Test Questions Insurance Property and Casualty
Coverage B of an unendorsed standard BOP policy provides how much coverage for theft of money & securities?
$0.
Fran is an office manager for a small business. Her car is struck by a hit-and-run driver while she was driving her car to the bank to make a company deposit. Fran carries a $50,000 limit for uninsured motorist coverage. How much of her $100,000 in medical expenses would be paid under Fran's personal auto policy?
$0. is correct. EXPLANATION: $0 will be paid because a personal automobile insurer will not pay any part of a loss that could be covered under workers' compensation laws.
The insured has suffered a severe storm and some of his trees, shrubs, and plants are heavily damaged by the wind. How much coverage could the insured expect to receive for his claim under his DP-3 Dwelling policy?
$0..
The basic limit for Coverage F -- Medical Payments of the standard Homeowners forms is:
$1,000 per person..
The Builders' Risk coverage form includes an additional coverage that provides a limited amount of coverage for lawns, trees, shrubs, or plants when located outside of buildings. This limit is:
$1,000, but $250 for any one tree, shrub, or plant.
Fly-By-Night Construction Company has a CGL policy with coverage dates of 03/01/17 to 03/01/18. The per occurrence limit is $500,000 and the general aggregate limit is $1,000,000. The maximum that can be paid during the policy period on the insured's behalf is:
$1,000,000.
Mary has insured her one-family home under an HO-3 form with a Coverage A limit of $100,000. If she suffered a $100,000 loss to her covered dwelling, how much coverage would be provided under Coverage B for her unattached garage on the premises?
$10,000
Under the additional coverages of the standardized Businessowners policy, how much is the limit for "Pollutant Clean-Up and Removal" if caused by a covered loss?
$10,000 in any 12-month period..
If the insured carries a DP-2 Dwelling form and insures the dwelling for 80% of its replacement cost value, what will he be paid if his 30-year-old roof sustains $10,000 in damages (disregarding any deductible)?
$10,000.
QUESTION: Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), the maximum limit (cap) for claims paid by either private insurers or the government in a single program year is:
$100 billion..
What is the standard minimum limit of liability for Coverage E -- Personal Liability coverage on Homeowners policies?
$100,000 per occurrence
The additional coverage of the Commercial Property cause of loss forms known as the "Limited Coverage for Fungus, Wet Rot, Dry Rot, and Bacteria" provides:
$15,000 coverage for all occurrences within a 12-month period..
The annual agency license renewal fee in West Virginia is:
$200..
An insured has a CGL policy with a $100,000 aggregate limit and a $25,000 occurrence limit. The insured has a claim for $35,000 and a second claim for $20,000. What is the insurer obligated to pay?
$25,000 on the first loss and the full amount for the second loss..
In West Virginia, when an insurer commits an act that intentionally violates an Unfair Trade or Marketing Practice, and the act is considered to be a general business practice, the penalty is a sum not to exceed ________ and revocation or suspension of the license to do business in West Virginia.
$250,000.
Mason has suffered a $42,000 loss to his commercial building due to fire. The building is covered under the Building & Personal Property coverage form and had been vacant for 74 days. The insurer would have paid the entire loss if the building had been occupied, but what will they pay because the insured building was considered vacant?
$35,700
An insured is covered under an HO-2 form with a Coverage A limit of $125,000 and a Coverage C limit of $65,000. What amount will automatically be provided for Coverage D?
$37,500
A standard Homeowners policy has been issued to cover a one-family structure with a coverage limit of $75,000 on the dwelling. What is the automatic amount of insurance coverage on personal property?
$37,500.
Camilla had an at-fault accident in her car and was sued for damages. Camilla is an executive with a major corporation and earns $2,500 per 5-day work week. Her insurance company has requested her appearance in court to defend herself against some of the damages claimed. She missed 2 days of work and will not be paid for that time. How much will Camilla's personal automobile policy pay her in total for the lost earnings?
$400..
The custom farming endorsement is usually attached to a farmowners policy when receipts exceed:
$5,000
What limit of liability would be needed for a risk that transports radio active materials as required by the Motor Carrier Act under the MCS-90 endorsement?
$5,000,000
Jeremy's home is valued at $950,000. How much insurance does he need to carry on his home, in order to comply with the coinsurance requirement of a Homeowners insurance policy?
$760,000.
At the time of fire damage to a covered auto under a business auto policy, the auto's actual cash value is $9,200. The cost to fully repair the damage would be $11,500. If the policy has a $250 comprehensive deductible, what amount will the insurer pay for the loss?
$8,950..
Dan insures a home for adequate limits under a DP-2. If a flood causes $1,000 in damage, what is the maximum the insurer will pay, disregarding deductibles?
0
Dexter covers his dwelling under a DP-2 policy with $10,000 personal property (contents) coverage. He owns a canoe and stores it at a lake in a private garage that he does not own. Fire destroys the garage and Dexter's boat. How much coverage will Dexter's DP-2 form provide for his boat?
0
Henry and John have an auto accident. Henry has been found to be 49% negligent and has sustained $50,000 in damages. John has been found 51% negligent and has sustained $100,000 in damages. John will receive:
0
The NAIC Model Unfair Claim Settlement Practice Act provides for a financial penalty of _________ for each violation of the Act.
1,000.
Under a standardized Dwelling form, a loss by a covered peril for Improvements, Alterations and Additions is covered for up to:
10% of the Coverage C limit of liability
The insured has a CGL policy with a $600,000 aggregate limit and a $300,000 per occurrence limit. The insured has one claim for $400,000 and another separate claim for $200,000. After paying these two losses, how much of the aggregate limit will remain for future claims?
100,000
Joseph Jones purchased a new car stereo system from Dailey's Auto Enhancements. Daily's permanently installed the stereo system in the console area of the car, where he could access it easier while driving than the typical area in the dashboard. The cost of the new system, disregarding any installation costs, was $2,000. One year after installation, Joseph's car was broken into and the stereo was stolen. At this point, the ACV of the system had fallen to $1,700. Disregarding any deductible, how much will Joseph's policy pay on this claim?
1000
The insured carries a personal auto policy providing a bodily injury limit of $50,000 each person with a per accident injury limit of $100,000. He injures two occupants in another vehicle. Their injuries total $60,000 for Mr. Jones and $50,000 for Mrs. Jones. The insurance company spent $40,000 in defense and investigation costs. How much will the insured's policy pay?
140,000
In West Virginia, every insurer must commence an investigation of any claim filed by a claimant within _____ of receipt of notice of claim.
15 working days .
An unauthorized insurer is transacting insurance in West Virginia. The Commissioner may, after notice and hearing, fine the violator $________ for each unauthorized act or transaction of unauthorized insurance.
20,000
Leland has two insurance policies covering his home. Indemnify Insurance carries a $120,000 limit of liability on the home, while Binders Keepers, Inc. carries a limit of $80,000. A fire breaks out in Leland's kitchen and causes $40,000 in damage. Remember, when there are two or more policies covering the same risk, the "other insurance clause", determines the method used to calculate each company's share of the claim. Leland's policy states that the pro-rata share method will be used.
24,000
Minimum automobile liability limits that must be carried in West Virginia are:
25/50/25
Rachel's home is worth $525,000. She has the home covered under a $500,000 Homeowners policy with a 1.5% deductible. When Rachel's husband sets their kitchen on fire while frying a turkey, he accidentally causes $36,000 in damages. How much can Rachel and her husband expect to receive in their settlement?
28,500
Under the West Virginia Automobile Insurance Plan, an insured may be eligible for coverage under a standard or preferred policy if, during the next ____ there are no traffic violations or accidents and continuous insurance coverage has been maintained.
3 years
Nina has the "Preservation of Property" additional coverage included in her standard Businessowners policy. How long does coverage apply while the property is being stored at another location?
30 days from the day the property was first moved..
Individual producers must maintain copies of continuing education course completion certificates listing the courses of instruction successfully completed, which has been executed by the organization sponsoring the courses, for a period of not less than:
4 years
The liberalization clause of a Businessowners policy automatically applies favorable expansions of coverage, for which a premium is not charged if the changes are made during the policy period or within ______ prior to the effective date of the policy.
45 days..
An insurer was notified of a hearing of alleged violation of unfair discrimination. The hearing was held and the Insurance Commissioner issued a cease and desist order to be effective immediately. Additionally, the Commissioner ordered the insurer to pay a penalty for each violation. What is the penalty?
5,000
An insurer has decided to cancel a standardized BOP policy because a governmental authority has ordered the premises demolished for a reason other than a covered cause of loss. The insurer must provide the insured with:
5-days' notice..
Which of the following is the amount of additional coverage on the standardized Homeowners forms for a Fire Department Service Charge?
500
How many continuing education credit hours in excess of the required number of hours may be carried over into the next reporting period by an agent or producer in West Virginia?
6
What is the time limit provided under the basic extended reporting period under the CGL claims-made form for the reporting of claims that occurred before the expiration date of the policy?
60 days to report the claim and 5 years of coverage for the reported claims..
For restaurants to be eligible for coverage by the standard BOP policy, they cannot exceed _______ in total floor area.
7,500 square feet
Under a DP-2 or DP-3 standardized policy what is the maximum that would be paid for one month for additional living expenses if Coverage A was $75,000?
75,000 is 22500
The Commercial Property coverage extension "Business Personal Property Temporarily in Portable Storage Units" will provide $10,000 of coverage for up to:
90 days
Which of the following would require bailee coverage?
