AD Banker Exam Questions
Which of the following vehicles is not considered an uninsured vehicle under Part C of the PAP? A A vehicle owned by the government B A vehicle whose coverage is denied by its insurer C A vehicle that disappears after a collision D A vehicle insured for less than the state's minimum required coverage
A A vehicle owned by the government Other vehicles that are not uninsured vehicles are company cars, self-insured, operate on rails or crawler treads, off-road vehicles, and those used as a residence.
The maximum amount payable for all losses within a policy period is known as the: A Aggregate limit B Per occurrence limit C Combined single limit D Per person limit
A Aggregate limit The aggregate limit is reduced by the amount paid each time a claim is paid during the policy term.
Under Part A of the Personal Auto policy, which of the following would be covered? A Damage to a parked car B Damage to a neighbor's lawn mower in the care of the insured C Damage to property being transported by the insured D Damage to the home the insured owns
A Damage to a parked car Liability coverage is not provided for: Damage to property owned, being transported, or in the care of the insured.
Which form is designed for Tenants? A HO-4 B HO-8 C HO-3 D HO-2
A HO-4 The HO-4 form is intended for tenants of rental dwellings and apartments.
Policyholder G wants her PAP to insure her sedan, primarily used for sales calls, her husband's SUV for car-pooling, the station wagon that their daughter uses to drive to school, and the van their son uses part-time to deliver dry-cleaning. Which of the following cars will G's agent tell her is not eligible? A The van B The sedan C The SUV D The station wagon
A The van While car-pooling and sales calls are acceptable business uses under the personal auto policy, business deliveries are not.
An insured with a $500,000 HO-5 policy incurs $1,500 in damages due to a flood destroying the wood flooring. The policy will pay: A Zero B $1,000 C $1,500 D $1,250
A Zero Flood is a Section I exclusion and is not covered.
Define physical hazard
A physical hazard is a condition on the property, or exposed to the property, that increases the probability of loss to the property.
In property insurance, which clause prevents the insured from relinquishing ownership and leaving damaged property to the insurer and claiming a total loss?
Abandonment Clause The Abandonment clause provides that the company will not accept property abandoned by an insured when there is a claim dispute.
An insurer that is authorized to do business in a particular state is said to be:
Admitted An admitted insurer is an insurer that is authorized to transact insurance in a state by that state's insurance department, as evidenced by a Certificate of Authority to transact business.
D does not agree with the insurance company's value of his property damaged as a result of his recent property loss. What establishes the procedure D and the insurance company must use to settle this issue?
Appraisal Clause The Appraisal Clause of the insurance policy provides a method of settling disputes between the insurer and the insured as an alternative to legal action.
K has a 10-piece antique fountain pen set that is insured with a pair and sets clause and is valued at $10,000. Each pen alone is only worth $500. If one pen is destroyed in a covered loss, how much will the policy pay? A $9,500 B $5,500 C $4,500 D $10,000
B $5,500 The remaining value of the 9 pens is $4,500 ($500 X 9). The loss of 1 pen has reduced the value of the set from $10,000 down to $4,500. Therefore, the policy will pay the difference of $5,500.
A liability policy contains a per person bodily injury limit of $25,000 and a per occurrence limit of $50,000. If an accident were to occur and three persons have claims of $20,000 each, the total amount paid is: A $75,000 B $50,000 C $60,000 D $25,000
B $50,000 The policy pays up to $25,000 for each person injured, but no more than $50,000 per occurrence, regardless of the number of persons injured. Therefore, the limit for this accident is $50,000.
An insured has a homeowners broad form with a $200,000 limit on the dwelling and the standard deductible. If the insured's $2,500 boat and trailer are stolen from his driveway, what is the most the insured will collect from the policy? A $2,500 B $2,250 C $1,500 D $1,250
C $1,250 The limit for watercraft including trailers is $1,500. The policy will pay the limit less the standard deductible of $250.
Under the unendorsed Homeowners Policy, jewelry is covered up to what amount? A $2,500 for loss by fire B $1,000 for loss by collapse C $1,500 for loss by theft D $1,500 for loss by any peril
C $1,500 for loss by theft Jewelry, watches, furs, precious and semiprecious stones are covered up to $1,500 for loss by theft. Other named peril losses are covered up to the Coverage C limit.
