following options) 1. An accountant's error that inflated a bid and caused a client to lose a major account. 2. Negligence of an architect who designed an unsafe building. 3. The failure of an attorney to properly defend a client due to his personal dislike of the client. 4. Failure of a doctor to render the quality of care that is customary in the medical field.
The failure of an attorney to properly defend a client due to his personal dislike of the client.
Negligence is defined as (Choose from the following options) 1. The failure to do what a reasonable prudent person would do under given circumstances. 2. An unbroken chain of events that results in bodily injury or property damage to another person. 3. Conduct that is so hazardous that the individual engaging in it will be held fully responsible for any resulting injury or damage. 4. An intentional act that results in bodily injury or property damage to another person.
The failure to do what a reasonable prudent person would do under given circumstances.
51. The common policy condition is a modular part combined with other parts to create the contract. The common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? (Choose from the following options) 1. The first named insured may cancel the policy at any time by giving written notice to the insurer. 2. Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained. 3. Requests for any changes in the policy from the insured may be made by the second named insured. 4. The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy.
The first named insured may cancel the policy at any time by giving written notice to the insurer.
Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? (Choose from the following options) 1. A temporary substitute vehicle is damaged while the insured is driving it. 2. The insured's vehicle is damaged when it collides with a deer. 3. A passenger in the insured's vehicle is injured following an accident caused by the insured. 4. The insured damages a rented garage when he failed to stop in time.
The insured damages a rented garage when he failed to stop in time.
5. According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when (Choose from the following options) 1. The insurer is not licensed to write workers compensation in that state. 2. The state has a monopolistic workers compensation fund. 3. The insured expects to extend operations to that state. 4. The insured has operations in the state where the policy is written.
The insured expects to extend operations to that state.
32. Under the provisions of the business income coverage form, all of the following are true EXCEPT (Choose from the following options) 1. The insured agrees to resume all or part of operations as quickly as possible. 2. The insured is reimbursed for payroll that continues after the loss begins. 3. The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first. 4. If the insured and insurer are unable to come to agreement as to the value of the loss, either party may make a written demand for an appraisal.
The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first.
100. In order for a Protection and Indemnity policy to cover a loss which of the following must be TRUE? (Choose from the following options) 1. The insured must have been the person operating the vessel 2. The insurer must conduct an investigation into the loss. 3. The loss must total. 4. The insured must be legally liable for the loss.
The insured must be legally liable for the loss.
147. Personal property coverage under a homeowners policy would cover (Choose from the following options) 1. Property moved to a newly acquired residence after 60 days. 2. A pet that the insured is temporarily keeping for a friend. 3. The insured's camera if it is stolen while the insured is on vacation. 4. A neighbor's fence if damaged by the insured.
The insured's camera if it is stolen while the insured is on vacation.
74. In which of the following situations would off-premises coverage in a broad theft endorsement apply? (Choose from the following options) 1. The insured's vacuum cleaner is stolen from her apartment. 2. The insured's camera is stolen from his vacation home while he is there. 3. The insured's live-in maid's quarters are burglarized. 4. The insured's jewelry is stolen from her vacation home after she returns home.
The insured's camera is stolen from his vacation home while he is there.
135. What will happen if a house covered by a standard mortgage clause is a total loss? (Choose from the following options) 1. The insurer pays the mortgagee according to the mortgagee's interest in the property. 2. The mortgagee retains no rights to any contracts involving the policy. 3. The insured receives the full benefit and passes the mortgagee's share to the mortgagee. 4. The mortgagee receives the full benefit and passes the insured's share to the insured.
The insurer pays the mortgagee according to the mortgagee's interest in the property.
What will happen if a house covered by a standard mortgage clause is a total loss? The mortgagee receives the full benefit and passes the insured's share to the insured. The insurer pays the mortgagee according to the mortgagee's interest in the property. The mortgagee retains no rights to any contracts involving the policy.
The insurer pays the mortgagee according to the mortgagee's interest in the property.
In a marine policy, which of the following is referred to as the "amount insured hereunder"? (Choose from the following options) 1. The agreed value 2. The duration of risk 3. The limit of insurance 4. The deductible
The limit of insurance
79. All of the following types of property are covered by a standard builders risk form EXCEPT (Choose from the following options) 1. Temporary structures. 2. Machinery that will be permanently attached to the building. 3. Tools 50 feet away from the building. 4. The building itself.
Tools 50 feet away from the building.
39. All of the following are true regarding physical damage coverage EXCEPT (Choose from the following options) 1. The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle. 2. Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limited to $1,500. 3. The policy will pay up to $20 per day up to a maximum of $600 for rental transportation. 4. The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible.
The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.
93. The members of a limited liability company are insureds under a businessowners policy (BOP) if (Choose from the following options) 1. Each individual is listed as a named insured on the policy. 2. A single individual member of the limited liability company is listed as the named insured. 3. Members of a limited liability company cannot be insureds under a BOP. 4. The limited liability company is designated as the named insured.
The limited liability company is designated as the named insured.
113. A mortgage company is named as a loss payee 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? (Choose from the following options) 1. The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. 2. The entire loss is payable to the mortgagee. 3. The entire loss is payable to the insured. 4. The loss is payable to the insured and the mortgagee.
The loss is payable to the insured and the mortgagee.
145. Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT (Choose from the following options) 1. The loss may be intentional. 2. The loss must not be catastrophic. 3. There must be a sufficient number of homogeneous exposure units to make losses reasonably predictable. 4. The loss produced by the risk must be definite.
The loss may be intentional
Who is NOT an insured for liability on a BAP? Anyone liable for the conduct of the insured The named insured in any covered auto The owner of a car the insured borrows Anyone using a covered auto with permission
The owner of a car the insured borrows
59. In terms of parties to a contract, which of the following does NOT describe a competent party? (Choose from the following options) 1. The person must not be under the influence of drugs or alcohol. 2. The person must be of legal age. 3. The person must be mentally competent to understand the contract. 4. The person must have at least completed secondary education.
The person must have at least completed secondary education.
119. The individual named insured endorsement under a commercial auto policy provides coverage for which of the following? (Choose from the following options) 1. The sole proprietor of the business and his or her spouse only 2. The sole proprietor of the business and his or her family members 3. The sole proprietor of the business only 4. The sole proprietor of the business and his or her employees
The sole proprietor of the business and his or her family members
1. All are true if a contractor defaults on a performance contract EXCEPT (Choose from the following options) 1. The surety will attempt to seek reimbursement from the contractor for any amounts it pays. 2. The surety may cancel the bond so as to avoid having to pay losses and expenses. 3. The obligee may hire another contractor to complete the job and have the surety repay the obligee. 4. The principal's obligations end.
The surety may cancel the bond so as to avoid having to pay losses and expenses
36. According to the first-party benefits provision, which of the following would NOT be covered for injuries in an auto accident? (Choose from the following options) 1. The vehicle owner who does not have proof of financial responsibility 2. A named insured 3. A person outside the vehicle struck during the accident 4. A vehicle occupant injured in the accident who is not a named insured
The vehicle owner who does not have proof of financial
62. All of the following are perils covered under the broad form dwelling policy EXCEPT (Choose from the following options) 1. Lightning. 2. Collapse. 3. Theft. 4. Fire.
Theft
125. Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? (Choose from the following options) 1. Outdoor personal property of the insured 2. Supplies used for repair of the dwelling 3. Theft of a renter's lawnmower used to service the premises 4. Fire damage to building material on the premises
Theft of a renter's lawnmower used to service the premises
65. What is the business auto coverage territory for? (Choose from the following options) 1. United States only 2. United States and Mexico 3. United States and its territories, Canada, or worldwide for private passenger hired autos 4. Only for the specific location of the business
United States and its territories, Canada, or worldwide for private passenger hired autos
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT (Choose from the following options) 1. Up to $200 a day for loss of earnings due to attendance at hearings or trials. 2. Premiums on appeal bonds in any suit the insurer defends. 3. Up to $250 for bail bonds required because of a covered accident. 4. Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
131. The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as (Choose from the following options) 1. Implied warranty. 2. Utmost good faith. 3. Reasonable expectations. 4. A warranty.
Utmost good faith.
Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? (Choose from the following options) 1. A family cemetery plot 2. A lakeside cabin rented by the insured for vacation 3. Vacant farmland owned by the insured 4. A residence where an insured is temporarily residing
Vacant farmland owned by the insured
69. A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n) (Choose from the following options) 1. Specific risk policy 2. Valued policy. 3. Pro-forma appraisal policy. 4. Equitable sum policy.
Valued policy.
53. Which of the following is NOT one of the available additional coverages in the builders risk form? (Choose from the following options) 1. Fire department service charge 2. Pollutant cleanup 3. Vandalism 4. Debris removal
Vandalism
23. According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT (Choose from the following options) 1. When all property has been destroyed. 2. With loss of specie. 3. When insured is irretrievable deprived of all property, even though not destroyed. 4. When cargo is misplaced.
When cargo is misplaced.
119. A claim is considered to have been made (Choose from the following options) 1. When notice is received and recorded by any insured or the insurer, whichever comes first. 2. When received in writing or telephonically by the insurer. 3. When notice is received by any insured. 4. When notice is received and recorded by the insurer.
When notice is received and recorded by any insured or the insurer, whichever comes first.
17. When would uninsured motorist coverage apply? (Choose from the following options) 1. When the other party is legally liable but has no insurance 2. When the insured drives an uninsured car 3. When the insured is legally liable, but does not have sufficient coverage 4. When the insured is legally liable
When the other party is legally liable but has no insurance
89. Personal business property out in the open is covered under commercial property policy only while (Choose from the following options) 1. Specifically described on the declarations. 2. Within 150 feet of the described premises. 3. Within 100 feet of the described premises. 4. Located on the described premises.
Within 100 feet of the described premises
85. How soon after the due date should the insurer pay the agent appointment fees? (Choose from the following options) 1. Immediately 2. Within 10 days 3. Within 30 days 4. Within 60 days
Within 30 days
93. 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 (Choose from the following options) 1. Within 30 days. 2. Within 60 days. 3. As soon as practical. 4. Within 45 days.
Within 45 days.
37. Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce (Choose from the following options) 1. Without receiving written consent from a Federal Judge. 2. Without receiving written consent from an insurance regulatory authority. 3. Under any circumstances. 4. Unless they have served an appropriate prison sentence.
Without receiving written consent from an insurance regulatory authority.
123. An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage? (Choose from the following options) 1. Yes, employer liability obligates the company to pay. 2. No, accidents outside the company premises are not covered. 3. No, liquor liability is excluded. 4. Yes, none of the exclusions will apply.