A TV repair shop.
would require bailee coverage?
A TV repair shop.
Which of the following MUST be covered for workers compensation benefits in West Virginia?
A bank teller
What is an administrator's bond?
A bond required by the court of the administrator of the estate of the deceased
Which of the following is considered a surety?
A bond that guarantees the performance of contracts. .
All of the following perils are covered for collapse under the Commercial Property additional coverage, EXCEPT:
A building that is in danger of collapsing.
Which of the following contractors would be eligible for a Businessowners policy?
A carpenter doing all of his own work building kitchen cabinets in people's homes and earns $75,000 per year.
Drew's agent is putting together a Commercial Property policy for him. The declarations page, the conditions page and several endorsements have been included. Which of the following must still be included to complete the policy?
A cause of loss form.
An "insured" under an unendorsed Homeowners policy can be all of the following, EXCEPT:
A childhood friend of the named insured who is visiting for a month from England..
would be considered a "non-residential building" under the National Flood Insurance Program, EXCEPT:
A condominium.
A situation where a building is not a total loss, but the cost to repair the the building is greater than the value of the building?
A constructive total loss.
When insurance is written on a Dwelling form, each of the following types of property would be insured under Coverage A, EXCEPT:
A detached garage. .
The West Virginia insurance code prohibits "defamation" as part of the Unfair Trade Practices the state has adopted from the NAIC. Which of the following statements is NOT TRUE concerning the West Virginia insurance code's further definition of "defamation"?
A false or malicious communication that injures another's reputation, fame, or character can only be classified as "defamation" if the communication is in printed form..
Which of the following is NOT a hazard? Oily rags by a hot water heater? Matches within reach of a small child? A fire started in a waste basket? Wet leaves laying on the sidewalk?
A fire started in a waste basket is not a hazard.
Which of the following would be considered vacant on an unendorsed Commercial Property policy?
A leased building in which less than 31% of the building is occupied..
Which of the following is true about a mobile home endorsement in terms of eligibility?
A mobile home must be designed for year-round living and be at least 10 feet wide and 40 feet long
true about a mobile home endorsement in terms of eligibility? Select the Correct Answer Can be added to the HO-6 To be eligible, a mobile home must be designed for year-round living or seasonal living A mobile home must be designed for year-round living and be at least 10 feet wide and 40 feet long The mobile home must be on a solid foundation
A mobile home must be designed for year-round living and be at least 10 feet wide and 40 feet long
The term "uninsured motor vehicle" is defined by the West Virginia insurance code to be any of the following, EXCEPT:
A motor vehicle for which the limits of liability carried are not sufficient to cover claims..
Sam the shopkeeper mops the floor of his store and forgets to set the "Caution Wet Floor" sign in the area to warn his customers. Sarah walks through the store a few moments later, slips on the floor and injures her arm and leg. This is an example of:
A negligent tort
Under Coverage F of a Homeowners policy, which of the following would be covered?
A neighbor who is injured while helping the insured to lay carpet.
A standard Homeowners policy is best described as:
A package policy that provides both property and liability insurance
An insurer was cited and found guilty of unfair discrimination. The carrier paid its fine for the offense and was also issued a cease and desist order. If the insurer continued with the practice of unfair discrimination, the additional penalty would be:
A penalty of up to $10,000 for each violation and/or revoke or suspend the person's license. .
Who is not an insured under the CGL form?
A person who helps an employee load a truck as a favor.
Which of the following sentence which best describes the term "fiduciary".
A person who is entrusted with the assets of another.
After a standard Personal Automobile policy has been in effect for more than 60 days, the insurer may cancel the policy for all of the following reasons, EXCEPT:
A regular operator of the vehicle has received a citation for speeding.
Which of these statements best describes "the law of agency?"
A relationship in which someone is authorized by contract to represent another party..
Who is an insured under the liability section of a Farm insurance policy?
A roadside farm stand employee
The "Medical Payments" section of the standard Yacht policy will provide coverage for all of the following, EXCEPT:
A scuba diving accident when diving from the insured boat..
Which of the following is not "mobile equipment" under the business auto policy?
A self-propelled vehicle with permanently attached street-cleaning equipment..
Which of the following serves as a deterrent for an insured to cancel an insurance policy before its expiration date?
A short-rate penalty deducted from the unearned premium..
Watercraft that are eligible for coverage under the Watercraft endorsement of the Homeowners policy, include all of the following, EXCEPT
A small fishing boat powered by an outboard engine of 15 horsepower or less. .
Watercraft that are eligible for coverage under the Watercraft endorsement of the Homeowners policy, include all of the following, EXCEPT:
A small fishing boat powered by an outboard engine of 15 horsepower or less. .
Indemnify Insurance has been using a specific ISO Homeowners form for several years in all states where they are an admitted user. Indemnify Insurance has recently admitted to another state, but the laws of that state contradict a few of the provisions in the ISO form, how is this situation likely to be handled?
A statutory form will be drawn up and attached to to each Homeowners policy Indemnify Insurance writes in the state.
An incorporated insurance company with its capital divided into shares and owned by its shareholders is known as:
A stock company. .
An insurance company held its annual meeting in Florida so attendees could have an opportunity to visit tourist spots as well as spend time on company business. At the meeting, three new directors were added after the attending stockholder's votes and mailed-in proxies were counted. This insurance company is:
A stock insurance company.
In connection with the bonding business which of the following statements is NOT true?
A surety bond protects the principal from sustaining a loss..
Surplus lines refer to insurers that are considered non-admitted carriers that are permitted to insure risks or exposures in the state. Who is permitted to offer their products?
A surplus lines agent.
In the CGL, which of the following would be included under the definition of a personal injury?
A tenant evicted by his landlord sues the landlord for invasion of privacy and wrongful eviction.
All of the following are differences between surety bonds and insurance contracts, EXCEPT
A transfer of risk occurs with surety bonds but not with insurance..
Which of the following would be eligible for coverage under a standard Businessowners policy?
A two-story apartment building with 15 units..
Bill Walters is named in the "Drive Other Car" endorsement attached to the Business Auto policy of his brother, John Walters, and a premium is shown in the endorsement for liability coverage. Which of the following vehicles would be covered autos under the "Drive Other Car" endorsement?
A van being driven by Bill. The van is owned by Kathy Webster
Which of the following watercraft would be covered under Section II - Liability of the Homeowners forms?
A watercraft in storage..
Under the Gramm-Leach-Bliley Act, there is a "pretexting provision". What is the definition of "pretexting".
Accessing private information using false pretenses. .
Which of the following Commercial Inland Marine coverage forms covers payments due to the insured from customers, when these payments cannot be collected due to loss or damage of records?
Accounts Receivable
How are household personal property claims settled under the farm policy?
Actual cash value
The amount it would cost to repair or replace property minus depreciation, is the definition of:
Actual cash value
Under the Farm insurance forms, the maximum amount payable for a loss to a satellite dish is:
Actual cash value..
When the property covered under an insurance policy is destroyed beyond repair and nothing of value remains, this is known as:
Actual total loss.
When someone dies without a will, their assets will be handled by a court appointed:
Administrator
What type of bond is required when a person dies without leaving a will?
Administrator's bond.
Loss to insured property caused by self-propelled missiles is covered under which of the following perils of the Homeowners form?
Aircraft
An insurer doing business in the United States, whose place of incorporation is Toronto, Canada would be identified as a(an):
Alien insurer.
An employee blanket bond covers ____ for dishonest acts.
All employees
Which of the following statements is TRUE regarding agent appointments in West Virginia?
All insurers must pay a renewal appointment fee by 11:59 PM on May 31st each year..
Which of the following would be covered under the "supplementary payments" of Section II - Liability of a Business Auto policy?
All post-judgment interest in a suit defended by the insurer.
All of the following statements are TRUE if Builders' Risk coverage is written on a completed value basis, EXCEPT:
All premiums must be paid up front before construction can begin
A consumer report may list adverse information about the consumer, such as lawsuits or arrests, only if those events occurred within seven years before the report or 10 years for bankruptcies. These restrictions do not apply to which of the following?
All responses listed are correct.
NFIP policies is required to include the Increased Cost of Compliance (ICC) coverage?
An NFIP Dwelling policy under the Regular Program..
An "uninsured motor vehicle" under a personal auto policy does not include:
An abandoned car used as a residence.
All of the following are duties conducted by insurance professionals who must be licensed before "transacting insurance", EXCEPT:
An attorney who oversees the adjustment of claims
Which of the following vehicles is considered a temporary substitute auto under a personal auto policy?
An auto loaned by the garage while the vehicle of the insured is being repaired. .
Which of the following circumstances would NOT be an injury considered to "arise out of and in the course of" the employment?
An employee was injured during a lunch break in the factory parking lot.
When an insurer takes no action upon realizing material changes in a contract, this is called:
An implied waiver..
A power surge sparks a small electrical fire in an office building. The electrical fire triggers the automatic sprinkler system and the water from the sprinklers, soaks the carpet and shorts-out all the computers, causing thousands of dollars in damage. The office must close for two months during repairs. The cost of renting a temporary office space while the physical damage to the office building is repaired is considered:
An indirect loss
Subrogation may follow which of the following events?
An insured collects from her insurance compnay for damages caused by a third party
An insurance broker is a person who represents:
An insured or prospective insured..
