Practice Questions
an insurer formed under the laws of another country is known as
alien insurer
the inspections and surveys condition in a BOP
allows the insurer the right to insect the insureds premises
For every excess lines policy or policy renewal procured from an unauthorized insurer, producers must file which of the following?
an affidavit
Which of the following would not be considered an insurance producer?
an insurer's officer
With respect to the business of insurance, a hazard is
any condition or exposure that increases the possibility of loss
In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss
Coverage E
Which of the following exclusions applies to both personal injury and advertising injury in the business owners policy?
Willful violation of a penal statue or ordinance committed by the insured
Which of the following would NOT be considered an insured under a homeowners policy?
a divorced spouse living in another state
first aid costs for others injured on the insured's premises
are paid in addition to the liability limit
under a business owners policy an insured can canel the policy
at any time by mailing a written notice of cancellation
Under farm liability, Coverage H includes
bodily injury
Which of the following other coverages is Not included in the basic form dwelling policy?
breakage of glass
which of the following losses will be covered by an unendorsed homeowners policy
damage caused by fire or lightning
which section of an insurance policy contains basic underwriting information, such as the insureds name, address, amount of covergae and premiums and a description of insured locations?
declarations
The part of a policy that clarifies terms in the policy is the
definitions
the purpose of the coinsurance clause found in property insurance policies is to
encourage the insured to insure the property closer to its full value
what policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?
equipment breakdown
which of the following would be named on the dec page of a property or liability policy?
first name insured
In insurance transactions, fiduciary responsibility means
handling insurer's fund in a trust capacity
which of the following is the correct formula for computing a loss ratio?
incurred losses + loss adjusting expense/ earned premium
Dwelling coverage inclused all of the following EXCEPT
land on which the dwelling is located
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 recieve on the claim under that endorement?
nothing
Which of the following limits, shown in the declarations of a policy, applies o medical expenses?
per person
which services are associated with standford & poors and AM best?
rating the financial strength of insurance companies
when the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as
state amount
Replacement cost coverage is provided in both the broad and special form dwelling policies when
the amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss
a company has a business owners policy on a building with an estimated replacement cost of $300,000. the company carries $150,000 of insurance. if a loss occurs, hw much will the insured company be paid?
the coinsurance formula would applu
under the provisions of the business income coverage form all of the following are true EXCEPT
the insured is reimbursed for the loss from the date of the loss to the date of restoration or policy expiration date, whichever comes first
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 the purpose of the motor carrier act of 1980?
to establish financial responsibility requirements for interstate motor carriers
which of the following best expresses the purpose of a state value contract?
to pre-establish the amount of coverage available for property items which are difficult to value
What is the purpose of the ordinance or law coverage endorsement?
to remove the exclusion of losses resulting from ordinances or laws
when an individual purchases insurance, what risk management technique is he or she practicing
transfer
Which of the following would be considered an insured under a business auto coverage form?
anyone while using a covered auto owned by the names insured, with permission
A liability policy that provides coverage for a claim for injury or damage if the claim is first filed against the insured during the policy period is called
claims-made form
what two policy components are part of every commercial package policy?
common policy declarations and common policy conditions
which section of an insurance policy indicates the general rules or procedures that the insurer and insured agree to follow under the terms of the policy?
conditions
what of the following risks is eligible for coverage under a business owners policy?
condos
which of the following lists specific perils covered under an insurance policy?
named perils
Which policy condition in HO policies states that insurance applies separately to each insured?
severability of insurance
a BOP is most similar to
Homeowners
If an insurer refuses to renew a dwelling policy for one of the acceptable reasons, the insurer must notify the insured within
45 Days
In a personal auto policy, the medical payments coverage is similar to
Accident insurance, because it pays medical expenses regardless of fault
Crime insurance is usual written on what basis?
All risk
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
The authority granted to an agent through the agent's contract is referred to as
Express authority
Which form insures both buildings and personal property on an opel peril?
Ho-5
under what conditions can broad theft coverage be added to a dwelling policy?
If the insured is owner-occupant of the dwelling
which of the following individuals would probably not have insurance interest in insured property?
Neighbor
What kind of coverage does form DP-3 provide?
Open Peril
Negligence is defined as
The failure to do what a reasonable prudent person would do under given circumstances.
the cancellation provision if a business owners policy specifies all of the following EXCEPT
The method of transferring the owner's right
All of the following statements concerning the New York automobile insurance plan are correct EXCEPT
The plan cannot reject state residents for any reason
Which situation would not be covered by the basic causes of loss form under a commercial property policy?
The surf side club waterfront restaurant is damaged when flood waters rise and seep into the resturant
Compulsory automobile financial responsibility laws may be satisfied in all of the following ways EXCEPT
a certificate of passing a safe driver's education course
the term "functional replacement cost" refers to
loss valuation
All of the following are true regarding physical damage coverage EXCEPT
the limit of liability is a greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repaid or replace the vehicle
A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if
the tree is blocking the driveway
When a vehicle from one state to another, what happens to the limits of policy liability in a personal auto policy?
they do not change
Which of the following is not considered a misrepresentation as it pertains to unfair trade practices?
making comparisons between different policies
what are the two sources for workers comp insurance
monopolistic state fund and competitive market
workers comp rating is developed by applying a rating bureau job classification rate to which of the following?
payroll
the defendant being released on a surety bail bond is the
principal
Under Section 1, homeowners insured must include
property coverage
which of the following would be the insureds duty in the event of a loss according to the duties in event of occurrence, claim or suit condition?
providing specific details regarding an occurrence
What is it called when an agent offers compensation to an applicant in exchange for business
rebating
in a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called
self-insured retention
which of the following entities are responsible for making premium payments in medical plans?
subscribers
An insurance agency could purchase an Errors and Omission insurance policy which would provide protection in the event of any of the following events, EXCEPT
the agency loses commission income from policies that were not issued by the insurer
in a group health policy, between whom is the contract?
the employer and the insurance company
the voluntary compensation endorsement in workers come policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?
the insured person must release the employer and the insurer from further liability
What is the purpose of medigap policies?
to cover expenses for Medicare deductibles and coinsurance
what amount of coverage is provided on HO policies for watercraft?
up to $1,500
Under the automobile assigned risk plan, how much coverage must be provided to the insured for liability arising out of the death of two person caused by a single auto accident?
up to $100,000
Under the business auto coverage form, mobile equipment is covered for liability insurance
when being carried or towed by a covered auto$
a premium discount is the term that describes when an insured owes a total standard premium greater than
$5,000
if a hearing is scheduled for a producer who has violated regulations regarding unfair trade practices, the Superintendent must send a prior notice within how many days of the hearing?
10 days
The minimum age requirement for a resident insurance producer in New York is
18
how long is a waiting period upon purchase of flood insurance through NFIP?
30 days
if a driver cancels his auto insurance and does not replace it, how long does the insurer have to report this to the Department of Insurance?
30 days
if licenses have administrative action taken against them, they must report this to the Superintendent withiin
30 days
unless an event is unforeseeable, how many days of advance notice must an employee provide an employer before taking paid family leave?
30 days
Records pertaining to a Transportation Network Company's trips must be maintained for a period of at least
6 years
according to the homeowners Coverage A, how much of a house's value must be insured in order to qualify for replacement coverage?
80%
which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?
A permanent resident lawfully present in the U.S.
according to the NY state disability benefits lay definitions, what is the term for the money allowances during disability payable to an eligible employee?
Benefits
an employee is injured while visiting the employers out-of-state site. How will the workers compensation benefits be determined?
Benefits will be provided if the state was listed on the policy info page
how is a professional liability policy writtten?
Claims-made
Which of the following is an additional coverage that is covered by the broad causes of loss form?
Collapse
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
Conditions
Most insurers issue health insurance policies for delivery in many states. because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state, the insurer attaches
Conformity with state statues optional provision
when an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
Farm fences (except field and pasture fences) are covered by which farm coverage form?
Coverage G
which of the following may be excluded from coverage in a Major Medical Expense policy?
Custodial care, cosmetic surgery, coverage provided under workers comp
which of the following is an approved written document that identifies procedures in place to keep the insurer's information system safe?
Cybersecurity policy
Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis?
DP-1
All of the following are optional coverages that may be attached to an HO-3 policy EXCEPT
Dwelling replacement cost
which of the following would modify the original insurance contract by either adding or removing coverage?
Endorsement
Insurers issuing motor vehicle liability policies should notify insureds of the availability of supplemental spousal liability insurance
Every year
An applicant is denied insurance because of the information found on a consumer report. Which of the following requires that the insurance company supple the applicant with the name and address of the consumer reporting company?
Fair Credit Reporting Act
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
Which of the following injuries may be covered under Coverage C- medical payments of a commercial general liability policy?
Injuries to a member of the general public that occurs on premises
According to agency law, the agent always represents the
Insurer
According the the nationwide marine definitions, risks that may be the subject of inland marine insurance include all of the following EXCEPT
Large pleasure boats
Under which of the following organizations are the practicing providers compensated on a fee-for-service basis?
PPO
in a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage for which the insured becomes legally liable because of a watercraft accident?
Part A
Workers comp statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. employers can meet such obligations through all of the following EXCEPT
Second injury funds program
Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?
Symbol 5
What is the business auto coverage territory for?
