Gaurunteed exam missed questions
In any case where there is a controversy or dispute between the insurance company and the insured, the soliciting agent is the agent of the (Choose from the following options) 1. Applicant. 2. Insured. 3. Company. 4. Beneficiary.
3. Company
Workers compensation rating is developed by applying a rating bureau job classification rate to each (Choose from the following options) 1. $1,000 of payroll. 2. $100 of payroll. 3. $250 of payroll. 4. $500 of payroll.
100 of payroll
Under contributory negligence, when an individual is found to have contributed to his or her own loss in any way, another party (Choose from the following options) 1. May be held liable only in the case of vicarious liability. 2. May not be held liable. 3. May be held liable, but to a reduced extent. 4. May be held liable for full damages despite the other party's negligence.
2 May not be held liable
Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits? (Choose from the following options) 1. $25 per day; $450 maximum 2. $20 per day; $600 maximum 3. $15 per day; $300 maximum 4. $15 per day; $450 maximum
2. $20 per day; 600 maximum
Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? (Choose from the following options) 1. $1,000 2. $5,000 3. $10,000 4. $25,000.
2. 5,000
Which of the following would NOT be classified as personal property for insurance purposes? (Choose from the following options) 1. Furniture 2. A house 3. A vehicle 4. Equipment
2. A house
All of the following are factors in rating workers compensation insurance EXCEPT (Choose from the following options) 1. Job classification. 2. Sales. 3. Payroll. 4. Loss experience.
2. Sales
Which of the following is a federal act that covers crews of ships the same as railroad workers? a) U.S. Longshore and Harbor Workers Compensation Act b) USA PATRIOT Act c) Workers compensation d) The Jones Act
d) The Jones Act
When an insurer refuses to renew an auto policy, within how many days must it mail a notice of nonrenewal to the insured? a) 7 days b) 10 days c) 14 days d) 20 days
D) 20 days
What is the maximum dollar amount personal protection insurance will pay for funeral expenses? A) 6,000 B) 3,000 C) 4,000 D) 5,000
D) 5,000
An insurance policy has been in force for over 55 days when it was terminated by the insurer. Which how many days of policy termination must the insurer mail or deliver a notice of termination to the named insured? (Choose from the following options) 1. 30 days 2. 5 days 3. 10 days 4. 20 days
1. 30 days
In this state, a temporary license may be issued for any of the following reasons EXCEPT (Choose from the following options) 1. A producer's retirement. 2. The death of a producer. 3. A producer's disability. 4. A producer's time in the military service.
1. A producers retirement
Under a businessowners policy, an insured can cancel the policy (Choose from the following options) 1. At any time by mailing a written notice of cancellation. 2. At any time with 10 days' advance written notice. 3. Only after the policy has been in force for 120 days. 4. Only at the time of policy renewal.
1. At any time by mailing written notice of cancellation
Which of the following would be included in the farm liability coverage forms? (Choose from the following options) 1. Bodily injury to a residence employee 2. Any obligation of the insured under a workers compensation law 3. Bodily injury to any person who is an insured 4. Bodily injury to an employed farmhand
1. Boldly injury of a residence employee
To legally transact insurance in this state, an insurer must obtain which of the following? (Choose from the following options) 1. Certificate of Authority 2. Power of Attorney 3. Business entity license 4. Certificate of Insurance
1. Certificate of authority
Workers Compensation laws provide all of the following types of benefits EXCEPT (Choose from the following options) 1. Compensatory benefits. 2. Medical benefits. 3. Rehabilitation benefits. 4. Death benefits.
1. Compensatory benefits
Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy? (Choose from the following options) 1. The insurer may inspect the workplace after giving the insured 5 days' notice. 2. If the policy period is longer than 1 year and 16 days, all policy provisions will apply as though a new policy was issued on each annual anniversary date. 3. The insured's right and duties may not be transferred to anyone else without the insurer's written consent. 4. The first named insured will act on behalf of all insureds under the policy.
1. Insurer may inspect the workplace after giving insured 5 days notice.
All of the following actions by a person could be described as risk avoidance EXCEPT (Choose from the following options) 1. Investing in the stock market. 2. Refusing to scuba dive. 3. Never flying in an airplane. 4. Not driving after being in an accident.
1. Investing in the stock market
The form of payment bond that protects an owner contracting for work against liens from subcontractors, suppliers, or laborers who are not paid for their services and materials by the general contractor is called (Choose from the following options) 1. Labor and material bond. 2. Performance bond. 3. Supply bond. 4. Completion bond.
1. Labor and materials bond
Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? (Choose from the following options) 1. Mechanical breakdown 2. Glass breakage 3. Riot or civil commotion 4. Towing and labor
1. Mechanical breakdown
An insurer who violates the Insurance Code statutes on illegal inducement is guilty of a (Choose from the following options) 1. Misdemeanor. 2. Felony. 3. Class C violation. 4. Civil violation.