Yes, none of the exclusions will apply.
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? Exclusions Declarations Insuring agreement Additional coverage
additional coverage
Crime insurance is usually written on what basis? (Choose from the following options) 1. Specific risk 2. Named peril 3. Closed risk 4. All-risk
all-risk
Which coverage form would provide coverage for all incoming and outgoing shipments? Mail coverage Annual transit Trip transit Motor truck cargo
annual transit
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority? (Choose from the following options) 1. Assumed 2. Apparent 3. Express 4. Implied
apparent
54. If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy? (Choose from the following options) 1. Umbrella policy 2. Excess policy 3. General liability policy 4. Auto policy
auto policy
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? Proximate cause Comparative negligence Relative degree of damage statute Contributory negligence
comparative negligence
Which of the following risks is eligible for coverage under a businessowners policy? (Choose from the following options) 1. Banks 2. Automobile dealers 3. Bars or taverns 4. Condominiums
condominiums
An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this? Consequential Direct Special Additional
consequential
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? (Choose from the following options) 1. Consideration 2. Good faith 3. Representation 4. Adhesion
consideration
99. Which of the following is considered to be a morale hazard? (Choose from the following options) 1. Smoking 2. Working as a firefighter 3. Engaging in illegal activities 4. Driving recklessly
driving recklessly
Which of the following is considered to be a morale hazard? Smoking Working as a firefighter Engaging in illegal activities Driving recklessly
driving recklessly
77. Which of the following is NOT a P&I exclusion? (Choose from the following options) 1. Excess coverage 2. Damage to hull and machinery 3. Commercial towing of other vessels 4. Detention of vessel
excess coverage
43. The authority granted to an agent through the agent's contract is referred to as (Choose from the following options) 1. Absolute authority. 2. Express authority. 3. Apparent authority. 4. Implied authority.
express authority
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? (Choose from the following options) 1. False advertising 2. Unfair claims 3. Twisting 4. Defamation
false advertising
Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license? (Choose from the following options) 1. Public drunkenness 2. Forgery 3. Speeding in an automobile 4. Trespassing through a neighbor's yard
forgery
41. What type of compensatory damages will pay for pain and suffering and disfigurement? (Choose from the following options) 1. Special (specific) 2. Tort 3. Normal 4. General
general
134. In farm insurance, Coverage I - Personal and Advertising Injury Liability for suits alleging personal injury is most similar to the coverage found in which coverage form? (Choose from the following options) 1. Personal auto 2. Dwelling 3. Umbrella liability 4. General liability
general liability
131. A BOP (businessowners policy) is most similar to (Choose from the following options) 1. Auto. 2. Umbrella. 3. Cargo. 4. Homeowners.
homeowners
8. A ranchowners policy is most similar to which of the following? (Choose from the following options) 1. Businessowners 2. Dwelling 3. Homeowners 4. Commercial Property
homeowners
Which of the following does a producer NOT have the authority to do? (Choose from the following options) 1. Negotiate contracts of insurance 2. Issue policies 3. Deliver policies 4. Solicit insurance contracts
issue policies
In a dwelling policy, which of the following is true regarding personal liability coverage? It does not cover medical payments to others. It is included in all dwelling policies. It is the same as in homeowners policies. It must be added as a supplement or written as a separate policy.
it must be added as a supplement or written as a separate policy
Which of the following is true regarding the fire department service charge under the builders risk form? It is a high-deductible endorsement. It is an additional coverage. It is an automatic coverage for $500. It is not available in this form.
its an additional coverage
120. Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use? (Choose from the following options) 1. Schedule 2. Merit 3. Judgment 4. Class
judgment
67. Which of the following is NOT an element of negligence? (Choose from the following options) 1. Unbroken chain 2. Libel 3. Duty 4. Breach
libel
136. What provision in a property policy applies when the insurer broadens coverage but does not increase the premium? (Choose from the following options) 1. Subrogation clause 2. Liberalization clause 3. Insuring clause 4. Appraisal clause
liberalization clause
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? Profit rating Components rating Loss costs rating Provision rating
loss costs rating
An insured is driving her automobile and strikes a large pothole that causes a flat tire. Which coverage of the insured's personal auto policy will pay for the repair? (Choose from the following options) 1. Comprehensive 2. Collision 3. Transportation expenses 4. Loss is not covered.
loss is not covered
A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy? Damage to the restaurant Spoilage of foods kept in storage Lost revenues from the restaurant Damage to the insured's auto
lost revenues from the restaurant
Rates that are established based on the similarities of the risk with other risks are known as Merit rates. Manual rates. Experience rates. "A" rates. Rates that are established by similarity of risk are manual rating or class rates.
manual rates
97. Which of the following events causing financial loss to an insured would not be covered under Federal Crop Insurance? (Choose from the following options) 1. Drought 2. Market price decline 3. Early freeze 4. Hail
market price decline
106. During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes (Choose from the following options) 1. Coercion. 2. Misrepresentation. 3. Defamation. 4. Twisting.
