GA P&C Flash Cards
Mark is injured at work in a state that provides a TTD benefit at 66 2/3%, the state minimum is $40 and the state maximum is $540. The waiting period is 3 days and the retroactive period is 15 days. Which of the following is Mark's TTD benefit if he earns $20 per hour and usually works a 40-hour week. Mark is injured on July 14th and does not return to work until September 3rd. Which of the following is the amount of TTD benefit he would have received?
$20 X 40 - $800 (This is the average weekly wage). 66 2/3% X $800 = $533.33 (Still lower than the maximum). July 15th to September 2nd = 50 days, which is 7 weeks and one day (7 1/7th) weeks. The waiting period does not apply because the disability exceeded 15 days. 7 1/7 X $533.33 = $3,809.50.
An insured has an auto accident and sustains bodily injury worth $50,000. The responsible party carries auto liability limits of 15/30/15 which provides $15,000 for bodily injury for any one person per occurrence. The insured carries Underinsured Motorist limits providing $100,000 bodily injury for any one person per occurrence. Therefore, the responsible party's policy will pay its limit of $15,000 and the insured's Underinsured Motorist policy will pay:
$35,000 EXPLANATION: The responsible party's policy will pay its limit of $15,000 and the insured's Underinsured Motorist policy will pay the difference in the amount of $35,000.
Which of the following types of property would be covered by Coverage B of a standard, unendorsed Businessowners policy?
A copy machine that is leased by the covered business. EXPLANATION: A copy machine that is leased by the covered business is covered by Section I - Coverage B Business Personal Property. The other answer choices are listed as "property not covered".
The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as:
A foreign insurer. EXPLANATION: The Insurance Commissioner/Director/Superintendent of a given state would refer to an insurance company formed under the laws of a different state as a foreign insurer. For example, the Superintendent in New York would refer to an insurer that was formed under the laws of Arizona as a "foreign insurer".
Acme Corp. requested three bids from different contractors for the construction of its new office building. Acme accepted the lowest bid from Corbett's Contracting and entered into a contract to have the office building constructed. After construction was completed, Corbett's presented Acme with a bill for construction costs over and above the amount of the bid that was agreed to in the contract. Which of the following types of bonds would protect Acme from paying the additional costs?
A performance bond. EXPLANATION: A performance bond guarantees the owner that the bidder will complete the work at the price that was bid as per the contract specifications.
A power surge sparks a small electrical fire in an office building. The electrical fire triggers the automatic sprinkler system and the water from the sprinklers, soaks the carpet and shorts-out all the computers, causing thousands of dollars in damage. The office must close for two months during repairs. The cost of renting a temporary office space while the physical damage to the office building is repaired is considered:
An indirect loss. EXPLANATION: An indirect loss is created when a direct loss has created a situation when damaged property cannot be used. The cost of renting temporary office space because the damaged space is unusable, is an indirect loss, sometimes known as a consequential loss.
Section I of the Businessowners policy places limitations on coverage for certain losses if they are not caused by a specified cause of loss. All of the following are specified causes of loss under the policy, EXCEPT:
Building glass breakage. EXPLANATION: Building glass breakage is not a specified cause of loss as listed by the Businessowners policy. All the other answers: Fire or lightning; Sinkhole collapse; and Water damage are all listed on the specified causes of loss.
Making false or misleading statements about dividends or shares of surplus previously paid on an insurance policy is known as:
Misrepresentation. EXPLANATION: Misrepresentation is intentionally making false statements designed to mislead another party.
Which of the following are grounds for the Commissioner to revoke an insurance license in Georgia?
Misrepresenting the terms and conditions of an insurance contract. EXPLANATION: Misrepresentation is one of the most frequent violations of the Insurance Code, requiring the Commissioner to revoke the violator's license.
Which of the following statements is TRUE regarding the National Flood Insurance Program's Preferred Risk Policy?
The NFIP Preferred Risk policy is offered to home and apartment dwellers who reside in areas of low to moderate flood risk.
