Exam- Fire and Casualty

Under a standard ISO, Homeowners Ho3, real and personal property are covered for the perils of:

"All risks" coverage applies to real property. Broad form named perils coverage applies only to personal property.

Under a standard (ISO) HO3, real property are covered for the perils on:

"All risks"- coverage applies to real property, broad form named perils coverage applies to personal property.

In a commercial property policy, the company providing the insurance is referred to as:

"We".

X is in an accident with Y. X suffers $5000 of damage but it is determined that X is 60% responsible for the accident. How much would X receive under contributory negligence rules?

$0

The PAP collision deductible is $1000, and the other-than-collision deductible is $500. How much would the insurer pay for an accident involving the overturn of one vehicle, resulting in $2000 of damage?

$1000

Lee has a Personal Auto Policy with $250 deductible collision coverage and $100 deductible other-than-collision coverage. He runs a stop sign and hits another car. There is $1300 worth of damage to his (the insured) car. How would the insurer pay for the damage to Lee's car?

$1050.

All of the following are incorrect regarding the CAARP EXCEPT:

$15,000/$30,000/$5,000 are the minimum liability limits required under this plan.

An apartment house is worth $500,000. The owner insures it for $300,000; the policy has an 80% coinsurance clause. There is a $200,000 loss. The insurer will pay:

$150,000

Very often the deductible amount under the collision sections of a Personal Auto Policy are different. With this in mind, what would be the amount that an insurer would pay for a loss under the following circumstances: $500.00 deductible for other-than-collision, and $250.00 for collision losses- An accident occurs when an insured runs a red light and collides with another car, causing $1750.00 worth of damage to his vehicle.

$1500.00.

If an insured has an HO3 policy, with replacement cost coverage on the buildings, what minimum amount must the insured carry to ensure that he has Dwelling- $200,000 and Other structures-- $40,000 replacement cost coverage for a partial loss to either the dwelling or other structures if the replacement cost is:

$160,000 on the dwelling and $32,000 on the other structures.

If an insurer pays an insured $25,000 in lost wages, $45,000 for physicians visits and hospital costs, and $15,000 for physical therapy treatments, and later finds out that the claim was fraudulent, the insured may be fined as much as:

$170,000

How much coverage, if any, is available under HO3 for landlord's furnishings?

$2,500.

What is the limit per day for transportation expenses in an unendorsed Personal Auto Policy, in the event of theft, after it is reported and automobile is not returned within 48 hours of theft?

$20

What is the limit for sound reproducing equipment under the coverage endorsement for excess sound-reproducing equipment, audio, visual, and data electronics, tapes, records, disks, and other media endorsement in a PAP?

$200

Under California financial responsibility law, the minimum financial responsibility for accidents that involve several people injured in one accident is:

$30,000

Coverage for Personal property under an HO4 with no deductible, provides coverage for personal property for the insured while vacationing in Europe. The hotel they are staying at burns down. The insured's clothing and suitcase are destroyed from the fire: clothing and suitcases-- $20,000 (replacement cost), jewelry-- $20,000 (replacement cost). Additionally, all of this property has depreciated by 20% in value. What will the insurer pay under this policy?

$32,000

If the limits of liability on a structure are $75,000, and the structure is worth $125,000, how much would be owed on a fire loss of $50,000 if the policy has an 80% coinsurance requirement (disregard any deductibles)?

$37,500

What would an insurer likely pay if the following were the details surrounding an accident for which the insured was at fault and had bodily injury policy limits of $25,000 per person and $50,000 per occurrence?

$48,000

A PAP contains the following limitations, $30,000/person and $50,000/accident for bodily injury. An accident occurs that injures three people resulting in a number of lawsuits. The outcome of the lawsuits found the insured to be liable and responsible for the following damages: $10,000 for the first person, $13,000 for the second person, and $35,000 for the third person. What will the policy pay?

$50,000

Sally owns a home replacement cost of the dwelling is $100,000, the policy requires 80% co-insurance, she purchased a home-owner's policy in the amount of $160,000. Three months after her policy was issued she has a fire in her kitchen and submits a claim for $50,000 for the damages caused by the fire.

$50,000

Calculate the amount the insurer would pay, under a PAP, for a loss in the following circumstances, with the following coverage limit. Collision coverage-- $500 deductible and Other-than collision coverage-- $50 deductible. Damage to the insured's vehicle-- $1,050 after the insured misses a stop-sign and hits another vehicle.

$550

Determine the actual cash value in the following situation: 8 years ago price of office equipment was $9,000: and has depreciated at time of fire--by $5000; Current replacement cost-is $12,000, what is the amount the insurer will pay:

$7,000.

A is in an accident with B, the accident results in B suffers $10,000 of damage, but it is determined that B was 25% responsible for the accident. How much would A receive under comparative negligence?

$7500

Car "A" is in an accident with car "B". "A" suffers $10000 of damage, but it is determined that "A" is 25% responsible for the accident. How much would "A" receive under comparative negligence rules?

$7500

Mary has an HO3 policy with replacement cost coverage on the insured buildings. The cost of replacement on the dwelling is $100,000, and the other structure (a garage) is $20,000. To be certain of replacement cost coverage on a partial loss to either structure, she must carry a minimum of:

$80,000 on the dwelling; $16,000 on the garage.

An insured has a Personal Auto Policy and did not pay the initial insurance premium when it was due. Insurer cancels the policy for non-payment. How many days notice must the insurer give?

10 days

The limited Mexico endorsement applies to trips to Mexico with duration of

10 days or less.

What is the minimum number of days that an insurer must give an insured, prior to canceling a policy for non-payment?

10 days.

Under a Builder's Risk form, how much insurance is required to pay any loss without a penalty for underinsurance?

100% of the completed value.

What is the minimum discount percentage for the "good driver" discount?

20%

Minimum number of required continuing education hours that a fire and casualty broker-agent must meet?

24 hours every renewal period- which must include 3 hours of Ethics.

The insurer decides not to renew an insured's Personal Auto Policy. How much notice must the insurer provide to the insured?

30 days.

Under a personal auto policy. If a newly acquired auto is to replace the covered auto with liability coverage only, how long does the insured have to request collision coverage?

4 days.

In an unendorsed claims-made general liability policyhow long does an insured have to report a claim which occurred during the policy period?

60 days.

Under a value reporting form, if the insured has made no reports as required, what is the most that will be paid in the event of a loss?

75% of the limit.

A Personal Auto Policy will cover all of the following types of losses, EXCEPT:

A "palm-top" computer, personally owned by the insured , is stolen from the insured's car while it is parked in her driveway at home.

What else must an applicant for a property and casualty license, life agent license, or personal lines agent license complete, in addition to pre-licensing classroom study?

A 12-hour course on ethics and the California Insurance code.

All of the following meet the definition of the insured under a HO3 policy, EXCEPT:

A 70-year old grandparent residing in adult care facility.

Which of the following policies would provide coverage for a building under construction?

A Builders Risk Policy.

When an employer has a choice to purchase Workers' Compensation insurance from a state fund or a private carrier, the state fund would be called:

A competitive state fund.

What is a self-insured retention (SIR) under an Umbrella Policy?

A deductible applicable to losses excluded by the underlying coverage and covered by the umbrella.

A Homeowner's Policy contains liability insurance coverage under Section II. Which of these would be covered under this part of the policy?

A fraudulent and unjustified lawsuit is filed against the name insured. The name insured, while using a metal detector belonging to his neighbor, damages when it is dropped on a cement sidewalk. The little boy of the named insured intentionally strikes another little boy with a hockey stick.

Which of the following is eligible for Business owners Policy?

A furniture store.

All of the following would not be eligible for coverage under the California FAIR Plan, EXCEPT:

A home located in designated hazardous brush or high risk urban areas.

Which of the following is an example of loss prevention?

A homeowner decides not to install a pool in the backyard.

Which of the following is covered by a Building and Personal Property coverage form (BRP)?

A light pole.

Of the following choices, which one would define the "retroactive date" which is contained in the structure of a claims-made professional liability policy contract?

A loss occurs or event can occur and still be eligible for recovery of payment under the terms of the policy, if it occurs after this date.

Company that negotiates and binds ceding reinsurance on behalf of an insurer is considered

A managing general agent.

When a state program is a company's only option for purchasing Workers' Compensation insurance, it is called:

A monopolistic state fund.

The term "proximate cause" is best defined by which of the following?

A negligent act that causes bodily injury or property damage that follows a sequence of uninterrupted, but related chain of events.

All of the following are NOT ELIGIBLE for the purchase of a home-owners policy, EXCEPT:

A non-owner tenant occupied dwelling.

Of the following loss scenarios, identify the one that is excluded from coverage under both the collision and other-than-collision coverage of an insured's PAP:

A palm-pilot computer (owned by the insured) is stolen from the vehicle while pared in the insured's driveway. There are forcible signs of entry into the vehicle.

The loss exposures in the following situations, resulting in bodily injury or property damage claims, are all excluded under a Commercial General Liability Policy, EXCEPT:

A patron of the insured business is injured by an employee of the insured, at the customer's residence. The employee was at the residence to perform the carpentry services that the business provides.

The insurance code definition of "insurance broker" is

A person who transacts all classes of insurance other than life and health, with but not on behalf of the insurer; but on behalf of another person.

All of the following vehicles are eligible for coverage under a Personal Auto Policy, EXCEPT:

A private passenger auto owned by a partnership.

Which of the following best characterizes a speculative risk?

A situation that offers the possibility of loss or a gain.

In California, excess and surplus lines coverage needs to be placed through:

A surplus lines broker.

A Business owners Policy would be appropriate for which of the following types of businesses?

A three story office building.

Which of the following risks are eligible for a Business owners Policy?

A three-story, 12 dwelling unit building.

Which of the following is not an uninsured motor vehicle as defined by personal auto policies uninsured motorist coverage?

A vehicle owned by a state agency which self-insures its auto.

All of the following are considered an uninsured motor vehicle, according to policy-definitions found in a Personal Auto Policy, EXCEPT:

A vehicle that is self-insured because it is owned by a state agency.

A common formula that is used to establish actual cash value is:

ACV= replacement cost minus depreciation.

Under the tort law, a corporation can be subject to a claim for legal liability on the basis of:

Absolute liability.