Under the Coverage A insuring agreement of the commercial general liability policy, the bodily injury or property damage must be caused by:
An occurrence.
Under the BOP Part III - Conditions section, all of the following would be considered unoccupied, EXCEPT:
An office building containing two empty units and these two empty suites represent 25% of the total floor space.
Risk is best defined as:
An uncertainty of loss
An insured submits a claim to the insurer and their adjuster acknowledges receipt of the claim. The insured then hears nothing more after making repeated attempts to contact the adjuster. This is considered:
An unfair claims settlement practice.
NOT a type of "fiduciary" bond?
Appeal bond
With a Commercial Package Policy (CPP), "interline endorsements" are endorsements that:
Apply to more than one coverage part of the package policy
Transacting insurance in West Virginia includes soliciting, negotiating and collecting premiums. The Off Shore Insurance Company has decided to close its West Virginia operations and not renew its license. The company plans to continue certain business transactions. They may not:
Appoint an agent to solicit new business in this state..
Uninsured motorist coverage and medical payments coverage under a Business Automobile policy:
Are not covered by the policy unless added by endorsement..
All of the following are situations in which a credit report may be used as specified under the Fair Credit Reporting Act, EXCEPT: Select the Correct Answer As part of a credit transaction. For employment purposes. For underwriting insurance. As evidence in a court case.
As evidence in a court case.
Domestic insurance companies must be examined by the West Virginia Insurance Commissioner:
At least once every 5 years and as often as the Insurance Commissioner deems necessary.
A structure made up of modified fire restive materials and has a fire restive rating of
At least one hour.
An agent living in Ohio wishes to write insurance business on clients residing in West Virginia. Which of the following must the Ohio agent do to qualify for a non-resident West Virginia license?
Be a licensed agent in good standing in his home state.
n agent living in Ohio wishes to write insurance business on clients residing in West Virginia. Which of the following must the Ohio agent do to qualify for a non-resident West Virginia license?
Be a licensed agent in good standing in his home state.
Which of the following statements BEST describes the reason it was necessary to create a federal flood insurance program in 1968?
Because other property policies routinely exclude flood from coverage.
An oral or written contract for temporary insurance is referred to as a:
Binder.
What type of employee dishonesty bond should a company purchase when they have a large turnover of employees in various positions?
Blanket employee bond
An insured has purchased Coverage A and Coverage B of a standard Businessowners policy and the limit of insurance shown in the Declarations is 80% of the replacement cost value, how will losses be settled?
Both Coverage A and Coverage B will be settled on a replacement cost basis..
Which of the following statements BEST DESCRIBES the main difference between a Commercial Umbrella policy and an Excess
Both Excess Lines policies and Commercial Umbrella policies increase the limits of the underlying policy but the Commercial Umbrella policy can also broaden and extend the coverages.
Brian owns a home that is covered under a Dwelling policy. He rents this home to Taylor. Joe, the neighbor who lives next door to Brian's rental home, has been cooking methamphetamine for quite some time and selling it out of his house. One afternoon, Joe's "meth lab" exploded, spreading dangerous chemical to the houses around his. It also caused a fire that rendered the house unstable until it can be demolished. The civil authorities in the area have required that Taylor vacate her rental home, until the area next door can be cleaned up. Which of the following statements is true regarding how Brian will be compensated under his Dwelling policy for the loss of Taylor's rent during the time she must live elsewhere?.
Brian will receive 20% of the coverage A limit, for a maximum of 2 weeks.
What is generally excluded on the Condominium Commercial Unit-Owners form?
Building coverage
Someone breaks down the door to a store and steals merchandise. This loss is known as:
Burglary.
Chad has his commercial building covered by a Commercial Property policy that includes Coverage A of the Building & Personal Property coverage form. He purchases a new building because he has plans to expand his business. Which of the following statements is TRUE regarding coverage for Chad's new building?
Chad's newly acquired building will be covered for 30 days from the date of acquisition for $250,000.
Extended reporting periods under the Commercial General Liability policy apply only to:
Claims-made policies
The form known as "Commercial Crime Forgery or Alteration" is:
Commercial Crime Coverage Form B
All of the following statements regarding the Commercial Package Policy are correct, EXCEPT:
Commercial Package Policies can include Ocean Marine and Aviation Insurance coverage
Which of the following lines of insurance was covered under the Terrorism Risk Insurance Act of 2002, but was excluded with the passage of the Terrorism Risk Insurance Program Reauthorization Act of 2015?
Commercial automobile.
Which of the following statements is TRUE regarding Commercial Property coverage?
Commercial property coverage can be written as both a monoline policy and as part of a package policy
All of the following are examples of the types of exclusions found in professional liability insurance policies, EXCEPT:
Compensatory damages.
a "cause of loss" form, EXCEPT:
Comprehensive
On a standard BOP policy, all of the following items have a limitation on the coverage amount if the cause of loss is theft, EXCEPT:
Computers..
Part of an insurance policy sets the rules of conduct, duties, and obligations of the insured and insurer under the terms of the insurance contract?
Conditions
The major difference in Section I of an HO-2 and an HO-4 form is:
Coverage A..
Would cover "unattached structures" under a Homeowners policy?
Coverage B
he following would cover "unattached structures" under a Homeowners policy?
Coverage B
An insured suffers a partial fire loss to his residence. Under an HO-3 policy what insuring agreement is available to pay for temporary, alternate living quarters?
Coverage D
Homeowners policies provide personal liability coverage that follows an insured anywhere in the world under:
Coverage E.
Which of the following is NOT true concerning the Terrorism Risk Insurance Program Reauthorization Act of 2015?
Coverage is mandatory..
Which of the following is the basis for insuring property under Section I of the Businessowners policy?
Coverage is written on an open peril basis
Noemi is a fashion designer who owns a company that sells her designs to high-end boutiques. She has her company automobiles covered by a standard Business Auto policy. Noemi has decided to rent a villa in the south of France for two months so she can work with some French designers to create a new line of handbags. When Noemi arrives in France, she rents a cute convertible that she drives for the duration of her stay. Noemi is driving the car back to the airport to return it and catch her flight back to the United States when she has an "at-fault" accident and injures several people. The injured people file a lawsuit against Noemi in a French court. Which of the following statements best describes how coverage will apply under Noemi's Business Auto policy?
Coverage will not apply because Section II of the BAP only provides world-wide liability coverage for private passenger autos that the insured hires, leases, rents, or borrows without a driver, for 30 days or less..
A bailee customers' policy:
Covers damage to customers' property when the insured is liable..
Which of the following is not an "additional coverage" under Homeowners Liability -- Section II coverage?
Damage to "property owned by the insured". i
not an "additional coverage" under Homeowners Liability -- Section II coverage?
Damage to "property owned by the insured"..
Debra is a licensed insurance agent in West Virginia. She appointed Tom a few years ago to work for her as an insurance solicitor. Over the past year, Tom's work has been lacking and Debra would like to terminate his appointment. Which of the following is the proper procedure for Debra?
Debra must make a written request to the Commissioner to have Tom's solicitor's license cancelled.
A person who knowingly makes false and maliciously critical or derogatory statements about another person with the intent to cause injury is guilty of
Defamination
A person who knowingly makes false and maliciously critical or derogatory statements about another person with the intent to cause injury is guilty of: Select the Correct Answer Defamation. Discrimination. Coercion. Intimidation.
Defamination
Where in the insurance contract can an insured find the terms used throughout the policy and an explanation as to what they mean in the context of the policy?
Definitions
Michelle is insured under the basic dwelling form DP-1 with the EC perils. She is driving her car on her driveway and causes damage to a fence on her property. The loss to the fence is $200. The Dwelling policy will:
Deny the claim because damage by vehicles is excluded if the insured caused the damage.
Before the acts of September 11, 2001 in the United States, insurers:
Did not exclude coverage, nor did they charge an extra premium to cover damages caused by terrorism..
Which of the following Commercial Automobile endorsements extends existing coverage to the individual scheduled and their spouse while using any non-owned auto for both business and personal use?
Drive Other Car (DOC) endorsement
The NAIC Model Unfair Claim Settlement Practice Act DOES NOT apply to any of the following types of coverage, EXCEPT:
Dwelling insurance..
Coverages A, B, C, and D of Section I of a Homeowners policy are (in order):
Dwelling; Other Structures; Personal Property (Contents); Loss of Use.
Two persons are involved in an auto accident on a West Virginia highway. Each person is 50% liable for damages to the other person. What amount of damages will each collect?
Each person will collect half of their damages.
All of the following statements are TRUE regarding coverage for Earthquake under a Homeowners policy, EXCEPT:
Earthquake coverage is provided on a Homeowners form without endorsement, but an additional premium must be paid..
TRUE regarding coverage for Earthquake under a Homeowners policy, EXCEPT:
Earthquake coverage is provided on a Homeowners form without endorsement, but an additional premium must be paid..
Which of the following is an example of a moral hazard? Ineptitude? Carlessness? Embezzlement? Apathy?
Embezzlement is a moral hazard.
Coverage C- Medical Payments under CGL policies include reimbursement for all of the following, EXCEPT:
Employee claims for on-the-job injuries.
An insured who would like to cover an employee while driving their own car on company time would need which of the following endorsements?
Employees as Insureds endorsement
One of the purposes of the coinsurance clause is to:
Encourage insureds to insure property for most of it's value if not all of its value.
