prop and casualty
A professional who wants coverage for all liability exposures should purchase what form of liability insurance? (Choose from the following options) 1. Directors and officers 2. Fiduciary and employment practices 3. Employee benefits 4. Commercial general and professional
Commercial general and professional
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?
60 days
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. what is the company guilty of.
misrepresentation
what is controlled business
insurance on the producers own/family/business associates life, or property
what provision defines how a policy will respond if there is more than one insurance policy written on the same risk
other insurance
coverage E
pays additional living expenses incurred following a covered loss
what types of entities can be insured under a general liability policy
sole proprietors, partnerships and corporations
wagering on a sporting event is known as what type of risk
speculative risk
what type of insurance company organized to return any profits to its stockholders is known as what
stock company
if a manufactured product is unsafe, what type of liability applies to the manufacture
strict liability
which type of misrepresentation persuades an insured to his detriment, to cancel,lapse,or switch policies from one to another
twisting
for the purpose of insurance what is risk
uncertainty of loss
what is the name of the process insurers use to determine whether or not a policy should be issued and on what terms and conditions
underwriting
insurance contracts are aleatory in nature. what does that mean
unequal values are exchanged between the parties to a contract
liability imposed on one party as a result of the actions of another person is known as
vicarious liability
what does the exclusions section of a policy specify
what perils are not insured against, or what persons are not covered
when does PRO RATA liability apply
when an insured has more than one policy covering a loss
when is controlled business legal
when commissions from controlled business do not exceed the aggregate commissions on all other business
in insurance contracts when is the offer usually made
when the application is submitted
in insurance contracts, when does acceptance usually occur
when the insurer approves a prepaid application
when can the commisioner or director examine insurers
whenever deemed necessary. atleast once every few years
self-insuring is typically used for what type of insurance
workers compensation
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
Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days?
60 days
Workers compensation laws provide all of the following types of benefits EXCEPT
Compensatory benefits.
According to the Federal Crop Insurance definitions, all of the following cereal grains are classified as "small grains" EXCEPT (Choose from the following options) 1. Wheat 2. Barley 3. Corn 4. Oats
Corn
what is burglary
FORCED ENTRY into another premises with felonious intent
In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT
If the policy is cancelled by the insured.
what are the two types of compensatory damages
SPECIAL AND GENERAL
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
Second injury funds programs.
In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the
Situs and status test.
What are the two types of compensatory damages? (Choose from the following options) 1. Pure and speculative 2. Tort and general 3. Normal and punitive 4. Special and general
Special and general
An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?
$30,000 This insured only carried 75% of the amount of insurance he had agreed to carry ($120,000 of the agreed $160,000), so the insurer will pay only 75% of the loss, or $30,000.
what are the coverage parts that may be included in a commercial package policy (CPP)
-COMMERCIAL PROPERTY -GENERAL LIABILITY -CRIME -EQUIPMENT BREAKDOWN -AUTO -INLAND MARINE -FARM
what components make up a commercial policy
-policy cover -policy declarations -interlines endorsements -lines of insurance declaration page -lines of insurance coverage forms -common policy conditions -lines of insurance conditions -causes of loss forms -endorsements
. 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
what is additional coverage in an insurance policy
A PROVISION adds more coverage for a specific loss at no additional premium
Professional photographers and musicians may insure their equipment with (Choose from the following options) 1. A theatrical property coverage form. 2. A contractors equipment floater. 3. An installation floater. 4. A commercial articles floater.
A commercial articles floater
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. Nothing 2. A waiver 3. A special provisions endorsement 4. A disclaimer
A special provisions endorsement
The authority granted to an agent through the agent's contract is referred to as (Choose from the following options) 1. Apparent authority. 2. Implied authority. 3. Absolute authority. 4. Express authority.
Express authority.
Which of the following will be covered by aviation hull insurance? (Choose from the following options) 1. Crew members 2. Fuselage and wings 3. Cargo inside the plane 4. Airport premises
Fuselage and wings
Which of the following statements is NOT true regarding a personal umbrella liability policy?