The limit of liability under a Personal Auto Policy under the section "coverage for damage to your automobile" is typically the lesser of the dollar amount needed to replace or repair the damaged property or the__________ of the damaged property. From the following choices, fill in the blank with the correct answer.

Actual Cash Value (AVC) or fair market value.

The amount to replace an insured's damaged property, less depreciation, is known as the:

Actual Cash value.

The limit of liability in a Personal Auto Policy providing coverage for "damage to your automobile" is stated as "the lesser of the amount necessary to replace or repair the damaged property (vehicle) or the ________."(Fill in the blank from the choice below.)

Actual cash value of the damaged or stolen property.

The Personal Auto Policy "coverage for damage to your own automobile" states that the limit of liability is the lesser of the amount necessary to repair the property or the:

Actual cash value of the stolen or damaged property.

The method of payment included an unendorsed home-owner's or dwelling policies for personal property is:

Actual cash value.

Under an unendorsed commercial property coverage form with no optional coverages, on what basis are buildings valued?

Actual cash value.

Which of the following losses would be excluded by the ordinance or law exclusion?

Additional cost necessary to make a restroom ADA compliant.

What additional coverage does a DP2 have compared to a D1?

Additional living expenses.

What additional coverage does a DP2 have compared to a DP1?

Additional living expenses.

An insurer that has a certificate of authority in California is:

Admitted

Commercial General Liability (CGL) contract Coverages A and/or B contains coverage for:

Advertising injury.

All of the following equipment would be covered under the Equipment breakdown Policy, EXCEPT:

Aircraft.

If an insured rents a vehicle while on vacation in the U.S., what coverage is provide under the Personal Auto Policy?

All coverage is in force in the Personal Auto Policy.

What coverage is available under the miscellaneous type vehicle endorsement?

All coverage under the Personal Auto Policy.

Ordinance or law coverage provides protection for which of the following losses?

All of the above are covered.

What perils are insured against under the "additional coverages- property removed" of a Homeowners Policy?

All perils.

What type of policy protects against loss from any peril except those that are specifically excluded?

All-risk or open peril.

After a collision loss, the Personal Auto Policy requires the insured to:

Allow the company to inspect the damaged property before it is repaired.

An item paid on a replacement cost is defined as an:

Amount to replace the damaged property without a depreciation.

Entities or organization that provide for medical expenses in California are subject to the jurisdiction of the State Department of Insurance (with several specific exceptions), unless these entities or organizations can demonstrate that during the course of providing these services, they are subject to the jurisdiction of:

An agency of the Federal Government, Another California governmental agency in the State of California. The agency of another state.

Which of the following events within the last three years would disqualify an individual from receiving a good driver discount?

An at-fault accident involving minor bodily injury.

Which of the following is covered under Worker's Compensation policy?

An employee accidentally getting injured at a customer's home while working at the customer's home.

A Commercial General Liability (CGL) Policy is quite broad in scope. However, there are a substantial number of exclusions. Three of the four following exposures are excluded. Identify the loss exposure that is covered by an unendorsed CGL- property damage or liability arising out of:

An employee accidentally injures a customer while working at the customer's home.

Which of the following bodily injury, or property damage loss, exposures is covered by an unendorsed Commercial General Liability Policy?

An employee who causes an injury to a customer while working in the home of that customer.

Under Section 770 true regarding unfair or deceptive trade practices, which of the following is an unfair trade practice?

An entity cannot demand the insurance to be placed with a particular agency.

An insurer's loss reserve for a claim is:

An estimate of the amount that the insurer will pay for present and future losses.

A representation in an insurance contract qualifies as which of the following?

An implied warranty.

California Insurance Code defines an insurance broker as; select be best or most correct answer.

An individual who receives compensation for transacting insurance on behalf of another person, but not on behalf of an insurance company.

The Commercial General Liability (CGL) contract contains exclusion for liquor liability. The purpose of this exclusion is to exclude coverage for liability arising from:

An insured's special loss exposures resulting from the insured being involved in the alcoholic beverage business.

All the following answers are not part of a dwelling coverage A, and which would be insured under "other structures", EXCEPT:

An unattached garage connected to the insured dwelling that is under the same roof as the insured dwelling.

All of the following are not part of coverage A- dwelling, and are insured under "other structures"; EXCEPT:

An unattached garage connected to the insured dwelling unit under by the same roof as the insured dwelling.

Which of the following describes the act of making a false entry in any book, statement or report of any insurer with the intent to deceive any examiner lawfully appointed to examine the insurer's affairs?

An unfair insurance trade practice.

Insureds, especially those with higher premiums, very often do not have the immediate funds to pay required premiums, such as automobile liability insurance. In many cases, insurers will provide premium financing. Which of the following statements is correct regarding this financing, according to the requirements of the California Insurance Code.

Any agent that assists in premium financing services is required to maintain all records regarding such financing for three years after transaction.

A commercial building which is a combination office, retail, and warehouse space, has been left vacant by its owners for more than 60 consecutive days. In what manner will an insurance company respond to a loss that occurs, which is covered under the commercial building and personal property coverage form which has a broad form cause of a loss on the building?

Any part of the loss which is caused by the perils of vandalism, theft, glass breakage, or sprinkler leakage will not be covered.

An open peril policy protects against the loss from:

Any peril, other than those specifically excluded.

Under a Personal Auto Policy, who qualifies as an insured while using a covered auto?

Any person.

Both the Commercial General Liability Policy and the Business Auto Policy have definitions of the terms "automobile" and "mobile equipment". These coverages:

Are very different; thus avoiding overlaps or gaps in coverage between the two policies.

Under the commercial Building and Personal Property coverage extensions, property off-premises is covered while the property is located:

At a trade show or a fair.

When must insurance agents or brokers, make insurance records available to the Insurance Commissioner?

At all times.

Under the "examination of your books and records" condition of a commercial policy, when may an insurer examine an insured's books and records?

At any time during the policy period and up to three years afterwards.

When is a property and casualty agent required to inform an insured of any conditions which may be precedent to coverage regarding a Personal Auto Policy.

At time of application.

Which of the following is not considered an intentional tort?

Auto accident.

All licensees must be appointed by the insurance companies they represent in order to sell the lines of insurance that a particular insurer may offer. Assuming that a licensed property & casualty broker/agent has received the proper appointments, what types of insurance, from the following list, may this individual.

Auto, property insurance.

Which of the following is not a type of property commonly insured under a commercial inland marine:

Automobiles while kept for the owner in a commercial parking garage.

Symbol 7 in a Business Auto Policy indicates that there is liability coverage for:

Autos specifically described in the policy are covered.

Risk management technique that eliminates a loss exposure and reduces the chance of loss to zero is:

Avoidance.

If an insured discovers an occurrence 75 days after the expiration of a claim-made Commercial General Liability Policy, what must the insured have in order for the loss to be covered?

Basic extended reporting period endorsement.

In a claims-made Commercial General Liability Policy, which of the following begins when the policy period ends, and is activated when the policy is cancelled or not renewed?

Basic extended reporting period.

Damages caused by burglary of personal property are not covered under which dwelling form (except by endorsement)?

Basic form.

Which of the following is the reason that an insured should not be making any kind of profit as the result of an insurance claim/loss being paid, but rather, the payment should restore the insured to same financial status that existed prior to the loss with no chance for any types of profit.

Basic principle of insurance.

Under the commercial property coverage program,what causes of loss form(s) include coverage for the peril of windstorm?

Basic, broad, and special.

Which causes of loss form, under commercial property coverage, includes coverage for the peril of windstorm?

Basic, broad, and special.

The Business Income coverage form covers the actual loss of business income sustained due to necessary suspension of operations. The loss of income must:

Be caused by an insured peril, otherwise there is no coverage.

Which of the following applies to adhesion:

Because the insured must accept the contract on a "take it or leave it" basis as written by the insurance company, if the contract can be interpreted in more than one way by the courts, the interpretation that favors the insured will be enforced by the courts.

Under a scheduled personal property endorsement, loss to stamps is excluded when they are:

Being shipped with freight company.

Coverage parts A, B & C of a Commercial General Liability provide coverage for which of the following?

Bodily injury and property damage, personal and advertising injury, and medical payments.

The products and completed operations hazard would apply to which of the following situations?

Bodily injury to a customer as the result of a defective product manufactured by the insured.

All of the following are parties to a surety bond EXCEPT:

Bondsman.

The coverage found under both a Homeowners Section II and a Comprehensive Personal Liability Policy extends to which of the following?

Both personal activities and premises of the insured as well as any activities of the insured that occur off the named premises.

How are HO3 and HO5 similar?

Both provide open peril coverage for the dwelling.

A person can base his/her claim for legal liability on the basis of all of the following, EXCEPT:

Breach of Liability.

What additional coverages are available under the scheduled personal property endorsement that are not available under an unendorsed Homeowner Policy?

Breakage of glassware caused by an earthquake.

What perils are provided under HO 2, 3, 4, 6 for personal property, Coverage C.

Broad Perils.

What exactly do umbrella policies provide for?

Broad excess liability coverage over two or more underlying policies.

Which of the following is a reason why someone would not purchase a Dwelling Policy instead of an HO3?

Broader coverage is desired.

Why would an insured want to use an HO3 policy instead of a Dwelling policy?

Broader coverage is needed by the insured.

If an insured requests coverage in a timely manner for a newly acquired auto under an existing Personal Auto Policy, what coverage is provided before the request is made?

Broadest coverage for any vehicle shown on the declarations.

Which property coverage form is best suited for a structure under construction?

Builders Risk coverage form.

Thomas Fry has insured a building under his commercial policy. The building was vacant for 75 consecutive days before a loss. The policy will not pay for the loss if caused by the perils of:

Building glass breakage and vandalism.

Who is responsible for damage to improvements in a leased building?

Building owner.

A policy called "Builder's Risk" would be found in which of the following circumstances?

Buildings in the process of being constructed.

Which of the items of real property under HO3 are valued on an actual cash value basis?

Built-in appliances.

Under California Insurance code, the marketing department is responsible for all of the following, EXCEPT;

Bulk Mailing.

Which of the following would best be described as using forcible entry to steal property when a business is closed?

Burglary.

If a named insured is not the owner of the building, improvements and betterments are covered under the:

Business Personal property.