Flood coverage can be added to a Commercial Property policy by attaching the Flood Coverage Endorsement. If the endorsement is purchased and the property is already covered under a flood policy from the National Flood Insurance Program, then the coverage under this endorsement is considered to be:
Excess over the NFIP maximum limits..
The "Business Income" additional coverage under the standard Businessowners policy includes all of the following in its definition of "ordinary payroll expenses", EXCEPT:
Executive payroll.
All of the following are considered to be unfair or deceptive claim settlement practices according to the West Virginia insurance code, EXCEPT:
Explaining a claims denial to a claimant by pointing out the provision, condition, or exclusion that was the basis for the claims denial..
The law recognizes two types of waivers. They are:
Express/implied
Which of the following is NOT an example of an unfair claim settlement practice?.
Failing to examine a claimant under oath.
Brianna is applying for a new job at General Hospital. Which law limits how much information Brianna's bank and mortgage lender can share with General Hospital, regarding to Brianna's finances and credit score?
Fair Credit Reporting Act
What type of bond might an executor of an estate be required to purchase?
Fiduciary bond
A payment bond is what type of instrument?
Financial Guarantee Bond.
All of the following statements are TRUE regarding the perils of the Homeowners forms, EXCEPT:
Fire or lightning is a named peril covering the buildings and other structures under an HO-4 form..
The CGL policy excludes coverage for damage done to the property of others if at the time of the loss that property was in the care, custody and control of the insured. However, the exclusion does not apply if the damage is caused by:
Fire, smoke or explosion.
Which of the following would be covered under the mobile equipment endorsement attached to a Commercial Auto policy? Select the Correct Answer Fork lift. A motorcycle. A company car. A company truck with a snow removal plow attached.
Fork lift
An agent, insured, or claimant has intentionally deceived an insurer for financial gain such as:
Fraud
Which of the following is an example of the "assumption of risk" defense against negligence?
Fred, in a hurry to get to work, takes a shortcut over a bridge marked "condemned," that subsequently collapses under the weight of his car.
Dana lives in a state that has passed a valued policy law (VPL). This means that all insurers issuing policies in the state must pay the ______ of the policy in the event of a total loss.
Full agreed value.
A department store has a large inventory of costume jewelry and watches. No single item is valued for more than $100.00. A customer steals most of the items and flees the scene. What theft coverage would be provided by an unendorsed standardized BOP policy?
Full limit of Coverage B.
Which of the following is a type of "voluntary loss" taken to save the property from further loss?
General Average Loss.
A customer in a restaurant becomes ill after they return home after eating. Which policy would respond to handle the claim?
General Liability policy that is unendorsed .
Gottfried, an insurance agent, has posted information online in an forum for insurance professionals. This information stated that Greta's insurance agency has been engaging in rebating and her appointing insurer is about to file for bankruptcy. Gottfried knows this information is untrue, but he is angry that some of his clients have recently left his agency to place business with Greta. Which of the following statements is true of Gottfried's actions?
Gottfried has defamed both Greta and her appointing insurer, an unethical and illegal action..
What is a definition of a surety bond?
Guarantees the Performance of a Duty
A licensee in West Virginia mails a letter to all of his clients alleging that a particular insurance company is in financial difficulties and its agent force gives no service to its customers. If these allegations are unfounded, the licensee may be found:
Guilty of defamation. .
Which of the following standard Homeowners forms does not provide any amount of coverage under the Coverage A - Dwelling insuring agreement?
HO-4
Faulty wiring causes a fire that destroys an insured's home. In insurance terms, the faulty wiring is called a:
Hazard
Every owner of a vehicle that is subject to registration in West Virginia, must complete an application for registration that includes a statement under penalty of false swearing that liability is in effect on the vehicle. If the Commissioner later determines that liability insurance was NOT in effect at the time the application for vehicle registration was made:
He/she will revoke both the driver's license of the owner and vehicle registration.
Brittany has been convicted of a misdemeanor for providing false information on an application for a vehicle registration in West Virginia. Which of the following is a penalty that will NOT be applied to Brittany?
Her driver's license will be revoked for a period of one year..
Which of the following is covered under the Federal Employees Compensation Act? I. Federal employees exempt under state workers compensation laws. II. Active duty military members. III. Members of the Merchant Marine under the Jones Act. IV. Longshoremen and Harbor Workers..
I only. .
Duties of the West Virginia Insurance Commissioner include: I. Affixing his or her official seal to all documents required to be filed. II. Reporting to the governor and legislature annually on department operations. III. Subpoena witnesses and compel their attendance at a hearing. IV. Establishing insurance rates for West Virginia Insurers. Select the Correct Answer I, II and III only. I, II, III and IV. I and II only. II, III and IV only.
I, II and III only. Affixing his or her official seal to all documents, reporting to the governor and legislature annually on department operations, Subpoena witnesses and compel their attendance at a hearing.
An insurer must hold a valid license in West Virginia to:I. Service policies remaining in force for West Virginia residents.II. Transact insurance in West Virginia.III. Liquidate assets and liabilities resulting from former operations in West Virginia.IV. Negotiate a plan of insurance for a large multi-state corporation with employees in West Virginia.
II and IV only.
An insurer must hold a valid license in West Virginia to: I. Service policies remaining in force for West Virginia residents. II. Transact insurance in West Virginia. III. Liquidate assets and liabilities resulting from former operations in West Virginia. IV. Negotiate a plan of insurance for a large multi-state corporation with employees in West Virginia.
II and IV only. Service policies remaining in force for West Virginia residents. and Negotiate a plan of insurance for a large multistate corporation with employees in West Virginia.
Sam, a West Virginia insurance agent, has a policy of charging his prospective clients an "application fee" each time he travels to a residence to complete an application. In West Virginia this is considered:
Illegal and considered an unfair trade practices act.
Fancy has purchased a new home and is required to purchase Flood insurance as a condition of closing the loan. Fancy has submitted a Flood insurance application along with his premium, when does the coverage become effective?
Immediately..
Upon request made by the consumer, a person who procures an investigative consumer report on the consumer must make a complete and accurate disclosure to the consumer of the nature of the report and investigation within:
In writing and mailed to the consumer within 5 days of the request..
Perry has his home covered under an HO-5 policy. He borrows a friend's expensive camera and takes it on vacation, where it is stolen. Coverage for the stolen camera is:
Included anywhere in the world..
The attempt to restore an insured to his or her financial condition before a loss occurred is:
Indemnification
Which of the following situations would NOT be considered an unfair claim settlement practice according to the NAIC Model Act?
Indemnify Insurance pays thousands of claims per year, but on two of those claims they failed to accept or deny the claim within the time frame required by state law. .
Under the law of agency, all of the following are types of authority an agent might possess
Indirect Authority.
Medical payments coverage under the Farmowners policy covers which of the following?
Injuries sustained by an invitee.
Many stationary objects, such as bridges, tunnels and power lines fall within the nationwide marine definition because they are considered to be:
Instrumentalities of transportation and communication.
All of the following are true regarding the "Write Your Own" program of the NFIP, EXCEPT:
Insurers are required to participate in the program..
Which of the following statements is NOT TRUE concerning an insurer's rights and duties under a Commercial Package policy?
Insurers issuing Commercial Package policies have the right to make inspections of the insured's business to determine if the insured is in compliance with health and safety regulations
NOT TRUE concerning an insurer's rights and duties under a Commercial Package policy?
Insurers issuing Commercial Package policies have the right to make inspections of the insured's business to determine if the insured is in compliance with health and safety regulations.
The perils insured against by a Homeowners policy are contained within the:
Insuring Agreements
When someone dies without a will they are said to have died:
Intestate
Which of the following BEST describes a tort?
Is an act causing harm to an innocent party for which a civil remedy is provided through the payment of monetary damages..
If, after a hearing, the West Virginia Insurance Commissioner determines that a licensed producer has engaged in an Unfair Method of Competition (an Unfair Trade Practice), the Commissioner can do all of the following, EXCEPT:
Issue an order absolving the producer from penalties other than those under the insurance code. .
All of the following statements are true regarding an interline endorsement used in a Commercial Package policy (CPP), EXCEPT:
It can apply to one or more coverage parts. .
Which of the following statements is TRUE regarding the Personal Effects Floater?
It can be purchased either on a permanent basis for frequent travelers or for a single trip.
Which of the following statements is TRUE concerning a Commercial Package policy?
It can be written for a specific policy term not to exceed three years..
Adding the Mobile Home endorsement to a Homeowners policy changes which of the following?
It changes the description of covered property.
Which of the following statements is TRUE regarding the HO-6 form?
It covers the walls, floors, and ceilings of dwelling unit..
Which statement is FALSE regarding an appointment contract with an insurance company?
It is generally an oral agreement between the parties
What is the purpose of reinsurance?
It is insurance for insurance companies, to reduce the risk of catastrophic losses.
a "monopolistic" state workers compensation fund?
It is the primary source of workers' compensation insurance in those states that do not allow private workers compensation insurance to be sold..
Jack rents a home to Tanya and maintains a DP-3 policy on the dwelling. Tanya accidentally leaves the oven on all day while she is out, her Lasagna catches fire, burning Jack's house to the ground, along with all the contents located inside. Which of the following items would be covered under Coverage C of Jack's DP-3 policy?
Jack's appliances.