It provides errors and omissions coverage for an agency.
can insurers advertise the existence of the guaranty association during solicitation and sale of insurance policies
NO, advertising the existence of the guaranty association for the purpose of solicitation or sale of insurance is illegal
what is the difference between a personal injury and an advertising injury
PERSONAL INJURY- refers to the individual ADVERTISING INJURY-refers to the business. both are non physical injuries
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept? (Choose from the following options) 1. Reasonable expectations 2. Cease and desist 3. Nonforfeiture 4. Indemnity
Reasonable expectations
Under Crime Coverage Form I - Lessees of Safe Deposit Boxes, securities are only covered in the event of
Theft
The type of insurance used to cover goods for one specific trip is called (Choose from the following options) 1. Motor truck cargo policy. 2. Trip transit. 3. Commercial property. 4. Bailee policy.
Trip transit.
whats the differenct between vacancy and unoccupancy
VACANCY-insureds structure in which no one has been living or working and no property is stored. UNOCCUPANCY- no people living in the structure but there is property stored.
Which of the following would be covered by the broad theft endorsement on a dwelling policy?
a camera the insured has with him on vacation
what are the most common penalties for violations of insurance statutes
a cease and desist order,a fine, and license suspention
what is a deductible in an insurance policy
a specific dollar amount that the insured must pay before the insurer will pay the policy benefits
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
a specific time
what is a binder
a temp insurance contract that goes in effect prior to the policy issue
what is a commercial floater
an inland marine policy designed to cover movable commercial property wherever it may be located
a liability policy that covers all claims arising out of inidents occuring during the policy period regardless of whether or not the policy is still in effect at the time of claim is known as
an occurence policy
how do the courts treat ambiguous insurance contracts
any ambiguity in an insurance contract is interpreted in the FAVOR OF INSURED
what is the difference between cancellation and nonrenewal
cancellation is the termination of a policy prior to the policies experation date. nonrenewal is the termination of a policy at its expiration date by not offering continuation of the policy.
if the commissioner/superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued
cease and desist order
what document is required for an insurance company to transact insurance
certificate of authority
in commercial inland marine policies, who transports the property of anyone who hires them
common carriers
what section personalizes an insurance policies
declarations
if a producer makes maliciously critical statements about another insurer, what is this illegal practice called
defamation
what are 2 coverage triggers in commercial crime policies
discovery form and loss sustained form
two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor
discrimination
what is negligence
failure to act reasonable under given circumstances
the requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility
fiduciary
The requirement that agents not commingle insurance monies with their own funds is known as
fiduciary responsibilities
in commercial property policies, who has control of the policy,and who can cancel it
first named insured
an insurance company is domiciled in california and transacts insurance in nevada. what is the insurers classification in nevada
foreign
what type of insurer is formed under the laws of another state
foreign
conditions that increase the chance of loss are known as what
hazards
when is an appraisal needed and how can it be requested
if the insured and insurer disagree about the value of the property loss. either party can make a written demand
what does coverage A of the commercial general liability (CGL) form provide coverage for
injury or death suffered by a third party, or damage to the property of other
what is subrogation
insurerers legal right to seek damages from third parties after reimbursing insureds for a loss
what part of an insurance policy contains the insurers promise to pay a claim
insuring agreement
In a dwelling policy, which of the following is true regarding personal liability coverage?
it must be added as a supplement or written as a seperate policy
what illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is
misrepresentation
what does an endorsement do to an insurance contract
modifies the policys original terms
an insurance policy is a non taxable dividend to the insured one year, and nothing the next. from what type of insurer did the insured purchase the policy
mutual
a policy that covers all causes of loss exept those specifically excluded is known as what type of policy
open peril or (SPECIAL) form
what is the term for the causes of loss insured against in an insurance policy
peril
what term defines an exact,direct,and uninterupted cause of loss
proximate cause
a situation in which a person can experience only a loss and no gain presents what type of risk
pure risk
in property insurance what is the actual cash value
replacement cost at the time of the loss minues depreciation
what provision found in property policies prevents an insured from collecting twice on the same loss; once from the insurer and again from a third party
subrogation
Under a dwelling policy, which of the following is NOT a factor in determining a loss?
