continued continued practice exam
A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues.
C. $3 million
Both Steve and his wife, Arlene, carry DP-2 policies on their $135,000 home. Steve's policy has a limit of $108,000 and Arlene's has a $27,000 limit, and both policies pay on a pro rata basis. After a hailstorm causes $13,000 in damage to their roof, how much of the damage will be covered by Steve's policy (ignoring any deductible)?
B. $10,400
under which circumstance would it be legal for an insurer to charge one insured more than another insured for the same coverage?
D. when the insured is statically more likely to experience a loss
When a severe flood is imminent, Erica goes out and spends $600 on sandbags, $200 on plastic sheeting and lumber, and $500 on a pump. Then she works for 8 hours, applying the protective measures to her home. After the flood passes, Erica files a claim for these expenses. Assuming the federal minimum wage at that time is $10 per hour, how much will her flood policy indemnify her?
1000
Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation?
A. $25,000
Peter works as a real estate agent and uses the internet extensively for sales leads and advertising. One day, he finds another realtor's ad online and copies it, using his own information as the contact info. This generates a lot of business for Peter, but unfortunately Peter gets a call one day and is informed that he is being sued for copyright infringement. This is an example of what type of claim covered under Peter's Commercial General Liability policy?
A. Advertising Injury
Which of these businesses would be LEAST likely to need a bailee's customer floater?
A. An ice cream shop
Who is NOT eligible for a homeowners policy?
A. An owner of a house in which he does not live, but rents to a tenant
A dryer fire scorches the interior of Bill's home, forcing him to move out while repairs are made. In addition to paying for temporary housing, he also loses the rental income he received from his roommate Frank. Which two Dwelling policy coverages could help Bill with the lost rental income AND his additional living expenses?
A. Coverage D & Coverage E
Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would cover any part of the loss that Jim's policy does not cover?
A. Direct Excess Coverage
Bill's new home is in the final stages of construction, and he has purchased an HO-2 policy to insure his financial interest in the property. This morning, Bill's contractor calls to tell him that an electrical fire has destroyed his new kitchen, and all of the crown molding that was supposed to be installed today has been stolen. It will be $15,000 to rebuild the kitchen and another $4,200 to replace the trim. How will Bill's insurer respond when he files a claim?
A. His insurer will pay $15,000 to rebuild the kitchen and nothing for the stolen trim.
Which endorsement to the Commercial Crime policy would protect a bank against its legal liability for burglary, robbery, destruction, or damage to customers' belongings kept in safe deposit at the bank?
A. Safe Depository
Which of the following would NOT be covered under a typical Ocean Marine policy?
A. The owner sustains a financial loss when her vessel is confiscated by the government.
Which of the following statements regarding health insurance is TRUE?
A. To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers.
Randy runs a business where he takes on the possessions of others and transports them from one location to another in exchange for a fee. What type of occupation does Randy have?
A. Trucker
In a garagekeepers policy, PIP coverage is:
A. available with an endorsement.
After a loss covered under a dwelling policy, Ordinance or Law coverage pays for:
A. increased repair costs due to laws or codes.
according to the workers' compensation policy conditions, the insurer has the right to:
A. inspect the workplace at any time.
Medical payments coverage in a Farm policy includes all of the following EXCEPT:
A. libel or slander.
Which of the following may be covered under a Mechanical Breakdown Insurance policy?
B. Breakdown due to electrical system malfunction
When a fire breaks out inside XYZ Printing, it damages the building structure, and two of the printing presses, which were bolted to the floor. What coverage within the BOP policy would cover the printing presses?
B. Coverage A
Tim, taking advantage of the economic downturn, started a business buying gold and silver from people who needed cash. Tim and one employee negotiated deals with sellers in the front of the shop, while another employee worked in the back of the shop, where she counted the money and kept the books. Which commercial crime coverage would protect Tim from losses resulting from theft, specifically by either his current money counter or any other money counter he may employee after her?
B. Employee theft: scheduled positions
Anton is purchasing homeowner's insurance for his new house. He wants to make sure his policy offers the BEST coverage available. Which policy should Anton choose?
B. HO-5
Which of the following would be considered an Instrumentality of Transportation and Communication?
B. Pipeline
Joe (the principal) is handling the disbursement of a deceased executive's estate, and he is required to carry a bond guaranteeing such work. The surety company requires one of its accountants to be a second signer on the disbursement checks that Joe writes. In this case, the surety has established:
B. joint control.
A large corporation owns a small hunting cabin in the woods, that it uses for occasional weekend getaways. The corporation can insure the cabin against property damage with a:
C. dwelling policy.
Coverage C - Personal Property of a homeowners policy typically excludes:
C. fish.
An insurer that adheres to the laws of a state but is located outside of that state is called a(n) ___________ insurer.
