Final exam
Which of the following risks is not eligible for coverage under the Businessowners policy? A An apartment building of any size B A 10-story office building C A construction company with $300,000 total annual payroll D A wholesaler with 25% of the floor space open to the public
B
All of the following are true of negligence, except: A It is the failure to use ordinary care B It does not include breach of contract C It does not require a duty to be owed D It is a type of tort
C
An insurance contract is said to be a contract of utmost good faith, because: A The insurer wrote the contract and has no reason to deceive the insured B Everything the insured states is a warranty, guaranteed to be true C Each party assumes that they can rely on the statements of the other party D Concealment of any known fact will automatically void the contract
C
Which of the following statements is true regarding the eligibility of flood insurance? A Banks, as well as savings and loan associations, may exempt an individual from purchasing flood insurance B All property located in a flood-prone area must be insured against flood by law C In order to qualify for a federal loan, the property owner must purchase flood insurance if the property is located in a special flood hazard area D Communities eligible for flood insurance coverage are known as authorized communities
C
Most liability policies do not provide coverage for: A General damages B Special damages C Compensatory damages D Punitive damages
D
The Voluntary Compensation Endorsement under Workers' Compensation insurance is best described as doing which of the following? A It provides coverage for unpaid volunteer workers B It is required for employers in elective states who are willing providing Workers' Compensation benefits to eligible employees C It provides coverage for employees who opt out of coverage under the standard Workers' Compensation policy D It provides coverage to employees or other persons who are otherwise exempt from receiving Workers' Compensation benefits
D
The taking of property from inside the premises by a person committing forcible entry defines a: A Robbery B Mysterious disappearance C Shoplifting D Burglary
D
When an individual faces the risk of economic loss in the event of property damage, this indicates which of the following? A Limit of recovery B Subrogation C Merit rating D Insurable interest
D
Which of the following is stated in the Insuring Agreement? A The Other Insurance provision B The perils excluded by the policy C The location of insured property and the named insured's mailing address D The perils insured against
D
Which of the following would NOT be an insured under Section II of the Homeowners policy? A Relatives of the named insured, meaning they are related by blood, marriage, or adoption B Members of the family under the age of 24 living at school away from the home C Any person legally responsible for watercraft owned by an insured D The insured's tenant
D
Which of the following would NOT be excluded under Coverage A of a Commercial General Liability policy? A Injuries resulting from a product that has been recalled B Damage to the insured's work C Injuries resulting from the insured's operation of mobile equipment D Injuries to employees covered by Workers' Compensation
D
Which statement regarding the National Flood Insurance Program is incorrect? A For contents to be covered, they must be inside a fully enclosed building B Covered properties may be used for personal or commercial purposes C The policy will not provide coverage for buildings or structures that are on or over water D It provides unlimited insurance coverage for qualified property owners
D
he Mobile Agricultural Machinery and Equipment Coverage Form includes coverage for all of the following, except: A Hay balers B Farm tractors C Cotton pickers D Irrigation equipment
D
A disability that prevents an employee from doing any work, and from which the employee is not expected to recover, is known as a: A Permanent total disability B Temporary total disability C Permanent partial disability D Temporary partial disability
Maybe A
Which statement regarding medical expenses coverage under Section II of the Businessowners Coverage Form is not correct? A Medical expenses incurred and reported within 1 year of the accident are covered B Payments are made to insureds or people the insured hires to do work C Payments are made regardless of fault D Expected or intended bodily injury or property damage is excluded
Maybe B
A Maryland insurer cannot look at claim experience to cancel or nonrenew a homeowner's policy more than: A 1 year B 6 months C 3 years D 2 years
Maybe C
Which of the following would not be covered under Coverage B of a Broad Form Dwelling policy? A Swimming pool B Pole barn connected to the dwelling by a utility line C Grain silo D Shed
Maybe C
Which of the following is true about premium financing agreements? A A premium finance agreement cannot be assigned to another finance company B Inspection fees cannot be added to the premiums to be financed C A new financing agreement is required if additional premiums need to be financed D Additional comments may be added to the agreement to explain computations
maybe D
An insurer that is organized in one state and authorized to do business in another state is known as which type of insurer? A Foreign B Captive C Alien D Domestic
A
Homeowners policies define the insured location to include all of the following, except: A Other premises rented to an insured for business use B Vacant land rented to the insured C Cemetery plots or burial vaults D Hotel rooms
A