misrepresentation
48. A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard? (Choose from the following options) 1. Physical 2. Morale 3. Moral 4. Legal
morale
#142. 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? a) Governor b) Policyholder c) Mortgagee d) Insurance company
mortgagee
30. What other term is used to refer to unintentional torts? (Choose from the following options) 1. Tortfeasor 2. Hazard 3. Peril 4. Negligence
negligence
83. A home is insured under an HO-2 policy. The homeowner decides to replace the roof on the house. He wasn't able to complete the roof in one day and left a portion of it unfinished overnight. A heavy rainstorm caused $20,000 of damage to the interior of the house and some furniture. In this situation, the policy will pay (Choose from the following options) 1. 80% of replacement cost. 2. Nothing. 3. The ACV of the damage. 4. Replacement cost of the damage.
nothing
25. What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? (Choose from the following options) 1. Valid insurance 2. Nonconcurrency 3. Primary and excess 4. Other insurance
other insurance
121. If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT (Choose from the following options) 1. No-fault medical payments. 2. Liability. 3. Physical damage. 4. Uninsured motorist.
physical damage
35. All of the following are examples of risk retention EXCEPT (Choose from the following options) 1. Self-insurance. 2. Premiums. 3. Deductibles. 4. Copayments.
premiums
Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT (Choose from the following options) 1. Blueprints. 2. Deeds. 3. Historical records. 4. Prepackaged software.
prepackaged software
125. The party to a surety or fidelity bond who promises to fulfill the obligation is the (Choose from the following options) 1. Principal. 2. Custodian. 3. Surety. 4. Obligee.
principal
FAIR plans are provided by The NAIC. Private insurers. The federal government. The State.
private insurers
Under Section I, homeowners insurance must include Negligence coverage. Property coverage. Liability coverage. Immediate coverage.
property coverage
All of the following are considered parts of the policy structure EXCEPT (Choose from the following options) 1. Insuring clause. 2. Conditions. 3. Provisions. 4. Exclusions.
provisions
A situation in which a person can only lose or have no change represents (Choose from the following options) 1. Pure risk. 2. Speculative risk. 3. Adverse selection. 4. Hazard.
pure risk
Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as (Choose from the following options) 1. Unlawful distribution of dividends. 2. Coercion. 3. Rebating. 4. Twisting.
rebating
63. What method do insurers use to protect themselves against catastrophic losses? (Choose from the following options) 1. Indemnity 2. Pro rata liability 3. Risk management 4. Reinsurance
reinsurance
149. All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT (Choose from the following options) 1. Falling objects. 2. Weight of ice, snow, or sleet. 3. Water damage. 4. Replacement cost.
replacement cost
A business owner whose inventory changes significantly throughout the year should consider having coverage written on what type of form? Comprehensive form Reporting form Fluctuating inventory form Blanket form
reporting form
For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as (Choose from the following options) 1. A burglary. 2. False pretense. 3. Robbery. 4. A theft.
robbery
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called Participation requirement. Self-insured retention. Stop-loss. Coinsurance.
self insured retention
139. Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called (Choose from the following options) 1. Blanket coverage. 2. Described coverage. 3. Specific coverage. 4. Schedule coverage.
specific coverage
139. Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? (Choose from the following options) 1. Symbol 5 2. Symbol 6 3. Symbol 7 4. Symbol 9
symbol 5
Which of the following terms refers to a person's ability to do some work or the need to do alternative work? Temporary total disability Temporary partial disability Permanent partial disability Permanent total disability
temporary partial disability
Who is NOT considered an employee in a commercial general liability (CGL) policy? (Choose from the following options) 1. Temporary worker 2. Leased worker 3. Full-time worker 4. Part-time worker
temporary worker
Which clause provides coverage for the cargo while being transported to or from a vessel in another craft, raft, or lighter? The transportation clause The transit clause The craft clause The voyage clause
the craft clause
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? Because the insured is currently not a drug user, his policy will not be affected. The policy will not be affected. The policy will be voided. The insurer will sue the insured for committing fraud.
the policy will not be affected
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? They do not apply. They increase based on the state law. They decrease based on the state law. They do not change.
they do not change
#138. The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? a) Occurrence b) Direct damage c) Time element d) Claims made
time element
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for Collision coverage. Uninsured motorist coverage. Towing coverage. Comprehensive (other-than-collision) coverage.
uninsured motorist coverage
149. An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some of furniture and clothes in the house. From an insurance standpoint, the insured's house is considered (Choose from the following options) 1. Condemned. 2. Under repair. 3. Vacant. 4. Unoccupied.
unoccupied
150. A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n) (Choose from the following options) 1. Specific risk policy 2. Valued policy. 3. Pro-forma appraisal policy. 4. Equitable sum policy.
valued policy
A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n) Pro-forma appraisal policy. Equitable sum policy. Specific risk policy Valued policy.