Which of the following would be considered an attractive nuisance? A A back lawn B A toy store C A trampoline D A candy store
C A trampoline
Which of the following would not be covered under the Building and Personal Property Coverage Form? A Furniture B Stock C Electronic data D Telephone system
C Electronic data Electronic data including information, facts, and computer programs and the cost to replace or restore the electronic information is not covered.
Actual Cash Value is best defined as which of the following? A Appraised value B Replacement cost C Today's current price, minus depreciation D Market value
C Today's current price, minus depreciation Actual Cash Value valuation provides that the policy will pay the cost to repair or replace the damaged property at the time of loss, less a depreciation factor based upon the age of the property.
The termination of an insurance policy, by either the insured or the insurer before the expiration date, is known as:
Cancellation Either party to the contract may cancel insurance policies before the expiration of the policy if the cancellation notice requirements are met.
When an applicant intentionally fails to make a material fact known, it is known as:
Concealment Concealment is defined as the withholding of known facts, the knowledge of which would change the decision of an insurer with respect to underwriting, settling a loss, or determining the premium.
In an insurance contract, the value that each party gives the other is called the:
Consideration Consideration can take the form of money, goods, a promise to do something, or anything else that changes the legal position of the party. A contract cannot exist without consideration being given by both sides.
The Additional Coverages part of a property insurance policy provides:
Coverage that supplements the basic coverages in the insuring agreement which is automatically included without an additional premium Additional coverages are automatically included in property policies without an additional premium. The type of additional coverages depends upon the type of policy. Additional coverages are paid in addition to those stated in the insuring agreement and include debris removal, collapse, and fire department service charges.
L owns a home covered under an HO-3 for $200,000. Under Coverage D, how much coverage does L have for lost income if his basement apartment becomes uninhabitable due to a fire loss? A $150,000 B $30,000 C $300,000 D $60,000
D $60,000 For a covered loss, the Coverage D limit for additional living expense, fair rental value, and civil authority prohibited use is 30% of Coverage A. 30% of $200,000 is $60,000.
Under the PAP, how long does an injured party have following an accident to report a Medical Payments claim? A 48 hours B 6 months C 1 year D 3 years
D 3 years The insurer will pay reasonable expenses incurred for necessary medical or funeral services incurred within 3 years of the date of the accident.
Under the Building and Personal Property Coverage Form, a building is considered vacant, unless at least what percentage of square footage is rented or used to conduct operations? A 51% B 61% C 41% D 31%
D 31% A building is considered vacant unless 31% or more of the total square footage is rented or is used to conduct operations.
Which coverage always contains an occurrence limit? A Strict liability B Advertising injury C Personal injury D Bodily injury and property damage
D Bodily injury and property damage Bodily injury and property damage is written with a per occurrence limit.
Which Federal entity administers the Terrorism Risk Insurance Program Reauthorization Act?
Department of the Treasury The Terrorism Risk Insurance Act, which protects consumers by ensuring the continued widespread availability and affordability of property and casualty insurance for a terrorism risk, is administered by the Dept. of Treasury.
The insurance contract is said to be a contract of utmost good faith, because:
Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest It is assumed that utmost good faith exists in both parties to the contract.
If an insurer is incorporated in Rhode Island, but primarily does business in New York, what type of insurer would it be considered in New York?
Foreign An insurer that is incorporated under the laws of another state is considered a foreign insurer.
Which part of a property insurance policy describes the perils?
Insuring Agreement The Insuring Agreement is the company's commitment to protect the insured and includes a description of the perils.
When writing an application for car insurance, Producer M asked her client, B, if he had been convicted of driving while intoxicated (DWI) in the past 10 years. B answered 'no,' although he had been convicted of a DWI last year. B is guilty of what?
Misrepresentation Misrepresentation is a false statement in the application and if material, meaning the company's decision to issue the application would have been different, the policy would be voided.
A potential cause of loss, such as fire, explosion, flood, or theft is considered to be a(n):
Peril A peril is a cause of potential loss to property such as fire, windstorm, hail, or flood.
