Exam Simulator 150Q number 2

24. Which of the following is a mandatory part of an insurance policy that varies with each individual policy? (Choose from the following options) 1. Insuring agreement 2. Declarations 3. Conditions 4. Exclusions

.1. Insuring agreement Right Answer 2. Declarations

6. Which loss listed below would be fully covered by a homeowners policy? (Choose from the following options) 1. $2,000 silver tea set stolen 2. $1,200 pedigreed golden retriever stolen 3. $24,000 bass boat destroyed in a tornado 4. $5,000 firearm collection stolen

1. $2,000 silver tea set stolen

51. Under Additional Coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? (Choose from the following options) 1. $500 2. $1,000 3. $5,000 4. Fire department service charges are not allowed.

1. $500

80. Concurrent causation occurs when (Choose from the following options) 1. A loss is caused by both a covered and an uncovered peril. 2. A loss is caused by two uncovered perils. 3. A loss is caused by an uncovered peril. 4. A loss is caused by a covered peril.

1. A loss is caused by both a covered and an uncovered peril.

62. When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy? (Choose from the following options) 1. They do not change. 2. They do not apply. 3. They increase based on the state law. 4. They decrease based on the state law.

1. They do not change.

33. A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called (Choose from the following options) 1. Supplemental extended reporting period. 2. Grace period. 3. Basic extended reporting period. 4. Extension of coverage.

2. Grace period. Right Answer 3. Basic extended reporting period.

66. A building insured with commercial property insurance has been vacant 90 days. Which of the following is NOT true? (Choose from the following options) 1. Payment for unnamed perils is reduced by 15%. 2. Payment for unnamed perils is reduced by 25%. 3. The insured has no coverage for losses caused by theft. 4. The insured has no coverage for losses caused by glass breakage.

2. Payment for unnamed perils is reduced by 25%.

36. When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy? (Choose from the following options) 1. No coverage applies automatically 2. Whatever coverage applied to the vehicle being replaced 3. Liability coverage only 4. Physical damage coverage only

2. Whatever coverage applied to the vehicle being replaced

69. Which of the following would NOT be covered by medical pay in Section II of your HO policy? (Choose from the following options) 1. You allow the neighborhood kids to play flag football in your yard; one is injured. 2. You cut your leg while whacking weeds in your backyard with your neighbor's weed whacker. 3. Your child's nanny falls while walking down your steps. 4. You are walking your neighbor's dog and it bites someone.

2. You cut your leg while whacking weeds in your backyard with your neighbor's weed whacker.

90. Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section? (Choose from the following options) 1. Up to $10,000 aggregate for the policy period 2. Up to $5,000 aggregate for the policy period 3. Up to $1,000 per occurrence 4. Up to $2,500 per occurrence

3. Up to $1,000 per occurrence

22. An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay? (Choose from the following options) 1. None 2. $500 3. $1,000 4. $1,200

4. $1,200 right Answer 3. $1,000

30. The standard crop-hail policy does not cover losses or damage caused by wind, rain, flood or frost. What perils are covered under the standard crop-hail policy? (Choose from the following options) 1. Fire 2. Lightning 3. Hail 4. All of the above

4. All of the above

23. Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? (Choose from the following options) 1. Overflow of inland or tidal waters 2. Unusual and rapid accumulation or runoff of surface waters from any source 3. A mudflow 4. All of the above could be considered flood sources

4. All of the above could be considered flood sources

42. The amount an insurer will pay under Coverage D (Loss of Use) depends on (Choose from the following options) 1. The length of time the dwelling is uninhabitable. 2. The amount of coverage on the dwelling. 3. How long a dwelling has been occupied. 4. If the dwelling is owner-occupied or rented out.

4. If the dwelling is owner-occupied or rented out. Right Answer 2. The amount of coverage on the dwelling.

1. Which of the following is true regarding the fire department service charge under the Builders Risk form? (Choose from the following options) 1. It is not available in this form. 2. It is a high-deductible endorsement. 3. It is an additional coverage. 4. It is an automatic coverage for $500.