Which of the following lines of insurance would cover the loss of net income a business incurs due to a fire?

Business income insurance.

Dwelling fire policy's coverage is to a Homeowner's Policy, as a commercial property policy's coverage is to a :

Business owners Policy.

What type of policy is comparable to commercial property policy coverage as a Dwelling Policy's coverage is comparable to a Homeowners Policy?

Business owners Policy.

If the named insured is not the owner of the building, improvements and betterments are covered under the:

Business personal property.

A business owner, who is insured with a Business Auto Policy, is interested in purchasing the necessary liability coverage for any losses and subsequent claims that result from an employee's use of their own vehicles. What would be the best way to do this?

Buy employer's non-ownership liability in the Business Auto Policy.

How can an insured ensure that she has protection against possible claims for libel, slander, and false arrest under an HO3 policy?

By adding a personal injury endorsement.

Which of the following is commonly found in liability policies, thus creating the need for inland marine coverage?

Care, custody, control exclusion.

Which commercial property form contains most of the exclusions that apply to a commercial property policy?

Causes of loss forms.

Typical exclusions under any Medical Expense Policy include all of the following EXCEPT:

Claims also covered by Personal Auto Policy Medical Payments.

Which of the following types of policies pays for bodily injury or property damage which occurs, or is discovered, during the policy period?

Claims made commercial liability policy.

What clause is used to require insureds to purchase close to the value of the property?

Coinsurance clause.

What additional coverage is provided in a DP3 that is not included in a DP1?

Collapse.

Which of the following perils is insured against in the Special form, but not in the Basic form?

Collapse.

Business auto policies (BAP) contain which of the following combinations of physical damage coverages?

Collision coverage, comprehensive coverage, or specified peril coverages.

Diamond Toy Company is being sued for a death caused from a child choking on a piece from one of its transformers. Where would Diamond find coverage for the defense of this law suit?

Commercial General Liability Insurance.

A bulldozer an insured is using to level

Commercial General Liability.

A person with a commercial policy is burning leaves. The fire gets out of control causing smoke damage to a neighboring property. The loss is covered by:

Commercial General Liability.

JAE Computer Company is being sued by Stack Computer Company for an advertising campaign Stack Computer feels is false and misleading. JAE company would find coverage for losses which could result from this lawsuit under which category of insurance:

Commercial general liability.

Identify which of the following is always included in a Commercial Package Policy?

Common policy declarations and conditions.

Employee dishonesty coverage form would apply to which of the following?

Company funds and securities that are stolen by an employee.

Which of the following is considered special damages?

Compensation for time away from work.

All Workers' Compensation policies provide:

Compensation for work related injuries without regard to fault.

In the business of insurance. The act of concealment is defined by all of the following statement EXCEPT

Concealment does not occur if no inquiry is made or the concealed facts immaterial.

An applicant for insurance does not reveal information that the insurer would rely upon to issue the policy. This is a/an:

Concealment.

The part of the policy that establishes the limits inside the policy the insurer and insured agreed is:

Conditions

Which of the following types of coverage would be needed to cover a contractor's bulldozers which are used in the contractor's business but are not held for sale?

Contractor's equipment floater.

Liability coverage under Boat owners policies typically exclude:

Contractual liability.

Your insured has a ten-year lease on his store. He has spent $50,000 on shelving, wall-to-wall carpeting, partitions, lighting, etc., all of which are part of the building and cannot be legally removed. He is concerned that a fire might damage these changes that he has made and wants to make sure he is protected for their value. He should purchase:

Coverage B personal property.

What is the primary difference between an HO3 and an HO5?

Coverage C broad named perils.

If an insured with a Personal Auto Policy has an accident in a state with personal injury protection (PIP), how does the policy respond?

Coverage automatically is broadened to provide PIP.

Of the following, which are included under the coverage provided by a Workers' Compensation Policy?

Coverage for sickness, injuries, or illnesses that are job-related, without regard to who is at fault or negligent.

Damage which is the result of a hailstorm, is covered in which of the following ways under a Personal Auto Policy?

Covered as an other-than-collision loss.

How would the damage resulting from hail be covered under a Personal Auto Policy?

Covered as other than-collision loss.

A car is insured using a Personal Auto Policy. The car is damaged by hail. The loss is :

Covered as other-than-collision loss.

If an employee embezzles $10,000 from an insurance company, which type of insurance would the employer need to be covered for this type of loss?

Crime insurance.

When must an injury occur for medical payments coverage of Commercial General liability Policy to apply?

Customers being on the insured's premises.

The collision coverage of a Personal Auto Policy covers:

Damage caused by the insured, driving into a fallen tree, that fell during a storm.

The personal property coverage part of an unendorsed HO3 policy form, covers which of the following?

Damage to the insured's living room furniture that is the result of the furniture being removed from the insured premises to prevent it from further damage after a covered fire at same premises.

What course of action does a party to a contract have if the other party is found to be in breach of that contract?

Damages for breach, reasonable attorney fees and costs.

Which of the following losses is not covered by either the Personal Auto Policy collision or other-than-collision coverage?

David leaves his personal (non-business) laptop computer in his car overnight. Car is parked in the driveway outside of his home. Computer is stolen from his car.

The part of the policy that states the amount of coverage, the insured property policy period is:

Declarations.

Which of the following is covered under Section II of a Homeowner's Policy?

Defense costs stemming from a lawsuit that is false and fraudulent. The insured's 4-year old son intentionally strikes another youngster with a canoe paddle. The insured damages a neighbor's camcorder after dropping it on a deck.

What must a licensee do in order to surrender for cancellation a license in their possession?

Deliver the document itself to the Commissioner.

The process whereby a mutual insurer becomes a stock company is called:

Demutualization.

The definitions of mobile equipment and automobile are defined in both a Commercial General Liability Policy and Business Auto Policy to specify the coverage on any vehicle or equipment. These two coverages:

Differ, therefore, avoids any over-laps or gaps between the two contracts.

A reduction in the value of property that results from damage to the property is know as:

Direct loss.

Which type of a crime policy will pay for loss, which is found during the policy period, even if the loss occurred prior to the effective date of the policy?

Discovery form.

The medical expense coverage in a Worker's Compensation Policy:

Does not have a dollar limit or a time limit.

The medical expense coverage in a Workers' Compensation Policy:

Does not have a time limit or a dollar limit.

Which of the following statements is not true? A property and casualty managing agent:

Does not have the authority to collect premiums from producing broker-agents.

The commercial general liability (CGL) declarations page displays many different limits of insurance that apply to a policy. One limit shown is the insured's general aggregate limit. Which of the following is a correct statement about the general aggregate limit? The general aggregate limit:

Does not include the products-completed operations aggregate limit.

Which are characteristics of negligence?

Duty, Breach, Proximate Cause, Damages.

Grace has a Homeowners Policy that includes Section I coverages 'A, B, and C'. These coverages , 'A, B, and C', provide coverage for:

Dwelling, other structures, and personal property.

All of the following are typical exclusions in an Inland Marine Policy, EXCEPT:

Earth movement.

Under the California insurance code, how does the Insurance Commissioner get in to office:

Elected by the citizens of California in the same time, place and manner as the Governor.

If an insured's employee embezzles $10,000 from the company's bank account, which of the following coverages would need to be in force for the loss covered?

Employee theft.

All of the following are areas that involve market regulation, Except:

Employee training.

Which of the following disallows or prevents a person who has given up a right to re-assert their previously waived right:

Estoppel.

Where would an insured, that is in the business of importing exotic animals from Africa, most likely go to obtain insurance coverage?

Excess and surplus lines insurer.

"Umbrella policies" provide coverage for and are best defined as which of the following?

Excess liability coverage, on a broader basis, above an underlying primary policy.

Under a special cause of loss form, if a landslide is caused by an unnatural flow of water due to improper grading, the loss is:

Excluded under the concurrent causation exclusion.

Under a special cause of loss form, if a landslide is caused by an unnatural flow of water due to improper grading, the loss is:

Excluded under the concurrent causation.

Under the Business Income coverage form, extra expense are:

Excluded.

What is it a bout a liability policy that causes there to be a need for inland marine coverage?

Exclusion for care, custody, and control.

Jackie's personal auto policy(which is unendorsed) would provide payment for which of the following?

Expense of repairing a neighbor's wall, surrounding a garden, that Jackie accidentally backed through.

A combined ratio is.

Expenses plus losses divided by premiums.

What does a supplemental extended reporting period endorsement provide?

Extends the filing reporting period indefinitely.

To determine the actual cash value of a commercial building for coinsurance purposes, use:

Fair market value.

What is one peril included in a DP2 that is not included in a DP1?

Falling objects.

Which of the following perils is included in the broad form, but not in the basic form?

Falling objects.

A pickup or van with a gross vehicle of 9,500lbs may be eligible for a personal policy if it was used in the business of:

Farming or Ranching.

Which of the following is not one of the three main types of insurance losses?

Financial loss.

When does a Personal Auto Policy require the insured to notify the police?

For hit & run accidents and thefts.

What must an insurer do who accepts an application from an agent who is not specifically appointed by the insurer, and then issues a policy from that application?

Forward to the commissioner a notice of appointment within 14 days of receipt of application.

Exclusive agents:

Generally represent only one insurer.

You are to meet with a small furniture manufacturer and make property and liability recommendations. You have insured many risks of this type in the past and have a good idea of what their needs may be. There are several popular ways of determining business loss exposure. Which of the following are the least professional and least likely to correctly identify loss exposures?

Get a copy of all current policies and determine what coverage they have been carrying and how much they have been paying.

All of the following types of businesses would need special inland coverage for their stock, EXCEPT:

Grocers.

The inspections and surveys condition of a Commercial Package Policy is important to the insurer for all of the following reasons, EXCEPT:

Guarantee that the insured is in compliance with safety regulations.

Which property is excluded under an HO3 policy?

Guard dog.

When an applicant or license during a hearing gives a plea of non-contendere they are:

Guilty according to insurance laws.

The applicant wants a Homeowner's Policy that has open peril coverage on his home (building structure). Assuming he is eligible for the policy, which policy would you recommend?

HO3

What type of Homeowner's Policy provides open peril coverage?

HO3.

The type of Homeowner's contract that should be considered, and then purchased, by one of your prospective insureds who is a tenant renting a 2,500 sq. foot, 2-story house, is which of the following?

