Property and Casuality

A lightning storm that completely destroys insured's roof is an example of a:

Direct loss ( is when property is damaged or destroyed by a peril that is covered under the policy)

The responsibility for the insured to prevent further loss of property from damage under reasonable conditions is listed under:

Duties of the insured

Which of the following is correct regarding cancelling of a policy?

If the insured terminated coverage, the insurer is sometimes allowed to deduct administrative costs for processing cancellation before refunding any premiums.

A change made by an insurer on an auto policy that deletes benefits after a policy has been insured is known as a (an) .

endorsement (is a written change to a policy that occurs at or after issue Endorsements can either add or delete coverage a future point in time.

The terrorism Risk insurance act stipulated that:

in the event of a major terrorist attack, insurer along with the federal government share losses.

An underwriter viewing a nap to determine the nature of the general area in which the insured's property is located is known as:

inspection report.

The name of the party that is listed in the declaration sand is protected against all covered losses is known as the : .

insured

What is the automatic limit of Coverage B, medical payments in the PAP

$1,000. per accident but this can be increased for addition premium to any limit the insured would like to choose).

According to TRIPRA, annual liability losses for the insured are capped at:

$100 Billion

If an insured has a policy with split limit liability of 25/40/15, what is the maximum amount the insurer will pay for property damage?

$15,000 ( in the policy with split limits of 25/40/15 the maximum amount payable for property damage by the insured is $15,000.

An insured, with Part D coverage, has his car stolen and incurs extra transportation expenses of about $30 per day for the ten days since the theft, when the car is covered. How much will his policy reimburse for this expense

$160 Part D coverage the contract stipulates loss payment is the lesser amount of either 1)the ACV of the stolen or damaged property at the time of a loss or 2) the amount required to repair or replace the property with other property which is of a like kind or quality)

I f painter wished to buy a BOP (Business owner policy) his payroll cannot exceed

$300,000.

An insured has a Basic Dwelling policy with a replacement value of $100,000. To save money on premiums, the insured decides to insure the property for $40,000. If the insured suffers a $10,000 loss, how much with insurer pay?

$5,000 ( 80% of the replacement cost) multiplied by the loss. $40,000/$80,000 (RC)= 0.5 *$10,000loss =$5,000

T replaced his homes roof five years ago. T suffers a covered loss to his roof which must be replaced. The insurer deems that the roof will cost $10,000 to replace and his older roof depreciated at a rate of $1,000 a year. If T's roof value is based off of ACV, how much will T's policy pay to replace the damaged roof?

$5,000. ($10,000-$5,000= $5,000)

Y has a policy of split limits of 50/100/50. If Y causes loss, what is the maximum amount that each person would receive?

$50,000

N caused an accident injuring three people. N's policy has split limits of liability of 250/500/250. What is the maximum amount that all three as a whole would collect in the event of death or injury?

$500,000

Personal Injury Protection pays for what percentage of the loss of income?

%80

___ of continuing education must be completed in the classroom or classroom equivalent.

(50%)

What is the minimum dollar coverage amount requirement for Basic Form coverage in a dwelling policy?

0$ (no minimum dollar coverage)

H has a policy with a $10,000 per occurrence limit of liability and an aggregate limit of $100,000. How many maximum dollar single claims can H have under policy before she would hit her aggregate limit?

10

What is the minimum number of underwriters required to form a texas a Lloyds?

10

Harry bought a used Mercedes in great condition and would like Part D coverage for the vehicle on his PAP. Harry currently has Part D coverage on one of his two currently covered autos. How long does Harry have to notify the insurer to have Part D coverage on the Mercades?

14 days.

The insurance commissioner must give how many days notice prior o holding a hearing regarding an agents unfair or deceptive practice

30

The most common distribution of the extra expense funds during the first three months following a covered direct loss is:

40/80/100. (Expense is most commonly paid out %40 the first 30days, another 40% days 31-60 and then the final 20% after 60days therefore the cumulative distribution is 40/80/100.

Which of the following individuals would not be considered as being an insured under a commercial general liability policy?

A real estate agent who is also employed as the insured's executive secretary.

A vehicle which is being used by an insured for a short period of time, which is not owned by the insured, and is being used because the auto of the insured is out of service due to a breakdown is called:

A temporary substitute auto.

Which of the following vehicles does not meet the definition of a covered auto under a PAP?

A van used regularly by the insured but which is not listed in the policy declarations.

D has a training business that is rapidly expanding. To accommodate D's growth, a finance company has let him money to buy more office equipment. A condition of the loan was that the lender was to be named to be covered under the policy until the loan is fully repaid. The lender is a (an) :

Additional Insured (third party added to a contract because they have a loss potential.

Which of the following actions are listed under the duties of the insured provision in a contract?

All of the answers listed (preventing further loss under reasonable conditions, the insured providing immediate notice of loss, the insured providing all statements and paperwork that would help with claim verification).

Which of the following would be an example of a peril?

All of the answers listed. (Fire, lightening, internal explosion).

H has his auto insured with the legal minimum coverage. One day H causes an accident in which he harms himself, the other driver and a pedestrian walking down the street. Who is considered an insured under H's contract.

All parties involved in the accident.

Which of the following would be considered controlled business?

Apartments owned by the producer.

Y has suffered a covered loss on his property. When the company sent an adjustor out to assess the damage Y did not feel that the value of the loss was correct. Y can make a request for:

Appraisal

An example of a fiduciary is which of the following:

Attorney

N owns three homes in two different states. If N wanted to have once policy that covers all of the properties, N should buy:

Blanket coverage (is more than one property at one or more locations under one contract).

Which of the following incidents would not be excluded under a DP-3 policy?

Burglary of a property that has vacant for 30 consecutive days.

Under a PAP, Part A, if an indicated dollar maximum amount will be paid which arises out of a single accident no matter the number of insured's, claims made of vehicles involved, it is which type of liability limit?

Combined single limit. (The combines single limit basis method expresses the loss limit for BOTH 1)Bodily Injury and 2) property damage loss in a single dollar amount (in thousands) arising out of one accident. The single dollar limit is the most paid in one accident no matter the number of insureds, claims made or vehicles involved.

Which coverage part of a commercial package policy protects a business against losses which arise out of the negligent acts of the insured that are not related to the use of an automobile?

Commercial General Liability Policy.

Business written only on a producer's property or interest is known as:

Controlled business

Which of the following best describes ACV loss valuation?

Current replacement minus depreciation. ( ACV is a loss valuation that reinforces the principle of indemnity because it takes into consideration the idea of usage over time. ACV is determined by taking current replacement cost minus depreciation which prevents profit from loss.

G's small business just suffered a data breach. Which of the following policies would cover G's loss?

Cyber Risk

All of the following are purposes for regulating and approving the use of policy forms except

Established Prices for insurance policies in Texas.

K has a property policy and would like to know which type of property is not protected against loss under the policy. The part of the contract that K should read is the:

Exclusions (exclusions listed in the policy limits the scope of coverage. The exclusions name the perils, property types and individuals that are not covered in the contract.

The federal law that states that insurer must have written permission from the insured to use credit in underwriting is known as the :

Fair Credit Reporting Act

In a Farm policy Coverage F, unscheduled farm personal property, covers all of the following property items against loss, except:

Feed racks.

Which of the following conditions does qualify for coverage under a flood?

Flooding in a widespread area

An insurance company organized under NY laws and licensed to do business in Texas is considered a

Foreign Company (the situation, the company is considered a foreign company in Texas)

What is an organization that solicits insurance only to its members?

Fraternal benefit society.

Which of the following homeowner forms pays for loss on a functional replacement cost basis

HO-8 ( Is to restore the insured property to its Market value because the replacement cost is far greater. Common building materials that offer the same function as the otherwise ultra-expensive replacement materials are used to restore the property but only to its market value)

An event or mindset that greatly increases the change that a peril will actually occur is known as:

Hazard (is a physical condition or mindset that creates an increased possibility that a peril will actually occur).

T is applying for a policy and has had many claims in the past on other properties. The agent tells T that based on his past the insurer may want to investigate into T's past claims. This type of report would be known as:

Inspection Report. is when underwriters view an insured's history of claims and underwriting maps on the insured's property).

B has a property policy and would like to know perils are covered. B should read the:

Insuring clause (states the obligation that are being assumed/promised by both parties. The insuring agreement also indicates whether perils are named or open)

All of the following statements about the supplemental extended Reporting Period Endorsement are true, except:

It extends a midi-tail to 10years instead of only 5years.

