Casualty Quiz Questions - general part 1

Harry bought a used Mercedes in great condition and would like Part D coverage for the vehicle on his PAP. Harry does not currently have any Part D coverage on his currently covered vehicles. How long does Harry have to notify the insurer to have Part D coverage on the Mercedes?

4 days!

The provision in Part A of a Personal Auto Policy that automatically increases the policy limits that are insufficient in a legal jurisdiction different than the one in which the car is registered is called: A: Out of State Coverage. B: Vehicle Inland Marine. C: Variable Split Limit Coverage. D: Adjustable Split Limit Coverag

A

Hired Auto coverage: A: protects the owner of a business when they rent a car for business use. B: protects an employee when a business rents a car for the employee to drive while on business. C: protects a business when an employee is using a rental car on business. D: is used on longer term leased vehicles only.

A - Hired Auto coverage can either supplement or replace a car rental agency's liability coverage. The Hired Auto policy's liability coverage protects the company an insured owns, it does not cover an employee driving the rented vehicle.

Which fact relating to the premium payment of a Workers Compensation policy is INCORRECT? A: If an insured has overpaid the premium for the past year, the insurer is entitled to retain the excess funds B: The premium made is a deposit premium. C: The insurer retains the right to audit the financial records of the insured up to three years after the policy is terminated. D: Workers Compensation premium is based, in part, on the salary of employees in specified worker classification.

A - If the insured has overpaid premiums for the previous years as verified by company audit, they are entitled to a refund from the insurer for the amount overpaid.

All of the following are exclusions to the Garage Coverage form, Section II, liability, EXCEPT: A: Accidental bodily injury to a customer arising from garage operations. B: Liquor liability. C: Care, custody and control of the property of others D: Injuries to workers in the garage

A - The garage policy Section II covers liability arising out of the operations of the garage that cause B.I. and P.D.

The old common law defense prior to Workers Compensation that basically said that a worker knew a job was dangerous when they took it and should not complain if they became injured at work is called:

Assumption of Risk

In the BAP, Other than collision coverage is all risk except for which of the following? A: flood damage to the auto. B: Collision and overturn of the vehicle. C: Contact with birds or animal, D: Theft loss.

B .. Only collision (which is a different form that can be purchased) and overturn or flipping over of the covered vehicle are excluded.

Before Workers Compensation laws, what did a worker who was ill or injured as a result of the work place have to do to be compensated for their loss? A: Rely on the mercy and generosity of the employer B: The employee had to sue the employer personally and prove negligence to collect. C: The employee had to sue the company they worked for and prove negligence. D: The laws at the time prevented the worker from collecting in any way.

B ...Workers had to sue the employer personally in civil court and prove negligence, which made nearly impossible for the worker to receive any compensation whatsoever.

The premium amount of the Workers Compensation policy is shown in the: A: Declarations B: Information Page C: Insuring Agreement D: Conditions

B... A WC policy does not have a declarations page, rather it has what is called a General Information Page which has the same elements that would otherwise be found in a declarations page.

A correct way to understand the concept of exposure is: A: to consider it as a cause of a loss. B: to view it as an action of negligence. C: to think of it as a likely reason as to why an insured would be sued for negligence. D: to understand it as an unbroken series of events leading to a loss.

C

None of the listed workers below are subject to Workers Compensation requirements, EXCEPT A: Railroad workers B: Coal miners C: Local and state government workers. D: Workers employed by the United States government.

C

The face amount of a Surety bond is called the: A: limit of liability B: maximum insurance amount C: penalty D: obligee limit

C

Which of the following vehicles does not meet the definition of a covered auto under a PAP? A: A temporary substitute auto that is not owned by the insured. B: A van used regularly by the insured but which is not listed in the policy declarations. C: A pickup truck leased by the insured for a year which is listed in the declarations. D: A trailer owned by the insured which attaches to a covered auto.