1. Misdemeanor
All of the following are considered parts of the policy structure EXCEPT (Choose from the following options) 1. Provisions. 2. Exclusions. 3. Insuring clause. 4. Conditions.
1. Provisions
All of the following are considered unfair trade practices in the business of insurance EXCEPT (Choose from the following options) 1. Sharing commissions. 2. Boycott. 3. Rebating. 4. Defamation.
1. Sharing commissions
In addition to the effective date of termination of coverage, a termination notice must contain (Choose from the following options) 1. The specific reason or reasons for the termination. 2. The telephone number of the Commissioner. 3. The amount of unearned premium. 4. The name and address of the insurance producer.
1. Specific reason or reasons for termination
Which of the following insurers are owned by stockholders? (Choose from the following options) 1. Stock 2. Mutual 3. Reciprocal 4. Fraternal
1. Stock
If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true? (Choose from the following options) 1. The policy will not lapse since payment to the agent is the same as a payment to the insurer. 2. The premium will be taken out of the Guaranty Association funds. 3. The agent's license will be automatically revoked. 4. The policy will lapse since the premium was not received by the insurer.
1. The policy will not lapse since payment to the agent is the same as payment to the insurer
A commercial auto coverage form that is designed for insureds engaged in the business of transporting goods for others is a (Choose from the following options) 1. Truckers coverage form. 2. Commercial carrier coverage form. 3. Garagekeepers coverage form. 4. Cargo carriers coverage form.
1. Truckers coverage form
Which of the following would be required to be licensed as an insurance producer? (Choose from the following options) 1. An insurance company director who performs executive, administrative and managerial duties 2. A salaried employee who advertises and solicits insurance 3. A person whose activities are limited to producing insurance advertisements 4. A salaried full-time employee who furnishes information for group insurance
2. A salaried employee who advertises and solicits insurance
Which of the following information about an applicant may be used to determine auto insurance rates? (Choose from the following options) 1. Credit score 2. Age 3. Occupation 4. Sex
2. Age
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? (Choose from the following options) 1. Assumed 2. Apparent 3. Express 4. Implied
2. Apparent
If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage? 1. Pay additional premium into his own liability policy 2. Attach the home day care coverage endorsement to the HO policy 3. Include home business endorsement in the HO policy 4. Buy additional coverage for his business
2. Attach the home day care coverage endorsement to the ho policy
The garage coverage form is used to insure (Choose from the following options) 1. Owner-operators who use their own trucks to haul property for the motor carriers that hire them. 2. Auto businesses, such as auto dealers, service stations, and auto repair shops. 3. Businesses that use automobiles to transport property of others or their own property. 4. All types of organizations other than auto businesses and motor carriers.
2. Auto businesses, such as auto dealers, service stations and auto repair shops
When Mary decided to sue her neighbor for damages to her yard, she was told to get a bond that would guarantee she would be able to pay court costs and resulting damages if she loses the case. What kind of bond is this? (Choose from the following options) 1. A bail bond 2. A cost bond 3. An appeal bond 4. A license and permit bond
2. Cost bond
All of the following are additional liability coverages automatically provided in a homeowners policy EXCEPT (Choose from the following options) 1. Claims expenses. 2. Damage to the property of others. 3. Loss assessment coverage. 4. Personal injury.
2. Damage to the property of others
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of 1. Nothing, unless the remarks were in writing 2. Defamation. 3. Misrepresentation. 4. Discrimination.
2. Defamation
Which of the following provisions requires that the insured protects the damaged property from further damage, cooperates with the insurer in settling the loss, and submits to the insurer signed proof of loss within a specified period of time? (Choose from the following options) 1. Proof of loss 2. Duties after loss 3. Legal action 4. Loss settlement
2. Duties after a loss
In farm insurance, Coverage I - Personal and Advertising Injury Liability for suits alleging personal injury is most similar to the coverage found in which coverage form? (Choose from the following options) 1. Umbrella liability 2. General liability 3. Personal auto 4. Dwelling
2. General Liability
An insurer or producer, upon making a declination of insurance, must (Choose from the following options) 1. Offer to resubmit the application to the underwriting department. 2. Inform the applicant of each specific reason for the declination. 3. Provide the application of at least 2 other insurers or producers who may accept their request for coverage. 4. Nothing, when the application is rejected, their obligation to the applicant ceases.
2. Inform the applicant of each specific reason for the declination
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, an insured group must become (Choose from the following options) 1. More active. 2. Larger. 3. Smaller. 4. Older.
