Test

An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover?

A child trips over a toy in the driveway, cuts her knee, and requires stitches Coverage excludes loss or damage that results from sexual molestation, corporal punishment, physical or mental abuse, and draft and saddle animals, including vehicles used with such animals, motor vehicles, aircraft, or watercraft

All of the following are conditions commonly found in the insurance policies EXCEPT

Insuring agreement Insuring agreement provides information on the policy's coverage's. Conditions state the legal obligations and duties of the parties to the contract.

Which item would not be covered under building coverage in a building and personal property policy?

The bulldozer being used as part of a business addition under construction that is parked 500 feet from the building building coverage insured the building described, including outdoor fixtures and furniture, items used to service the property, permanently installed machinery and equipment, and additions under construction, including materials, supplies and equipment within 100 feet of the premises

A certified insurance consultant was advising his client on benefits and advantages of an insurance policy. His friend, and insurance producer, later sold the policy to the client. As a token of his appreciation for added business, the producers shared part of his commission with the consultant. Which of the following statements is true regarding this scenario?

The consultant has violated the code provisions for compensation and will have to pay a fine. Consultants who violate provisions of the insurance code regarding compensation can be penalized between $250 and $2,500

A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?

The damage occurred when the concrete fell Under the conditions , the loss occurs at the time of the incident, not when the faulty work was done.

Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?

The endorsement is available for additional premium

According to the standard workers comp and employer liability policy form, a state should be listed in part three-- other states' insurance of the workers comp and employers liability policy when

The insured expects to extend operations to that state By naming the state in Part Three of a workers comp and employers liability, an employer provides that company operations may be conducted in that state

All of the following are other coverage's included in both the broad and special form dwelling policy EXCEPT

Theft of personal property Can only be included by endorsement

An insurer can cancel an auto policy for all of the following reasons EXCEPT

a covered operator caused a car accident An insurer can cancel policy in the first 60 days or if a policyholder hasn't paid premiums or loses his or her license

The insurance with a homeowner's policy has had damage to his property caused by a volcano. Which of the following is true?

all volcanic eruptions within 72 hour period will be considered one occurrence.

An installation floater is used to insure

appliances intended to become a permanent part of the building

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

conditions

An owner of a parking lot wants liability coverage for damage to vehicles while in her custody. She needs

garage keepers coverage Provides physical damage coverage on customer's autos while in the care, custody, and control of the garage operation

Courts will interpret any ambiguity in an insurance contract

in favor of the insured

All of the following actions by a person could be described as risk avoidance EXCEPT

investing in the stock market Investing in the stock market is not an example of risk avoidance; it creates a possibility of a loss

The Federal Fair Credit Reporting Act

regulates consumer reports

An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay

$1,000 minus the deductible Because the HO-3 covers structures on an open peril basis, the insurance company would pay $1,000 minus any deductible the insured must pay

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember then when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy will not be affected In insurance, fraud is the intentional misrepresentation or material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first 2 years of the effective policy date. In this particular instance the applicant did not commit fraud

A business hosted an annual holiday party for employees and customers, after which a customer who had too much to drink was involved in an automobile accident. Occupants of the other car involved sued the business for serving the customer too much alcohol. Will the business owner's policy provide coverage?

Yes, non of the exclusions will apply The liquor liability exclusion applies to only the insured's in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages. In this case, the company's policy will most likely have to pay

The additional living expense coverage on homeowner's policies

is intended to allow the family to maintain its normal standard of living The family is allowed to maintain its normal standard of living while waiting for its house to be repaired after a covered loss

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

it provides errors and omissions coverage for an agency

A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain

license and permit bonds License and permit bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits

all of the following coverages are included in the BOP without requesting coverage extensions EXCEPT

newly acquired or constructed property

The HO-3 homeowner's policy provides

open peril coverage on the dwelling and broad form coverage on personal property The open peril coverage applies to property insured under Coverage A and B only

Under works comp system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

the employer, regardless of whether it was at fault for the injury or disease Employers are required to purchase workers comp policies. Part one pays for work related injuries to employees without regard for negligence

What is max monetary per willful violation of unfair trade practices regulations?

$25,000 if the producer knowingly and willingly engaged in an unfair method of competition or an unfair or deceptive practice, the penalty will be $25,000 per violation with a max aggregate amount of $250,000 in any 6 month period

Under business owner's policy section 1, in an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgage holder?

