Exam 1
A driver must present proof of financial responsibility if he/she is in involved in an accident resulting in bodily injury, or in which what amount of physical damage results? A $750 B $500 C $1,000 D $250
$1,000
The Additional Coverage for Pollutant Clean up and Removal is covered up to what limit? A $100,000 B $500 C $1,000 D $10,000
$10,000
A Personal Auto Policy is written with a single limit of $100,000 for bodily injury. When 6 people are injured in a covered accident amounting to a total of $150,000, how much will the policy pay? A $150,000 B $600,000 C $100,000 D $50,000
$100,000
Which symbol covers autos left in the insured's care, custody and control? A 31 B 13 C 3 D 30
30
All of the following would be considered a covered resident under the Homeowners Policy, except: A A 20-year-old exchange student who is a resident of the household B A 22-year-old relative enrolled in school full time that was a resident of the household before moving out to attend school C The insured's relatives who are residents of the household D A 22-year-old exchange student
A 22-year-old exchange student
Which of the following would constitute a pretext interview? A Disguising one's true identity in the investigation of a claim B A producer so entitled adds CPCU to her business cards and letterhead C A producer represents himself as a Medicare Adviser or Specialist D A producer meets with a senior in his home more than 24 hours after providing a Scope of Appointment notice to the individual
A producer represents himself as a Medicare Adviser or Specialist
All of the following are included in Section I - Property, of the Businessowners Coverage Form, except: A An automatic increase in Business Personal Property Coverage to offset seasonal variations in stock B An automatic 90% coinsurance clause C Business Income and Extra Expense coverages D An automatic increase in the limit of insurance for the building
An automatic 90% coinsurance clause
Under Workers' Compensation, all the following injuries are covered, except: A An employee who is injured despite the extensive safety measures of the employer B An employee who intentionally injures himself/herself C An employee who is injured solely through his/her own negligence D An employee injured because of unsafe working conditions
An employee who intentionally injures himself/herself
When an insured fails to disclose known facts in an application for insurance, he/she may be guilty of: A Breach of warranty B Waiver C Twisting D Concealment
Concealment
Medical Payments under Section II of the Homeowners Policy would cover all of the following, except: A Medical and surgical expenses B Dental expenses C Loss of Income of an injured person D Prosthetic devices
Loss of Income of an injured person
The broader definition of an accident that also includes a continuous and repeated exposure, can best be defined as a(n): A Exposure B Incident C Disaster D Occurrence
Occurrence
Which type of risk involves the possibility of loss or gain? A Pure B Stable C Speculative D Insurable
Speculative
Insured locations under a Homeowners Policy include all of the following, except: A Individual and family cemetery plots B Vacant farm land C Any part of a premise occasionally rented to an insured for nonbusiness use D Non-owned premises where the insured is temporarily residing
Vacant farm land
Insurance fraud is punishable by a fine of up to: A 00% the value of the fraud B $150,000 or double the value of the fraud, whichever is greater C 50% the value of the fraud D $100,000 or double the value of the fraud, whichever is less
$150,000 or double the value of the fraud, whichever is greater
Furnishing false information to the Commissioner is subject to a civil penalty of $100,000 plus what amount per 30 days period of noncompliance? A $1,000 B $5,000 C $500 D $10,000
$5,000
Under a Homeowners Policy, how much coverage is provided for theft or unauthorized use of a credit card? A $1,000 B $2,500 C $500 D The Coverage C Limit of Insurance
$500
The minimum aggregate liability limit for disease under the Employers Liability policy is how much? A $300,000 B $500,000 C $150,000 D $100,000
$500,000
An insured has a Building and Personal Property Coverage Form with limits of $300,000 and a coinsurance clause of 80% with the standard deductible of $250. The building value at the time of loss was $500,000. How much will the policy pay when there is a $10,000 covered loss? A $7,750 B $7,500 C $10,000 D $7,250
$7,250
The Commissioner may suspend or revoke a license or certificate of authority, not to exceed ______ year(s), of anyone for willfully violating the prohibition on arranging for the sale of free insurance. A 1 B 3 C 2 D 4
1
An individual license will automatically terminate immediately upon the death of the licensee or if the license has not been renewed within _____ months following its expiration. A 24 B 18 C 12 D 36
12
All CA resident insurance licenses renew every ______ years on the last day of the month in which the license was originally issued. A 5 B 3 C 4 D 2
2
Which symbol covers physical damage for dealers? A 31 B 13 C 3 D 30
31
Policyholder W has had an accident in which her covered auto was totaled. The insurer has promised to replace the car with a comparable auto. The insurer must re-open its claim if Policyholder W cannot locate a comparable auto within how many days? A 10 B 35 C 45 D 30
35
Under most circumstances, within how much time is an insurer expected to affirm or deny a claim? A 30 days B 10 days C 20 days D 40 days
40 days
Files and records must be maintained for inspection by the Commissioner for no fewer than how many years? A 5 B 1 C 4 D 8
5
The Mini Tail, when written with the Claims-Made Form under the Commercial General Liability Part, provides ________ days after the policy period for reporting a claim. A 120 B 60 C 180 D 90
60
Under the Broad Cause of Loss Form, how long is vacancy allowed before the peril of vandalism coverage is suspended? A 60 days B 90 days C 30 days D 120 days