Any rules or regulations established by the Georgia Insurance Commissioner must be approved by:
The State Attorney General. EXPLANATION: All rules and regulations made by the Commissioner must be approved by the Attorney General and filed at the Commissioner's office for at least ten days before they become effective. The power to make any rules or regulations regarding insurance is vested legislatively in the Commissioner.
Which of the following information does not appear on an insurance license issued in Georgia?
The company that has appointed the licensee. EXPLANATION: The company that has appointed the licensee does not appear on the license.
The major difference between a Commercial Crime policy and a Government Crime policy is:
The coverage for Employee Theft under a Government Crime form can be applied on either a "per occurrence" basis or a "per employee" basis. EXPLANATION: The coverage for Employee Theft under a Government Crime form can be applied on either a "per occurrence" basis or a "per employee" basis. The Commercial Crime form written for businesses can only be written on a "per occurrence" basis.
James has purchased a 20-year-old home for $120,000. He covers it with an HO-5 form for $100,000 with a deductible of $500. The roof of the home needs to be replaced and James has this work performed and purchases a service agreement on the roof before moving into the home. The service agreement covers $1,000 for roof damage from any cause that occurs within 5 years of the installation of the new roof. Two years after moving into the home, a heavy thunderstorm hits James' neighborhood and large sections of his roof are damaged, totaling $3,000 in damage. How will this claim be paid?
The service agreement pays $1,000 first, leaving the remaining $2,000 minus the deductible ($1,500) for the insurance company to pay. EXPLANATION: The service agreement ALWAYS pays first because the Homeowners policies are considered EXCESS when there is a home warranty or service agreement in place. Therefore in the situation posed by the question, the service agreement pays $1,000, leaving the remaining $2,000 minus the deductible ($1,500) for the insurance company to pay.
Which of the following NFIP policies is required to include the Increased Cost of Compliance (ICC) coverage?
An NFIP Dwelling policy under the Regular Program. EXPLANATION: ICC coverage is mandatory coverage that must be included on all NFIP policies, except those in the Emergency Program, or those policies insuring contents only. Therefore, an NFIP Dwelling policy under the Regular Program would be the only policy listed that be required to include ICC coverage.
Camilla had an at-fault accident in her car and was sued for damages. Camilla is an executive with a major corporation and earns $2,500 per 5-day work week. Her insurance company has requested her appearance in court to defend herself against some of the damages claimed. She missed 2 days of work and will not be paid for that time. How much will Camilla's personal automobile policy pay her in total for the lost earnings?
$400. EXPLANATION: Even though Camilla makes $500 a day in earnings, the personal auto supplementary payments will only pay up to $200 per day in lost earnings for attending court. Therefore, Camilla would be paid $200 a day, or $400 total.
In order to qualify for a surety bond there are times the principal must have another party sign the agreement. This party agrees to reimburse the surety if the principal defaults. This party is known as:
An indemnitor. EXPLANATION: The person who agrees to indemnify the surety if the principal defaults is known as an indemnitor.
All of the following statements are true regarding the chief administrative officer of a state insurance department, EXCEPT:
He/She sets insurance rates within their state. EXPLANATION: The Commissioner/Director/Superintendent of a state insurance department does not set insurance rates, they only approve those rates. The other three answer choices are correct.
A tenant of the insured is injured. How would the insured's Commercial General Liability - Coverage C respond to the claim?
It would not pay for the claim if the injured tenant was on the premises in the area they normally occupy. EXPLANATION: Coverage C - Medical Payments of the CGL policy would not pay for the claim if the injured tenant was on the premises in the area they normally occupy.
The Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA) covers all of the following, EXCEPT:
Malpractice Insurance. EXPLANATION: The Act does not apply to any type of professional liability insurance except "Directors & Officers Liability", therefore, malpractice insurance is not covered under TRIPRA.
Which of the following statements is FALSE concerning coverage under the Business Auto policy?
Medical payments coverage is automatically provided. EXPLANATION: Medical payments coverage is an optional coverage (and not automatically provided) for autos under the Business Auto policy.
The estimated annual premium for a workers' compensation policy will be based on all of the following, EXCEPT:
The average premium of insureds in the same area working in the same industry. EXPLANATION: The estimated annual premium is a secondary calculation based on a premium discount, a schedule rating factor, and the experience modification factor.
