EXAM FX- Simulated Test Questions
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a) 10 days b) 3 days c) 5 days d) 7 days
5 days
Which of the following would be named on the declarations page of a property or liability policy? a) Beneficiaries b) All insureds c) Additional insureds d) First named insured
First Named insured
What are conditions that increase the chance of a loss are known as what?
Hazards
The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT a) $1,000 on silverware. b) $200 on money. c) $1,500 on securities. d) $1,500 on jewelry.
1,000 on silverware
What is symbol 19?
Mobile equipment subject to a motor vehicle insurance law
What law protects consumers from the circulation of inaccurate or obsolete information?
The fair credit reporting act
What is the civil penalty for violating a cease and desist order of the Commissioner? a) $1,000 b) $5,000 c) $10,000 d) $50,000
10,000
What is the maximum number of boarders per unit that would be allowed in the homeowners policy? a) 2 b) 3 c) 4 d) 5
2
Which of the following is true regarding Continuing Education required for those holding a Pennsylvania producer license? a) Varies from insurer to insurer b) 24 hours each licensing period c) 12 hours each annual period d) Continuing Education is optional
24 hours each licensing period
A producer has successfully completed 52 hours of CE. How many hours can the producer apply to her current reporting period, and how many hours can she carry forward to the next reporting period? a) 26 hours will be applied to the current reporting perio and the remaining 26 can be applied to the period immediately following. b) Only 24 hours of the 52 earned may applied to this reporting period. c) 24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over. d) 28 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following.
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over.
Within how many days must a producer respond to an inquiry from the Commissioner? a) 3 days b) 10 days c) 15 days d) 30 days
30 days
The insured's home is covered by an HO-3. Two years ago, the insured bought the home for $58,000. Today, its replacement value is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage? a) $46,400 b) $48,000 c) $58,000 d) $60,000
48,000
A tornado that destroys property would be an example of which of the following? a) A peril b) A pure risk c) A loss d) A physical hazard
A peril
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? a) Defamation b) Unfair discrimination c) Errors and omissions d) Fraud
Fraud
Which of the following policies does NOT contain an automatic reinstatement provision? a) Business automobile liability b) Personal automobile liability with split limits c) Homeowners d) General liability written with an aggregate limit
General Liability written with an aggregate limit
Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries? a) Injury that was intentionally self-inflicted b) Injury incurred while the person was under the influence of drugs or alcohol c) Injury incurred while attempting to elude apprehension by a law enforcement official d) Injury incurred during the commission of a felony
Injury incurred while the person was under the influence of drugs or alcohol
The Pennsylvania Property and Casualty Insurance Guaranty Association provides protection to insureds in the event of a) Unfair claims methods or practices. b) Insurance producer's dishonesty. c) Insurance company insolvency. d) Unfair trade practices.
Insurance company insolvency.
Which of the following is NOT one of the 3 requirements for property to be eligible for FAIR plan coverage? a) Coverage could not be purchased through the normal insurance market b) It must be valued at an amount under the maximum value amount set by the state c) It must be located in a specific area defined by the state d) It must be considered insurable based on reasonable underwriting standards
It must be valued at an amount under the maximum value amount set by the state
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of a) Unfair claim practice. b) Rebating. c) Misrepresentation. d) Concealment.
Misrepresentation
What is symbol 9?
Non-owned autos
When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)? a) Only if the insured has 4 or more employees. b) Never c) Only if the insured does not have commercial auto coverage d) Only in addition to commercial auto coverage.
Only if the insured does not have commercial auto coverage
Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises? a) Business income - report of values b) Permitted incidental occupancies c) Special limit of liability d) Professional liability
Permitted incidental occupancies
B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit? a) Property damage liability b) Crime coverage part c) Personal and advertising injury liability d) Bodily injury liability
Personal and advertising injury liability
Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to a) Specified losses b) Property losses only c) Liability losses only d) Property and liability losses
Property and liability losses
Which of the following persons may be covered under farm Coverage J? a) Resident employees b) First named insured c) Additional insureds d) Farm employees
Resident employees
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called a) Participation requirement. b) Self-insured retention. c) Stop-loss. d) Coinsurance.
Self-insured retention.
In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the a) Loading and unloading test. b) Situs and status test. c) Maritime and navigable waters test. d) Wharf and pier test.
Situs and status test.
What is symbol 7?
Specifically described autos
Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? a) Symbol 5 b) Symbol 6 c) Symbol 7 d) Symbol 9
Symbol 5
Which of the following may NOT be included in an insurance company's advertisement? a) That its policies are covered by a state Guaranty Association b) The policies' limitations or exclusions c) The name of a specific agent d) An identification of a limited policy as a limited policy
That its policies are covered by a state Guaranty Association
Which of the following would the livestock coverage form NOT insure against? a) Death of livestock caused by accidental drowning b) Death of livestock caused by a tornado c) The euthanasia of livestock after being hit by a vehicle d) The euthanasia of livestock suspected of carrying mad cow disease
The euthanasia of livestock after being hit by a vehicle
The common policy condition is a modular part combined with other parts to create the contract. The common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? a) The first named insured may cancel the policy at any time by giving written notice to the insurer. b) Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained. c) Requests for any changes in the policy from the insured may be made by the second named insured. d) The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy.
The first named insured may cancel the policy at any time by giving written notice to the insurer.
Under the "limited tort insurance" option, an insured may not seek recovery for pain and suffering or other nonmonetary damages UNLESS a) The insured is the at fault driver. b) The other party was found to be 100% at fault for the injuries. c) The injuries fall within the definition of "serious injury." d) The injuries result in the insured being unable to work for at least 7 days.
The injuries fall within the definition of "serious injury."
Which of the following is NOT one of the available additional coverages in the builders risk form? a) Fire department service charge b) Pollutant cleanup c) Vandalism d) Debris removal
Vandalism
Which of the following could be covered by an HO policy? a) Property of a tenant not related to the insured b) An oriental rug in an on-premises apartment c) Birds, fish, and animals d) A sports car kept in an attached garage
An oriental rug in an on-premises apartment
What is symbol 1?
Any auto
A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called a) Bodily injury/property damage form. b) Occurrence form. c) Premises coverage. d) Claims-made form.
Claims-made form
The ABC Corporation has $100,000 of coverage on its building through insurance Company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay? a) Company A will pay $24,000; Company B will pay $0. b) Company A will pay $16,000; Company B will pay $8,000. c) Company A will pay $20,000; Company B will pay $4,000. d) Company A will pay $12,000; Company B will pay $12,000.
Company A will pay $16,000; Company B will pay $8,000.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) Stocks, securities, or bonds. b) An offer to share in commissions generated by the sale. c) Dividends from a mutual insurer. d) An offer of employment.
Dividends from a mutual insurer
Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance? a) Exposure b) Loss c) Hazard d) Risk
Exposure
Which of the following does the term proximate cause refer to? a) Injury that leads to monetary compensation b) Duty of the defendant to act c) Reason for filing a lawsuit d) Negligence that leads to an injury
Negligence that leads to an injury
Which of the following liability exposures is most likely for a small specialty clothing retail boutique? a) Operations liability exposure b) Product liability exposure c) Completed operations liability exposure d) Premises liability exposure
Premises Liability Exposure
Under Section I, homeowners insurance must include a) Negligence coverage. b) Property coverage. c) Liability coverage. d) Immediate coverage.
Property Coverage
All of the following types of property are covered by a standard builders risk form EXCEPT a) Tools 50 feet away from the building. b) The building itself. c) Temporary structures. d) Machinery that will be permanently attached to the building.
Tools 50 feet away from the building
A businessowners policy is a) A monoline policy. b) A self-contained prepackaged policy. c) A special policy designed for large retail operations. d) Part of a commercial package policy.
a self-contained prepackaged policy
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses? a) Exclusions b) Declarations c) Insuring agreement d) Additional coverage
additional coverage
Which of the following would be considered an insured under a business auto coverage form? a) The owner or anyone else from whom the named insured hires or borrows a covered auto b) Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business c) A partner of the named insured for any covered auto owned by that person or a member of his or her household d) Anyone while using, with permission, a covered auto owned by the named insured
anyone while using, with permission, a covered auto owned by the named insured
An insured is driving above the posted speed limit. As he rounds a curve, he crashes into an illegally parked car. This is an example of a) Comparative negligence. b) Vicarious liability. c) No-fault liability. d) Contributory negligence.
d) Contributory negligence.
What is symbol 6?
owned autos subject to compulsory UM law
An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy? a) A two-wheeled trailer designed to be towed by the station wagon b) A farm pickup with 1,000-pound capacity c) A station wagon that is used personally d) A two-ton grain truck with a 6,500-pound capacity
A two-ton grain truck with a 6,500-pound capacity
What is a unilateral contract?
A unilateral contract is a one-sided contract. This means only one party makes an enforceable promise
A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? a) The entire loss is payable to the insured. b) The loss is payable to the insured and the mortgagee. c) The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. d) The entire loss is payable to the mortgagee.
The loss is payable to the insured and the mortagee
With regards to premium rates, which of the following statements is NOT true? a) If a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer. b) The Commissioner sets all insurance premium rates used in Pennsylvania. c) Pennsylvania is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner. d) After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate. All premium rates must be filed with the Commissioner. The insurer must wait 30 days before using the filed rate, or until the approval is received. If, after thirty days, the filing has not been disapproved, the insurer may use the filed rate.
b) The Commissioner sets all insurance premium rates used in Pennsylvania.
What are the three types of agent authority?
express, implied, and apparent
All of the following are conditions commonly found in the insurance policy EXCEPT a) Subrogation. b) Appraisal. c) Insuring agreement. d) Cancellation and nonrenewal.
insuring agreement
A common exclusion found under physical damage to your auto includes a) Riot or civil commotion. b) Towing and labor. c) Mechanical breakdown. d) Glass breakage.
mechanical breakdown
What is symbol 5?
owned autos subject to no-fault coverage
What is symbol 2,3,4 ?
owned autos, owned private passenger autos, and owned other than private passenger
What are the two types of compensatory damages? a) Pure and speculative b) Tort and general c) Normal and punitive d) Special and general
special and general
What is symbol 8?
Hired autos
When an auto insurance policy is cancelled by the insurer for an allowable reason other than nonpayment of the premium, how much prior notice must be given to the named insured? a) 45 days b) 10 days c) 15 days d) 30 days
30 days
In addition to income benefits, how much will a dependent survivor receive as a funeral benefit for a deceased employee covered under Workers Compensation? a) Reasonable and necessary b) $1,000 c) $3,000 d) $5,000
3000
A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly? a) Products b) Professional errors & omissions (E&O) c) Completed operations d) Medical payments
Completed operations
What is consideration in an insurance contract?
Consideration is something of value that each party gives to the other
Farm fences (except field and pasture fences) are covered by which farm coverage form? a) Coverage A b) Coverage B c) Coverage E d) Coverage G
Coverage G
The part of a policy that clarifies terms in the policy is the a) Definitions. b) Insuring agreement. c) Conditions. d) Exclusions.
Definitions.
When would a misrepresentation on an insurance insurance application be considered fraud?
When its intentional and material
What type of coverage does a homeowners policy include that a dwelling policy does not? a) Personal property b) Other structures c) Broad form d) Liability
Liability