Practice Exam #4

An insurer has been found guilty of participating in the unfair claims settlement practices. The Commissioner may order all of the following EXCEPT a) The payment of appropriate policy limits. b) The payment of the actual economic damage. c) A fine up to 3 times the amount of economic damage. d) Restitution to each claimant who suffered economic damage.

c) A fine up to 3 times the amount of economic damage. The restitution may not exceed the amount of the actual economic damage, subject to the policy limits.

Which of the following properties would be eligible for Homeowners coverage through the Joint Insurance Association? a) Farm property in use b) Mobile homes c) A newly built home d) Seasonal dwellings

c) A newly built home The following classes property are NOT acceptable for Homeowners coverage through the JIA: Seasonal dwellings; Farm property unless inactive; Mobile homes or trailer units; Vacant or unoccupied properties; and Properties in the course of construction or major renovation, until occupied.

To avoid cancellation or nonrenewal of an auto policy due to the insureds' driving history, the insurer is permitted to a) Assess a penalty of no more than 10% of the premium increase amount. b) Increase the premium without notice. c) Exclude certain drivers from coverage by name. d) Enroll the insured in a state approved driver's program.

c) Exclude certain drivers from coverage by name. To avoid cancellation, nonrenewal or premium increase due to driving history of an insured under an automobile policy, the insurer is permitted to exclude certain drivers from the policy by name.

J is applying for his producer license. He took his written examination on March 1st, but failed it. When is the earliest J will be able to take the examination again? a) April 1st b) March 2nd c) March 5th d) March 15th

c) March 5th If an applicant fails a written examination, he or she must wait 4 days before retaking the examination.

The members of a limited liability company are insureds under a businessowners policy (BOP) if a) A single individual member of the limited liability company is listed as the named insured. b) Members of a limited liability company cannot be insureds under a BOP. c) The limited liability company is designated as the named insured. d) Each individual is listed as a named insured on the policy.

c) The limited liability company is designated as the named insured. If the named insured is designated as a limited liability company, the named insured and members also are insureds, but only with respect to the conduct of the business. Managers are insureds, but only with respect to their duties as managers.

How long is a waiting period upon purchase of flood coverage through NFIP? a) 10 days b) 30 days c) 60 days d) There is no waiting period.

b) 30 days Upon purchase of a flood policy, a 30-day waiting period is in place beginning from the time of application and premium payment.

Collision coverage extends to rented passenger vehicles that have been rented for a) Fewer than 15 days. b) No more than 30 days. c) Any amount of time. d) No more than 10 days.

b) No more than 30 days. Collision coverage must also include any passenger car rented by the insured for a period of no more than 30 days.

An insured is at fault in an auto accident in a state other than the state registered and insured in. The insured's business auto policy will a) Adjust to at least that state's required minimums. b) Pay the entire amount of the other party's damages. c) Not pay any of the loss. d) Pay only up to the limits of your policy.

a) Adjust to at least that state's required minimums. According to the other state's insurance clause, the company will adjust to at least the other state's minimums.

When can an insurer cancel a workers compensation policy for reasons other than nonpayment of premium? a) With the Commission's approval b) Under no circumstances c) Only when the policy expires d) With a 45-day notice to the employer

d) With a 45-day notice to the employer If an insurer decides to cancel a workers compensation policy before its expiration, the insurer must provide the employer a cancellation notice delivered by personal service or registered mail at least 45 days prior to the date of policy cancellation.

What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement? a) $25 b) $50 c) $75 d) $100

a) $25 This endorsement provides a basic limit of $25 for towing and labor costs incurred at the place a vehicle is disabled. Higher limits are available for an additional premium.

Upon the discharge of Ben's bail bond, his surety insurer still held some collateral. Ben had not yet paid the last premium due on the bail bond. How will the premium be paid? a) The surety insurer will deduct the premium due from the collateral being returned b) The surety insurer will waive any premium still due c) The surety agent is responsible for the remaining premium due d) Ben must pay the premium before the collateral will be returned

a) The surety insurer will deduct the premium due from the collateral being returned Immediately upon the discharge of a bond, the surety insurer or surety agent must return any collateral held by the surety insurer or the surety agent. Any unpaid premiums due on the bail bond may be deducted from any collateral being returned.