Examfx questions
A performance bond is an example of which of the following types of bonds?
Contract
Which type of authority is found in the agent's contract?
Express
All of the following are ways to handle risk EXCEPT
Elimination
The defendant being released on a surety bail bond is the
Principal
A policy contains a consent to settle a loss provision, which requires the insurer to obtain the consent of an insured before the settlement of a claim. With this in mind, what kind of liability policy does the insured most likely have?
Professional liability
Which of the following is NOT a cause of loss form for commercial property coverage?
Specific
Which of the following is covered under a dwelling policy?
Fire caused by an earthquake
Which of the following losses would be excluded from coverage under the farm property special form?
Fire caused by cutting tobacco
In order to receive transportation expenses under the personal auto policy following damage to your auto caused by collision, you must have
Collision coverage
Employers Liability Coverage under a workers compensation policy includes
Damages claimed by third parties
All of the following are optional endorsements that may be added to the standard equipment breakdown coverage from EXCEPT
Debris removal
To determine the actual cash value of an insured property, what must be deducted from the current replacement cost?
Depreciated value
Which of the following statements is correct regarding the debris removal coverage under the businessowners policy (BOP)?
The insured's limit of liabilty is 25% of the sum of the direct loss payent plus the deductible amount
The insured's guest cottage, which is insured under his farm policy, is being rented by a young couple. When one of the renters is injured in the rented property, the insured flies a claim under his farm liability coverage. How will the coverage repond?
The claim will not be covered
Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. Georgia has a compulsory workers compensation laws. Space Age's owner thinks that his company is too small and unprofitable to carry the workers comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT
Forced payment if billing for services rendered by any private insurer that "binds" coverage based on an employer's request for coverage.
Agents may be found guilty of defamation if they make false statements that are intended to
Maliciously criticize another insurance company
What are the types of compensatory damages?
Special and general
Which of the following statements is true regarding the examination of a company's records?
The director has the authority to examine every authorized insurer in this state
The regulation of insurance industry primarily rests with
The state
Which of the following is most likely INELIGIBLE for coverage uner businessowner policy?
A Bank
Which of the following risks would be eligible for coverage under a dwelling polcy form?
A duplex that is occupied by two families, each of which have a bedroom rented to a boarder
With regard to homeowners Section II, which of the following does NOT meet the definition of insured locations?
A plot farmland owned or rented by the insured
Which of the following is NOT an example of the company's location of incorporation?
Authorized
Under which legal defense may a claimant's recovery be defeated if the defendant can show that claimant contributed, no matter how slightly, to the injury or damage?
Comparative Negligence
The supplementary payments section of the commercial general liabilty policy would cover
Court costs assessed against the insured in a suit
Which of the following is covered by auto other-than-collision (comprehensive) coverage?
Electric equipment required for the normal operation of the car
Which of the following statements does NOT describe endorsements?
Endorsements may only add coverage to a current policy, not remove
All of these types of property may be covered on a farm property coverage from EXCEPT
Growing crops
Which of the following is NOT found in the common policy declarations of a commercial package policy?
Insuring agreement
When does a license expire?
Never, as long as it is renewed by the expiration date and the appropriate fees are paid and CE hours are earned.
The garage coverage form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing or storing automobiles. Which of the following coverages are not included in the garage policy?
Physical damage on customer's auto.
The declarations section in a homeowners policy provides all of the following information EXCEPT`
Policy exclusions
Businessowners liability coverage automatically includes all of the following liability coverages EXCEPT
Pollution
Which of the following would NOT be covered by commercial inland marine policies?
Property lost due to a military action
The purpose of the Fair Reporting act is to
Protect consumers against the circulation of inaccurate or obsolete personal or financial information
The insurance company requires that an insured installs a fire alarm and an automatic sprinkler system as a condition for coverage. This is aan example of what?
Protective safeguard endorsement
All of the following are TRUE regarding the cancellation condition of a policy EXCEPT
The insurer must provide proof that the insured received the notice.
when does the federal emergency flood insurance program go into effect?
When a community applies for the program
Which of the following is NOT an indicator of a competent party?
Business profession
What type of insurer uses a formal sharing agreement?
Reciprocal insurers
Which of the following would NOT be covered under the directors and officers liability coverage?
Reimbursement for fines and penalties
Which of the following is NOT part of Section II of the boatowners policy?
Watercraft damage
A home is insured for $200,000 under and HO-3. Last week, the owner purchased a new home and begin to move his personal property to the new residence. Last night, vandals did $8,000 of damage to the property that had been moved to his new residence. Disregarding any deductible, how much will the HO-3 pay?
$8,000
The obligation to compensate injured workers without regard to fault or negligence is known as
Absolute liability
Which of the following would be added for coverage under a property policy by an endorsement?
Additional insureds
To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policyowner face?
Financial loss
The individual named insured endorsement offer liability coverage to the sole proprietor of a business and his or her familiy members. Which coverage is also provided under the individual named insured endorsement of a commercail auto policy for owned passenger vehicles and nonowned autos.
Physical damage coverage
Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?
1
An insured intentionally did not disclose a material fact on an application for insurance. This would be considered
Concealment
Which of the following exposures is not covered under the garage liability coverage form?
Contractual liability
The purpose of purchasing an umbrella liability is to provide
Excess insurance over the primary liability policy
Which of the following is NOT a characteristic of a difference in conditions (DIC) policy?
It is a standard policy
Which statement best describes agreement as it relates to insurance contracts.
One party accepts the exact terms of the other party's offer.
Bob's insurance corporation is changing its name to Bob's insurance company. Which of the following is true?
The director must be notified prior to the name change
What was the purpose of the motor carrier act 1980?
To establish financial responsibility requirements for insterstate motor carriers
Which of the following is a purpse of the FAIR plan?
To maximize the availability of P&C insurance
What is the purpose of the ordinance or law coverage endorsement?
To remove the exclusion of losses resulting from ordinances or laws.
The broad cause of loss from in the commercial property policy contains three perils in addition to the basic form perils. Which of the following is NOT one of those three perils?
Utility services
Which of the following would be considered a covered auto on your personal auto policy?
Your farm wagon being towed by your pick up truck
The livestock coverage form provides coverage for livestock. Livestock means any of the following EXCEPT
Turkeys and chickens
A scheduled personal property endorsement will be used to insure
Higher limits of coverage for fine arts items.
A structure may be eligible for coverage under the national flood insurance program if it meets all of the following requirements EXCEPT
Is entirely over water
The extended nonowned coverage provides protection to
Only person(s) named on the policy.
Which of the following would be covered under a building and personal property coverage form?
Outdoor sign
Medical benefits under workers compensation statues are provided
Without limit
Which of the following clauses excludes assignment or granting of policy provisions to any person who repairs property for a fee?
No benefit to bailee clause
When reviewing a standard workers compensation and employers liability policy, the limits of the benefits provided are stated
In the state workers compenstion law itself
Which is NOT true of workers compensation coverage?
Medical payments benefits are limited
What coverage form in the farm policy insurers equipment on an open peril basis?
Mobile agriculture machinery and equipment
A corporation is insured under the commercial general liability (CGL) policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for all of the following named in suit EXCEPT
Spouses of officers and stockholders
Each of the following may be insured under the HO-3 homeowners policy EXCEPT
The owner-occupant of a condominium unit.
Under the property and casualty conditions of a homeowners policy, what may happen if it is discovered that the policyowner commited concealment or fraud?
The policy may be voided
An aleatory contract is based on what kind of exchange?
Unequal exchange of values