In which section of the BOP would coverage for equipment breakdown be found? A Optional Coverages B Coverage Extensions C Endorsements D Additional Coverages
A
Which condition broadens coverage of an existing policy with no increase in premium? A Liberalization B Assignment C Loss payable D Subrogation
A
To whom are Workers' Compensation survivor benefits paid? A A worker who survives an injury B The spouse and/or dependent child of a deceased worker C The employer of a deceased employee D An employer who survives an attack by an employee
B
A disability that prevents an employee from doing any work, and from which the employee is not expected to recover, is known as a: A Permanent total disability B Permanent partial disability C Temporary total disability D Temporary partial disability
A
A person or business wanting to insure a single shipment of cargo would use the: A Trip Transit Coverage Form B Annual Transit Coverage Form C Cargo Owners Coverage Form D Shippers Coverage Form
A
All of the following statements about medical payments coverage under a Commercial General Liability policy are correct, except: A Coverage applies to the named insured's injuries B Coverage applies to injuries that occur on the premises that the insured owns or rents C Coverage applies to injuries that occur because of the insured's operations D Coverage applies to expenses that are incurred and reported to the insurer within 1 year of the accident
A
Which of the following applies when two parties rely upon the promises of the other? A Concept of utmost good faith B Parole evidence rule C Doctrine of estoppel D Concept of adhesion
A
An alarm system installed in a home is considered which of the following ways to manage risk? A Retention B Reduction C Avoidance D Transfer
B
A firm that only transports the goods of others for hire, rather than transporting its own goods, would purchase a: A Trucking Liability Coverage Form B Non-owned Goods policy C Truckers Coverage Form D Garage policy
C
A state that requires the Commissioner of Insurance to determine that a company's rates are appropriate before the rates are made effective uses which type of rating approval method? A Open competition B File and use C Prior approval D Mandatory
C
Commercial Inland Marine policies are typically written on what basis? A Specified causes of loss B Named perils C Open perils D Broad Form causes of loss
C
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 Contingent insured B Additional insured C Named insured D Contract insured
C
Theft is specifically defined as: A Threatening bodily harm to a bailee B Malicious vandalism C Any act of stealing D The loss of property when the cause is unknown
C
Which of the following is not an example of a pure risk? A A tornado destroying a mobile home park B A fire causing a home to be uninhabitable C Wall Street's decline in the stock market D A slip and fall injury at a large department store
C
An insured accidentally backs into the neighbor's young child, who was riding by on a skateboard. The child has medical expenses, and there is damage to the skateboard. Which sections of the insured's Personal Auto policy will pay? A Personal injury and property damage B Bodily injury and collision C Medical payments and collision D Bodily injury and property damage
D
W plays hockey on the weekends and was injured while defending the goal. Which of the following defenses could the owner of the ice rink use to avoid liability for W's injuries? A Statute of limitations B Contributory negligence C Comparative negligence D Assumption of risk
D
When a claimant brings a negligence claim against the insured, the court determines that the claimant is partially responsible for the loss, and the damages they are owed is reduced by the amount of their responsibility. This describes which defense against negligence? A Contributory risk B Comparative risk C Comparative negligence D Contributory negligence
D
When personal property is insured on the Scheduled Personal Property Endorsement attached to a Homeowners policy, it is subject to all of the following coverage terms, except: A Losses caused by wear and tear or deterioration are excluded B Coverage is provided against open perils C Coverage is provided worldwide D Losses are subject to the Section I deductible
D
Which of the following is not covered by the Inside the Premises - Robbery or Safe Burglary of Other Property Insuring Agreement? A Building damage caused by robbers stealing expensive watches from a retailer B Loss of valuable stock kept inside a safe after the safe was broken into by burglars C Loss to merchandise after an electronic store is held up at gunpoint D Loss of money after an ATM is hacked so that it dispenses money to the hacker
D
Comprehensive coverage under the Business Auto Coverage Form protects covered autos against all of the following perils, except: A Freezing B Contact with a bird or animal C Falling objects D Earthquake
Maybe A
The Dwelling Program may provide coverage to which of the following residences? A Dwellings used for incidental business B Dwellings with two units and six boarders C Farm dwellings D Mobile homes on wheels
Maybe A
The following qualifications are required for a producer license in Maryland, except: A Pass a licensing examination for each subdivision of insurance to be transacted B Be at least 21 years of age C Pay the $54 license fee D Have no committed any act that is grounds for denial, suspension, or revocation of license
Maybe B
An insured has commercial property coverages included in their Commercial Package policy. All three Causes of Loss forms would protect against loss caused by: A Chemical damage to glass B Earth movement C Theft of merchandise D The explosion of gases within a furnace
