Fred Loya Practice Test (106 questions)
The PAP territory limits include:
Montreal, Canada
The equipment dealer's coverage form covers all of the following types of property, EXCEPT:
Motor vehicles designed for highway use
Coverage on an annual transit policy is usually provided on which of the following basis?
Named peril
Which type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to an individual or family from causes such as injury, disability, death, sickness, or unemployment.
Personal Loss Exposure
Which of the following is also known as a human loss exposure?
Personal loss Exporsure
Which of the following loss exposures is not covered by section II of Ron's homeowner policy?
Ron's registered/license personal auto while used on his own property which includes 10 acres of undeveloped land
If an insured rents an auto while on vacation, what coverage, if any, will be available for physical damage coverage under a personal auto policy?
The broadest coverage on any auto shown in the declaration
Mitchell's (unendorsed) personal auto policy liability coverage would pay for:
The cost of repairing the neighbor's fence that Mitchell damaged due to the negligent operation of his car
Which of the following statements is true about CAARP?
The minimum liability for CAARP is $15,000/$30,000/$5,000
Which of the following persons is NOT an insured under section 1 of homeowner's policy?
The named insured's (non-resident) spouse.
If an insured borrow's a neighbor's vehicle to run a personal errand, how do the policies respond in the event of an auto incident?
The neighbor's policy is primary and the driver's policy is excess
What is the difference between the per accident limit in a split limits policy and the single limits?
The per accident limit applies only to bodily injuries, and the single limit applies to all claims
It is a violation of the CA Insurance Code to act as a producer for a non-admitted carrier unless:
The producer is a surplus lines broker
What is the primary difference between umbrella and excess liability policies?
The umbrella covers most liability exposure; the excess liability may cover only one line
Carmen is driving her own car on behalf of her employer. Carmen's negligent operation of her car injures members of the public. The employers may be held liable because of what is called:
Vicarious liability
which of the following is NOT an uninsured motor vehicle as defined by personal auto policies uninsured motorist coverage?
a vehicle owned by a state agency which self-insures it's autos
the PAP 'coverage for damage to your own automobile" states that the limit of liability is the lesser of the amount necessary to repair or replace the property or the:
actual cash value of the stolen or damaged property
if an insured rents a vehicle while on a two week vacation in the U.S., what coverage is provided in the PAP?
all coverage is in force in the PAP
what coverage is available under the miscellaneous type vehicle endorsement?
all coverage under the PAP
under tort law, a person can face a claim for legal liability on the basis of all of the following except:
breach of contract
if an insured timely requests coverage for newly acquired auto under an existing PAP, what coverage is provided before the request is made?
broadest coverage for any vehicle shown to the declarations
which of the following types of policies pays for bodily injury or property damage which occurs or is discovered during the policy period?
claims made commercial liability policy
what additional coverage is provided in a DP-3 that is not provided in DP-1?
collapse
If an insured with a PAP has an accident in a state with PIP, how does the policy respond?
coverage automatically is broadened to provide PIP
A car is insured using a PAP ,the car is damaged by hail. The loss is:
covered as "other than collision" loss
The collision coverage of a PAP covers:
damages caused by the insured by driving into a tree that had fallen during a recent storm
Self-funding of employee benefit plans CANNOT be used for:
death benefits
what mus a licensee do in order to surrender for cancellation a license in their possession?
deliver the document itself to the commissioner
Which of the following perils is included in the broad form, but not in the basic form?
falling objects
when does a PAP require the insured to notify the police?
for hit and run accidents, and thefts
What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer, and then issues a policy from that application ?
forward to the commissioner a notice of appointment with 14 days of receipt of application
A representation in an insurance contract qualifies as of the following?
implied warranty
where would an insured find insurance coverage to protect against damage to a shipment of television shipped on a semi-truck for the insured's business?
inland marine
A possibility of financial loss resulting from the ownership of property is known as:
insurable interest
which of the following types of loss would result in a claim for monetary damages due to injury to another or damage to another property?
liability loss
what coverage is available under the named non-owner coverage endorsement?