HO4.

Which homeowners form is best for use on a brand- new single family dwelling?

HO5

Which of the following would be used for a new single-family dwelling?

HO5

What type of policy would provide both property and liability coverage for the owner of a condominium, as well as for assessments following damage to the building and other structures?

HO6

Jack, a condo owner, wants a fire and allied lines coverage for personal property, liability coverage for him and family members, and protections for assessments or damage for the building structure and other common areas. Which homeowners form would you recommend?

HO6.

What must a life agent travel agent, or fire and casualty insurance agent do in order to act as an agent of a particular insurer?,

Have an insurance company file an action notice of appointment with the commissioner.

Property and casualty broker-agent, when properly appointed, may transact all of the following except.

Health insurance.

What does the California FAIR plan provide coverage for?

Homes located in a hazardous brush or high risk urban areas.

Yacht policies typically provide for:

Hull, protection and indemnity.

Which of the following is true regarding coinsurance clause:

If the insured purchases less than the coinsurance required amount, the insured will pay a percentage of the loss?

Damage done by an earthquake to an insured is covered by the Personal Auto Policy:

If the other-than-collision coverage is purchased.

What is the effect of the "concurrent causation" exclusion under the "causes of loss" broad form in commercial property policy?

If there is a loss resulting from two or more perils that occur at the same time to cause a loss, then there is no coverage if any of the other perils are excluded.

The commercial property policy part- "causes of loss-broad form", includes an exclusion for "concurrent causation." The effect of this exclusion is:

If two or more perils happen at the same time to cause a loss, there is no coverage is any of the perils are excluded.

The best definition of the term "collision", as found in a Personal Auto Policy, is which of the following?

Impact with other vehicle or object; or upset of the insured vehicle.

In the state of CA no rate will remain in effect if it is considered to be any of the following, EXCEPT,

Impartial.

In the state of CA, no rate will remain in effect if it is considered to be any of the following, EXCEPT:

Impartial.

What would the commissioner likely do if an agent induces a client to co sign a loan

Impose a $1000 fine.

Your client owns a business that leases a warehouse and office space. In order to maximize the space and the size of the building, he has installed over $100,000 of partitions, lighting , security equipment, carpeting, bookcases, and storage cabinets. All of these features are permanently installed, and therefore, can be removed and taken when he moves, upon expiration of the lease. To protect his financial interests in these items in the event of fire, which of the following should be utilized on his commercial property policy?

Improvements and betterments coverage.

Your commercial auto policy insured needs coverage for his liability arising out of his employees using their own cars in his business. the best way to be sure your insured is covered is to:

Include employers non-ownership liability coverage in the employer's commercial auto policy.

What are the licensing requirements for individuals that are permitted to sell the California FAIR Plan?

Individuals having a fire & casualty broker-agent license.

All of the following causes of loss are covered by Equipment Breakdown insurance, EXCEPT:

Inherent defect.

Abstracts, maps, and mortgages are covered under which of the following?

Inland Marine.

Where would an insured find insurance coverage to protect against damage to a shipment of televisions shipped on a semi-truck for the insured's business?

Inland marine.

Which of the following types of insurance were designed to cover domestic shipments, means of transportation, personal property floater risks, and commercial property floater risks?

Inland marine.

If a building is damaged during an attempted burglary where money was stolen from a vault, which of the following coverages would cover the loss of the money, as well as the damage to the building?

Inside the premises-theft of money and securities.

Which of the following best describes an insurer who has enough financial resources only to provide for all of its liabilities and for all reinsurance of all outstanding risks?

Insolvent

Which of the following is a common policy condition for a Commercial Package Policy?

Inspections and surveys.

A possibility of financial loss resulting from the ownership of property is known as:

Insurable interest.

What factor supports the principle of indemnity?

Insurable interest.

Which advisory organization(s) develop forms for the standard market?

Insurance Services Office and American Association of Insurance Services.

Which party is allowed to cancel a commercial policy (assuming all legal requirements are met)?

Insurance company and/or the first named insured in the policy.

Which of the following insurance professionals would be employed to aid an insurance broker?

Insurance solicitor.

All of the following are common policy conditions under the commercial lines program, EXCEPT:

Insured risks and perils.

Which part of the insurance contract summarizes the major promises of the insurer?

Insuring Agreement.

A commercial property policy can provide coverage for all of the following, EXCEPT:

Intangible losses.

Which of the following situations suggest the need for an endorsement to an insured's Homeowner's Policy due to an attachment on the additional residence rented to others? The insured also owns a two-family dwelling and rents it out to two families. The insured:

Is concerned that she might be liable to the renter for injuries that might occur in connection with the rental.

This statement that is true regarding medical expense coverage in a Worker's Compensation Policy is:

It contains an unlimited amount of coverage for both time and dollar amount.

All of the following statements concerning business owner's policy are true, EXCEPT:

It contains simpler reading which lower handling costs for insurers.

The ordinance and law exclusion found in property policies, such as the commercial property coverage and the Homeowner's Policy, have the following effect:

It excludes part of the loss resulting from the enforcement of a building ordinance or law.

The ordinance or law exclusion/limitation found in the property policies such as the commercial property coverage, and in the Homeowner's Policy, has the following effect:

It excludes that part of the loss resulting from the enforcement of a building ordinance or law.

The ordinance and law exclusion found in property policies, such as the commercial property coverage and the Homeowner's Policy, have the following effect:

It excludes the part of the loss resulting from the enforcement of a building ordinance or law.

Of the following, which is the true characteristic about insurance?

It is considered a method of transferring risk.

Which of the following statements is true regarding the materiality of representations and concealment?

It is determined (by the affect of the facts on each party) by the contract in determining his/her estimate of the disadvantages of the contract.

There is exclusion in automobile insurance issued by admitted insurers in California regarding coverage in Mexico, which can only be provided through an endorsement to a PAP. Which is true regarding this?

It is liability coverage, on an excess basis, provided for losses that occur in Mexico, within 25-miles of the California/Mexico International border.

Which of the following is true regarding the loss of income that is the result of a suspension of a business's operation under the business income coverage form?

It must be the result of a peril that is insured under the policy, otherwise there will be no coverage.

There is a type of policy in the commercial insurance field known as a commercial lines package. Why would an insured purchase this structure of policy over a monoline policy?

It provides the convenience of one policy for all exposures and risks.

How is an admitted insurer defined according to California DOI?

It transacts insurance according to the state of California.

A Homeowners Policy includes a "scheduled personal property endorsement" provides coverage for which of the following?

Jewelry, furs, musical instruments, and cameras for dollar value amount decided by the insurer.

The name for a Commercial Package Policy is "Jim Koslin DBA Coastline Photo Shop." Under the terms of the common policy conditions of the Commercial Package Policy, who is responsible for the premium payments?

Jill.

Kim's car is insured with a Personal Auto Policy. The coverage includes medical payments with $2000 limits. Which of the following is a true statement about the medical payment coverage for necessary medical expenses?

Kim gives her neighbor a ride to the store in the insured car. She has an auto accident in which they each incur over $2000 in medical expenses. The maximum amount that Kim's policy will pay is $2000 to her and $2000 to her neighbor.

The collision coverage of a Personal Auto Policy does not cover the following loss situations, EXCEPT

Large limbs and branches of a tree that have fallen into the street as a result of a windstorm. The insured collides with them.

Which is an additional benefit that is included in a DP2 that is not included in a DP1?

Lawns, Trees, and Shrubs.

What coverage is available under the extended non-owned liability coverage?

Liability and medical payments.

The watercraft endorsement on a Homeowners Policy extends coverage for:

Liability coverage for all watercraft listed on the schedule.

The watercraft on a Homeowners Policy extends coverage for:

Liability coverage for watercraft listed on the schedule.

Max's Personal Auto Policy (PAP) has liability and collision coverage. His neighbor's car has liability coverage only. Max borrows his neighbor's car to go to the store and has an accident that is his fault. He damages his neighbor's car and another car. Max's PAP provides:

Liability coverage that is excess of his neighbor's liability coverage. His collision coverage also applies, but on a primary basis.

Under a Yacht policy, protection and indemnity provides coverage for:

Liability if the insured vessel strikes a marina and injures a dock worker.

What is the type of loss exposure that would include land and property attached to it?

Liability loss exposure.

Which of the following types of loss would result in a claim for monetary damages due to injury to another or damage to another's property?

Liability loss.

Which of the following coverages may you buy with a named non-owner liability policy? (the most complete answer.)

Liability, medical payments, and uninsured motorist.

Which of the following coverages may you buy with a named operator policy?

Liability, uninsured motorist, medical payments, collision, and other-than-collision.

To be covered for a hit and run accident under the Uninsured Motorist Property Damage coverage of a PAP, what is required to be provided to the insurer?

License number of the hit and run vehicle.

According to the CA Insurance code, a binder is deemed a valid insurance policy for the purpose of providing insurance coverage specified in the binder for each of the following types of insurance, Except:

Life insurance.

What does a release bill of lading do for a common carrier?

Limits the carrier's liability on the shipment.

If a bartender allows a patron to leave the bar, and the patron is involved in a drunk driving accident, what would the bar owner need to cover their liability?

Liquor Liability.

A Personal Auto Policy is written for Lisa providing liability coverage. Which of the following auto liability situations would not be covered unless Lisa has an endorsement attached and paid an additional premium?

Lisa destroys a mailbox while driving a (non-owned) company car furnished for Lisa's regular use.

Which of the following may be covered under the Physical Damage insuring agreement of a Personal Auto Policy?

Loss of a CD player installed in the vehicle dashboard.

What type of crime form covers losses during the policy period, regardless of when the loss is discovered?

Loss sustained form.

Which of the following type of coverage would pay for a theft which occurred during the policy period and is found for up to one year after policy termination?

Loss sustained.

All of the following are characteristics of "an ideally insurable loss exposure." Except:

Losses that are catastrophic.

All of the following are characteristics of an "ideally insurable exposure", Except.

Losses that are catastrophic.

Which of the following would be considered special damages?

Lost wages.

If a motor home is scheduled on a miscellaneous type of vehicle endorsement, all of the following property is covered, EXCEPT:

Luggage.