Maybe D
Under the Equipment Breakdown Protection Coverage Form, which of the following would not be considered a breakdown? A Leakage in a valve or fitting B Failure of pressure or vacuum equipment C Bursting caused by centrifugal force D Electrical failure causing damage to equipment
began A
A Commercial Crime policy written with the Inside the Premises - Robbery or Safe Burglary of Other Property Insuring Agreement would cover which of the following? A A messenger is robbed while transporting high-end computer components B A robber breaks glass display cases and steals the jewels inside C A masked gunman confronts a cashier and demands money D An employee breaks into the company safe and steals precious metal
B
All of the following are Coverage Extensions under the Building and Personal Property Coverage Form, except: A Outdoor Property B Inflation Guard C Personal Effects and Property of Others D Newly Acquired or Constructed Property
B
Dwelling policies consider one volcanic eruption to be all eruptions that occur within what time period? A 48 hours B 72 hours C 24 hours D 168 hours
B
Coverage D of a Dwelling policy covers which of the following losses? A Loss of rental income due to the cancellation of a lease B Damage to a swimming pool C Access prevented by a civil authority because of a neighboring location's direct loss by a peril covered under the insured's policy D Additional living expenses after a covered loss
C
If glass that is part of an insured dwelling is broken, a Special Form Homeowners policy will cover the loss under all of the following circumstances, except: A An earthquake is the proximate cause of loss B A falling tree is the cause of loss C The dwelling has been vacant for 70 consecutive days D The dwelling has been unoccupied for 90 consecutive days
C
The Non-owned Detached Trailers Coverage Extension on the Building and Personal Property Coverage Form provides up to what amount for non-owned trailers used in the insured's business? A $1,000 B $10,000 C $2,500 D $5,000
D
Under Part D - Coverage for Damage to Your Auto of the Personal Auto policy, vehicle upset would be covered under: A Transportation expenses coverage B Other than collision coverage C Comprehensive coverage D Collision coverage
D
Under a Commercial General Liability policy, which of the following would cause the insured's legal liability associated with a product to be excluded from policy coverage? A Breach of warranty B Strict liability C Negligence D Expected or intended injury
D
Collapse is not covered under which of the following property forms? A Causes of Loss - Basic Form B DP-3 C Causes of Loss - Broad Form D HO-2
A
L owns a home covered under an HO-3 for $200,000. Under Coverage D, how much coverage does L have for lost rental income if the basement apartment becomes uninhabitable due to a fire loss? A $200,000 B $100,000 C $60,000 D $30,000
C
Liability coverage under Part A of a Personal Auto policy would be excluded for all of the following, except: A Intentional damage caused by the insured B Damage caused by a snowmobile C A vehicle driven by an unlicensed driver D Use of a non-owned vehicle without permission
C
Liability insurance for aircraft allows the insured to select any of the following coverages, except: A Coverage for bodily injury or death sustained by passengers B Coverage for bodily injury or death sustained by third parties who are not passengers C Coverage for bodily injury or death sustained by employees D Coverage for damage to the property of others
C
Under Coverage A - Bodily Injury and Property Damage Liability of a Commercial General Liability policy, which of the following would not be covered? A An insured's client was injured after slipping on a loose rug on the insured's premises B While working at a trade show, an insured's employee started a small fire, causing damage to property belonging to a different business C An insured's employee is injured when a bookcase in the office falls on them D An insured traveled to Canada to visit a client, who was injured during the meeting after the client tripped over the insured's briefcase
C
Which of the following perils is not covered under a Broad Form Dwelling policy? A Weight of ice and snow B Vehicle damage to the dwelling C Smoke damage from industrial operations D Burglary damage
C
Under Section II of the Businessowners Coverage Form, all of the following are excluded, except: A Damage to others while loading or unloading an auto B Liability arising out of the ownership, maintenance, or use of a commercial watercraft C Liability arising out of the ownership, maintenance, or use of a commercial auto D Personal and advertising injury liability
maybe D
The HO-2 protects against all of the following losses, except: A Theft of jewelry B Fire loss to a tool shed that stored gasoline in gas cans for the insured's personal use of a lawn mower C Smoke damage to a fence after a house fire D Rain damage to the interior after a window was left open during a storm
D
Under the Farm Liability Coverage Form, coverage is NOT provided for bodily injury or property damage arising out of the insured's custom farming activities when the insured's custom farming receipts: A Are less than $10,000 for the 12 months immediately preceding the occurrence B Are less than $5,000 for the 12 months immediately preceding the occurrence C Exceed $10,000 for the 12 months immediately preceding the occurrence D Exceed $5,000 for the 12 months immediately preceding the occurrence
D