liability, medical payments, and uninsured motorist
when coverage is available under the extended non-owned liability coverage?
liability, medical payments, and uninsured motorist
all of the following are characteristics if an "ideally insurable loss exposure" EXCEPT:
losses that are catastrophic
An insured's duties after a loss are described in the homeowner's section I conditions. Which of the following is NOT a correct statement about these duties? the insured must:
make all necessary repairs to protect the property from further damage. the expense is paid by the insured
if an insured purchases and all-terrain vehicle (ATV), what endorsement can be added to the PAP to insure the vehicle?
miscellaneous type vehicle endorsement
what endorsement can be used to insure a motorcycle under a PAP?
miscellaneous type vehicle endorsement
if an individual does not own an auto nor have regular use of an auto, what endorsement to a PAP could be used to properly protect that individual?
named non-owned coverage endorsement
Ian, your unmarried homeowners' insured does not not own a car. He is planning a vacation to Florida and will be renting a car. He also drives cars belonging to friends. To protect Ian in these situations, you would recommend a PAP with a:
named non-owner coverage endorsement
under an unendorsed PAP, what coverage is available for personal effects?
none
All of the following are principal rating factors under proposition 103 for PAP, EXCEPT:
numbers of listed drivers
under a PAP, who qualifies as an insured while using a covered auto?
only the name insured, resident relatives, and other entities responsible for the use of the auto
If an armored car carrying an insured's bank deposit is robbed, what insurance would the insured need to be covered?
outside the premises-theft or money and securities
which type of loss is a business exposed to death, retirement, resignation, or disability of a key employee?
personnel loss exposure
which coverage is typically provided in a boat owner's policy?
physical damage, liability, and medical payments
All of the following expenses are covered in addition to the limits of liability under Coverage A of PAP, EXCEPT:
pre-judgment interest
The liability coverage in a yacht policy is referred to as:
protection and indemnity
the Mexico coverage endorsement may be attached to PAP and:
provide excess liability coverage for accidents in Mexico within 25 miles of the U.S. border
An umbrella policy:
provides broad excess liability coverage over one or more primary policies
what is one of the principle rating factors under proposition 103 allowed for PAP?
safety drving record
In CA, excess and surplus lines coverage need to be placed through:
surplus lines broker
if an insured under a PAP leaves a covered auto at an auto dealer for repair, auto is involved in an incident while being test driven by an employee of the dealer, how will the PAP respond to liability claims?
the PAP is excess
What does it mean if an agent's license is inactive?
the agent cannot transact any insurance business for which is valid, active license is required
The personal auto policy towing and labor endorsement pays for:
the cost of labor only if the labor is performed at the place of disablement
what steps need to be taken to terminate a licensee's license that is in the possession of the employer?
the licensee needs to give a written notice of intent to the insurance commissioner
Under the liability portion of an unendorsed PAP what coverage is available if the named insured is operating a company car on a regular basis?
the policy excludes this usage
CA has a lower financial responsibility limits than most other states. If Randy, a CA PAP insurer, carrying minimum limits on coverage, has an accident in a state that requires higher limits, then:
the policy will automatically provide the higher required limits at no extra charge
It's a violation of the CA insurance code to act as a producer for a non-admitted carrier unless:
the producer is a surplus line broker
a home is damaged minutes after an earthquake, first by fire, then by the fuel pipes bursting, causing an explosion. Under an HO-3 form:
there is coverage, but only for the damaged caused by the fire and explosion
A home is damaged minutes after an earthquake, first by fire, and then by fuel pipes bursting and causing explosion. Under a homeowner's HO-3 form:
there is coverage, but only for the damages caused by the ensuing fire and explosion
what is the primary reason for co-insurance clauses in property policies?
to encourage insured to purchase coverage near the value of the property
What is an additional coverage provided by an HO-3 policy?
trees, shrubs, and other plants
which of the following does not have a standard coverage form?
umbrella policy
The intentional relinquishment of a known right is:
waiver
If a tenant is insured under a building personal property coverage form, when is the property considered vacant?
when there is insufficient business personal property present to conduct customary operations.
an applicant would like to buy a personal umbrella policy:
your insurer may require that he maintain underlying liability coverage by carrying auto and liability coverage
Jevon has a PAP with a $250 deductible collision coverage and $100 deductible in "other than collision" coverage. He runs a stop sign and hits another car. Damages are worth up to $1,300 to his (insured) car. How much does the insurer pay for damage to Jevon's car?
$1,050
What is the limit for sound reproducing equipment under the coverage endorsement for excess sound reproducing equipment, audio, visual and date electronics, tapes, records, disks, and other media endorsement in a PAP?
$200
under the financial responsibility in CA, what is the minimum limit for several people injured in one accident?
$30,000
A PAP insured's car was total loss when the car was stolen and wrecked. The insured has the following coverage: Liability, medical payments, and "other than collision". Her PAP:
'other than collision" will pay for the loss
The limited Mexico endorsement applies to trips to Mexico with a duration of:
10 days or less
What is the minimum discount percentage for the "good driver" discount/
20%
under a PAP if a newly acquired auto is to replace the covered auto with liability coverage only, how long does the insured have to request collision coverage?
4 days
In an unendorsed claims made general liability policy, how long does an insured have to report a claim which occurred during the policy period?
60 days
What is a self-insured retention under an umbrella policy?
A deductible applicable to losses exclude by the underlying coverage and covered by the umbrella
Which of the following is most likely to be eligible for the CA fair plan?
A well-maintained dwelling located in a hazardous brush area
The amount to replace an insured's damaged property, less depreciation, is known as:
Actual Cash Value
When is a fire and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a PAP?
At application
Under a personal umbrella policy, what underlying coverage's must an insured typically maintain?
Auto and personal liability only
The medical expense plan designed to cover a hospital visit for hernia repair is known as:
Basic medical
Under a scheduled personal property endorsement, loss to stamps are excluded when they are:
Being shipped with a freight company
Which peril(s) is/are included in the vacancy permit endorsement?
Building glass breakage, sprinkler damage, vandalism. (all of the above)
Which of the following perils is insured against in the special form but not in the basic form?
Collapse
In the business of insurance, concealment is defined by all of the following statements except:
Concealment does not occur if no injury is made
What course of action does a party to a contract have if the other party is found to be in breach of that contract?
Damages for breach, reasonable attorney fees, and costs.
Which type of crime policy will pay for a loss, which is found during the policy period, even if the loss occurred prior to the effective date of the policy?
Discovery
to determine the actual cash value (ACV) of a commercial building for coinsurance purposes, use:
Fair market value
A pickup or can with a gross vehicle weight of 9,500 lbs. may be eligible for a personal policy if it was used in the business of:
Farming or ranching
In CA, a rate will not remain in effect if it is considered to be any of the following EXCEPT:
Impartial
In the State of CA, no rate will remain in effect if it is considered to be any of the following, EXCEPT:
Impartial
Kim's car is insured with a personal automobile policy. The coverage includes medical payments with $2,000 limits. Which of the following is a true statement about the medical payment coverage for necessary medical expenses?
Kim gives her neighbor a ride to the store in the insured car. She has an auto accident in which they each incur over $2,000 in medical expenses. The maximum amount that Kim's policy will pay is $2,000 to her and $2,000 to her neighbor
Max's PAP has liability and collision coverage. His neighbor's car has liability coverage only. Max borrows his neighbor's car to go to the store and has an accident that is his fault. He damages his neighbor's car and another car. Max's PAP provides:
Liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on a primary basis
PAP is written for Lisa providing liability coverage. Which of the following auto liability situation would not be covered unless Lisa had an endorsement attached and paid an additional premium?
Lisa destroys a mailbox while driving a (non-owned) company car furnished for Lisa's regular use
Which of the following types of coverage would pay for losses which occurred during the policy period and are found for up to one year after policy termination?
Loss sustained
If a motor home is scheduled on a miscellaneous type of vehicle endorsement, all the following property is covered, except:
Luggage
The amount paid for damage property which is equal to the price for which it could have been sold is:
Market value