John has completed all the requirements and was granted a Life insurance license in Ohio 5 years ago. He applies for a non-resident Property insurance producer license in West Virginia. Which of the following statements best reflects the response he will receive from the West Virginia Commissioner in response to his license application?
John's non-resident license application will be denied because John did not apply for a license in the same line of insurance in which he holds his Ohio license.
All of the following are EXCLUDED under the Earthquake Endorsement to a Homeowners policy, EXCEPT
Land shock waves..
All of the following is considered an "insured" under a CGL policy, EXCEPT:
Lawyers of the named insured.
Milton agrees to steal and wreck Albert's car for $4,000 so that Albert can collect $8,000 under his auto insurance policy. Which of the following elements of a valid contract are missing in this agreement?
Legal Purpose
The Watercraft Endorsement to the Homeowners policy provides:
Liability and Medical Payments coverage that would otherwise be excluded under the Homeowners policy..
Tort applies to all the following except:
Liability arising from breach of contract.
An insured has her business automobiles covered under a Business Auto policy with Symbol 7 specified on her Declarations page. She has purchased a trailer with a load capacity of 2,500 pounds and hitched it to a covered van. While she is driving the van, the trailer breaks free and crashes into another vehicle, causing bodily injury. Which of the following statements is true regarding this insured's situation?
Liability coverage is not extended under Symbol 7 for a trailer with a load capacity of more than 2,000 pounds, therefore coverage will not apply.
All of the following statements are true of coverage under a commercial general liability policy, EXCEPT: Select the Correct Answer Liability on the part of the insured must be proven before an injured party may be paid medical expenses under the medical payments section of the policy. Once in effect, an extended reporting period may not be cancelled. Under an "occurrence" version of the CGL policy, any claim for damages always carries back to the policy in effect when the injury occurred. The insurer may require an injured party to submit to a medical examination by a company-selected doctor before paying a claim.
Liability on the part of the insured must be proven before an injured party may be paid medical expenses under the medical payments section of the policy.
In a published interview, a local merchant charges that one of his competitors is guilty of unethical and illegal business practices. The competitor sues and is awarded $25,000 in damages. Under which definition of "personal injury" would the merchant have coverage for this claim under his CGL policy?
Libel, slander, defamation, invasion of privacy.
All of the following statements regarding medical payments under the general liability policy are true, EXCEPT:
Loss of earnings as a result of injuries caused by a product of the named insured
Under a standardized NCCI workers' compensation policy, the insurance company will pay to the insured, as part of any claim, proceeding, or suit defended, all of the following expenses, EXCEPT:
Loss of earnings..
The focus of Equipment Breakdown coverage is
Loss prevention.
The West Virginia Commissioner has issued a cease and desist order to a licensee, but the order has been ignored. Which of the following is the method the insurance code stipulates that the Commissioner can use to enforce the order?
Make an application to the circuit court to enforce the order..
The Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) covers all of the following, EXCEPT:
Malpractice Insurance..
Charles' wife Mary has a company car furnished to her through her job. One day, Charles runs out of the wax he is using to polish his boat and he decides to go out to the store and get more. Mary's company car is parked behind Charles' car in the driveway, so he grabs Mary's keys and drives her car to the store. On the way back home, Charles has an accident in which he is at fault, and bodily injury and property damage are the result. Which of the following statements is TRUE regarding how this claim will be settled?
Mary's company policy will pay first, and Charles' policy will also pay, but on an excess basis. .
Willie's Widgets is eligible to receive an experience rating to bring down their workers' compensation premium rates. Willie's is granted this eligibility on May 1st, 2018. Which of the following best defines the "experience period" the NCCI will use to calculate Willie's experience rating?
May 1st, 2013 to May 1st, 2017..
not true regarding uninsured motorist coverage in West Virginia?
May be rejected by the insured. .
Which of the following would be considered "economic losses" that could result in compensatory damages being awarded in a negligence case?
Medical expense and lost wages..
What coverage under the BOP automatically applies if a customer slips and falls on the named insured's premises, regardless of legal liability?
Medical expense coverage.
WOULD typically be covered under a state's automobile "no-fault" law?
Medical expenses incurred by the insured in an automobile accident
Which of the following is NOT a coverage of the Truckers form?
Medical payments..
A person takes bank deposits to the bank every day for a business. In Commercial Crime insurance terminology, this person is known as a:
Messenger
All of the following are included in the Businessowners policy coverage territory, EXCEPT:
Mexico.
Mikala holds an insurance license in West Virginia and has received an inquiry from the Insurance Commissioner in the mail. Which of the following statements is CORRECT regarding Mikala's response to the Commissioner?
Mikala will respond in writing, making sure her response reaches the Commissioner within 15 working days from the date appearing on the inquiry itself.
Advertising injury coverage applies only if the offense arises from:
Misappropriation of ideas or copyright infringement in the course of any advertising..
Making false or misleading statements about dividends or shares of surplus previously paid on an insurance policy is known as:
Misrepresentation.
All of the following statements are true regarding the coverage of mobile or trailer homes under a Dwelling insurance policy, EXCEPT:
Mobile or trailer homes can be owner or tenant occupied.
The base deductible of 5% under the Earthquake Endorsement can be converted to a specific dollar amount by:
Multiplying the greater of Coverage A or C, by the deductible percentage scheduled on the policy
To receive workers compensation benefits, an employee's occupational disease:
Must be caused by the conditions of the employment.
"Theft" as defined by a Crime insurance policy, includes all of the following, EXCEPT:
Mysterious disappearance..
A physicians, surgeons, and dentists professional liability policy would cover
Negligent acts of a staff nurse or aide
An insured has taken an inventory of his merchandise and discovers a substantial shortage of valuable stock. He submits a claim to his insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for the missing inventory?
No coverage would apply
The claimant and insurer have agreed on a settlement of a claim. What is the time limit on the payment of the claim according to West Virginia law?
No later than 15 working days of the receipt of such agreement.
Coverage D - Loss of Use on the Homeowners forms provides coverage for "Civil Authority Prohibits Use" for:.
No more than two weeks..
All of the following are reasons an insurer may cancel a standard BOP policy with 5-days' notice, EXCEPT:
Nonpayment of premium..
The NAIC Model Unfair Claim Settlement Practices Act specifies that when a violation of the Act is suspected, a hearing must be held:
Not less than 30 days after notice has been provided to those involved.
A common carrier has signed a contract to deliver goods of the seller. The goods are to be shipped "Free on Board Destination". When does the responsibility of the seller end?
Not until the goods are delivered to the buyer in accordance with the contract terms..
While in England an insured has her purse stolen and files a claim for $500 of cash, $1,000 in airline tickets, $250 for miscellaneous items and $50 for the value of the purse. How much of this loss would be covered under a DP-1 dwelling form?
Nothing
An applicant for insurance has been advised by his insurer that something adverse appeared on his investigative consumer report. The information is in error. The applicant may:
Obtain the name of the reporting agency from the insurer and correct the error.
Which of the following accurately lists the four elements of a legally binding contract
Offer and acceptance (agreement), consideration, competent parties, and legal purpose
The standard Businessowners policy includes an extension of coverage to cover the "personal effects" of:
Officers, partners, or employees for $2,500..
Under a Mobile Homeowners package policy, how is the mobile home itself covered in case of a total loss?
On a Replacement Cost basis..
Under a standard Equipment Breakdown policy, the loss settlement is:
On a replacement cost coverage, if the repair or replacement, is made within 24 months of the loss.
Claims that are paid under a CGL policy coverage, are charged against the aggregate policy limits, and reduce the amount of insurance remaining to pay future claims under the current policy. When will the limits be reinstated?
On the effective date of the next policy renewal
In West Virginia, a producer license expires on:
On the last day of the licensee's birth month two years after the date of issuance..
A NFIP policy has a policy period of:
One year term only..
Sam and Dan are working to clean out the gutters around the roof on Sam's house. Sam and Dan are standing at the top of separate ladders that are propped against the side of Sam's house, when Dan's ladder begins to wobble and ultimately falls into Sam's ladder. Both men and their ladders crash to the ground. Whose injuries will be covered by Sam's Homeowners policy under Coverage E - Personal Liability?
Only Dan's injuries would be covered.
correctly applies to a named perils policy?
Only the perils listed by name in the policy are covered
Which of the following statements correctly applies to a named perils policy?
Only the perils listed by name in the policy are covered..
An HO-5 form provides what kind of coverages for dwellings and their contents?
Open peril coverage for buildings and personal property.
For the insured dwelling and other structures, the DP-3 provides:
Open peril coverage.
A gas line explodes outside of Mindy's Mending Shop, ruining her new landscaping. Which coverage extension of Mindy's Commercial Property policy would cover the cost of replacing the damaged trees and shrubs?
Outdoor Property
An "other insurance" clause is included in insurance policies to deal with the problem of:
Overinsurance
A Homeowners policy is a personal package policy. All of the following are advantages of a personal package policy, EXCEPT:
Package policies allow for lower deductibles..
All of the following would be advantages to an insured or an insurer for purchasing or writing a Commercial Package policy, EXCEPT:
Packaging monoline policies together can provide broader coverage under each coverage part than purchasing the policies separately..
Coverage A of the HO-2 form would cover which of the following items?
Paint to be used on the building..
Under Part A of a Personal Automobile policy, "supplementary payments" refer to?
Payment of defense and other expenses by the insurance company beyond the limits of liability. .
Which of the following statements is TRUE regarding Coverage F - Medical Payments to Others on the Homeowners policies?