60 days
Which of the following is true regarding liability insurance? A The liability policy provides coverage for all acts of wrongdoing B A liability policy provides coverage for criminal acts C A liability policy provides coverage for all torts D A liability policy provides coverage for unintentional torts
A liability policy provides coverage for unintentional torts
Any private passenger auto, pickup, van, or trailer, not owned by or furnished for regular use by the named insured or a family member while being used by the named insured or a family member, under the Personal Auto Policy is defined as: A A Substitute Auto B A Covered Auto C A non-owned auto D A Newly Acquired auto
A non-owned auto
The term General Average under Ocean Marine Insurance is described as: A A partial loss where jettison of cargo is necessary to save the ship and the loss is shared B A partial loss where the loss is not shared C The average freight charges on the entire cargo of the ship D The average value per item of all the cargo on the ship
A partial loss where jettison of cargo is necessary to save the ship and the loss is shared
All of the following are included under Section II (Who is an Insured) of the Commercial General Liability Coverage Forms that is written on an occurrence basis, except: A A real estate manager B Any individual, partnership, joint venture or corporation that is named in the Declarations C A partner of an insured partnership while on personal business D An operator of a forklift
A partner of an insured partnership while on personal business
Which of the following is classified as an insurance broker? A A person who negotiates insurance contracts on behalf of an insured B An employee who negotiates insurance contracts for his/her employer C A person in the home office who does not solicit outside of the office D A person who places coverage for his/her own insurance
A person who negotiates insurance contracts on behalf of an insured
A person who is on the premises without permission of the owner, is considered to be: A A solicitor B A Licensee C A trespasser D An Invitee
A trespasser
Under the Basic Dwelling Form, losses are paid on a(n) ____ basis. A Replacement Cost B Agreed Value C Actual Cash Value D Market Value
Actual Cash Value
The Basic (DP-1) Dwelling Form does not include: A Additional Living Expenses B World-Wide Coverage on Personal Property C Fair Rental Value D Property Removed to a Newly Acquired Residence
Additional Living Expenses
All of the following statements regarding the property policy structure are correct, except: A The insuring agreement describes the perils that are covered under the policy B The insured's duties and obligations are listed in the conditions section C The Declarations Page lists other parties having an insurable interest in the property D Additional coverages are added to the policy for an additional premium
Additional coverages are added to the policy for an additional premium
In an insurance transaction, a(n) ______ represents the insurance company. A Broker B Agent C Solicitor D Administrator
Agent
Under the BOP, which of the following properties are not covered? A Tenants improvements made to structures not owned by the tenant B Aircraft, automobiles, motor trucks and other vehicles subject to motor vehicle registration C Business Personal Property located outside the building D Building materials, equipment or supplies located in the open
Aircraft, automobiles, motor trucks and other vehicles subject to motor vehicle registration
A person can purchase an insurance policy to cover losses from all the following, except: A Sudden and direct damage to property by natural causes B Loss of property through burglary or theft C Loss of assets through tort actions brought against the person D An operation of drug smuggling
An operation of drug smuggling
The Personal Auto Policy does not provide coverage for which of the following? A A pickup truck or van B Any vehicle with fewer than four wheels or designed mainly for the use off public roads C Off-road vehicles used in a medical emergency D A non-owned golf cart
Any vehicle with fewer than four wheels or designed mainly for the use off public roads
When the insured and the insurer fail to agree on the amount to be paid for a property loss, the dispute resolution method is called a(n): A Appraisal B Approximate Clause C Agreement Clause D Abandonment
Appraisal
Michael takes his son Pete to a baseball game. In the third inning, a foul ball strikes Pete in the face, fracturing his jaw. What legal defense could the ballpark use to avoid liability? A Assumption of risk B Contributory negligence C Comparative negligence D Statute of limitations
Assumption of risk
All of the following are methods of loss valuation, except: A Blanket value B Stated amount C Actual cash value D Replacement cost
Blanket value
Under the California Insurance Code, there are no _______ for life or health insurance in California. A Non-resident agents B Producers C Brokers D Resident agents
Brokers
A direct loss is best described as: A Specific Coverage B A Proximate Cause C Bursting of a water pipe that causes water damage D Loss of rents from a dwelling made uninhabitable because of fire
Bursting of a water pipe that causes water damage
Under Transit Coverage Forms, the Annual Transit Form is designed for which of the following? A Business firms that desire coverage only on shipments received from others B Business firms that desire coverage only on their shipments to others C Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier D Business firms that do not make regular shipments
Business firms that want to protect property of all kinds being shipped to others or being received from other shippers during the year via common carrier