Coverage F under the farm forms covers which of the following?
Unscheduled personal property. EXPLANATION: Coverage F covers unscheduled personal property on a blanket basis. One limit for all business personal property is stated. The items are not scheduled as they are under Coverage E.
The policy territory of a Commercial General Liability includes:
The United States and Canada. EXPLANATION: The policy territory includes the United States, Canada, Puerto Rico and other possessions of the U.S.
Which of the following best describes a licensed insurance professional's "implied authority"?
The authority given by a principal to an agent that is not formally expressed or communicated EXPLANATION: Implied authority is an element of the law of agency that is not formally expressed or communicated. This allows the licensed insurance professional to perform all the usual tasks required to sell and service the insurance policies.
Under the farm forms, a "half a head" of livestock is an animal that is:
Under one year of age and the most coverage that will be paid for that animal under the policy is $1,000. EXPLANATION: An animal under one year of age, is known as a "half a head." Coverage F covers farm personal property on a blanket basis both on and off the insured premises. A blanket limit for livestock can be added, however, the most that will be paid for "half a head" of livestock (an animal under one year of age) is $1,000.
If a dwelling or commercial building has been without occupants for a significant period of time, but personal property still exists within the dwelling or building, it is considered:
Unoccupied. EXPLANATION: If a dwelling or building has had no occupants for a period of time specified by state law, but still has personal property within its walls, the dwelling or building is said to be "unoccupied".
If an insured intentionally conceals a material fact on an application for insurance, the coverage may be:
Voided. EXPLANATION: The reason for concealing a material fact is that the insured knows that the insurer would not issue the policy, as applied for, if the true facts were known. Concealment and fraud will void the policy. COVERED IN INSURANCE FUNDAMENTALS.
The liability section of the Business Auto policy excludes coverage for pollution damage except in certain circumstances. Which of the following statements describe a circumstance where pollution would NOT be covered by the Business Auto policy?
When a covered truck leaks contaminating anti-freeze from its radiator because the radiator cap was accidentally left off. EXPLANATION: For the leaking antifreeze to be covered, the leak must have been caused by an accident.
What is the purpose of the "Other States" coverage of a standard workers' compensation policy?
To provide coverage for exposures that develop in other states during the policy period. EXPLANATION: The "Other States" coverage applies to both Workers Compensation and Employers Liability coverage under a Workers Compensation policy. The purpose is to provide coverage against loss exposures which develop during the policy period (but were not present at policy inception), in any state designated on the information page of the policy.
Homeowners policies cover all of the following, EXCEPT:
A 2-family dwelling occupied by tenants who are renting the covered premises from the named insured. EXPLANATION: A 2-family dwelling occupied by tenants who are renting from the named insured would not be covered under a Homeowners policy. Rental property is covered under the Dwelling policies.
Title insurance would cover which of the following?
A claim for a hidden lien on his/her real property is presented to the insured. EXPLANATION: One of the most important features of title insurance is to protect the insured from claims for liens against his or her real property that were previously unknown prior to purchasing the property.
Kim owns an Art studio where she offers painting lessons and sells painting and art supplies. She carries a Commercial General Liability policy to cover her business. Which of the following situations would be covered by Kim's CGL insurance?
A client slips and falls on wet paint that was dripped on the floor in Kim's art studio. The client breaks her arm. EXPLANATION: The CGL policy is designed to cover "premises liability" and business liability exposures. This would cover the client who slipped and fell in the studio. The other answer choices would be covered under different types of liability policies.
The aircraft physical damage (hull) deductible is normally expressed as:
A percentage of the value of the aircraft.
Which of the following is considered an Unfair Claim Settlement Practice?
Requiring a claimant to submit a preliminary claim report before moving forward on the claim. EXPLANATION: Requiring a claimant to submit a preliminary claim report before moving forward on the claim is an Unfair Claim Settlement practice according to the NAIC.