4. It is an automatic coverage for $500. Right Answer 3. It is an additional coverage.

68. All of the following are other coverages included in both the broad and special form dwelling policy EXCEPT (Choose from the following options) 1. Theft of personal property. 2. Collapse. 3. Breakage of glass. 4. Lawns, trees, shrubs, and plants.

4. Lawns, trees, shrubs, and plants. Right Answer 1. Theft of personal property.

84. All of the following types of property are covered by a standard builders risk form EXCEPT (Choose from the following options) 1. Machinery that will be permanently attached to the building. 2. Tools 50 feet away from the building. 3. The building itself. 4. Temporary structures.

4. Temporary structures. Right Answer 2. Tools 50 feet away from the building.

52. An insured works outside the home. The insured's sister lives with him and cares for his 4 children. When his home is severely damaged by fire, they move into an apartment while repairs are being made. The largest apartment available in the area has 2 bedrooms, so the insured's sister stays at a motel while the repairs are made. How much will the HO-3 pay for their additional living expense? (Choose from the following options) 1. The cost of renting an apartment, and 50% of the cost of the motel 2. Nothing 3. All of the expense up to the Coverage D limit 4. The cost of renting an apartment, but not the cost of the motel room

4. The cost of renting an apartment, but not the cost of the motel room Right Answer 3. All of the expense up to the Coverage D limit

77. Coverage F (medical payments) under a homeowners policy would cover (Choose from the following options) 1. A residence employee who is injured on the job. 2. A tenant who is injured while on the premises. 3. A family member who is injured while residing in the insured premises. 4. The insured for injuries sustained while working at home.

4. The insured for injuries sustained while working at home. Right Answer 1. A residence employee who is injured on the job.

53. Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? (Choose from the following options) 1. The insured's friend is injured in an accident while riding as a passenger in the insured's car. 2. The insured's mother is injured while exiting from the insured vehicle. 3. The insured is struck by another vehicle while crossing the street. 4. The insured is injured while driving his motorcycle on his resident premises.

4. The insured is injured while driving his motorcycle on his resident premises.

46. All of the following statements regarding a Boatowners policy are true EXCEPT (Choose from the following options) 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required. 2. Watercraft liability coverage provides protection up to specified limits, for claims against a "covered person" for damages because of bodily injury caused by a watercraft occurrence. 3. Physical damage coverage is provided on an actual cash value (ACV) basis. 4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured.

4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured. Right Answer 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required.

25. What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000? (Choose from the following options) 1. $80,000 2. $100,000 3. $60,000 4. $75,000

1. $80,000

4. If the actual values exceed the limit of insurance, the businessowners policy (BOP) contains a seasonal increase provision that automatically increases the limit of insurance for business personal property by (Choose from the following options) 1. 10% 2. 25% 3. 30% 4. 50%

1. 10% right Answer 2. 25%

8. Removal coverage under a standard fire policy remains in effect for (Choose from the following options) 1. 5 days. 2. 10 days. 3. 15 days. 4. 30 days.

1. 5 days.

73. Which of the following risks would NOT be eligible for coverage under a homeowners policy? (Choose from the following options) 1. An applicant who owns and lives on a commercial farm 2. An applicant who lives in a duplex that she does not own 3. An applicant who owns and lives in a duplex 4. An applicant who owns and lives in a single-family dwelling that also contains incidental business activities

1. An applicant who owns and lives on a commercial farm

41. Which of the following describes contributory negligence? (Choose from the following options) 1. Any degree of negligence by the injured party may bar recovery. 2. The time period in which a claim must be filed 3. Negligence is apportioned between both parties in an accident. 4. The voluntary assumption of exposure to risk

1. Any degree of negligence by the injured party may bar recovery.

49. If an insured holds more than one policy on a property, and the only difference is in the coverage amount or coverage period, this is called (Choose from the following options) 1. Concurrent Policy Coverage. 2. Side-by-Side Coverage. 3. Coinsurance. 4. Co-Coverage Policy.

1. Concurrent Policy Coverage.

13. In dwelling policies, automatic increase in insurance is (Choose from the following options) 1. Coverage without additional premium. 2. Coverage for newly acquired property. 3. Coverage by endorsement. 4. Automatic coverage.