Rates that cannot be used until the Department or Division of Insurance approves them are referred to as:
Prior approval rates In prior approval states, rates cannot be used until the Department or Division of Insurance authorities approve them, or until a specific time has passed after the filing without being disapproved.
Insurance is designed to provide protection against what?
Pure Risk With pure risk, the only consideration is the possibility of loss or no loss. By contrast, speculative entails a chance of gain as well as a chance of loss.
A fire sprinkler system installed in a factory is considered what method of managing risk?
Reduction The fire sprinkler system will minimize the chance and severity of loss, but not entirely prevent it.
Where can an insured find insurance coverage after being rejected by Insurer A due to claims history?
Residual Market The residual market is a coverage source of last resort for businesses and individuals who have been rejected by voluntary market insurers.
Taxable corporate dividends are received by which type of insurer's shareholders?
Stock A stock company is owned by its stockholders who elect the directors and officers.
The following are all found on the Declarations Page, except: A.) Location of the insured property B.) Amount of the deductible C.) Expiration date of the policy D.) The exclusions
The exclusions The Declarations Page contains the information necessary to tailor the policy to the individual and property insured. The exclusions, common to all policies, are found in the Exclusions section of the policy and coverage forms.
What best describes the principle of Indemnity?
The insured is restored to the same financial condition as prior to the loss, with no loss or gain Indemnity is the principle that restores an insured party to the economic position he/she enjoyed before sustaining a loss.
When an insurance policy is not clear, the court will usually interpret in favor of the insured because of which characteristic?
The policy is a contract of adhesion A contract of adhesion is a contract between two parties that is written on a 'take it or leave it' basis. Because the other party has no control over the terms of the contract, any ambiguity is usually construed against the party who drew it up.
Determining acceptable risks is the primary responsibility of the:
Underwriter The selection of risk is the primary responsibility of the underwriter, who protects the insurer by selecting risks that fall into the normal range of expected losses.
An applicant makes a statement on the insurance application which becomes part of the contract that she has an alarm system which qualifies her for a premium discount. This statement is considered a
Warranty A warranty is a statement that is guaranteed to be true, as opposed to a representation of something that is true to the best of one's knowledge.
The part of a property policy that gives basic information such as the named insured, a description of the property, the location of the property, and the amount of premium involved, is known as the: A Declarations B Insuring Agreement C Policy Provisions D Conditions
A Declarations The Declarations contain the information that is specific to the individual and property being insured.
Which of the following is true regarding the Fine Arts Floater? A It covers such items as paintings, rare manuscripts and antiques B It has automatic coverage for only 30 days on newly acquired articles C Coverage is limited to the United States, Canada, and Mexico D Loss is paid on an actual cash value basis
A It covers such items as paintings, rare manuscripts and antiques The Fine Arts Floater is designed for works of art, antiques, and works of craftsmanship of high value.
Under Section II of the Homeowners Policy, a one or two family dwelling where the insured resides in one of the units, including other structures and grounds at that location, is defined as: A The Residence Premises B Non-business Premises C The Dwelling Structures D The Insured Location
A The Residence Premises The Residence Premises is either a 1, 2, 3, or 4 family dwelling in which the named insured resides. The residence premises also includes other structures and the grounds at that location, such as the 5 acres upon which the insured sits, including the barn, detached garage, and swimming pool.
Under a Dwelling Policy, the coverage extension of Debris Removal will pay for: A The removal of the debris caused by an insured peril B The removal of debris resulting from the action of a civil authority C The removal of the debris from an automobile accident on the insured location D The removal of debris resulting from demolition required by an ordinance or law
A The removal of the debris caused by an insured peril This coverage pays the insured's reasonable expenses for the removal of debris of covered property if the property is damaged by an insured peril.
A flood damages a single-family dwelling that is in a community in the early stages of participation in the NFIP, but they are not yet considered participating. What is the maximum a resident may receive for damages to their personal property? A $35,000 B There is no coverage C $10,000 D $100,000
C $10,000 The dwelling is covered under the Emergency program. The maximum amount of coverage for contents in a single-family dwelling is $10,000.
