Property and Casualty

Agents may be found guilty of defamation if they make false statements that are intended to

Maliciously criticize another insurance company

The amount of loss the insured is willing to absorb without insurance protection is known as

Self-insured retention

Abandonment

The abdication of insured property into the hands of another, or into the possession of no one in particular.

An insured's accounts receivable records have been damaged. The loss may be covered with

The accounts receivable coverage form

Victoria has automobile liability, uninsured motorist, and underinsured motorist coverage all with limits of 100/300/100. The at-fault driver in her crash had liability and uninsured limits of 25/50/10. Victoria had injuries amounting to 40,000 and her 25,000 car was declared a total loss. How would the damages be paid?

The at-fault driver policy pays up to it limit and Victoria's underinsured motorist coverage pays the rest of her BI leaving the at-fault driver personally liable for the rest of he damage to Victoria's car

Which of the following statements is CORRECT regarding business income coverage under the businessowners policy (BOP)?

The business income losses are payable for 12 consecutive months following the occurrence.

Which of the following is FALSE concerning liability coverage of a business auto policy.

The company will reimburse the insured for all loss of earning

All of the following information must appear on the insurance identification card EXCEPT

The insured driver's birthdate

Under the common policy conditions of a policy, all of the following are TRUE about changes in a policy EXCEPT

The insurer must obtain permission from all named insureds to make a change

Which of the following is NOT one of the available additional coverages in the builders risk form?

Vandalism

The limited theft endorsement designed for landlord excludes all of the following EXCEPT

A lawnmower the landlord owns and keeps at rented premises

The MO Basic Property Insurance and Placement Program may cancel a policy for all of the following reasons EXCEPT

A loss caused by an act of GOD

All of the following are additional liability coverages automatically provided in a homeowner's policy EXCEPT

Personal Injury

B is the owner/operator of a light manufacturing company who has willfully failed to comply with the requirements of the Worker's Compensation Notice for exactly 10 days now. When he was reported to the Division of Worker's Compensation B was found guilty and fined the maximum amount allowed by law for his actions. How much was B fined?

10,000

The businessowners policy (BOP) extension coverage form for personal property off-premises is limited to

10,000

What fee would a business entity be required to pay in order to obtain an insurance producer's license ?

100

A trucking company has a 1,000,000 umbrella policy in place. The businessowner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of 400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of 300,000. It turned out that the business actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay?

100,000 The umbrella policy pays as if the underlying limits were in effect.

An insurer must provide forms necessary to present claims within a few calendar days of a request. How many days?

15

An insured has 5,000 of medical coverage under a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. The insured's medical expenses are 8,000. The first passenger's total 4,000; the second passenger's total 6,500; and the third passenger's total 1,200. How much will the policy pay under the medical payments coverage?

15,200

An uninsured driver has just received notice that her license will be suspended. How long after the notice has been mailed will the suspension go into effect?

33 Days

Level 2 Violations of unfair insurance trade practices may result in a monetary penalty of up to

50,000

An insured was judged at fault in a automobile accident. He has the 100/300 bodily injury liability coverage. Three other individuals were injured in the vehicle hit by the insured. They were awarded damages of 150,000 , 75,000 , 75,000. What amount, if any, was not covered by the insurance policy.

50,000 was no covered. No one person would get more than 100,000 for bodily injury.

Additional Coverage

A provision in an insurance policy that allows for more coverage for specific loss expense without increase in premium.

Homeowners policies consider all of the following insured locations EXCEPT

A strawberry patch owned by the insured

Absolute Liability

A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.

The Second Injury Fund will pay the benefits in which of the following situations?

Am employee with a previous injury suffers a second injury that causes the disability to be more serious

Which of the following is indicated on a certificate of insurance

Amounts and types of insurances

All of the following persons would be covered under a business auto policy EXCEPT

An employee of the named insured operating an auto that is owned by the employee's spouse

Admitted Insurer

An insurance company authorized and licensed to transact business in a particular state.