What information does not need to be communicated in an insurance contract? A Information not already known by both parties B The period during which the insurance is to continue C The financial rating of an insurance company D Information that is material to a risk
C The financial rating of an insurance company
All of the following are true, except: A The Pair and Sets Clause allows the company to pay for a loss in proportion to the actual loss B Fine arts are insured on a valued basis C Cameras are insured on a valued basis D For newly acquired jewelry, furs, cameras and musical instruments, the insured must report the objects within 30 days and pay the additional premium
Cameras are insured on a valued basis
Under the California insurance code, the penalty for unlawfully acting as an insurer without a(n) _____________ is imprisonment (state or county jail) not to exceed 1 year, and/or a fine not to exceed $100,000. A Acknowledgment B Approval C Letter of Acceptance D Certificate of Authority
Certificate of Authority
Under Part D - Coverage for Damage to Your Auto of the Personal Auto Policy, vehicle upset or its impact with another vehicle or object would be covered under: A Other than Collision B Collision C Comprehensive D Transportation Expenses
Collision
An insurance license may be suspended or revoked by the ___________ after it has been issued. A Commissioner of Insurance B NAIC C Agency D Insurer
Commissioner of Insurance
All of the following statements are true, except: A In order to qualify for a federal-guaranteed mortgage loan, the property must be covered by Flood Insurance if located in a designated flood area B Under a Flood Policy, protection is provided to property that is on normally dry land C The federal government is the reinsurer D Contents are covered under a Flood Policy if located within 100 feet of the building
Contents are covered under a Flood Policy if located within 100 feet of the building
All of the following are methods of managing risk, except: A Avoiding the risk B Retaining the risk C Transferring the risk D Contracting the risk
Contracting the risk
When Transit Coverage Forms are written on an open cargo basis they: A Cover losses due to improper packing or handling B Cover only inbound shipments from suppliers C Cover only outbound shipments to customers D Cover all shipments
Cover all shipments
Under the Dwelling Policy, household and personal property, including property damaged in transit between the insured's old and new residences, are covered under: A Coverage B B Coverage D C Coverage C D Coverage A
Coverage C
Choose the incorrect statement regarding Medical Expenses coverage under the BOP. A Payment of medical expenses is made regardless of who is at fault B It pays medical expenses incurred within one year of the date of the accident C It covers accidents on premises the insured owns or rents, or due to the insured's operations D Coverage excludes funeral expenses
Coverage excludes funeral expenses
Under the Dwelling policies, which is correct regarding coverage of trees, shrubs or plants? A Theft of shrubs and plants is covered B Damage by wind, hail, weight of ice, snow or sleet is not covered C All vehicle damage to trees, shrubs, or plants is covered D The Limit of Liability is $1,000 for any tree, shrub, or plant
Damage by wind, hail, weight of ice, snow or sleet is not covered
Which statement is true concerning Homeowners policies? A Dwellings under construction are covered for theft B Coverage is not provided to a garage rented for private garage purposes C Damage to borrowed property caused by an insured is covered D Coverage is provided to property of boarders not related to the insured
Damage to borrowed property caused by an insured is covered
All of the following are false in regard to deductibles in property insurance, except: A Deductibles tend to increase premiums B Deductibles help reduce the number of frivolous or small claims C Deductibles reduce the total amount of insurance available D Deductibles apply only to larger losses
Deductibles help reduce the number of frivolous or small claims
The insurance contract is said to be a contract of Utmost Good Faith, because: A Concealment of known facts on the part of the insured will void the contract B The insurer has drawn up the contract and, therefore, there is no intent to deceive C Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest D The insured must warrant that his/her representations are true
Each party is entitled to rely upon the representations of the other that there is nothing concealed or dishonest
Statutory Law Defenses are determined by which of the following? A Administrative decisions B Judicial decisions C Enactment of Legislatures D Executive decisions
Enactment of Legislatures
What type of funds received from a client must be maintained in a trust account at a bank or depository in California? A Fiduciary B Cash C Foreign D Securities
Fiduciary
Every licensee must include the license number on all of the following, except: A Home address labels B Printed advertisements C Business cards D Price quotations
Home address labels
Ocean Marine Insurance is written full value and may become void if which of the following happens? A The vessel changes course for any reason B The vessel is decommissioned while at sea C The Inchmaree Clause is violated D If implied warranties are violated
If implied warranties are violated
Under Loss Conditions of the Commercial Property Coverage Part, which of the following is not a correct statement? A The insurer will pay for the covered loss within 30 days after they receive the sworn statement of loss B The insured must sign a sworn statement of loss within 60 days after the insurer's request C Each party will pay its chosen appraiser and bear the umpire expenses equally D If the property is vacant for more than 60 consecutive days, the insurer will not cover any loss
If the property is vacant for more than 60 consecutive days, the insurer will not cover any loss