It can be very tempting for commission-based insurance salespeople to perform unethical activities in order to make a sale. Of the following, which would not be a reason why the agent might be tempted to act?

Maintaining the best interest of customers first and foremost.

An insured's duties after a loss are described in the Homeowner's Section I conditions. Which of the following is NOT a correct statement about these duties? The insured must:

Make all necessary repairs to protect the property from further damage. The expense is paid by the insured.

An insured purchased a commercial policy on an owned building. The company contains a coinsurance provision. The coinsurance clause:

Makes carrying insurance of a percentage of the building value advisable to avoid a possible penalty.

A private passenger vehicle is added to an insurance policy. According to CA Insurance Code:

Makes no mention of a vehicle inspection requirement.

Which coverage protects physicians, surgeons, and dentists for their personal activities?

Malpractice coverage.

Under the California insurance code, the word shall is best defined as:

Mandatory, required, must, no discretion as applied by the insurance code.

The state law that regulates insurer practices regarding underwriting, sales, rate-marking, and claims handling are called:

Market conduct regulation.

The state laws that regulate insurer practices regarding underwriting, sales, rate-making, and claims handling are called:

Market conduct regulation.

The amount paid for damaged property, which is equal to the price for which it could have been sold is called:

Market value.

What do the initials STARR represent?

Methods of risk management.

If an insured purchases an all-terrain vehicle (ATV), what endorsement can be added to the Personal Auto Policy to insure the vehicle?

Miscellaneous type vehicle endorsement.

What endorsement can be used to insure a motorcycle under a Personal Auto Policy?

Miscellaneous type vehicle endorsement.

A Homeowner's Policy, specifically coverage C, has certain limits on various classifications of property, the lower sub-limits apply for theft to the following types of personal property; EXCEPT

Money.

The Personal Auto Policy territory include:

Montreal, Canada.

The equipment dealer's coverage form covers all of the following types of property, EXCEPT:

Motor vehicles designed for highway use.

What is required of a broker-agent before appointing an insurance solicitor?

Must hold a permanent license.

Which of the following are the elements of contract law:

Mutual consent, consideration, legal valid purpose, and competent parties.

The process whereby a stock insurer becomes a mutual insurer is called:

Mutualization.

Are standardized umbrella policies available?

NO, because each company wants the ability to establish their own pricing.

If an individual does not own an auto, nor have regular use of an auto, what endorsement to a Personal Auto Policy could be used to properly protect that individual?

Named non-owned coverage.

Jim, your unmarried homeowner's insured does not own his car. He is planning a vacation trip to Florida and will be renting a car. He also drives cars belonging to friends occasionally. To protect Jim in theses situation, you would recommend a personal auto policy with a

Named non-owner coverage endorsement.

What kind of coverage would you recommend to one of your insureds who is single and does not own a car, but, she does, on occasion, drive cars that belong to her friends. Additionally, she is planning a vacation to Florida and will be renting a car while there.

Named non-owner coverage endorsement.

Coverage on an annual transit policy is usually provided on which of the following basis?

Named peril.

What would be the reason for a $100 deductible versus a thousand dollar deductible?

Neither of these apply. Reduced number of small claims submitted to the insurance company by insureds. Reduced premium.

Business income, as it is defined under a Business Income coverage form, provides coverage for actual losses of business income resulting from the suspension of the actual operations of the business. Which of the following is the formula to determine this dollar amount?

Net income of the business plus normal operating expenses, including payroll.

What is revenue minus expense?

Net income.

The types of transactions and insurers that a surplus lines broker is involved with is/are:

Non-admitted insurers, transacting property, and casualty insurances.

Under an unendorsed Personal Auto Policy, what coverage is available for personal effects?

None of the above. All personal property in the auto up to $500. Luggage and clothing up to $500. Luggage up to $200.

Which of the following would be covered by the physical damage section of a Personal Auto Policy?

None of these are covered. Theft of an insured's portable CD player which has taken after a window was smashed. Passengers in the vehicle who are injured in a covered accident. Mechanical breakdown, but only if regular maintenance records can be provided.

A property and casualty general agent can do all of the following except:

None of these are excluded from the powers and authority given to the property and casualty managing general agents.

Which of these Dwelling policy types do not include coverage for burglary of personal property

None of these covers theft of personal property, except by endorsement. The broad form. The special form. The basic form.

The limit of medical expense coverage in a Workers' Compensation Policy is:

Not limited for either the time and/or the dollar amount.

All of the following are requirements for a notice by an insurer, Except:

Notice must be sent with return receipt required.

All of the following are requirements for a notice by mail to an insured by an insurer, Except.

Notice must be sent with return receipt required.

All of the following are principal rating factors under Proposition 103 for personal auto policies, EXCEPT:

Number of listed drivers.

One example of a loss covered by Business income insurance is a loss:

Of profits due to a suspension of business operations because of a premises fire.

Which of the following types of businesses could utilize a Business owners Policy?

Office buildings 2-stories high and containing about 25,000 square feet.

Insurers may purchase reinsurance for a variety of reasons. Which of the following is not a good example of the use of reinsurance? Insurer purchases reinsurance:

On below average business submitted to them, keeping the good business for themselves.

Named insured on a commercial insurance policy is "sam stone and dan Sullivan DBA S&S bar and grill" if the insurer cancels the policy, they are required to mail or deliver written notice to

Only Sam Stone.

When may a representation be withdrawn?

Only before the insurance is in effect.

There is a "changes" condition found in a commercial lines policy that says that the policy has within it all the agreements between the insured and the insurer, regarding the insurance that is being provided. Additionally, this condition further provides that the policy terms can be waived or amended by which of the following terms?

Only if an endorsement is attached to the policy and comes from the insurer.

A commercial Building and Personal Property coverage form covers three kinds of property- one of which has "_________your business personal property." In this clause, "Your" refers to:

Only the named insured(s) shown in the declarations.

What type of coverage is usually provided by an Inland Marine Policy?

Open or all-risk coverage.

Inland marine polices nearly always provide_________________________coverage.

Open peril.

Inland marine policies nearly always provide______________ coverage.

Open peril/All-risk/Special Form.

If an Inland Marine policy provides coverage for any loss unless it is specifically excluded, it would be considered which of the following?

Open perils.

In the state of California, how is a domestic insurer defined according to the DOI code?

Organized, chartered, or incorporated under the laws of the State of California.

Which of the following coverages is a property insurance coverage?

Other than collision.

There is a certain type of liability coverage referred to as P&I, which stands for "protection & indemnity". What type of protection does this coverage offer?

Other vessels that receive collision damage from the insured vessel.

An insured living in California has the following coverages under a PAP: liability, medical payments, and loss other-than-collision. The individual's vehicle is stolen from her driveway and then totally wrecked. Which of the following covers this loss?

Other-than-collision coverage.

A Personal Auto Policy (PAP) insured's car was a total loss when the car was stolen and wrecked. The insured has the following coverages: liability, medical payments, and other-than-collision. Her PAP:

Other-than-collision will pay for the loss.

If an armored car, is carrying the insured's bank deposit is robbed, what insurance would the insured need to have?

Outside the premises-theft of money and securities.

The symbol "4" on a Business Auto Policy indicates coverage for which of the following categories of vehicles?

Owned autos other than private passenger autos.

All of the following are considered intentional torts;Except:

Ownership of a wild animal.

What items of personal property are included in Coverage A under an HO3 policy?

Paint on the premises to be applied to the interior.

Under a commercial property coverage form, all of the following properties are included in the definition of "building", EXCEPT:

Patio.

What rights does an insurer have as far as auditing the books of an insured, according to the conditions of a commercial property policy?

Perform audit while policy is in force and up to three years after expiration or termination of policy.

What is one way in which HO2, HO4, and HO6 similar?

Perils insured against under coverage C.

A commercial lines policy contains a number of conditions. Which of these is not one of these conditions?

Perils insured by the policy.

Commercial lines program policy- common policy conditions- do not include which of the following as a condition?

Perils insured.

In a commercial lines policy, common policy conditions do not include which of the following as a condition?

Perils insured.

If an insured signs a claim form for a claim which is fraudulent, the insured may be found guilty of _______.

Perjury.

Medical payment coverage in a Boat owners Policy cover injuries to:

Permissive occupant of the insured's boat.

Medical payment coverage in a Boat owners policy cover injuries to

Permissive occupants of the insured's boat.

Under the California insurance code, the word May is best defined as.

Permissive, or optional as it applies to the insurance code.

Under a Personal Umbrella policy, what underlying coverages must an insured typically maintain?

Personal Auto Policy and personal liability coverage.

Which type of insurance can best be defined as a condition or situation for any exposure or financial loss presented to an individual during the policy period?

Personal Loss Exposure

Which of the following is not available to be added as an endorsement to a home-owner's policy?

Personal Umbrella endorsement.

What is the difference between a personal article floater versus a personal property floater?

Personal article floater policy covers property on an scheduled basis, personal property floater policy unlisted or unscheduled the property covered.

Inland Marine floater is most similar to Schedule Personal Property endorsement on a Homeowners:

Personal articles floater.

Which Inland Marine floater is most similar to the Scheduled Personal Property endorsement on a Homeowners Policy?

Personal articles floater.

Which of the following is also known as a human loss exposure?

Personal loss exposure.

Type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to a business owner by the injury, disability, death or sickness of a valuable employee:

Personnel loss exposure.

The theft of the insured's automobile would be covered under:

Physical damage coverage.

Which coverages are typically provided in a Boat Owners Policy?

Physical damage, liability, and medical payments.

An individual who lives next to a nuclear power-plant is exposed to which of the following types of hazards?

Physical.

The water damage exclusion in the causes of loss- special form applies to all of the following, EXCEPT:

Plumbing system leakage.

State of California DOI minimums for liability coverage are $15,000/$30,000/$5,000. An insured has an accident out of state that has higher financial responsibility limits than California. Which statement is true?

Policy automatically provides the higher necessary limits without an extra premium.

All of the following are listed on a Commercial General Liability declarations page, EXCEPT:

Pollution liability limit.

Every admitted insurer in the state of California is required to maintain a unit or division to investigate which of the following?

Possible fraudulent claims made by insureds.

All of the following expenses are covered, in addition to the limits of liability, under Coverage A of a Personal Auto Policy, EXCEPT:

Pre-judgment interest.