Which of the following forms provide coverage for indirect loss? A Commercial Glass Coverage Form B Legal Liability Coverage Form C Business Income Coverage Form D Building and Personal Property Coverage Form
C Business Income Coverage Form The two indirect loss forms to the Commercial Property Coverage Part are the Business Income Coverage Form and the Extra Expense Coverage Form.
The Commercial Property Basic Causes of Loss Form insures against all of the following perils, except: A Riot or civil commotion B Sinkhole collapse C Mechanical breakdown D Sprinkler leakage
C Mechanical breakdown Equipment breakdown coverage is separately available under the equipment breakdown form.
Under all the Dwelling Forms, the dwelling described in the declarations is covered under: A Coverage E B Coverage B C Coverage C D Coverage A
D Coverage A Coverage A applies to the Dwelling at the described location; Coverage B, to Other Structures; Coverage C, to Personal Property; Coverage D, to Fair Rental Value, and Coverage E to Additional Living Expenses.
When the insurance company and insured cannot agree upon the amount of the loss, the person selected to help the two hired appraisers is called a(n): A Adjuster B Claim representative C Agent D Umpire
D Umpire Both the insurance company and insured's representatives (usually appraisers) will select a third person to serve as an umpire. If the two appraisers fail to agree on the appraisal, they will submit their differences to the umpire, and an agreement of any two of the three will set the amount of the loss.
Which of the following is true regarding a negligence claim? A An uninjured party to an accident is presumed to be negligent B The claimant must demonstrate that the actions of the insured were the direct or proximate cause of the claimed injury or damages C In every accident there is one or more negligent parties D Every accident resulting in bodily injury or property damage is due to a negligent act
B The claimant must demonstrate that the actions of the insured were the direct or proximate cause of the claimed injury or damages Accidents can occur that are the fault of no one. For one party to be able to collect damages from another, arising from an accident, the claiming party must prove negligence on the part of the other party.
Under the PAP, a temporary substitute would be covered if used: A To test drive new models B To pick up a new refrigerator that won't fit in the family car C While an insured auto needs servicing D Because the insured's auto is an automatic, and his/her daughter wants to learn to drive manual
C While an insured auto needs servicing A temporary substitute is a covered auto as long as an owned car is out of normal use due to breakdown, repair, servicing, loss, or destruction.
Short rate cancellation occurs when:
D The insured cancels the policy mid-term When the insured cancels a policy before the expiration date, a short rate cancellation is issued and the insurer retains a portion of the unearned premium to cover costs.
Which property insurance condition states that a suit may not be filed by the insured against the insurer under certain circumstances? A Ordinance or Law B Legal Action Against Us C Loss Payment D Claim settlement
B Legal Action Against Us Unless all terms of the policy have been complied with by the insured, the insured cannot file suit against the insurer. An insured cannot ignore his/her responsibilities under the policy, then subsequently bring legal action against the insurer.
Medical Payments under Section II of the Homeowners Policy would cover all of the following, except: A Prosthetic devices B Loss of Income of an injured person C Dental expenses D Medical and surgical expenses
B Loss of Income of an injured person Coverage F (Medical Payments to Others), pays necessary medical expenses incurred within three years from the date of an accident. This may include surgical, dental, hospital, ambulance, professional nursing and similar expenses.
Which of the following statements about medical payments is true? A They apply to all expenses incurred within 5 years of the accident B Payments are made regardless of fault or negligence C They apply to members of amateur athletic teams sponsored by the insured D They apply to all persons, including the insured on the premises for any reason
B Payments are made regardless of fault or negligence Medical payments coverage provides payment of medical and medically associated expenses on a voluntary basis, without regard to negligence or fault on the part of the insured.
B is traveling to Europe for a month's vacation. Which of the following coverages might her agent recommend to cover personal items? A Personal articles floater B Personal effects floater C Scheduled personal property D Camera floater
B Personal effects floater The Personal Effects floater provides worldwide coverage for items worn or carried by tourists.
Which of the following is true regarding the Difference in Conditions Policy? A The DIC policy provides excess amounts of insurance above the primary property policies B There is no coinsurance clause or pro rata clause and it may be written for a different amount from the policy it complements C The DIC usually carries a very low deductible D The minimum coinsurance allowed under the DIC form is 90% coinsurance
B There is no coinsurance clause or pro rata clause and it may be written for a different amount from the policy it complements The DIC policy is not an excess layer of insurance. Rather, it provides coverage for perils not insured against under standard property policy forms.