valued policy
Which of the following losses would NOT be covered by a homeowners policy? (Choose from the following options) 1. A $550 utility trailer blown away by a tornado 2. A stolen silver tea set worth $2,000 3. A $800 outboard motor destroyed by hail 4. A coin collection valued at $500 lost in a fire
A coin collection valued at $500 lost in a fire
Which of the following best describes the unfair trade practice of defamation? (Choose from the following options) 1. Assuming the name and identity of another person 2. Issuing false advertising material 3. Refusing to deal with other insurers 4. Making derogatory oral statements about another insurer's financial condition
Making derogatory oral statements about another insurer's financial condition
Which of the following is the closest term to an authorized insurer? (Choose from the following options) 1. Certified 2. Licensed 3. Legal 4. Admitted
admitted
What type of bond guarantees that a construction contractor will enter into a contract at a set price? (Choose from the following options) 1. Maintenance bond 2. Bid bond 3. Performance bond 4. Payment bond
bid bond
A business uses its own trucks to deliver their own products to the customer. Which commercial auto coverage form should the business buy to insure the trucks? (Choose from the following options) 1. Motor carrier coverage 2. Business auto physical damage 3. Commercial carrier coverage 4. Truckers liability
motor carrier coverage
What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence? (Choose from the following options) 1. Common cause 2. Proximate cause 3. Concurrent causation 4. Indemnity
proximate cause
Installing deadbolt locks on the doors of a home is an example of which method of handling risk? (Choose from the following options) 1. Transfer 2. Self-insurance 3. Reduction 4. Avoidance
reduction
All of the following are factors in rating workers compensation insurance EXCEPT (Choose from the following options) 1. Payroll. 2. Loss experience. 3. Job classification. 4. Sales.
sales
All of the following are characteristics of the dwelling policy EXCEPT (Choose from the following options) 1. The dwelling must be owner-occupied. 2. Coverage includes the dwelling only, contents only, or both. 3. Incidental occupancy of limited service-type exposure is permitted. 4. Dwellings up to four family units are eligible.
the dwelling must be owner occupied
An insured has a standard HO-4 policy with a $30,000 limit of coverage for personal property. While he was traveling, a fire in his hotel destroys clothes and luggage with a replacement value of $10,000 and jewelry with a replacement value of $10,000. Disregarding any deductible, and assuming a depreciation of 20% has occurred in both properties, what amount is the insurer obligated to pay? (Choose from the following options) 1. $11,000 2. $16,000 3. $20,000 4. $30,000
16,000
A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days? (Choose from the following options) 1. 15 2. 20 3. 30 4. 10
30
Which of the following statements is true regarding the premium computation for workers compensation insurance? (Choose from the following options) 1. The premium basis for workers compensation insurance varies by the type of industry in which the insured is involved. 2. The insured pays a guaranteed premium based on an estimated value of the annual income received. 3. The premium is set at the beginning of the policy period and will not change. 4. A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.
A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.
A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called (Choose from the following options) 1. Premises coverage. 2. Claims-made form. 3. Bodily injury/property damage form. 4. Occurrence form.
Claims-made form.
Which crime coverage form is used to cover securities held in trust by another party as collateral for some obligation? (Choose from the following options) 1. Coverage K - Liability for Guests' Property - Safe Deposit Box 2. Coverage L - Liability for Guests' Property - Premises 3. Coverage M - Safe Depository Liability 4. Coverage J - Securities Deposited with Others
Coverage J - Securities Deposited with Others
Which of the following best describes a misrepresentation? (Choose from the following options) 1. Making a maliciously critical statement that is intended to injure another person 2. Discriminating among individuals of the same insuring class 3. Issuing sales material with exaggerated statements about policy benefits 4. Making a deceptive or untrue statement about a person engaged in the insurance business
Issuing sales material with exaggerated statements about policy benefits
Which of the following statements concerning the builders risk coverage form is correct? (Choose from the following options) 1. It may be written on a reporting form for the completed value of the structure. 2. It usually continues in effect for one year after completion of the structure. 3. It covers the interest of the builder only and cannot include coverage for the owner. 4. It may not be written for perils other than fire and extended coverage.
It may be written on a reporting form for the completed value of the structure.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are (Choose from the following options) 1. Not taxable since the IRS treats them as a return of a portion of the premium paid. 2. Paid at a fixed rate every year. 3. Taxable as ordinary income. 4. Guaranteed.
Not taxable since the IRS treats them as a return of a portion of the premium paid.
Who would participate in a Write Your Own (WYO) flood insurance program? (Choose from the following options) 1. Lloyd's associations 2. Government insurance companies that write and service National Flood Insurance policies 3. Businesses requiring National Flood Insurance policies 4. Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society? (Choose from the following options) 1. General 2. Compensatory 3. Specific 4. Punitive
Punitive
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must (Choose from the following options) 1. Respond to the consumer's complaint. 2. Defend the report if the agency feels it is accurate. 3. Change the report. 4. Send an actual certified copy of the entire report to the consumer.
Respond to consumer complaint
An insured's accounts receivable records have been damaged. The loss may be covered with (Choose from the following options) 1. The accounts receivable coverage form. 2. Commercial property insurance. 3. The commercial articles coverage form. 4. The valuable papers coverage form.
The accounts receivable coverage form.
All of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT (Choose from the following options) 1. This coverage provides an additional $2,500 amount of insurance. 2. This coverage limit pays in place of the limit of insurance shown in the declarations. 3. This coverage limit is payable in addition to the limit of insurance shown in the declarations. 4. This coverage is not subject to any deductible.
This coverage limit pays in place of the limit of insurance shown in the declarations.
Should an insurance company deny a claim submitted by an insured without providing to that insured a prompt and reasonable explanation of the claim denial, the insurer would be in violation of (Choose from the following options) 1. Twisting. 2. Fiduciary responsibilities. 3. Marketing practices provisions. 4. Unfair claims methods and practices regulations.
Unfair claims methods and practices regulations.
