Insurance Exam 18

Standard and Poor's, A.M. Best and Moody's are examples of: Answer Choices: Independent rating services. Insurance department regulatory agencies. Risk retention groups. Stock company rating bureaus.

Independent rating services.

When a state requires that all property policies within the state provide coverage equivalent or greater to the SFP with the EC perils attached, ______________ policies are exempt from this requirement. Answer Choices: Dwelling policies. Inland marine. Auto policies. Equipment breakdown policies.

Inland marine.

Hamish has covered his antique automobile with a loss settlement amount that is stated in the policy of $55,000. The ACV of the vehicle is $32,000, but Hamish insured it for more because of his emotional attachment to the car. The policy deductible is $1,000. Hamish is driving his beloved automobile to an antiques car show one afternoon, when he is distracted by another antique vehicle and crashes into a brick retaining wall. Hamish's antique car is a total loss. Which of the following is the amount he should receive for his claim? Answer Choices: $31,000. $23,000 $55,000. $32,000.

$31,000.

Motels insured under an ISO Businessowners may not exceed how many stories? Answer Choices: 3 stories 4 stories 5 stories No limit

3 stories

How many days does the liberalization clause provide for under the ISO standard BOP policy form prior to, or during the policy period? Answer Choices: 55 days 30 days 45 days 35 days

45 days

All of the following would be considered "uninsured motorists", EXCEPT: Answer Choices: A motorist driving without liability insurance. A motorist who Is covered for liability, but does not carry enough coverage to meet the state's financial responsibility requirements. A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident. A motorist with liability coverage with an insurance company that has become insolvent.

A motorist driving with coverage up to the required state financial responsibility limits for liability, but not high enough to pay the claims for an at-fault accident.

The Extended Business Income provision covers the first 60 days after the loss for reimbursement of earnings for the insured business: Answer Choices: Immediately after the loss has occurred. After a waiting period of 72 hours. After the repairs have been made to the insured property. Only applies if the insured is forced to relocate.

After the repairs have been made to the insured property.

Which of the following is covered under Part A of the Personal Auto policy? Answer Choices: Damage to the attached garage of a dwelling rented by the insured. Intentional acts by the insured. Damage to insured's property in the vehicle. Damage to property of others in the vehicle.

Damage to the attached garage of a dwelling rented by the insured.

Which of the following is NOT a claim settlement option for liability claims? Answer Choices: Excessive amounts claimed. Lost wages claimed. Loss of Use. Disfigurement.

Excessive amounts claimed.

A named peril aviation policy would cover all of the following, EXCEPT: Answer Choices: Flood Theft Stationary land damage Windstorm

Flood

Part D of the personal auto policy does NOT cover: Answer Choices: Earthquake. Explosion. Wind. Freezing.

Freezing.

Which of the following statements is TRUE concerning the Part D coverage of a standardized Personal Auto policy? Answer Choices: Select the Correct Answer Can be endorsed to settle on a replacement cost basis. It can cover owned and nonowned automobiles. Applies only when the insured is "at-fault" in an accident. Excludes physical damage coverage to cars over 10 years old.

It can cover owned and nonowned automobiles.

Which of the following is not essential in determining if a salvage award is to be made? Answer Choices: Life-saving efforts. The effort must be successful. The salvage service must be voluntary. The property involved must be in peril from some hazard.

Life-saving efforts.

Under a Personal Watercraft, Boatowners or Yacht policy, how are physical damage claims settled? Answer Choices: On an actual cash value (ACV) basis. On a replacement cost basis. On a functional replacement cost basis. On an agreed amount basis.

On an actual cash value (ACV) basis

Which of the following would be considered "general damages" that could be awarded to a plaintiff in a negligence case? Answer Choices: Lost wages. Medical expenses. Pain and suffering. Vocational rehabilitation.

Pain and suffering.

Driver 1 and Driver 2 are in an accident. Driver 2 has the following damages: Property Damage - $1,000 Rental Car Expense - $500 Emergency Room Expense - $400 Lost Wages - $300 The extent of the bodily injury will not be known for six months. How should the adjuster on this claim pay damages for Driver 2? Answer Choices: Pay all damage to date, provide a full and final release has been signed by Driver 2. Pay nothing until total of all damages has been determined. Pay the property damage and rental car expense and settle the bodily injury at a later time. None of the responses listed are correct

Pay the property damage and rental car expense and settle the bodily injury at a later time.

Under Part A of a Personal Automobile policy, "supplementary payments" refer to which of the following? Answer Choices: Payment of defense and other expenses by the insurance company beyond the limits of liability. Payments made by the insured for damages exceeding his policy limits. Payments received by the insured directly from the person or persons who caused a loss. Payments made by the insurance company for the insured's own medical expenses, to supplement any other medical insurance.

Payment of defense and other expenses by the insurance company beyond the limits of liability.

Homeowner policies typically provide coverage for all of the following, EXCEPT: Answer Choices: Personal liability. Personal injury. Claim expenses. Medical payments.

Personal injury.

Brianna owns a large Flea Market and she rents space to many different vendors. Brianna requires each vendor to carry liability insurance in case someone is injured in their rented space. Brianna is practicing: Answer Choices: Risk transference. Risk retention. Risk avoidance. Risk reduction.

Risk reduction.

Which of the following would be considered a non-pecuniary wage in Texas? Answer Choices: An end-of-year bonus. The health insurance premium paid by a workers employer. Commissions paid for sales made. A raise to the workers salary.

The health insurance premium paid by a workers employer. Non-pecuniary wages are not paid in "money", but they are still considered as "wages".

All of the following is a function of the standard mortgage clause in a property insurance policy, EXCEPT: Answer Choices: Protects the rights (insurable interest) of the mortgagee, even if an insured intentionally causes a loss to the mortgaged property. Guarantees that the mortgage payments will be made by an insurance policy, if the insured does not make the payments. Allows the mortgagee to pay the premium if the insured refuses to do so. Allows the mortgagee to submit a proof of loss if the insured refuses to do so.

Guarantees that the mortgage payments will be made by an insurance policy, if the insured does not make the payments.

Which of the following is NOT a correct statement in determining the cost of a "comparable automobile" when a physical damage loss has a occurred? Answer Choices: When comparable automobiles are available or were available in the local market area in the last 90 days, the average cost of two or more comparable automobiles. The cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the United States market. When comparable automobiles are not available or were not available in the local market area in the last 90 days, the average of two or more quotations from two or more licensed dealers in the local market area. If not possible to determine the value using standard methods of value determination, the cost of a comparable automobile shall otherwise be supported by documentation and fully explained to the claimant.

The cost of a comparable automobile as determined by a computerized automobile valuation service that produces statistically valid fair market values within the United States market

If an insured covers his home with a standard unendorsed HO-5 form and purchases a Coverage A limit that meets the coinsurance requirement, which of the following would NOT be covered on a replacement cost basis? Answer Choices: The dwelling. Other structures. Personal property. An attached garage.

Personal property.

The EC peril of "smoke" under the standard DP-1 form covers which of the following? Answer Choices: Soot from the smoke stack of the factory across the street that settles on the siding of the dwelling. The release of soot from a furnace that damages the walls of the living room in the covered dwelling. The release of soot from a fireplace that damages the walls and ceiling of the family room in the covered dwelling. Oily soot from a smudge pot used to keep the apples in the orchards next door from freezing, that settles on the brick veneer of the covered dwelling.

The release of soot from a furnace that damages the walls of the living room in the covered dwelling.