Policyholder S has a HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay? A $2,500 B $250 C $2,750 D $500
C $2,750 When an insured's property is damaged by a covered peril, the Reasonable Repairs additional coverage pays the reasonable costs by the named insured to take necessary measures to protect the property against further damage. The policy would therefore pay the full amount of the loss to the window, plus the insured's cost in covering it to prevent further damage.
Liability for use of which of the following vehicles is not covered by the Homeowners policy? A Riding lawn mower B Motorized custom wheel chair for a resident family member C Dune buggy used on a public beach D Motorized golf cart used at the golf course
C Dune buggy used on a public beach An owned vehicle designed for recreational use off public roads must be used on the insured premises for coverage to apply.
Coverage D of the Dwelling Policy provides coverage for: A Trees, Shrubs, and Other Plants B Additional Living Expenses C Fair Rental Value D Other Structures
C Fair Rental Value Loss of Rental Income is an indirect loss sustained by the insured when the dwelling is rendered uninhabitable by a direct loss. Coverage D provides protection for this indirect loss.
After a lightning storm, the electrical transformer in B's town fails and she has no electricity for 3 days. The damage caused by the loss of electricity: A Is provided as 10% of Coverage C B Is limited to 10% of Coverage A C Is not covered D Is covered for the Coverage A amount
C Is not covered Damage from power failure that takes place away from the insured premises is excluded under the dwelling forms.
Which property condition requires the insurer broaden coverage during the policy period without an increase in premium? A Appraisal B Assignment C Liberalization D Other Insurance
C Liberalization The Liberalization Clause states that if the insurance company makes a change that broadens coverage under this edition of the policy without an additional premium charge, the change will automatically apply to this policy.
The maximum amount a policy will pay in the event of a loss, regardless of the number of insureds, claims made, lawsuits filed, or parties making claims is the: A Deductible B Premium C Limit of liability D Split limit
C Limit of liability The limit of liability, or limits of insurance, are shown on the policy declarations page and are the most paid by the policy regardless of the number of insureds, claims made, lawsuits filed, or parties making claims or filing lawsuits.
All of the following are covered under Section II of the Homeowners Policy, except: A Medical expenses for an accident arising out of the premises or non-business activities of an insured B The insured's liability for bodily injury to others C Property of the insured D The insured's liability for damages to property of others
C Property of the insured Loss or damage to the insured's property would be covered under Section I, Property.
Which of the following is not true concerning Section II of the Homeowners Policy? A Payment under Damage to Property of Others is made regardless of negligence B The coverage for Damage to Property of Others pays the replacement cost of the property damaged up to $1,000 per occurrence C The Damage to Property of Others duplicates coverage that is included in Section I D The coverage for Damage to Property of Others excludes property that is covered in Section I
C The Damage to Property of Others duplicates coverage that is included in Section I The Damage to Property of Others Additional Coverage supplements the Property Damage Liability Coverage by providing limited Coverage for damage, caused by the insured, regardless of negligence. Coverage does not apply to property damage covered under Section I of the policy.
Which of the following is true of the Dwelling Under Construction Endorsement of a Dwelling Policy? A The amount of insurance in force is the limit of liability stated in the Declarations B Insurance applies to the Dwelling and to other structures C The premium is based upon the average amount of insurance during construction D The insured has up to 90 days to notify the company that the dwelling is occupied
C The premium is based upon the average amount of insurance during construction The limit of liability for Coverage A is provisional and is based on the building's value upon completion. The limit of insurance at any given time prior to completion is a percentage of the Coverage A limit that equals the proportion the actual value bears to the value on the date of completion.
Which of the following losses would the Building and Personal Property Coverage Form NOT pay on an actual cash value basis? A A loss to outdoor equipment or furniture B A loss to awnings and floor coverings C A loss to appliances, whether attached or not D A loss of $2,500 or less to a building
D A loss of $2,500 or less to a building A loss to the building of $2,500 or less would be paid at replacement cost, all others mentioned are paid at actual cash value.
