Insurance

The pro rata liability clause is designed to protect the principle of

Indemnity.

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?

Up to $1,000 per occurrence

When an insurance policy does not offer a continuation or replacement at its expiration date, it is considered a

Nonrenewal.

Which of the following statements is INCORRECT?

A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.

First aid costs for others injured on the insured's premises

Are paid in addition to the liability limit.

Which of the following authorities is authorized to issue a temporary insurance producer's license?

Commissioner

When would UM coverage apply?

Only when the other party is legally liable but has no insurance

Which of the following is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000?

$80,000

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?

3 years

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

Assuming the insurer and the insured agree to the amount payable for a loss covered under a dwelling policy, how soon after the insurer has received proof of loss must it make payment?

60 days

All of the following are licensing requirements for a business entity, EXCEPT

Having all employees complete continuing education courses once every 2 years.

If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the

Scheduled personal property endorsement

With regards to premium rates, which of the following statements is NOT true?

The Commissioner sets all insurance premium rates used in Pennsylvania.

A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?

$30,000

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 has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay?

$60

If a loss occurs, the insured with a homeowners policy is required to do the following EXCEPT

Arrange for an appraisal by an unbiased third party.

A producer's license must be renewed

Biennially.

The section of an insurance policy that details what perils are not insured against and what persons are not insured is known as the

Exclusions.

The authority granted to an agent through the agent's contract is referred to as

Express authority.

Limited Fungi, Wet or Dry Rot, or Bacteria Coverage may be added to which HO policies?

HO-3 and 5

All of the following are conditions commonly found in the insurance policy EXCEPT

Insuring agreement.

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution.

Which of the following is a statutory defense?

Comparative negligence

An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay?

$1,000

Transportation expenses are covered under a personal auto policy for

$20 per day, for a maximum of $600.

Within how many days must a producer respond to an inquiry from the Commissioner?

30 days

Under the dwelling policy form, what is the maximum time limit during which multiple volcanic activities would be considered part of one occurrence?

72 hours

Which of the following other coverages is NOT included in the basic form dwelling policy?

Breakage of glass

With regards to a homeowners policy, which coverage provides for indirect or consequential losses?

Coverage D

Which of the following statements is true concerning Underinsured Motorists Coverage under a Personal Auto Policy in Pennsylvania?

Coverage applies as excess to the bodily injury limits carried by the operator of the other vehicle.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer.

Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries?

Injury incurred while the person was under the influence of drugs or alcohol

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, which of the following must occur?

The change must be reported to the Commissioner.

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.

A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true?

The loss is payable to the insured and the mortgagee.

If a personal auto policy is being cancelled by the insurer for nonpayment of premium, how much notice must the insurer provide to the policyowner?

15 days

Which of the following statements is NOT true regarding a personal umbrella liability policy?

It provides errors and omissions coverage for an agency.

When an insured purchases a private passenger automobile insurance policy with a $500 deductible for collision coverage, how will that affect the rate for collision coverage?

It will be reduced.

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk?

Other insurance

Which of the following would qualify as a competent party in an insurance contract?

The applicant has a prior felony conviction.