1. Coverage without additional premium. Right Answer 3. Coverage by endorsement.

96. The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as (Choose from the following options) 1. Effective Procedure for Certified Producers (EPCP). 2. Eligible Electronic Effective Date (EEED). 3. Electronic Effective Date Procedure (EEDP). 4. Electronic Producer Data Procedure (EPDP).

1. Effective Procedure for Certified Producers (EPCP). Right Answer 3. Electronic Effective Date Procedure (EEDP).

44. Which of the following homeowners forms is designed for individuals that own and reside in a condominium? (Choose from the following options) 1. HO-4 2. HO-6 3. HO-2 4. HO-3

1. HO-4 Right Answer 2. HO-6

78. Surplus Lines insurance usually involves insurance for which type of individuals? (Choose from the following options) 1. High-risk individuals 2. Standard risk individuals 3. Low-risk individuals 4. All of these qualify for surplus lines insurance.

1. High-risk individuals

82. Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy? (Choose from the following options) 1. It pays for the loss of rent you would have collected less any expenses that would not have continued. 2. Coverage continues until repairs are completed. 3. The period of time to repair or replace is not limited by the expiration date of the policy. 4. Loss or expense caused by the cancellation of a lease is covered.

1. It pays for the loss of rent you would have collected less any expenses that would not have continued. Right Answer 4. Loss or expense caused by the cancellation of a lease is covered.

88. An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true? (Choose from the following options) 1. Losses will be paid to the mortgagee and mortgagor as their interest appears. 2. Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness. 3. The mortgagee must settle with the mortgagor in the event of a loss. 4. The additional premium required for the mortgage endorsement must be paid by the mortgagee.

1. Losses will be paid to the mortgagee and mortgagor as their interest appears.

93. Annual transit policies are written on what kind of basis? (Choose from the following options) 1. Named peril 2. Temporary 3. Open-peril 4. Reduced liability

1. Named peril

7. All of the following are additional liability coverages automatically provided in a homeowners policy, EXCEPT (Choose from the following options) 1. Personal injury protection. 2. Claims expenses. 3. Damage to the property of others. 4. Loss assessment coverage.

1. Personal injury protection.

75. Which of the following is the most common way to transfer risk? (Choose from the following options) 1. Purchase insurance. 2. Increase control of claims. 3. Lessen the possibility of loss. 4. Name a beneficiary.

1. Purchase insurance.

71. An insured that plans to cancel his/her claim-made insurance policy can protect themselves against potential claims that may arise from an occurrence that happened during the policy period, but is reported after the cancellation by purchasing (Choose from the following options) 1. Supplemental Extended Reporting Period. 2. Laser Beam endorsement. 3. A Mini-Tail coverage. 4. A Midi-Tail coverage.

1. Supplemental Extended Reporting Period.

45. All of the following people would be considered insureds under the liability section of a homeowners policy, EXCEPT (Choose from the following options) 1. The 22-year-old niece of the insured, who is visiting. 2. A 15-year-old foster child residing in the premises. 3. The mother of the insured who is residing in the household. 4. The legal representative of a deceased insured.

1. The 22-year-old niece of the insured, who is visiting.

17. Which of the following would the livestock coverage form NOT insure against? (Choose from the following options) 1. The euthanasia of livestock suspected of carrying mad cow disease 2. Death of livestock caused by accidental drowning 3. Death of livestock caused by a tornado 4. The euthanasia of livestock after being hit by a vehicle

1. The euthanasia of livestock suspected of carrying mad cow disease Right Answer 4. The euthanasia of livestock after being hit by a vehicle

83. A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffer a loss due to a fire, which of the following is true? (Choose from the following options) 1. The loss is payable to the insured and the mortgagee. 2. The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. 3. The entire loss is payable to the mortgagee. 4. The entire loss is payable to the insured.

1. The loss is payable to the insured and the mortgagee.

39. According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when (Choose from the following options) 1. The state has a monopolistic workers compensation fund. 2. The insured expects to extend operations to that state. 3. The insured has operations in the state when the policy is written. 4. The insurer is not licensed to write workers compensation in that state.