2. Larger
Coverage for drones, remotely piloted aircraft systems, is usually broken up into what two parts? (Choose from the following options) 1. Personal and commercial lines 2. Liability and hull damage 3. Homeowners and aircraft coverage 4. Property and life insurance
2. Liability and hull damage
Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? (Choose from the following options) 1. Provide the name and address of the injured worker and any witnesses to the injury 2. Make voluntary payments for treatment of the worker's injury 3. Provide immediate medical care required by the law 4. Notify the insurer at once
2. Make voluntary payments for treatment for workers injury
Which of the following, upon conviction, carries a fine of up to $2,000 for each violation? 1. Unfair discrimination 2. Misrepresenting the terms of a policy 3. Rebating 4. False advertising
2. Misrepresenting the terms of a policy
An insured unintentionally accepted forged currency during the course of regular business. Which of the following crime coverages protects against such a loss? (Choose from the following options) 1. Forgery or alteration 2. Money orders and counterfeit paper currency 3. Employee theft 4. Inside the premises - theft of money or securities
2. Money orders and counterfeit paper currency
Which of the following limits, shown in the declarations of a policy, applies to medical expenses? (Choose from the following options) 1. Per incident 2. Per person 3. Per occurrence 4. Per injury
2. Per person
At the time of loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following EXCEPT (Choose from the following options) 1. Paying the value of the lost or damaged property. 2. Replacing the property with other property of a lesser kind or quality. 3. Paying the cost of repairing or replacing the lost or damaged property. 4. Taking all or part of the property at an agreed or appraised value.
2. Replacing the property with other property of a lesser kind or quality
Which of the following individuals is eligible for Homeowner's insurance? (Choose from the following options) 1. Someone who wants to insure a dwelling that doesn't yet meet the Commissioner's minimum standards for insurability 2. Someone who owns a house, but does not make it their primary residence 3. Someone who has had a policy canceled for nonpayment in the last 2 year 4. Someone who has property used for hazardous purposes
2. Someone has a house but doesn't make it their primary residence
Supplementary payments on a CGL provide all of the following EXCEPT (Choose from the following options) 1. The cost of bonds to release attachment. 2. Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds. 3. $100 in gasoline costs by the insured driving a witness to and from court. 4. Pre-judgment and post-judgment interest.
2. Up to $500 a day for lost earnings and 2,000 for the cost of bail bonds
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? (Choose from the following options) 1. Representation 2. Warranty 3. Concealment 4. Indemnity
2. Warranty
What is the liability limit for the death of one person in an accident for Michigan auto insurance policies? (Choose from the following options) 1. $10,000 2. $100,000 3. $250,000 4. $500,000
250,000
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT (Choose from the following options) 1. No-fault medical payments. 2. Liability. 3. Physical damage. 4. Uninsured motorist.
3) Liability
A premium discount is the term that describes when an insured owes a total standard premium greater than (Choose from the following options) 1. $15,000. 2. $1,000. 3. $5,000. 4. $10,000.
3. $5,000
A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil and certain categories of hazardous waste? (Choose from the following options) 1. $500,000 2. $750,000 3. $1 million 4. $5 million
3. 1 million
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? (Choose from the following options) 1. $750 2. $1,000 3. $1,500 4. $2,250
3. 1,500
If an insurer wishes to appoint a producer, it must file a notice of appointment within how many days of the date that the contract is executed? (Choose from the following options) 1. 45 days 2. 7 days 3. 15 days 4. 30 days
3. 15 days
The Employee Theft crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to (Choose from the following options) 1. 30 days. 2. 60 days. 3. 90 days. 4. 120 days.
3. 90 days
An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover? (Choose from the following options) 1. A child has bruises on her legs from receiving a spanking from the insured and must be seen by her pediatrician. 2. A child riding the insured's horse falls off, breaking his collar bone. 3. A child trips over a toy in the driveway, cuts her knee, and requires stitches. 4. A child is playing in the insured's car, puts it in drive, and backs into the neighbor's mail box.
3. A child trips over a toy in the driveway, cuts her knee, and requires stitches.
Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur? (Choose from the following options) 1. Per occurrence limit 2. Split limit 3. Aggregate limit 4. Per person limit
3. Aggregate limit
In insurance, an offer is usually made when (Choose from the following options) 1. The agent hands the policy to the policyholder. 2. An agent explains a policy to a potential applicant. 3. An applicant submits an application to the insurer. 4. The insurer approves the application and receives the initial premium.
3. Applicant submits an application to the insurer
Which bonds are issued to secure the release of a person from jail pending a courtroom appearance? (Choose from the following options) 1. Appeal bonds 2. Fiduciary bonds 3. Bail bonds 4. Cost bonds
3. Bail Bonds
An insurance contract must contain all of the following to be considered legally binding EXCEPT (Choose from the following options) 1. Consideration. 2. Competent parties. 3. Beneficiary's consent. 4. Offer and acceptance.
3. Beneficiary's consent
Which endorsement adds coverage for employee use of automobiles in the insured's business and the insured's use of rented autos if no coverage is provided on a business auto policy? (Choose from the following options) 1. Newly acquired auto exposure liability 2. Additional insured 3. Hired and nonowned auto liability 4. Substitute auto liability
3. Hired and non owned auto liability
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? (Choose from the following options) 1. Assumed 2. Express 3. Implied 4. Apparent
3. Implied
The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the (Choose from the following options) 1. Exclusions. 2. Declarations. 3. Insuring agreement. 4. Conditions.
