Review before exam
An insured has a HO policy and is required to be a member of the HO association in her neighborhood, The associations community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost,. How much of the assessment will her homeowners policy pay? None $500 $1000
$1000 As an additional coverage, homeowners policies will pay up to $1,000 of a loss assessment.
Eric was judged at fault in an automobile accident. Eric has the 100/300 bodily injury liability coverage. three other individuals were injured in the vehicle which eric hit, they were awarded damages of $150,000, $75,000. what amount, if any, was not covered by his insurance policy. all of the damages were covered $50,000 150,000
$50,000 the 100 in the 100/300 means the most that only ONE individual will be awarded for bodily injury is $100,000. the 150,000 leaves 50,000 unpaid
Which of the following is NOT a government-funded insurance program Medicare Social Security Federal Deposit Insurance Corporation (FDIC)
(FDIC) FDIC is funded by premiums paid on deposits in covered financial situations, the others are funded in whole or part by taxes
The neighborhood association of which an insured is a member has become liable for the damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. how much will the damage of the Property of Others additional coverage of the insured's homeowners policy pay? Up to $1,000 2,000 It will pay nothing
1,000 The policy will pay up to $1000 per occurrence for the insured share of loss assessment charged against them as owner or tenant of the residence premises during the policy period by corporation or association of property owners.
An insured has a personal umbrella with a 2,000 SIR. Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim? 2,000 1,000 10,000
10,000 If no other policy pays, the insured must pay a SIP
AN insurance producer is also the instructor of a 3-hour ethics course held once a year. The maintain certification the producer must: Take 24 hours of continuing education must take 18 hours of continuing education courses
18 hours Insurance producers must complete a minimum of 24 hours of approved course work during each 2-year license renewal period. Course instructors earn the same number of continuing education credits as are granted for the course they are teaching, sin in this example, the producer-instructor has earned 6 CE hours in 2 years while teaching
Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss 10 days 30 days 45 days
30 days The insurer has 30 days to tell the insured that it has chosen to repair or replace the covered property
If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for 30 days 60 days 90 days
30 days personal property being moved to a new location can be covered for up to 30 days without the notice to the insurer
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer have to comply 5 days 3 days 20 days
5 days
All of the following statements are true regarding obtaining a nonresident license in this state EXCEPT A person must satisfy pre licensing examination requirements in this state The home state must aware nonresident producer licenses to residents of this state on the same basis
A person must satisfy pre licensing examination requirements in this state In order to obtain a nonresident producer license in tis state, persons must be licensed in good standing in their home state and submit the required application and fees. Pre licensing examination is not required for nonresident producers. The nonresident state and the home state however, must award licenses on the same basis
In an auto policy, the medical payments coverage is similar to: Accident insurance, because it pays medical expenses regardless of fault Bodily injury coverage because it provides legal protection if the insured causes injuries to others bodily injury coverage, because it pays the insured doctor bills.
Accident insurance, because it pays medical expenses regardless of fault Medical payments will pay for accidental bodily injury of an insured, regardless of fault or auto. It will pay medical expense of others occupying the insured auto
Under Coverage B- Other structures, a homeowners policy provides coverage for other structures on the residence premises. which of the following statements is NOT true of this coverage Other structures may not be used to store business property of others, even though a business is not conducted from the structure Any loss paid under Coverage
Any loss paid under coverage B reduces the Coverage A limit of liability
Under the HO-4 and HO-6 homeowners policy forms, property is insured against Broad form perils Basic form perils Special form perils
Broad form perils HO-4 and HO-6 provide the same level of coverage as Coverage C in HO-2 and HO-3
HO policies provide coverage for The land under the residence property of tenants, roomers, or boarders not related to any insured Business property while on the residence premises
Business property while on the residence premises Your contents coverage will cover up to a 2,500 for loss of business property on premises
Larry was involved in an automobile accident for which he was at fault. Which of the following coverage's would pay for damage to Larry's automobile? Other than collision Comprehensive coverage Collision
Collision The policy defines collision as the upset or impact of a covered vehicle with another vehicle or object
Which of the following dwelling coverage forms would pay replacement cost for the dwelling? DP-2 and DP-3 DP-3 Only DP-1
DP-2 and DP-3 DP-2 and DP-3 pay replacement as long as the house is insured for at least 80% of its value on the date of loss.
