Property & Casualty

Under Coverage C of a homeowners policy, the amount of insurance provided to cover personal property of the insured is? A.) 50% of the amount provided as Coverage A. B.) Equal to the amount provided as Coverage B. C.) Equal to the amount provided as Coverage A. D.) 50% of the amount provided as Coverage B.

A.) 50% of the amount provided as Coverage A.

How long is a temporary license valid for?

6 months

Workers compensation coverage would NOT pay for which of the following? A.) In-home medical devices B.) Physical therapy C.) Prescriptions D.) Travel expenses

A.) In-home medical devices

The pro rata liability clause is designed to protect the principle of? A.) Indemnity B.) Subrogation C.) Insurable interest D.) Waiver & estoppel

A.) Indemnity

All of the following are conditions commonly found in the insurance policy EXCEPT? A.) Insuring agreement B.) Cancellation & Renewal C.) Subrogation D.) Appraisal

A.) Insuring agreement

What is form HO-4? A.) Special Form B.) Contents Broad Form C.) Comprehensive Form D.) Broad Form

B.) Contents Broad Form P.S. tenant broad form; insures personal property for broad perils.

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for payment of losses or claims. The company is guilty of? A.) Rebating B.) Misrepresentation C.) Concealment D.) Unfair claim practice

B.) Misrepresentation

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? A.) Representation B.) Warranty C.) Concealment D.) Indemnity

B.) Warranty

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? A.) Uninsured motorist B.) No-fault medical payments C.) Liability D.) Physical damage

D.) Physical damage

What are "general damages"?

Compensate for pain and suffering, mental anguish, or disfigurement.

What is "pro rata"?

Provides for the sharing of loss with other insurance.

For insurance purposes, when an insured losses property to another because the person used violence or threat of violence to gain the property, this is defined as?

Robbery

What are "declarations"?

Section containing the basic underwriting information, such as the insured's name, address, amount of coverage, premiums, & a description of insured locations.

What is strict liability?

A person or business that manufactures or sells a product makes an implied warranty that the product is safe.

What does appraisal mean?

A professional assessment to determine extent of damage.

What is a "material misrepresentation"?

A statement that, is discovered, would alter the underwriting decision of the insurance company.

How long is the waiting period after the application has been accepted before flood coverage goes into effect? A.) 30 days B.) 6 months C.) 12:01 the next day D.) 5 days

A.) 30 days

Which of the following statements is true regarding the premium computation for workers compensation insurance? A.) 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. B.) The premium is set at the beginning of the policy period and will not change.

A.) 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.

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? A.) Any other state B.) Anywhere in the world C.) Mexico D.) Only in California

A.) Any other state

First aid costs for others injured on the insured's premises? A.) Are paid in addition to the liability limit. B.) Apply only if the insured is legally liable. C.) Also over injuries to the insured's family members. D.) Are deducted from the liability limit.

A.) Are paid in addition to the liability limit.

A producer who fails to separate premium monies from his own personal funds is guilty of? A.) Commingling B.) Larceny C.) Embezzlement D.) Theft

A.) Commingling

What is form HO-5? A.) Comprehensive Form B.) Special Form C.) Condominium Unit Owners Form D.) Modified Coverage Form

A.) Comprehensive Form P.S. Covers both the dwelling and other structures on an open peril basis.

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT? A.) Conditions B.) Consideration C.) Legal purpose D.) Offer & acceptance

A.) Conditions

What does form HO-4 do? A.) Contents Broad Form: Tenant broad form; insures personal property for broad perils. B.) Broad Form: Named Peril. C.) Modified Coverage Form: Used when replacement cost coverage isn't practical. D.) Condominium Unit Owners Form: Expands coverage to include parts of the building.

A.) Contents Broad Form: Tenant broad form; insures personal property for broad perils.

What type of form is HO-4? A.) Contents broad form B.) Comprehensive form C.) Modified coverage form D.) Special form

A.) Contents broad form

Which of the following would NOT be considered an unfair and deceptive practice? A.) Controlled business B.) Rebating C.) Defamation D.) Misrepresentation

A.) Controlled business

Which of the following property coverages would provide protection to contents damaged by fire? A.) Coverage C B.) Coverage D C.) Coverage A D.) Coverage B

A.) Coverage C

A unique feature in a bailee form is that it covers? A.) Customer's property whether or not the insured has been negligent. B.) Fire and theft losses to the insured's stock held for sale without any deductibles. C.) All loses and has no exclusions D.) The building occupied by the insured whether it is owned or leased.

A.) Customer's property whether or not the insured has been negligent.

Which of the following is a mandatory part of an insurance policy that varies with each individual policy? A.) Declarations B.) Conditions C.) Exclusions D.) Insuring agreement

A.) Declarations

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? A.) Defamation B.) Undercutting C.) Twisting D.) Slandering

A.) Defamation

In Property Policies, what is Coverage A? A.) Dwelling B.) Personal Property C.) Fair Rental Value D.) Additional Living Expenses

A.) Dwelling

Which of the following would modify the original insurance contract by either adding or removing coverage? A.) Endorsements B.) Additional coverage form C.) Conditions D.) Flexible policy

A.) Endorsements

All of the following are found in the declarations section of a policy EXCEPT the? A.) Exclusions B.) Policy premiums C.) Name of the insured D.) Limits of insurance

A.) Exclusions

The homeowners-policy covers collapse by all of the following EXCEPT? A.) Foundation cracks B.) Weight of snow C.) Hidden insect or vermin damage D.) Weight of too many people attending an event in the house.

A.) Foundation cracks

If a property or casualty insurer is unable to pay claims, which entity would pay benefits to policy holders? A.) GA insurance insolvency pool B.) Nobody C.) The federal reserve fund D.) The NAIC

A.) GA insurance insolvency pool

If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose? A.) It's common law defenses against liability suits. B.) It's ability to provide group health insurance. C.) It's right to hire persons' with disabilities. D.) It's eligibility for workers' compensation insurance.

A.) It's common law defenses against liability suits.

In Property Policies, what is Coverage B? A.) Other Structures B.) Additional Living Expenses C.) Dwelling D.) Personal Property

A.) Other Structures

All of the following are examples of transacting insurance in GA EXCEPT? A.) Placing advertisements for an insurer. B.) Insurance solicitation C.) Preliminary insurance regulations D.) Making an insurance contract go into effect.

A.) Placing advertisements for an insurer.

All of the following statements regarding continuing education requirements in GA are true EXCEPT? A.) Producers may repeat the same courses to meet the required CE hours for licensing period. B.) Ethnics education is required every licensing period. C.) Excess hours may be carried over to the next licensing period.

A.) Producers may repeat the same courses to meet the required CE hours for licensing period.

All of the following are considered parts of the policy structure EXCEPT? A.) Provisions B.) Exclusions C.) Insuring clause D.) Conditions

A.) Provisions

Which of the following would be covered under the film? A.) Sound tracks B.) Contraband C.) Unused footage D.) Library stock

A.) Soundtracks

What is form HO-3? A.) Special Form B.) Comprehensive Form C.) Condominium Unit Owners Form D.) Modified Coverage Form

A.) Special Form P.S. dwelling and other structures on an open peril basis; personal property only for broad perils.

Which of the following is NOT considered a misrepresentation as it performs to unfair trade practices? A.) Making comparisons between different policies. B.) Stating that the insurance policy is a share of stock. C.) Exaggerating benefits provided in the policy.

A.) Stating that the policy is a share of stock.

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT? A.) Submitting to a medical exam when requested. B.) Furnishing the insurer with copies of any demands, notices, or other legal papers received in connection with a claim or suit.

