P & C Questions 3

When must insurers notify existing policyholders who do not have residential earthquake insurance that coverage may be available through the Market Assistance Program or the Arkansas Earthquake Authority?

At least three times over a four-year period

Naples Pizza is a successful 10,000 square foot restaurant that generates close to $8 million in gross sales annually. Is this business eligible for a businessowners policy (BOP), and why or why not?

No, because its gross sales are too high.

A home may not be eligible for coverage under a FAIR plan in most states because of all of the following EXCEPT:

The air-conditioning and heating system is obsolete.

A state that maintains a fund that pays for workers compensation claims is called what type of workers compensation insurance market?

monopolistic state fund

All of the following are commonly excluded from coverage in a property insurance policy EXCEPT:

lightning

Within how many days must an insurer notify the Commissioner after terminating a producer's appointment?

30

ABC Insurers issued a homeowners policy insuring Judy's home on June 1. One year later, ABC discovered that Judy intentionally made a material misrepresentation in the application, and it wants to cancel the policy. What is ABC permitted to do?

ABC can cancel the policy by giving 20 days' written notice.

Which of the following is not an acceptable reason for cancelling a personal automobile insurance policy that has been in effect for more than 60 days?

Change in marital status

Clark sued his insurance company because it didn't pay his claim, saying he found the wording in his policy vague and ambiguous. Based only on this information, in whose favor did the Court render judgment?

Clark's, because the policy is a contract of adhesion

Tom and Ann have just bought a condominium as a secondary residence. Which of the following homeowners coverage form is best designed for them?

HO 6 Unit-Owners Form

Which statement is correct about assessments made by the Arkansas Rural Risk Underwriting Plan?

The Commissioner may assess member insurers up to $200 annually to cover the expense of mailing fire department renewal subscription notices.

The farm policy defines a dwelling as all of the following EXCEPT:

a barn used to store farm equipment

Which form of the commercial general liability (CGL) policy covers the insured for injuries or damages only if the policy is in force when the claim arises?

claims- made form

Which of the following defenses to negligence argues that because the plaintiff's actions partly contributed to the accident, the plaintiff should bear a proportional share of the responsibility for his or her injury?

comparative negligence

Randy goes to Main Street Insurance Company to buy a homeowners policy. He observes that he cannot negotiate the terms with the insurer, which presented the policy to him on a take-it-or-leave-it basis. This type of contract is considered a(n):

contract of adhesion

Chad's home suffered severe water damage while he was negotiating its sale. The real estate sales contract had only been signed by Chad at the time the damage occurred. Who will be able to collect insurance to repair this damaged property?

only Chad, the current owner of the property

Which of the following causes of loss would typically be covered under a standard property insurance policy?

tornado

In an insurance contract, only the insurer makes a legally enforceable promise (to pay covered claims). The policyholder makes no legally enforceable promise, which means insurance policies are:

unilateral contracts