Pays the medical expenses of others without regard to whether or not the insured was negligent.
All of the following would be excluded under Part D of a Personal Auto policy, EXCEPT:
Permanently-installed GPS systems..
A business owner would be covered for wrongful eviction, defamation of character, false arrest, and malicious prosecution under which of the following Commercial General Liability coverage part?
Personal and Advertising Injury.
Which of the following would be considered a "breakdown" as defined in an Equipment Breakdown policy?
Pressure or vacuum equipment failure.
The three parties to a contract bond are:
Principal, obligee, surety.
The Gramm-Leach-Bliley consumer privacy act requires:
Privacy notices to be delivered electronically only if the customer or consumer agrees
Farm liability coverages include each of the following, EXCEPT:
Professional liability..
All of the following are covered under the definition of money in commercial crime insurance, EXCEPT:
Proof of debt
The Coverage C - Uninsured Motorists coverage of a standard, unendorsed Personal Automobile policy applies to all of the following, EXCEPT:
Property damage sustained by the insured vehicle by an uninsured vehicle..
All of the following would be covered under a Builders Risk Policy, EXCEPT:
Prospective buyer.
Which of the following statements describes the coverage provided under Coverage C of the Ordinance or Law Endorsement to a Commercial Policy policy?
Provides coverage for the increased costs to repair or rebuild to comply with current building, zoning, or land use ordinances or laws..
All of the following statements are TRUE regarding Section II - Liability of the Garage Coverage form, EXCEPT:
Provides coverage when an employee causes damage to a customer's vehicle.
true regarding the "Building Additions and Alterations" additional coverage of the Homeowners forms, EXCEPT:
Provides up to $2,500 to cover fixtures, installations and improvements made or acquired at the insured tenant's expense..
What does the Small Business Administration (SBA) surety bond program provide?
Reimburses the sureties that provide the bonds a percentage of the losses sustained if the contractor defaults
Which of the following loss valuations can be stated as "we agree to pay the cost to repair or replace without deduction for depreciation?"
Replacement cost
Replacement cost coverage is best defined as:
Replacement cost without deduction for depreciation
John Smith has just made his last car payment which concludes his contract. The finance company, for reasons not immediately apparent, has the car repossessed. If Mr. Smith brings a suit, the court will allow Mr. Smith to retake possession of the car pending the court's final ruling as to ownership if Mr. Smith provides the court a:
Replevin bond.
The original Terrorism Risk Insurance Act of 2002 defined an act of terrorism as a violent act or any act that is dangerous to all of the following, EXCEPT:
Reputation
What type of insurance is usually provided or subsidized by the state or federal government because it is not ordinarily available from private insurers?
Residual market insurance.
Blake has been planning to quit his job as a clerk in a United States Court House and open an antique store. After doing some research and finding that antiques do not sell well, he decides to abandon the plan and stay on at the court house. Blake is practicing:
Risk avoidance
Meg has been in very good health in the past 3 years. She has been exercising, her blood pressure is at a perfect level and her cholesterol is the envy of all her friends. Because Meg is feeling so healthy, she decides to cancel her health insurance policy. This is an example of which of the following risk management methods?
Risk retention..
Roger accidentally hits a tree in his owned vehicle and it is a total loss. His car was three years old and in pristine condition with an actual cash value of $12,250. To replace the car with a new one of the same make and model, it would cost $19,400. To purchase a used car of the same make and model that is also 3 years old with similar mileage, it would cost $11,200. Disregarding any deductible, how would Roger's claim be settled under Part D of his standard Personal Auto policy?
Roger will receive a check for $11,200 to purchase a used car of like kind and quality to the vehicle that was wrecked.
Sam currently has all of his business locations covered under a standard Businessowners policy. He purchases new business personal property for his businesses. Which of the following statements best describes how coverage will apply for Sam's newly acquired property?
Sam will have $100,000 of coverage for 30 days or until he reports his newly acquired business personal property to the insurer, whichever comes first..
In a Commercial Crime policy, "non-negotiable" instruments that represent money are known as:
Securities..
According to the West Virginia insurance code, "to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company", is the definition of: Select the Correct Answer Placing insurance. Soliciting insurance. Negotiating insurance. Selling insurance.
Selling insurance
If an insurer takes an adverse action based upon credit information, the insurer must do all of the following, EXCEPT:
Send a copy of the report to the person for review..
Which of the following is NOT a responsibility of the Insurance Commissioner in any given state?
Setting insurance rates.
The purpose of the appraisal clause is:
Settle disputes concerning the amount of a loss.
The HO-3 form insures for direct physical loss to covered property involving collapse of a building caused by all of the following, EXCEPT:
Settling.
Mary holds a West Virginia insurance license. She has reason to suspect that insurance fraud has been perpetrated. Which of the following is Mary's next step as required by the West Virginia insurance code?
She must report the suspected fraudulent insurance act to the Fraud Unit within 14 days..
Under a CGL policy, personal and advertising injury liability coverage does NOT apply to damages resulting from:
Slanderous statements made by an advertising firm. .
NOT covered under the basic cause of loss form of a Commercial Property policy?
Smoke from industrial operations..
According to the West Virginia insurance code, "attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company", is the definition of:
Soliciting insurance..
Which of the following best describes an "insurance producer"?
Someone who represents an insurance company in the soliciting and negotiation of insurance
Which of the following is NOT defined as "covered property" under an Equipment Breakdown policy?
Spare equipment parts..
The "control of property" condition of the Commercial Property policy:
States that if an insured violates the policy conditions at one location, coverage at other locations will not be affected..
Wyatt is a blasting contractor who set off a blasting charge, damaging several buildings in the area and causing severe bodily damage to several people. Which type of liability applies?
Strict liability
What type of liability is specifically imposed by statutory law?
Strict liability..
What type of liability is imposed by law without regard to fault on those participating in certain activities or owning certain things that are considered especially hazardous?
Strict/Absolute
If a bond is called upon for payment, which party pays out the face amount of the bond?
Surety
After completing an inspection of an insured's pressure equipment and fire suppression systems, the inspector determines that the pressure equipment needs to be repaired and the suppression systems have not been cleaned and inspected in the time frame required by the policy. The insurer will:
Suspend coverage immediately by red tagging the items until they are repaired, cleaned and pass reinspection.
Which Garage Coverage form symbol is used to indicate that the covered automobile(s) is/are subject to a compulsory "no-fault" law?
Symbol 25..
Insurance companies often outsource a significant percentage of their duties to Third Party Administrators.
TPA's assume the risk on the policies they handle.
When determining if an injury or illness is compensable under a workers' compensation policy, which of the following is the criteria used?
That the injury or illness arose out of and in the course of the employment.
Which of the following Commercial Property conditions is meant to prevent "over indemnification" of the insured?
The "Insurance Under Two or More Coverages" condition..
Harvey's Hardware carries a CGL policy with a $2,000,000 "per occurrence" limit and a $4,000,000 "aggregate limit". Harvey's also carries a Commercial Umbrella policy with a $2,000,000 "aggregate limit" and a $300,000 self-insured retention (SIR). The hardware store has 7 bodily injury claims during the policy period, with no single occurrence totaling more than $2,000,000, but the total of the 7 occurrences is $8,000,000. How will this claim be paid?
The CGL policy will pay $4,000,000, the Umbrella policy will pay $2,000,000, leaving $2,000,000 of the claim uninsured..
Gino owns a pizza restaurant and has hired drivers to deliver pizzas to customer's homes in their own vehicles. His restaurant carries a standard Businessowners policy and a Commercial Automobile policy. One evening, one of Gino's hired drivers has an accident and injures other people. Those who were injured in the accident sue Gino's Pizza for damages. Which of the following statements best indicates how the claim will be handled?
The Commercial Automobile policy will respond to the claim
Katrina has her commercial building covered by a Commercial Package policy. Which if the following is the section within her policy where she would see the dimensions of her building listed?
The Commercial Property declarations page..
If a Condominium Association policy and a Condominium Unit-Owners policy are in force on the same property, how would the claim be handled?
The Condominium Association form is primary. .
Who is the principal in a bid bond?
The Contractor
Which of the following standardized Dwelling insurance forms provides coverage for loss of rental income?
The DP-1, DP-2, DP-3 forms
Dwelling forms may provide replacement cost coverage for the dwelling and other structures?
The DP-2 and DP-3.
Which of the following Dwelling forms provides "open peril" coverage for dwellings and other structures?
The DP-3 special form
The Federal Regulation that is also known as "The Financial Modernization Act of 1999" is:
The Gramm-Leach-Bliley Act.
Which of the following statements is TRUE regarding the peril of theft under the Homeowners policies?
The HO-8 form specifies a limit of $1,000 for theft..
Which of the following is a true statement regarding the Law of Large Numbers?
The Law of Large Numbers states that as the number of insured units increases, the ability to predict losses increases.
The insured has a Homeowners policy with a $5,000 loss deductible. He has purchased some expensive camera equipment, scuba gear, and clothing to take on a 2-week cruise and is concerned about theft of his newly purchased property. What coverage would be recommended?
The Personal Effects Floater.
Under employment practices liability, the coverage territory is worldwide as long as the suit is brought in:
The United States
The Mountain Top Corporation has three corporate officers. What would the state of West Virginia require this company to provide in terms of workers compensation coverage to these corporate officers?