the amount negotiated by the insured
what is the occurrence form trigger based one
the date of the injury or damage
which of the following is NOT a characteristic of an insurable risk
the loss must be catastophic
what are policy limits
the max amount an insured may collect for a loss under the terms of the policy
what does the principle of utmost good faith imply
there is no fraud, misrepresentation, or concealment between the parties
what is the purpose of a cease and desist order
to prevent a producer or insurer from further violating laws and transacting insurance
what is the purpose of the insurance guaranty associations
to protect policyowners,insureds,and beneficiaries from financial losses caused by insolvent insurers
what does indemnify mean in insurance
to restore an insured to the same financial status as before a loss
when would a misrepresentation on an insurance application be considered fraud
when it is intentional or material
A grave marker was damaged by vandals. It would cost $3,000 to have the damage repaired. Under these circumstances, how much would a homeowners policy pay?
$3,000
The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?
1 year
Which of the following would be considered an insured under a business auto coverage form?
Anyone while using, with permission, a covered auto owned by the named insured
The major portion of the premium for an equipment breakdown policy pays (Choose from the following options) 1. For repairs after a loss. 2. For coverage for bodily injury and property damage of others. 3. For replacement parts. 4. For inspections and examinations.
For inspections and examinations.
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. Drive other car 2. Additional insured - lessor 3. Hired autos specified as covered autos you own 4. Individual named insured
Individual named insured
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. Commercial carrier coverage 2. Truckers liability 3. Motor carrier coverage 4. Business auto physical damage
Motor carrier coverage
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? (Choose from the following options) 1. Nonprofit service organization 2. Stock 3. Mutual 4. Reciprocal
Mutual
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
if an insured peril was the proximate cause of loss what type of loss is it.
direct
what type of licensee represents the insurance company
agent
what are three types of agent authority
express, implied and apparent
who owns stock companys
stockholders
what process is used to settle a casualty claim when the insured and the insurer cannot agree
arbitration
Which of the following describes the transfer of a legal right or interest in an insurance policy?
assignment
in property insurance, when must insurable interest exist
at the time of loss
if an insured meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer
authorized or admitted
what are the methods in managing risk
avoidence,transfer,sharing,retention,and reduction
how are supplementary payments pain in liability insurance policies
in addition to the limits of liability
what insurance principle does pro rata liability protect
indemnity
what provision states that if a policy allows for greater benefits that the financial loss incurred,the insured may be compensated only for the amount lost
indemnity
an insureds business is damaged by fire and temp shut down for repairs. as a result the insured suffers loss of income. what type of loss is the loss of income.
indirect loss or consequential loss
Which of the following lists all the required elements for establishing a charge of negligence?
-legal duty owed -breach of legal duty owed -proximate clause -damages
. Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to
2 weeks
Which of the following persons is required to hold a producer license? (Choose from the following options) 1. A person who administers employee benefits 2. A person who negotiates insurance contracts 3. A person who creates insurance advertisements 4. A person who takes messages related to claims
A PERSON WHO NEGOTIATES INSURANCE CONTRACTS
Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis?
DP-1
The part of a policy that clarifies terms in the policy is the (Choose from the following options) 1. Definitions. 2. Insuring agreement. 3. Conditions. 4. Exclusions.
Definitions.
. In liability insurance policies, supplementary payments are made
In addition to the limit of liability.
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become (Choose from the following options) 1. More active. 2. Larger. 3. Smaller. 4. Older.
Larger.
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
Which of the following is NOT a contract bond? (Choose from the following options) 1. Bid bond 2. Litigation bond 3. Performance bond 4. Maintenance bond
Litigation bond
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 building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true?