A.) Submitting to a medical exam when requested.

According to standard workers compensation and employer liability policy form, a state should be listed in Part 3-Other States' Insurance of the Workers' Compensation and Employers liability policy when? A.) The insured expects to extend operations to that state. B.) That state has a monopolistic workers compensation fund.

A.) The insured expects to extend operations to that state.

Which of the following statements are true concerning a bonded contractor who defaults on a construction performance contract? A.) The oblige may engage another contractor and then seek reimbursement from the surety. B.) The contractor will lose his license to operate in the state. C.) The surety may cancel the bond and avoid paying any losses or expenses.

A.) The oblige may engage another contractor and then seek reimbursement from the surety.

If an insurance premium is paid by the policy owner to an agent, and the agent fails to remit that premium to the insurer, which of the following statements is true? A.) The policy will not lapse since payment to the agent is the same as payment to the insurer. B.) The premium will be taken out of the Guaranty Association Funds. C.) The agent's license will be automatically revoked.

A.) The policy will not lapse since payment to the agent is the same as payment to the insurer.

What type of liability would a person who owns wild animals have?

Absolute

What is the difference between an accident and a occurrence?

Accident: sudden, unplanned Occurrence: continuous or repeated exposure to conditions resulting in injury or damage.

What are the 6 types of Loss Valuation?

Actual cash value, Replacement cost, Market value, Agreed value, Stated value, & Salvage value

What are the 4 elements of a legal contract?

Agreement, Consideration, Competent parties, Legal purpose

What is the Gramm-Leach-Bliley Act?

An insurance company may not disclose nonpublic information to a nonaffiliated 3rd party except for certain reasons. (Requires 2 disclosures to a customer, when customer relationship is established and before disclosing protected information. Customer must also receive an annual privacy disclosure, have the right to opt out, or choose not to have their private information shared with other parties.)

What are the 5 underwriting process resources?

Application form, Motor vehicle records, Interviews with neighbors, friends & employers, Inspection of property, & Inspection of insurance history.

What is a "mortgagee"?

Attached to a policy to protect the interest of the mortgagee in the mortgaged property.

Transportation expenses are covered under a personal auto policy for? A.) $50 per day, for a maximum of $750. B.) $20 per day, for a maximum of $600. C.) $25 per day, for a maximum of $500. D.) $50 per day, for a maximum of $500.

B.) $20 per day, for a maximum of $600.

A grave markers was damaged by vandals. It would cost $3,000 to have the damage repaired. Under those circumstances, how much a homeowners-policy pay? A.) $1,000 B.) $3,000 C.) NONE D.) $500

B.) $3,000 (only up to $5,000 for grave markers under Coverage C.)

If an insured covered under a Mobile Homeowners Policy moves the mobile home to protect it from a covered peril, the policy will pay up to? A.) $350 B.) $500 C.) $750 D.) $1,000

B.) $500

A driver who completes a defensive driving course may qualify for a premium discount of? A.) 5% B.) 10% C.) 12.5% D.) 15%

B.) 10%

What is the maximum period of time a temporary license can be in force? A.) 1 year B.) 15 months C.) 6 months D.) 3 months

B.) 15 months

Insurers must update copies of its rates, plans, systems, and underwriting rules every? A.) Year B.) 2 years C.) 3 years D.) 4 years

B.) 2 years

Insurers must update copies of it's rates, systems, and underwriting rules every? A.) Year B.) 2 yrs. C.) 3 yrs. D.) 4 yrs.

B.) 2 yrs.

Under the conditions of a film coverage form, how long must the insured maintain records of each production? A.) 1 year after completion B.) 3 years after completion C.) 5 years after completion D.) 7 years after completion

B.) 3 years after completion

How long is a waiting period upon purchase of flood coverage through NFIP? A.) 10 days B.) 30 days C.) 60 days D.) NO WAIT

B.) 30 days

How long is the waiting period after the application has been accepted before flood coverage goes into effect? A.) 5 days B.) 30 days C.) 6 months D.) 12:01 am the next day

B.) 30 days

How many days before a policy is nonrenewed must an insurer deliver or mail written notice to the insured? A.) 20 days B.) 30 days C.) 10 days D.) 15 days

B.) 30 days

Rates for private passenger motor vehicle insurance on file with the Commissioner are considered approved after? A.) 30 days B.) 45 days C.) 60 days D.) 90 days

B.) 45 days

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? A.) 30 days B.) 60 days C.) 90 days D.) 120 days

B.) 60 days

Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days? A.) 30 days B.) 60 days C.) 100 days D.) 365 days

B.) 60 days

In a personal auto policy, the medical payments coverage is similar to? A.) Bodily injury coverage, because it pays the insured's doctors' bills. B.) Accident insurance, because it pays medical expenses regardless of fault. C.) Accident insurance, because it has the same limits.

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

Which of the following is another term for an authorized insurer? A.) Legal B.) Admitted C.) Certified D.) Licensed

B.) Admitted

What does form HO-2 do? A.) Comprehensive Form: Covers both the dwelling and other structures on an open peril basis. B.) Broad Form: Named Peril. C.) Contents Broad Form: Tenant broad form; insures personal property for broad perils. D.) Special Form: Dwelling and other structures on an open peril basis; personal property only for broad perils.

B.) Broad Form: Named Peril

Professional photographers and musicians may insurer their equipment with? A.) Installation floater B.) Commercial articles floater C.) Theatrical property coverage form D.) Contractors equipment floater

B.) Commercial articles floater

What are the 2 major sections of commercial crime policies? A.) Occurrence and claims made B.) Commercial entities and government entities C.) Discovery form and loss sustained form D.) Property and Liability

B.) Commercial entities and government

All of the following are classes of inland marine risks EXCEPT? A.) Bridges, tunnels, & other instrumentalities of transportation & communication. B.) Common carrier cargo liability. C.) Commercial property floater risks. D.) Domestic shipments & transportation risks.

B.) Common carrier cargo liability.

All of the following are supplemental payments found in liability policies EXCEPT? A.) Limited amounts for bail bonds and other bonds related to a claim. B.) Costs the insured incurred in hiring an attorney. C.) All expenses and defense costs incurred by the insurer. D.) Reasonable expenses incurred by the insured.

B.) Costs the insured incurred in hiring and attorney.

In dwelling policies, automatic increase in insurance is? A.) Coverage for newly acquired property. B.) Coverage by endorsement C.) Automatic coverage D.) Coverage without additional premium

B.) Coverage by endorsement

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT? A.) An offer to share in commissions generated by the sale. B.) Dividends from a mutual insurer. C.) An offer of employment. D.) Stocks, securities, or bonds.

B.) Dividends from a mutual insurer.

Professional liability coverage protects the insured against legal liability resulting from? A.) The unprofessional conduct of an employee. B.) Errors and omissions C.) Liability assumed under a contract D.) Dishonest acts

B.) Errors and omissions

Professional liability coverage protects the insured against legal liability resulting from? A.) The unprofessional conduct of an employee. B.) Errors and omissions C.) Liability assumed under a contract. D.) Dishonest acts

B.) Errors and omissions

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the? A.) Conditions B.) Exclusions C.) Declarations D.) Endorsements

B.) Exclusions

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations? A.) Workers classification factor B.) Experience modification factor C.) Merit rating factor

B.) Experience modification factor

Which federal act provides benefits to injured civilians who are employed by the federal government? A.) U.S. longshore and harbor workers compensation act B.) Federal employees compensation act C.) Federal employers liability act D.) The jones act

B.) Federal employees compensation act

The policy conditions define? A.) The amount of coverage B.) How parties to the contract must act following a loss. C.) The basic underwriting information. D.) The excluded perils

B.) How parties to the contract must act following a loss.