The West Virginia workers compensation code provides that coverage can be rejected or they can be voluntarily covered..
The broad evidence rule is used when:
The actual cash value of property is being determined..
Indemnify Insurance Company has been accused by a claimant in West Virginia of making settlement offer that is unreasonably low. The Commissioner will make a decision as to whether or not an unreasonably low settlement offer was made by considering all of the following, EXCEPT:
The amount of time the insurer took to complete the claims investigation.
Which of the following best describes a licensed insurance professional's "implied authority"?
The authority given by a principal to an agent that is not formally expressed or communicated
What is "express authority" under the law of agency?
The authority given to the agent as specified in the contract..
All of the following claims would be excluded under the Homeowners Watercraft Endorsement, EXCEPT:
The bodily injury suffered by the insured while he was operating the covered watercraft, loses his balance and hits his head on the floor of the boat.
The additional coverage for collapse applies under which of the following Commercial Property cause of loss forms?
The broad and special forms..
Jordan's Jams purchases a standardized Commercial Property policy on August 15th from Binders Keepers, Inc. On September 20th, Binders Keepers adopted a form revision that provided broader coverage without additional premium, however Jordan's policy was written before the form revision was adopted. Which of the following statements is TRUE regarding how the broadened coverage would apply to Jordan's Jams? Select the Correct Answer The broadened coverage would apply to Jordan's Jams but only after a 45-day waiting period as specified by the Liberalization clause of the Commercial Property form. The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium. The broadened coverage would not apply to Jordan's Jams because the coverage was written before the form was revised. The broadened coverage would apply to Jordan's Jams but only on the date that Jordan's renews the policy, it would not apply during the current policy period.
The broadened coverage would apply to Jordan's Jams immediately on September 20th because the revision was adopted during the policy period and did not require an additional premium..
Which of the following statements is TRUE regarding how the standard Businessowners policy additional coverage of "Collapse" becomes payable?
The collapse must be such that the building cannot be used as intended
All of the following would be covered under the Products Liability coverage of the CGL policy, EXCEPT:
The cost to recall defective products..
would be covered under the Products Liability coverage of the CGL policy, EXCEPT:
The cost to recall defective products..
Jess owns a computer repair business that is covered under a Commercial Property policy that includes coverages A, B & C of the Business & Personal Property coverage form. One afternoon a fire broke out in the shop and completely destroyed 5 computers belonging to a client. Which of the following statements best describes how the policy coverage extension for Personal Property of Others will apply to the claim for the loss of the computers.
The coverage extension would pay the owner of the computers directly, up to $2,500..
The major difference between a Commercial Crime policy and a Government Crime policy is:
The coverage for Employee Theft under a Government Crime form can be applied on either a "per occurrence" basis or a "per employee" basis.
uninsured motorist coverage is NOT correct?
The coverage must be included in all personal automobile policies sold in every state..
Tara's hair salon was already having a bad year when a client slipped and broke her arm on a worn out piece of flooring, and sued the salon for $500,000. Tara had recently purchased an Excess Liability policy and she was hoping that she could cover the claim with the new "excess" policy, leaving her CGL policy untouched. This is not possible because:
The coverage under an Excess Liability policy are only triggered when the underlying policy's limits have been exhausted.
Coverage under a standard Personal Watercraft policy extends to all of the following, EXCEPT:
The crew of the boat for medical payments..
Gordon's Carpentry built a garage for a client. Two weeks after the work was completed, the garage collapsed and damaged the client's car, equipment in the garage, and caused bodily injury to the client. Gordon's CGL policy would not cover:
The damage to the garage
All of the following describe one of the four elements of a negligent act, EXCEPT:
The defendant entered into a legal contract with the plaintiff..
Gavin, the named insured under a Personal Auto policy, his daughter Tabitha, and two of her friends are riding in the covered auto when Gavin accidentally runs a stop sign, striking another vehicle. Everyone in Gavin's vehicle was injured as well as the driver and two passengers in the other car. Who would be covered for their injuries under Part A of Gavin's policy?
The driver and passengers in the other car..
The Business Auto policy liability exclusion pertaining to pollution removes coverage for each of the following, EXCEPT:
The escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto.
Increased cost of construction extension is:
The extension of coverage that pays the increased costs to meet newer building codes.
Carol is covered under a Commercial Property policy with an Earthquake & Volcanic Eruption -- Sprinkler Leakage Only Endorsement attached. Which of the following statements is correct regarding Carol's deductible under the endorsement?
The flat dollar deductible for fire applies..
Which of the following statements regarding uncontrolled Commercial Inland Marine forms is NOT TRUE?
The forms can be used as part of a Commercial Package policy..
The insured is covered under an HO-6 form. The Coverage A limit is $500,000. The insured also owns a separate three-car garage adjacent to the condominium building worth $100,000. Which of the following statements is true regarding coverage for the garage?
The garage is covered as part of the $500,000 Coverage A limit..
All of the following are advantages of purchasing workers' compensation insurance from a private carrier, EXCEPT:
The high deductibles
Under the Equipment Breakdown Protection form that covers boilers and machinery, what is considered to be one loss event?
The initial breakdown that causes other breakdowns.
TRUE regarding an insured who has been injured by a hit-and-run driver in West Virginia?
The injured West Virginia driver must notify their own insurance company within 60 days of the accident with the hit-and-run driver.
In insurance terms, the phrase "severability of insurance" means:
The insurance applies separately to each insured..
While conducting an examination of a company, the Commissioner may hire attorneys, appraisers, independent actuaries or other professionals. These costs must be paid by:
The insurance company being examined.
An insured has her property covered under an "open peril" cause of loss form. She experiences a loss. The burden of proof that the peril that was the actual cause of loss in the claim, lies with:
The insurance company.
An insured who had a $500,000 primary liability policy purchased a $1 million Umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $500,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary underlying liability policy or the Umbrella policy. How will this loss likely be settled?
The insured will be liable for the full $100,000 loss..
The insured has liability coverage with a limit of $300,000 per occurrence. She purchases a $1 million Personal Umbrella to extend and broaden her coverage. The Umbrella policy includes a $10,000 retained limit. The insured becomes liable for $800,000 in damages that are excluded by the underlying liability policy, but is covered by the Umbrella policy. How would this case likely be settled?
The insured would pay $10,000 and the Umbrella policy would pay $790,000. .
All of the following statements are correct regarding the insurer's right to "examine under oath" as specified in the Building and Personal Property coverage form, EXCEPT:
The insurer has the right to examine any insured under oath, but only if the claimant has brought a lawsuit against the insurer..
Which of the following statements is correct concerning the premiums for a workers' compensation policy?
The insurer has three years after policy expiration to audit the insured's payroll records in order to determine the final premium. .
Which of the following statements is NOT TRUE of the Loss Payment condition of the Building and Personal Property Coverage form?
The insurer may elect to take possession of the property and pay the insured 15% above the appraised value
In West Virginia, when a claims investigation has been concluded, which of the following is required of the insurer?
The insurer must either deny the claim in writing or make a written offer within 10 working days of the conclusion of the investigation..
The Homeowners policy on Dylan's $110,000 home is voided when he intentionally burns the house to the ground. Consequently, he does not receive the settlement check he was hoping to when he committed the arson, but he still has an outstanding mortgage balance of $76,000. How does this event affect the mortgage lender?
The insurer pays the mortgage lender $76,000..
Mary intentionally trips her neighbor while the neighbor is trespassing on the insured's property. Although the neighbor is not injured, Mary gives the neighbor $500 in cash to settle any potential liability claim. How will Mary's insurance company most likely respond in this situation?
The insurer will deny liability coverage because Mary's action was intentional
Which of the following statements is TRUE regarding how the Building and Personal Property Coverage form would handle a loss to a party wall when the other party decides not to repair or replace the damage?
The insurer will pay the full value to repair or replace the party wall for the insured when the other party decides not to repair or replace.
When the triggering event threshold has been met under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA), the insurer's deductible amount:
The insurer's deductible is calculated at 20% of the insurer's direct earned premiums for commercial insurance.
Mrs. Vincent is covered under a standard PAP that covers her 2016 Ford SUV. She carries liability and full physical damage coverage. Her neighbor owns a 2002 Chevrolet pick-up truck with liability coverage only. Mrs. Vincent borrows the truck to pick up lawn furniture, parks the truck at the store, and leaves the keys in the ignition. The truck is stolen and later found wrecked. Which of the following would apply?
The loss is covered under Mrs. Vincent's "other than collision" coverage.
generally not considered to be a legal defense against claims of negligence?
The loss to the plaintiff was caused intentionally by the defendant. .
When a loss occurs and coverage is provided by a reciprocal exchange, which of the following is responsible to cover the loss?
The member insurers..
The Declarations section of an insurance policy contains:
The name and address of the insured and the duration of the policy..
NOT true concerning Commercial Package policy modification factors
The numerical figure used as a modification is set within each coverage part of the standard policies that make up the package.
The parties to a bond include the surety, the principal, and:
The obligee
With surety bonds, who is to be protected under a performance bond?
The obligee..
Underinsured motorist coverage provides first-party protection to an insured after an accident in which of the following situations?
The other driver has insufficient liability limits and is "at-fault". .
Would be covered under the building coverage of an NFIP policy?
The plumbing system of the covered building.
Which of the following would be covered under the building coverage of an NFIP policy?
The plumbing system of the covered building..