An agent who enters into agreements with more than one insurer is which of the following? A Independent B Captive C Direct D Exclusive
Independent
Which part of a property insurance policy describes the perils? A Insuring Agreement B Definitions C Declarations D Additional Coverages
Insuring Agreement
All of the following are considered part of the consideration of an insurance contract, except: A The insurer's promise to indemnify in the event of loss B The payment of a claim for the insured C Payment of the initial premium D Issuance of the policy
Issuance of the policy
Which of the following describes the Lay Up Warranty under the Yacht Policy? A It states that coverage is suspended while the yacht is laid up B It is an additional coverage that applies when the yacht is being repaired or serviced C It is a limitation of coverage on the yacht that applies when the yacht is outside its navigational limits D It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
It applies when the insured yacht is in storage and allows a return of premium due to the lower risk
Which of the following is true regarding the Fine Arts Floater? A It covers such items as paintings, rare manuscripts and antiques B Coverage is on an Actual Cash Value basis C Coverage is limited to the United States, Canada, and Mexico D It has automatic coverage for 30 days on newly acquired articles
It covers such items as paintings, rare manuscripts and antiques
All of the following are true of Protection and Indemnity, except: A It covers injuries caused by negligence B It covers cargo if lost or damaged through negligence C It does not cover injuries to seamen D It covers damage to fixed objects
It does not cover injuries to seamen
Choose the true statement about BOP business personal property. A It is covered while in transit B It is covered only while within the building or an enclosed structure on the premises C Coverage extends to property in vehicles within 500 feet of the premises D It is covered when located in or on the building at the described premises, or in the open (or in a vehicle) within 100 feet of the premises
It is covered when located in or on the building at the described premises, or in the open (or in a vehicle) within 100 feet of the premises
All of the following are true, except: A It is necessary to warn a trespasser of any hidden danger B A person on the premises with the owner's knowledge and tolerance, who may be there for no benefit of the owner, is a licensee C Specific damages include actual medical expenses D To avoid a claim for negligence, a property owner must warn an invitee of any hidden danger
It is necessary to warn a trespasser of any hidden danger
Which of the following best describes a Liability Policy that is primary? A It pays only after other insurance covering the same loss is exhausted B It shares the loss with other policies covering the same loss C It is the policy that pays first with respect to other policies D It provided only basic coverage
It is the policy that pays first with respect to other policies
All of the following are true of Part A automobile liability coverage, except: A It provides third party protection B It may be written either split or single limit C It protects the insured for losses when the insured is legally liable D It is written on an aggregate limit basis
It is written on an aggregate limit basis
All of the following are true of the Personal Auto Policy, except: A It is written in simplified terminology B It provides no-fault in states that require it C It provides no coverage for personal effects in the vehicle D It is written only with split limits of liability
It is written only with split limits of liability
Which of the following is the best description of the Voluntary Compensation Endorsement under Workers' Compensation Insurance? A It provides coverage to employees that are not otherwise covered B It provides coverage for independent contractors C It provides coverage for employees who option out of coverage under the standard Workers' Compensation policy D It provides coverage for unpaid volunteer workers
It provides coverage to employees that are not otherwise covered
All of the following are false regarding coinsurance, except: A Its purpose is to encourage the insured to carry insurance to value B The coinsurance clause applies only to losses exceeding the coinsurance percentage C Coinsurance does not apply to vacant or unoccupied property D The minimum coinsurance percentage on commercial policies is 50%
Its purpose is to encourage the insured to carry insurance to value
What are bonds that are used in court proceedings called? A Performance Bonds B Judicial Bonds C Tax Bonds D Permit Bonds
Judicial Bonds
Broker-Agent who receives compensation for referring a client to a premium financing entity must do all of the following, except: A Disclose the amount of compensation received B Disclose all forms of periodic payments offered by the insurer to the consumer prior to placing business with a premium financing entity C Obtain the client's written consent to enter into a premium financing arrangement D Keep records of premium financing arrangements for a minimum of 5 years
Keep records of premium financing arrangements for a minimum of 5 years
Under Coverage A of a Dwelling Policy, all of the following are included, except: A Fire or lightning damage to outdoor television antennas B Land, including the land on which the dwelling is located C Materials for repairing the dwelling, located on the described location D Outdoor equipment on the location used to service the dwelling
Land, including the land on which the dwelling is located
Any notice required to be given to an insured by the insurer may be mailed, postage paid, and addressed to the policyowner, insured, claimant, or beneficiary to be notified at the: A Home address B Business address C Agent's business office address D Last known address of record
Last known address of record