State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT? A.) Offering benefit certificates or securities in return for purchasing insurance. B.) Inviting prospective clients to the grand opening of the company's new office. C.) Issuing or delivering insurance company stock in return for purchasing insurance. D.) Promising returns and profits from the purchase of insurance.

B.) Inviting prospective clients to the grand opening of the company's new office.

In which of the following situations is it legal to limit coverage based on marital status? A.) Divorce within the last 6 months of applying for insurance. B.) It is never legal to limit coverage based on maritial status. C.) Legal separation during the application process.

B.) It is never legal to limit coverage based on marital status.

Which of the following statements are NOT true regarding a personal umbrella liability policy? A.) It provides excess liability coverage over underlying personal liability. B.) It provides errors and omissions coverage for an agency. C.) It may cover certain expenses not provided under the primary layer.

B.) It provides errors and omissions coverage for an agency.

How does the mobile home endorsement affect the other coverage of law or ordinance in a homeowners policy? A.) It has no effect on this coverage. B.) It removes the coverage. C.) It broadens the coverage. D.) It limits the coverage.

B.) It removes the coverage.

The insured was mowing the lawn in his yard with a lawnmower borrowed from his brother. The fuel line ruptured, and the lawnmower was destroyed in the fire. How will the insured's homeowner's liability policy respond? A.) The insured's homeowners liability policy and the brother's property policy will share on a prorated basis. B.) It will cover the damage. C.) It will not cover because the insured is not liable. D.) It will pay the brother's property insurance deductible.

B.) It will cover the damage.

Each of the following involves pure risk EXCEPT? A.) Flood B.) Loss in the stock market C.) Drought D.) Bodily Injury

B.) Loss in the stock market

Which of the following will be covered by the contractors equipment floater in an unfiled inland marine insurance? A.) Any type of mobile equipment. B.) Mobile equipment during transport to and from the job site. C.) Mobile equipment only while it is located on the job site. D.) Mobile equipment owned by construction equipment dealers.

B.) Mobile equipment during transport to and from the jobsite.

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit? A.) Crime coverage B.) Personal and advertising injury C.) Bodily injury D.) Property damage

B.) Personal and advertising injury

All of the following statements concerning liability coverage ate true EXCEPT? A.) Liability policies defend the insured against claims, real or alleged. B.) Policy holder can sue the insure whether or not all conditions and provisions of the policy were met. C.) Liability policies normally include supplementary payment provisions.

B.) Policy holder can sue the insure whether or not all conditions and provisions of the policy were met.

A business-owners policy is? A.) Monoline B.) Self-contained prepackaged C.) A special policy designed for large retail operations. D.) Part of a commercial package policy.

B.) Self-contained prepackaged

All of the following are unfair claims settlement practices EXCEPT? A.) Failing to acknowledge pertinent communication pertaining to a claim. B.) Suggesting negotiations in settling the claim. C.) Refusing to pay without conducting a reasonable investigation. D.) Failing to adopt and implement reasonable standards for settling claims.

B.) Suggesting negotiations in settling the claim.

How are surety bonds different from insurance? A.) Surety bonds are issued by the government; insurance is issued by private companies. B.) Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses. C.) Insurance guarantees specific duties or obligations will be fulfilled; surety bonds pay for losses.

B.) Surety bonds guarantee specific duties or obligations will be fulfilled; insurance pays for losses.

Under a dwelling policy, which of the is NOT a factor in determining a loss? A.) The amount necessary to repair or replace the property. B.) The amount negotiated by the insured. C.) The policy limit

B.) The amount negotiated by the insured.

Prior to state-directed workers compensation statutes being enacted, employees had? A.) No right to sue their employers for their work-related injuries. B.) To sue an employer for the "loss" and prove that the employer was at fault. C.) Limited payments for their work-related injuries.

B.) To sue an employer for the "loss" and prove that the employer was at fault.

The Other Insurance Clause? A.) Prohibits other insurance on the same property. B.) Upholds the principle of indemnity. C.) Allows more than one person to be insured under the policy. D.) Allows coverage for catastrophic losses.

B.) Upholds the principle of indemnity.

Coverage under a Floor Plan Merchandise form is written on a reporting form basis that requires the insured to file reports with the insurer. What is the time frame for those reports? A.) 20 days after the report is due. B.) Within 30 days after the end of each month

B.) Within 30 days after the end of each month

What are the 4 coverage form for a Dwelling Policy?

Basic(DP1), Broad(DP2), Special(DP3), & Basic Perils

Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits? A.) $15 per day; $450 B.) $25 per day; $450 C.) $20 per day; $600 D.) $15 per day; $300

C.) $20 per day; $600

The regular National Flood insurance program would insure an eligible single-family dwelling for up to? A.) $150,000 B.) $200,000 C.) $250,000 D.) $100,000

C.) $250,000

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? A.) 90 days B.) 1 week C.) 2 weeks D.) 1 month

C.) 2 weeks

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? A.) 90 days B.) 1 year C.) 3 years D.) 5 years

C.) 3 years

If drivers' complete defensive driving course, how long will the discount apply to their premiums? A.) 1 year B.) 2 yrs. C.) 3 yrs. D.) 4 yrs.

C.) 3 yrs.

If the premium for a policy will be increased by more than 15%, how much warning must the insured get? A.) 15 days B.) 30 days C.) 45 days D.) 60 days

C.) 45 days

In the event of theft of a covered vehicle, transportation expenses coverage in a personal auto policy will cover the expenses starting how many hours after theft? A.) Immediately B.) 24 hrs C.) 48 hrs D.) 72 hrs

C.) 48 hrs

A binder is effective for a period of? A.) 30 days B.) 60 days C.) 90 days D.) 10 days

C.) 90 days

Which of the following would NOT be a violation of state insurance regulations? A.) Agent A uses her license to write only insurance for herself and her immediate family. B.) Agent B charges his clients a consulting fee, in addition to the premium for placing a policy. C.) Agent C uses her license to write only businesses other than controlled. D.) Agent D collects premiums due to policies and deposits the funds in his personal account.

C.) Agent C uses her license to write only business other than controlled.

Who is required to participate in the GA insurers insolvency pool? A.) All insurers operating in GA and it's surrounding states. B.) Anyone who holds a property or casualty license policy in GA. C.) Any insurer authorized to write property or casualty insurance in GA.

C.) Any insurer authorized to write property or casualty insurance in GA.

Which of the following clauses establishes the procedure for determining the amount of a loss when the insurer and the insured cannot agree on the value of property or amount of loss? A.) Valuation clause B.) Loss settlement clause C.) Appraisal clause D.) Loss payment clause

C.) Appraisal clause

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be? A.) Qualified B.) Approved C.) Authorized D.) Certified

C.) Authorized

What does form HO-5 do? A.) Special Form: dwelling and other structures on an open peril basis; personal property only for broad perils. B.) Contents Broad Form: Tenant broad form; insures personal property for broad perils. C.) Comprehensive Form: Covers both the dwelling and other structures on an open peril basis. D.) Broad Form: Named Peril

C.) Comprehensive Form: Covers both the dwelling and other structures on an open peril basis.

Which of the following positions are responsible solely for offering advice on insurance policies for a fee? A.) Sub-agent B.) Broker C.) Counselor D.) Agent

C.) Counselor

Which of the following is covered under the Mail Floater of a Commercial Inland Marine policy ONLY if it is sent by registered mail? A.) Money orders, checks, drafts, notes. B.) Bonds, stocks, stock certificates, coupons attached to bonds. C.) Currency and unsold travelers checks. D.) Postage and revenue stamps.

C.) Currency and unsold travelers checks.

2 individuals are in the same risk and age class; yet, they are charged different rates for their policies due to an insignificant factor. What is this called? A.) Misrepresentation B.) Adverse selection C.) Discrimination D.) Law of large numbers

C.) Discrimination

Directors and officers liability insurance defends against a cooperation on it's officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT? A.) Neglect B.) Breach of duty C.) Embezzlement D.) Misstatements

C.) Embezzlement

The deductible does each of these EXCEPT? A.) Reduce loss costs. B.) Lower premium costs. C.) Indemnify the insured. D.) Excludes payment for small claims.

C.) Indemnify the insured.

Under a homeowners policy, all of the following information must be included in the insured's signed, sworn proof of loss EXCEPT? A.) Other insurance B.) Interest of all insured's in the property. C.) Insured's income and net worth at the time of loss. D.) The time and cause of loss.

C.) Insured's income and new worth at eh time of the loss.

Under the dwelling policy, Coverage C - Personal Property is? A.) A prohibited coverage in the dwelling form. B.) Limited to 50% of the amount of insurance that is written as Coverage A. C.) Limited to covering a servant's property while at the insured location. D.) Automatically provided as 50% of Coverage A.

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

Under the dwelling policy, Coverage C - Personal Property is? A.) Prohibited coverage in the dwelling form. B.) Limited to 50% of the amount of insurance that is written as Coverage A. C.) Limited to covering a servant's property while at the insured location. D.) Automatically provided as 50% of Coverage A.

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

The physicians and surgeons equipment floater is NOT intended for which of the following? A.) Waiting room furniture at a doctors' office. B.) Office equipment at a dentist office. C.) Medical supplies at a hospital. D.) Surgeon's supplies at a surgeon office.

C.) Medical supplies at a hospital (Coverage is not intended for hospitals, schools, or other institutions.)

What is form HO-8? A.) Comprehensive Form B.) Contents Broad Form C.) Modified Coverage Form D.) Broad Form

C.) Modified Coverage Form P.S. used when replacement cost coverage isn't practical.

What type of property does a personal floaters policy cover? A.) Moveable property, located outside of the insured's home. B.) Moveable property, located inside of the insured's home. C.) Moveable property, whether located.

C.) Moveable property, whether located.

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? A.) Nonprofit service organization B.) Stock C.) Mutual D.) Reciprocal

C.) Mutual

Which of the following does the term proximate cause refer to? A.) Duty to the defendant to act. B.) Reason for filing a law suit. C.) Negligence that leads to an injury. D.) Injury that leads to monetary compensation.

C.) Negligence that leads to injury.

An insured owns and operates a commercial business. He has included a business income coverage form with his commercial package policy. When the insured's business is severely damaged by fire, the business income coverage will pay for? A.) Annual sales less the cost of merchandise. B.) Loss of total annual sales. C.) Net income plus continuing expenses of the business. D.) Sales value production less the cost of raw stock.

C.) Net income plus continuing expenses of the business.

An agent license can be issued? A.) To partnerships B.) Any person approved by the Commissioner. C.) Only to individuals D.) To a natural person or a corporation.

C.) Only to individuals

Before an insurer will pay any loss under a policy, what is usually required from the insured? A.) A binder B.) A claims-made form C.) Proof of loss D.) Notice of claim

C.) Proof of loss

Any inducement offered to the insured in the sale of an insurance policy that is NOT specified in the policy is an unlawful practice known as? A.) False advertising B.) Coercion C.) Rebating D.) Twisting

C.) Rebating

A nonresident agent is allowed to conduct insurance transactions in GA because his home state allows GA residents to transact insurance business in it. This is known as? A.) Over-insurance B.) App. C.) Reciprocity Agreement D.) Nonresident Agreement

C.) Reciprocity Agreement

An insurance agent's responsibilities include all of the following EXCEPT? A.) Represent the insurer. B.) Perform professionally. C.) Represent the client. D.) Perform faithfully.

C.) Represent the client.

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT? A.) They pay pre-judgement and post-judgement interest. B.) They pay all costs incurred by the insured in helping to investigate or defend a claim. C.) They pay defense costs even after the aggregate limit has been reached.

C.) The pay defense costs even after the aggregate limit has been reached.

Besides the peril of earthquake, which other peril is covered by the earthquake cause of loss form under a commercial property policy? A.) Hurricane B.) Lightning C.) Volcanic Eruption D.) Earthquake

C.) Volcanic Eruption

What is proximate cause?

Causes of bodily injury or property damage is natural & reasonably foreseeable. (for injured party to collect damages, negligence must have proximate cause)

The violation of cease and desist order may result in a fine of? A.) $3,000 B.) $5,000 C.) $7,500 D.) $10,000

D.) $10,000

Which loss listed below would be fully covered by a homeowners policy? A.) $1,200 pedigreed golden retriever stolen. B.) $24,000 bass boat destroyed in a tornado. C.) $5,000 firearm collection stolen. D.) $2,000 silver tea set stolen.

D.) $2,000 silver tea set stolen.

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 people in the other auto as follows: "A"-$15,000, "B"-$30,000, and "C"-$35,000. How much will her insurance pay for all injuries? A.) $105,000 B.) $25,000 C.) $30,000 D.) $50,000

D.) $50,000

If a policy is cancelled due to nonpayment of premium, how many days' advance notice must the insurer give the policyholder before cancellation? A.) 7 days B.) 30 days C.) 15 days D.) 10 days

D.) 10 days

An insured must get advance warning if the premiums will be increased by more than? A.) 20% B.) 5% C.) 10% D.) 15%

D.) 15%

Authorized insurance companies are examined by the Commissioner at lease once every? A.) Year B.) 2 yrs. C.) 3 yrs. D.) 5 yrs.

D.) 5 yrs.

The dwelling insured on HO-2, HO-3, or HO-5 forms is covered for replacement, provided that it is insured for at lease what percentage of replacement cost on the date of loss? A.) 25% B.) 40% C.) 75% D.) 80%

D.) 80%

What is the coinsurance requirement for a theatrical property floater under an Inland Marine Policy? A.) 100% B.) 50% C.) 75% D.) 80%

D.) 80%

A contract for the transport of goods between the shipper and the carrier is called? A.) A bailment B.) A binder C.) A bill of sale D.) A bill of landing

D.) A bill of landing

In a participation plan, the insured may be eligible for which of the following? A.) In increase in insurance over time. B.) Lower premiums C.) Guaranteed dividends D.) A partial premium refund

D.) A partial premium refund

In personal auto policy, the medical payments coverage is similar to? A.) Accident insurance, because it has the same limits. B.) Bodily injury coverage, because it pays the insured's doctor bills. C.) Bodily injury coverage, because it provided legal protection if the insured causes injuries to others. D.) Accident insurance, because it pays medical expenses regardless of fault.

D.) Accident insurance because it pays medical expenses regardless of fault.

An agent is acting ethically in all the of following situations EXCEPT A.) Working within the conditions of his/her contract B.) Representing the insurer, not the insured C.) Keeping customers' best interests in mind D.) Always representing the insured

D.) Always representing the insured.

Which coverage form would provide coverage for all incoming and outgoing shipments? A.) Trip transit B.) Motor vehicle cargo C.) Mail coverage D.) Annual transit

D.) Annual transit

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an? A.) Local insurer B.) Certified insurer C.) Self-insurer D.) Authorized insurer

D.) Authorized insurer

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? A.) Furriers block policy B.) Personal property coverage part C.) Vendor's single interest policy D.) Bailee's customer policy

D.) Bailee's customer policy

In return for premium, an insurance company must? A.) Provide the insured with coverage adequate for all potential losses. B.) Use standardized tables of coverage for specific risks to be excluded from coverage. C.) Give the insurer valuable consideration. D.) Be fair in underwriting and pay covered losses.

D.) Be fair in underwriting and pay covered losses.

What is form HO-2? A.) Special Form B.) Contents Broad Form C.) Comprehensive Form D.) Broad Form

D.) Broad Form P.S. Named peril

Homeowners policies provide coverage for? A.) Losses caused by off-premises power failure. B.) The land under the residence. C.) Property of tenants, roomers, or boarders not related to any insured. D.) Business property while on the residence premises.

D.) Business property while on the residence premises.

A producer who fails to separate premiums monies from his own personal funds is guilty of? A.) Larceny B.) Embezzlement C.) Theft D.) Commingling

D.) Commingling

Which of the following entities has the power to issue certificates of authority? A.) Department of Insurance B.) NAIC C.) Federal Insurance Regulation Board D.) Commissioner of Insurance

D.) Commissioner of Insurance

A plasterer has finished a job. What type of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly? A.) Medical payments B.) Products C.) Professional errors and omissions D.) Completed operations

D.) Completed operations

What does form HO-6 do? A.) Special Form: Dwelling and other structures on an open peril basis; personal property only for broad perils. B.) Contents Broad Form: Tenant broad form; insures personal property for broad perils. C.) Broad Form: Named Peril. D.) Condominium Unit Owners Form: Expands coverage to include parts of the building.

D.) Condominium Unit Owners Form: Expands coverage to include parts for the building.

Producers in GA will be deemed to be using their license primarily to write controlled business if, during any calendar year? A.) The licensees write more than 5 policies classified as controlled business. B.) The licensees write more than 2 policies on themselves or their property. C.) They do not advertise or solicit insurance transactions. D.) Controlled business accounts for more than 25% of the agent's business.

D.) Controlled business accounts for more than 25% of the agent's business.

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by a manager while in an official capacity? A.) Employment practices liability B.) Errors and omissions C.) Malpractice insurance D.) Directors and officers liability

D.) Directors and officers liability

How is the Commissioner of Insurance selected to be the chief officer of the Department of Insurance? A.) Hired by the Department B.) Nominated by insurers C.) Appointed by the Governor D.) Elected to office

D.) Elected to office

In Property Policies, what is Coverage D? A.) Other Structures B.) Personal Property C.) Additional Living Expenses D.) Fair Rental Value

D.) Fair Rental Value

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? A.) Defamation B.) Coercion C.) Misrepresentation D.) False advertising

D.) False advertising

When doing business in GA, an insurance company that is formed under the laws of another state is known as which type of insurer? A.) Domestic B.) Alien C.) Nonadmitted D.) Foreign

D.) Foreign

A mobile homeowners policy is structured the same as a? A.) Personal auto policy B.) Dwelling policy C.) Commercial package policy D.) Homeowners policy

D.) Homeowners policy

Transacting insurance without a license in this state is considered a(n)? A.) Felony B.) Insurance fraud C.) Coercion D.) Misdemeanor

D.) Misdemeanor

A bond written for a set limit, and the surety will be liable ONLY for the amount of the limit. This limit is known as the? A.) Face value B.) Stated amount C.) Limit of liability D.) Penalty

D.) Penalty

A customer was injured in a supermarket parking lot when a grocery cart collided with the customer's leg. Coverage for this claim would be provided under? A.) Completed operations B.) Workers compensation C.) Product liability D.) Premises and operation

D.) Premises and operations

Which of the following liability policies is usually written on a "claims-made" form? A.) Auto B.) Personal C.) Umbrella D.) Professional

D.) Professional

What type of information would be found in a policy's insuring agreement? A.) Location of premises B.) Policy limits C.) Insurer's address D.) Renewal dates

D.) Renewal dates

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called? A.) Stop-loss B.) Coinsurance C.) Participation requirement D.) Self-insured retention

D.) Self-insured retention

Which of the following would NOT be considered a flood? A.) Overflow of tidal waters B.) Mudslides C.) Runoff of surface waters D.) Sewer backup

D.) Sewer backup

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy? A.)The mortgagee is prohibited from bringing a suit against the insurer. B.) The loss reimbursement is paid to the insured. C.) The loss reimbursement is not awarded if damages arose from the insured's negligence. D.) The loss reimbursement is paid to the mortgagee.

D.) The loss reimbursement is paid to the mortgagee.

Who is NOT an insured for liability on a BAP? A.) Anyone using a covered auto with permission. B.) Anyone liable for the conduct of the insured. C.) The named insured in any covered auto. D.) The owner of a car the insured borrows.

D.) The owner of a car the insured borrows.

What are common carriers required to issue to every shipper that it transports good for? A.) Transit coverage form B.) Motor truck cargo form C.) Common carrier cargo liability notice D.) Uniform bill of lading

D.) Uniform bill of lading

Supplementary payments on a CGL provide all of the following EXCEPT? A.) $100 in gasoline cost by the insured driving a witness to and from court. B.) Pre-judgement and post-judgement interest. C.) The cost of bonds to release attachment. D.) Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.

D.) Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.

Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? A.) Property of others B.) Manuscripts C.) Works of art or antiques D.) Valuable paper and records

D.) Valuable paper and records

A beauty parlor burns to the ground. What type of loss is this to the owner?

Direct

What are the 2 types of losses?

Direct & Indirect (consequential)

What term includes damage where the insured peril was the proximate cause of loss?

Direct Loss

What are the 9 types of property policies?

Dwelling, Homeowners, Commercial Package, Commercial Policy, Commercial Property Conditions Form, Business Owners, Commercial Inland Marine, National Flood Insurance, Other Policies

What is a deposit premium?

Estimated premium paid in advance of policy being issued.

How often is the Commissioner of Insurance elected?

Every 4 years

What are "Exclusions & Policy limits"?

Exclusions: perils that are not insured against and what are not insured. Policy limit: maximum amounts an insured may collect or is protected under the terms of the policy

What is the definition of negligence?

Failure to use reasonable and prudent care

What are the 3 elements of insurable interest?

Financial, Blood(Family), & Business

What does the coinsurance clause state?

In consideration of a reduced rate, the insured agrees, to maintain a certain minimum amount of insurance on the insured property. (does not affect in total loss)

What is a deposit premium audit?

Insurer may audit insured's books and records to determine adequate premium.

What is a "competent party"?

Legal age, Sound mental capacity, & Not under the influence.

What are the 4 elements of negligence?

Legal duty, Standard of care, Unbroken chain of events, & Actual loss or damage.

The process of determining the premium charged and how much insurance is required for a partial loss is called?

Loss valuation

What are "special damages"?

Out of pocket expenses for medical, miscellaneous expenses or loss of wages.

What are the limits of liability?

Per occurrence(accident), per person, aggregate, split, & combined

What are the 3 kinds of hazards?

Physical, Moral, & Morale

Can a misrepresentation void a contract?

Possibly

What does "consideration" mean in a legal contract?

Premiums and representations on the part of the insured; payment of claims on the part of the insurer.

What is an "Endorsement"?

Printed addendums to a contract that are used to change the policy's original terms and conditions, or coverages. Addendums: additional material added to the end of something.

What are the duties of the named insured in the event of a loss?

Protect the damaged property from further damage, Prepare an inventory of damaged property, Cooperate with the insurer in settling the loss, Notify the police, & Submit to the insurer a signed sworn proof of loss after being requested to do so within a certain time.

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

Proximate cause

What are "punitive damages"?

Punishment for extreme behavior, gross negligence or willful intent.

What are the different types of damages?

Special, General, & Punitive

What is the meaning of "representations"?

Statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true.

What is the "Law of large numbers"?

States that the large number of people with similar exposure to loss is more predictable of future losses.

What are the types of liability?

Strict & Vicarious

What are "binders"?

Temporary agreement issued by an agent or insurer providing temporary coverage until a policy can be issued. (expires when a policy is issued)

What is the Terroism Risk Insurance Act (TRIA)?

Temporary federal program, intended to share risk of loss from terroist attacks with insurers, insurer must meet deductibles and retentions before government reimbursement.

What does subjugation mean?

The insurer's legal right to seek damages from 3rd parties, after it has reimbursed the insured for the loss.

What is "concealment"?

The intentional withholding of information of a material fact that is crucial in making a decision and may void a policy.

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?

Unoccupied

What is an "arbitration"?

When the insurer and insured don't agree on how to settle a claim.

What is an "appraisal"?

When there is a disagreement between the insured and insurer on the value of any property loss?

What is proof of loss?

a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid.

What is "indemnity"? And what can it be referred to as?

1.) In the event of loss, an insured or a beneficiary is permitted to collect the extent of the financial loss, no more. 2.) Reimbursement

What is the Fair Credit Reporting Act? And who administered it?

1.) Protects consumer from any disturbing false or obsolete personal financial information. 2.) By the federal trade commissions.

What are the 2 type of risk? And what do they mean?

1.) Pure & Speculative 2.) Pure: only results in a loss or no change. (Insurable) Speculative: opportunity for either loss or gain. (Not insurable)

What is a certificate of insurance? And what is it's purpose?

1.) Written evidence showing the insurance policy has been issued. 2.) Lists amounts and types of insurance provided.

What is vicarious liability?

A doctrine to transfer the liability from one person to another who would probably have a greater ability to pay. (Ex: parents to children)

What is a deductible?

A dollar amount that must be met by insured before insurer provided coverage. (higher deductible=lower premium)

What is a "notice of claim"?

A form or statement from an insured to an insurer, informing the insurer that events leading to a possible claim have occurred; the form includes how when, & where the loss took place.

The maximum penalty that may be assessed for a single non-willful violation of the Insurance Code is? A.) $1,000 B.) $5,000 C.) $10,000 D.) $50,000

A.) $1,000 ($5,000 for a willful violation)

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? A.) 5 B.) 6 C.) 7 D.) 8

A.) 5

Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur? A.) Aggregate limit of liability B.) Combined single limit of liability C.) Per occurrence limit of liability D.) Split limit of liability

A.) Aggregate limit of liability

When transacting business in GA an insurer formed under the laws of another country is known as a/an? A.) Alien insurer B.) Domestic insurer C.) Foreign insurer D.) Admitted insurer

A.) Alien insurer

What is form HO-6? A.) Modified Coverage Form B.) Condominium Unit Owners Form C.) Special Form D.) Comprehensive Form

B.) Condominium Unit Owners Form P.S. Expands coverage to include parts of the building.

What does form HO-8 do? A.) Special Form: Dwelling and other structures on an open peril basis; personal property only for broad perils. B.) Modified Coverage Form: Used when replacement cost isn't practical. C.) Broad Form: Named Peril D.) Comprehensive Form: Covers both the dwelling and other structures on an open peril basis.

B.) Modified Coverage Form: Used when replacement cost isn't practical.

In Property Policies, what is Coverage C? A.) Dwelling B.) Personal Property C.) Fair Rental Value D.) Additional Living Expenses

B.) Personal Property

The insured purchased a $200,000 extra expense policy. If the percentage applying to the limit of insurance are 40, 80, & 100%, what would be the maximum payable for a 47-day loss? A.) $80,000 B.) $120,000 C.) $160,000 D.) $200,000

C.) $160,000 (when the period of restoration is 30 days or less, the first percentage applies. More than 30 less than 60 days, second percentage. More than 60 days, third percentage.

Which of the following people are required to hold a producer license? A.) A person who administers employee benefits. B.) A person who creates insurance advertisements. C.) A person who negotiates insurance contracts. D.) A person who takes messages related to claims.

C.) A person who negotiates insurance contracts.

Which of the following would be required to be licensed as an insurance producer? A.) A salaried full-time employee who furnishes information, for group insurance. B.) An insurance company director who performs executive, administrative and managerial duties. C.) A salaried employee who advertises and solicits. D.) A person whose activities are limited to producing insurance advertisements.

C.) A salaried employee who advertises and solicits insurance.

In Property Policies, what is Coverage E? A.) Dwelling B.) Personal Property C.) Additional Living Expenses D.) Fair Rental Value

C.) Additional Living Expenses

Which of the following is included under the physical damage coverage of a personal auto policy? A.) A cellular phone located in a locked vehicle. B.) Custom furnishings or equipment in a pickup or van. C.) Sound reproduction equipment permanently installed in the covered auto. D.) A covered auto that is seized and destroyed by a government authority.

C.) Sound reproduction equipment permanently installed in the covered auto.

What does form HO-3 do? A.) Comprehensive Form: Covers both the dwelling and other structures on an open peril basis. B.) Modified Coverage Form: Used when replacement cost coverage isn't practical. C.) Special Form: Dwelling and other structures on an open peril basis; personal property only for broad perils. D.) Broad Form: Named Peril

C.) Special Form: Dwelling and other structures on an open peril basis; personal property only for broad perils.

An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT? A.) The agency negligently fails to offer an increased limit of coverage or benefit under a policy. B.) The agency is sued by an insured for giving incorrect advice. C.) The agency losses commission income from policies that were not issued by the insurer.

C.) The agency losses commission income from policies that were not issued by the insurer.

What is the major difference between a stock company and a mutual company? A.) Amount of benefits B.) Number of producers C.) Types of policies issued D.) Ownership

D.) Ownership

Chance of a windstorm causing a loss to one's property is? A.) Hazard B.) Peril C.) Uninsurable D.) Risk

D.) Risk

An insured's business is damaged because of a fire, and he is forced to close the property temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Indirect (consequential)

What is subrogation?

Insured's legal right to seek damages from 3rd parties

What does arbitration mean?

Used when the insured and insurer cannot agree on how to settle a claim.

How to calculate loss payment?

loss payment= (insurance carried/insurance required) x loss amount

When is liability coverage included in a homeowners policy? A.) It is included automatically B.) If the insured has forms HO-2 & HO-3. C.) If the insured has form H)-4. D.) If there is an endorsement

A.) It is included automatically

An insurance contract must contain all of the following to be considered legally binding EXCEPT? A.) Offer & acceptance B.) Consideration C.) Competent parties D.) Beneficiary's consent

D.) Beneficiary's consent

Which of the following would NOT be considered a source of insurability information by an insurer? A.) Insurance history B.) The applicant's marital status C.) Interviews with the applicant's neighbors & friends D.) Motor vehicle records

B.) The applicant's marital status

Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT? A.) Expenses the insured incurs rendering first aid for bodily injury to 3rd parties. B.) Damage to the property of others. C.) Damage to a 3rd party property for which the insured is legally liable. D.) Claims expense

C.) Damage to a 3rd party property for which the insured is legally liable.

All of the following are exclusions that apply in all 3 types of Dwelling Policies EXCEPT? A.) Water damage B.) Earth movement C.) Fire or lightning D.) Government action

C.) Fire or lightning

With respect to auto insurance, the term owned autos includes all of the following EXCEPT? A.) A pickup or van titled to and used in the name insured's business. B.) Any private passenger auto titled to the named insured. C.) A pickup or van acquired by the named insured for a period of more than 6 months. D.) Any private passenger auto leased to the named insured for a period of more than 6 months.

A.) A pickup of van titled to and used in the named insured's business.

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? A.) Additional coverage B.) Exclusions C.) Declarations D.) Insuring agreement

A.) Additional coverage

Which of the following statements is TRUE regarding members of the Georgia Fair Access to Insurance Requirements (FAIR) plan? A.) All authorized insurers of property insurance must become members. B.) Only policyholders who meet certain standards of financial solvency may purchase coverage. C.) Membership is restricted to the top 10 property insurers by premium volume. D.) Only licensed agents may be members.

A.) All authorized insurers of property insurance must become members.

Which of the following is a method of claim settlement used in casualty insurance when the insured and insurer cannot agree on how to settle a claim? A.) Arbitration B.) Proof of loss C.) Restoration D.) Appraisal

A.) Arbitration

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the? A.) Insuring agreement B.) Conditions C.) Exclusions D.) Declarations

A.) Insuring agreement

Which of the following perils is covered under both the basic form and broad form dwelling policies? A.) Internal explosion B.) Falling objects C.) Weight of ice, snow, or sleet. D.) Freezing of plumbing, heating, or air conditioning systems.

A.) Internal explosion

Which of the following statements is NOT true regarding personal umbrella liability policy? A.) It provided errors and omissions coverage for an agency. B.) It may cover certain exposures not provided under the primary layer. C.) It may require the payment of self-insured retention. D.) It provides excess liability coverage over underlying personal liability.

A.) It provides errors and omissions coverage for an agency.

Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy? A.) Loss or expense caused by the cancellation of a lease is covered. B.) It pays for the loss of rent you would have collected less any expense that would not have continued. C.) Coverage continues until repairs are completed. D.) The period of time to repair or replace is not limited by the expiration date of the policy.

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

Duties of the insurer found in property policy conditions include all of the following EXCEPT? A.) Notify the insured in the event of financial difficulty. B.) Pay covered losses C.) Provide advance notice of cancellation. D.) Return any premiums to the insured.

A.) Notify the insured in the even of financial difficulty.

Rental Reimbursement is only available if the policy includes which coverage? A.) Other than collision coverage B.) Extended non-owned coverage for named insured C.) Towing and labor costs D.) Named non-owner coverage

A.) Other than collision coverage

In a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage for which the insured becomes legally liable because of a watercraft accident? A.) Part A B.) Part B C.) Part D D.) Part E

A.) Part A

Under the personal auto policy, liability for bodily injury resulting from the insured's use of a non-owned automobile is? A.) Provided by the insured's policy on an excess basis. B.) Not covered C.) Shared on a pro rata basis. D.) Provided by the insured's policy on a primary basis.

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

Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? A.) Vacant farmland owned by the insured. B.) A residence where an insured is temporarily residing. C.) A family cemetery plot. D.) A lakeside cabin rented by the insured for vacation.

A.) Vacant farmland owned by the insured.

An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. HIs car is stolen and recovered 5 days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay? A.) $45 B.) $60 C.) $75 D.) $100

B.) $60

What is the amount of coverage that would be available for a detached garage under the Coverage B-Other Structures of a homeowners policy? A.) No coverage B.) 10% of Coverage A C.) 20% of Coverage A D.) A flat amount listed in the policy declarations.

B.) 10% of Coverage A

What is a material misrepresentation? A.) Concealment B.) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company. C.) Any misstatement made by an applicant for insurance. D.) Any misstatement by the producer.

B.) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company.

A policy condition that stipulates how the amount of damaged or lost property will be determined if the insured and the principle do not agree on the value of a property loss is known as? A.) 3rd party provision B.) Appraisal C.) Coinsurance D.) Loss valuation

B.) Appraisal

If an insured has an umbrella policy in addition to his personal auto policy, which would be considered the underlying policy? A.) General liability policy B.) Auto policy C.) Umbrella policy D.) Excess policy

B.) Auto policy

If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply? A.) Within 60 days B.) Automatically C.) When the new policy is written. D.) When the policy is up for renewal.

B.) Automatically

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of? A.) Breach of warranty B.) Concealment C.) Waiver D.) Fraud

B.) Concealment

The difference in the contents coverage on an HO-3 & HO-5 is which of the following? A.) Content are covered for replacement cost on HO-3, and ACV on HO-5. B.) Contents are covered open peril on HO-5, and named peril on HO-3. C.) Contents are covered open peril on HO-3, and named peril on HO-5. D.) Contents are covered for replacement cost on HO-5, and ACV on HO-3.

B.) Contents are covered open peril on HO-5, and named peril on HO-3.

Which of the following statements is true concerning the special form dwelling policy? A.) Coverage A is for all-risk, and Coverage C is for basic perils only. B.) Coverage A is all-risk perils, & Coverage C is for the broad form perils. C.) Both Coverage A & Coverage C are provided on all-risk basis. D.) Both Coverage A & Coverage C are provided for the broad form perils.

B.) Coverage A is for all-risk perils, & Coverage C is for the broad form perils.

Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? A.) Coverage C B.) Coverage D C.) Coverage A D.) Coverage B

B.) Coverage D

In dwelling policies, automatic increase in insurance is? A.) Coverage for newly acquired property. B.) Coverage by endorsement C.) Automatic coverage D.) Coverage without additional premium.

B.) Coverage by endorsement

Which of the following best describes a misrepresentation? A.) Discriminating among individuals of the same insuring class. B.) Issuing sales material with exaggerated statements about policy benefits. C.) Making a deceptive or untrue statement about a person engaged in the insurance business. D.) Making a maliciously critical statement that is intended to injure another person.

B.) Issuing sales material with exaggerated statements about policy benefits.

Which of the following would NOT be considered causes for flood conditions covered by the National Flood Insurance Program? A.) Mudflow & collapse B.) Landslides C.) Overflow of inland or tidal waters D.) Unusual & rapid accumulation or runoff of surface waters from any source.

B.) Landslides

Which of the following coverages is included in an unendorsed homeowners policy? A.) Earthquake B.) Medical payment to others C.) Personal property replacement coverage. D.) Fungi, wet or dry rot, or bacteria.

B.) Medical payment to others

When an umbrella policy us broader than underlying insurance and it pays a loss that is not covered y the underlying policy, it usually only pays? A.) A percentage of the loss as described on the declarations. B.) The excess over the self-insured retention. C.) The amount specified in the policy under the additional coverage provisions. D.) The amount in excess of the policy's limits of liability.

B.) The excess over the self-insured retention.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT? A.) A friend injured while driving the insured's vehicle with permission. B.) The insured is injured while exiting a friend's mobile home. C.) The insured is injured by a motor vehicle while crossing the street. D.) The insured's child sustains injuries when the car she is in accidentally rolls down a hill.

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

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? A.) The insured would have to pay the self-insured retention limit. B.) The insured would be responsible for the amount required as underlying limits in the event of a claim. C.) It would have no effect on the umbrella policy. D.) The policy will be cancelled.

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

If more than one person has an insurable interest in the property covered under a dwelling policy,...? A.) All insured must decide which one will be liable for the loss. B.) The insurer will be liable for only the insured's interest in damaged property. C.) Liability will be split evenly among all people who have insurable interest. D.) All involved must decide which one will be liable for the loss.

B.) The insurer will be liable for only the insured's interest in damaged property.

Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? A.) Supplies used for repair of the dwelling. B.) Theft of a renter's lawnmower used to service the premises. C.) Fire damage to building material on the premises. D.) Outdoor personal property of the insured.

B.) Theft of a renter's lawnmower used to service the premises.

In forming an insurance contract, when does acceptance usually occur? A.) When an insured submits an application. B.) When an insurer's underwrites approves coverage. C.) When an insurer receives an application. D.) When an insurer delivers the policy.

B.) When an insurer's underwrites approves coverage.

In the event of theft of covered vehicle, transportation expenses coverage in a personal auto policy will cover the expenses starting how many hours after theft? A.) Immediately B.) 24 hrs C.) 48 hrs D.) 72 hrs

C.) 48 hrs

An insured insists that the insurer owes him $10,000 for liability damages, while the insurer asserts that they owe no more than $7,000. Which of the following would most likely describe the type of claim settlement that the insured and the insurer might pursue? A.) Independent audit B.) Appraisal hearing C.) Arbitration D.) Small claims court

C.) Arbitration

Which of the following would NOT be covered under the liability section of a personal auto policy? A.) Bodily injury resulting from an accident while a person other than the named insured is operating the vehicle. B.) Property damage to a store front while the insured driver is under the influence. C.) Bodily injury caused by the insured's negligence while driving a three-wheel all-terrain vehicle. D.) Property damage caused by a trailer detaching from an insured vehicle.

C.) Bodily injury caused by the insured's negligence while driving a three-wheeled all-terrain vehicle.

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? A.) Representation B.) Adhesion C.) Consideration D.) Good Faith

C.) Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A.) Contract of adhesion B.) Acceptance C.) Consideration D.) Legal purpose

C.) Consideration

In insurance transactions, fiduciary responsibility means? A.) Being liable with respect to payment of claims. B.) Commingling premiums with agent's personal funds. C.) Handling insurer funds in a trust capacity. D.) Maintaining a good credit record.

C.) Handling insurer funds in a trust capacity.

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act? A.) Illegal until endorsed by the Guaranty Association. B.) Legal, provided that the other insurers are paid royalties for the usage of their names. C.) Illegal under any circumstances. D.) Legal, provided that the information can be verified.

C.) Illegal under any circumstances.

Which of the following types of property would be covered in homeowners coverage forms? A.) Structures rented to others who are not tenants of the dwelling. B.) Animals, birds, or fish C.) Landlord furnishings in an on-premises apartment. D.) Structures used for business purposes.

C.) Landlord furnishings in an on-premises apartment.

Which of the following personal auto coverages would pay for insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? A.) Comprehensive coverage B.) Collision coverage C.) Liability coverage D.) Medical payments

C.) Liability coverage

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? A.) The insured's vehicle is damaged when it collides with a deer. B.) A passenger in the insured's vehicle is injured following an accident caused by the insured. C.) The insured damages a rented garage when he failed to stop in time. D.) A temporary substitute vehicle is damaged while the insured is driving it.

C.) The insured damages a rented garage when he failed to stop in time.

All of the following are true regarding physical damage coverage EXCEPT? A.) The policy will pay up to $20 per day up to a maximum of $600 for rental transportation. B.) The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible. C.) 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. D.) Losses to non-owned autos will be covered the same as the broadest coverage available for any covered auto, except non-owned trailers are limited to $1,500.

C.) 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.

In personal auto policies, the term "you" refers to? A.) Any person reading the policy. B.) The insurer. C.) The named insured. D.) Any person injured in a covered accident.

C.) The named insured.

Which of the following is an example of a producer's fiduciary duty? A.) A duty to base all transactions upon the principle of utmost good faith. B.) The obligation to tell the truth to the best of one's knowledge. C.) The trust that a client places in the producer's hands in regard to handling premiums.

C.) The trust that a client places in the producer's hands in regard to handling premiums.

Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value? A.) They are excluded from the flood insurance policy. B.) They are subject to a $1,000 deductible. C.) They are automatically provided with replacement cost coverage. D.) They qualify for maximum compensation under the flood insurance program.

C.) They are automatically provided with replacement cost coverage.

Both the broad theft and limited theft endorsements on the dwelling program exclude all of the following types of property EXCEPT? A.) Motor vehicle licensed for the road. B.) Aircraft C.) Watercraft D.) Credit cards

C.) Watercraft

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and 2 passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the 1st passenger, and $8,000 for the 2nd passenger. How much will the policy pay under medical payments coverage? A.) $15,000 B.) $5,000 maximum for the accident C.) $5,000 minus the policy deductible D.) $14,000

D.) $14,000

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? A.) Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle. B.) Any auto furnished for the insured's regular use, but not named on the policy. C.) Any vehicle while located inside a racing facility for the purpose of racing. D.) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair.

D.) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair.

Which of the following statements regarding coverage for the flood and earthquake perils is true? A.) Flood & earthquake coverage is available in all policies. B.) Flood & earthquake is available only through government insurance. C.) Flood insurance is usually provided in property policies, but earthquake coverage is available by endorsement only. D.) Both flood & earthquake are excluded perils in all property policies.

D.) Both flood & earthquake are excluded perils in all property policies.

The at-fault driver in a insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is? A.) Not liable for the damages in excess of his limits. B.) Required to post a bond for the amount of damages above his limits. C.) Considered uninsured D.) Considered underinsured

D.) Considered underinsured

Which one of the following provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time? A.) Legal action B.) Loss settlement C.) Proof of loss D.) Duties after loss

D.) Duties after loss

Which of the following claims would be included under the dwelling policy? A.) Fire damage to a garage located on the insured premises used as an auto repair shop. B.) Theft of the insured's auto from the detached garage. C.) Death to the insured's pet caused by smoke inhalation. D.) Fire damage to the insured's rowboat stored in the attached garage.

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

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? A.) Lower limits B.) The insurer will not pay for out-of-state accidents. C.) Only the limits specified in the policy. D.) Higher limits

D.) Higher limits

Who is responsible for filling out a notice of claim form? A.) Adjuster B.) Agent C.) Insurer D.) Insured

D.) Insured

The endorsement that provided coverage for looses arising from sudden collapse of earth arising from underground limestone created by the action of water on rock formation is a/an? A.) Mine subsidence endorsement B.) Earthquake endorsement C.) Earth subsidence endorsement D.) Sinkhole collapse endorsement

D.) Sinkhole collapse endorsement

Which of the following would qualify as a competent party in an insurance contract? A.) The applicant is intoxicated at the time of application. B.) The applicant is a 12-year-old student. C.) The application is under the influence of a mind-impairing medication at the time of application. D.) The applicant has a prior felony conviction.

D.) The applicant has a prior felony conviction.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy A.) The insured's friend is injured in an accident while riding as a passenger in the insured's car. B.) The insured's mother is injured while exiting from the insured vehicle. C.) The insured is struck by another vehicle while crossing the street. D.) The insured is injured while driving his motorcycle on his resident premises.

D.) The insured is injured while driving his motorcycle on his resident premises.

In which of the following situations would off-premises coverage in a broad theft endorsement of the insured's dwelling policy apply? A.) The insured's live-in-maid's quarters are burglarized. B.) In insured's china set is stolen from her home while she's traveling on business. C.) The insured's vacuum cleaner is stolen from her apartment. D.) The insured's camera is stolen from his suitcase while he is on vacation.

D.) The insured's camera is stolen from his suitcase while he is on vacation.

When would uninsured motorist coverage apply? A.) When the insured drives an uninsured vehicle. B.) When the insured is legally liable, but does not have sufficient coverage. C.) When the insured is legally liable. D.) When the other party is legally liable but has no insurance.

D.) When the other party is legally liable but has no insurance.