All of the following statements are true regarding a Personal Umbrella policy, EXCEPT:
The policy can be written as a monoline policy
The time period after the policy inception and before the policy expiration is known as:
The policy period
Joe makes a small down payment on a sports car and finances the remainder of the cost of the car with Benevolent Bank, Inc. He also purchases a standard Personal Automobile policy through Binders Keepers Insurance Company to cover the car. Joe makes one car payment before he is caught with $200,000 of drugs in the car on his way to deliver it to addicts for money. Joe is arrested and the car is permanently confiscated by the authorities. How will coverage apply in this situation?
The policy will cover the damage to the body of the automobile on behalf of Benevolent Bank, Inc.
All of the following statements are true regarding a Personal Liability Supplement, EXCEPT:
The policy will cover watercraft liability..
The insured is wearing a diamond ring while on vacation in Europe. Her ring is valued at $1,500 is stolen. What coverage would apply under her Homeowners policy?
The policy will pay the loss less the deductible..
All of the following would be covered under Coverage B of a Homeowners policy, EXCEPT:
The roof of the covered dwelling
would be covered by Section I of the Businessowners policy?
The seizure of the insured's building by the civil authorities in order to stop the spread of fire..
James has purchased a 20-year-old home for $120,000. He covers it with an HO-5 form for $100,000 with a deductible of $500. The roof of the home needs to be replaced and James has this work performed and purchases a service agreement on the roof before moving into the home. The service agreement covers $1,000 for roof damage from any cause that occurs within 5 years of the installation of the new roof. Two years after moving into the home, a heavy thunderstorm hits James' neighborhood and large sections of his roof are damaged, totaling $3,000 in damage. How will this claim be paid?
The service agreement pays $1,000 first, leaving the remaining $2,000 minus the deductible ($1,500) for the insurance company to pay.
All of the following are defenses to a common carriers liability under a Motor Truck Cargo policy, EXCEPT:
The shifting of a load in a tractor-trailer due to the driver's high rate of speed..
would be covered under Part Two - Employer's Liability of a standard workers' compensation policy?
The spouse of an injured employee sues the employer for loss of consortium..
All of the following illustrations could be expected on a FIRM, EXCEPT:
The standard premium rates for a flood zone
One of the Unfair Claim Settlement Practices is "failing to affirm or deny coverage of claims within a reasonable time after having completed its investigation related to such claim or claims". How is the length of time that is considered "reasonable" decided?
The state legislatures set the reasonable time period by statute..
Which of the parties to a bond is the insurance company?
The surety
All of the following are "open-peril" exclusions of the HO-3 and HO-5 form, EXCEPT: Select the Correct Answer Flood. Neglect, deterioration, and general wear and tear. Theft. Mold, fungus, and wet rot.
Theft..
Which of the following statements is TRUE regarding controlled commercial inland marine forms?
These forms are usually issued according to published rules and rates.
Under Coverage B of the BOP, how are exterior signs covered?
They are listed as "property not covered" but they can be covered if they are scheduled on the policy
The West Virginia Assigned Risk Plan, known as the "West Virginia Automobile Insurance Plan" classifies applicants for coverage as "substandard risks" for all of the following reasons, EXCEPT:
They own a much older vehicle..
Arnold's Applesauce has its business structures covered under a standardized Commercial Property policy. After filing a claim, they are considering bringing legal action against their insurer. Which of the following statements is best describes Commercial Property condition that governs this action?
This condition is known as "Legal Action Against Us" and it requires that the insured has complied with all the policy conditions before bringing a lawsuit against the insurer. It also stipulates that the insured has two years from the date of the direct physical loss to file the lawsuit.
The West Virginia Insurance Commissioner has which of the following duties and responsibilities?
To affix the Insurance Department's official seal to papers and documents.
An insured has a $1,000 insurance claim and is able to prove his loss and its value. The insurer's adjuster offers $500, knowing that the claimant would probably take the offer to avoid incurring the cost of an attorney to sue for the actual amount of the claim. The offer made by the adjuster is considered:
To be an unfair claims settlement practice
The West Virginia insurance code defines an insurance producer as an individual appointed by an insurer to perform all of the following duties, EXCEPT:
To navigate insurance contracts on behalf of the insurer.
All of the following benefits are paid according to a state-mandated schedule of workers compensation benefits, EXCEPT:
Total partial disability
Which inland marine form covers single shipments of property?
Trip transit policy.
Concurrent causation is:
Two or more perils that cause a single loss.
Which of the following would meet the definition of "concurrent causation"?
Two or more perils that cause a single loss..
The Builders' Risk form covers all of the following, EXCEPT:
Unattached signs..
Which of the following best describes the concept of risk?
Uncertainty of Loss
A privately owned insurance company has sent a memo to its agents that they may take applications in a particular section of the state, but they are not to quote a premium rate. The insurer wants to discourage insureds in the area so policies will be priced by the underwriter accordingly. Some property may be approved, and some may not even though there is a paid fire department in the neighborhood. The majority of the property is small, well maintained property, but the president of the company feels his company should only insure in the newer, elite sections of town where there is less likelihood of severe loss. Since the company is privately held, he feels he can make decisions regarding his company. The West Virginia Insurance Department has had several complaints about the insurer and the way they are charging for property they do write. What Unfair Trade Practice, if any, is the company violating?
Unfair discrimination.
An insurance company that permits different rate classifications for individuals of the same class and same hazard may be guilty of:
Unfair discrimination.
Which of the following terms is used to describe a contract where the insurance company is the only party that is legally bound to preform its part of the agreement?
Unilateral
What is the period of time an insured has to report a loss covered under a Commercial Crime policy?
Up to one year following the expiration date of the policy..
Since the parties to an insurance policy rely on the honesty of the other, an insurance contract is considered to be based on:.
Utmost good faith
Under "Coverage A - Building" of the BOP form, which of the following is NOT covered?
Valuable papers and records.
Under a Businessowners policy, the "Hired and Nonowned Auto Liability" endorsement would cover:
Vehicles borrowed by the insured..
Vehicles which may be insured by a personal auto policy are described in the eligibility rules. Each of the following statements is true about vehicles eligible for personal auto policy (PAP) coverage, EXCEPT:
Vehicles with fewer than four wheels are eligible.
On the basic dwelling policy all of the following perils are excluded, Except:
Volcanic eruption.
Which of the following is a covered basic form peril of the Homeowners policies?
Volcanic eruption.
TRUE about Workers Compensation benefits, EXCEPT:
Waiting periods apply to medical and disability benefits..
The Commercial Property broad cause of loss form would cover which of the following types of water damage?
Water escaping from a cracked water heater. .
All of the following would be excluded by the basic cause of loss form under a Commercial Property policy, EXCEPT:
Water leaks from the sprinkler system in the building, causing wall and floor damage
Under a directors and officers policy, when can the insurance company reimburse the corporation for reimbursement to directors and officers for defense and damages paid in legal proceedings?
When allowed by its bylaws.
Under a liability policy the insurance company will pay damages on behalf of an insured when:
When it is established that the insured is legally liable..
Any surplus lines broker working in West Virginia who refuses to allow the Commissioner's examiners to have free access to his/her books and records:
Will have his/her license revoked
The "Medical Payments" coverage of the standard Yacht policy covers all medical expenses incurred by an insured, family members, invitees, or guests if a claim is submitted:
Within 1 year following a covered accident
Every insurer in West Virginia, upon receiving notification of a claim, must promptly provide the necessary claim forms, instructions, and reasonable assistance within:
Within 15 working days.
Under "pollution cleanup and removal" coverage under the standard ISO BOP form, when must a loss be reported?
Within 180 days
Commercial inland marine policies require the insured to submit a signed, sworn statement of loss:
Within 60 days of the insurer requesting it..
West Virginia has specified certain types of commercial insurance as exempt from rate-filing requirements. All of the following are types of policies that are exempt from filing rates in West Virginia, EXCEPT:
Workers' compensation
Under the CGL coverage part as it relates to products liability coverage, which of the following would apply?
Worldwide coverage is provided as long as the product is manufactured or sold in the covered territory and the claim is brought within the coverage territory.
For a liability claim to be paid, the insured must be
an insured under policy.
Risk
an uncertainty of loss
Untrue statements made by the insured on an application:
are known a misrepresentations.
Frayed electrical wires, outdated plumbing, worn out heating and air conditioning units:
are not typically covered under property insurance policies.
Non combustible construction is much less susceptible to fire,
but wind resistance can be variable
The Doctrine of Utmost Good Faith:
each party to a contract must rely on the honesty and integrity of the other party.
Many states amend property insurance coverage additions and extensions by statue due to insufficient coverage amounts or time limits. All the following are property insurance additions, or extensions that are frequently amended by state statue
except other structures.
Dana lives in a state that has passed a valued policy law. This means all insurers issuing policies in a state must pay the _______ of the policy in the even of a loss.
full agreed value
Construction that is very fire restive and holds up to wind well:
is Masonry Noncombustible
Coinsurance clause:
is known as the loss settlement clause in Dwelling and Homeowners policies.
FAIR plans are
part of the residual market in any state.
Concealment means:
to hide.
Misrepresentation means:
to lie.
Insurance to Value:
used to describe coverage written in an amount close to the value of the object being insured.
Liability through another person:
vicarious, imputed liability.
The insurance company will pay the difference between the ACV of the property before and after a loss
when a part of a pair or set cannot be repaired, or replaced.