1. The state has a monopolistic workers Right Answer 2. The insured expects to extend operations to that state.

81. Who is responsible for equitably evaluating insurable risks and selecting and distributing to the insurer those that are profitable to the insurer? (Choose from the following options) 1. Underwriter 2. Insured 3. Insurance Commissioner 4. Governor

1. Underwriter

21. The regular National Flood Insurance Program would insure an eligible single-family dwelling for up to (Choose from the following options) 1. $200,000. 2. $250,000. 3. $100,000. 4. $150,000.

2. $250,000.

86. If a claimant contacts an agent regarding her life insurance policy and clearly expects a response, within what span of time must a complete response be issued? (Choose from the following options) 1. 15 days 2. 21 days 3. 31 days 4. 90 days

2. 21 days Right Answer 1. 15 days

31. What kind of insurers offer rates for insurance coverage to insureds who have an average or better-than-average loss exposure? (Choose from the following options) 1. Standard market insurers 2. Admitted insurers 3. Surplus lines insurers 4. Excess insurers

2. Admitted insurers Right Answer 1. Standard market insurers

43. Which of the following watercraft will NOT be covered by business liability insurance? (Choose from the following options) 1. Owned watercraft 53 feet long 2. An auto parked at the insured's premises 3. Watercraft while on shore at a premises owned by the insured 4. Nonowned watercraft 50 feet long used for transporting personal property of the insured

2. An auto parked at the insured's premises Right Answer 1. Owned watercraft 53 feet long

34. Additional coverages in the liability section of a homeowners policy cover all the following EXCEPT (Choose from the following options) 1. Damage to a third party property for which the insured is legally liable. 2. Claims expense. 3. Expenses the insured incurs rendering first aid for bodily injury to third parties. 4. Damage to the property of others.

2. Claims expense. Right Answer 1. Damage to a third party property for which the insured is legally liable.

38. With regards to a homeowners policy, which coverage provides for indirect or consequential losses? (Choose from the following options) 1. Coverage C 2. Coverage D 3. Coverage A 4. Coverage B

2. Coverage D

89. Which of the following is NOT true about earthquake coverage? (Choose from the following options) 1. Coverage may be written in a Difference of Conditions policy. 2. Coverage is commonly provided through a federally-funded program. 3. Coverage is excluded by most property forms. 4. Coverage may be added to property policies by endorsements.

2. Coverage is commonly provided through a federally-funded program.

28. Which of the following claims would be included under the dwelling policy? (Choose from the following options) 1. Theft of the insured's auto from the detached garage 2. Death to the insured's pet caused by smoke inhalation 3. Fire damage to the insured's rowboat stored in the attached garage 4. Fire damage to a garage located on the insured premises used as an auto repair shop

2. Death to the insured's pet caused by smoke inhalation Right Answer 3. Fire damage to the insured's rowboat stored in the attached garage

64. Which of the following terms best describes a trembling or shaking of the earth that is volcanic or seismic in origin? (Choose from the following options) 1. Geotectonic inversion 2. Earthquake 3. Tectonic shifting 4. Tsunami

2. Earthquake

3. What type of coverage do umbrella policies provide? (Choose from the following options) 1. Primary coverage for risks that are difficult to insure 2. Excess coverage over an underlying or primary policy 3. Property coverage for those who do not qualify for homeowners insurance 4. Property coverage for the basic perils of fire, wind, and hail

2. Excess coverage over an underlying or primary policy

32. Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance? (Choose from the following options) 1. Risk 2. Exposure 3. Loss 4. Hazard

2. Exposure

91. What is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent? (Choose from the following options) 1. Contributory negligence 2. Proximate cause 3. Comparative negligence 4. Relative degree of damage statute

2. Proximate cause Right Answer 3. Comparative negligence

87. For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as (Choose from the following options) 1. False pretense. 2. Robbery. 3. A theft. 4. A burglary.

2. Robbery.

29. An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if (Choose from the following options) 1. An extended ownership endorsement is added. 2. Separate policies are written for each individual involved. 3. A joint ownership coverage endorsement is added. 4. A miscellaneous type vehicle endorsement is added.

2. Separate policies are written for each individual involved. Right Answer 3. A joint ownership coverage endorsement is added.