10 days

In a farm policy, any cost incurred by the insurer from the investigation or defense of a claim will be paid by

The insurer Limits states that the most the insurer will pay in the result of a judgement against an insured is the limit stated in the policy. Any cost incurred by the insurer for the investigation or defense of a claim or suit will be paid by the insurer, over and above the limits shown in the policy.

A specific coverage part is listed on the commercial package policy dec page, but there is no premium shown. What does that mean?

There is no coverage.

As insured has $5,000 of medical coverage on a PAP at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second. How much will the policy pay under medical payments coverage?

$14,000 the limit is not more than $5,000 per person, per accident

Tom's truck service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits?

$20 per day; $600 max The physical damage section includes a coverage extension that would pay for substitute transportation, up to $20 per day and max of $600, after the theft of a covered auto

An insurer must provide written notice how many days in advance if it decides to cancel a policy because that insured failed to make the 3rd installment on an auto policy premium?

10 days Cancellation for failure to pay the first installment requires 15 days; all others require 10

When insured's are injured on the job in CT, they must wait how long for disability benefits to begin under works comp?

3 days

If an insurance producer moves to another residence, within what span of time must he report his new address to the DOI?

30 days

Under business owner policy section 1, it an insurer wants to cancel a policy for any reason except nonpayment of premium, how many days before the effective cancellation date must the insurer notify the mortgage holder?

30 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 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?

60 days All losses will be paid within 60 days of receiving the proof of loss

In a participation plan, the insured may be eligible for which of the following

A partial premium refund The insured is eligible for dividends if the experience during the policy term falls within guidelines established by the insurer as the inception of the policy term. Dividends are not guaranteed, and to be eligible for participation, the account must generate a minimum amount of premium

Which of the following statements is true regarding the premium computation for workers comp insurance?

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 Because the initial premium calculation is based on estimated payrolls, a premium auditor may inspect actual payrolls paid to ensure the adequate premiums are being paid

Coverage F (medical payments) under a homeowner's policy would cover

A residence employee who is injured on the job Residence employee are eligible for medical payments if the bodily injury arises in the course of employment, and if the employee is not covered by workers comp

In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation?

Agreed Value Agreed value is a property policy with a provision agreed upon by the insurer and insured as to the amount of insurance that represents a fair valuation for the property at the time the insurance is written. When a loss occurs, the policy pays the agreed valued as specified on the policy schedule, regardless of the insured property's appreciation or depreciation

If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage?

Attach the home day care coverage endorsement to the HO policy a home day care coverage endorsement may be attached to the homeowner's policy to cover the liability exposure associated with the business

Which of the following is an example of a protective safeguard is a business owner's policy?

Automatic sprinkler system The protective safeguards endorsement adds a policy condition requiring the insured to maintain protective safeguards as a condition for coverage

What certification must an insurer receive before it can transact insurance in CT

Certificate of Authority

Which of the following much an insurer obtain in order to transact insurance within a given state?

Certificate of authority

Workers comp laws provide all of the following types of benefits EXCEPT

Compensatory benefits Awards for pain and suffering are not compensated under workers comp

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment Concealment occurs when a person withholds a material fact that is crucial to making a decision. In insurance, this involves withholding information that would be crucial to underwriting decisions

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?

Consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representation made in the application. Consideration on the part of the insurer is the promise to pay in the event of a loss

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report Include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources

The difference in the contents coverage on a HO-3 and HO-5 is which of the following?

Contents are covered open peril on HO-5, and named peril on HO-3 HO-5 provides open peril coverage for contents; HO-3 is named peril coverage for contents. Replacement cost coverage is available only be endorsement to either form

The designation symbols used in commercial auto policies can be found in which policy section?

Covered Auto Section 1- covered auto of a commercial auto policy explains the designation symbols used in that coverage

What is another name for liquor liability insurance?

Dram shop insurance Liquor liability is also known as dram shop liability, and refers to the exposure that bars, restaurants and other similar establishment face due to the selling, distributing, manufacturing, or serving of alcoholic beverages

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies Twisting is misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, or switch policies from one to another

Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance?

Exposure Exposure is a unit of measurement used to determine rates charged for insurance coverage

Which of the following losses would be covered by an unendorsed homeowner's policy?

Fire or lightning Fire and lightning are included in basic perils, which in turn are included in almost all homeowners policies. Earthquake coverage is only by endorsement. Theft in or to buildings under construction is not covered. If the insured's own acts, decisions, or failure to act causes the loss, it is not covered

Perils provided in policies issued by the Connecticut FAIR plain include

Fire, lightning, and internal explosion

If a farm building or structure is vacant or unoccupied, which is true?

If for 120 consecutive days, the limits applicable to the building and its contents are reduced by 50%

Under which of the following conditions can broad theft coverage be added to a dwelling policy?

If the insured is owner-occupant of the dwelling Broad theft coverage can be added as an endorsement to a dwelling policy if the insured is owner-occupant of the dwelling

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal It is illegal to participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly

With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT

Immediately report to an emergency room for medical attention The PAP states that the insurer has no duty to provide coverage under the policy if the insured's failure to comply with the duties after an accident or loss results in harm to the insurer

When is liability coverage included in a homeowners policy?

It is included automatically All homeowner's policies automatically have liability coverage included in section 2

Crews of ships are covered by the

Jones Act The Jones Act is a federal law that provides remedies to seamen who are injured while working on a vessel. It extends to provisions of the Federal Employers Liability Act (FELA)

Dwelling coverage includes all of the following EXCEPT

Land on which the dwelling is located the land is not covered, and nothing that happens to the land would be considered a covered loss

What type of property would NOT be covered under the dwelling policy special form coverage A- Dwelling?

Land on which the dwelling is located.

Which of the following types of property would be covered in homeowner's coverage forms?

Landlord furnishing in an on-premises apartment Landlord furnishings in an on-premises apartment are covered for up to $2,500. All the other types of property would be excluded from coverage under homeowner's forms

Which of the following is the basis for a claim against an insurance policy?

Loss Claims result form losses by a peril insured against in an insurance policy

Which of the following would be covered under the crime coverage inside the premises-theft of money and securities?

Loss or damage to a locked sage, vault, or cash register

Several Insured's have become liable because of a single loss. How will the policy's limit of liability be affected?

No more than the per occurrence limit applies, no matter how many insured's are involved The insurance applies separately to each insured. This condition does not increase the insurer's liability for only one occurrence.

An insured carries a property policy on her home in the amount of $250,000. A bank is shown as the mortgagor in the policy. Last month the insured made her final mortgage payment, but did not remove the bank from the policy. In the event of a covered loss to her home, how much will the bank receive?

Nothing Because the bank does not have a financial interest in the house at the time of the loss, they will receive nothing

Duties of the insurer found in property policy conditions include all of the following EXCEPT

Notify the insured in the event of financial difficulty The insurers report to the state, not the policyholders

Where is the policy period stated?

On the declarations page of the policy

Which coverage would a business owner need in a crime policy to cover money that may be stolen from a messenger?

Outside of premises Outside the premises coverage covers outside loss of money and securities

Which of the following limits, shown in the dec pages of a policy, applies to medical expenses?

Per person A combined single limit of insurance is applicable for all bodily injury and property damage losses that arise from a single occurrence. Medical expenses are limited to the per person limit shown in the declarations

All of the following are additional liability coverages automatically provided in a homeowner's policy EXCEPT

Personal injury personal injury may be added by endorsement

All of the following are parts of a personal auto policy EXCEPT

Physical damage coverage PAP is divided into: liability coverage, medical payments, uninsured motorist coverage, coverage for damage to your auto, duties after an accident, and general provisions. physical damage is in a commercial auto policy

Who are the parties to a bond?

Principal- obligee- surety the principal makes a promise to perform for the obligee; the surety pays loss to obligee if the promise is not kept

Which of the following would not be a violation of state insurance regulations?