Under Section II of a Homeowner's Policy, comprehensive personal liability coverage is extended to which of the following?

Premises described in the policy, and all personal activities of the insured, on or off the described premises.

All Homeowners' policies describe the duties of the insured following a loss. Identify which of the following is not a duty of the insured following a loss.

Prepare an inventory of the property that was damaged, include a description of the property, the quantity, the amount of the loss, and the actual cash value.

Which of the following would disallow an insured from receiving the benefits under the insurance policy:

Principle of insurable interest.

The method that the California DOI uses to approve or disapprove rate filings for various types of insurance such as homeowners and automobile is known as?

Prior approval method.

Which rate approval filling system is used in California for most lines of insurance

Prior approval.

Professionals are exposed to liability for failure to perform their duties. Which of the following would be the least likely prospect for a Professional Liability Policy?

Pro basketball Player.

Which of the following is not listed on a Commercial General Liability declarations page as an aggregate limit?

Products/completed operations limit.

Professional liability insurance should be purchased by all of the following categories of professions, EXCEPT:

Professional athletes and coaches.

A practicing physician would need the type of professional liability coverage that is contained in a medical malpractice policy because:

Professional liability and malpractice claims are excluded in commercial general liability policies.

All of the following are mandatory coverages of a Business owners Policy, EXCEPT:

Professional liability coverage.

A physician is being sued by a patient for misdiagnosing terminal cancer. What type of insurance would protect the physician against this type of mistake?

Professional liability.

A physician may have misdiagnosed a patient for terminal cancer. What type of insurance would protect the physician for this type of mistake?

Professional liability.

All of the following occupations are exposed to a chance of failing to properly fulfill their professional duties and are therefore potential prospects for professional liability policies, EXCEPT:

Professional sports players.

A representation as to the future is considered which of the following?

Promise

What is the primary difference between a HO2 and a HO4 policy?

Property insured under Coverage A.

Where is Ocean Marine liability insurance found?

Protection and indemnity coverage.

Insurance which covers ship owners against vicarious liability claims, due to operations of the insured vessel, is:

Protection and indemnity insurance.

The liability coverage in a Yacht Policy is referred to as:

Protection and indemnity.

An Umbrella Policy:

Provides broad excess liability coverage over one or more primary policies.

What is the requirement and what is provided, under the Mexico coverage endorsement to a PAP in California?

Provides liability coverage (excess) for any accident in Mexico within 25 miles of US border.

What would be the best way to make sure your client, the owner of a commercial auto policy, would be able to obtain liability coverage exposures resulting from employees using their own vehicles in your client's business?

Purchase employer's non-ownership liability coverage in the commercial auto policy.

A situation in which there is only the possibility of loss or no loss is considered a:

Pure risk.

RW and associates is an agency which represents BLG insurance corporation. RW and associates may leave the name BLG insurance corporation in its advertisements by clearly stating the relationship between the two business in any of the following ways ; EXCEPT

RW and Associates underwriting for BLG Insurance Corporation.

Which of the following would be known as the process whereby an insurer determines appropriate charges for its policies?

Rate-making.

How would a peril best be defined?

Reason for the loss of event that leads up to a loss.

What will the mortgage holder do in the event that an insurer does not pay a claim as the result of the actions of the insured?

Receive full payment for the loss, if the required premium has been paid.

All of the following insurance company are private insurers; EXCEPT

Reciprocal insurance companies.

All of the following are listed on a commercial liability declarations page, EXCEPT:

Rented to you limit.

The amount to replace property with like property of the same quality and construction is the:

Replacement cost.

The amount to replace property with like property of the same quality and construction is the properties:

Replacement value.

The California Insurance Code:

Requires agents to keep records of any compensation they may have received for their services involved with premium financing.

One difference between a robbery peril and a burglary peril is that the burglary peril:

Requires physical signs of forcible entry or exit.

All of the following are differences between surety bonds and Insurance EXCEPT:

Reserves are not established.

All of the following would be considered benefits of insurance except:

Retention of the loss by the insured.

In the event of recovery of stolen property, which of the following is an insurer's option when making a settlement with the insured under a Personal Auto Policy?

Return stolen property to the address shown in the policy.

It is vital that an insurance agent/broker full assesses, analyze, and review a particular risk in order to determine the proper insurance coverage needed. The least likely way to do this is to:

Review all coverage in their current insurance contracts as well as the premiums paid.

Which of the following perils is covered by a causes of loss-basic form?

Riot or civil commotion.

Which of the following is best defined as the taking of property from a person by someone who has caused, or who has threatened to cause, that person bodily harm"?

Robbery.

Which of the following loss exposures is not covered by Section II of Ron's Homeowners Policy?

Ron's registered/licensed personal auto while used on his own property which includes 10 acres of undeveloped land.

What is one of the principle rating factors under Proposition 103 allowed for personal auto policies?

Safety driving record.

The negotiation of a policy involves which of the following?

Sending the prospect an email suggesting that they buy a certain type of policy.

Any person who makes a loan of money using real property as security:

Shall not make available information contained in a borrowers insurance policy, if the borrower filed a statement with the lender, that they do not want lender to disclose such information.

The execution of a policy involves which of the following?

Signing a covering note.

A commercial property cause of loss forms do not cover any losses caused by:

Smoke damage from industrial operations.

A commercial property causes of loss forms do not cover any losses caused by:

Smoke damage from industrial operations.

Which of the losses listed would be covered under Dick's Personal Auto Policy other-than-collision?

Someone shoots Dick's car rear window while the care is parked on the street overnight.

The Dwelling Policy form that offers the broadest type of coverage is which of the following?

Special.

An insured's Business Auto Policy specifies that the liability coverage applies to covered autos- symbol 7. This means:

Specifically described autos are covered.

Which peril(s) is/are included in the broad form, but not in the basic form?

Sprinkler Leakage, Vandalism, Building Glass breakage.

Which perils is/are included in the vacancy permit endorsement?

Sprinkler leakage, Vandalism, Building glass breakage.

Stan Wilson and Stacy Wilson are the owners of S&S Deli, which is insured by a Commercial Package Policy, and both are listed as insured's. Who is responsible to pay the premium payment on the policy?

Stan.

In a commercial property, the insurance claim is denied because of the insured's actions. The mortgage holder will in most cases:

Still have the right to receive the full amount of the loss payments.

In a commercial property, the insurance claim is denied because of the insured's actions. The mortgage holder will, in most cases:

Still have the right to receive the full amount of the loss payments.

What type of insurance company has owners who are stockholders in the company and who share in the profits of the company?

Stock insurance companies.

What type of insurance company is owned by individuals that are stockholders in the company, and share the profits of the company?

Stock insurance companies.

Why would an insured need an Inland Marine Policy if she is shipping stock on her own trucks?

Stock is only covered if it is in the building, or within 100 feet of the building premises.

Insurer's right to recover the payment of a claim, after they paid the insured for their property losses from a negligent 3rd party is known as:

Subrogation.

Your HO3 insured wants to make sure he has liability protection against claims for false arrest, libel, and slander, You should:

Tell him he should add the personal injury endorsement.

Which of the following defines a binder?

Temporary insurance protection, either writing, between the insured and insurer.

Organization will cease to exist as an entity, eligible to hold a license, for all of the following reasons, except:

Termination of a key employee.

You are the agent for an insured that carries both a Homeowners Policy and a Personal Auto Policy (PAP) with you, through the same insurance carrier. The insured is driving home (in the auto you have insured) after purchasing a brand new big-screen TV, VCR, stereo, and CD/DVD player all-in-one unit. He collides with a parked car and destroys the new TV. How would this loss be covered?

The Homeowners Policy-personal property coverage.

If an insured under a Personal Auto Policy leaves a covered at an auto dealer for repairs, and the auto is involved in an accident while being test driven by an employee of the dealer, how will the Personal Auto Policy respond to a liability claims?

The Personal Auto Policy is excess.

In a reference to the coverages provided in the basic form, the Boat Owners Policy is similar to what other policy?

The Personal Auto Policy.

In reference to the coverage's provided in the basic form, the Boat owners Policy is similar to what other policy?

The Personal Auto Policy.

What does it mean if an agent's license is inactive?

The agent cannot transact any insurance business for which a valid, active license is required.

What will happen when an agent's action notice of appointment with an insurance company is terminated and the agent has on other appointments with any other insurance company?

The agent's permanent license becomes inactive.

An insurance deductible is:

The amount of covered expense that the insured pays before the insurer pays.

An application for a license can be denied without a hearing. Which of the following circumstances would allow for an application to be denied for an insurance license, without a hearing?

The applicant for the license had a license denied for cause within the previous 5 years.

An application for a license can be denied without a hearing. Which of the following circumstances would allow for an application to be denied for an insurance license, without a hearing, EXCEPT.

The applicant has committed a felony.

Under which of the following circumstances can the insurance commissioner deny the application for an agent's license without a hearing?

The applicant has had a license denied for cause withing the past five years.

Which of the following is the best definition of an insurer's loss reserve?

The approximate dollar amount of an insurer's liability of at least one or more open claims.

What is primary medical payments coverage difference between a Boat Owners Policy and an HO3 policy?

The boat owners policy covers injuries to the people on the boat, and the HO3 covers injuries to others outside the home.

In a commercial property policy, which cause of purchasing a Commercial Package Policy instead of purchasing the coverage on a monoline basis?

The broad and special form.

Plate glass coverage, which is found in a commercial property policy (basic, broad, and special causes of loss forms), contains which of the following characteristics?

The broad and special forms have limited coverage for glass breakage.

If an insured rents an auto while on vacation, what coverage, if any, will be available for physical damage coverage under a Personal Auto Policy?

The broadest coverage on any auto shown in the declarations.

What does a pure risk consist of?

The chance of loss only.

A Personal Auto Policy contains the state required liability, medical payment coverage and as other-than-collision coverage. How would a claim be paid if there were a loss after an insured vehicle is stolen and then wrecked?

The claim would be paid under "other-than-collision" coverage.

An insurance company pays a loss and continues coverage of the auto policy under the following circumstances: An insured, honestly thinking that he/she received his/her last traffic ticket more than 36 months ago, applies for an auto policy, stating that he/she has had not tickets or accidents in the past 36 months. Several days after the policy is issued, the insured's car is stolen. While the claim is being processed, the insurance company discovers that the insured had received his/her most recent traffic ticket for speeding 32 months ago. Why is the claim paid and the policy continued/

The concealed facts were not material. They would have paid the claim anyways.

