EXAM INSURANCE (USE), not importantn, THIS ONE!!!

An insured is in his garage with his two friends when some shelving loaded with heavy objects collapses and falls on them. All three of them are experiencing back pain, so they go to an emergency room where MRIs are performed at a cost of $750 each. How much will the medical expense coverage of the insured's dwelling policy pay for these costs?

$1500

A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy?

$175,000

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

$2,500

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2500

Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?

$500 (five hundred dollars)

A commercial property special form covers property in transit up to

$5000

The general powers and duties of the Insurance Department include all of the following EXCEPT

1. Determining if a producer has acted in violation of the Insurance Code.2. Enacting statutes to.3. Distributing information regarding the Department's activities.4. Enforcing the Insurance Code. Enacting statues to regulate the insurance industry

A temporary license in this state is valid for

180 days

When a notice of nonrenewal is furnished to an insured, how soon a copy of the notice must be provided to the insured's agent?

5 business days

Every agent broker and adjuster must keep a record of all transactions that occur under their license. These records must be kept.

5 years

The Businessowners policy (BOP) extension coverage form for personal property off-premises is limited to

5000

If a person whose license has been temporarily suspended demands a hearing, the Commissioner must hold the hearing within how many days after receipt of the demand?

?

Which of the following would be covered by the broad theft endorsement on a dwelling policy

A camera the insured has with him on vacation

Which of the following is NOT covered under accounts receivable coverage form?

Any loans required to offset uncollectible amounts

Which of the following types of authority is also called "perceived authority?

Apparent

All agents, brokers, and adjusters must keep a record of all transactions that occur under their license. These records must be kept

At the address listed on the license

Insurable interest in a property policy must be proven

At the time of loss

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

Avoidance

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

Deductible

Loss valuation is best described as the process of

Determining the premium charged and the amount of insurance required on a specific property

Essential property insurance includes coverage against

Direct damage to property under construction.

A producer just completed a continuing education (CE) course. How soon would the producer be allowed to repeat the same course as part of his CE requirement?

During the next licensing renewal period

All of the following are optional coverages that may be attached to an HO-3 policy EXCEPT

Dwelling replacement cost.

What is the purpose of the coinsurance clause found in property insurance policies?

Encourage the insured to insure the property closer to its full value

An insured just purchased an auto policy for his new car. He wants to understand what perils are not insured against. Which section of his policy should the insured check?

Exclusions

Rita drops off her wedding gown at Vicky's Dry Cleaners for a final pressing. The store's press breaks, so Vicky takes Rita's dress to her other store across town. On the way to the other store, Vicky is held at gunpoint until she gives the man the wedding dress. What crime coverage form would pay for the loss of the gown in this situation?

Extortion - Commercial

Premiums collected on behalf of the insurance company by an agent will be held in what capacity?

Fiduciary

When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity?

Fiduciary

For how many years must insurance producers keep records of written disclosures regarding producer compensation?

Five years

Replacement cost is defined as

Full replacement of property at its current cost, new and without reduction for depreciation.

The main difference between an HO-4 and an HO-6 is

HO-6 provides limited dwelling coverage as well as contents coverage

An additional loss that results from a direct loss of property is called a/an

Indirect loss

Which of the following is true regarding the fire department service charge under the builders risk form?

It is an additional coverage.

Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use?

Judgment

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

Loss

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

An insurer may cancel or nonrenew personal insurance based upon which of the following

Non-payment, material Misrepresentation, or Fraud

Which of the following terms means termination of insurance policy at its expiration date by not offering a policy continuation or replacement?

Nonrenewal

A deli owner has a businessowners liability policy. When a customer slipped and hurt herself at the deli, the liability policy paid for medical expenses. The customer, however, is now suing the business owner because she claims there was no caution sign warning her that the floor was wet. What is the insurer obligated to do?

Pay to defend the policyowner in the lawsuit because liability coverage contains a duty-to-defend provision

A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy, which is most likely?

Premiums would go down

Following the death of a producer, which of the following would NOT receive a temporary insurance license in order to continue the insurance business until someone is qualified for a permanent license?

Producer's 17-year-old son

An insurance company can make changes to premium rates or policy terms

Prospectively only.

Which of the following would be the insured's duty in the event of a loss according to the duties in event of occurrence, claim, or suit condition?

Providing specific details regarding an occurrence

Which of the following is the most common way to transfer risk?

Purchase insurance

What type of insurer uses a formal sharing agreement?

Reciprocal insurer

following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

Reduction

Which method of loss valuation is contrary to the basic concept of indemnity?

Replacement cost

Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days?

Sixty days

Who is responsible for verifying that an insurer is authorized to sell insurance policies in this state?

Soliciting producer

An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?

Specific

Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called

Specific coverage

A stock insurer is defined as an insurer

Stock

All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT

The 22-year-old niece of the insured who is visiting

In Washington, the FAIR plan is administered by

The Industry Placement Facility

Records that must be kept by an agent must include all of the following information EXCEPT

The amount of any deductible or copayment.

The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks?

The difference in the actual cash value as a pair and as a single

50.In insurance terms, what are components?

The factors that determine rates

A homeowner sells his house to a friend. The friend wants to keep the homeowner's current policy in effect. Under the assignment provision, which of the following is most likely?

The homeowner will need to get written consent from the insurer before the policy can be reassigned.

Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS

The insured had drained the plumbing system.

A producer has been convicted of a felony. How will that affect the producer's license?

The license may be revoked immediately

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

Once a producer's appointment is filed, within how many days will the Commissioner verify the appointment (for eligible producers)?

Thirty days

All of the following statements are true regarding fire department service charge additional coverage under the businessowners policy EXCEPT

This coverage limit pays in place of the limit of insurance shown in the declarations.

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

Transfer of rights and duties under the policy

Which of the following would be a proper choice of policy for a company that transports goods that are irreplaceable in nature?

Valued policy

When does the federal emergency flood insurance program go in effect?

When a community applies for the program

Which of the following is NOT considered an insurable peril?

a loss that results from gambling

According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties

automatically transfer to a legal representative

Which of the following NOT be covered as a loss Coverage D of a homeowners policy?

intentional damage by a child under 13

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest so the agent guarantees higher dividends than he knows would be possible

misrepresentation

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

misrepresentation

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

other insurance

The deductible under earthquake coverage is stated as what?

percentage of loss

Which of the following is consideration on the part of an insurer?

promising to pay in accordance with the contract

All of the following are ways to handle risk EXCEPT

reciprocal insurance exchange

The equipment breakdown coverage form values loss on a/an

replacement cost basis

An apartment occupant's personal property would be insured under which homeowners form?

tenant broad form HO-4

Producer licenses are valid from the initial licensing or reinstatement period until

the licensees birth month, plus 1 year

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

the loss of income for the time the diner was closed

When an insurer cancels a policy, it must do all of the following EXCEPT

Advise the insured of possible eligibility for coverage through the assigned risk plan

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

Agreed value

When a property insurance policy is knowingly written with limits that exceed the amount that could be expected to be paid in the event of loss, which of the following are guilty of an illegal act?

All of the above

An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured's sister has to stay at a motel. How much will the HO-3 form pay for these additional living expense?

All of the expense up to the Coverage D limit

A policy that insures all property at multiple locations for a single amount is referred to as

Blanket

.The liability coverage of the businessowners policy is written on a

Businessowners liability coverage form

A producer who fails to separate premium monies from his own personal funds is guilty of

Comingling

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

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

Consumer report

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

Which of the following is NOT true about earthquake coverage?

Coverage is commonly provided through a federally-funded program