92. Which policy condition in HO policies states that insurance applies separately to each insured? (Choose from the following options) 1. Payment of claim 2. Severability of insurance 3. Appraisal 4. Limit of liability

2. Severability of insurance

79. In the conduct of their business, insurance producers act in what kind of capacity when handling premium funds? (Choose from the following options) 1. Financial 2. Special 3. Fiduciary 4. Accounting

2. Special Right Answer 3. Fiduciary

20. Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS (Choose from the following options) 1. The insured purchased the water damage endorsement. 2. The insured had drained the plumbing system. 3. The insured purchased special form coverage. 4. The dwelling had been vacant for no more than 90 days.

2. The insured had drained the plumbing system.

37. Which of the following best expresses the purpose of a stated value contract? (Choose from the following options) 1. To provide a maximum limit for which the insurance company may become liable in casualty losses 2. To pre-establish the amount of coverage available for property items that are difficult to value 3. To ensure that the principle of indemnification applies 4. To establish the value of property subject to loss by theft or robbery

2. To pre-establish the amount of coverage available for property items that are difficult to value

14. Equipment breakdown coverage is written with a single limit of insurance per accident. However, what is the sublimit for hazardous substance cleanup, or repair or replacement of contaminated property? (Choose from the following options) 1. $50,000 2. $15,000 3. $20,000 4. $25,000

3. $20,000 right Answer 4. $25,000

61. An insured files a $100,000 claim for disability income benefits from her nonoccupational disability policy. Her injury is work-related, but she tells both her doctor and her insurance company that the injury occurred while she was on vacation. The maximum fine that the insured could be ordered to pay if convicted of insurance fraud is (Choose from the following options) 1. Nothing. Her policy will cover the injury. 2. $100,000. 3. $200,000. 4. $150,000.

3. $200,000.

55. An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pay for damages? (Dollar amounts are rounded to the nearest hundred.) (Choose from the following options) 1. $35,700 2. $40,000 3. $41,700 4. $50,000

3. $41,700

48. An insurance policy specifies that it will pay $600 for a specific loss. The policyowner suffers a loss of $535. How much will the policy pay? (Choose from the following options) 1. $300 2. $500 3. $535 4. $600

3. $535

100. In a dwelling policy, which of the following other structures would be covered? (Choose from the following options) 1. A structure used by the insured in which to operate a retail business 2. A structure used by the insured to house a manufacturing operation 3. A structure rented to a neighbor for use as a private garage 4. A structure used as part of a farming operation

3. A structure rented to a neighbor for use as a private garage

35. Which of the following would NOT qualify as a hired auto? (Choose from the following options) 1. An auto leased from a commercial rental company 2. An auto rented for personal use 3. An auto borrowed from an employee 4. An auto hired by an employer

3. An auto borrowed from an employee

26. When must application for coverage be made for Federal Crop Insurance? (Choose from the following options) 1. All applications must be submitted by April 15th each calendar year 2. At any time before the crop is harvested 3. At or before a date established by the Federal Crop Insurance Corporation 4. At any time before a loss has occurred

3. At or before a date established by the Federal Crop Insurance Corporation

58. All of the following statements are FALSE regarding garage physical damage coverage EXCEPT (Choose from the following options) 1. Specific causes-of-loss coverage is not available for physical damage coverage. 2. No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations. 3. Collision coverage is provided only for dealers. 4. Autos held for sale by a dealer are listed individually in the policy.

3. Collision coverage is provided only for dealers right Answer 2. No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations.

16. In many circumstances, the action of more than one cause produces a particular harm or loss to an insured. The predominant legal rule is that if a loss is caused by both an insured peril and an uninsured peril, coverage is deemed to apply. This rule of law is called (Choose from the following options) 1. Simultaneous causation. 2. Dual causation. 3. Concurrent causation. 4. Primary & excess causation.

3. Concurrent causation.

97. A small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true? (Choose from the following options) 1. Business auto coverage form may apply. 2. Any coverage form applies. 3. Coverage can continue under the truckers coverage form. 4. Farm liability coverage applies.

3. Coverage can continue under the truckers coverage form. right Answer 1. Business auto coverage form may apply.

94. A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called (Choose from the following options) 1. Retroactive date. 2. Retention date. 3. Effective date. 4. Original date.

