Exam Prep 4
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?
$6,000 would be paid under other-than-collision coverage.
If a homeowner's policy is being cancelled because of unpaid premiums, how much notice should be provided?
10 days
Which coverage form would provide coverage for all incoming and outgoing shipments?
Annual transit
An installation floater is used to insure
Appliances intended to become a permanent part of the building.
Insurers that write ______ insurance need to belong to the FAIR Plan.
Basic Property only
An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?
Coverage E - Additional Living Expense
Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period?
Discovery form
Which of the following is a legal action?
Discrimination in policy benefits on the basis of life expectancies.
States with monopolistic state workers compensation funds
Do not allow private insurers to be licensed to write workers compensation coverage.
Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT
Embezzlement.
If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a/an
Experience rating plan.
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Which statement regarding insurable risks is NOT correct?
Insureds cannot be randomly selected.
In a dwelling policy, which of the following is true regarding personal liability coverage?
It must be added as a supplement or written as a separate policy.
All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT
It provides coverage for all employees, even those employees who were terminated in the past 90 days.
Rates that are established based on the similarities of the risk with other risks are known as
Manual rates.
Where is the policy period stated?
On the declarations page of the policy
All of the following statements regarding parts used in the repair of an insured vehicle are true EXCEPT
Parts used in the repair of an insured vehicle by other than the original manufacturer must use replacement parts from the manufacturer only.
Who might receive dividends from a mutual insurer?
Policyholders
Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item?
Reinstatement of limit
Peril is most easily defined as
The cause of loss insured against.
Which of the following is NOT a purpose of the FAIR Plan?
To regulate premium rates for property insurance
Which of the following exposures is insured under Coverage I - Personal and Advertising Injury Liability?
Unintentional acts arising from the operation of a farming business
The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?
Up to $2,000
A type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured property has been destroyed is called a(n)
Valued policy.
Which of the following is NOT one of the available additional coverages in the builders risk form?
Vandalism
A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT
Workers compensation coverage