In Liability Insurance, Bodily Injury may include which of the following? A Loss of Earnings B False Arrest C Slander D Invasion of Privacy
Loss of Earnings
A policy is issued for a premium of $500 per year, but a condition that would have caused the premium to be substantially more was misrepresented in the application. This information is deemed by the insurer to be: A Warrantied B Waived C Non-disclosed D Material
Material
Which Workers' Compensation benefits do not have a limit? A Medical benefits B Scheduled injuries C Death and survivor benefits D Temporary Total Disability benefits
Medical benefits
Money and Securities Optional Coverage (when activated by an entry on the Declarations Page) of the BOP will cover which of the following? A Money and securities against theft, disappearance or destruction B Accounts receivable records, which are necessary to prove amounts owed the insured C Loss of Money or Securities resulting from dishonest acts of employees D Business Personal Property, as well as Money and Securities, against theft or destruction
Money and securities against theft, disappearance or destruction
All of the following are elements in establishing the tort of negligence, except: A Legal Duty B Moral Duty C Standard of Care D Proximate Cause
Moral Duty
Carl owns a manufacturing plant and needs coverage in case his machinery breaks down. His agent recommends Equipment Breakdown coverage and explains that it does not cover which of the following? A Boilers and pressure equipment B Motor vehicles C Electrical systems D Air conditioning systems
Motor vehicles
Under the Business Income Coverage Form, when proper entry is made in the Declarations, the following are all Optional Coverages, except: A Maximum Period of Indemnity B Non-Time Element Coverage C Business Income Agreed Value D Monthly Limit of Indemnity
Non-Time Element Coverage
The Businessowners Policy provides coverage on which of the following basis? A Agreed Value B Open Peril C Named Peril D Actual Cash Value
Open Peril
A Homeowners Policy HO-3 provides: A Open Perils Coverage on the dwelling and Broad Form Coverage on the personal property B Open Perils Coverage on both the dwelling and personal property C Replacement Cost coverage on both the dwelling and personal property D Broad Form Perils on both the dwelling and personal property
Open Perils Coverage on the dwelling and Broad Form Coverage on the personal property
All of the following are considered liability assumed under insured contracts, except: A Sidetrack agreements B A lease of premises C Ordinance or Law D Elevator maintenance agreements
Ordinance or Law
The Insurance Guarantee Association will do which of the following if a member insurer becomes insolvent and is liquidated? A Assign claims to other member insurers who must then cover 100% of the loss B Pay covered claims to the lesser of $500,000 or a policy's limit of liability C Pay all covered claims up to the limit of liability in the contract D Pay only covered claims which are not subject to civil lawsuits
Pay covered claims to the lesser of $500,000 or a policy's limit of liability
All of the following are false concerning the National Flood Insurance Program, except: A Flood policies are available only from the National Flood Insurance Program B Payment for losses are made by the federal government C Agents may bind flood insurance for up to 15 days prior to submitting the final application D When coverage is on dwelling property, it is extended to include trees, shrubs, and plants
Payment for losses are made by the federal government
Which of the following is true of medical payments? A The insured must be legally liable for coverage to apply B Payments are made without regard to negligence C Medical payments replace bodily injury coverage D Medical payments, when made, are an admission of negligence
Payments are made without regard to negligence
The insuring agreement of a policy describes: A The duties of the insured in the event of a loss B Perils that are covered C Transfer of the rights of recovery D Perils that are not covered
Perils that are covered
Coverage B of the CGL provides which of the following? A Bodily Injury and Property Damage Liability B Supplementary Payments C Medical Expense D Personal and Advertising Injury
Personal and Advertising Injury
Coverage B of the CGL provides which type of coverage? A Professional liability B Bodily injury and property damage C Personal and advertising injury D Medical payments
Personal and advertising injury
If renewal fees are paid and continuing education requirements are satisfied, but an agent has no active Notice of Appointment on file with the Commissioner, the license will be: A Cancelled B Terminated C Revoked D Placed on inactive status
Placed on inactive status
Which one of the following funds is considered to have been stolen and can result in his/her punishment under the law if an agent puts to personal use? A Renewal commissions received B Expense reimbursements C Premiums collected D First year commissions received
Premiums collected
Which is not a category of inland marine insurance? A Property held by a bailee B Fixed Instrumentalities of transportation C Property in transit D Property in landlocked areas
Property in landlocked areas
Insurance is designed to provide protection against which of the following? A Involuntary risk B Certain Risk C Speculative risk D Pure Risk
Pure Risk
Which risk management type shifts the risk of loss to a larger homogeneous group? A Risk Transfer B Risk Avoidance C Risk Assumption D Risk Reduction
Risk Transfer
Which of the following is the taking of property from the care and custody of a person by one who has caused or threatened bodily harm to that person. A Theft B Assault C Robbery D Burglary
Robbery
Which of the following is not a responsibility of the Insurance Commissioner? A Order rates for Workers' Compensation insurance increased B Reject a requested rate increase for Workers' Compensation insurance C Order rates for Workers' Compensation insurance reduced D Set the rates for Workers' Compensation insurance