United States and its territories, Canada, or worldwide for private passenger hired autos
which of the following would qualify for C-MAP?
a 4-family owner-occupied dwelling located in a designated arez
which of the following is most likely ineligible for coverage under the BOP
a bank
which of the following would not be classified as personal property for insurance purposes?
a house
Who may share in the commission from the sale of a life insurance policy?
a licensed property insurance agent of the same insurer involved in the transaction
which of the following is the basis for a claim against an insurance policy?
a loss
in a participation plan, the insured may be eligible for which of the following?
a partial premium refund
a business owners policy is
a self-contained prepackaged policy
how is the paid family leave coverage provided to a private employer
added as a rider to an exsiting health insurance policy
Which rider in a disability policy pays income during the waiting period before social security benefits can begini?
additional monthly benefits
an employer that qualifies for a "self-insured" workers comp plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called?
aggregate excess coverage
according to the conditions of a workers comp polic, the insurer has the right to inspect the insured workplace
at any time
which of the following is not an example of the company's location of incorporation?
authorized
what type of bond guarantees that a construction contractor will enter into a contact at a set price?
bid bond
workers comp laws provide all of the following types of benefits except
compensatory benefits
When an individual obtains an insurance license for the primary purpose of writing insurance on him or herself, or for members of his or her immediate family, or business, this is called
controlled business
Regarding a medical plan, as the stop-loss rises, the premium
decreases
The period of time immediately following a disability during which benefits are not payable is
elimination period
an executive is accused of sexual harassment. what type of coverage would respond?
employment practices liability
in addition to the coverages built into the property coverage form, insurers may offer other endorsements that can further expand the coverage provided in the policy
for an addition premium
which of the following would not be considered rebating?
giving a client a $20 pen with the insurer's logo during the insurance application process
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
insuring agreement
a structure may be eligible for coverage under the national flood insurance program if it meets all the following requirements EXCEPT
is entirely over water
What is the benefit of experience rating?
it allows employers with low claims experience to get lower premiums
when is liability coverage included in a homeowners policy?
it is included automatically
all of the following are true of Coverage B- other structures EXCEPT
it must be added by endorsement to a homeowners policy
which of the following statements is not true of commercial umbrella liability policy?
it would automatically cover all losses as they occur
When a health insurance policy is purchased in the state of New York, the insured may cancel the policy and recieve a premium refund within
20 days
a clients policy lapsed in 2012 without being renewed. in what year could the insurance company destroy the file on this policy?
2022
The patient protection and Affordable care act mandate that insurers provide coverage for adult children of the insured up to the age of
26
Under the dwelling policy, Coverage C - Personal Property is
Limited to covering a guest's property while at the insured location
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
A dwelling policy has been in effect for 60 days when fraud was discovered by the insurer. Prior to the cancellation date, the insurer must provide a notice of
30 Days
The removal coverage included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?
30 Days
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss?
30 Days
How long does a licensee have to notify the superintendent of a change of address or email?
30 days
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
License and permit bonds
All of the following are perils covered under the broad form dwelling policy EXCEPT
Theft
in addition to the common policy conditions, all of the following apply to liability coverage except
employers liability- workers comp
which of the following health care plans would most likely provide the insured with comprehensive health care coverage?
health maintenance organization plan
any accident where there is a loss of time from regular duties exceeding one day beyond the workday and where medical treatment beyond ordinary first aid is required must be reported as a workers comp claim injury within 10 days after the employer learns of the injury. failure to do so
is considered a misdemeanor punishable by a fine
the causes of loss insured against in an insurance policy are known as
perils
when an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?
subrogation
if an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?
the auto policy
the members of a limited liability company are insureds under a BOP if
the limited liability company is designated as the name insured
A policy with a 31-day race period implies
the policy remains in force without penalty for 31 days even though the premium due has not been paid
Vandalism and malicious mischief would be covered if the insured premises have been vacant for no more than how many days?
60
according to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?
60 Days
under the conditions of the dwelling policy, within how many days does an insurer have to pay for a loss once a proof of loss form has been received and an agreement with the insured as to the amount payable has been reached?
60 Days
in an earthquake coverage provided by endorsement n a homeowners form, one or mother earthquake shocks would be considered a single earthquake if they occur within what maximum time period?
72 hours
What is the basic limit for cost incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement?
$25
What is the limit for the forgery or alteration coverage in the business owners policy?
$2,500
the commercial general liability coverage part a- bodily injury and property damage provides coverage for which of the following?
Premises
All of the following are examples of risk retention EXCEPT
Premiums
The risk of loss may be classified as
Pure risk and speculative risk
All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT
They pay defense costs even after the aggregate limit has been reached