Which form is designed for the unit-owner of a condominium? A HO-2 B HO-8 C HO-4 D HO-6
D HO-6 The HO-6 Form is designed for the owner-occupant of a condominium unit.
Personal Injury includes all of the following, except: A Bodily Injury B Libel C Slander D False Arrest
A Bodily Injury Personal Injury is non-bodily injury to a person arising from wrongful conduct.
The Outdoor Property Extension under the Building and Personal Coverage Form insures against which perils? A Fire, lightning, explosion, riot, civil commotion and aircraft B Fire, lightning, windstorm, hail, riot, civil commotion and aircraft C Fire, lightning, windstorm, hail, explosion, aircraft, and vehicles D Fire, lightning, riot, civil commotion, aircraft, and vandalism
A Fire, lightning, explosion, riot, civil commotion and aircraft The most that is paid under the Outdoor Property Extension is $1,000 per Occurrence, but not more than $250 on any one tree, shrub, or plant. The perils covered by this extension are fire, lightning, explosion, riot or civil commotion, and aircraft.
Which of the following is true concerning the Home Day Care Coverage Endorsement to the Homeowners Policy? A It extends Section II coverages to the insured's home day care business B It covers injury to attendees while loading or unloading them from draft or saddle animals C It provides Commercial General Liability coverage for the day care operation D It covers injury to an employee, as well as attendees, arising out of day care operations
A It extends Section II coverages to the insured's home day care business The Home Day Care Coverage Endorsement extends the coverage of the Homeowners Section II to the Day Care Business.
Choose the false statement about a newly acquired additional vehicle under the PAP: A It may be used to transport goods for hire if receipts are less than $10,000 B It must be reported to the insurer within a specified period C It may be used on a farm D Coverage will be as broad as the broadest coverage on any insured vehicle in the household
A It may be used to transport goods for hire if receipts are less than $10,000 Vehicles used to carry goods for hire cannot be insured under a Personal Auto Policy.
Policyholder J has a no-fault auto policy. Upon being hit by a driver that ran a stop light, J suffers a broken leg. Whose insurance company will pay for J's injury? A J's insurer B The insurer of the at-fault driver C The court will determine which insurer is responsible D J's and the negligent driver's insurer will share the loss
A J's insurer Under no-fault insurance, the injured party collects insurance benefits from his/her own insurance as if it were first-party coverage, eliminating the need to determine negligence or legal liability.
Bodily Injury may include which of the following? A Loss of Earnings B False Arrest C Invasion of Privacy D Slander
A Loss of Earnings Bodily injury includes such items as medical expenses, lost wages, mental anguish, death and disfigurement.
When coverage applies to losses from all perils except those specifically excluded, the policy is said to be written on which of the following basis? A Open Perils B Valued C Named Perils D Agreed Amount
A Open Perils The open perils policy insures against all perils that are not excluded, rather than enumerating the perils being insured against.
All of the following are false concerning the National Flood Insurance Program, except: A Payment for losses are made by the federal government B Flood policies are available only from the National Flood Insurance Program C Dwelling coverage includes trees, shrubs, and plants D Agents may bind flood insurance for up to 15 days prior to submitting the final application
A Payment for losses are made by the federal government Although private insurers sell and service flood insurance in addition to that provided by the National Flood Insurance Program, the federal government reinsures all flood insurance.
Which type of standard policy includes coverage options that would not exclude damage by flood? A Personal Auto B Commercial Property C Dwelling D Homeowners
A Personal Auto Part D - Coverage for Damage to Your Auto covers flood, including flash flood.
Which of the following endorsements to the Homeowners Policy adds coverage for injury resulting from libel, slander, false arrest, defamation, invasion of privacy and other such offenses that could result in a personal liability suit? A Personal Injury Endorsement B Permitted Incidental Occupancies Endorsement C Additional Residence Rented to Others Endorsement D Business Pursuits Endorsement
A Personal Injury Endorsement The Personal Injury Endorsement provides coverage for injuries to others that are not of a physical nature.
All of the following perils are included under the Dwelling Broad Form, except: A Smoke damage from industrial operations B Falling Objects C Volcanic Eruption D Burglary Damage
A Smoke damage from industrial operations Smoke damage is a covered peril of the Dwelling Broad Form. However, the description of the peril specifically excludes smoke from agricultural smudging or industrial operations.
Which of the following conditions would not be found in a CGL policy written on the occurrence form? A The Insured's Right to Claim Information B Representations C Duties in the Event of Occurrence, Claim, or Suit D Severability
A The Insured's Right to Claim Information This condition is found in the claims-made form only.
Under the Homeowners Policy, Medical Payments coverage will apply to expenses that are incurred within what length of time following an accident? A 2 years B 3 years C 4 years D 1 year
B 3 years Medical Payments Coverage will pay for necessary medical expenses that are incurred or medically ascertained within 3 years from the date of an accident causing bodily injury.
Under the Vacancy Clause of a Building and Personal Property Coverage Form, losses caused by vandalism are not covered if the damaged property has been vacant for how many days? A 90 B 60 C 120 D 30
B 60 Losses caused by vandalism are not covered if the property has been vacant for 60 days or more.
Bodily injury liability coverage includes all of the following, except: A Mental anguish B Breach of contract C Lost wages D Medical bills
B Breach of contract Bodily Injury coverage covers physical injury, sickness or disease sustained by a person including death resulting from any of these. Breach of contract does not fall under this definition.
T's office condominium is covered under a Condominium Commercial Unit-Owners Coverage Form. Which of the following is not covered on a primary basis? A Improvements B Fixtures owned by the Association C Furniture D Business personal property
B Fixtures owned by the Association In the event both the unit-owner's policy and the association's policy cover the fixtures, the unit-owner's coverage will be excess.
Which of the following is true regarding the Personal Liability Supplement? A It covers the insured's personal autos B It provides coverage for claim expenses, first aid expenses and damage to property of others C The Limit of Liability is the same as the Coverage A amount D It covers Professional Services rendered by the insured
B It provides coverage for claim expenses, first aid expenses and damage to property of others. The Claim Expenses, First Aid Expenses, and Damage to Property of Others are Additional Coverages that supplement Coverage L, Personal Liability, and Coverage M, Medical Payments.
All of the following are covered under the Building and Personal Property Coverage Form, except: A Personal Property owned and used to service and maintain the building B Completed additions C Accounts, bills, currency, deeds, evidence of debt, money or securities D Building materials that are on or within 100 feet of the described premises
C Accounts, bills, currency, deeds, evidence of debt, money or securities. Accounts, bills, currency, deeds, evidences of debt, money or securities are not covered under this form, but can be more properly covered under other insurance forms.
Coverage E of a Homeowners Policy would cover which of the following? A Bodily Injury arising out of the sale of a controlled substance B Bodily Injury to an insured C Bodily Injury to a guest caused by the insured's pet dog D The transmission of a communicable disease by an insured
C Bodily Injury to a guest caused by the insured's pet dog Coverage E of the Homeowners Policy provides Personal Liability coverage for bodily injury or property damage arising out of an occurrence, with certain limitations and exclusions. Injury caused by communicable disease and the sale of a controlled substance are both excluded under the policy.
Policyholder M insures her owner-occupied single family residence under a dwelling property policy (DP-3) with a limit of $100,000. If the dwelling is damaged in a fire, what policy coverage will pay for M's extra costs to stay in a motel and board her pets while the fire damage is being repaired? A Coverage C B Coverage D C Coverage E D Coverage B
C Coverage E Coverage E pays for the necessary increase in living expenses incurred by the insured if the building is rendered unfit for its normal use.
Collision Coverage under Part D of the Personal Auto Policy would cover which of the following? A Damage to the auto caused by objects blown into it during a severe windstorm or tornado B Damage to the auto caused by collision with an animal on the roadway C Damage to the insured auto's bumper sustained when the auto crashed into a tree D Breakage of the windshield caused by collision with a stone or other missile
C Damage to the insured auto's bumper sustained when the auto crashed into a tree Part D of the policy specifically stipulates certain causes of loss that are not considered collision. They include missiles or falling objects, fire, theft, explosion, windstorm, contact with a bird or animal, among others.
Which of the following statements regarding Multi-Peril Crop Insurance is correct: A Multi-peril crop insurance is not reinsured by the federal government, but through CHIAA B Multi-peril crop insurance protects against the perils of lightning, wind, and pollution C Multi-peril crop insurance is reinsured by the federal government by FCIC D Insects and plant disease are excluded from coverage
C Multi-peril crop insurance is reinsured by the federal government by FCIC The coverage is written by private insurers and is reinsured by the Federal Crop Insurance Corporation (FCIC).
The person specifically designated in the policy as the person with whom the contract of insurance has been made, is considered to be the: A Contract Insured B Contingent Insured C Named Insured D Additional Insured
C Named Insured The Named Insured is the entity with whom the insurance contract is made. When there is more than one entity designated as named insured in the policy, then contractual obligations are transacted with the first one designated, known as the first named insured.
In respect to Section II of a Homeowners Policy, all of the following are true, except: A Damage to Property of Others pays up to $1,000 per occurrence B Bodily injury or property damage arising from a vehicle used to assist the handicapped, such as a wheelchair, is covered C Section II losses are subject to a standard $250 deductible D Individual and family cemetery plots qualify as an insured location
C Section II losses are subject to a standard $250 deductible Section II losses are not subject to a deductible.
Section II of a Homeowners policy may cover which of the following incidents? A The homeowner's family dog bites their 2 year old son B An insured's guest damages the stair railing during a visit C The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat D Bodily injury caused by an insured's activities while picnicking at a city park
D Bodily injury caused by an insured's activities while picnicking at a city park. Bodily injury to others caused by the insured's activities is covered under the Homeowners liability section. Damages to the insured's property are not covered and damages caused by an owned inboard motorboat are excluded from coverage.
Which of the following insurance forms is designed for the person who has the potential for a liability exposure caused by negligent acts of the contractor or subcontractor he hires to make repairs, construction, or alterations? A Contractual Liability Insurance B Completed Operations Insurance C Contractors Liability Insurance D Contingent Liability Insurance
D Contingent Liability Insurance Contingent liability is liability imposed because of accidents caused by persons other than employees for whose acts an individual, partnership or corporation may be responsible. For example, an insured that hires an independent contractor can, in some cases, be held liable for his negligence.
Which is true of Coverage C of the Dwelling Policy? A Coverage C provides coverage for passports, tickets, and deeds B Coverage C provides coverage for coins and currency C Coverage C provides coverage for grave markers D Coverage C provides coverage for the personal property of a guest
D Coverage C provides coverage for the personal property of a guest At the insured's request, Coverage C will apply to personal property of a guest or servant while located on the described location. Personal property of a tenant or boarder is not covered.
Which of the following best describes a liability policy that is written on a primary basis? A It pays only after other insurance covering the same loss is exhausted B It provides only basic coverage C It shares the loss with other policies covering the same loss D It is the policy that pays first with respect to other policies
D It is the policy that pays first with respect to other policies Sometimes liability insurance is written in layers to provide higher limits of coverage. When this is done, the primary insurance pays the entire claim until its limits are exhausted, then the excess policy pays the balance of the claim.
Which type of liability limit applies to Medical Payments coverage? A Combined B Aggregate C Per occurrence D Per person
D Per person Medical payments coverage for all types of policies pays on a "per person" limit
When a claimant can prove that a product caused an injury, the fact that the manufacturer will be held liable regardless of whether the product was defective or not, is considered which of the following? A Contingent Liability B Direct Liability C Vicarious Liability D Strict Liability
D Strict Liability The doctrine of strict liability applies to products and their manufacturers. It holds that the manufacturer can be held responsible for an injury caused by a product, even if the product is not defective.
Under Part F of the Personal Auto Policy, which of the following is correct when there are two or more auto policies issued by the insurer on the same auto? A Each policy will pay the loss independently of the other B Each policy will share equally in the loss C This policy will be excess if the other policy is in a different insurer D The maximum that will be paid is equal to the limit of the policy with the higher limit of liability
D The maximum that will be paid is equal to the limit of the policy with the higher limit of liability The Two or More Auto Policies provision of the Personal Auto Policy is intended to prevent the stacking of limits if more than one policy issued by the insurer applies to the same accident.
