P&C PART 2

If a policy has been in effect for at least 60 days or is due for renewal, a cancellation may only be effected for which of the following reasons?

A change in the risk that substantially increases the hazard insured against

A producer advises a policyholder that he should replace his life insurance policy with another, similar policy. The agent is advising this, however, for the sole purpose of earning commission. What violation has he committed?

Churning

Which of following agencies administers the National Flood Insurance Program?

FIA Federal Insurance Administration

The most the insurer will pay for a loss under a businessowners policy is

The limit of insurance after the deductible is paid.

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover

a share of the loss

The violation of a cease and desist order may result in a fine of

$10,000.

In P&C insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit?

Deductible

For a contract to be enforceable by law, the contract must be

Legal and not against public policy

How is the premium paid for the business owners policy?

One indivisible premium

Expenses that an organization would not have incurred if business interruption had not existed are known as

Extra expenses.

A dwelling policy has a standard deductible that applies to all property coverage, except fair rental value, additional living expense, and the fire department service charge. How much is this deductible?

$250

Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?

10 days

What is the coinsurance requirement for a theatrical property floater under an Inland Marine Policy?

80%

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? a) Making comparisons between different policies b) Stating that the insurance policy is a share of stock c) Exaggerating the benefits provided in the policy d) Stating that the competitors will arbitrarily increase their premiums each year

Making comparisons between different policies

What is the maximum period of time a temporary license can be in force?

15 months

How long after application acceptance of Flood Policy until coverage begins?

30 days

Under the additional coverages of a BOP, property removed to protect it from loss will be covered at another location for up to

30 days.

If the premiums for a policy will be increased by more than 15 percent, how much warning must the insured get?

45 days

Which of the following is covered under the Camera and Musical Instruments Dealers floater?

A customer's camera left at a camera shop for repair

Which of the following is covered under the Camera and Musical Instruments Dealers floater?

A musical instrument sold and delivered to a customer

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover

A share of the loss.

An uninsured motor vehicle includes all of the following EXCEPT The insurance company denies coverage. The vehicle has no liability bond or insurance in force. A vehicle being used for public livery. The accident was a hit-and-run.

A vehicle being used for public livery.

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto?

A vehicle that is titled to another person, but is being used with permission by an insured

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Conditions

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential

An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a statement of good health. Which of the following terms best describes what the applicant has violated?

Consideration

Which of the following exclusions would fall under Coverage E? Bodily injury to a residence employee Falling Objects Land Contractual Liability

Contractual Liability

Who is responsible for filling out a notice of claim form?

Insured

Which of the following is a definition that shapes the extent of contractual liability coverage by describing the types of contract covered by the insurance?

Insured Contract

A basic dwelling policy automatically provides coverage against fire, lightning, and

Internal explosion.

All of the following are true regarding deposit premium EXCEPT It is 50% of the actual premium It could be adjusted by the audit It must be paid in advance It is an estimated premium paid at the policy issue

It is 50% of the actual premium

An insurance agent visits a potential client and explains the various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?

Misrepresentation

Which of the following does the term proximate cause refer to?

Negligence that leads to an injury

The party of a surety or fidelity bond that promises to fulfill the obligation is

Principal

A sworn written statement that must be furnished by the insured to the insurer before any loss under a policy can be paid is called

Proof of Loss

For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following? Glass breakage Fire Riot Vandalism

RIOT

After a loss, an insured covered by a business property coverage is NOT required to

Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation.

The Federal Fair Credit Reporting Act

Regulates consumer reports.

A property policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss valuation method?

Stated amount

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

THERE IS NO COVERAGE

Georgia Law requires that every policy of Fire Insurance covering property located in the state conform to the provisions of

The Standard Fire Policy

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS

The insured had drained the plumbing system.

All of the following are true statements regarding the supplementary payments of a CGL Policy EXCEPT A: They pay defense costs even after the aggregate limit has been reached B: They pay all expenses incurred by the insurer C: They pay pre-judgement and post-judgement interest D: They pay all reasonable costs incurred by the insured in helping investigate or defend a claim

They pay defense costs even after the aggregate limit has been reached

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?

Transfer of rights and duties under the policy

The type of insurance used to cover goods for one specific trip is called

Trip transit

Which type of liability insurance may an insured reject in writing?

Uninsured motorist coverage

An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some of furniture and clothes in the house. From an insurance standpoint, insured's house is considered

Unoccupied

When does the insurer's duty to defend a suit or claim end in a commercial general liability policy?

When loss payments equal the applicable limit of insurance

What is the main distinction between a hired auto and a nonowned auto?

Who owns the auto

Which of the following is NOT an optional coverage available in a businessowners policy

Workers Comp (should be a separate policy)

The proof of loss statement must be

in writing

Which of the following would be added for coverage under a property policy by an endorsement? All insureds Named Insured First named insured Additional Insureds

Additional Insureds

Which of the following exposures is not covered under the garage liability coverage form? Products and completed operations liability Auto liability Contractual liability Premises and operation liability

Contractual Liability

A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

There is no coverage.

What is a Certificate of Insurance?

A written document showing the types and amounts of insurance that have been issued to the insured

All of the following statements describe the concept of strict liability EXCEPT a) It is applied in product liability cases. b) It is imposed on defendants engaged in hazardous activities. c) Claimants may need to provide proof that a product defect caused an injury. d) It is imposed regardless of fault.

It is imposed on defendants engaged in hazardous activities. Strict liability is commonly applied in product liability cases. The business is then liable for defective products, regardless of fault or negligence.

In return for a premium, an insurance company must

Be fair in underwriting and pay covered losses

Which of the following other coverages is NOT included in the basic form dwelling policy?

Breakage of glass

The causes of loss found in the Standard Form Businessowners policy are identical to the causes of loss found in

Commercial Building and Business Personal Property Coverage Form, Basic causes of loss.

The homeowners policy covers collapse caused by all of the following EXCEPT a) Weight of snow. b) Hidden insect or vermin damage. c) Weight of too many people attending an event hosted in the house. d) Foundation cracks.

d) Foundation cracks.

Expenses that an organization would not have incurred if business interruption had not existed are known as

Extra expenses

In which of the following situations would off-premises coverage in a broad theft endorsement apply? a) The insured's vacuum cleaner is stolen from her apartment. b) The insured's camera is stolen from his vacation home while he is there. c) The insured's live-in maid's quarters are burglarized. d) The insured's jewelry is stolen from her vacation home after she returns home

The insured's camera is stolen from his vacation home while he is there.

Which of the following is NOT true of National Flood Insurance? a) National Flood Insurance provides coverage that is excluded from property insurance policies. b) Insurance provided by the flood program also is available in standard property policies. c) Emergency program limits are available to communities immediately. d) Participating communities must agree to implement certain land use regulations.

b) Insurance provided by the flood program also is available in standard property policies.

Under the liability section of the Personal Auto Policy, all of the following are considered persons insured, EXCEPT a) The insured's neighbor who temporarily borrows the insured's car. b) A co-worker who borrowed the insured's car to run an errand for the insured's employer. c) The insured's employer, if the insured used the employer's vehicle to run an errand for his employer. d) The daughter of the insured while driving her boyfriend's car.

c) The insured's employer, if the insured used the employer's vehicle to run an errand for his employer.