All of the following are true regarding the California Standard Form Fire Insurance Policy, Except:

The content and wording of the policy is stated in the State Insurance Code.

One of the major advantages to insureds of a commercial lines package program over purchasing coverage on a mono-line basis is:

The convenience of having all coverage in one policy.

The Personal Auto Policy towing and labor endorsement pays for:

The cost of labor only if the labor is performed at the place of disablement.

All of the following are covered by Protection and Indemnity insurance, EXCEPT:

The cost of reasonable measures that insured must take to prevent damage at the time of loss.

Steven's (unendorsed) Personal Auto Policy liability coverage would pay for:

The cost of repairing the neighbor's fence that Steven damaged due to the negligent operation of his car.

Which of the following is the only reason that an insurer can cancel an automobile insurance policy?

The driver's license of the individual who usually operates the vehicle and who is insured by the policy, has had his/her license suspended temporarily.

Which of the following is the only reason that an insurer can cancel an automobile insurance policy?

The driver's license of the individual who usually operates the vehicle that is insured by the policy and who is insured by the policy has had his license suspended temporarily.

Which of the following coverage parts is not found in a standard Commercial Package Policy?

The dwelling property coverage part.

The retroactive date of a claims-made Professional Liability Policy is always:

The earliest date an event/loss may occur and still be eligible for recovery.

A claims-made Professional Liability Policy contains a retroactive date. Which of these best describes this date?

The earliest date that a loss or event may occur, and still be eligible for coverage under the policy.

Extra expense insurance covers:

The extra expense that business incurs to continue a business while damage to the premises are being restored.

Under the common policy conditions, who is authorized to make changes to a commercial insurance policy?

The first named insured (with insurer's consent).

Who has the right to request cancellation of a commercial lines policy?

The first named insured and the insurer.

All of the following contribute to the rising cost of Workers' Compensation Insurance, EXCEPT:

The growing population.

What is the coverage under a Homeowner's Policy that is provided for the personal property of the insured when personal property is away from the premises, while the insured is traveling anywhere in the world?

The identical coverage limits to that of coverage of personal property on the premises.

Ordinance or law coverage provides protection for which of the following losses?

The increased expense incurred for the insurer to repair or rebuild property according to building code specifications.

Where do most states require insurers to file policy forms?

The insurance department.

The exclusion for liquor liability found in a Commercial General Liability Policy excludes coverage for any liability claims that are the result of:

The insured being in the alcoholic beverage business.

Which of the following choices is not covered under Section II of a Homeowners Policy?

The insured being liable for bodily injury to someone in the insured's immediate resident family.

Which is a valid reason for an applicant to purchase an HO3 policy instead of a Dwelling Policy?

The insured desires broader coverage.

An automobile insurance company is permitted to cancel a Personal Auto Policy for which reasons listed below?

The insured driver's license is suspended. This is the person that normally drives.

Your insured has a Personal Auto Policy that provides medical payments coverage of $2,000. Of the following statements, which is true regarding the amount payable under this section of the policy?

The insured is car-pooling to work with her neighbor when they are in an accident. Both are injured and incur almost $3,000 each in medical expenses. The insured and her neighbor would each be paid $2,000 from the policy.

All of the following loss exposures are covered under the Liability Section of a Homeowner's Policy, EXCEPT:

The insured is using his personal new auto, fully registered and licensed, on his premises, which included a large parcel of undeveloped land.

The phrase "80% coinsurance" in the commercial property field refers to:

The insured must maintain insurance coverage equal to 80% of the value of the property as well as receiving a lower premium; otherwise a coinsurance penalty will be imposed in the event of a loss.

An endorsement and an extra premium would be required for which of the following liability losses under a Personal Auto Policy?

The insured regularly uses, at the permission of his employer, a company owned car, and has an accident with the vehicle.

When the coinsurance requirement is not satisfied:

The insured will pay part of the loss.

The Ca Insurance code requires property insurance policies to specify all of the following information EXCEPT:

The insured's address.

The medical payments coverage found in a Commercial General Liability Policy applies to which of the following categories of individuals?

The insured's customers who are in the process of transacting business at the insured's premises.

A standard "unendorsed" HO3 policy would cover which of the following types of losses?

The insured's furniture is damaged when it is removed from the insured's residence during a fire at the residence.

The ordinance or law limitation in a Homeowners Policy may cause a gap in coverage in which of the following situations?

The insured's home is damaged by fire and must be rebuilt to meet present building codes. The additional cost of complying with the codes is 50%.

The term "subrogation" refers to:

The insured's right to recover payment from a responsible at fault party.

Who is considered the first party to an insurance contract?

The insured.

Define the term "WE" as it is found in the three types of property covered under a commercial building and personal property coverage form, specifically, business personal property.

The insurer as listed in the declarations page.

What is one of the main reasons the federal government insurance programs exist?

The large amount of resources needed from some catastrophic losses.

What steps need to be taken to terminated a licensee's license that is in the possession of an employer?

The licesnsee needs to give written notice of intent to the insurance commissioner.

Under a building and personal property coverage form, if the insured building has been vacant for more than 60 consecutive days, what effect will this have on a vandalism loss?

The loss is excluded.

The word materiality applies to the concepts of concealment and representation. Which of these is true in this regard?

The materiality of any information in this regard is determined by the influence of the facts on each party in determining their estimates of the disadvantages of the proposed contract.

Which of the following is a true statement about CAARP?

The minimum liability for CAARP policies are $15000/$30000/$5000.

If the named insured has been charged with arson in reference to a total fire loss to the insured's building, what effect will the insured's action have on the mortgage holder's claims for damages?

The mortgagee is entitled to receive 100% of their loss>

Fred is a named insured on a commercial policy insuring a commercial building. Fred burns the building down and is convicted of arson. Fred's commercial property policy conditions state that:

The mortgagee of the insured property can recover on this loss.

The term "your" (as found in the definitions section of a commercial building and personal property coverage form), referring to your business personal property, is defined as which of the following?

The name insured from the declarations page, exclusively.

Which of the following person is not an insured under Section 1 of a Homeowners Policy?

The named insured's non-resident spouse.

A single person does not own or lease an automobile. She occasionally drives her housemate's vehicle on an emergency basis. She is going on vacation and will have to rent a car. To obtain full automobile insurance coverage when this occurs, what should she purchase?

The named non-owner coverage endorsement.

If an insured borrows a neighbor's vehicle to run a personal errand, how do the policies respond in the event of an auto accident?

The neighbor's policy is primary and the driver's policy is excess.

All of the following factors can be used, according to the Insurance Code in California, to determine auto insurance policy rates. In addition to any other factors, the insurance Commissioner is allowed to adopt and include regulation:

The number of miles driven annually by the insured. The driving safety record of the insured.

What is one reason a person may purchase a Dwelling Policy instead of a Homeowners Policy?

The owner does not reside in the dwelling.

What is the difference between per accident limit in a split limits and the single limits?

The per accident limit applies only to bodily injuries, and the single limit applies to all claims.

What is the difference between per accident limit in a split limits policy and the single limits?

The per accident limit applies only to bodily injuries, and the single limit applies to all claims.

Under the liability portion of an unendorsed Personal Auto Policy, what coverage is available if the named insured is operating a company car on a regular basis?

The policy excludes this usage.

Under the liability portion of an unendorsed personal auto policy, what coverage is available if the named insured is operating a company car a regular basis?

The policy excludes this usage.

California has lower financial responsibility limits than most other states. If Randy, a California Personal Auto Policy insured, carrying minimum limits on coverage, has an accident in a state that requires higher limits then:

The policy will automatically provide the higher limits-at no extra charge.

An insured's vehicle is stolen. The insured rents a replacement vehicle for two months until her auto is repaired by the insurer. Will her Personal Auto Policy pay for the cost of the rental, and if so How?

The policy will pay all needed expense the insured incurs for the rental car up to the stated limits found in the policy.

Liability exposures that result from the location of a business, in addition to the activities of that business, is known as which of the following?

The premises and operations exposure.

Why would an employer be held liable for the negligent operation by an employee who is driving a vehicle on behalf of the employer and causes to an injury to a pedestrian?

The principle of vicarious liability.

It is a violation of the CA Insurance Code to act as a producer for a non-admitted carrier unless:

The producer is a surplus lines broker.

The California Insurance code contains requirements concerning the requirements for name approval fo all insurance licensees. These requirement include which of the following?

The professional designation of "CPCU" is acceptable following the name of a Property & Casualty broker-agent who has completed the Chartered Property & Casualty Underwriter courses.

What is the primary difference between an HO2 and HO3 policy?

The property covered.

Unendorsed Personal Auto Policy would cover which of the following under the liability coverage part?

The repair expenses that are needed to fix the damage to a neighbor's fence that was the result the insured negligently driving through it while driving unsafely.

When an automobile insurance policy is canceled at the request of the insured, and the insurance company keeps all earned premiums, in addition to an amount to pay for overhead expenses incurred by the insurer, it is referred to as what type of cancellation?

The short rate type of cancellation.

The coverage that is the broadest, is found in which of the following dwelling insurance contracts?

The special form.

Section I of a Homeowners Policy provides coverage for all of the following individuals, EXCEPT:

The spouse of the insured. (not living in the same residence).

Which of the following combinations of characteristics should be considered when making an insurance recommendation to a prospective insured that has just purchased a new office building/

The structure that is exposed to a loss, the perils that may occur, consequently causing a loss, the possible financial impact of a loss.

Under the California insurance code, when an insurance agent/broker advertises in the internet and is transacting insurance in California, they shall provide all of the following information, except:

The telephone number where they can be reached.

During the application process for a Personal Auto Policy, the applicant says that he has not had any tickets or accidents. The insurance company accepts the risk and issues the policy. Shortly after, the insured's vehicle is stolen resulting in the insurer paying the loss and not cancelling the policy. This is despite the fact that they found out that the insured had received several traffic tickets that he neglected to mention. What is the reason for the course of action of the insurer?

The traffic tickets that were not disclosed were not material. This is why the policy was not rescinded and the claim was paid.

