Property Casualty Exam - Quizzes

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

What is a binder?

A temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued

What is a Certificate of Insurance?

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

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

Annual transit

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

Bailee's customer policy

The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?

Company A - $16,000 Company B - $8,000 pro rata - proportional carrying of loss

What is the purpose of the coinsurance clause found in property insurance policies?

Encourage the insured to insure te property closer to its full value

If a farm building or structure is vacant or unoccupied, what is true?

If for 120 consecutive days, the limits applicable to the building and its contents are reduced by 50%

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

Manual Rates/ Class rates

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 - personal property replacement cost endorsement excludes property such as art and antiques

What type of coverage is Coverage E in homeowners policies?

Personal Liability

Which of the following liability exposures is most likely for a small specialty clothing retail boutique?

Premises liability exposure

An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister has to stay at a motel. How much will the HO3 form pay for these additional living expense?

all of the expense up to the coverage D limit - pays the expenses incurred to maintain the same lifestyle as before the loss

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

an unfair trade practice

A policy that insures all property at multiple locations for a single amount is referred to as

blanket

A builder's risk form is most often written as which of the following? - completed value form - scheduled form - reporting form - specific value form

completed value form

The difference in the contents on an HO3 and HO5 is which of the following?

contents are covered open peril on HO5 and named peril on HO3

In insurance transactions, fiduciary responsibility means

handling insurer funds in a trust capacity

The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?

time element - because of the direct relation of the time a business is unable to operate to the amount of loss

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 (not the same w every loss/insurer)

Using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating will the insurer most likely use?

judgement - not possible to rate the risk based upon history or experience

What type of coverage does a homeowners policy include that a dwelling policy does not? - personal property - other structures - broad form - liability

liability

What does livestock coverage form cover?

named peril coverage resulting in death or destruction of livestock by basic cause of loss except by vehicles

Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises?

permitted incidental occupancies

What type of information would be found in a policy's insuring agreement? - policy limits - insurer's address - renewal dates - location of premises

renewal dates

Which of the following is used in the formula for calculating the actual cash value of a property? --> what is formula for ACV

replacement cost - depreciation

If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the

scheduled personal property endorsement

When an insurer cancels, midterm, a commercial property or casualty insurance policy for an allowable reason, they must

send or deliver a "Notice of Cancellation" at least 60 days prior to the effective date of cancellation and state the reason for cancellation

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property?

$25,000

All of the following are special personal property limits under a homeowners policy EXCEPT: - $1,500 for trailers not used with watercraft - $2,500 for theft of firearms - $500 for business personal property on the insured premises - $1,500 for securities, accounts, deeds, and evidences of debt

$500 for business personal property on the insured premises

The extra expense coverage form provides:

coverage that will permit the insured to continue in business without interruption following a property damage loss, money spent to minimize business interruption after a direct property loss

Which of the following is a mandatory part of an insurance policy that varies with each individual policy? - exclusions - insuring agreement - declarations - conditions

declarations

The requirement that agents not commingle insurance monies with their own funds is known as

fiduciary responsibility

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

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?

personal and advertising injury liability - damage of the character of the claimant

Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to: - specified losses - property losses only - liability losses only - property & liability losses

property & liability

A type of policy that is used to provide a specific amount of replacement cost for a given risk after an insured's property has been destroyed is called a

valued policy

Which of the following is NOT one of the additional coverages in the builders risk form? - pollutant cleanup - vandalism - debri removal - fire dept service charge - preservation of property

vandalism