3. Effective date. Right Answer 1. Retroactive date.

54. Which coverage applies to losses caused by larceny, embezzlement, misappropriation, wrongful abstraction and other acts of theft by an employee? (Choose from the following options) 1. Inside the Premises - Theft of Money and Securities 2. Inside the Premises - Robbery or Safe Burglary of Other Property 3. Employee Theft 4. Forgery or Alteration

3. Employee Theft

5. Which of the following statements is true regarding Workers Compensation law in California? (Choose from the following options) 1. If the employee was partially responsible for causing his/her own injury, there is no coverage. 2. If the employee was partially responsible for causing his/her own injury, damages awarded will be lowered. 3. In cases where pain and suffering is involved and fault is clearly established against the employer, the employer may also be held liable for additional damages. 4. None of the above are true.

3. In cases where pain and suffering is involved and fault is clearly established against the employer, the employer may also be held liable for additional damages. right Answer 4. None of the above are true.

60. Larry invites his neighbors out for a day on the water in his boat powered with a 150hp outboard. While attempting to tie the boat to dock, his neighbor's hand is broken when caught between the boat and dock. What coverage would apply to the broken hand? (Choose from the following options) 1. Section II-Personal Liability-of Larry's Homeowners policy 2. Larry's Boatowners policy is primary, and if its limits are too low, his Homeowners liability would pay as excess 3. Larry's Boatowners policy 4. Larry's Outboard Boat and Motor policy

3. Larry's Boatowners policy

67. Adam is injured in a car accident caused by John. What kind of insurance would cover John's obligation to pay for Adam's injuries? (Choose from the following options) 1. Life insurance 2. Health insurance 3. Liability insurance 4. Property insurance

3. Liability insurance

70. A shipload of cement has been damaged by water and has become concrete. According to general cargo insurance terms in Ocean Marine policies, this is considered (Choose from the following options) 1. Demurrage. 2. Sympathetic damage. 3. Loss of specie. 4. Adventure.

3. Loss of specie.

19. Following the holiday season, an insured decides to store his decorations in the attic for the summer. While moving the decorations, he accidentally drops a heavy box that crashes through the ceiling and damages a table and lamp in the dining room causing $1,000 of damage to them. His HO 00 03 will pay (Choose from the following options) 1. $1,000 less the deductible. 2. The market value of the damaged property. 3. Nothing. 4. $1,000.

3. Nothing.

27. What type of bond guarantees that a construction contractor will enter into a contract at a set price? (Choose from the following options) 1. Maintenance bond 2. Bid bond 3. Performance bond 4. Payment bond

3. Performance bond Right Answer 2. Bid bond

99. What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle? (Choose from the following options) 1. Equitable spread of risk 2. Ideally insurable risk 3. Profitable distribution of exposures 4. Adverse selection

3. Profitable distribution of exposures

11. Which of the following is NOT one of the four primary elements considered in establishing negligence? (Choose from the following options) 1. Legal duty 2. Standard of care 3. Proof of carelessness 4. Proximate cause

3. Proof of carelessness

72. Which of the following is used in the formula for calculating the actual cash value of a property? (Choose from the following options) 1. Fair market value 2. Agreed value 3. Replacement cost 4. Stated value

3. Replacement cost

56. Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy? (Choose from the following options) 1. Blue skies endorsement 2. Personal property injury endorsement 3. Scheduled personal property endorsement 4. Personal property replacement cost endorsement

3. Scheduled personal property endorsement

15. Which of the following is NOT a goal of risk retention? (Choose from the following options) 1. To fund losses that cannot be insured 2. To minimize the insured's level of liability in the event of loss 3. To reduce expenses and improve cash flow 4. To increase control of claim reserving and claims settlements

3. To reduce expenses and improve cash flow right Answer 2. To minimize the insured's level of liability in the event of loss

63. Following a property loss that is covered under a Businessowners policy, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue? (Choose from the following options) 1. Adjudication 2. No-fault procedure 3. Appraisal 4. Arbitration

4. Arbitration Right Answer 3. Appraisal

57. First aid costs for others injured on the insured's premises (Choose from the following options) 1. Apply only if the insured is legally liable. 2. Also cover injuries to the insured's family members. 3. Are deducted from the liability limit. 4. Are paid in addition to the liability limit.

4. Are paid in addition to the liability limit.

65. A couple bought tickets to a college hockey tournament. At the game, a stray puck flies into the stands and hits the wife in the face, breaking her nose. Which legal defense may bar her from recovering damages for the injury she received at the hockey game? (Choose from the following options) 1. Comparative negligence 2. Contributory negligence 3. Defense against negligence 4. Assumption of risk

4. Assumption of risk

50. Which of the following Dwelling coverages would provide coverage to a garage not attached to the primary insured dwelling? (Choose from the following options) 1. Coverage C 2. Coverage E 3. Coverage A 4. Coverage B

4. Coverage B

10. Rates that are established based on the similarities of the risk with other risk are known as (Choose from the following options) 1. "A" rates. 2. Merit rates. 3. Manual rates. 4. Experience rates.

4. Experience rates. Right Answer 3. Manual rates.

18. The major portion of the premium for an equipment breakdown policy pays (Choose from the following options) 1. Repair to prevent. 2. Coverage for BI & PD of others. 3. For replacement parts. 4. For inspections and examinations.

4. For inspections and examinations.

12. Which method of loss valuation is contrary to the basic concept of indemnity? (Choose from the following options) 1. Market value 2. Agreed value 3. Replacement cost 4. Functional replacement cost

4. Functional replacement cost Right Answer 3. Replacement cost

2. There are over 200 different crops that may be insured under crop insurance policies; however, the eligibility list varies (Choose from the following options) 1. Seasonally. 2. According to weather patterns. 3. Annually. 4. Geographically.

4. Geographically.

95. Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? (Choose from the following options) 1. Individual Named Insured 2. Drive Other Car 3. Additional Insured - Lessor 4. Hired Autos Specified as Covered Autos You Own

4. Hired Autos Specified as Covered Autos You Own Right Answer 1. Individual Named Insured

98. Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time? (Choose from the following options) 1. Provision rating 2. Profit rating 3. Components rating 4. Loss costs rating

4. Loss costs rating

9. Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? (Choose from the following options) 1. Manuscripts 2. Works of art or antiques 3. Valuable papers and records 4. Property of others

4. Property of others Right Answer 3. Valuable papers and records

76. Which of the following types of property would be covered in any of the homeowners coverage forms? (Choose from the following options) 1. Animals, birds or fish 2. Landlord furnishings in an on-premises apartment 3. Structures used for business purposes 4. Structures rented to others who are not tenants of the dwelling, other than a garage

4. Structures rented to others who are not tenants of the dwelling, other than a garage Right Answer 2. Landlord furnishings in an on-premises apartment

47. All are true if a contractor defaults on a performance contract EXCEPT (Choose from the following options) 1. The surety will attempt to seek reimbursement from the contractor for any amounts it pays. 2. The surety may cancel the bond so as to avoid having to pay losses and expenses. 3. The obligee may hire another contractor to complete the job and have the surety repay the obligee. 4. The principal's obligations end.

4. The principal's obligations end. Right Answer 2. The surety may cancel the bond so as to avoid having to pay losses and expenses.

74. The contents coverage on a homeowners policy would pay how much after the loss of one of a pair of golden candlesticks? (Choose from the following options) 1. The actual cash value of the pair 2. Nothing 3. The difference in the actual cash value as a pair and as a single 4. The replacement cost of the pair

4. The replacement cost of the pair Right Answer 3. The difference in the actual cash value as a pair and as a single

40. An insured is driving her auto and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair? (Choose from the following options) 1. Comprehensive 2. Collision 3. Other than collision 4. This loss is not covered

4. This loss is not covered

59. According to the principles of ocean marine insurance, an actual total loss may occur in all of the following situations EXCEPT (Choose from the following options) 1. When all property has been destroyed. 2. With loss of specie. 3. When insured is irretrievable deprived of all property, even though not destroyed. 4. When cargo is misplaced.

4. When cargo is misplaced.

85. The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured (Choose from the following options) 1. Is one of the reasons an insurer can cancel the policy. 2. Will suspend the physical damage coverage. 3. Will waive all future premiums. 4. Will not relieve the insurer of its policy obligations.

4. Will not relieve the insurer of its policy obligations.