Payment for unnamed perils is reduced by 25%.
who is an insurance agent
a person authorized to sell solicit and negotiate insurance contracts
what are an insurers obligations in P&C insurance
be fair in underwriting and pay for covered losses
what type of policy insures all property at multiple locations for a single amount
blanket policy
what type of licensee represents the insured
broker
Which of the following is true of dwelling policy coverage? (Choose from the following options) 1. Special forms only have special exclusions. 2. Exclusions apply to all three policy forms. 3. Exclusions only apply to broad policy forms. 4. There are no exclusions in basic forms.
Exclusions apply to all three policy forms.
Which of the following regulatory authorities participated in creating the National Do Not Call Registry? (Choose from the following options) 1. NAIC 2. BBB 3. FTC 4. SEC
FTC
Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? (Choose from the following options) 1. Manuscripts 2. Works of art or antiques 3. Valuable papers and records 4. Property of others
Valuable papers and records
what is consideration on the part of the insurer
a promise to pay in the event of a loss
in P&C policies what is required for an assignment to be valid
a written consent of the insurer
if an insurer holds a certificate of authority, it is known as what type of insurer
authorized or admitted
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? (Choose from the following options) 1. Alien 2. Nonadmitted 3. Foreign 4. Domestic
Foreign
All of the following are licensing requirements for a business entity, EXCEPT (Choose from the following options) 1. Demonstrating general fitness, competence, and reliability. 2. Maintaining on staff at least 1 licensed person in good standing. 3. Applying for a license in the same lines of authority as held by licensed designees. 4. Having all employees complete continuing education courses once every 2 years.
Having all employees complete continuing education courses once every 2 years.
what law protects consumers from the circulation of inaccurate or obsolete info.
fair credit reporting act
who must be notified of a producers change of address
the DEPARTMENT OF INSURANCE commissioner/director/superintendent
In which of the following situations would off-premises coverage in a broad theft endorsement apply?
the insureds camera is stolen from his vacation home while he is there
who is responisble for the cost associated with the examination of the insurers
the insurer who is being examined
both robbery and burglary can be considered what
theft
whats the broadest coverage in the commercial crime form
theft coverage
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy?
theft of a renters lawnmower used to service the premises
to whom may a certificate of authority be issued
to an insurer authorized to transact business in this state
in property insurance what is the purpose of coinsurance clause
to encourage insureds to insure property close to its value
whats the purpose of a claims made form
to pay for bodily injuries or property damage reported during the policy period
In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records? (Choose from the following options) 1. $2,000 2. $5,000 3. $10,000 4. $100,000
$5,000
Which of the following is the closest term to an authorized insurer?
Admitted
A situation in which a person can only lose or have no change represents (Choose from the following options) 1. Speculative risk. 2. Adverse selection. 3. Hazard. 4. Pure risk.
Pure Risk
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
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 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.
Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT (Choose from the following options) 1. An agent offers the use of his lake house to person as an inducement to buy. 2. An agent offers to share his commission with a policyholder. 3. An agent offers tickets to a baseball game as an inducement to buy insurance. 4. An agent misrepresents policy benefits to convince a policyowner to replace policies.
An agent misrepresents policy benefits to convince a policyowner to replace policies.
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
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. Workers classification factor 2. Merit rating plan 3. Arbitration plan 4. Experience modification factor
Experience modification factor
With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT (Choose from the following options) 1. Immediately report to an emergency room for medical examination. 2. Notify the insurer as soon as possible with a description of the accident. 3. Protect the insured auto from further damage. 4. Promptly contact the police if the accident was a hit-and-run.
Immediately report to an emergency room for medical examination.
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. Profit rating 2. Components rating 3. Loss costs rating 4. Provision rating
Loss costs rating
Which of the following watercraft will NOT be covered by business liability insurance? (Choose from the following options) 1. An auto parked at the insured's premises 2. Watercraft while on shore at a premises owned by the insured 3. Nonowned watercraft 50 feet long used for transporting personal property of the insured 4. Owned watercraft 53 feet long
Owned watercraft 53 feet long
Which of the following is an example of apparent authority of an agent appointed by an insurer?
The agent accepts a premium payment after the end of the grace period.
