EXAMFX 2
Workers compensation rating is developed by applying a rating bureau job classification rate to each $500 of payroll. $1,000 of payroll. $100 of payroll. $250 of payroll.
$100 of payroll
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? $175,000 $180,000 $200,000 $100,000
$175,000
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? Revocation of license $2,500 $1,000 $100 per violation
$2,500
A covered watercraft was damaged in an accident. The actual cash value of the damaged property was assessed at $10,000. The cost of repairs for the watercraft was assessed at $5,000. The insured's watercraft policy is written with a $25,000 limit. How much will the insurer pay for coverage to damage to the watercraft? $5,000 $10,000 $15,000 $25,000
$5,000
Within how many days must an insurer provide the insured or the beneficiary forms necessary to submit an insurance claim? 15 days 30 days 90 days There are no specified limits.
15 days
What is the maximum number of required continuing education requirements for a producer within a given 2-year period? 36 6 12 24
24
If the appointment of any insurance producer is to be terminated, the Director must be notified by the insurer within how many days of that termination? 15 30 5 10
30
A property insurance policy which pays a specified amount in the event of a total loss which is not related to the extent of the actual financial loss, is called A valued policy. An actual cash value policy. A replacement cost policy. A policy of indemnity.
A valued policy
An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured's sister has to stay at a motel. How much will the HO-3 form pay for these additional living expense? The cost of renting an apartment, but not the cost of the motel room The cost of renting an apartment, and 50% of the cost of the motel Nothing All of the expense up to the Coverage D limit
All of the expense up to the coverage d limit
Which of the following describes contributory negligence? The voluntary assumption of exposure to risk Any degree of negligence by the injured party may bar recovery. The time period in which a claim must be filed Negligence is apportioned between both parties in an accident.
Any degree of negligence by the injured party may bar recovery
Which of the following is NOT covered under accounts receivable coverage form? Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs Any loans required to offset uncollectible amounts Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds Sums due the insured that are uncollectible due to a covered loss
Any loans required to offset uncollectible amounts
In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn? Blanket Loss of use Specified Comprehensive
Comprehensive
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe? Contingent Aleatory Unilateral Conditional
Conditional
Which of the following property coverages would provide protection to contents damaged by fire? Coverage B Coverage C Coverage D Coverage A
Coverage c
Which of the following is a mandatory part of an insurance policy that varies with each individual policy? Exclusions Insuring agreement Declarations Conditions
Declarations
Which of the following notifies the applicant that an investigative consumer report will be made? Disclosure of Investigation Notice Notice of Investigation Fair Credit Reporting Act Disclosure Consumer Report Investigation Notice
Fair credit reporting act disclosure
Which federal act provides benefits to injured civilians who are employed by the federal government? Federal Employees Compensation Act Federal Employers Liability Act (FELA) The Jones Act U.S. Longshore and Harbor Workers Compensation Act
Federal employees compensation act
A specialized type of insurance that guarantees the faithful performance of a trustee of employee benefit plans is called Surety bond. Directors and officers insurance. Employee benefit plan comprehensive coverage. Fiduciary liability insurance.
Fiduciary liability insurance
Under the Nebraska Motor Vehicle Safety Responsibility Act, owners and operators of registered motor vehicles must provide proof of financial responsibility that can be satisfied by any of the following EXCEPT Obtaining a certificate of self-insurance. Filing a "hold harmless" agreement with the Motor Vehicle Department. Posting sufficient cash or securities with the state. Purchasing automobile liability insurance.
Filing a "hold harmless" agreement with the Motor Vehicle Department
The term used to describe the cost and charges associated with the transfer of goods from one location to another is Freight. Transfer. Cargo. Shipping.
Freight
Which of the following businesses would be eligible for a businessowners policy? Hill & Morton Funeral Home Family Fun Time Amusement Park Joe's Bar And Grill Hometown Bank & Trust
Hill & Morton Funeral Home
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? Hired autos specified as covered autos you own Individual named insured Drive other car Additional insured - lessor
Individual named insured
All of the following are conditions commonly found in the insurance policy EXCEPT Subrogation. Appraisal. Insuring agreement. Cancellation and nonrenewal.
Insuring agreement
When is liability coverage included in a homeowners policy? If the insured has forms HO-2 or HO-3 If the insured has form HO-4 If there is an endorsement It is included automatically.
It is included automatically
Crews of ships are covered by the Federal Employers Liability Act. Jones Act. U.S. Longshore and Harbor Workers Compensation Act. States' workers compensation laws.
Jones Act
Which of the following lists all the required elements for establishing a charge of negligence? Legal duty owed, standard of care, proximate cause, damages Legal duty owed, proximate cause, intervening cause, damages Legal duty owed, deliberate attempt to cause harm, damages Breach of reasonable person rule and proximate degree of care
Legal duty owed, standard of care, proximate cause, damages
What type of coverage does a homeowners policy include that a dwelling policy does not? Other structures Broad form Liability Personal property
Liability
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true? Glass breakage as a result of vandalism is covered. Damage to glass building blocks is not covered. Loss by theft is covered. Loss by vandalism and malicious mischief is excluded.