C. foreign
which statement about the federal employees compensation act is TRUE?
C. it provides federal government insurance for civilian employees.
Customer representatives:
C. must be licensed by the Florida Department of Financial Services.
In a BOP, the General Aggregate Limit is:
C. twice the per occurrence limit.
Tim's $2,500 boat trailer was stolen from his driveway. Ignoring any deductibles, how much can Tim receive for his stolen trailer when he files a claim against his homeowners policy?
D. $1,500
Which of these statements about foreign insurers in Florida is TRUE?
D. A foreign insurer can usually only issue insurance to someone who was denied coverage by domestic insurers.
Honey's Bakery is a local coffee shop run by two sisters. In a rush to leave one afternoon, their new employee forgets to turn off the gas stove. The leaking gas causes an explosion, destroying the kitchen. Which condition in their commercial property policy could help the sisters cover the cost of the damage?
D. Control of Property
Generally speaking, which of the following has the broadest coverage?
D. Umbrella coverage
The Insurance Guaranty Association is a mechanism that covers claims in the event of:
D. an insurer's insolvency.
Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim?
B. $15,000
Lightning strikes one of Christy's trees in her backyard and starts a fire that spreads to two other trees before firefighters are able to put it out. The fire department charges her $600 for responding to her call. Christy's DP-2 policy has a Coverage A limit of $95,000. What is the maximum amount of indemnification that Christy can expect to receive for this loss (ignoring any deductible)?
B. $2,000
Diana is insured under a DP-2 policy with the following coverage limits: Coverage A - $150,000, Coverage B - $15,000, and Coverage C - $25,000. She and her fiancé have planned a destination wedding, but their hotel catches fire shortly after their arrival. Smoke from the fire damages all of their belongings, including Diana's $4,000 wedding dress. Diana's loss totals $5,200. When she files a claim with her insurance company, how much can she expect to receive for this loss under her DP-2 (ignoring any deductible)?
B. $2,500
Norris borrows Arnold's truck to pick up some lumber from the hardware store. On the way to the store, Norris collides with a car, injuring the three people inside. The driver suffers $15,000 in injuries, one passenger suffers $25,000, and the other passenger suffers $20,000. Norris has a PAP with liability limits of 50/100/50, and Arnold's policy has liability limits of 25/50/10. Everyone involved in the accident has minimum PIP coverage for Florida. How much will the primary policy pay for the injuries?
B. $30,000
While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. What is the per occurrence limit after this claim is settled?
B. $300,000
Jennifer's PAP has a Comprehensive deductible of $100. Jennifer lets her sister Tina borrow her car, and Tina hits a llama worth $500. The llama's owner files a claim for the loss of his llama. How will that claim be settled?
B. $500 paid under Jennifer's liability coverage
An employee receiving income benefits under Workers Compensation insurance cannot receive more than:
B. 66 2/3% of the State Average Weekly Wage.
On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration most likely resulted from the earlier accident with the exercise bike. Which of the following CGL policies would cover Ryan's claim filed January 25, 2011?
B. A claims-made policy from Jan 31 2010 -Jan 31 2011 with a retroactive date of Jan 1 2008
Cliff receives a letter from the IRS, informing him that he has severely underestimated his Adjusted Gross Income for the past year. Cliff was oblivious to this fact because XYZ Accounting has filed his taxes for him for the past 15 years. Now, Cliff owes $15,000 in back taxes. He sues XYZ Accounting for this mistake. Which of the following would cover the cost of the lawsuit for XYZ Accounting?
B. Errors and Omissions Insurance
RWW Insurance creates a radio promotion where they advertise that they will insure any car for $200 a year. They don't actually offer such a plan, but they figure they will be able to sell hundreds of policies to people who show up looking for the bargain. What type of unfair insurance trade practice does this behavior exemplify?
B. False information and advertising
Mark is on vacation in Italy when his luggage is stolen, including a $2,000 laptop, a $500 suitcase, and $400 in clothes. Mark has an HO-3 homeowners policy. Excluding any applicable deductible, which of the following statements is TRUE?
B. Mark's homeowners policy will cover $2,400 of this loss.
Craig has a poor driving record. He lives in Florida, has a valid driver license, and has registered his car, but due to his history, he is unable to obtain auto insurance through the private market. According to state law, Craig must have liability insurance in order to drive on public roads. How will Craig be able to purchase coverage?
B. Through the Florida Automobile Joint Underwriting Association
Kate has a Personal Auto Policy through XYZ Insurance. In which of the following scenarios would XYZ Insurance NOT be allowed immediately to increase Kate's policy premium?