Which of the following statements about an aggregate limit is correct? A It replaces the per occurrence limit for each loss B It applies per occurrence C It is a lifetime limit D It applies to losses from all occurrences within a specified policy period
D
All of the following statements regarding property insurance terminology are true, except: A Proximate cause is a secondary cause of loss B Words, terms, or phrases that are described in an insurance policy are definitions C A deductible is a specified amount of loss that is retained by the insured D An insurance policy that pays only after primary coverage has been exhausted is said to be excess
A
Customers of an insurer must be provided with a notice of the insurer's privacy policies and practices regarding customers' nonpublic personal information at least: A When the customer relationship is established and annually thereafter B When the customer relationship is established and only when the privacy policy is revised C At policy delivery and annually thereafter D Prior to disclosing any nonpublic personal information and every 2 years thereafter
A
Every automobile policy issued in Maryland must have minimum liability limits of at least: A 30/60/15 B 15/30/10 C 50/100/25 D 25/50/15
A
For how many hours after the first tremor would earth movement damage be covered under the Earthquake Endorsement attached to a Businessowners policy? A 168 hours B 72 hours C 144 hours D 24 hours
A
Insureds who have collision and comprehensive coverage for a covered auto under Part D of their Personal Auto policy are subject to: A One deductible for collision losses and a separate deductible for comprehensive losses B A deductible applicable only to losses covered by comprehensive coverage C A deductible applicable only to collision losses D A single deductible applicable to any loss under Part D
A
Losses that cannot be calculated objectively, such as pain and suffering or mental anguish, are considered: A General damages B Special damages C Punitive damages D Physical damages
A
Part B - Medical Payments Coverage of a Personal Auto policy would cover medical expenses sustained by any insured while they occupy: A A car used to carpool with colleagues B A company car furnished to a family member C 3-wheel vehicle used off-road D A van used as a residence
A
Supplementary payments under Part A - Liability Coverage of a Personal Auto policy will pay: A Premiums on appeal bonds B Doctor bills when the insured is injured in an auto accident C Loss of earnings when the insured is hospitalized after an accident D Damages awarded against the insured, after the Part A limit is exhausted
A
The Utility Services endorsements that may be added to the BOP cover certain losses that result from the interruption of all of the following services, except: A Transport supply B Communication services C Power supply services D Water supply services
A
The policy territory of a Personal Auto policy is limited to which of the following? A The United States, its territories and possessions, Canada, and Puerto Rico B Anywhere worldwide C The United States, Puerto Rico, and Mexico D The United States and its territories and possessions only
A
To help offset inflation, insureds under a Dwelling policy may purchase which endorsement? A Automatic Increase in Insurance B Dwelling Under Construction C Personal Liability Supplement D Broad Theft Coverage
A
Under Coverage A of the HO-6, which of the following is not covered? A Materials and supplies used to repair the building B Other structures owned solely by the insured C Alterations and improvements D Appliances and fixtures
A
Under the Other Insurance condition, when two property policies cover the same property on a pro rata basis, how is a loss apportioned? A The first policy will pay up to its limits, then the second policy acts as excess coverage B Neither policy will pay because of overinsurance C Each policy will pay an equal share of a loss D Each policy will share losses proportionately according to the total insurance provided for the property
A
Under the PAP, which of the following is not considered occupying a vehicle? A Standing by the car exchanging insurance information B Getting out of the car C Jumping off the hood D Slamming fingers in a closing door
A
When an insured sustains bodily injury caused by an uninsured motorist, uninsured motorists coverage on a Personal Auto policy will pay: A Compensatory damages only B Compensatory, punitive, and exemplary damages C Punitive and exemplary damages only D Compensatory and punitive damages only
A
Which of the following is a physical hazard? A Uneven pavement in a sidewalk B Dishonesty on the part of an insured C The storage of flammables in a fireproof container D An insured's attitude that good housekeeping is not important
A
Which of the following is correct regarding a temporary license? A A temporary license may be issued to the surviving spouse of a disabled or deceased producer B The duration of a temporary license may not exceed 15 days C A temporary license may be issued for up to 12 months after successfully completing the licensing examination D A temporary license may not be issued to an employee of a business entity
A
Which of the following is true regarding an unendorsed HO-4? A It provides named perils coverage on an actual cash value basis B It provides named perils coverage on a replacement cost basis C It provides open perils coverage on a replacement cost basis D It provides open perils coverage on an actual cash value basis
A
