ExamFX Questions MS P&C
Al of the following statements describe the concept of strict liability except
it is imposed on defendants engaged in hazardous activities
In insurance, an offer is usually made when
the applicant submits an application to the insurer
in forming an insurance contract, when does acceptance occur?
when the underwriter approves coverages
After a producers license expired, they may reinstate it without having to take the licensing exam if thy file for reinstatement
within 12 months
What is the maximum fine for attempting to obtain a license through fraud or misrepresentation?
$1,000
An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?
$30,000
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and his policy is ACV, how much will it pay toward the insured's new roof?
$5000 ($6000-(5x$250)
If an insurance company has their certificate of Authority revoked for a failure to pay a judgement within 90 days, after paying the judgement, they will be barred from doing business in Mississippi for a period of
3 Years
After receiving a cease and desist order how long does a person have to request a hearing?
30 Days
Within how many days must the insurer that terminates an agent's appointment notify the commissioner?
30 Days
A business owner has a building and personal property policy that covers a shed in which he stored extra parts. If he buys a second shed for the same purpose, this will be automatically covered for how long
30 days
In response to a notice of cancellation, the named insured requests the reasoning behind the decision. How soon must the insurer respond?
5 Days after the request
If a producer's appointment is denied by the Commissioner, the Commissioner must notify the appointing agency within
5 days
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?
60 Days (HO)
Assuming the insurer and the insured agree on the amount payable for a loss covered under a dwelling policy, how soon after receiving the proof of loss must the insurer pay the claim?
60 days (Claim)
Which of the following would be covered by the broad theft endorsement on a dwelling policy?
A camera an insured has with him on a vacation
Which of the following is another term for an authorized insurer
Admitted
Which of the following types of valuation works best for property whose value does not fluctuate much?
Agree Value
In which of the following types of property valuation will the policy pay the full value as specified on the policy schedule, regardless of the insured's property appreciation or depreciation?
Agreed Value
How much is covered for debris removal under the HO property additional coverage
All reasonable costs
Which coverage form would provide coverage for all incoming and outgoing shipments?
Anuall Transit
An installation floater is used to insure
Appliances intended to become a permanent part of the building
A policy condition that stipulated how the amount of damaged or lost property will be determined if the insured and the principal do not agree on the value of the property is known as
Appraisal
A policy condition that stipulates how the amount of damaged or lost property will be determined will be determined if the insured and the principal do not agree on the value of a property loss is known as
Appraisal
Following a property loss that is covered under businessowners policy, If the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue?
Appraisal
Which of the following clauses establishes the procedure for determining the amount of loss when the insurer and insured cannot agree on the valuation of property or the amount of loss?
Appraisal Clause
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
Insurable interest in a property policy must be proven
At the time of the loss
Which of the following is an example of protective safeguard in a businessowners policy?
Automatic sprinkler system
Which of the following other coveraged is not included in the basic form of dwelling policy
Breakage of Glass
Which of the following is not in a commercial package policy
Certificate of Authority
Which of the following are classes of inland marine risks except?
Common carrier cargo liability
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
Conditions
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
The extra expense coverage form provides
Coverage that will permit the insured to continue in business without interruption following a property damage loss
Which of the following is covered under the mail floater of a commercial Inland marine policy ONLY if sent by registered mail?
Currency and unsold travelers checks
What are the three dwelling policy forms?
DP1-Basic DP2-Broad DP3-Special
What term includes damage where the insured peril was the proximate cause of loss?
Direct loss
An insured has four separate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000 and each has the Pro Rata Liability other insurance clause. In the event of a total loss to the building. What would each insurer pay?
Each policy will pay $25,000 of the loss
What is the purpose of coinsurance clause found in property insurance policies?
Encourage the insured to insurer the property closer to its full value
All of the following are found in the declarations section except
Exclusions
All of the following are considered pollutants as defined under Section 1 - Property of the businessowners policy except
Fire
What is the purpose of a homeowners policy?
Homeowners policies are designed to cover dwelling primarily used as private homes.
What does fair rental value include?
If property under Coverage A, B or C becomes damaged or destroyed and unfit for normal use, the policy will pay the fair rental value of the described premises under Coverage D- Fair Rental Value, or part of it used as rental property.
An insurer wants to reward its office assistance by paying them a commission on each insurance contract sold this is
Illegal; insurers cannot pay commission to people not licensed to contract insurance
All of the following are conditions commonly found in the insurance policy except
Insuring agreement
Which of the following statements concerning builders risk form is correct?
It may be written on a reporting form for the completed value of the structure
How does the mobile home endorsement affect the other coverages of law or ordinance in a homeowners policy?
It removes coverage
Which of the following lists all of the requirements for establishing a charge of negligence
Legal duty owed, standard of care, proximate cause, and damages
A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true?
Loss by vandalism and malicious mischief is excluded
Which of the following coverages in a dwelling and homeowners policies is for indirect losses?
Loss of use
Which of the following coverages in a dwelling and homeowners policy is for indirect losses?
Loss of use
The physicians and surgeons equipment floater NOT intended for which of the following
Medical supplies located in a hospital
All of the following would be covered under the medical expense coverage of a business owners policy except
Mental Health Counseling
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
Misrepresentation
Which of the following would be considered a cause for flood conditions covered by the National Flood Insurance Program?
Mudflow
what are the extended covered perils?
On a basic policy, extended covered perils include windstorm or hail, explosion, smoke, aircraft and vehicles, riot or civil commotion, volcanic eruption, and vandalism and malicious mischief.
A sworn written statement that must be furnished by the insured to the insurer before any loss under a policy can be paid
Proof of loss
According to the definition provided by the insurance code in connection with the Mississippi Windstorm Underwriting Association, the term insurable property menas
Real property and its contents at a fixed location in the coast area
Carl's application for a life policy was rejected because of information disclosed in an inspection report. Carl reviewed the consumer reporting agency's file and found they had incorrect information concerning his personal life. Carl can legally require the reporting agency to
Reinvestigate
What information can be found on the insuring agreement
Renewal Dates
Which method of loss valuation is contrary to the basic concept of Indemnity
Replacement Cost
Upon policy delivery, the producer may be required to obtain any of the following except
Signed waiver of premium
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?
Specific
Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location
Specific Coverage
When the amount of insurance written in a property policy is not subject to any coinsurance provisions and that amount is paid in the event of a covered loss, the coverage is said to be written as
Stated amount
what coverage forms are available under the home owners program?
The 6 coverage forms available under the homeowners program are HO-2 broad form, HO-3 special form, HO-4 contents broad form, HO-5 comprehensive form, HO-6 condominium unit owners, and HO-8 modified coverage form.
An insured's accounts receivable records have been damaged. The loss may be covered with
The accounts receivable coverage form
Theft coverage under an HO-8 is restricted to
The actual cash value of what was stolen, with limits for certain classes of property.
Under a dwelling policy, which of the following is NOT a factor in determining a loss?
The amount negotiated by the insurance
Which of the following would not be considered a source of insurability information by an insurer?
The applicant's marital status
Which of the following is NOT in the consideration in a policy
The application given to a prospective insured
Which of the following is NOT in the consideration in a policy?
The application given to a prospective insured
which of the following is not part of the consideration in a policy?
The application given to a prospective insured
What are the eligibility requirements for a dwelling property policy?
The dwelling policy can insure just the dwelling, only its contents, or both.
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?
The first named insured may cancel the policy at any time by giving written notice to the insurer
If an insurer becomes insolvent, which of the following would pay benefits to policyholders?
The guaranty Association
Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy UNLESS
The insured had drained the plumbing system
When does worldwide personal property coverage apply? what is not covered?
The insured may elect to apply up to 10% of the personal property limit to pay for losses to personal property away from the premises. There is no coverage for row boats or canoes, or for property of guests and servants if away from the insured premises
If more than one person has an insurable interest in the property, is the insurer liable for more than the insureds interest in the loss or damaged property?
The insurer will not be liable for more than the insured's interest in the loss or damaged property.
What is the purpose of removal, and how long does coverage last in a dwelling policy?
The policy will pay for loss or damage to property removed from the insured premises when threatened by a peril insured against. the basic form policy provides coverage for 5 days, while the broad and special forms provide 30 days of coverage.
if the commissioner has determined not to renew a producer's license, which of the following needs to happen?
The producer must be notified in writing
An agent wants to pay a referral fee to an unlicensed employee of a licensed agent. which of the following statements are true?
The referral fee must be a one-time nominal, fixed-dollar amount
What perils are insured against in a special form policy?
The special forms is an open peril form. All perils are insured against except those specifically excluded
The regulation of the insurance industry primarily rests with
The state
All of the following are other coverages included in both broad and special dwelling policy EXCEPT
Theft of personal property
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage
The type of insurance used to cover goods for one specific trip is called
Trip Transit
What are common carriers required to issue to every shipper that it transports goods for ?
Uniform bill of lading
Which of the following endorsements could be added to a business owners policy to protect against loss of income due to lightning striking an electrical grid making the business unable to operate
Utility services time element endorsement
Which of the following is not one of the available coverage in the builders risk form?
Vandalism
Which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?
Warranty
What endorsement may be added to a homeowners policy to protect against property damaged caused by the overflow of a sump pump
Water backup and sump discharge or overflow
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
Will issue the policy anyway and pay the value to the beneficiary
if an insured has an endorsement to cover musical instruments. If a new instrument is purchased how long do they have to inform the insurer for it to be covered
Within 30 days
A commercial package policy allows the insured to select the coverage needed and customized the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage except
Workers Compensation Coverage
In equipment breakdown coverage, all accidents would be considered a single accident if they occur
at a single location at the same time from the same cause
All of the following are classes of inland marine risks except
common carriers cargo liability
In a dwelling policies, automatic increase in insurance is
coverage by endorsement