Which of the following would NOT be covered as a loss under Coverage D of a homeowners policy?

An insured leased a dwelling for 5 years. Two years later, the property owner died, and the new property owners wanted to make the property their principle residence, so the lease was canceled.

In order to get a nonresident license in this state, a producer must

Apply and pay a fee to a nonresident state that reciprocates

An insured owns an automobile liability policy with bodily injury limits of 200,000 and an umbrella liability policy with a limit of 1,000,000. The insured is involved in an automobile accident and is found liable for injuries totaling 900,000. Which of the following examples best describe how the benefits will be paid?

Auto liability policy = 200,000, Umbrella liability policy = 700,000

If an insurer makes a change to broaden coverage in a dwelling policy while it is in effect, the changes will apply

Automatically

In a DP-1, if the insured elects to apply Coverage B to a detached garage, Coverage A will

Be reduced by 10%

Which of the following components is NOT part of a policy structure

Benefits

Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under a

Business auto policy

Which of the following is not found in a commercial package policy?

Certificate of authority

How is a professional liability policy written

Claims-made

Insurers providing workers' compensation coverage must do which of the following annually with regards to safety engineering and management programs

Collect data on the program's effectiveness

During the policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of

Defamation

If a binder is not replaced by an insurance policy, the insurer will make a binder premium charge that

Does not exceed the pro rata premium of the issued policy

An executive is accused of sexual harassment. What type of coverage would respond?

Employment practices liability

Which of the following would modify the original insurance contact by either adding or removing coverage?

Endorsements

Which of the following statement does NOT describe endorsements ?

Endorsements may only add coverage to a current policy, not remove.

If an insurer transacts insurance without first having received a Certificate of Authority, the insurer is guilty of a

Felony

A driver who has been convicted of driving under the influence in this state must have automobile coverage under which of the following types of insurance?

Form 22 Insurance

Under marine and transportation coverage, property that remains segregated from a mass of property and may be identified is designated as an

Import

Restoring an insured financially after a claim is known as

Indemnity

The pro rata liability clause is designed to protect the principle of

Indemnity

Additional Insureds

Individuals or business that are not named as insured on the declaration page, but are protected by the policy, usually in regard to a specific interest.

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

Which of the following provisions is usually found in homeowners polices and provides a replacement cost settlement to policyholders who carry adequate insurance?

Insurance to value

Which of the following is NOT in the common policy declarations of a commercial package policy?

Insuring agreement

Section III of the business auto policy provides physical damage coverage. All of the following are physical damages that may be selected coverages EXCPET

Limited peril coverage

Which of the following describes an insurer's responsibility for payment under a policy as stated in the common policy provisions?

Limits of liability

Fair rental value coverage in the dwelling policy is similar to which homeowners policy form?

Loss of use

A worker was injured at his place of employment on March 14th and due to the injury would not return to work until March 30th. What would be the first day for which the compensation would be paid.

March 14th

Which of the following would NOT be covered by a workers compensation policy

Maternity leave benefits

Which of the following is the major coverage provided by the businessowners liability coverage form?

Medial payments

Which of the following exposures is NOT covered under a homeowners policy?

Medical payments to an insured

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

An applicant for property insurance owns a building in which combustible material are stored in the furnace room. From an underwriting standpoint, this risk would likely be considered a

Morale hazard

What type of property does a Personal Floaters policy cover?

Moveable personal property wherever it my be located

An insurance policy form that lists specific covered perils provides

Named peril coverage

An applicant for an insurance license has failed his written examination. Most likely, the fee for the examination will be

Nonrefundable

Which provision defines how the policy will respond if there is other valid insurance written on the same risk?

Other Insurance

The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in a garage policy?

Physical damage on a customer's auto

Businessowners liability coverage automatically includes all of the following coverages EXCEPT

Pollution

The Director may suspend, revoke, refuse to issue or renew a producer's license if the producer

Previously had his or her license revoked in another state

The defendant being released on a surety bail bond is the

Principal

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

Principal

Which of the following would NOT be covered by commercial inland marine policies?