Loss by vandalism and malicious mischief is excluded
In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period? Loss sustained form Retroactive form Mysterious disappearance form Discovery form
Loss sustained form
Illegal use of narcotics would be an example of a Pure hazard. Morale hazard. Moral hazard. Physical hazard.
Moral hazard
A participating insurance policy may do which of the following? Pay dividends to the policyowner Provide group coverage Pay dividends to the stockholder Require 80% participation
Pay dividends to the policy owner
All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT Coverage includes all property, including money and securities owned or held by the insured. Provides coverage for all employees, even those employees who were terminated in the past ninety days. Provides coverage for direct loss or damage to business personal property. Losses result from dishonest acts of any of the insured's employees.
Provides coverage for all employees, even those employees who were terminated in the past ninety days
What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence? Common cause Proximate cause Concurrent causation Indemnity
Proximate cause
The Broad Form Products Coverage endorsement in commercial auto policies does which of the following? Adds the defective products exclusion Removes property coverage Adds property coverage Removes the defective products exclusion
Removes the defective products exclusion
All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT Falling objects. Weight of ice, snow, or sleet. Water damage. Replacement cost.
Replacement cost
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 -A burglary. -False pretense. -Robbery. -A theft.
Robbery
Which policy condition in HO policies states that insurance applies separately to each insured? Severability of insurance Appraisal Limit of liability Payment of claim
Severability of insurance
Which of the following is NOT considered a residual market? State Property and Casualty Guaranty Association Joint underwriting association FAIR plan Assigned risk auto plan
State property and casualty guaranty association
Cargo has been insured warehouse to warehouse. Which of the following is true? The cargo is covered from origin to destination or 30 days after discharge, whichever is first. The cargo is covered from origin to destination or 90 days after discharge, whichever is first. The cargo is always insured from origin to destination. The cargo is covered from origin to destination or 60 days after discharge, whichever is first.
The cargo is covered from origin to destination or 60 days after discharge, whichever is first
All of the following statements concerning coinsurance are true EXCEPT -The coinsurance formula will also be applied to total losses. -It is used to help adequacy and equity in rates. -The insured agrees to maintain insurance equal to some specified percentage of the value of the property. -If the insurance carried is less than required, the insurance may not cover the whole loss.
The coinsurance formula will also be applied to total losses
The members of a limited liability company are insureds under a businessowners policy (BOP) if Each individual is listed as a named insured on the policy. A single individual member of the limited liability company is listed as the named insured. Members of a limited liability company cannot be insureds under a BOP. The limited liability company is designated as the named insured.
The limited liability company is desgnated as the named insured
Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? Manuscripts Works of art or antiques Valuable papers and records Property of others
Valuable papers and records
The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured -Will not relieve the insurer of its policy obligations. -Is one of the reasons an insurer can cancel the policy. -Will suspend the physical damage coverage. -Will waive all future premiums.
Will not relieve the insurer of its policy obligations
Of the following, which is NOT defined in the personal auto policy as an uninsured motor vehicle? A vehicle in which the driver or owner is unknown A vehicle which is not covered by a bodily injury liability policy A vehicle covered by a bodily injury liability policy, but the coverage limit is less than the minimum required by the financial responsibility law A vehicle owned by a government entity
a vehicle owned by a government entity
Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT -Expenses the insured incurs rendering first aid for bodily injury to third parties. -Damage to the property of others. -Damage to a third-party property for which the insured is legally liable. -Claims expense.
damage to a third-party property for which the insured is legally liable
Which of the following is considered to be a morale hazard? Driving recklessly Smoking Working as a firefighter Engaging in illegal activities
driving recklessly
Which of the following causes of loss would NOT be covered under a BOP form? Tornado Earth movement, power failure, and flood Riot, sprinkler leakage, or sinkhole collapse Fire or lightning
earth movement, power failure, and flood
Which of the following would modify the original insurance contract by either adding or removing coverage? Flexible policy Endorsements Additional coverage form Conditions
endorsements
Which of the following coverages is included in an unendorsed homeowners policy? Medical payment to others Personal property replacement coverage Fungi, wet or dry rot, or bacteria Earthquake
medical payment to others
What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? Valid insurance Nonconcurrency Primary and excess Other insurance
other insurance
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called Self-insured retention. Stop-loss. Coinsurance. Participation requirement.
self-insured retention
The formation and recommendation of model insurance legislation and regulations designed to bring uniformity from state to state is one of the purposes of The Guaranty Association. The Insurance Legislation Commission. The Association for Insurance Regulation. The NAIC.
the NAIC
The most the insurer will pay for a loss under a businessowners policy is The limit of insurance after the deductible is paid. The amount of the loss minus the deductible. 80% of the loss. 20% of the loss.
the limit of insurance after the deductible is paid
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT -Up to $200 a day for loss of earnings due to attendance at hearings or trials. -Premiums on appeal bonds in any suit the insurer defends. -Up to $250 for bail bonds required because of a covered accident. Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident.
up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident
