Property and casualty insurance Exam Questions and Answers Part one

During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes

Misrepresentation.

A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

Morale

A business using its own trucks to move its own cargo would insure the cargo using

Motor truck cargo - owners form.

In dwelling policies, automatic increase in insurance is

Coverage by endorsement.

Losses caused by vandalism and malicious mischief are excluded under a homeowners policy if the dwelling had been vacant for more than

60 days.

For how long must a company maintain a complete file of all advertisements used?

At least 4 years

Which of the following would NOT be compensable under Workers Compensation insurance?

While working in his office, Bill suffers a heart attack.

Which of the following best describes liberalization clause in a policy?

Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium.

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. This is an example of

Coercion.

Which of the following risks is eligible for coverage under a businessowners policy?

Condominiums

Which of the following would NOT be considered an unfair and deceptive practice?

Controlled business

The designation symbols used in commercial auto policies can be found in which policy section?

Covered Auto

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT

Employers liability.

Which of the following is an example of an unfair claims settlement practice?

Failure to promptly settle a claim when liability has been clearly established

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Which of the following would the livestock coverage form NOT insure against?

The euthanasia of livestock after being hit by a vehicle

Homeowners policies provide coverage for

Business property while on the residence premises.

To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than

6 stories.

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

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

The legal liability coverage form provides coverage for damages for which the insured is legally liable arising from

Direct physical damage to property of others in the insured's care.

All of the following actions can be described as twisting EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

Which of the following are the authorities that an agent can hold?

Express and implied

Which of the following regulatory authorities participated in creating the National Do Not Call Registry?

FTC

Which of the following would be covered under the crime coverage inside the premises - theft of money and securities?

Loss or damage to a locked safe, vault, or cash register

Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence.

Insurable interest in the property covered in a policy must be proven

At time of loss.

If an insured has an umbrella liability policy in addition to his personal auto policy, which would be considered the underlying policy?

Auto policy

The risk management technique that is used to prevent a specific loss by not exposing oneself to that activity is called

Avoidance.

Bob's home is insured for $100,000 under a dwelling policy. Yesterday his home suffered $20,000 damage from a fire. Today the home was struck by lightning, starting another fire that completely destroyed the structure. Bob's policy will pay

$100,000.

The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to

$250,000.

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years.

What is the minimum age for obtaining an insurance producer's license in this state?

18

In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?

1st limit

Coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by an accident if the expenses are incurred and reported to the insurer within how many years of the accident date?

3 years

How long is the waiting period after the application has been accepted before flood coverage goes into effect?

30 days

Which of the following would be considered an unfair claims settlement practice?

A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Professional photographers and musicians may insure their equipment with

A commercial articles floater.

An insured couple owns a pontoon boat. Which situation would NOT be covered by their watercraft endorsement under their homeowners policy?

A friend rents their boat and runs it into a neighbor's dock.

In which of the following situations would the jewelers block extension cover a loss?

A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged.

In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within

A specified time.

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the

Additional insured.

What documentation grants express authority to an agent?

Agent's contract with the principal

In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured property's appreciation or depreciation?

Agreed value

When transacting business in this state an insurer formed under the laws of another country is known as a/an

Alien insurer.

Which of the following would NOT be considered an exception to the National Do Not Call List?

Calls based from outside of the United States

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as

Cancellation.

Who will transport the property of anyone who hires them?

Common carriers

If an insurer appoints a producer, which authority must be notified?

Department of Insurance

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

All of the following are other coverages under the dwelling policy EXCEPT

Earth movement.

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?

If a consumer does not sign and return the notice of disclosure within 30 days

In accordance with American Institute Hull Clauses, a pro rata return of premium will be given for all the following reasons EXCEPT

If the policy is cancelled by the insured.

With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT

Immediately report to an emergency room for medical examination.

What was created to keep telemarketers from calling consumers who do not wish contacted?

National Do Not Call Registry

If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?

Personal and advertising injury liability

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT

Physical damage.

Valuable papers and records form provides coverage for the reconstruction of all of the following types of records EXCEPT

Prepackaged software.

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

Principal

Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss?

Privilege to adjust with the owner

The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called

Pro rata liability.

Who is NOT considered an employee in an commercial general liability (CGL) policy?

Temporary worker

An apartment occupant's personal property would be insured under which homeowners form?

Tenant broad form (HO-4)

All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT

The 22-year-old niece of the insured who is visiting.

Which of the following entities must approve all continuing education courses in this state?

The Commissioner

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss

What is the purpose of increased value and excess liability (IVEL) clauses?

To provide extra coverage for the same losses covered by an underlining policy

What is a wrongful act or the violation of someone's rights that leads to legal liability called?

Tort

A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession?

Trailer interchange coverage

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT

Workers compensation coverage

An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowners policy provide coverage?

Yes, none of the exclusions will apply.

Which inland marine form would provide the best protection for a dry cleaning company against loss or damage to their customer's property while in the care, custody, and control of the dry cleaners?

Bailee's customer policy

Which of the following is an example of a protective safeguard in a businessowners policy?

Automatic sprinkler system

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?

3 years

Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits?

$20 per day; $600 maximum

A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil?

$1 million

For the purpose of examination by the department, insurers must keep a record of all financial files for at least

5 years.

If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?

90

An individual was just caught acting as an exclusive general agent - even though he is not properly licensed. Assuming that this occurred in a single day, what is the maximum penalty he faces?

A third degree misdemeanor and a $1,000 fine

What are common carriers required to issue to every shipper that it transports goods for?

A uniform bill of lading

What is a Certificate of Insurance?

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

The insured with a homeowners policy has had damage to his property caused by a volcano. Which of the following is true?

All volcanic eruptions within a 72-hour period will be considered one occurrence.

Which of the following risks would NOT be eligible for coverage under a homeowners policy?

An applicant who owns and lives on a commercial farm

If the ocean marine contract pays the ACV of the property just prior to the loss, it is

An indemnity contract.

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page.

When the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation?

Cease and Desist Order

Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis?

DP-1

Which of the following losses would be covered by an unendorsed homeowners policy?

Fire or lightning

In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?

First named insured

Which of the following homeowners policies covers those who rent their dwelling?

HO-4

A ranchowners policy is most similar to which of the following?

Homeowners

In order to reject uninsured motorist coverage, the first named insured must make the rejection

In writing at the time of application.

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?

Individual named insured

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

Insurance premium paid.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

What other term is used to refer to unintentional torts?

Negligence

An insured who has coverage for all his personal property has his TV stolen from the shop of the repairman. The owner of the repair shop filed a claim under the insured's policy, but it paid nothing to the owner of the store. Which provision does the policy have?

No benefit to bailee clause

Which of the following terms refers to other insurance that is written on the same risk, but not on the same coverage basis?

Nonconcurrency

A participating insurance policy may do which of the following?

Pay dividends to the policyowner

Which of the following perils is covered by the HO-2 and HO-3?

Sudden and accidental rupture of a heating system

Robbery is

Taking of property by use of force, violence, or fear.

If an insured lives in a high-risk area and can't find an insurer that will cover his/her property, which of the following would most likely provide coverage?

The FAIR Plan

What is the deductible of a personal liability umbrella policy called?

The SIR

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

The accounts receivable coverage form.

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.

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.

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy?

The insured is injured while driving his motorcycle on his resident premises.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured while exiting a friend's mobile home.

Personal property coverage under a homeowners policy would cover

The insured's camera if it is stolen while the insured is on vacation.

Which of the following is NOT covered under Coverage E - Scheduled Farm Personal Property?

Turkeys

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of

Twisting.

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for

Uninsured motorist coverage.

Pete wants to have separate insurance coverage for separate acreages. What kind of insurance should Pete get?

Unit Insurance

Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish?

Up to $1,000

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

Workers compensation

In order to satisfy the Pennsylvania Motor Vehicle Financial Responsibility Law, an auto liability policy issued for delivery in the state must have bodily injury and property damage limits not less than

$15,000/$30,000/$5,000. (comment -The Financial Responsibility Law requires minimum limits of $15,000 of bodily injury liability for one person injured in an accident; $30,000 of bodily injury liability for two or more people injured in a single accident; and $5,000 of liability for damage to property of others in a single accident.)

Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records?

$5,000

A commercial property special form covers property in transit up to

$5,000.

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000.

How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card?

$500

The standard property deductible per occurrence on a commercial package policy is

$500.

To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?

10 days

When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within

30 days.

The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will

Apply to injuries of any guests or visitors.

Which of the following would NOT be covered under the liability section of a personal auto policy?

Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle.

Which of the following statements regarding coverage for the flood and earthquake perils is true?

Both flood and earthquake are excluded perils in all property policies.

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

Certificate of authority

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

An insured is driving above the posted speed limit. As he rounds a curve, he crashes into an illegally parked car. This is an example of

Contributory negligence.

Which of the following statements is true concerning the special form dwelling policy?

Coverage A is for all-risk perils, and Coverage C is for the broad form perils.

Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss?

Coverage D

All of the following are found in the declarations section of a policy EXCEPT the

Exclusions.

State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT

Inviting prospective clients to the grand opening of the company's new office.

All of the following are true of Coverage B - Other Structures EXCEPT

It must be added by endorsement to a homeowners policy.

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.

Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time?

Loss costs rating

A restaurant is out of business for 3 days after an insured's automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured driver's auto policy?

Lost revenues from the restaurant

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?

Making comparisons between different policies

Rates that are established based on the similarities of the risk with other risks are known as

Manual rates.

ABC Trucking hauls products for Acme, Inc. as a contract carrier. On one shipment, the driver stopped at a truck stop for lunch. Leaving the truck in the parking lot, he made certain that the truck was locked before leaving it. Upon returning to the truck, he discovered that someone had broken into the truck and stolen the cargo. Is ABC legally liable for this loss?

No, the driver had taken reasonable measures to protect the property by locking the truck.

Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms?

None

What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?

Open peril policy

Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to

Property and liability losses

While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store?

Property damage liability

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it's in the best interest of the client.

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

Reduction

The Federal Fair Credit Reporting Act

Regulates consumer reports.

In property insurance, actual cash value is defined as which of the following?

Replacement cost at the time of the loss, less depreciation

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT

Submitting to a medical exam when requested.

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

The carrier

According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means

The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party.

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered good will because payments are made without regard to fault.

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 loss to the date of restoration or policy expiration date, whichever comes first.

Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT

The insurer does not have the right to inspect the insured's property and operations.

What will happen if a house covered by a standard mortgage clause is a total loss?

The insurer pays the mortgagee according to the mortgagee's interest in the property.

If more than one person has an insurable interest in the property covered under a dwelling policy,

The insurer will be liable for only the insured's interest in the damaged property.

All of the following are true regarding physical damage coverage EXCEPT

The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.

The members of a limited liability company are insureds under a businessowners policy (BOP) if

The limited liability company is designated as the named insured.

In personal auto policies, the term "you" refers to

The named insured.

Which of the following licensees is classified as a representative of the insurance company and not allowed to represent an insured or claimant?

Producer

The Business Pursuits endorsement under Section II of a homeowners policy will cover all of the following EXCEPT

Business liability.

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must

Respond to the consumer's complaint.

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

Symbol 5

What is the maximum amount of protection available to insureds under the Pennsylvania Property and Casualty Insurance Guaranty Association?

The amount of loss up to the amount of coverage in the original policy, not to exceed $300,000 (per claimant)

When a vehicle travels 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 true regarding a risk retention group?

It is a liability insurance company owned by its members.

If a property is covered by Company A for $20,000 and Company B covers the same property for $40,000, how much will Company A pay on a $24,000 loss?

$8,000

If an insurer terminates a producer's appointment, the Commissioner must be notified within how many days?

30

What is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property?

80% (note-Coverage F - Unscheduled Farm Personal Property insures all farm personal property on a blanket basis. Coverage F is subject to an 80% coinsurance clause. )

Which of the following would NOT be classified as personal property for insurance purposes?

A house

Which insurers are required to participate in the Pennsylvania Automobile Insurance Plan (Assigned Risk Plan)?

All insurers authorized to write auto liability insurance in the state

Which of the following policies must contain, at a minimum, policy language equal to the Standard Fire Policy?

All of the above

A person applying for a manager or exclusive general agent license must meet all of the following criteria EXCEPT

Be responsible for at least 25% of total commissions collected by the office that he or she manages.

The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage?

Computer fraud

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of

Concealment

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

Which of the following is defined as a covered cause of loss in businessowners property coverage?

Leakage from fire-extinguishing equipment

A common exclusion found under physical damage to your auto includes

Mechanical breakdown.

In which of the following situations would punishment include imprisonment?

Omission of a material fact with intent to embezzle funds

Which of the following terms refers to such disabilities the loss of a limb, hearing , or eye sight?

Permanent partial disability

In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by

The insurer.

A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license?

The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible.

A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true?

The loss is payable to the insured and the mortgagee.

In terms of parties to a contract, which of the following does NOT describe a competent party?

The person must have at least completed secondary education.

How soon after the due date should the insurer pay the agent appointment fees?

Within 30 days

What is not a consideration when paying an inland marine claim?

Market value when the property was first purchased

In addition to income benefits, how much will a dependent survivor receive as a funeral benefit for a deceased employee covered under Workers Compensation?

$3,000

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

$30,000

An insured has a special form dwelling policy written for $100,000 on a dwelling. The dwelling's replacement cost is $115,000. Fire causes $75,000 in damage to the dwelling, $15,000 damage to a separate garage, and kills 10 trees valued at $600 each. How much will the policy pay for the trees?

