Property: Guarantee Exam

firms must have producers that will be responsible for their compliance with state laws and regulations. what is the minimum number of producers that must be present in a given firm?

1

NFIP flood insurance policies have a term period of

1 year

in illinois, any type of property or casualty insurance policy that not being renewed because of nonpayment or premium requires an advance notice of how many days to the insured and a copy to the writing producer

10 days

the personal property off-premises extensions of dwelling forms provides limits of coverage up to

10% of Coverage C anywhere in the world

within what time period from the receipt must the insurer refund premiums due to the insured?

15 days

temporary licenses may be issued to surviving spouses under certain circumstances. these licenses are good for how many days?

180 days

people are eligible to apply for basic property insurance through the FAIR plan after they have failed to obtain insurance through the normal market after

3 attempts

an individual just applied for national flood insurance. how many days can she expect to wait before coverage is effective

30 days

within how many days must a producer report his or her felony conviction to the director?

30 days

cancellation of a commercial lines policy for any other reason than nonpayment of premium requires how many days advance written notice?

60 days

how soon does the period of restoration for business income coverage begin after the direct loss

72 hours

An insured is the owner of a clothing boutique and has a Floor Plan Merchandise Floater. She noticed three months ago that 3 dresses had been stolen but didn't file a report until recently. How much will her insurer pay?

90% of the limit written

which of the following would NOT be allowed to offer insurance advice for a fee or commission in this state?

a director of an insurance company

in a liability policy with split limits of 25/50/25, which number is the max amount that would be payable in the event of damage to a person's property?

the amount if the third number, $25,000 ex: represents the max payable to person's property

A house insured with a homeowners policy has been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal?

An additional 5% of the policy limit may be paid for debris removal

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

Be reduced by 10%

loss valuation is best described as the process of

Determining the premium charged and the amount of insurance required on a specific property

which homeowners form provides open peril coverage for dwelling (Coverage A) and contents (coverage C)

HO-5 ex: open peril for both dwelling and contents

Which statement best describes "agreement" as it relates to contracts?

One party accepts the exact terms of the other party's offer ex: Agreement includes both an offer and its acceptance.

What are the 2 types of utility services endorsements available in businessowners policies?

Utility services - Direct Damage, and Utility Services - Time Element.

if a producer's license is violated for criminal activity, what is the maximum amount that can be charged for each offense?

$10,000

what is the maximum civil penalty that a producer can be charged if found guilty of violations in a court of law?

$100,000

the amount of reinsurance available for mine subsidence losses on a residential or commercial building cannot be less than what amount

$200,000

how much is the fee for a nonresident producer to obtain and maintain his or her insurance license?

$250 payable once every 2 years

insureds covered under a Mobile Homeowners Policy move their mobile home to prevent it from being damaged by a fire. What is the maximum amount the policy will pay for this?

$500

A home is insured for $200,000 under an HO-3. Last week, the owner purchased a new home and began to move his personal property to the new residence. Last night, vandals did $8,000 of damage to the property that had been moved to his new residence. Disregarding any deductible, how much will the HO-3 pay?

$8,000

after a covered loss on a homeowners policy, the insured must do all of the following EXCEPT

abandon the property involved to the insurer

under the garment contractor floater of an inland marine policy, coverage while the property is in transit between the insure and the subcontractor is usually written on which basis

all-risk

which of the following statements is CORRECT regarding the replacement cost coverages under the businessowners policy (BOP)?

an 80% insurance to value requirement is in place

Under coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage?

any loss paid under Coverage B reduces the Coverage A limit of liability

according to the Illinois Insurance Code, disclosure rule for life or health insurance solicitation

applies to all policies and insurance issuers

what is the minimum penalty that may be imposed on an insurer found guilty of defamation?

at least $200, but no more than $10,000

when a premium finance agreement contains a power of attorney enabling the premium finance company to cancel any insurance contract listed in the agreement, in the event of payment default, the insurance contract may not be cancelled by the company unless

at least 10 days' written notice if given of the finance company's intent to cancel the payment default in sured within the 10 days period

the requirements to hold a nonresident producer license include all of the following EXCEPT

be a part-time resident of illinois

in the event that a premium finance agreement is cancelled or prepaid, the service charge or other allowable charge will

be retained by the premium finance company

if an insurance producer knowingly and consistently converts fiduciary monies for personal use, the producer will be charged with a

class 4 felony

what two policy components are part of every commercial package policy?

common policy declarations and common policy conditions

An insured intentionally did not disclose a material fact on an application for insurance. this would be considered

concealment

Which of the following elements of an insurance contract requires paying premium

consideration

which of the following perils is NOT covered by DP-2?

damage to pets, birds, or fish

all of the following are optional endorsements that may be added to the standard equipment breakdown coverage form except

debris removal

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?

equipment breakdown

which of the following is covered under a dwelling policy?

fire caused by an earthquake

which of the following is NOT true regarding the automatic increase in insurance endorsement in dwelling policies?

it does not require additional premium

which one of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions?

limits of liability

with respect to the commercial package policy, an interline endorsement is one that

may apply to more than one line of insurance that is included in the package

what is the limit to the number of 90-day temporary licenses that a person may hold?

no more than 1 per lifetime

if the Director serves a notice of a hearing upon a insurer, when must the hearing be held?

no sooner than 20 days and no later than 30 days after the notice is served

a trust officer of a bank wants to counsel people on their life insurance policies, for a small fee. what licensure must the officer receive in order to do this legally

none

what term includes losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage that is neither intended nor expected?

occurence

what kind of coverage does Form DP-3 provide

open peril

Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of the

policy

when an insurer pays for the cost to exchange damaged property with new property of similar kind and quality, it is called

replacement cost

all insurance companies are forbidden to do any of the following EXCEPT

require proof of insurability

which of the following perils will be EXCLUDED from coverage under HO-4 Tenant Broad Form of a homeowner policy?

sewer water backup

Which of the following is NOT a cause of loss form for commercial property coverage?

specific

homeowner policies consider all of the following insured locations EXCEPT

strawberry patch owned by the insured

an insured was having a new home built. while digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. the force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. who pays for this damage?

the contractor ex: damage caused by the use of explosives or damage cause by harboring poisonous snakes or wild animals are examples. neighbor would not need to prove negligence, just that the damage occurred

in order for the cancellation of a property insurance policy to be effective, the insurance company must send prior written notice of the cancellation to

the first name insured the mortgagee, if any a copy of the notice to the writing producer - all of the above

all of the following are TRUE regarding the cancellation condition of a policy EXCEPT

the insurer must provide proof that the insured received the notice

if the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?

the insurer will be reimbursed for the excess costs by the NFIP

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to completed, the insured was without income for that period of time. The insured's policy included both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

the loss of income for the time the diner was closed

all of the following are considered insured under the hired and nonowned auto liability endorsement added to a businessowners policy EXCEPT

the owner of a nonowned vehicle

under the property and casualty conditions of a homeowners policy, what may happen if it is discovered that the policyowner committed concealment or fraud?

the policy may be voided

all of the following are true about the completion of prelicensing training EXCEPT

the requirement can be fulfilled by competing training through lecture course, home study or online

the broad cause of loss form in the commercial property policy contains three perils in addition to the basic form perils. which of the following is NOT one of those three perils

utility services

what guarantees that the information explained in the insurance contract is true?

warranty

When does the federal emergency flood insurance program go into effect and end?

when a community applies for the program