Set the rates for Workers' Compensation insurance
A trucker shipping its own goods using unowned trucks would use which form? A Owners form B Truckers form C Shippers form D Annual transit form
Shippers form
In California, all of the following are recognized ethical standards, except: A Recommending products that meet customer needs B Increasing your level of competence C Obeying all rules and regulations D Staying in touch with your customers on a weekly basis
Staying in touch with your customers on a weekly basis
When a claimant can prove that a product caused the 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 Absolute Liability B Strict Liability C Direct Liability D Contingent Liability
Strict Liability
The property insurance condition that states that the insured may not file suit against the insurer unless all terms of the policy have been complied with, is: A Ordinance or Law condition B Loss Payment condition C Claim settlement condition D Suit Against Us condition
Suit Against Us condition
An optional reporting period of unlimited duration that may be purchased by endorsement to a Claims-Made Form, if requested within 60 days of the end of the policy term, is called: A Supplemental Extended Reporting Period B Basic Extended Reporting Period C Mini-Tail D Midi-Tail
Supplemental Extended Reporting Period
In Liability Insurance, the maximum amount payable for loss (per location and/or per person) from all occurrences within a policy period regardless of the number of separate accidents (occurrences), is known as: A The Per Person Limit B The Combined Single Limit C The Per Occurrence Limit D The Aggregate Limit
The Aggregate Limit
The Businessowners Policy is similar to which of the following policies? A The Difference in Conditions Policy B The Commercial Package Policy C The Homeowner Policy D The Personal Automobile Policy
The Homeowner Policy
All of the following are true about the Limits of Insurance Section of the Businessowners Coverage Form - Section II, except: A The Medical Expense limit is a per person limit B The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit C The Damage to Premises Rented to You limit applies only to premises rented to the insured D The Liability and Medical Expense limit applies per person or organization for personal injury claims
The Products and Completed Operations aggregate limit is equal to the Liability and Medical Expense limit
Which statement is true concerning Homeowners policies? A Section I limits coverage on utility trailers up to $2,000 B The HO-4 provides open peril coverage on both the dwelling and contents C Section I limits coverage on fire department service charge to $100 D The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement
The Section I deductible does not apply to property covered under the Scheduled Personal Property Endorsement
Which Cause of Loss form for the Commercial Property Coverage Part will cover loss of sales merchandise due to a burglary? A The Special Form B The Broad Form C The Broad Form and the Special Form D There is no Burglary coverage in the Property Policy
The Special Form
An agent's appointment remains in effect until any of the following takes place, except: A Expiration of the license B Filing of a notice of termination by the appointing insurer C Cancellation D The agent attains the age of 65
The agent attains the age of 65
Which of the following is true regarding Completed Operations Coverage? A The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss B Coverage applies only during the period that the insured has custody and control of the work deemed faulty or inadequately performed C Bodily injury arising from negligent or faulty work of the insured is not covered if it occurs after the work is completed and turned over to its owner D If faulty work, negligently performed, causes damage to other property of the claimant, then coverage extends to include the faulty work
The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but will not pay for the cost of replacing the work that caused the loss
Coverage for a loss that was discovered, but did not occur during the policy period, is provided by: A The loss sustained form B The occurrence form C The claims made form D The discovery form
The discovery form
Which of the following is not true of Temporary Total Disability? A The employee is expected to return to work B The length of the disability must exceed the waiting period C Retroactive benefits will be paid if disability exceeds the waiting period D The employee can work while recovering
The employee can work while recovering
Which of the following is true concerning the Home Day Care Coverage Endorsement to the Homeowners Policy? A The endorsement covers injury to an employee, as well as attendees, arising out of day care operations B The endorsement 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 The endorsement extends Section II coverages to the insured's home day care business
The endorsement extends Section II coverages to the insured's home day care business
Under the Dwelling Policy coverage extension of Debris Removal, which of the following is correct? A The limit for Debris Removal is 5% of the Coverage A Limit of Insurance B The limit for Debris Removal is an additional amount of insurance C The limit for Debris Removal is 10% of the Coverage A Limit of Insurance D The extension does not increase the amount of insurance under the policy
The extension does not increase the amount of insurance under the policy
In California, all of the following are required to be specified in all insurance policies, except: A The parties between which the contract is made and period during which the insurance is to continue B A statement of premium or a statement of the basis and rates upon which the final premium it to be determined and paid C The financial rating of the insurer D The property or life to be insured