3. Insuring agreement
What are the two types of compensatory damages? (Choose from the following options) 1. Pure and speculative 2. Tort and general 3. Normal and punitive 4. Special and general
3. Normal and punitive
When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)? (Choose from the following options) 1. Only if the insured has 4 or more employees. 2. Never 3. Only if the insured does not have commercial auto coverage 4. Only in addition to commercial auto coverage.
3. Only if the insurer does not have commercial auto coverage
The following areas are regulated by the Insurance Department EXCEPT (Choose from the following options) 1. Insurer financial requirements. 2. Policyowner rights and disclosures. 3. Producer commission schedules. 4. Producer regulations and testing requirements.
3. Producer commission schedules
Which of the following is NOT one of the four primary elements considered in establishing negligence? (Choose from the following options) 1. Legal duty 2. Standard of care 3. Proof of carelessness 4. Proximate cause
3. Proof of carelessness
Which of the following persons may be covered under farm Coverage J? (Choose from the following options) 1. Additional insureds 2. Farm employees 3. Resident employees 4. First named insured
3. Resident employees
Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy? (Choose from the following options) 1. Inspection 2. Cancellation 3. Sole representative 4. Transfer of your rights and duties (assignment)
3. Sole representative
The claims-made trigger is based on which of the following? (Choose from the following options) 1. The place where the injury or damage occurs 2. The date when injury or damage occurs 3. The date the claim is first made 4. The amount of the insured's deductible
3. The date the claim is first made
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? (Choose from the following options) 1. Reassignment and modification 2. Changes 3. Transfer of rights and duties under the policy 4. Subrogation
3. Transfer of rights and duties under the policy
Which of the following is NOT a responsibility of an insurance agent? (Choose from the following options) 1. Explaining policy provisions 2. Submitting the application to the insurer 3. Underwriting the contract 4. Delivering the contract
3. Underwriting the contract
If an insurance agent has made a misrepresentation or incomplete comparison of policies for the purpose of inducing a potential client to purchase an insurance policy, the agent may be assessed a fine of up to (Choose from the following options) 1. $100 2. $500 3. $1,000 4. $2,000
4. 2,000
When an insurer refuses to renew an auto policy, within how many days must it mail a notice of nonrenewal to the insured? (Choose from the following options) 1. 7 days 2. 10 days 3. 14 days 4. 20 days
4. 20 days
Coverage F (medical payments) under a homeowners policy would cover (Choose from the following options) 1. A tenant who is injured while on the premises. 2. A family member who is injured while residing in the insured premises. 3. The insured for injuries sustained while working at home. 4. A residence employee who is injured on the job.
4. A residence employee who is injured on the job
Any qualified applicant for coverage under the Michigan Automobile Insurance Placement Facility has which of the following rights? (Choose from the following options) 1. Request assignment 2. Reject assignment 3. Request reassignment 4. All of the above
4. All of the above
A person who has reason to believe that an insurer has improperly denied him or her insurance, or has charged an incorrect premium for insurance is entitled to (Choose from the following options) 1. A private, informal, managerial-level conference with the insurer. 2. A formal review with the producer of record. 3. A review held by the judge of the circuit court. 4. All of the above.
4. All the above
The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a (Choose from the following options) 1. Breaking and entering. 2. Theft. 3. Robbery. 4. Burglary.
4. Burglary
A small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true? (Choose from the following options) 1. Any coverage form applies. 2. Coverage can continue under the truckers coverage form. 3. Farm liability coverage applies. 4. Business auto coverage form may apply
4. Business auto coverage form may apply
A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called (Choose from the following options) 1. Bodily injury/property damage form. 2. Occurrence form. 3. Premises coverage. 4. Claims-made form.
4. Claims-made form
Membership in the Michigan Property and Casualty Guaranty Association is (Choose from the following options) 1. Compulsory for all companies selling property, casualty or surplus lines insurance in Michigan. 2. On a voluntary basis. 3. Compulsory for all insurance companies. 4. Compulsory for all admitted insurance companies authorized to sell property and/or casualty insurance in Michigan.
4. Compulsory for all admitted insurance companies authorized to sell property and/or casualty insurance in Michigan
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? (Choose from the following options) 1. Adhesion 2. Personal 3. Unilateral 4. Conditional
4. Conditional
The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the (Choose from the following options) 1. Exclusions. 2. Declarations. 3. Insuring clause. 4. Conditions.