The amount an insurer will pay under Coverage D (Loss of Use) depends on
The amount of coverage on the dwelling.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 Days
Which of the following definitions best defines the term "accident"? (Choose from the following options) 1. Physical damage to tangible property of others caused by the negligence of an insured 2. The negligent or purposeful act or omission by an insured that results in physical trauma or death to a person 3. A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended 4. Injury to the character of another person caused by libel, slander, false arrest, invasion of privacy and other acts
A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended
Which of the following is the federal body that regulates truckers who travel across state lines? (Choose from the following options) 1. Truckers and Trade Commission 2. Federal Trade Commission 3. Federal Motor Carrier Safety Administration 4. Motor Carriers Commerce Agency
Federal Motor Carrier Safety Administration
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. Primary and excess 2. Other insurance 3. Valid insurance 4. Nonconcurrency
Other insurance
Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? (Choose from the following options) 1. Legal action against the insurer 2. Privilege to adjust with the owner 3. Transfer of rights of recovery 4. Reinstatement of limit
Privilege to adjust with the owner
Which of the following terms describes a reduced or limited amount of coverages, other than the combined single limit, that is available to pay claims resulting from passenger bodily injury? (Choose from the following options) 1. Limited liability 2. Sublimit 3. Smooth limit 4. Lower limit
Sublimit
The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks?
The difference in the actual cash value as a pair and as a single
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.
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?
Proximate cause
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? (Choose from the following options) 1. The change must be reported to the Commissioner. 2. The change must be reported to the Federal Producer's Directory. 3. The licensee must obtain a new license. 4. 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.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? (Choose from the following options) 1. Coercion 2. Misrepresentation 3. False advertising 4. Defamation
False advertising
Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this?
Fiduciary capacity
Dwelling coverage includes all of the following EXCEPT
land on which the dwelling is located
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?
$1 million
What is a binder? (Choose from the following options) 1. Written evidence showing the amounts and types of insurance provided by an insurance policy or policies that have been issued 2. A temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued 3. A contract for lease of premises 4. A condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure
A temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued
Which insurers are required to participate in the Pennsylvania Automobile Insurance Plan (Assigned Risk Plan)? (Choose from the following options) 1. All domestic insurers 2. Only those that volunteer to provide coverage 3. All insurers authorized to write insurance in the state 4. All insurers authorized to write auto liability insurance in the state
All insurers authorized to write auto liability insurance in the state
commercial property coverage can be written with one of three causes of loss forms. what are they
BASIC, BROAD, and SPECIAL
Which of the following would be included in the farm liability coverage forms? (Choose from the following options) 1. Bodily injury to an employed farmhand 2. Bodily injury to a residence employee 3. Any obligation of the insured under a workers compensation law 4. Bodily injury to any person who is an insured
Bodily injury to a residence employee
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 that was intentionally self-inflicted 2. Injury incurred while the person was under the influence of drugs or alcohol 3. Injury incurred while attempting to elude apprehension by a law enforcement official 4. Injury incurred during the commission of a felony
Injury incurred while the person was under the influence of drugs or alcohol
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. Losses will be paid to the mortgagee and mortgagor as their interest appears. 2. Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness. 3. The mortgagee must settle with the mortgagor in the event of a loss. 4. The additional premium required for the mortgage endorsement must be paid by the mortgagee.
Losses will be paid to the mortgagee and mortgagor as their interest appears.
under absolute liability does an injured party need to prove negligence
NO. absolute liability exists when a condition or conduct is inherently dangerous,so proof of negligence isnt needed
Which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis?
Nonconcurrency
Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms? (Choose from the following options) 1. None 2. HO-2 3. HO-3 4. HO-5
None
Who would participate in a Write Your Own (WYO) flood insurance program? (Choose from the following options) 1. Businesses requiring National Flood Insurance policies 2. Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis 3. Lloyd's associations 4. Government insurance companies that write and service National Flood Insurance policies
Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
. Which 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
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
The insured has violated the contract without the knowledge of the mortgage holder. After a loss (Choose from the following options) 1. The pro rata liability clause applies. 2. The insured cannot collect but the mortgage holder will still be paid. 3. Neither the insured nor the mortgage holder will be paid. 4. Both the insured and mortgage holder will be paid.