B. XYZ Insurance expands coverage for all policies - a change which automatically applies to Kate's policy, as well.
Sally has an HO-3 policy on her $150,000 home in the country. One day, a bear breaks down Sally's back door to get into her kitchen for a snack. When Sally comes home to find the damage, she files a claim with her insurance company. Will the damage to Sally's home be covered, and why or why not?
B. Yes. The HO-3 is an open-peril policy, without an exclusion for wildlife.
Edward is a member of the Knights of Columbus, a religious group dedicated to voluntary service to the benefit of society. He also recently purchased a $100,000 life insurance policy from the organization. This was possible because the Knights of Columbus is:
B. a fraternal benefit society.
Frank owns a bakery specializing in authentic French bread. He uses two specialty ovens for his daily production of French bread. If one of these giant ovens were to break down, it would cost Frank's bakery a lot of money to repair, not to mention the loss of revenue caused by lower production. On his Equipment Breakdown Protection Form, each of Frank's ovens would be considered:
B. an "object."
A fidelity bond covers:
B. an insured business for loss resulting from any dishonest acts committed by its bonded employees.
The Office of Insurance Regulation:
B. approves insurance forms.
john and lucy both apply for policies with acme insurance at the same time. they are exposed to similar hazards and would presents essentially the same amount of risk to acme insurance. acme insurance offers lucy a premium policy at excellent rates, but restricts john to a very limited policy with high premiums. acme insurance may be guilty of:
B. unfair discrimination
acme construction, inc has one contractor and one receptionist. the contractor makes $25/hr, and the receptionist makes $10/hr. the contractor worked exactly 8 hours in 2010, so he made $200......
C. $105
Craig has an HO-3 policy covering his primary residence with a Coverage A limit of $250,000, Coverage B limit of $25,000, and a Coverage C limit of $150,000. Craig also has a cabin on the lake, which was burglarized. The thieves stole much of the cabin's contents, for a total loss of $18,500. Ignoring any deductibles, how much will Craig's HO-3 policy pay for this claim?
C. $15,000
Sherrie's roof and fence are damaged in a violent windstorm. Sherrie has a typical HO-3 policy with a $150,000 limit for Coverage A - Dwelling. Assuming she has no endorsements, how much coverage does she have available for the damage to her fence?
C. $15,000
According to the commercial property policy, a commercial building is considered vacant if less than ____ of the available square footage is occupied for ____ consecutive days.
C. 31%, 60
Which of the following is most likely a third party claim?
C. A woman files an insurance claim when she is injured by an employee at a local bar.
Adam is shopping for a car in a local automobile dealership. While visiting the showroom, he trips over a rug that has folded over and breaks his arm in the fall. Which of the following is true?
C. Adam may file a third party claim with the dealership's insurance company.
John moved out of his house and put it up for sale three months ago. While he was waiting for the house to sell, John's plumbing pipes froze and burst in the icy temperatures, which eventually led to water damaging the cabinetry and hardwood floors. Which of the following statements would most likely be TRUE?
C. Although John's house was still covered under an HO-3, the damage would not be covered because he didn't shut off the water supply.
Bill has experienced a loss covered under the Business Income and Extra Expense coverage in his Equipment Breakdown Protection Coverage Form. When does the period of restoration begin?
C. At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later
Which of the following does NOT apply to commercial property insurance?
C. Because of their complexity, commercial policies only offer named-peril coverage.
Which of the following may be covered under an Equipment Breakdown Protection Coverage Form?
C. Equipment built to operate under internal pressure or vacuum
Randy owns a clothing store. One day, he notices a shady character with a backpack who is hanging around acting nervous. Randy becomes suspicious and approaches the young man. As the boy makes an effort to avoid him, Randy grabs his arm and detains him until the police arrive. Not finding any stolen merchandise, the police let the boy go. Two weeks later Randy is notified that he will be sued for violation of the young man's civil rights. This is an example of what type of personal injury covered under Randy's Commercial General Liability policy?
C. False Arrest, Detention, or Imprisonment.
Paula is hoping to become a customer representative; under what circumstances might she be able to skip the pre-licensing course and exam?
C. If she has earned nine hours of college credit in property and casualty courses.
The coverage limit in Bob's commercial property policy goes up 2% every time the policy renews. Which optional coverage might Bob have included as part of his insurance package?
C. Inflation Guard
Which of the following is TRUE about workers' compensation insurance?
C. It benefits both the employee and the employer.
ABC Roofing has two CGL policies that cover the same losses. Both policies are occurrence forms, thus pay out on a pro rata basis. The first policy is through KLM Insurance and has a limit of $300,000. The second is through XYZ Mutual, with a limit of $600,000. One day, ABC Roofing suffers an occurrence resulting in a $150,000 covered loss. How will this loss be indemnified?
C. KLM Insurance will pay $50,000; XYZ Mutual will pay $100,000
Which policy is used as an alternative to the Trucker's Policy to cover companies that offer transportation services to the public on a regular basis, rather than for hire?
C. Motor Carrier policy
Don works as an adjuster for ABC Insurance. Which of the following is most likely NOT one of Don's responsibilities?
C. Represent the insured if a claim goes to court
When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed?
C. Soft fraud
When a faulty electrode in a children's toy is recalled by ABC Toymakers Inc., it is a costly endeavor. Especially since ABC Toymakers Inc.'s base insurance policy doesn't cover product recalls. Which excess liability coverage could help pay for losses associated with the recall?
C. Umbrella Policy
Which of the following is NOT a feature of a typical Business Owners Policy?
C. Usually Actual Cost Valuation
Francis has many employees who go out and market his product in the streets on a daily basis. This "go get 'em" approach seems to work well for business, but it does increase the risk of an auto accident. To curb the financial risk of a hospital stay resulting from an accident, Francis adds _____________ to his BAP.
C. a Medical Payments/PIP endorsement
Florida law requires all Medigap insurance policies to have a "Free Look Period," which means that:
C. a policyholder may return the policy for a full refund anytime during the first 30 days of coverage.
coast-to-coast trucking is in the business of transporting fresh produce from farmers to markets all across the us. which type of inland marine policy would best protect coast-to-coast trucking's interest in the produce that it ships?
C. motor truck cargo policy
For loss settlement purposes, most homeowners policies:
C. pay for damages to personal property at actual cash value, and damages to structures at replacement cost.
which of the following is not one of the employer's duties if injury occurs?
C. remain with the injury employee until emergency assistance or a family member arrives.
in order for customers of a home to qualify for flood insurance protection , which of the following conditions must be met?
C. the contents must be located in a fully enclosed building.
Scott lived in a mobile home before it was completely destroyed in a recent flood. The mobile home is large enough to qualify for a special loss settlement under his flood policy, which has a limit of $28,000. Before the flood, the mobile home was worth $15,000, but it would cost $25,700 to buy a new one today. How much indemnification will Scott receive for this loss?
D. $22,500
This agent is a salaried employee who sells insurance products for only one insurer.
D. Direct Writer
Which of the following oversees continuing education classes for customer representatives?
D. Division of Insurance Agent and Agency Services
Which of the following would be covered under the peril of "theft" in an homeowners policy?
D. Losses caused by attempted theft
Veronica owns a pottery business and is insured under a commercial property policy. She was in the process of building an extra structure for the sole purpose of kiln firing her pottery when a massive storm came through and blew down all the scaffolding, which added additional cost to the construction project. Which coverage extension of the Builder's Risk Coverage Form would cover the scaffolding?
D. Scaffolding, Construction Forms, and Temporary Structures
After a rain storm, Nancy realizes that she left her bedroom windows open the entire time. Now there is extensive water damage to her area rug and furniture, and the laptop that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners policy, so she calls her insurance company and files a claim. What is the likely result of Nancy's claim?
D. The insurer will not cover any of the damage, since Nancy left the windows open.
Which characteristic would prohibit a convenience store/gas station from purchasing a BOP?
D. The operation of a car wash
Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn with a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. When will Steve receive full indemnification for his losses on the barn?
D. When he replaces the barn and submits receipts to the insurer
bill works for an alien insurer operating in florida. his company began business overseas and follows all applicable florida laws. in order to operate his business in florida, in addition to following all the state's insurance laws, bill's company must also possess:
D. certificate of authority
A CGL can provide liability insurance coverage for all of the following persons, EXCEPT:
D. customers.
A customer representative's duties include:
D. giving customers information about their policies.
a recent flood caused %5,000 in damages to maxwell's outdoor furniture and professional grade barbecue grill that he keeps on his patio. if maxwell has a flood insurance policy with $25,000, of personal property coverage, which of the following statements is true?
D. maxwell's insurer will pay nothing for his loss, because the damaged property was not inside a building
Cindy holds an insurance policy from Sine Nomine Insurance. This is not a publicly traded company, and Cindy can participate in the election of the board, receiving dividends if the company does well. Sine Nomine Insurance could be best described as a:
D. mutual insurance company.
Dwelling policies cover:
D. property, and liability with an endorsement.
The insuring agreement for Part A-Liability in a personal auto policy states that:
D. the insurer has the right to settle liability cases out of court.
which of the following is NOT a reason to purchase umbrella liability coverage?
D. to reduce your insurance costs
In a Personal Auto Policy, deductibles are applied on a/an ________ basis.
D. per claim
which of the following is NOT considered an "out-of-pocket expense" in health insurance?
D. policy premiums
under the longshore and harbor workers' compensation act, how much would the surviving spouse of a deceased worker receive in benefits?
A. 50% of the deceased workers average weekly wage