For how long must a company maintain a complete file of all advertisements used? (Choose from the following options) 1. 90 days after the advertisement is first used 2. 30 days after the advertisement expires 3. No more than 3 years 4. At least 4 years
at least 4 years
According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties (Choose from the following options) 1. Transfer to a legal representative after court appointment. 2. Die with the insured. 3. Are suspended until probate is completed. 4. Automatically transfer to a legal representative.
automatic transfer to a legal representative
A producer who fails to segregate premium monies from his own personal funds is guilty of (Choose from the following options) 1. Commingling. 2. Larceny. 3. Embezzlement. 4. Theft.
commingling
All of the following are conditions commonly found in the insurance policy EXCEPT (Choose from the following options) 1. Subrogation. 2. Appraisal. 3. Insuring agreement. 4. Cancellation and nonrenewal.
insuring agreement
If an employer in a state with elective workers compensation laws chooses not be to subject to those laws, what does the employer lose? (Choose from the following options) 1. Its common law defenses against liability suits 2. Its ability to provide group health insurance 3. Its right to hire persons with disabilities 4. Its eligibility for workers compensation insurance
it common law defenses against liability suits
What type of coverage does a homeowners policy include that a dwelling policy does not? (Choose from the following options) 1. Other structures 2. Broad form 3. Liability 4. Personal property
liability
An individual has started a construction business and plans to specialize in remodeling and rewiring residential properties. Because the city where he is located and where he plans to operate the business has building codes, he will need to obtain a (Choose from the following options) 1. License and permit bond. 2. Bid bond. 3. Performance bond. 4. Completion bond.
license and permit bond
Which of the following is NOT a contract bond? (Choose from the following options) 1. Performance bond 2. Maintenance bond 3. Bid bond 4. Litigation bond
litigation bond
Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT (Choose from the following options) 1. Self-insurance plans. 2. Assigned risk plans. 3. Competitive state funds. 4. Second injury funds programs.
second injury funds program
Hazard is best defined as (Choose from the following options) 1. A deliberate attempt to deceive. 2. Something that increases the risk of loss. 3. The uncertainty of loss. 4. Neglect to communicate a material fact.
something that increases the risk of loss
Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss? (Choose from the following options) 1. Protective safeguards 2. Utility service - direct damage 3. Utility service - time element 4. Extra expense
utility service- direct damage
When a parent is required to pay for damages caused by his or her children, this is an example of (Choose from the following options) 1. Assumption of risk. 2. Vicarious liability. 3. Strict liability. 4. Intervening cause.
vicarious liability
Under the business auto coverage form, mobile equipment is covered for liability insurance (Choose from the following options) 1. When coverage is written as Symbol 1. 2. When being carried or towed by a covered auto. 3. On an excess basis. 4. When listed on the declarations.
when it is being carried or towed by a covered auto
A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil? (Choose from the following options) 1. $500,000 2. $750,000 3. $1 million 4. $5 million
1 million
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? (Choose from the following options) 1. Product liability 2. Completed operations 3. Personal and advertising injury liability 4. Premises and operations
3. Personal and advertising injury liability
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within (Choose from the following options) 1. 15 days. 2. 30 days. 3. 3 days. 4. 7 days.
30 days.
Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? (Choose from the following options) 1. $1,000 2. $5,000 3. $10,000 4. $25,000
5,000
If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss? (Choose from the following options) 1. $8,000 2. $0 3. $20,000 4. $12,000
8,000
In order for a foreign insurer to do business in this state, it must apply for and obtain (Choose from the following options) 1. A nonresident insurer license. 2. NAIC approval. 3. A certificate of authority. 4. A solvency certificate.
A certificate of authority.
Which of the following statements regarding coverage for the flood and earthquake perils is true? (Choose from the following options) 1. Flood and earthquake coverage is available only through government insurance. 2. Flood insurance is usually provided in property policies, but earthquake coverage is available by endorsement only. 3. Both flood and earthquake are excluded perils in all property policies. 4. Flood and earthquake coverage is available in all policies.
Both flood and earthquake are excluded perils in all property policies.
The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay? (Choose from the following options) 1. Company A will pay $24,000; Company B will pay $0. 2. Company A will pay $16,000; Company B will pay $8,000. 3. Company A will pay $20,000; Company B will pay $4,000. 4. Company A will pay $12,000; Company B will pay $12,000.
Company A will pay $16,000; Company B will pay $8,000.
Which of the following is a statutory defense? (Choose from the following options) 1. Assumption of risk 2. Intervening cause 3. Contributory negligence 4. Comparative negligence
Comparative negligence
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of (Choose from the following options) 1. Misrepresentation. 2. Fraud. 3. Warranty. 4. Concealment.
Concealment
CGL Coverage B (Personal and Advertising Injury) will cover (Choose from the following options) 1. Inadvertent injury to others caused in the course of advertising the insured's product. 2. The failure of goods to conform to advertised quality or performance. 3. Oral or written publication of material the insured knows is false. 4. An offense committed by an insured whose business is advertising.
Inadvertent injury to others caused in the course of
Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? (Choose from the following options) 1. Bid bond 2. Payment bond 3. Performance bond 4. Supply bond
Payment bond
HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year? (Choose from the following options) 1. Peak season 2. Value reporting 3. Spoilage 4. Inventory increase
Peak season
Which of the following terms refers to a person's ability to do some work or the need to do alternative work? (Choose from the following options) 1. Temporary total disability 2. Temporary partial disability 3. Permanent partial disability 4. Permanent total disability
Temporary partial disability
Which of the following exposures is insured under Coverage I - Personal and Advertising Injury Liability? (Choose from the following options) 1. Failure of goods to perform 2. Statements made by an insured during their farm radio show 3. Breach of a written contract 4. Unintentional acts arising from the operation of a farming business
Unintentional acts arising from the operation of a farming business
Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant? (Choose from the following options) 1. Public adjuster 2. Public adjuster solicitor 3. Producer 4. Broker
producer
While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? (Choose from the following options) 1. Property damage liability 2. Collision coverage 3. Other-than-collision coverage 4. This loss would not be covered.
property damage liability
The requirement that agents not commingle insurance monies with their own funds is known as (Choose from the following options) 1. Accepted accounting principal. 2. Fiduciary responsibility. 3. Premium accountability. 4. Express authority.
fiduciary responsibility
Which of the following will be covered by aviation hull insurance? (Choose from the following options) 1. Cargo inside the plane 2. Airport premises 3. Crew members 4. Fuselage and wings
fuselage and wings
Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included? (Choose from the following options) 1. Loss resulting from the insured's release of any other negligent party from their legal liability 2. Damage caused by inherent vice, insects, animals, wear and tear, and gradual deterioration 3. Loss resulting from acts of employee dishonesty 4. Liability assumed under a written agreement
loss resulting from acts of employee dishonesty
How soon after the due date should the insurer pay the agent appointment fees? (Choose from the following options) 1. Immediately 2. Within 10 days 3. Within 30 days 4. Within 60 days
within 30 days
An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? (Choose from the following options) 1. $5,000 minus the policy deductible 2. $14,000 3. $15,000 4. $5,000 maximum for the accident
14,000
The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true? (Choose from the following options) 1. All eruptions are considered separate occurrences no matter how close together. 2. Coverage for each volcanic eruption would require a separate deductible. 3. All volcanic eruptions within a 72-hour period will be considered one occurrence.
All volcanic eruptions within a 72-hour period will be considered one occurrence.
Which of the following authorities is authorized to issue a temporary insurance producer's license? (Choose from the following options) 1. Federal Insurance Licensing Association 2. State Insurance Board 3. Commissioner 4. NAIC
Commissioner
In order to reject uninsured motorist coverage, the first named insured must make the rejection (Choose from the following options) 1. Orally to the producer who wrote the application. 2. Orally to the insurer that issued the policy. 3. Uninsured motorist coverage is not included on a policy unless specifically requested, in writing. 4. In writing at the time of application.
In writing at the time of application.
Which of the following statements is NOT true regarding a personal umbrella liability policy? (Choose from the following options) 1. It provides errors and omissions coverage for an agency. 2. It may cover certain exposures not provided under the primary layer. 3. It may require the payment of a self-insured retention. 4. It provides excess liability coverage over underlying personal liability.
It provides errors and omissions coverage for an agency.
. Robbery is (Choose from the following options) 1. Taking of property by use of force, violence, or fear. 2. Taking of property without causing property damage or bodily harm. 3. Any act of stealing. 4. Taking of property from within the premises leaving visible signs of forced entry.
Taking of property by use of force, violence, or fear.
. According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when (Choose from the following options) 1. The insurer is not licensed to write workers compensation in that state. 2. The state has a monopolistic workers compensation fund. 3. The insured expects to extend operations to that state. 4. The insured has operations in the state where the policy is written.
The insured expects to extend operations to that state.
The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT (Choose from the following options) 1. The insured's child sustains injuries when the car she is in accidentally rolls down a hill. 2. A friend is injured while driving the insured's vehicle with permission. 3. The insured is injured while exiting a friend's mobile home. 4. The insured is injured by a motor vehicle while crossing the street.
The insured is injured while exiting a friend's mobile home.
Which of the following would NOT be considered an unfair and deceptive practice? (Choose from the following options) 1. Controlled business 2. Rebating 3. Defamation 4. Misrepresentation
controlled business
Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period? (Choose from the following options) 1. Retro form 2. Reporting form 3. Loss sustained form 4. Discovery form
discovery form
The American Institute's Hull Clause for the Return of Premium will apply if a vessel has been laid up in port not under repair, and not used for storage. The premium will be returned for (Choose from the following options) 1. Each 30-day period. 2. The first 10 days only. 3. The first 30 days only. 4. Each 10-day period.
each 30 day period
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 (Choose from the following options) 1. Unfair claim practice. 2. Rebating. 3. Misrepresentation. 4. Concealment.
misrepresentation
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 (Choose from the following options) 1. A mutual insurer. 2. A reciprocal company. 3. A fraternal insurer. 4. A stock company.
mutual insurer
. Transportation expenses are covered under a personal auto policy for (Choose from the following options) 1. $25 per day, for a maximum of $500. 2. $50 per day, for a maximum of $500. 3. $50 per day, for a maximum of $750. 4. $20 per day, for a maximum of $600.
$20 per day, for a maximum of $600.
If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state? (Choose from the following options) 1. 90 2. 180 3. 30 4. 60
90
Which of the following would NOT be considered a misrepresentation on the part of the insurer? (Choose from the following options) 1. Embellishing the benefits provided in the policy 2. Overstating returns on policy dividends 3. Backdating policies to secure a lower premium for the insured 4. Implying that term insurance has cash value
Backdating policies to secure a lower premium for the insured
. An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined? (Choose from the following options) 1. Benefits will be provided if the state was listed on the policy information page. 2. The legal system will determine which state's benefits apply to this particular loss. 3. The state's benefits that pay the lowest amount will be selected by the insurance company. 4. The employee may elect to receive benefits from both the home state and the state in which the injury occurred.
Benefits will be provided if the state was listed on the policy information page.
Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? (Choose from the following options) 1. Damage to the dwelling caused by ash or dust from a volcanic eruption 2. Damage to the dwelling caused by the insured when moving furniture 3. Accidental scorching caused when a hot iron is placed upon a built-in counter top 4. Interior damage caused by water seeping under the shingles on the roof
Damage to the dwelling caused by ash or dust from a volcanic eruption
Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners? (Choose from the following options) 1. Vendor's single interest policy 2. Bailee's customer policy 3. Furriers block policy 4. Personal property coverage part
bailee's customer policy
Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as (Choose from the following options) 1. Cessation. 2. Cancellation. 3. Rescission. 4. Nonrenewal.
cancellation
Which of the following is NOT found in a commercial package policy? (Choose from the following options) 1. Common policy declarations 2. Interline endorsements 3. Certificate of authority 4. Common policy conditions
certificate of authority
The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? (Choose from the following options) 1. Computer fraud 2. Money orders and counterfeit paper currency 3. Other crime coverage 4. Outside premises
computer fraud
The part of a policy that clarifies terms in the policy is the (Choose from the following options) 1. Conditions. 2. Exclusions. 3. Definitions. 4. Insuring agreement.
definitions
A beauty parlor burns to the ground. What type of loss is this to the owner? (Choose from the following options) 1. Consequential 2. Specific 3. Consecutive 4. Direct
direct
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean? (Choose from the following options) 1. Coverage is automatic. 2. There is no coverage. 3. Coverage applies without premium. 4. This must be a misprint on the form.
there is no coverage
What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy? (Choose from the following options) 1. $15,000 all expenses incurred during a 12-month period 2. $20,000 all expenses incurred during a 12-month period 3. $5,000 for all expenses incurred during a 12-month period 4. $10,000 for all expenses incurred during a 12-month period
$10,000 for all expenses incurred during a 12-month period
The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to (Choose from the following options) 1. $150,000. 2. $200,000. 3. $250,000. 4. $100,000.
$250,000.
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? (Choose from the following options) 1. $3,000 would be paid under other-than-collision; $3,000 would be paid under collision coverage. 2. $6,000 would be paid under collision coverage. 3. This would not be a covered loss. 4. $6,000 would be paid under other-than-collision coverage.
$6,000 would be paid under other-than-collision coverage.
What is the purpose of the coinsurance clause found in property insurance policies? (Choose from the following options) 1. Ensure that insureds do not overinsure their property 2. Prevent insureds from profiting from a loss 3. Encourage the insured to insure the property closer to its full value 4. Encourage higher standards of care by requiring the insured to pay a portion of every
Encourage the insured to insure the property closer to its full value
Which of the following watercraft will NOT be covered by business liability insurance? (Choose from the following options) 1. Nonowned watercraft 50 feet long used for transporting personal property of the insured 2. Owned watercraft 53 feet long 3. An auto parked at the insured's premises 4. Watercraft while on shore at a premises owned by the insured
owned watercraft 53 feet long
What is the major difference between a stock company and a mutual company? (Choose from the following options) 1. Types of whole life policies 2. Ownership 3. Amount of death benefit 4. Number of producers
ownership
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? (Choose from the following options) 1. General 2. Special 3. Tort 4. Normal
special
Which of the following would determine minimum and maximum limits for FAIR plan rates? (Choose from the following options) 1. Individual insurers 2. The State 3. The federal government 4. The NAIC
the state
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 (Choose from the following options) 1. Within 60 days. 2. As soon as practical. 3. Within 45 days. 4. Within 30 days.
within 45 days
Liability imposed on one party as a result of the actions of another person is known as (Choose from the following options) 1. Strict liability. 2. Absolute liability. 3. Vicarious liability. 4. Comparative negligence.
. Vicarious liability.
All of the following violations may result in an agent's imprisonment EXCEPT (Choose from the following options) 1. Engaging in the business of insurance after being convicted of breach of trust. 2. Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction. 3. Embezzling funds from the insurer. 4. Knowingly obtaining information about a consumer under false pretenses.
Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction.
To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form? (Choose from the following options) 1. MCS-80 2. Garage 3. MCS-70 4. MCS-90
MCS-90
All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT (Choose from the following options) 1. Imprisonment. 2. License revocation. 3. Re-examination. 4. A monetary fine.
Re-examination
A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely? (Choose from the following options) 1. The homeowner will need to get written consent from the insurer before the policy can be reassigned. 2. The policy will have to be cancelled. 3. The homeowner should let the friend take over the premium payments. 4. The friend will have to apply for coinsurance from another insurance company.
The homeowner will need to get written consent from the insurer before the policy can be reassigned.
Which of the following would NOT be compensable under Workers Compensation insurance? (Choose from the following options) 1. Jim's hand is caught in a drill press and one of his fingers is severed. 2. Pete works as a roofer. Today Pete accidentally falls from a ladder and breaks his arm. 3. After working for an insulation company for 30 years, Joe is diagnosed with mesothelioma (cancer caused from exposure to asbestos). 4. While working in his office, Bill suffers a heart attack.
while working in his office, bill suffers a heart attack