The name of the financial responsibility law in Texas is:

Motor Vehicle Safety Responsibility Law

Do the payment of Supplementary Benefits in CGL reduce the liability limits of a CGL?

Never (Supplementary or addition payments are paid in addition to liability limits of the CGL policy and the payments do not reduce the policy limits in any manner.

Which of the following is not required basic element of a contract?

None of the answers list ( A contract is a legal agreement and is enforceable by law when all four elements of offer/acceptance, consideration, competent parties, and legal purposes are met. All of the listed answers are required, so there are no exceptions in the answer set)

In 2007, T opened up a small office business which has three employees. At the time, he paid minimal premiums for workers compensation (WC) because he had little salaries paid. In 2011, the insurer decides to audit T's books for the 2007 fiscal year to see if they charged too little in premiums for the year. Which of the following is most likely to occur under the deposit premium/audit provision?

None of the answers listed.

A policy that will cover any specific immediate losses unless they are excluded in the policy for coverage is a:

Open Peril policy will cover all losses, unless they are specifically excluded for coverage. Open peril policies are usually also called" special form coverage").

If a CGL claims made continuous coverage timeline shows first there was policy A, then Policy B followed by Policy C which is in effect today, which company would a claim made today be presented if the exposure to loss happened when Policy A was in effect?

Policy C (since the exposure to loss happened on or after the retroactive date there is a claim made trigger in this example. Therefore, claims made contract structure dictates the claim must be presented to, and paid by, Policy C, the claims made form currently in effect.

The starting point in an insurance transaction that is sent to underwriting before coverage can being is known as:

Policy Claims.

H owns a small retail store which sells handbags. Which type of exposure would be most threatening to H's business?

Premises and Operations (considering that H's business is a small store that does not produce the items or construct anything, the most threatening exposures would be the actions of employees and the physical hazards of the store.)

H has been in a car accident and caused $20,000 of total damage. H's policy will cover the full amount but the insure requires H fill out forms and send them back before the claim will be paid. This process is called

Proof of Loss (written proof of loss must be completed by the insured within a specific time as required by the insurer and is the final step before the claim is paid.

The Gramm-Leach-Bliley Act was enacted to

Protect Privacy of consumer information.

Replacement Cost:

Provides benefits that are the exact amount of money to replace destroyed property at the time loss occurred.

The anniversary date upon which an insured switches from an occurrence form CGL to a claim made form, without a break in coverage is called:

Radioactive date (claims made policy is the date when a claim made policy form actually replaces an occurrence form and there is no break in coverage)

All of the following statements are correct regarding insurable interest except:

The insured must have a speculative risk in the property.

Personal injury Protection must be providing on all Texas automobiles liability policies. If the insured does not want the coverage, they must do which of the following?

Reject the coverage in writing.

D has a single family home located at a permanent residency. The type of coverage that D has is considered to be:

Specific coverage refers to one single property at one fixed location)

In a Personal Auto Policy, the general provision which gives the right to the insurer to recover any payments made to an insured from a third party who caused the loss is called:

Subrogation (provision allows the insurer to recover loss from an at-fault third party for any sums paid by the company to the insured as a result of the loss created by the at-fault third party).

B has a large warehouse for his tool and die business. One day, a customer was injured on B's premises. While B's policy will cover the loss, he contends that his customer smelled strongly of alcohol and feels that the injured party has some responsibility for getting hurt. The case goes to court and B must go to give a deposition in which his policy will cover his loss of income for the day of work he misses. This is an example of a (an):

Supplementary additional payments. do not reduce liability limits. They are paid in addition to the applicable amount of liability for lost wages when the insured is required to appear in court and/ or costs to post bonds to specified amounts)

Which regulatory body governs the Texas Lloyds insurers?

Texas insurance Code.

What factor is listed is incorrect with respect to the Business Auto Policy (BAP)?

The BAP does not include Supplementary Payments similar to the PAP.

Who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in Texas?

The agent and the company

Which of the following individuals would not be able to collect for BI under coverage B, medical payments in a personal auto policy owned by the described insureds?

The insured and her friend are power walking when an errant car comes over the curb to strike and injure the friend. (Coverage B insured includes the name insured family members and any other person occupying the vehicle. Coverage also extends to the insured and family members when struck by an auto as pedestrians but it does not extend to nonfamily pedestrians).

Under a CGL policy coverage B, if the insured advertises services and the ad does harm to another, which of the following action would not be covered?

The insured has intentionally written several untrue and damaging facts about a local business competitor.

Which of the following statement are correct under mortgagee rights? .

The mortgagee must pay any due premiums when they are required to

All of the following is correct about Market Value Except:

The only policy that normally carries Market value is the HO-6 Form. (The only policy which commonly includes Market value is HO-8, Modified Form)

Which of the following physical losses to a covered auto could be covered by either collision or other than collision coverage?

The windshield of the car is broken.

Which of the following statements about NFIP deductibles is true?

There is a deductible applied to the building and another to the contents under both the emergency and the regular programs.

An admitted insurer is issued a certificate of authority for which of the following reasons?

This is considered to be the insurer's license to write insurance.

D just purchased a warehouse at an auction. When D receives the keys and documents, he arrives a the building to finds it completely with no property but there is miscellaneous office furniture. The warehouse has a

Unoccupied

Which of the following is not an amount or coverage payable under Part A, liability of a PAP Supplementary Payment coverage?

Up to $250 per day to the insured for lost wages in helping the insured defend a lawsuit.

What is required for an agent whose license has been revoked?

Wait at least five years before applying for a new license.

H has a commercial policy covering his warehouse. During the application, H told the insurer the he guaranteed that smoke detectors were installed and function al in the building even though the warehouse does not have smoke detectors. If a firre were to occur and the insurer proves that there were not functional smoke detectors, they do not have to pay the claim. H's untrue statement of functional smoke alarms would be considered to be

Warranties/Warranty

X and Z own a company that is insured through a commercial property policy. X is the first named insured on the contract while Z is also listed as an insured. If any endorsement needs to be made in the contract, who has the sole right to make changes?

X

In 1980, G had a customer home built and purchases an HO-5 policy. In 2005, G sold his house to X, who decided to purchase an HO-3 policy. In 2006, a electrical fire causes the home to suffer a total loss. Which of the following is correct about the loss?

X is the only person that can collect loss because they were the insured at the time of loss.

G is driving X's car with permission when G slams into another car, causing BI to the other driver, D. Assuming all of the drivers are property insured, which of the following will occur?

X's policy will cover the loss. (the coverage follows the car, where ever the car goes the insurance goes with it as long as the operator has the permission of the insured to use the vehicle).

If an insurer receives permission to share information with a non-affiliated third parties, under the Gramm-leach Bliley Act, customers must receive a notice every (____) for as long as the customer relationship lasts.

Year

An insured buys a used car from a local dealer. Upon purchase, the insured calls her agent immediately in which the producer tells the insured that she is covered against loss until the policy is issued or declined. The agent gave:

a binder (a binder is a written or oral authority which gives the insured temporary coverage against loss pending the future issuance of a policy).

Y and Z are recently married couple and have just closed on their first home. Upon closing the home, their agent told them that even though it will take a few weeks for the insurer to officially underwrite and issue coverage, that if a loss were to occur while the insurer was deciding on coverage, that they would be covered. Y and Z agent issued a:

binder

The clause that states an insured must pay a certain amount of partial losses if they do not carry the minimum specified amount of replacement cost value is known as:

coinsurance/insurance to value.

If an insured hides information and fails to disclose a known material fact to the insurer is known as:

concealment ( is failure to disclose a known fact that is being hidden by an applicant. The insurer must prove concealment was intentional to void a contract).

In a property policy, the mortgagee is defined as the :

lender

The stated maximum that an insurer will pay on a loss that is listed in the declaration is known as

limited of liability.

Boats of what length require Yacht Coverage:

longer than 26feet.

In a property insurance contract, the declarations state:

premium amount. (The contract is the face page of the policy. It states the names of parties, the length of coverage, premium amount, description of coverage and property and lists all endorsements).

A risk manager manages risk by which of the following

reducing the risk

The fair Credit Reporting Act:

states that permission must be grants in writing from the insured for the insurer to obtain reports from outside sources.

A coverage trigger is

the event that makes a CGL policy respond to a claim.

ABC insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. ABC is committing a prohibited act under Texas insurance laws covering:

unfair methods of competition

A foreign insurance company conducting insurance business in Texas:

was formed under the laws of another state.