Which of the following is true regarding liability insurance? A A liability policy provides coverage for unintentional torts B A liability policy provides coverage for all torts C A liability policy provides coverage for criminal acts D The liability policy provides coverage for all acts of wrongdoing
A
Which of the following is true regarding the Yacht Policy? A It has navigational limits that describe the area where the yacht is allowed to operate B Coverage is excluded for fuel spills C It is designed for boats that can be towed by automobiles D It covers damage to the hull and fittings, and liability coverage must be attached by endorsement
A
Which of the following would be covered under the Damage to Property of Others Additional Coverage of a Homeowners policy? A Damage caused intentionally by the insured's 10-year-old son B Damage arising out of the insured's business pursuits C Damage to property owned by the insured's tenant D Damage to property owned by the insured
A
Which of the following would not be considered an insured under a Commercial General Liability policy? A An LLC employee's spouse assisting in cleaning the office so they can leave for vacation more quickly B Executor of the CEO's estate after their death C Volunteer worker handing out flyers for the insured's business D Real estate manager acting on behalf of the insured
A
All of the following are examples of theft, except: A Leaving the store premises without paying for merchandise taken B Securities are missing from a safe, though no signs of forcible entry are visible, and no one with access to the safe is suspected C Robbery of an employee taking the store's receipts to the bank D Burglary of a business safe when the business is closed
B
All of the following statements regarding liability losses are correct, except: A Property damage includes physical damage to tangible property, including loss of use of that property B Bodily injury includes personal injury, sickness, and disease C Advertising injury includes defamation and copyright infringement D Loss of consortium means the loss of companionship of a spouse
B
Loss of income suffered by a storeowner after their store is destroyed in a fire is considered a(n): A Provisional loss B Indirect loss C Secondary loss D Direct loss
B
Under the Commercial Building and Personal Property Coverage Form, the commercial building owned by the insured is considered vacant unless at least what percentage of the square footage is rented or is used to conduct operations? A 61% B 31% C 41% D 51%
B
Under the Discovery Form available for Commercial Crime coverage, the latest a covered loss can be discovered and be covered by the policy is: A The retroactive date B The policy expiration date C One year after policy expiration D Two years after policy expiration
B
Which of the following best describes both the premium paid by the insured and the promise by the insurer to pay a covered loss and defend the insured in a lawsuit? A Acceptance B Consideration C Legal Purpose D Offer
B
Which of the following could be considered a custodian under the terms of a Commercial Crime policy? A A watchperson B The insured's partner C A janitor employed by the insured D A messenger
B
Which of the following is correct concerning the limit of insurance applying to liability coverage under the Business Auto Coverage Form? A The limit is determined by the number of the insured's vehicles involved in the accident B The limit is the most the policy will pay for any single accident C The limit is the most the policy will pay for each vehicle involved in a single accident D The limit is determined by the number of vehicles scheduled on the policy
B
Which of the following statements about the limits of liability under Section II of the BOP is NOT correct? A The Damage to Premises Rented to You limit applies only to premises rented to the insured B The Products-Completed Operations Aggregate limit is equal to the Liability and Medical Expense limit C The Medical Expense limit is a per person limit D The Liability and Medical Expense limit applies per person or organization for personal injury claims
B
Which of the following would be considered an attractive nuisance? A A back lawn B A trampoline C A toy store D A candy store
B
Which of the following statements regarding the Trip Transit Coverage Form is correct? A It covers shipments from the moment of purchase B It is used to insure only furniture or household goods C It is used to insure single shipments D It can be written only on an open perils basis
C
Withdrawals may be made from the premium account only for the following, except: A To pay net premium to the insurer B Return of premiums to an insured C To pay claims D Commissions to the producer
C
D does not agree with the insurance company's value of property damaged as a result of D's recent property loss. Which of the following conditions establishes the procedure D and the insurance company must use to settle this issue? A Subrogation B Loss Settlement C Loss Payable Clause D Appraisal
D
On a Broad Form Homeowners policy, if the cost of a covered loss to a structure and any debris removal expenses exceeds policy limits, how much additional coverage is provided to pay any remaining debris removal expenses? A 5% of the Coverage A limit B $0 C $500 D 5% of the applicable limit
D
On a Personal Auto policy, which of the following is covered under Part C - Uninsured Motorists Coverage? A Punitive damages awarded against the insured B An insured who is covered by Workers' Compensation and driving a vehicle during the course of their employment C A family member struck by a vehicle owned by the named insured, but covered only on a different policy D An accident caused by an unidentified hit-and-run driver
D