The insured cannot collect but the mortgage holder will still be paid.
what does the term "reasonable expectations" mean in insurance
certain expectations for coverage that a reasonable person would have based on sources other than just the policy language
a state issued document empowering an insurance company to become an admitted insurer is called what
certificate of authority
what are agents/producers required to do in order to renew their license
complete continuing education hours and pay a renewal fee
WHAT PART OF AN INSURANCE POLICY SETS FORTH THE RULES OF CONDUCT,DUTIES,AND OBLIGATIONS OF THE PARTIES TO THE CONTRACT
conditions
information about changes to the policy or return of premium can be found in what section of a policy
conditions
for what reason can a temp license be issued
continuation of business in case the licensed producer dies or becomes disabled
what are the 3 liability coverages included in the commercial general liability coverage form
coverage A- BODILY INJURY AND PROPERTY DAMAGE coverage B- PERSONAL OR ADVERTISING INJURY coverage C-medical payments
in a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss?
coverage E
how is the actual cash value of the property calculated
current replacement cost minus depreciation
what part of a policy shows the amount of insurance premium and policy terms
declarations
where is the policy period stated in an insurance policy
declarations
the part of the policy that clarifies the terms in the policy is called?
definitions
how are direct and indirect losses related
direct losses can cause indirect losses
insurers are classified according to their domicile. what are three types of insurers
domestic. foreign. alien
in the agent/insurer relationship who is considered the principal
insurer
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
coverage C
payd for personal property damage
what are the five characteristics of an ideally insurable risk
1)due to chance 2)definate and measurable 3)statistically predictable 4) not catastrophic 5)coverage cannot be mandatory
What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act? (Choose from the following options) 1. $1,000 2. $5,000 3. $10,000 4. $15,000
$5,000
Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? (Choose from the following options) 1. 90 days 2. 1 year 3. 3 years 4. 5 years
3 years
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.
All of the following are parts of a personal auto policy EXCEPT (Choose from the following options) 1. Physical damage coverage. 2. Medical payments coverage. 3. Duties after an accident or loss. 4. Liability coverage.
Physical damage coverage.
when other insurance is written on the same basis as a commercial property policy, what is the insurer obligated to cover
a share of the loss
Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS (Choose from the following options) 1. The insured is the at fault driver. 2. The other party was found to be 100% at fault for the injuries. 3. The injuries fall within the definition of "serious injury." 4. The injuries result in the insured being unable to work for at least 7 days.
The injuries fall within the definition of "serious injury."
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 passenger in the insured's vehicle is injured following an accident caused by the insured. 2. The insured damages a rented garage when he failed to stop in time. 3. A temporary substitute vehicle is damaged while the insured is driving it. 4. The insured's vehicle is damaged when it collides with a deer.
The insured damages a rented garage when he failed to stop in time.
what is a warranty in an insurance contract.
absolute true statement in which the validity of the policy depends
persons who are not named on the declarations page of a policy but who are protected by the policy are known as what type of insured
additional insured
what is it called when risks with higher probability of loss are seeking insurance more often than other risks
adverse selection
according to the law of agency, who represents the principal(insurer)
agent or producer
what is the limit that the insurer will pay for all losses that occur during a policy period?
aggregate limit
what are the four elements of an insurance contract
agreement(offer and exceptance)consideration, competent parties, and legal purpose
what type of insurer is formed under the laws of another country
alien
what would be considered a single accident in equiptment breakdown coverage
all accidents at a single location at the same time by the same cause
who is considered a nonresident agent
an agent who resides and is licensed in another state, but is authorized to transact business in this state
who must be a member of insurance guaranty association
any authorized insurer within a state
what type of property can be covered under inland marine insurance
any type of propert that is portable on land as well as means of transportation and communication
who is an insured in P&C insurance
anyone covered under the policy even if not specifically named
what type of authority is based on the agents actions or words
apparent
what type of property would be covered under the builders risk coverage form
buildings, temp structures, foundations, fixtures, equiptment,and materials and supplies within 100 feet
what is the purpose of interline endorsements in commercial package policies (CPPs)
eliminate redundancy and minimize the number of other policy endorsements
insurance is used to transfer what to an insurance company
financial responsibility for loss
Which of the following claims would be included under the dwelling policy?