4. Conditions
The designation symbols used in commercial auto policies can be found in which policy section? (Choose from the following options) 1. Liability Coverage 2. Definitions 3. Conditions 4. Covered Auto
4. Covered auto
An insurance producer did not renew her license when it was due, so the license lapsed. Two months prior to that, the producer sold several insurance policies and was still awaiting commissions. Now that the producer is no longer licensed, which of the following is true regarding the commissions from the sale of insurance policies? (Choose from the following options) 1. Commissions will be prorated for the time between the sale and the license lapse. 2. Commissions may be paid to another licensed producer who may write a personal check to this producer. 3. Commissions will be forfeited since the producer is no longer license. 4. Deferred commissions may be paid to the producer for policies sold while the producer was licensed.
4. Deferred commissions may be paid to the producer for policies sold while the producer was licensed
An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act? (Choose from the following options) 1. Independent agency marketing 2. Illegal 3. Insurance telemarketing 4. Direct response marketing
4. Direct response marketing
Which of the following would modify the original insurance contract by either adding or removing coverage? (Choose from the following options) 1. Additional coverage form 2. Conditions 3. Flexible policy 4. Endorsements
4. Endorsements
Which of the following would be named on the declarations page of a property or liability policy? (Choose from the following options) 1. Beneficiaries 2. All insureds 3. Additional insureds 4. First named insured
4. First named insured
Which of the following would be covered under the Garage Liability Coverage Form? (Choose from the following options) 1. Product recalls 2. Fellow employees 3. Loss of use 4. Insured's business premises
4. Insureds business premises
What provision in a property policy applies when the insurer broadens coverage but does not increase the premium? (Choose from the following options) 1. Insuring clause 2. Appraisal clause 3. Subrogation clause 4. Liberalization clause
4. Liberalization clause
A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain (Choose from the following options) 1. Fidelity bonds. 2. Performance bonds. 3. Bid bonds. 4. License and permit bonds.
4. License and permit bonds
Which professional liability form provides coverage for liability arising out of errors or mistakes made in rendering medical services? (Choose from the following options) 1. Druggist 2. Directors and officers 3. Errors and omissions 4. Physicians, surgeons and dentists malpractice
4. Physicians, surgeons, and dentists malpractice
Pertaining to insurance, which of the following is an example of a producer's fiduciary responsibility? (Choose from the following options) 1. Helping insureds to file claims 2. Performing reviews of insured's coverage 3. Offering additional coverage to insureds 4. Promptly forwarding premiums to the insurance company
4. Promptly forwarding premiums to the insurance company.
Burglary is defined as (Choose from the following options) 1. Taking of property from the care of a person in a violent act. 2. Any act of stealing. 3. Taking of property by use of force, violence, or fear. 4. Taking of property from within the premises leaving visible signs of forced entry.
4. Taking of property from within the premises leaving visible signs of forced entry
Insurance companies transacting automobile insurance in Michigan must offer uninsured motorist coverage that equals the insured's coverage limits for (Choose from the following options) 1. Combined limit of liability. 2. Bodily injury. 3. Personal injury protection. 4. Underinsured motorist protection.
4. Underinsured motorist protection
Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? (Choose from the following options) 1. A residence where an insured is temporarily residing 2. A family cemetery plot 3. A lakeside cabin rented by the insured for vacation 4. Vacant farmland owned by the insured
4. Vacant farmland owned by the insured
An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of (Choose from the following options) 1. Intervening cause. 2. Juvenile delinquency. 3. Absolute liability. 4. Vicarious liability.
4. Vicarious liability
Personal injury Protection (PIP) will pay for funeral expenses in the amount of up to what limit A) 3,000 B) 1,000 C) 5,000 D) 20,000
5,000
If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person? (Choose from the following options) 1. $30,000 2. $50,000 3. $100,000 4. $180,000
50,000
Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will a) Either pay or defend as it decides. b) Pay the alleged damages. c) Proceed according to your request. d) Defend with the hopes of not paying damages.
A) Either pay or defend as it decides
HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year? a) Peak season b) Value reporting c) Spoilage d) Inventory increase
A) Peak season
Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages? a) Special b) Tort c) Normal d) General
A) Special
Commercial auto coverage form that is designed for insured engaged in the business of transporting goods for others is a what? a) Truckers coverage form. b) Commercial carrier coverage form. c) Garagekeepers coverage form. d) Cargo carriers coverage form.
A) Truckers coverage form
All of the following are considered parts of the policy structure EXCEPT a) Provisions. b) Exclusions. c) Insuring clause. d) Conditions.
A) provisions
How many hours of Continuing Education are required to maintain a Counselor's license? a) None b) 12 c) 24 d) 30
A- none
What is the maximum fine for submitting a false or fraudulent claim to the insurer? a) $500 b) $1,000 c) $1,500 d) $2,000
B) 1,000
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses? a) Insuring agreement b) Additional coverage c) Exclusions d) Declarations
B) Additional coverages
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least 5 years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next 2 years. What term best describes this act? a) Unfair discrimination b) Fraud c) Errors and omissions d) Defamation
B) Fraud
An uninsured motor vehicle includes all of the following except? a) A vehicle that has no liability bond in force. b) A vehicle owned and operated by a self-insurer. c) A vehicle which flees a hit-and-run accident. d) A vehicle not covered by an auto insurance policy.