What fundamental doctrine 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 Doctrine of proximate cause Doctrine of concurrent causation Doctrine of indemnity
Doctrine of proximate cause An example of proximate cause: A property insurance policy covers the peril of fire, and further damage is caused by: a) smoke from the fire; b) water used to extinguish the fire; c) and the process of moving property out of the path of the fire, Fire would be considered the proximate cause of all the damage.
The policy conditions define How parties to the contract must act following a loss the amount of coverage
How parties to the contract must act following a loss Conditions is an essential part of a policy stricter. Conditions define what each party to the policy is required to do contractually in the event of a loss.
Which statement regarding insurable risks to NOT correct An insurable risk must involve a loss that is definite as to cause, time, place, and amount insured's cannot be randomly selected insurance cannot be mandatory
Insured's cannot be randomly selected Granting insurance must not be mandatory, selecting insured's randomly will help the insurer to have a fair proportion of good risks to poor risks, All other statements are true,
If the insured's house is completely destroyed by a fire, and the insured did not set the fire, the amount of insurance on the house is deemed to be the value of the building, according to which law? New Hampshire Guaranty Association Law New Hampshire Valued Policy Law
NH valued Policy Law when a building insured for a specific limit of insurance is totally destroyed by fire or lightening, whitout fault or the insured the amount of insurance on the building is taken to be the value of the building for insurance purposes
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk primary and excess other insurance
Other insurance Other insurance is a provision in an insurance policy that defines how the policy will respond if there is other valid insurance written on the same risk
Which home owners endorsements covers liability exposures arising from an incidental business conducted within a building on the resident premises professional liability permitted incidental occupancies special limit of liability
Permitted incidental occupancies A permitted incidental occupancies endorsement covers liability exposures arising from an incidental business conducted within a building on the residence preimses
Fire Insurance policies that are issued in NH must be designated as the: Guaranty Association of the NH Fire Policy Standard Fire Policy for NH National Fire Policy
Standard Fire Policy for NH With rare exceptions, all fire insurance policies issued in NH must be designated as the Standard Fire Policy for NH
Which of the following organizations was designed to make auto insurance that is adequate, reasonable, and not unfairly discriminatory readily available to the citizens of the state? The New Hampshire Automobile Reinsurance Facility The New Hampshire Automobile Guaranty Association
The NH Automobile reinsurance facility The NH Automobile Reinsurance Facility was established to make automobile insurance that is adequate, reasonable, and not unfairly discriminatory readily available to the citizens of the state.
The amount an insurer will pay under Coverage D (loss of use) depends on The amount of coverage on the dwelling How long a dwelling has been occupied The length of time the dwelling is uninhabitable
The amount of coverage on the dwelling Loss of use usually is limited to a percentage of the overall dwelling or personal property coverage
Which of the following would NOT be covered as an additional coverage in Section ll of a homeowners policy Cost of ambulance service for a friend hurt on premises The broken leg of a guest who fell through a rotted set of steps The insured's reasonable expenses in helping investigate a claim
The broken leg of a guest who fell through a rotted set of steps The insured is legally liable because the rotten steps had not been replaces; therefore, Coverage E Personal Liability applies
All of the following are characteristics of the dwelling policy except? Incidental occupancy of limited service type exposure is permitted dwellings up to four family units are eligible The dwelling must be owner-occupied
The dwelling must be The dwelling must be owner occupied Dwelling policies insure residential exposures with only limited service type business exposures allowed. The dwelling can be completed or under construction, and can be owner occupied or tenant occupied. The dwelling policy can insure the dwelling only, contents only, or both
A homeowner sells his house to a friend. The friend wants to keep the HOs current policy in effect, Under the assignment provision, which of the following is most likely? The policy will have to be cancelled The homeowner will need to get written consent from the insurer before the policy can be reassigned
The homeowner will need to get written consent from the insurer before the policy can be reassigned In property and casualty insurance, assignments of policies are usually valid only with the prior written consent of the insurer
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. Losses to non-owned autos will be covered the same as the broadest coverage available for any covered auto, except non-owned trailers are limited to $500
The limit of liability if the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
All of the following are true regarding physical damage coverage EXCEPT the limit of liability is the greater of the ACV of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle. losses to non-owned autos will be covered the same as the broadest coverage available for any covered auto, except non owned trailers are limited to 500$
The limit of liability is the greater of the ACV of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle The limit of liability is the lesser of the actual cash value of the vehicle ta the time of the loss or the amount necessary to repair or replace the vehicle
Which of the following claims would be included under the dwelling policy? Fire damage to the insured's rowboat stored in the attached garage fire damage to a garage located on the insured premises used as an auto repair shop
The rowboat rowboats and canoes are covered under the dwelling policy as personal property
What guarantees that the information explained in the insurance contract is true? warranty a representation a binder
Warranty a warranty is considered a statement of fact or something guaranteed to be true. Breach of warranties can be considered grounds for voiding the policy
Which of the following is true regarding single dwellings that are insured to at least 80% of the replacement value? They are subject to a 1,000 deductible They are automatically provided with replacement cost coverage they qualify for maximum compensation under the flood insurance program.
They are automatically provided with replacement cost coverage Single family dwellings are automatically provided with replacement cost coverage if insured to at least 80% of the replacement value, or the maximum allowed under the regular insurance program
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for: Comprehensive coverage Collision coverage Uninsured Motorists Coverage
Uninsured Motorists Coverage Trailers, while being towed by an insured auto, are covered automatically for BI/PD and U/M under Part A of a personal Auto policy
When a parent is required to pay for damages caused by his or her child, this is an example of Vicarious liability strict liability assumption of risk
Vicarious liability When one party is held liable for act of another party, it is called vicarious liability. Employers are responsible for employees acting within the scope of their employment. Parents sometimes are held responsible for acts of their children.
In forming an insurance contract, when does acceptance usually occur when an insurer receives an application When an insured submits an application When an insurer approves a prepaid application
When an insurer approves a prepaid application In insurance, the offer is usually made by the applicant, in the form of the application, Acceptance takes place when an insurers underwrite approves the application and issues a policy.
Which of the following describes the transfer of a legal right or interest in an insurance policy legal purpose assignment
assignment is the transfer or a legal right or interest in an insurance policy
Which of the following losses would not be covered by homeowners policy? an outboard motor destroyed by hail a coin collection valued at $500 lost in a fire
coin collection valued at $500 lost in a fire No more than $200 for coins
If an insurance policy prohibits the insured from relinquishing ownership of insured property that has been damaged it is prohibiting abandonment assignment
abandonment is the relinquishing of property into the hands of another, or into the possession of no one in particular
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not b a problem keeping the policy in force, this is an example of what type of agent authority assumed apparent expressed
apparent An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing. In fact, the agent has no such power
The NFIP emergency program Goes into effect after the community has received a Flood Hazard foundry Provides limited amounts of coverage at subsidized rates provides more coverage than the normal program both 1 and 2
both 1 and 2 The NFIPS emergency program goes into effect when a commputiy has applied for the program and requested a study of the areas flood potentional. It ends when the normal program begins. It provies limited amounts of coverage at subsidized rates. These are standard conditions of the NFIP
Which of the following is true regarding the change of address requirements for producers change of address must be filed within 90 days of the change of a legal residence change of address regulations are the same for both resident and nonresident producers
change of address regulations are the same for both resident and nonresident producers just like a resident producer who moves to another state, a nonresident producer who moves from one state to another must file a change of address and provide certification from the new resident state within 30 days of the change of legal residence
The homeowners policy covers collapse caused by all of the following except foundation cracks weight of snow weight of too many people attending an event hosted in the house
foundation cracks Collapse must be caused by some sudden, unexpected reason. The foundation cracks would take years to cause collapse, meaning there would be plenty of time to find and repair them.
In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer? under no circumstances if there are no authorized insurers for a specific type of coverage in this state
if there are no authorized insurers for a specific type of coverage in this state unauthorized insurers can only conduct business in a state through licensed excess and surplus lines broker. it is the producers responsibility to confirm, prior to transacting insurance with an insurer, that the company is authorized
According to agency law, the producer always represents the client state insurance department insurance company
insurance company Under agency law the producer legally represents the insurance COMPANY with which they are contracted
What is surplus lines insurance Insurance in excess of a standard policy's coverage insurance placed with an unauthorized insurer additional insurance placed on itemized risks
insurance placed with an unauthorized insurer Insurance obtained from or placed with an unauthorized insurer is surplus lines insurance
While cutting grass in your yard with your brothers borrowed lawnmower, the fuel line ruptures and the lawnmower is destroyed in the fire. How will your HO liability react? It will cover the damage It will not cover the damage because you are not liable
it will cover the damage Your HO liability will cover the damage to property of others even if you are not liable.
Extended nonowned coverage endorsement in a PAP broadens which of the following coverage's Uninsured motorists physical damage liability and medical payments
liability and medical payments This endorsement can broaden the liability only, or liability and medical payments coverage provided in the policy for individuals specifically named on the endorsement, It provides coverage for nonowned autos that are available for the regular use of the insured, the use of covered vehicles to carry persons or property for a fee, or use of the vehicle in other businesses.
Which of the following personal auto coverage's would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss comprehensive coverage collision coverage liability coverage
liability coverage supplementary payments, found in Part A- Liability, include expenses insured by the insured at the insurers request, including $200 per day for attending trails or hearings
If a producer sold policies at the loss cost rate, the result would be loss to the insurer rate discrimination manual rates
loss to the insurer Loss cost rates do not cover the expense and profit components for the insurer. Without these components, the insurer would suffer a financial loss.
Which of the following liability coverage's must be added by endorsement to a homeowners policy in order to apply property damage liability medical payments to others personal injury
personal injury Personal injury applies only if added by endorsement and an additional premium is paid
If a person is using an auto with the belief that he is entitles to do so, subrogation rights under a personal auto policy would apply to all coverage's EXCEPT physical damage uninsured motorists liability
physical damages Subrogation rights do not apply to physical damage coverage if the damage is caused by a person using the auto with a reasonable belied that they were entitles to do so
All of the following are considered parts of the policy structure except conditions provisions insuring clause
provisions is a broad term used to refer to the sections or clauses of an insurance policy that communicates the policy's benefits, conditions, etc. the essential parts of the policy are the declarations, insuring clause, conditions, and exclusions
For an additional premium, the extended coverages written on the basic form dwelling policy would cover which of the following? riot glass fire
riot
An insured child ran into a neighbors planter on his bike and broke their planter the cost to replace was 500 which section of the insured homeowners policy would pay? Section ll subject to deductible section ll with no deductible
section 2 with no deductible under section ll additional coverage damage to property of others, the policy would provide replacement cost coverage up to 1000 to pay for damage to property of other caused by an insured
The policy provision found in property insurance policies that prevents the insured from collecting trice for the same loss is called subrogation consent to settle loss right of salvage
subrogation
under the property and casualty conditions of a homeowners policy, what may happen if it is discovered that the policyower committed concealment or fraud? the insurer may void the policy only if given 10 days notice to the insured the policy may be voided
the policy may be voided the results in immediate void of the policy
An insured with limits lower than required by law would be considered underinsured motorist uninsured motorist
uninsured motorist someone with an auto policy with limits lower that those required by law would be considered uninsured
All of the following will be considered the insured under Part B: Medical Payments of a personal auto policy EXCEPT The named insureds spouse the named insured as a pedestrian struck by a motor vehicle A person using the insured covered car without permission
using care w/o permission insured is defined under Part B: Medical payments as the named insured or any family member while occupying any motor vehicle or trailer, the named insured or family member as a pedestrian if struck by a motor vehicle, or any other person while occupying a covered vehicle
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? Representation warranty concealment
warranty a warranty is a statement guaranteed to be true, when an applicant is applying for an insurance contract the statements he or she makes are generally not warranties but representations. representations are statements that are true to the best of the applications knowledge
When does the federal emergency flood insurance program go into effect? as soon as the flooding occurs when a community applies for the program
when a community applies for the program the FEFIP goes into effect when a community applies for the program and ends when all NFIP criteria have been met and the regular program can begin
Collision deductibles apply to every collision yes or no
yes
