Insurance Exam 17

What is the purpose of freight insurance? Answer Choices: Covers shipper fees. Covers loss to the cargo. Covers the insurable interest of the shipper due to jettison of the cargo. Covers the cargo until it reaches the warehouse.

Covers shipper fees.

Which of the following would be covered by the Sign Coverage Form for Newman Sign Company? Answer Choices: Customer signs in their care custody and control Newman's sign repair trucks Sign manufacturing equipment at the shop Accounts Receivable for uncollectible accounts

Customer signs in their care custody and control will cover the neon, electrical, and mechanical signs of others that in the care, custody and control of the insured.

An inland marine coverage which covers the insured's merchandise held for sale, such property that is sold but not delivered, customers property in the care and custody of the insured, and property being transported to or from the insured, is a: Answer Choices: Dealers form Commercial articles floater. Floor plan merchandise coverage form. Bailee's customers policy.

Dealers form

Claims filed against the insurance company by the insured are known as: Answer Choices: First-party claims. Third-party claims. Self-insured claims. Subrogation claims.

First-party claims

Perry has his home covered under an HO-5 policy. He borrows a friend's expensive camera and takes it on vacation, where it is stolen. Coverage for the stolen camera is: Answer Choices: Excluded by the care, custody & control rule. Included anywhere in the world. More appropriately claimed under the friend's policy because he was the owner of the camera. Included for up to $500.

Included anywhere in the world

For the insured dwelling and other structures, the DP-3 provides: Answer Choices: Open peril coverage. The broad form perils. The basic form perils. Fire, lightning, the extended coverage perils and vandalism & malicious mischief coverage.

Open peril coverage.

With a "full release settlement" of an insurance claim: Answer Choices: The claimant does not have to sign a release. The insurer can make payments over 90 days. The insurer has 60 days to make payment. All damages are paid immediately in one lump sum.

All damages are paid immediately in one lump sum.

Under the "Coverage C - Personal Property" section of the Homeowners policy, how much coverage is provided on watercraft, including their trailers, furnishings, equipment and outboard motors. Answer Choices: $1,500 $1,000 $2,500 $500

$1,500

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: Answer Choices: $15,000 $35,000 $25,000 $100,000

$35,000

Zach's factory was damaged by a fire and shuts down for 90 days for repairs. In order to keep his business going, Zach spends $150,000 renting another building, along with some machinery and other supplies. Had he not taken these measures, Zach's total loss of business income would have been $300,000; but by renting a building and equipment, he manages to reduce that loss by $80,000. Zach's Commercial Property policy includes Business Income coverage with Extra Expense. How much will his insurer indemnify him? Answer Choices $370,000 $300,000 $120,000 $210,000

$370,000

The insured carries $100,000 loss of income coverage with a 25% monthly limitation. He sustains a loss of $35,000 for the first month and $20,000 the second month. How much will be paid? Answer Choices: $55,000 $45,000 $35,000 $20,000

$45,000

Which of the following represents the amount of coverage a Homeowners policy will provide for personal property located in a self-storage facility? Answer Choices: 5% of the Coverage C limit or $5,000, whichever is greater. 10% of the Coverage C limit or $1,000, whichever is smaller. 10% of the Coverage C limit or $1,000, whichever is greater. $1,000.

10% of the Coverage C limit or $1,000, whichever is greater.

Elias is employed in Texas for 3 different employers. He is injured while at work for Company A, he submits a claim for payment of benefits, and he is now recuperating. Companies B & C have paid their shares of the claim through their workers' compensation insurance carriers. Which of the following best describes the next step the insurer's for Companies B & C may take because the compensable injury did not occur while the employee was working at Company B or C? Answer Choices: Companies B & C will continue to make benefit payments to the injured worker because they hired a worker with multiple employments. During the hiring process, Companies B & C would have agreed to split any compensation payments equally between the employers. Companies B & C will file a joint lawsuit against Company A's insurer to recover the benefit amounts they paid the injured worker due to the negligence of Company A. Companies B & C will submit an application to the Texas Subsequent Injury Fund to receive reimbursement for the amount of income and death benefits they paid to a worker whose injuries were received at another employer. Companies B & C will submit a form to the Workers Compensation Division and the Commissioner will determine the amount of benefits that are fair and just for Companies B & C to pay.

Companies B & C will submit an application to the Texas Subsequent Injury Fund to receive reimbursement for the amount of income and death benefits they paid to a worker whose injuries were received at another employer.

All of the following bonds guarantee the payment of certain taxes, EXCEPT: Answer Choices: Hunting and fishing license bonds Fuel bonds Liquor and tobacco Contract surety bonds

Contract surety bonds

Spencer is covered under a standard Personal Automobile policy with a policy inception date of October 15th. Additionally, the policy will expire on October 15th of the current year. Spencer contacts his agent on October 7th and asks to have an new endorsement added to his policy. The agent agrees, adds the coverage the same day, and informs Spencer that there will be an additional premium of $20 per month charged. When will the adjustment of premium be effective for Spencer? Answer Choices: Spencer would not be permitted to add an endorsement until the policy period ends and a new policy is issued sometime after October 15th. October 16th. October 15th. October 7th.

October 7th. Becomes effective on the date of the change.

"Experience rating" provides employers with the incentive to: Answer Choices: Hire only experienced workers. Prioritize safety and control hazards in the workplace. Hire fewer workers. Purchase private workers' compensation coverage.

Prioritize safety and control hazards in the workplace.

Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay? Answer Choices: The water damage. The increased cost of the water bill. The cost to replace the particular part in the plumbing system that busted and caused the damage. The furnace repairs and/or replacement.

The water damage

In which of the following cases of alleged negligence would the defendant not be legally liable? Answer Choices: Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. Jeff sues Bill for damages. Jack was having a walkway at his business replaced. There were still several large spaces to be filled when a mail carrier, whose back was broken from the fall, sued Jack for damages. Irene purchased several jars of crabapple jam from a gourmet jam and jelly company. She suffered severe gastric disturbance as a result of eating the jam and sued for damages from the jam and jelly company. Susan accidentally dropped a bowling ball on the foot of Lynette at the local bowling alley. Lynette sued Susan for damages.

Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. Jeff sues Bill for damages. Bill does not owe Jeff for the damages his vehicle sustained. Jeff was negligent for not being more attentive while driving.

The ISO standardized Businessowners policy provides a limit of $2,500 for Fire Department Service charges. This limit applies: Answer Choices: Per policy year. To one specified location. Regardless of the number of services or number of buildings. Coverage is limited as to the number of fire departments that respond.

Regardless of the number of services or number of buildings.

Under a standard Equipment Breakdown policy, the loss settlement is: Answer Choices: ACV for all covered losses if the the claim is reported within 24 months. Replacement cost for all covered losses. Replacement cost coverage, if the repair or replacement, is made within 18 months of the loss. Replacement cost coverage, if the repair or replacement, is made within 24 months of the loss.

Replacement cost coverage, if the repair or replacement, is made within 24 months of the loss.