B) a vehicle owned and operated by a self insurer
Which of the following exposures is insured under Coverage I - personal and advertising injury liability? a) Breach of a written contract b) Unintentional acts arising from the operation of a farming business c) Failure of goods to perform d) Statements made by an insured during their farm radio show
B) unintentional acts arising from the operation of a farming business
Which homeowners form provides open peril coverage for dwelling (Coverage A) and contents (Coverage C)? a) HO-2 b) HO-3 c) HO-5 d) HO-8
C - HO-5
Which of the following other coverages is NOT included in the basic form dwelling policy? a) Personal property temporarily away from the insured premises b) Tenant's improvements, alterations, and additions c) Breakage of glass d) Removal coverage
C breakage of glass
Which of the following is NOT one of the available additional coverages in the builders risk form? a) Fire department service charge b) Pollutant cleanup c) Vandalism d) Debris removal
C) Vandalism
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? a) Reporting form b) Loss sustained form c) Discovery form d) Retro form
C) discovery form
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? a) Reporting form b) Loss sustained form c) Discovery form d) Retro form
C) discovery form
Which of the following statements is INCORRECT with regard to surplus lines insurance? a) Before coverage is placed with a surplus lines company, diligent effort must be made to place the risk with admitted insurers. b) Business placed with a surplus lines insurer is subject to a premium tax that must be collected by the broker. c) Policies written by a surplus lines insurer typically contain standard coverages and forms. d) To sell surplus lines insurance, the licensee must obtain a surplus lines broker's license. Surplus lines insurers do not have to file their rates or forms with the insurance department, and because they are not admitted, each policy will show an amount as premium tax payable to the Department of Insurance.
C. Policies written by a surplus lines insurer typically contain standard coverages and forms.
Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as (Choose from the following options) 1. Rescission. 2. Nonrenewal. 3. Cessation. 4. Cancellation.
Cancellation
What method of premium computation relates an employer's losses, payroll and premiums to the rating bureaus classifications of operations A) workers classification factor B) merit rating plan C) arbitration plan d) Experience modification factor
D) Experience modification factor
Expenses that an organization would not have incurred if business interruption had not existed are known as a) Continuing expenses. b) Additional expenses. c) All-inclusive expenses. d) Extra expenses.
D) Extra expense
A person covered under personal protection insurance had a terrible accident that impaired his ability to perform regular work duties for 5 years. For how long will the worker's personal protection insurance pay benefits for lost income? a) 6 months b) First year only c) First 3 years d) Full 5 years
D) Full 5 years
In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT a) Separation of insured. b) Legal action against insurer. c) Bankruptcy. d) Employers liability.
D) employers liability
The limited fungi, wet or dry rot, or bacteria coverage endorsement applies to which type of losses? (Choose from the following options) 1. Liability and personal articles 2. Property and liability 3. Personal effects and liability 4. Property and personal injury
Property and liability
While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? (Choose from the following options) 1. Property damage liability 2. Collision coverage 3. Other-than-collision coverage 4. This loss would not be covered.
Property damage liability
Under the Essential Insurance Act, a producer must submit an eligible applicant's application for auto or home insurance to a) The insurer that will charge the lowest premiums. b) The insurer selected by the applicant. c) All insurers represented by the producer. d) The insurer that the producer feels is most likely to accept the application. Upon request, a producer must submit the application for auto insurance or home insurance to the insurer selected by the eligible applicant.
The insurer selected by the applicant - b
A person who has reason to believe that an insurer has improperly denied him or her insurance, or has charged an incorrect premium for insurance is entitled to a) A private, informal, managerial-level conference with the insurer. b) A formal review with the producer of record. c) A review held by the judge of the circuit court. d) All of the above.
a) A private, informal, managerial-level conference with the insurer.
All of the following qualify as an "insured contract," as defined in commercial auto policies EXCEPT a) Agreement for demolition near a railroad. b) A lease of premises. c) A sidetrack agreement. d) Easement or license agreement.
a) Agreement for demolition near a railroad.
Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) False advertising b) Defamation c) Coercion d) Misrepresentation
a) False advertising
The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy? a) Physical damage on a customer's auto b) Auto liability c) Premises and operations liability d) Product liability The garage policy has a care, custody and control exclusion which would eliminate coverage for any damage to a customer's auto. This exposure would need to be covered under a garagekeepers policy.
a) Physical damage on a customer's auto
An insured's child ran into a neighbor's planter on his bicycle and broke the planter and ruined the plants. The cost to replace the planter was $400, and the cost to replace the plants was $100. Which section of the insured's homeowners policy would pay? a) Section II with no deductible b) Section I with no deductible c) Section I, subject to the deductible d) Section II, subject to the deductible
a) Section II with no deductible
A corporation is insured under a commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for all of the following named in the suit EXCEPT a) Spouses of officers and stockholders B) Officers of the corporation C) Stockholders D) Employees of the corporations
a) Spouses of officers and stockholders
A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury? a) The appliance was manufactured in the United States. b) The commercial general liability policy extends rights to Switzerland. c) The appliance manufacturer did not have a permit to sell globally. d) The appliance manufacturer is negligent. Coverage territory means anywhere in the world if injury or damage results from goods or products manufactured or sold in a coverage territory.
a) The appliance was manufactured in the United States.