Producer C uses her license to write uncontrolled business only The purpose of a license is to primarily write non-controlled business

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client

All of the following statements regarding a boat owner's are true EXCEPT

Replacements for the boat listed in the declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium

At the time of loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following EXCEPT

Replacing the property with other property of a lesser kind or quality At the time of loss, the insurer's claim settlement options include the following: pay the value of the lost or damaged property; pay the cost of repairing or replacing the lost or damaged property; take all or part of the property at an agreed or appraised value; or repair, rebuild, or replace with property or like kind and quality

If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowner's policy by purchasing the

Scheduled personal property endorsement Would provide all-risk coverage without the limitations for theft that are found in coverage C. The amount of coverage purchased is usually based upon recent appraisal, or the purchase price if newly purchased

Ina personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called

Self-insured Retention In casualty insurance, the portion of a claim not paid by insurance is called a retention. In property insurance, it is called a deductible

In order to be covered by the U.S. Longshore and Harbor workers compensation act, a worker must meet the requirements of the

Situs and status test A work is covered only if he meets a situs and status test. The injury must occur on the navigable waters or no an adjoining wharf, pier, dock or similar facility used in the loading, unloading, building, or repairing vessels. In addition, the individual must have been engaged in maritime employment when injured.

Which of the following is covered under they physical damage coverage of a personal auto policy?

Sound reproduction equipment permanently installed in the covered auto sound reproduction equipment is covered if installed by the manufacturer or installed later where the manufacturer would have installed the equipment

A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?

Stated amount A stated amount is an amount of insurance scheduled in a property policy which is not subject to any coinsurance requirements in the event of a covered loss

Who is covered by HO-4?

Tenants The HO-4 is a tenant broad form that may not be issued to an owner-occupant

An auto insured has purchased an auto policy with BI/PD limits of 100/300/50. Which of the following statements is FALSE concerning UM/UIM coverage?

The insured may sign a waiver and opt out of the uninsured motorist The insured much purchase UM/UIM in limits at least equal to Connecticut's minimum financial responsibility requirement

An insured invites his neighbors out for a day on the water in his boat powered with a 150 hp outboard motor. While attempting to tie the boat to the dock, his neighbor'rs hand is broken when caught between the boat and dock. What coverage would apply to the broken hand?

The insured's boat owner's policy Outboard boat and motor policies are property coverage only. Homeowner's liability does not apply to outboards with more than 25 hp. Boat owner's policies contain property, liability, and medical payments coverage.

With the following respect to commercial auto policies, the garage coverage form provides liability protection for all of the following EXCEPT

The insured's business income losses due to personal injury The garage coverage form does NOT cover personal injury and loss of wages from those injuries. such coverage would be provided by a commercial general liability policy

An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the agent talked to the insured's family, and they explained that the insured was recovering from a surgery and might have been under the influence of medication at the time of the application. Which of the following is true?

The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of the application

a temporary license may be issued without examination to all of the following EXCEPT

The spouse of a retired producer There is no provision for a temporary license to be issued to conduct the business of a retired producer or broker

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if

The tree is blocking the driveway An insured's homeowner's policy will pay up to $1,000 to remove from premises if a neighbor's tree fell by a covered peril, or if the tree blocks a driveway or handicapped ramp, even if no damage to a covered structure has occurred

What is the limit to the number of times that the commissioner can examine the books and records of an insurance company?

There is no limit The commissioner may examine as often as deemed necessary

All of the following statements are true regarding fire department service coverage under the business owners policy EXCEPT

This coverage limit pays in place of the limit of insurance shown in the declarations The fire department service charge covers charges up to $2,500 for DP'10 ($1,000 for DP '02) and is payable in addition to the limit of insurance shown in the dec and is not subject to any deductible.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral In a unilateral contract, the insured is not legally bound to do anything. The insurer, however, must pay losses covered by the policy

In the PAP, owned trailers being towed by an insured auto are automatically covered for

Uninsured motorist coverage Trailers, while being towed by an insured auto, are covered automatically for bodily injury, property damage and uninsured motorist under part A of a PAP

An insured relocated to another state for work. However, she still owns and insures a house in this state, bust has had no one living in for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered

Unoccupied Unoccupancy refers to an insured structure in which no people have been living or working within the required period of time, but the structure contains contents

How much coverage can be available for watercraft damage in the homeowner's policy?

Up to $1,500 Homeowner's policies limit the amount of property and liability coverage available for watercraft. Only $1,500 of coverage is provided in the policy for damage to watercraft, accessories, equipment and trailers, and liability for watercraft is limited by the size of the boat

The members of a limited liability company are insured's under a business owner's policy if

the limited liability company is designated as the name insured If the named insured is designated as a limited liability company, the name insured and members also are insureds, but only with respect to the conduct of the business. Managers are insureds, but only with respect to their duties as managers

The type of insurance used to cover goods for one specific trip is called

trip transit Trip transit policies cover a single shipment of goods for a specific trip