readiness exam

An insured was traveling down an icy road and hit a sign, causing $1,350 damage to the car. The policy requires a $250 deductible. The insured already collected on a $1,500 claim earlier this year. How much will the insured collect on this claim?

$1,100

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies.

Which of the following types of bonds guarantees that a supplier will furnish supplies, materials, products, and equipment as specified in the written contract?

Supply bond

An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?

$10,000

When reviewing a standard workers compensation and employers liability policy, the limits of coverage are described in Part One of the policy. The dollar limits of the benefits provided are stated

In the state workers compensation law itself.

With regard to homeowners Section II, which of the following does NOT meet the definition of insured location?

A plot of farmland owned or rented by the insured

What does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured.

What do you call a limit of liability offered as a combined single limit of coverage for all bodily injury to passengers and nonpassengers of an aircraft and property damage?

Smooth limit

Which of the following statements is NOT true of a commercial umbrella liability policy?

It would automatically cover all losses as they occur.

The extended nonowned coverage provides protection for

Only the person(s) named on the policy.

The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy?

Physical damage on a customer's auto

Which of the following is NOT available in a package policy?

Professional liability

The amount of loss the insured is willing to absorb without insurance protection is known as

Self-insured retention.

Members of Lloyd's Associations are liable only for which of the following?

Their individual portion of the risk

All of the following qualify as an "insured contract," as defined in commercial auto policies EXCEPT

Agreement for demolition near a railroad.

An agreement that is enforceable by law is known as what kind of contract?

Legal

How is the premium paid for the businessowners policy?

One indivisible premium

Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT

Pollution.

Which of the following is not involved in a three-party contract?

Producer

What types of injuries could incur additional penalties and/or increased benefits paid by the employer?

The employer's willful failure to provide required safety goggles

Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

Without receiving written consent from an insurance regulatory authority.

If a car is stolen and left in a snow bank, causing the radiator to freeze and sustain heavy damage, is the damage covered by the auto policy?

Yes, freezing exclusion is removed if the car is stolen.

A businessowners policy is discontinued. For how long does the insurer have the right to examine and audit the insured's books and records?

3 years

The obligation to compensate injured workers without regard to fault or negligence is known as

Absolute liability.

Insurance contracts are unilateral in nature. What does that mean?

Only one party makes a promise.

A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT

Auto collision coverage.

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 payment of premium?

Consideration

Which of the following exposures is not covered under the garage liability coverage form?

Contractual liability

Under which legal defense may a claimant's recovery be defeated if the defendant can show that claimant contributed, no matter how slightly, to the injury or damage?

Contributory negligence

The supplementary payments section of the commercial general liability policy would cover

Court costs assessed against the insured in a suit.

Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. Georgia has compulsory workers compensation laws.Space Age's owner thinks that his company is too small and unprofitable to carry the workers comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT

Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage.

Which of the following is the other major coverage provided by the businessowners liability coverage form?

Medical payments

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

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by

The golfer's homeowners liability coverage.

What is an insured contract?

Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sound worse than it is. This is an example of an unfair trade practice of

Defamation.

In a personal auto policy (PAP), a covered auto includes all of the following EXCEPT

A van used in the delivery business.

Which of the following commercial auto coverages provides protection for most commercial auto exposures except truckers, garages,and motor carriers?

Business auto coverage

When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flower bed. The insured was found to be legally liable for this damage. This is an example of

Vicarious liability.