Which of the following individuals could qualify for a temporary insurance license? a) The designee of a producer that is called to active service with the Navy b) A deceased producer's brother who is employed by the Department of Insurance c) A retired producer d) An employee of a deceased producer
a) The designee of a producer that is called to active service with the Navy
An individual skilled in the process of selecting risks that will not create adverse selection for an insurance company is called a) Underwriter. b) Adjuster. c) General agent. d) Actuary.
a) Underwriter.
Which of the following endorsements could be added to a businessowners policy to protect against loss of income due to lightning striking an electrical grid making the business unable to operate? a) Utility services time element endorsement b) Utility services direct damage endorsement c) Named peril endorsement d) Protective safeguards endorsement
a) Utility services time element endorsement
When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flower bed. The insured was found to be legally liable for this damage. This is an example of a) Vicarious liability. b) Intervening cause. c) Comparative negligence. d) Gross negligence. Vicarious liability may be imposed on one person as the result of the acts of another person who is acting on their behalf or under their control. Employers often are liable for the acts of employees acting within the scope of their employment. Parents are held liable for the acts of their children who are under the parents' control.
a) Vicarious liability.
A trucking company has a $1 million umbrella policy in place. The businessowner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300,000. It turned out that the business actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay? a) $50,000 b) $100,000 c) $200,000 d) $300,000
b) $100,000 - The umbrella policy pays as if the underlying limits were in effect. The underlying limit agreed to by this business was $200,000 per person. Therefore, the umbrella would be the additional $100,000. The business itself would be responsible for the difference between what was required and what was actually provided.
An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000
b) $30,000
How much notice must the Property and Casualty Guaranty Association give before cancelling insurance policies? a) 2 weeks b) 10 days c) 15 days d) 30 days
b) 10 days
The Michigan Property and Casualty Guaranty Association secures funds in order to pay claims of insolvent member insurers by a) Lotteries. b) Assessments on all member insurers. c) Assessments on all policyholders in the state. d) Government loans.
b) Assessments on all member insurers.
The difference in the contents coverage on an HO-3 and HO-5 is which of the following? a) Contents are covered for replacement cost on HO-3, and ACV on HO-5. b) Contents are covered open peril on HO-5, and named peril on HO-3. c) Contents are covered open peril on HO-3, and named peril on HO-5. d) Contents are covered for replacement cost on HO-5, and ACV on HO-3.
b) Contents are covered open peril on HO-5, and named peril on HO-3.
The extra expense coverage form provides a) Payment for unforeseen expenses an insured may incur while the business is shut down following a property damage loss. b) Coverage that will permit the insured to continue in business without interruption following a property damage loss. c) Extra money for an insured whose accounts receivable records have been damaged. d) Additional money to pay for property damage losses at a covered location.
b) Coverage that will permit the insured to continue in business without interruption following a property damage loss.
States with monopolistic state workers compensation funds a) Sell workers compensation insurance through private insurers that are in the state and receive a kickback for all policies sold on an annual basis. b) Do not allow private insurers to be licensed to write workers compensation coverage. c) Provide workers compensation insurance through managed risk plans. d) Require all employers in their state to purchase workers compensation insurance regardless of their financial capacity.
b) Do not allow private insurers to be licensed to write workers compensation coverage.
Replacement cost is defined as a) Payment of the full policy limits in the event of a total loss. b) Full replacement of property at its current cost, new and without reduction for depreciation. c) The market value of property of like kind and quality. d) Full replacement of property with like kind and quality, less an allowance for physical deterioration and depreciation.
b) Full replacement of property at its current cost, new and without reduction for depreciation.
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions? a) Premiums b) Limits of liability c) Consideration d) Utmost good faith
b) Limits of liability
All of the following are characteristics of the dwelling policy EXCEPT a) Dwellings up to four family units are eligible. b) The dwelling must be owner-occupied. c) Coverage includes the dwelling only, contents only, or both. d) Incidental occupancy of limited service-type exposure is permitted.
b) The dwelling must be owner-occupied.