An office building is limited in the number of stories it may contain and still be eligible for coverage under a standard Businessowners Policy. This number is:
Six stories EXPLANATION: Office buildings cannot exceed six stories in height and still be eligible for coverage under the standardized BOP policy.
The auto liability limits $100/300/50 are an example of:
Split limits. EXPLANATION: This is an example of a split limit. Separate limits apply to bodily injury per person, bodily injury per accident, and property damage per accident.
Under Ben Green's personal auto policy, each of the following would qualify as a "family member" EXCEPT:
Susan Green, Ben's wife. Susan maintains a separate residence although she and Ben are not divorced. EXPLANATION: The question is asking which person is NOT a family member. Susan Green is no longer a member of the insured's residence and would not be covered. A spouse is considered to be a family member of the insured IF they live with the insured in the same household.
Which of the following sections of a CGL "occurrence" form is different under a "claims-made" CGL form?
The "conditions". EXPLANATION: There are differences in the "conditions" section of an "occurrence form" versus a "claims-made" form. The definitions, supplementary payments, and Coverage A are all the same in both the "occurrence" and the "claims-made" CGL policies.
Under a Crime insurance discovery form, a loss is "discovered":
When the insured first becomes aware that a loss has occurred or gives notice of an actual claim of a covered loss. EXPLANATION: Under a Crime insurance discovery form, a loss is "discovered" when the insured first becomes aware that a loss has occurred or gives notice of an actual claim of a covered loss.
Watercraft that are eligible for coverage under the Watercraft endorsement of the Homeowners policy, include all of the following, EXCEPT:
A small fishing boat powered by an outboard engine of 15 horsepower or less.
Which of the following would be covered under Coverage A of a Farm insurance policy?
A structure attached to the dwelling. EXPLANATION: Coverage A covers the dwelling and any attached structures such as a garage.
Which of the following is the limit for "loss assessment" provided by Section II of the Homeowners forms?
$1,000 EXPLANATION: The Homeowners policies, under Section II provide $1,000 for loss assessment.
The limit of insurance for the standard Businessowners policy coverage extension for "Personal Property Off-Premises" that applies to "property in transit" is:
$10,000. EXPLANATION: The standard Businessowners policy provides a $10,000 limit for "property in transit" under the coverage extension known as "Personal Property Off-Premises".
If a licensee has engaged in unfair competition or deceptive acts or practices as determined by the Commissioner which the person may not have known is a violation of a Code, a fine of up to _____ for each act or violation may be applied.
$2,000. EXPLANATION: A fine of up to $2,000 for each act or violation which the person may not have known was a violation of the Code.
Rachel's home is worth $525,000. She has the home covered under a $500,000 Homeowners policy with a 1.5% deductible. When Rachel's husband sets their kitchen on fire while frying a turkey, he accidentally causes $36,000 in damages. How much can Rachel and her husband expect to receive in their settlement?
$28,500 is correct. EXPLANATION: A $500,000 policy limit with a 1.5% deductible would equal a deductible of $7,500 which would be subtracted from the $36,000 in damages leaving a settlement of $28,500.
Under a standardized Dwelling form, a loss by a covered peril for Improvements, Alterations and Additions is covered for up to:
10% of the Coverage C limit of liability. EXPLANATION: Under a standardized Dwelling form, a loss by a covered peril for Improvements, Alterations and Additions is covered for up to 10% of the Coverage C limit.
If an insured carries Coverage C under a Dwelling policy, how much coverage applies off the insured premises (world-wide basis)?
10% of the Coverage C limit. EXPLANATION: The DP forms have a 10% limitation of the Coverage C amount when personal property is OFF the premises.
A personal auto policy provides coverage for all of the following drivers of an insured car, EXCEPT:
A thief who steals the car. EXPLANATION: Obviously, the thief did not have permission to drive the car. He or she would never be considered an insured.
All licensees in Georgia must keep records of their insurance transactions for a period of:
5 years. EXPLANATION: Records and files of insurance transactions should be kept for 5 years, the amount of time between examinations by the insurance departments.
An insured has an NFIP policy and suffers a direct loss due to flood. How many days does the insured have to submit a proof of loss?
60 days.
The Part A - Liability section of a standardized personal auto policy will provide coverage for which of the following vehicles?
His family car while being used in car pool. EXPLANATION: The only one that would be covered is the family car while being used in a car pool. Using a vehicle as a taxi, livery service or as part of any ride sharing network is excluded.
A CGL policy written on a claims-made form covers:
Accidents happening on or after the retroactive date and reported during the policy period or extended reporting period. EXPLANATION: Claims-made CGL policies cover accidents happening on or after the retroactive date and reported during the policy period or extended reporting period.
A couple has volunteered to cook at special events for their church. The church is concerned that one of these volunteers might be injured in the kitchen and wants to protect them in case of an accident. The church maintains workers compensation coverage for its maintenance personnel. What should the church do to provide coverage?
Add the Voluntary Compensation Endorsement to the workers compensation policy. EXPLANATION: In certain states it is not mandatory to cover certain classes of employees. The Voluntary Compensation Endorsement added to the workers compensation coverage would provide the coverage for this exposure. A general liability policy would not cover accidents that occur unless there is negligence on the part of the church.
Any individual in Georgia appointed or employed by an insurer that solicits insurance or procures applications for insurance is a(n):
Agent/producer. EXPLANATION: The question/statement reflects the key element of defining an agent. An agent represents the company who defines the power to represent the insurer and not the insured. An agent is also referred to as a producer.
Estoppel is best exemplified by which of the following?
An insurer is prohibited from denying a claim because its appointed producer advised the insured the claim covered. EXPLANATION: An insurance producer is the legal agent of the insurer. Statements made by an appointed producer are legally considered to be made by the party that the agent represents, which is the insurer. Therefore, if an appointed agent says a certain claim is covered, the insurer must cover that claim. The insurer would be prohibited from or estopped from denying it, even if the policy clearly excluded the claim.
Which of the following would be "an insured" under a Business Auto policy?
Any person who is driving a covered auto owned by the named insured after receiving permission. EXPLANATION: The only person that would be covered is: "Any person who is driving a covered auto owned by the named insured after receiving permission."
Which of the following statements BEST describes the reason it was necessary to create a federal flood insurance program in 1968?
Because other property policies routinely exclude flood from coverage. EXPLANATION: It was necessary to create a federal flood insurance program because other property policies routinely exclude flood from coverage. Many citizens were losing everything because they could not purchase insurance to cover their home and their belongings in case of flood.
The insured has suffered a covered loss under his DP-3 form. He fails to protect the property from further loss. The additional loss that occurs as a result of this failure may be denied. Why?
Because there was a failure to perform the required duties. EXPLANATION: When the insured fails to protect the property from further loss, the insurer can exclude coverage for the loss.
All of the following are examples of the types of exclusions found in professional liability insurance policies, EXCEPT:
Compensatory damages. EXPLANATION: One of the purposes of this coverage is to provide protection for compensatory damages.
All of the following statements regarding uninsured motorist coverage in Georgia are true, EXCEPT:
Coverage cannot be rejected. EXPLANATION: Coverage can be rejected, but only in writing.
Traditionally, the most common type of crop insurance sold prior to the creation of the Multi-Peril Crop Insurance Program was:
Coverage for hail damage. EXPLANATION: Hail damage to crops was the most popular form of crop insurance. Currently, the Multi-Peril Crop Insurance Program has surpassed Crop-Hail Insurance because of the broader coverage.
Bob and Pete's Used Cars has purchased a Garage policy with dealer's physical damage coverage on the cars owned by the dealership at its location. Pete goes to an auto auction 150 miles away, purchases a vehicle and drives it back to the dealership. If Pete suffers a physical damage loss during this trip:
Coverage will apply only if the "Dealers Drive Away Collision" endorsement is attached to the Garage policy.
The Homeowners forms exclude coverage for loss resulting from "earth movement" but the peril of "earthquake" can be added by endorsement as an insured peril for:
Coverages A, B, and C. EXPLANATION: The Earthquake Endorsement to a Homeowners policy adds "earthquake" as a covered peril for Coverages A, B, and C.
Sean is covered under a standard, unendorsed Personal Auto policy. He has an external hard drive connected to the manufacturer-installed stereo system of the car, with thousands of digital music files stored there. The vehicle is broken into and the hard drive is stolen. How will the insurance company handle the claim for the hard drive?
Deny the claim in full because this loss is excluded by Part D of the policy. EXPLANATION: These items are specifically excluded under the policy, therefore the claim would be denied. There is an endorsement that can be added to the policy for an additional premium to cover these types of items, but the question did not specify that this endorsement was carried in our example.
Which of the following endorsements can be attached to the Business Auto policy to extend coverage to individuals such as the owner of the business who does not carry personal auto insurance?
Drive Other Car endorsement. EXPLANATION: The purpose of this endorsement is to provide coverage for the owner of a business that does not own a personal automobile and therefore, does not have coverage under a Personal Auto policy. The "Drive Other Car" endorsement covers this business owner when he/she is driving "other cars" not owned or leased by the business for personal use. If the owner had a Personal Auto policy, he/she would not need this endorsement to their Business Auto policy.
Which of the following best describes the fundamental trade-off of Workers Compensation insurance?
Employees are provided no-fault benefits for most work-related injuries in exchange for the loss of the right to sue the employer for damages. EXPLANATION: Workers compensation insurance provides a fundamental trade-off: covered employees who are injured in an accident at work lose their rights to sue their employers, in exchange for being provided certain medical, loss-of-income, rehabilitation, and death benefits, regardless of who is at fault.
Andrew Daniels has paid a premium to an insurance company for a Homeowners policy, and the policy was issued. Later, a fire occurred, and Andrew's home suffered damage. In this situation, both Andrew and his insurance company are required to perform certain duties because an insurance policy is a(n) ______ contract.
Executory. EXPLANATION: An insurance contract outlines the duties of both the insured and the insurance company, and states that those duties must be performed, before the contract will be fully executed.
An insured has purchased BAP physical damage coverage against specified causes of loss. Protection applies to all of the following perils, EXCEPT:
Falling objects. EXPLANATION: This is named peril coverage (specified causes of loss) and is not nearly as broad as comprehensive coverage. This coverage form names the perils that will be covered and falling objects is not a named peril. Comprehensive covers anything other than collision.
Which of the following would be covered under the mobile equipment endorsement attached to a Commercial Auto policy?
Fork lift. EXPLANATION: Mobile equipment is a self-propelled land conveyance that is NOT designed to be used on public roads as transportation. When these types of vehicles are used on public roads under their own power, the mobile equipment endorsement is necessary to cover these vehicles under the policy. Some types of mobile equipment that operate in a given state must be licensed, and evidence of liability insurance provided.
The "removal coverage" of the Standard Fire policy is:
Is extremely broad and will cover the removal expense for five days and beyond if an extension is arranged with the insurance company. EXPLANATION: The removal coverage is so broad that it actually becomes "all risk" coverage. Extensions of this coverage beyond five days, can be arranged with the insurance company.
Recovery under the Standard Fire policy may be limited by the "pro rata" liability clause. All of the following statements are true about this clause, EXCEPT:
It allows the insured to collect the full limit of liability under all policies covering the damaged property, in case of a loss. EXPLANATION: The purpose of insurance is to indemnify and not permit an insured to collect more than the loss in case of multiple policies covering the same risk.
All of the following statements are TRUE regarding Part D - Other Than Collision coverage, EXCEPT:
It covers property damage the insured causes to others. EXPLANATION: You are looking for the statement that is NOT TRUE, which is: "It covers property damage the insured causes to others". This is not a true statement because property damage to others is a "liability" coverage under an auto policy, not a "comprehensive" coverage. The three other answer choices are true. Remember that "comprehensive" coverage is a "property" coverage, not a "liability" coverage.
Mike purchased a policy several years ago to cover him for liability. Last year, Mike determined that the limits of his liability policy were not high enough to cover him adequately should a loss occur, so he purchases an excess liability policy to provide more coverage. Mike experiences a loss, and discovers that his underlying liability policy had expired before the loss, but his excess liability policy is still in effect. How will this loss be paid?