fire damage to the insureds rowboat stored in the attached garage
in ( CPPs) who may cancel the policy in writing and make changes to the policy with the consent of the insurer
first named insured
what do individuals use to transfer their risk of loss to a larger group
insurance
in general, who can be excluded from producer licensing and exam requirements
insurance company OFFICERS,DIRECTORS,OR ANY OTHER EMPLOYEE who doesnt transact insurance or recieve commission
All of the following are conditions commonly found in the insurance policy EXCEPT
insuring agreement
what is the name for policy endorsements that may apply to more than one coverage part
interline endorsements
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?
judgment
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become
larger
what law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated
law of large numbers
what type of perils are covered by the advertising injury form
libel,slander,defamation, violation of privacy, infringement of copyright
what determines an insurers responsibility for payment as stated in an insurance policy
limits of liability
insurance is a contract that protects the insured from what
loss
Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?
loss cost rating
(insurance carried / insurance required) x loss amount =
loss payment
in a commercial crime policy, what does employee theft cover
losses resulting from theft by employees
The insured's house is located one mile from the county's new landfill and across the road from the entrance of a rock quarry. It would cost $150,000 to rebuild the house if something happened to it, but when the insured tried to sell it, the best offer he received was $80,000. The insurance company will insure the house for only $80,000. What method of valuation is used to insure this property?
market value
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
may not be held liable
what types of expenses are coverred by coverage c -medical payments in commercial liability policies
medical,surgical, hospital, or funeral expenses for third parties injusred bc of the insureds business operations
what type of policy consists of the declarations conditions endorsements and other attachments to a single line of insurance
monoline
an insurer discovers that an applicant for a policy has submitted a fraudulent insurance claim in the past.what type of hazard does this represent
moral
a person who does not lock the doors to their house shows an indifferent attitude. what type of hazard does this represent.
morale
the type of insurance company organized to return any surplus money to its policy holders is known as what
mutual company
what term describes a loss caused by continuous exposure to a condition
occurrence
what does the term unilateral contract mean
one-sided contract only one party makes enforceable promise
who may share commission from the sale of a life insurance policy
only producers properly licensed for the type of insurance transaction
which coverage would a business owner need in a crime policy to cover money that may be stolen from a messenger
outside the premises
what sublimit in a liability policy puts a ceiling on the payment for all claims that arise from a single accident
per occurrence
what are three types of hazards
physical, moral and morale
what policy provision defines the location where coverage is provided
policy territory
what is the fee a person pays an insurance company to recieve coverage.
premium
What is the term for the entity that an agent represents regarding contractual agreements with third parties?
principal
who can usually be granted a temp license
producers spouse or designee in case the licensed prodeucer dies or becomes disabled
what is covered under the legal liability coverage form
property in the insured care, custody or control
what are an insureds duties after a loss
protect the damaged property from further damage. cooperate with the insurer in settling a loss. and submit proof of loss PROTECT COOPERATE SUBMIT
an agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. what is the agent guilty of
rebating
Which of the following insurance options would be considered a risk-sharing arrangement?
reciprocal
which methods of loss valuation is contrary to the principle of indemnity
replacement cost
what is the date stipulated on the declarations page of a claims made liability form as the earliest date on which an incident may occur and be covered by the policy
retroactive date
what is consideration in an insurance contract
something of value that each party gives to the other. consideration on the part of the insurer is binding
what types of limits of liability has the limits seperately stated for different coverages
split limits
what is proof of loss
sworn statement from an insured letting the insurer know about the loss