All of the following are special personal property limits under a homeowners policy EXCEPT a) $1,500 for trailers not used with watercraft. b) $2,500 for theft of firearms. c) $500 for business personal property on the insured premises. d) $1,500 for securities, accounts, deeds, and evidences of debt
c) $500 for business personal property on the insured premises
How is a licensee's date of Continuing Education credit review determined? a) By the number of years the licensee has been a producer b) By the date on which he/she was initially licensed c) By the licensee's month and date of birth d) By the name of the company to which the licensee is appointed
c) By the licensee's month and date of birth
Lost Treasures has a guard dog in a fenced lot to protect the salvage yard. The dog scared a passerby, who now claims that it was a traumatic experience and that he now suffers from recurring nightmares. A claim for personal injury of $5,000 is filed against Lost Treasures. Why will the personal and advertising injury liability section (Coverage B) of the CGL policy cover this claim? a) The injury was expected or intended. b) The occurrence was off premises. c) Mental anguish is a covered injury. d) Animals are excluded from coverage. Mental anguish is a covered injury under personal and advertising injury liability. Of course, documentation from a licensed practitioner that mental trauma has indeed resulted from this incident will be required prior to coverage.
c) Mental anguish is a covered injury.
Which of the following is NOT one of the requirements for obtaining a nonresident license in Michigan? a) The applicant must be at least 18 years old. b) The applicant must hold a current resident insurance license in his/her home state. c) The applicant must complete prelicensing education and examination in the nonresident state. d) The applicant must be in good standing.
c) The applicant must complete prelicensing education and examination in the nonresident state.
Which of the following would NOT be covered by uninsured motorist coverage? a) The insured's car is hit by someone whose auto insurer is insolvent. b) The insured's family member is struck by a hit-and-run driver. c) The insured causes a head-on collision with the car of an uninsured motorist. d) The insured's neighbor borrowed the insured's car and was hit by an uninsured motorist.
c) The insured causes a head-on collision with the car of an uninsured motorist.
An insured has an automobile policy with limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded $125,000 for his injuries and $25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1,200. The total payment made under the insured's policy is a) $126,200. b) $100,200. c) $150,200. d) $125,200.
d) $125,200. The amount of coverage for the other driver's injuries is limited to $100,000. The damage to the other driver's car, $25,000, is covered in full. The damage to the insured's car is covered minus the $1,000 deductible. Thus, the total payment is $125,200.
An insured was judged at fault in an automobile accident. He has the 100/300 bodily injury liability coverage. Three other individuals were injured in the vehicle hit by the insured. They were awarded damages of $150,000, $75,000 and $75,000. What amount, if any, was not covered by his insurance policy? a) $100,000 b) $150,000 c) All of the damages were covered by his insurance policy. d) $50,000
d) $50,000
An employee is injured while visiting the employers out of state site. How will the workers compensation benefits be determined? a) The legal system will determine which state's benefits apply to this particular loss. b) The state's benefits that pay the lowest amount will be selected by the insurance company. c) The employee may elect to receive benefits from both the home state and the state in which the injury occurred. d) Benefits will be provided if the state was listed on the policy information page.
d) Benefits will be provided if the state was listed on the policy information page.
During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of a) Twisting. b) False advertising. c) Misrepresentation. d) Defamation. It is against the law for any person to make, publish, or circulate any oral or written statement or literature that is false, maliciously critical of or substantially misrepresents the financial condition of any insurer, and which is intended to injure any person engaged in the insurance business.
d) Defamation. It is against the law for any person to make, publish, or circulate any oral or written statement or literature that is false, maliciously critical of or substantially misrepresents the financial condition of any insurer, and which is intended to injure any person engaged in the insurance business.
65. Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? a) Drive other car b) Additional insured - lessor c) Hired autos specified as covered autos you own d) Individual named insured
d) Individual named insured
Which of the following lists all the required elements for establishing a charge of negligence? a) Legal duty owed, proximate cause, intervening cause, damages b) Legal duty owed, deliberate attempt to cause harm, damages c) Breach of reasonable person rule and proximate degree of care d) Legal duty owed, standard of care, proximate cause, damages
d) Legal duty owed, standard of care, proximate cause, damages
Which of the following, upon conviction, carries a fine of up to $2,000 for each violation? a) Rebating b) False advertising c) Unfair discrimination d) Misrepresenting the terms of a policy
d) Misrepresenting the terms of a policy
An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement? a) 70% of the replacement cost b) 80% of the replacement cost c) 100% of the actual cash value d) Nothing
d) Nothing
All of the following statements about mutual insurance companies are correct EXCEPT a) Dividends allow policyholders to share in a mutual company's divisible surplus. b) Dividends are a return of unused premiums. c) Mutual companies issue policies referred to as participating. d) Policy dividends issued by mutual companies are guaranteed and not taxable.
d) Policy dividends issued by mutual companies are guaranteed and not taxable.
Who would participate in a Write Your Own (WYO) flood insurance program? a) Lloyd's associations b) Government insurance companies that write and service National Flood Insurance policies c) Businesses requiring National Flood Insurance policies d) Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis
d) Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis