Study questions P & C

Fiduciary liability policy paid by the pension fund

An audit revealed the administrator for a pensions plan has made investments that were not consistent with the risk tolerance set forth in the plan for its members. The earnings for the past year are substantially below the average for comparable funds. The governing board wants to take action against the administrator. What type of commercial liability would the board need to provide for this risk?

$50,000

An insured was judged at fault in an automobile accident. He has the 100/300 BI coverage. Three other individuals were injured in the vehicle hit by the insured. They were awarded damages of $150,000, $75,000, and $75000. What amount, if any, was not covered by his insurance policy?

1

Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?

60 days

An agent suspects that his insurer is committing insurance fraud. Within how any days of that discovery must the agent report the fraud to the Department of Insurance?

Retention

If an insured purchases an insurance policy witha large deductible, what risk management technique is the insured covering?

Be reduced by 10%

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

65%

Under the Workers Compensation Act what percentage of the employees wages will the surviving spouse with 2 children receive of the employees death?

Comparative negligence

Under which legal defense is there an apportionment if damages based upon the degree of fault of the plaintiffs and the defendant?

Contributory negligence

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

$8,000

Using the pro-rata method, if a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss?

insuring agreement

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and insured

Insuring agreement

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Reciprocal insurers

What type of insurer uses a formal sharing agreement?

A contractual liability policy

What type of policy, which may be added by endorsement or purchased separately, may an individual purchase i order to provide coverage for other types of contracts?

$120,000

When an insured purchased his home 10 years ago for $80,000, it has a replacement value cost of $100,000. Today the home has a replacement cost of $200,000 and has depreciated 4% each year. The insured's home has a cash value of:

Vicarious liability

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

Vicarious liability

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

Replacement cost

When an insurer pays for the cost to exchange damaged property of similar kinds and quality, it is called

When loss payments equal the applicable limit of insurance

When does the insurer's duty to defend a suit of claim end in a commercial liability policy limit?

When loss payments equal the applicable limit of insurance.

When does the insurer's duty to defend a suit or claim end in a commercial general liability policy?

in the state workers compensation law itself

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

They are covered if they are used to replace previously owned autos with that coverage

When symbol 7 is provided, which of the following statements is true with regards to newly acquired autos?

The jones act

Which federal act covers crews of ships the same as railroad workers?

HO-5

Which form insures both building and personal property on an open peril basis?

Form 5

Which homeowners form provides open peril coverage for dwelling (Coverage A) and content (coverage C)?

Fire caused by earthquake

Which of the following is covered under a dwelling policy? -Fire caused by earthquake -Freezing plumbing system -Flood or surface water -Structures used for commercial manufactoring

Insuring agreement

Which of the following is not found in the common policy declarations of a commercial package policy? -Schedule of coverage parts -Amount of premium for each coverage part -policy number -insuring agreement

Occupation

Among people in the same class and life expectancy, which of the following factors can be used to influence premium rates?

$10,000

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

Concealment

An insured intentionally did not disclose a material fact on a application form insurance. This would be considered:

Collect premium for in-force policies and explain coverages to clients that have existing policies.

Chris, who is unlicensed works part time in her father's insurance agency. She may perform all of the following activities, except:

an intervening cause

For negligent liability to exist, which is not a requirement?

A reasonable expectation that the act may cause injury or damage

For there to be negligent liability all of the following must exist, except:

Misrepresentation

Guaranteeing future dividends is considered to be an unfair or deceptive act known as:

It transfers the risk to all persons insured.

How does insurance distribute the financial consequences of individual losses?

90 days prior to expiration

How long is the period of time in which a licensee must renew his or her license?

A contractual liability policy

What type of policy, which may be added by the endorsement or purchased separately, may an insured purchase in order to provide coverage for other types of contracts?

a vehicle purchased 90 days ago

Which of the following would not be covered under a personal auto policy? -a trailer owner by the insured -a vehicle purchased 90 days ago -a vehicle listed on the declarations page - a non owned temporary substitute vehicle

$0

You open your locked safe this morning and find $4000 worth of property is missing with no other signs of forced entry. How much does your safe burglary policy pay?

an intervening cause

for negligent liability to exist, which is not a requirement? -Proximate Cause -A breach of legal duty to act or not to act -injury or damage to another -an intervening cause

the contractor

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?

3 days

An insurer must notify the consumer in writing that an investigative consumer report has been requested within how many days of the initial request?

Apply and pay a nonresident state that reciprocates

In order to get a nonresident license in Louisiana, producers must:

Federal Employers Liability Act (FELA)

The Federal act that provided more favorable benefits for interstate railroad workers allowing the injured worker to sure the employer for negligence is the:

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

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?

Auto collision coverage

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

If an applicant is declined for an insurance policy, he or she has no right to know what was in the report

According to the Fair Credit Reporting act all of the following statements are true except: -If an applicant is declined for an insurance policy, he or she has no right to know what was in the report -It protects consumers against the circulation of inaccurate information -it ensures that consumer reporting agencies are fair in their treatment of consumers -Investigative consumer reports can be used to obtain information on the applicants character and reputation

Insurer

All advertisements, regardless of their source of creation, are the responsibility of the

The coinsurance penalty applies.

Due to the amount of insurance on a business less than 80% of its actual value on the date of loss. Which of the following is true?

50% of the limit of insurance

Farmer Steve's shed has been vacant for an entire year. When he files a claim to cover some recent damage to the shed. How much will his farm policy pay?

Riot

For an additional premium, the extended coverages written on the basic from dwelling policy would cover which of the following? -Vandalism -Glass Breakage -Fre -Riot

Policy

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

Replacement Cost basis

The equipment breakdown coverage form valus loss on a/an:

physical damage on a customers auto

The garage coverage form is written to cover the insurance needs of the business in selling, repairing, servicing, or storing automobiles. Which of the following coverages is not included in a garage policy? -Product liability -physical damage on a customers auto -auto liability -premises and operations liability

Turkeys and chicken

The livestock coverage form provides coverage for livestock. Livestock means any of the following except? -Turkeys and Chickens -Cattle and swine -sheep and goats -Horses and mules

absolute liability

The obligation to compensated injured workers without regard to fault of negligence is known as

10% of Coverage C anywhere in the world

The personal property off-premises extension of dwelling forms provides limits of coverage up to

Assignment

The transfer of a legal right in a insurance policy is called a

the policy period ends

Under a workers compensation policy, premiums will be determined when

Intervening cause

What doctrine may reduce of bar the recovery from a defendant if another event, beyond the control of the defendant, sets in motion a new chain of event causing injury or damage?

they are not taxable and are not gauranteed

What is an accurate description of life insurance policy dividends?

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

What is an insured contract?

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

What is an insured contract?

To share the risk of loss from terrorist attacks with the insurance industry

What is the purpose of Terrorism Risk Insurance Act?

protect the general public

What is the purpose pf requiring licenses for persons who transmit insurance

The company will reimburse the insured for all loss of earnings

Which of the following is false concerning liability coverage of a business auto policy? -The company will pay any interest accruing between time of judgement and payment. -The company will defend any suit alleging BI or PD covered by the policy -The company will reimburse the insured for all loss of earnings. -The company will pay the premium on any appeal bond

After 1 year

If a producer's license was revoked for a violation of the insurance code, when can the producer apply for a new license?

$2,500

If an individual willfully violates provision of the Fair Credit Reporting Act, what is the max civil penalty?

Limits of Liability

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

absolute liability

All are legal defenses against a claim of negligence except? -Assumption of risk -Absolute liability -Intervening cause -Contributory negligence

Coverage is commonly provided through a federally funded program

All of the following are true statements about earthquake coverage in property policies except: -Coverage is commonly provided through a federally funded program -coverage is excluded by most property forms -coverage may be added by endorsements -coverage can be purchased separately for an additional premium.

An insured's 14 year old son was throwing rocks at a neighbors house and broke several windows

Coverage E (Personal Liability) and/or Coverage F (Medical Payments to Others) would respond to a claim arising from all of the following situations except: -While sweeping the floors an insureds resident maid trips and falls down the stairs breaking her leg -An insureds boat stored in the garage slips off its supports and injures a visitor -An insureds dog left in the care of a friend bites a sales person -An insured's 14 year old son was throwing rocks at a neighbors house and broke several windows

$2,500

If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

$500

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

stop committing a particular violation

The Commissioner issues a Cease and Desist order, that means the insurer must:

Self-insured retention

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

Business Auto Policy

Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under a

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

Under Coverage B - other structures, a HO policy provides coverage for other structure on the residence premises. Which of the following statements is not true of this coverage?

while it is in any residence premises occupied by the insured.

Under Coverage C and at the request of an insured, personal property of a guest or residence employee is covered:

it is specifically stated in the contract

Which of the following is not true of the agents implied authority? -It is incidental to express authority -It is given to an agent by the insurance company that is not specifically communicated -it is specifically stated in the contract -it is assumed by the agent in order to transact the business of insurance

Market Value

Which valuation method takes into consideration what a willing buyer would pay for an insureds property?

it grants the insurer the right to make inspections regarding issued insurance

which of the following is true regarding inspection and surveys as a common policy condition? -it does not allow findings to be used for establishing premium charges -it grants the insurer the right to make inspections regarding issued insurance -it does not allow the insurer to make recommendations -It requires the insurer to conduct an inspection at least once during the policy period

Real property

Which of the following types of property is not movable? -Firm Property -Transferable property -Fixed property -Real Property

Outdoor Sign

Which of the following would be covered under building and personal property coverage from? -personal property while airborne -underground pipes -outdoor sign -building foundations

Twisting

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as:

Personal

In reference to insurable interest, which of the following is not an element of insurable risk? -Blood -Financial -Business -Personal

Limited Peril Coverage

Section III of the business auto policy provides physical damage coverage. All of the following are physical damages that may be selected coverages, except: -Specified causes of loss -collision coverage -Comprehensive Coverage -limited peril coverage