Property lost due to military action

What is a bailee responsible for

Property of others in his custody

The insurance Company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is an example of what?

Protective safeguards endorsement

If an insurer decides to cancel an entire line of commercial casualty insurance, what must the insurer do?

Provide a 90-day written notice to the Director before notifying the insured

Which of the following would NOT be covered under the directors and officers liability coverage?

Reimbursement for fines and penalties

When an insurer pays for the cost to exchange damaged property with new property of similar kind and quality, it is called

Replacement cost

Which of the following is a method of establishing a premium of large commercial accounts

Retrospective rating

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

Riot

Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages?

Special

What are the types of compensatory damages?

Special and General

Which of the following actions does NOT constitute false advertising?

Stating that dividends are not guaranteed

Business auto coverages apply only to those that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadcast coverage ?

Symbol 1

Which of the following is NOT a type of personal property that will be covered under inland marine insurance?

TVS and record players

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. Who pays for this damage?

The Contractor

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as INDIRECT loss

The loss of income for the time the diner was closed

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

The proximate cause

Which of the following is NOT among the ways the Missouri Basic Property and Placement Program could complete an action form?

The risk is acceptable if the policy is cosigned by a second insured

If an applicant submits the initial premium with an application, which action constitutes acceptance?

The underwriters approve the application

Which of the following is TRUE about retrospective commissions to insurers in this state

They are prohibited

What is the role of the facility under the Missouri Basic Property Insurance and Placement Program?

To assist applicants in obtaining basic property insurance

What is the purpose of the ordinance or law coverage endorsement?

To remove the exclusion of losses resulting from ordinances or laws

What is the purpose of the Terrorism Risk Insurance Act?

To share the risk of loss from terrorist attacks with the insurance industry

When does the federal emergency flood insurance program go into effect?

When a community applies for the program

Under Coverage C, and at the request of an insured, personal property of a guest or residence employee is covered

While it is in any residence premises occupied by an insured

What is the main distinction between a hired auto and a non-owned auto?

Who owns the auto

A binder is issued on February 15th, and the policy is issued March 12th. If a valid claim is made on February 25th, will it be covered under the policy?

Yes, because the policy replacing the binder is effective when the binder is issued

Your friend's dog that you are keeping while the friend is out of town bit a visitor in your home. Does your homeowners liability coverage apply?

Yes, the coverage would apply for any animal in your care

Under the FAIR plan, what is the commission for a producer on a renewal policy?

10 % 12% is on new Business 10% is on Renewals

Which of the following is NOT among the penalties an uninsured driver faces

A felony

Which of the following elements of an insurance contact requires paying premium and providing a statement of good health?

Consideration

Which of the following entities is eligible for a besinessowners policy

Convenience Stores

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

Which of the following is NOT TRUE regarding the automatic increase in insurance endorsement in dwelling policies

It does not require additional premium

How is the premium paid for the businessowners policy

One indivisible premium

Which statement best describes agreement as it relates to insurance contracts

One party accepts the exact terms of the other party's offer

A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true?

Payment for unnamed perils is reduced by 25 %

What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident?

Per Occurrence

In reference to insurable interest, which of the following is NOT an element of insurable risk?

Personal

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?

Professional liability

All of the following are considered parts of the policy structure EXCEPT

Provisions

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

Stated amount

Actual Cash Value (ACV)

The required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation.

Adverse Selection

The tendency of risks with higher probability of loss to purchase and maintain insurance more often than the risks who present lower probability.

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

Which of the following exclusions applies to both personal injury and advertising injury in the businessowners policy

Willful violation of a penal statute or ordinance committed by the insured

Medical benefits under workers compensation statutes are provided

Without limit

The Director has the power and authority to perform all of the following EXCEPT

Write insurance statutes

Last week, an individual purchased a homeowners policy. The insurer unexpectedly cancelled the policy this morning. Is this action legal?