It will be denied, due to nonconcurrency. EXPLANATION: The claim will be denied, due to nonconcurrency. If the underlying liability policy was expired, the excess policy will not be triggered to pay anything on the claim.
All of the following statements are true of liability insurance, EXCEPT:
Liability insurance provides indemnification for the insured. EXPLANATION: The statement that is NOT true is that Liability insurance provides indemnification for the insured.
Which of the following would NOT be covered by the Commercial General Liability policy?
Liability that the insured assumes in a contract.
"Theft" as defined by a Crime insurance policy, includes all of the following, EXCEPT:
Mysterious disappearance. EXPLANATION: "Theft" as defined by a Crime insurance policy, includes all of the following, EXCEPT mysterious disappearance.
A physicians, surgeons, and dentists professional liability policy would cover which of the following?
Negligent acts of a staff nurse or aide. EXPLANATION: A physicians, surgeons, and dentists policy is professional liability coverage which would extend to the named medical professional(s) as well as to the staff. Premises liability is not included, nor is coverage for criminal acts.
An applicant for insurance has been advised by his insurer that something adverse appeared on his investigative consumer report. The information is in error. The applicant may:
Obtain the name of the reporting agency from the insurer and correct the error. EXPLANATION: The Fair Credit Reporting Act requires consumer reporting agencies to adopt reasonable procedures for meeting the needs of commerce for consumer reports in a manner which is fair and equitable to the consumer with regard to the accuracy of reports. The insurance company is not responsible for correcting consumer report errors. The insurer can advise the applicant of the problem and the name of the reporting agency. It is up to the applicant to have the report corrected.
The Mobile Home endorsement to a Homeowners policy provides for loss settlement:
On a replacement cost basis if the insurance-to-value (coinsurance) requirement is met. EXPLANATION: If the mobile home is insured for at least 80% of its value, the insured is entitled to replacement cost coverage up to the limit of the policy.
Sam and Dan are working to clean out the gutters around the roof on Sam's house. Sam and Dan are standing at the top of separate ladders that are propped against the side of Sam's house, when Dan's ladder begins to wobble and ultimately falls into Sam's ladder. Both men and their ladders crash to the ground. Whose injuries will be covered by Sam's Homeowners policy under Coverage E - Personal Liability?
Only Dan's injuries would be covered. EXPLANATION: The Homeowners policy provides coverage under "Coverage E - Personal Liability" for sums the insured is liable for injuries to "OTHERS", therefore Dan's injuries would be covered. No one with the title of "insured" under a Homeowners policy can collect for injuries under the liability section of the policy, so Sam's injuries are not covered by his Homeowners policy.
Which of the following types of bonds guarantees that all project materials will be paid in full by the contractor upon completion of the project?
Payment bond. EXPLANATION: A payment bond guarantees that all project materials will be paid in full by the contractor upon completion of the project?
Most crop insurance in the United States is written by:
Private stock and mutual companies. EXPLANATION: The private sector now writes about 85% of the multi-peril crop coverage.
Risk retention and purchasing groups are used to provide which of the following types of coverage?
Products Liability insurance. EXPLANATION: Risk retention and purchasing groups allow product manufacturers to purchase group coverage for products liability.
Which type of damages is not intended to indemnify the plaintiff?
Punitive damages. EXPLANATION: Punitive damages are awarded in cases of gross negligence for the purpose of punishing the defendant. Special and general damages are types of compensatory damages, which are intended to indemnify the plaintiff.
The examination of a foreign insurer (one formed outside the state of Georgia) or an alien insurer (one formed in another country) must be conducted in the state of Georgia. Which of the following statements is correct regarding such examinations?
The Commissioner may accept the examination report on a foreign or alien insurer as prepared by the Insurance Department of the company's state of domicile. EXPLANATION: Reciprocity of examinations of companies exist among all Insurance Departments that are accredited by the National Association of Insurance Commissioners (NAIC). The Commissioner may accept the examination report on a foreign or alien insurer as prepared by the Insurance Department of the company's state of domicile.
The federal law that requires insurers to give customers written privacy notices is:
The Gramm-Leach-Bliley Act. EXPLANATION: The Gramm-Leach-Bliley Act (GLB Act), also known as the Financial Modernization Act of 1999, requires insurers to give customers written privacy notices that explain information-sharing practices and requires insurers to safeguard sensitive data.
Tara's hair salon was already having a bad year when a client slipped and broke her arm on a worn out piece of flooring, and sued the salon for $500,000. Tara had recently purchased an Excess Liability policy and she was hoping that she could cover the claim with the new "excess" policy, leaving her underlying CGL policy untouched. This is not possible because:
The coverage under an Excess Liability policy are only triggered when the underlying policy's limits have been exhausted. EXPLANATION: Excess liability policies are purchased to add coverage to existing liability policies, but those policies are not triggered until the underlying policies have exhausted the benefits payable.
The insured is covered under a BOP policy. Contents coverage is included. If the insured buys a separate piece of machinery and insures it separately, how will the BOP policy respond to a loss to this machinery?
The equipment policy will be primary and the BOP will be excess if the separate policy does not provide adequate limits of coverage. EXPLANATION: The BOP will only pay on an excess basis if the other coverage does not provide adequate limits of coverage.
All of the following are characteristics of an insurable risk, EXCEPT:
The loss must be catastrophic in nature.
Crop insurance provides coverage for losses to:
The marketable portion of growing crops. EXPLANATION: Most forms exclude damage to the trees, vines, bushes, plants and blossoms that produce the crops. Only the marketable portion of the crop is usually covered.
Under a liability policy, "supplementary payments" include all of the following, EXCEPT:
The negotiated settlement. EXPLANATION: The negotiated settlement is considered to be "damages", not supplementary payments. The other three answer choices ARE covered under supplementary payments.
Which of the following statements is TRUE regarding a Government Crime policy?
The policy permits the limit for employee theft to apply on either a "per occurrence" or "per employee" basis..
Which of the following is true if the employer does not reimburse the insurer for the amount of the chosen workers compensation claim deductible?
The unpaid deductible will be treated in the same way as the nonpayment of premium.
Which of the following is NOT TRUE regarding surety bonds?
They are an agreement that in exchange for a premium, the surety will indemnify the obligee. EXPLANATION: The answer choice that is NOT TRUE regarding surety bonds is: "They are an agreement that in exchange for a premium, the surety will indemnify the obligee." The other three answer choices are true of surety bonds and listed in the chart within the Virtual Classroom.
How often may the Georgia Commissioner of Insurance examine the affairs of an authorized insurer?
Whenever necessary. EXPLANATION: Whenever necessary, the Commissioner (or designee) may examine the affairs, transactions, accounts, records and assets of insurers authorized to do business in Georgia. The Commissioner may also examine any other facts relating to the insurer's business methods, management and dealings with policyholders.
Under "pollution cleanup and removal" coverage under the standard ISO BOP form, when must a loss be reported?
Within 180 days. EXPLANATION: The expenses will be paid only if they are reported to the insurer within 180 days of the date of the direct loss or by the end of the policy period, whichever is earlier.
A burglar apprehended in Smith's Jewelry Store by Mr. Smith, the owner, puts up a fight and suffers a broken jaw as a consequence. The burglar sues Smith's Jewelry Store for bodily injury. Will the store's CGL policy provide defense of the suit?
Yes. Although intentional, the injury was committed by Mr. Smith to protect himself and his property and is therefore covered. EXPLANATION: The claim is covered because Mr. Smith was trying to protect himself and his property by using reasonable force. If the burglar did not have a weapon and Mr. Smith shot him there might be a coverage problem.
Which of the following cause of loss forms provides named peril coverage?
he basic and broad forms only.
All of the following are excluded under the 1943 Standard Fire policy, EXCEPT:
he theft of property after it had been removed from the insured premises to protect it from further loss. EXPLANATION: The theft of property after it had been removed from the insured premises to protect it from further loss WOULD be covered. The other losses listed as answer choices would be excluded by the policy.