$5,000

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

10 days

Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?

Discrimination

Professional liability coverage protects the insured against legal liability resulting from

Errors and omissions.

Which of the following would be considered false advertising?

Implying that the agent is the insurer

After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT

Imprison the licensee.

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement.

All of the following actions by a person could be described as risk avoidance EXCEPT

Investing in the stock market.

If an employer in a state with elective workers compensation laws chooses not be to subject to those laws, what does the employer lose?

Its common law defenses against liability suits

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?

Liability coverage

In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period?

Loss sustained form

Which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery?

Outside the premises

How much is the premium for the dwelling under construction endorsement under the dwelling policy?

The average amount of insurance during construction

The abandonment provision in property insurance policies states that

The insured may not relinquish ownership of damaged property to claim a total loss, but must protect damaged property from further loss.

One of the primary benefits to the insured in selecting the "full tort option" under their auto insurance coverage is

Unrestricted ability to sue for pain and suffering.

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered

Vacant.

In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records?

$5,000

An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it?

Contractors equipment floater

Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace?

Make voluntary payments for treatment of the worker's injury

The type of professional liability coverage a medical doctor needs is

Malpractice coverage.

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 receive on the claim under that endorsement?

Nothing

The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?

Up to $2,000

A type of policy that is used to provide a specific amount of replacement cost for a given risk after it has been destroyed is called a(n)

Valued policy.

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?

Per occurrence

What is the limit for the forgery or alteration coverage in the businessowners policy?

$2,500

A builder's risk form is most often written as which of the following?

Completed value form

Which of the following is the federal body that regulates truckers who travel across state lines?

Federal Motor Carrier Safety Administration

Bulk carriers are used to transport

Loose cargo.

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.

An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if

A joint ownership coverage endorsement is added.

Which of the following persons is required to hold a producer license?

A person who negotiates insurance contracts

Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license?

Forgery

What is the civil penalty for violating a cease and desist order of the Commissioner?

$10,000

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?

$6,000 would be paid under other-than-collision coverage.

A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?

30

An insured owns a building valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how , much should he insure the property for?

80% of the property's replacement cost or more

All of the following are exclusions under farm property coverage EXCEPT

Loss of use.

Under the dwelling policy, Coverage C - Personal Property is

Limited to covering a servant's property while at the insured location.

Which of the following is defined as the cost to replace damaged property with less expensive and more modern construction or equipment?

Functional replacement cost

Loss of yield from which of the following causes would be covered under a Federal Crop Insurance policy?

Any of the above

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered?

Any other state

Which of the following would be included in the farm liability coverage forms?

Bodily injury to a residence employee

Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS

The injuries fall within the definition of "serious injury."

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's

Ancestry

Which coverage form would provide coverage for all incoming and outgoing shipments?

Annual transit

A recent college graduate bought a new car and is trying to get automobile insurance on it as required by the lienholder. After being rejected by several insurance companies due to his driving record, he finally talked to an agent who can get him coverage. His agent called him a residual market risk. From which type of automobile insurance plan can the applicant purchase insurance?

Assigned risk

Individuals in the business of selling construction equipment and mobile equipment should insure with a/an

Equipment dealers coverage form.

The provision in Pennsylvania workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called

Exclusive remedy.

All of the following statements describe the concept of strict liability EXCEPT

It is imposed on defendants engaged in hazardous activities.

Which of the following is the type of property NOT covered by the homeowners policy?

Land on which the property is located

What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence?

Proximate cause

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the Commissioner.

Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss?

Utility service - direct damage

All of the following are essential elements of a commercial package policy (CPP) EXCEPT

Valuations and/or settlement provisions

According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT

When cargo is misplaced.

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries?

Injury incurred while the person was under the influence of drugs or alcohol

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid?

Other-than-collision

Which of the following may be covered by electronic data processing coverage form under an inland marine policy?

a) Computer hardware that is specifically scheduled. b) Extra expense the insured incurs to continue the business following a loss. c) Data processing media, including magnetic tapes or paper tapes, punch cards and discs

Which of the following definitions best defines the term "accident"?

A sudden, unplanned and unexpected event, not under the control of the insured, resulting in injury or damage neither expected nor intended

With regards to a homeowners policy, which coverage provides for indirect or consequential losses?

Coverage D

In property and casualty 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

If an insurer changes a form that it uses to transact insurance, it must do which of the following?

File the form with the Commissioner for approval

The major portion of the premium of an equipment breakdown policy pays?

For inspections and examinations

The other insurances clause of an ocean marine policy allows coverage for which reasons?

To obtain coverage for war, strikes, and related risks not covered by the policy