Yes, because the policy was in effect for fewer than 60 days

An insured and his spouse were traveling down an icy road and hit a sign, accumulating 1,350 damage to their car. They have a $250 deductible. They already collected on a 1,500 claim earlier this year. How much will they collect on this claim?

1,100

The personal property off-premises extension of dwelling forms provides limits of coverage up to

10 % of Coverage C anywhere in the world.

If an administrative action has been taken against a producer in another jurisdiction, within how many days of the final disposition of the matter must the producer report the action to the Director

30 Days

An insured is the owner of a clothing boutique. She has a Floor Plan Merchandise Floater to cover the property that is financial until is sold. At Closing time a month ago, she noticed that 3 very expensive dresses had been stolen. However, she did not file a report to her insurance company until recently. How much will her insurer pay for this loss?

90% of the limit written. If the insured has not filed a report at the time of a loss, the insurer will be liable only for 90% of the limit written

A unique feature in a bailee form is that it covers

Customers property whether or not the insured has been negligent.

Which of the following would NOT generally be included in the supplementary payments portion of a liability policy?

Damage to the property owned by the insured

What policy would a business owner whose business fills scuba tanks most likely need to insure unfired pressure vessels and compressors?

Equipment Breakdown

To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policyowner face?

Financial Loss

Which homeowners form provides open peril coverage for dwelling (Coverage A) and contents (Coverage C)?

Form 5

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer

If there was no authorized insurers for a specific type of coverage in this state

Adhesion

A contract offered on a take-it-or-leave-it basis by an insurer, in which the insured's only option is to accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.

Which of the following would be covered by the medical payments coverage in a personal auto policy

An insured slams a hand in a car door while getting in, breaking his hand

A general liability policy will respond to claims against an insured when bodily injury or property damage is caused by

An insured's negligence

Accident

An unplanned, unforeseen event which occurs suddenly and at a specific place.

When can an insured cancel a property policy?

Any any time

If an insurer declares that the value of a loss is 5,000, but the insured is confident that the amount of the loss is substantially different, which of the following would most likely be used to settle the dispute

Arbitration

Which of the following describes the transfer of a legal right or interest in an insurance policy

Assignment

Insurable interest in a property must be proven

At the time of loss

A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT

Auto Collision Coverage

The supplementary payments section of the commercial general liability policy would cover

Court costs assessed against the insured in a suit

The extra expense coverage form provides

Coverage that will permit the insured to continue in business without interruption following a property damage loss.

To purchase insurance, the policyowner must have financial interest in the property being insured, This is known as

Insurable Interest

All of the following are factors in the determination of actual cash value EXCEPT

Insurance premium paid

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement

All of the following are additional coverages under a homeowners policy EXCEPT

Outbuildings

Which of the following would be covered under a building and personal property coverage form?

Outdoor sign

Coverage B- Personal and Advertising Injury Liability responds to claims arising from

Suits alleging infringement of a copyright

The Governor has asked the Director to examine an insurance company after a group of insureds has filed several complaints against the company. Who will pay for this examination?

The Insurance Company

When a regular bill of lading is issued, who will be responsible for the invoice cost of any damaged property?

The carrier

An insured was covered under a certified policy. She didn't pay her premiums and her insurer canceled her policy. What is the maximum special premium charge assessment that she could face upon reinstatement

The cost of filing an SR-26 form and providing and providing 10 days coverage

A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by

The golfer's homeowner's liability coverage

Which would NOT be covered by an insured's uninsured motorist coverage?

The insured causes a head-on collision with the car of an uninsured motorist

Which of the following statements is correct regarding the debris removal coverage under the businessowners policy (BOP)

The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductible amount

If premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?

The insurer will be reimbursed for the excess costs by the NFIP

The insured's product under a commercial general liability policy does NOT include which of the following?

Vending machines rented to others