The term assignment refers to:

The transfer of the insured's interest in a policy to another party

What is the primary difference between umbrella and excess liability policies?

The umbrella covers most liability exposures; the liability will cover only one line.

With regards to insurance applicability the word "risk" can be best defined as which of the following?

The uncertainty associated with a loss occurring.

Newly acquired motorcycles are not automatically covered under a Personal Auto Policy (PAP) because:

The unendorsed policy does not cover two-wheeled vehicles.

The loss under a watercraft endorsement is covered if it arises out of:

The use of a sailboat in a racing competition.

Hull coverage in an Ocean Marine Policy covers which of the following?

The vessel itself, including engines, and fuel.

What does Ocean Marine hull insurance cover?

The vessel itself.

Other-than-collision coverage of a Personal Auto Policy covers which of the following types of losses?

The windshield of the vehicle is damaged while left overnight on a city street within 5 miles of the insured's residence.

"Other-than-collision" coverage of a Personal Auto Policy includes which of the following types of losses?

Theft of any of these would be covered.

Which of these are covered by an Employee Dishonesty coverage form?

Theft of stock from the business, owned by the policy holder, by an employee.

Under an unendorsed Personal Auto Policy, transportation expense coverage applies to:

Theft only losses.

The broadest form of crime coverage is:

Theft.

Under the California Insurance code all insurance licensee's who collect premiums have a fiduciary responsibility to both the insurer and the insured; if it is discovered that the agent or broker commingled or diverted premium dollars would be charged for:

Theft.

Which of the following types of crime insurance is the broadest in terms of coverage?

Theft.

All of the following explain the characteristics that are unique to insurance contracts, EXCEPT:

There is an equal exchange of amounts or value withing the contract.

A home is damaged two hours after an earthquake, first by fire, then by fuel pipes bursting and causing an explosion. Under an HO3 form:

There is coverage, but only for the damage caused by the fire and explosion.

A plate glass coverage is needed by some insureds. Which of the following statements about the coverage for the peril of glass breakage in commercial property for a building and personal property basic, broad, and special causes of loss forms is true.

There is limited glass coverage in both of the broad and special forms.

What is one difference between a Homeowner's Policy and a Dwelling Policy for personal property coverage?

There is no appreciable difference.

A home is damaged two hours after an earthquake; first by fire, and then by fuel pipes bursting and causing an explosion. Under a homeowners HO3 form:

There is no coverage, but only for the damage caused by the ensuing fire and explosion.

Which of the following is true regarding an Umbrella policy:

There is no standardized form used by Insurance companies.

What is the advantage to the insured of purchasing a Commercial Package policy instead of purchasing the coverage on a monoline basis?

There is the convenience of all coverage being contained in one policy, which typically contains package discounts.

Which of the following statements is true regarding compensatory damages?

There is usually no direct correlation between the amount of general and special damages awarded to the victim.

For any type of risk exposure to be considered an ideally insurable risk, which of the following characteristics does not have to exist?

There is very little, if any, chance of a loss happening during the policy period.

In addition to paying legal damages, but without deducting payments from the policy's limits, which of these would be covered in a Personal Auto Policy?

These are all covered in addition to the limits states in the policy contract.

Why is a newly acquired motorcycle not automatically covered under the terms and conditions of a Personal Auto Policy?

These types of vehicles (motorcycles and other types of non-automobiles) are not covered under a Personal Auto Policy that is unendorsed.

Which of the following statements is true regarding insurers with admitted status in california?

They may not use race, color, religion, or national origin as a condition to use higher rates.

The process of underwriting a Disability Income Insurance policy includes analyzing the risks associated with certain activities, hobbies, and hazardous sports. Therefore, how does the California Insurance Code define and classify an act of an applicant who doesn't mention, when applying for this type of insurance, his/her recent interest and participation in bungee jumping?

This is defined and classified as concealment.

Your insured client has an auto policy with liability and collision coverages. The insured experiences an at-fault accident the first time he uses the neighbor's truck which has liability coverage only. His PAP provides coverage and will pay for the entire loss since he was driving the truck:

This is not how the insurer would handle this claim.

The phrase "aggregate limit" is found and defined in a Commercial Liability Policy. Which of these is true about this limit?

This limit could reduce the products and completed operations.

How do insurance regulators view a statement made by an agent to a prospective insured that the dividends of an insurance contract are guaranteed each year?

This would be considered misrepresentation.

What causes of loss are covered under the Business Income Coverage form?

Those shown on the declarations.

The commercial property conditions include a condition called "liberalization". The effect of this condition is:

To automatically apply a broader coverage to the commercial property coverage part if a policy form revision would broaden coverage without an additional premium.

Commercial property conditions include a condition called "liberalization". The effect of this condition is:

To automatically apply broader coverage to the commercial property coverage part if a policy form revision would broaden coverage without an additional premium.

What is the main purpose of tort law?

To determine financial responsibility for damages.

What is the purpose of the inspections and surveys condition of the Commercial Package Policy?

To determine the rate to be charged.

What is the primary reason for co-insurance clauses in property policies?

To encourage insured's to purchase coverage near the value of the property.

Why is the examination of books and records condition important in a commercial policy?

To ensure that the proper amount of premium is charged.

A reporting form is used for property insurance:

To maintain the correct limits of coverage without over or under insuring when the value or volume of the property varies during the policy term when inventory fluctuates.

Coverage under a comprehensive Personal Liability Policy or a Homeowners Section II extends:

To the premises described and to the personal activities of the insured on or off of the premises.

Equipment Breakdown insurance covers all of the following, EXCEPT:

Tools subject to regular replacement.

The territorial limits of a personal auto policy includes which of the following?

Toronto, Canada

What gives an insured party the right to seek compensation if it is proven that another person with negligence contributed to the injury?

Tort law.

A wrongful act other than a crime or breach of contract is:

Tort.

Under the California insurance code, a surplus lines broker:

Transacts business with only non-admitted insurers.

What is an additional coverage provided by an HO3 policy?

Trees, shrubs, and other plants.

A fine arts policy coverage:

USA and Canada.

Which of the following does not have a standard coverage form?

Umbrella Policy.

Which of the following does not have a standard coverage form in common use?

Umbrella policy.

Which of the following is considered an monoline coverage:

Umbrella policy.

Under a Personal Auto Policy, how would the damage sustained to an insured vehicle from the insured smashing into a large fallen tree that had come down several hours earlier as the result of a lightning strike be covered?

Under the collision section of the policy.

Under a Personal Auto Policy (PAP), how would the damage sustained to an insured vehicle as the result of an earthquake be covered?

Under the other-than-collision section of the policy.

What is the process whereby insurers decide which customers to insure and what coverage to offer?

Underwriting.

Of the following choices, which is correct regarding why a motorcycle is not automatically covered under a Personal Auto Policy?

Unendorsed Personal Auto Policy does not automatically cover two-wheeled vehicles.

The provision in a property policy which states that the insured has been paid up to their insurable interest is:

Valuation clause.

Which of the following cities would fall within the policy territory limits of a PAP issued by an insurer in the State of California?

Vancouver, Canada.

Livery conveyance is best described as a:

Vehicle for hire to transport people.

Which of these is not included in the definition of an "uninsured motor vehicle" in a Personal Auto Policy?

Vehicles that are owned by an agency of the State that self-insures the vehicle.

Coverage Part A of a Commercial Package Policy, specifically inland/marine coverage, includes coverage for all of the following types of property, EXCEPT:

Vehicles that are stored for the owner in a commercial public parking lot.

A representation as to the past, present, or future is a/an

Verified promise.

Laura is driving her own car on behalf of her employer. Laura's negligent operation of her car injures a member of the public. The employer may be held liable because of what is called:

Vicarious liability.

If the vacancy permit endorsement is added to a Building and Personal Property coverage form, the vacancy condition under the basic policy is:

Waived only for designated perils during the permit period.

If the vacancy permit endorsement is added to a building and personal property coverage form, the vacancy conditions under the basic policy is:

Waived only for designated perils during the permit period.

The intentional relinquishment of a known right is:

Waiver.

What is the term known as when a person intentionally gives up a known right?

Waiver.

Which exclusion in the "causes of loss- special form" excludes coverage for mudlfow?

Water (flood)

Which of the following collapse losses would be covered under an HO3?

Weight of contents.

If a property owner is insured under a building and personal property insurance form, when is the property considered vacant?

When less than 31% of the building space is rented to others or in use by the insured.

When does the authority to transact insurance that is granted to a licensee from an insurance company become effective

When the Insurance Company representatives signs the action notice of appointment..

All property and casualty broker?agents must not only be licensed with the DOI, but they must also have an action notice of appointment with the insurance companies they will be representing. When does the action notice become effective?

When the action notice of appointment is signed by the insurer.

When does the license of a property and casualty broker-agent become inactive?

When the broker/agent has no action notice of appointment with any insurance , but licensing and renewal fees have been paid and continuing education requirements have been met.

If a tenant is insured under a Building and Personal Property coverage form, when is the property considered vacant?

When there is insufficient business personal property to conduct customary operations.

Absolute risk (liability) is imposed:

When there is negligence whether proven or not.

What is one main factors that the insurance commissioner uses while determining whether a rate is excessive or unfairly discriminatory?

Whether the rate mathematically reflects the insurance company's investment income.

Which of the following endorsement is included in all home-owner policies:

Worker's Compensation.

Which of the following is not a federal program?

Worker's Compensation.

A policy may not be transferred without:

Written consent of the insurer.

An individual is driving home from the store with a new 48-inch flat screen TV. An accident occurs, and the TV is destroyed. The driver carries a Homeowners Policy(HO), as sell as a Personal Auto Policy (PAP). Will the damaged TV be covered? If yes, how?

Yes, under the personal property part of his HO policy.

An individual is driving home from the store with a new 48-inch flat screen TV. An accident occurs and the TV is destroyed. The driver carries a Homeowners Policy(HO) as well as a Personal Auto Policy (PAP). Will the damaged TV be covered? If yes, How?

Yes, under the personal property part of his policy.

An applicant would like to buy a Personal Umbrella Policy:

Your insurer may require that he maintain underlying liability coverage by carrying auto and personal liability coverage.

A written provision that modifies the provisions of the original contract is known as:

an endorsement

Exclusive agents:

generally represent only one insurer.