C

While working for Virus Computer Store, J decided to break into the store at night and destroys the safe and steals $20,000 worth of merchandise and cash. The policy that will cover the computer store is: A: Robbery B: Burglary C: Employee Dishonesty D: Employee Honest

C

Which of the following policies would protect an insured against a medical incident where a required level of professional service was not delivered? A: Directors and Officers B: Errors and Omissions C: Malpractice D: Employment Practices Liability

C -Malpractice insurance is designed to protect people who work in the health care industry and pays damages from a medical incident in which the required level of professional service was not delivered

Permanent Partial Disability means: A: An employee who qualifies for a lifetime benefit and who will never again work . B: An employee who is disabled to the extent that no job duties can be performed for a period of time but eventually the employee will be able to perform them again some day in the future. C: An employee who suffers an injury that can never be healed but the worker will still be able to return to work after being paid a one time, lump sum amount for their loss . D: A disability in which a worker cannot work for a short period of time or can not do all of their duties for a short time but eventually can do all the duties again.

C ...

When an employee, whether they are acting alone or in collusion with other employees, commits a robbery or burglary that causes loss or damage to an employer, the only policy that will cover such loss is: A: Employee Robbery B: Employee Burglary C: Employee Dishonesty D: Employee Forgery

C! Employee Dishonesty will pay for loss of or damage to money and securities as well as other property directly from the theft committed by an employee. Bear in mind that Employee Dishonesty covers theft, which is any act of stealing.

Which of the following statements about the CGL policy is NOT true? A: If the insured files for bankruptcy the insurer still has an obligation to pay claims covered under the CGL as long as the premiums are paid and the insured has complied with the terms of coverage. B: The CGL premium is paid on a deposit basis. C: The CGL does not subject the insured to insurer inspection of the financial records of the insured. D: If the insured is sued for actions which the insured may have liability, it is the obligation of the insured to promptly notify the insurer of the event.

C! The CGL does allow the insurer the right to audit the books of the insured for up to three years from the date of policy termination.

The PAP insuring agreement that promises to pay the amount of damages that the insured would have collected from the insurance company of another driver if that driver had the proper amount of auto liability insurance is found in which coverage? A: Part A B: Part B C: Part C D: Part D

C- The insuring agreement of the Uninsured Motorist coverage promises to pay the amount of damages that the insured would have collected from the insurance company of the uninsured driver if that driver had the proper amount of auto liability insurance.

Section III of a BAP can cover autos or its equipment for physical damage coverage on which basis? A: Other than collision coverage. B: Specified Causes of Loss C: Collision. D: Any of the above.

D- Section III of the BAP spells out Physical Damage Coverage for covered auto or its equipment under: Other than collision coverage OR specified causes of loss coverage AND collision coverage.

An insured, with Part D coverage, has his car stolen and incurs extra transportation expenses of about $30 per day for the ten days since the theft, when the car is recovered. How much will his policy reimburse for this expense? A: $300 B: $200 C: $180 D: $160

D- There is a 48 hour waiting period after a car is stolen before the $20 per day transportation expense limit can be claimed. Since the insured was without the car for ten days, only eight are recoverable for the reimbursement: $20 multiplied by 8 days equals $160.

The statements which follow concerning the Claims Made Coverage Trigger are true, EXCEPT: A: A claims made coverage trigger can apply to both Bodily Injury and Property Damage loss. B: The loss must occur on or after the retroactive date. C: The claim must be first made either during the policy period or during the Extended Reporting Period. D: The claim can take place anywhere in the world and is not limited to any specific geographic area.

D... A requirement of a Claims Made Coverage Trigger is that the claim must take place in the coverage territory as stated in the CGL policy. There is not worldwide coverage.

The declarations of a CGL shows the insured listed in the following order: A, B, C and then D. Who is the insured to whom the policy will pay in the event of loss? A: A, B, C and D. B: A and B only. C: D only. D: A only

D... Commercial policies recognize only the first named insured in the declarations to whom benefits and refunds will be paid as well as from whom timely premium payments are required.

S has an UIM limit of $75,000 and is injured by at-fault driver F who has a single B.I. limit of $25,000. S sustains $55,000 of loss, How much will the coverages of S and F combined pay?

The limit of S ($75,000) minus the limit of F ($25,000) = the maximum amount that the policy of S will pay ($50,000). In this case the loss is only $55,000 so that is most that S will receive in total from both policies. The total from both policies equals $55,000 ($30,000) + ($25,000). This fits the formula UIM-B.I. = UIM payment amount.

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

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