The financial rating of the insurer
Which of the following is not true, regarding the Value Reporting Form? A The insured is required to report 100% of values with each report B The insured is only required to report up to 80% of value of the property C Late reporting or under-reporting will result in a penalty in the event of a loss D The insured pays an advance premium at the beginning of the policy period
The insured is only required to report up to 80% of value of the property
Under Coverage C of the Special Form Dwelling policy, all of the following are included, except: A Household and personal property usual and incidental to occupancy of the premises B The insured's golden retriever C Property of guests and servants, but not tenants or boarders D Property being moved to a newly acquired principal residence for up to 30 days
The insured's golden retriever
Which of the following is stated by the Common Policy Condition Examinations of Your Books and Records? A The insurer may examine the books at any time during the policy period and up to 3 years afterward B The insurer may examine the insured's books only upon permission by the insured C The insurer may examine the insured's books and records any time during the policy period, only D Insurer may examine the insured's books and records at any time during the policy period and for up to one year immediately following policy expiration
The insurer may examine the books at any time during the policy period and up to 3 years afterward
Which statement is false regarding a newly acquired additional vehicle? A The insurer must be notified immediately B It is covered as soon as the insured has insurable interest C It may be a pickup truck with a GVW of up to 10,000 lbs D Coverage is as broad as the broadest coverage for any vehicle now insured by the insurer
The insurer must be notified immediately
All of the following statements regarding a property policy are correct, except: A The conditions describe the responsibilities and obligations of the insurer and the insured B A deductible is a portion of a loss that an insured must bear C The insuring agreement personalizes the policy, specifying the exact property being insured D An indirect loss is an additional loss that results from a direct loss
The insuring agreement personalizes the policy, specifying the exact property being insured
Under Coverage A of the Homeowners Policy, all of the following are covered, except: A The dwelling on the residence premises B The land on which the dwelling is located C Structures that are attached to the dwelling D Materials located on or next to the residence premises used to construct, alter, or repair the dwelling
The land on which the dwelling is located
Which of the following is not a reason why a license may be suspended or revoked after it has been issued? A The licensee has knowingly misrepresented the terms or effect of an insurance policy or contract B The licensee has submitted to the Commissioner a false or fraudulent certificate of prelicensing or continuing education C The licensee does intend actively and in good faith to carry on as a business with the general public the transactions which would be permitted by the issuance of the license applied for D The licensee has previously engaged in a fraudulent practice or act or has conducted any business in a dishonest manner
The licensee does intend actively and in good faith to carry on as a business with the general public the transactions which would be permitted by the issuance of the license applied for
In California, all of the following are true, except: A The notice of appointment of an agent by an insurer must be filed with the Commissioner upon licensing the agent or within 30 days of the appointment B It is considered a misdemeanor in this state to assist a nonadmitted insurer to transact business unless acting in the capacity of Surplus Lines Broker C Any insurer, agent, broker or solicitor who is found to have willfully violated the rules regarding 'free insurance' may have its certificate or license suspended for a maximum of one year D 'Pretext interviews' are interviews in which a person pretends to be someone he/she is not, or pretends to represent someone he/she does not in an attempt to gain personal or confidential information
The notice of appointment of an agent by an insurer must be filed with the Commissioner upon licensing the agent or within 30 days of the appointment
Which statement is false? A The per occurrence limit is the greatest amount recoverable during the policy period B An excess coverage policy pays only after a primary policy has been exhausted C Primary coverage pays first with respect to other policies D Pro rata is proportionate distribution of liability among insurers that have policies on the same risk
The per occurrence limit is the greatest amount recoverable during the policy period
Under the Property Removed coverage extension of a Dwelling Policy, which of the following is incorrect? A Coverage applies up to 5 days in the DP-1, and up to 30 days in the DP-2 B The property is covered against direct loss from any cause C The extension does not change the Limit of Liability that applies to the property D The policy will not provide any coverage while insured property is being removed from endangered property
The policy will not provide any coverage while insured property is being removed from endangered property
Under Binders, all of the following are incorrect, except: A A binder will not end when the policy is issued B The premium amount would not be stated C A binder does not name the company providing coverage D A binder always expires 15 days after its inception date
The premium amount would not be stated
Which of the following is true regarding the Supplemental Extended Reporting Period? A It covers claims that take place after the policy term, during the Supplemental Extended Reporting Period B Cancellation by the insurer requires 90 days notice of cancellation C The charge for the Supplemental Extended Reporting Period shall not exceed the premium of the expiring policy D The premium is a one-time charge
The premium is a one-time charge
Which of the following is a specification that must be included in an insurance contract? A Information already known by both parties B Information that should be known by both parties C Information of a party's own judgement upon the matters of a contract D The risks insured against
The risks insured against
Under Ocean Marine Insurance, which of the following describes what is included in Hull Coverage? A The ship itself, including permanent fixtures of the vessel B The ship hull, deck, and superstructure C Only the ship hull--that portion of the ship that rides the sea and is topped by the deck D The ship superstructure, cabins, masts, and spars
The ship itself, including permanent fixtures of the vessel
Under the Broad Form Dwelling Policy (DP-2), which peril is not included for coverage without an endorsement? A Damage to appliances by artificially generated electricity B Falling Objects C Theft D Volcanic Eruption
Theft
Which of the following is a true statement and could be used in describing a category of crime? A Employee Dishonesty Coverage Form A covers extortion B In order to constitute burglary for insurance purposes, there must be actual use or threat of force C Theft includes any act of stealing, including burglary and robbery D Under the Commercial Crime Program, money includes evidence of debt
Theft includes any act of stealing, including burglary and robbery
Common carriers need to purchase Common Carrier Cargo Liability because: A In case goods in their custody are damaged by an act of God B In case goods improperly packaged by the shipper are damaged in shipment C They can be held legally liable for loss or damage to property in their custody D In case of an inherent flaw in property that manifests itself while in the shipper's possession
They can be held legally liable for loss or damage to property in their custody
Which of the following may result when any producer, agent, or broker knowingly commits an unfair trade practice? A It is considered a felony and the agent will face a minimum of 10 years in prison B They may have their license revoked C Any company with whom they have an agency contract will be fined D There is no penalty for violating an unfair trade practice if a specific statute was not violated
They may have their license revoked
Under Equipment Breakdown Insurance, all breakdowns that manifest themselves at the same time and are the direct result of the same cause, are considered: A Separate Occurrences B A catastrophic loss C To be one breakdown D One Occurrence
To be one breakdown
Temporary authority can be granted to an unlicensed person to handle the affairs of an agent on active military service, to do all of the following, except: A Transact new business in that agent's name B Mail out any claim payments due to clients C Transmit premiums to the insurer which are sent to the agent's office D Provide administrative assistance to existing clients
Transact new business in that agent's name
The common policy declarations of the CPP contain all of the following, except: A Name and address of the named insured B The policy period C Description of the business being insured D Transfer of rights and duties
Transfer of rights and duties
Which statement is false regarding a Homeowners Policy? A Section II of all Homeowners Policies are exactly alike B Under an HO-2, the insured may rent his/her garage to the neighbor for a woodworking shop C Contents are insured everywhere in the world D The HO-2 provides broad form coverage on both the dwelling and contents
Under an HO-2, the insured may rent his/her garage to the neighbor for a woodworking shop
Physical damage coverage under a Business Auto Coverage Form includes all of the following, except: A Collision Coverage B Comprehensive Coverage C Uninsured Motorist Coverage D Specified Causes of Loss
Uninsured Motorist Coverage
Under Personal Marine Insurance, the Personal Articles Floater (Scheduled Articles Floater) is: A Used to insure personal property on a blanket basis B Used to provide replacement cost coverage on personal property C Used to replace Coverage C of the Homeowners Policy D Used to insure individual personal property on an itemized or scheduled basis
Used to insure individual personal property on an itemized or scheduled basis
The Businessowners Coverage Form Section II - Liability covers which of the following for medical expenses? A Tenants of the insured B Members of athletic teams sponsored by the insured C Volunteer workers of the insured D A person hired to do work for the insured
Volunteer workers of the insured
When an employee is injured in an auto accident while on company business, he/she would be covered under: A Garage Liability Form B Workers' Compensation Insurance C Garagekeepers Form D Company group health insurance
Workers' Compensation Insurance
Which statement is true regarding Workers' Compensation? A Workers' Compensation will not cover pain and suffering B An employee is entitled to benefits under Workers' Compensation arising out of work only if the employer carries Workers' Compensation Insurance C The Other States part of Workers' Compensation provides coverage for liability suits brought against employers outside the United States or Canada D The basic limit for Employer Liability Coverage for injury per accident is unlimited
Workers' Compensation will not cover pain and suffering
Advertising Injury Coverage includes all of the following, except: A Violation of copyright, title or slogan B Wrongful entry C Infringement of copyright D Misappropriation of advertising ideas or style of doing business
Wrongful entry
