Insurance Licensing Exam

Property Insurance that provides $100k for a building and $50k for personal property at a single location is called what kind of coverage?

Specific Coverage

What insurance principle does pro rata liability protect?

Indemnity

How is coverage written for dwellings under the FAIR Plan?

On a flat basis

Which method of loss valuation is contrary to the principle of indemnity?

Replacement Cost

In describing types of losses, another word for "consequential" would be a(n) ___ .

indirect loss

All of the following are conditions commonly found in the insurance policy except __. A. subrogation B. appraisal C. insuring agreement D. cancellation and nonrenewal

insuring agreement

Boat owners policies are usually written as ___ peril.

open

Insured's building has an actual cash value of $200k and he has insured the property for $120k with an 80% coinsurance clause. A $40k loss occurs. How much will the policy pay?

$30k

The declarations page of the homeowners policy provides all of the following except: A. Insured's address. B. What deductible amount applies to each loss covered by the policy. C. A statement that earthquake damage is not covered. D. The amount of premium charged for each coverage.

A statement that earthquake damage is not covered.

An uninsured motor vehicle includes all of the following except __ . A. A vehicle being used for public livery B. The accident was a hit-and-run. C. The insurance company denies coverage. D. The vehicle has no liability bond or insurance enforce.

A vehicle being used for public livery.

What type of liability would a person who owns wild animals have?

Absolute Liability

Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses? A. Insuring agreement B. Declarations C. Exclusions D. Additional Coverage

Additional Coverage

Which of the following would not be a violation of state insurance regulations? A. Agent A uses her license to write only insurance for herself and her immediate family B. Agent B charges his clients a consulting fee, in addition to the premium for placing a policy. C. Agent C uses her license to write only business other than controlled. D. Agent D collects premiums due on policies and deposits the funds in his own personal account.

Agent C uses her license to write only business other than controlled.

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

In property and casualty insurance, what is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? A. Deductible B. Self-Insured Retention C. Coinsurance D. Premium

Deductible

All of the following actions can be described as twisting except: A. Making an incomplete comparison between the existing and proposed policies. B. Explaining to client the advantages of permanent insurance over term and suggesting changing policies. C. Misrepresenting the terms and conditions of the existing policy to make the new one more attractive. D. Embellishing the terms of the proposed policy in order to convince the insured to switch

Explaining to client the advantages of permanent insurance over term and suggesting changing policies.

Circulating deceptive sales material to the public is what type of Unfair Trade Practice? A. False Advertising B. Defamation C. Coercion D. Misrepresentation

False Advertising

K owns several buildings at different locations with each one insured on a separate policy. Which of the following methods of writing insurance does this describe?

Specific Limit

For a contract to be enforceable by law, the purpose of the contract must be __.

Legal and not against public policy

Which of the following is not considered a misrepresentation as it pertains to unfair trade practices? A. Making comparisons between different policies B. Stating that the insurance policy is a share of stock C. Exaggerating the benefits provided in the policy D. Stating that the competitors will arbitrarily increase their premiums each year.

Making comparisons between different policies

_____ refers to when multiple policies cover the same property but have different effective and expiration dates.

Nonconcurrency

In CT, if an insurer issues property policies, what must they do concerning the peril of flood? A. Nothing, flood is always excluded. B. Cover the peril as any other loss C. Cover the peril subject to a special deductible D. Notify the insured in writing if flood is excluded.

Notify the insured in writing if flood is excluded.

All of the following are parts of a personal auto policy except: A. Physical Damage Coverage B. Liability Coverage C. Medical Payments Coverage D. Duties after an accident or loss

Physical Damage Coverage

A driver is planning a trip to DMV to renew his license and to register a new vehicle. Prior to his visit, he should remember that:

Proof of financial responsibility is a pre-req to entitle any person to receive or retain a motor vehicle operator's license or a certificate of registration of any motor vehicle.

All of the following are true regarding rebates except: A. Rebates are allowed if it is in the best interest of the client B. Rebates are only allowed if specifically stated in the policy C. Rebating can be anything of monetary value given as an independent to purchase insurance D. Dividends are not considered to be rebates.

Rebates are allowed if it is in the best interest of the client

Which of the following is included under the physical damage coverage of a personal auto policy? A. Custom furnishings or equipment in a pickup or van. B. Sound reproduction equipment permanently installed in the covered auto. C. A covered auto that is seized and destroyed by a government authority. D. A cellular phone located in a locked vehicle.

Sound reproduction equipment permanently installed in the covered auto.

The legal process that gives the insurer, after a loss, the right to seek recovery from a third party that was responsible for the loss is ____ .

Subrogation

Which of the following is an example of a producer being involved in an unfair trade practice of rebating? A. Making deceptive statements about a competitor B. Telling a client his first premium will be waived if he purchases the insurance policy today. C. Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest. D. Charging a client a higher premium for the same policy as another client in the same insuring class.

Telling a client his first premium will be waived if he purchases the insurance policy today.

A producer will be receiving compensation directly from a customer for an issued policy. Which of the following must be disclosed to the customer before the compensation can be received?

The amount of compensation the producer will receive

All of the following statements concerning coinsurance are true, except: A. It is used to help adequacy and equity in rates. B. The insured agrees to maintain insurance equal to some specified percentage of the value of the property. C. If the insurance carried is less than required, the insurance may not cover the whole loss. D. The coinsurance formula also will be applied to total loss.

The coinsurance formula also will be applied to total loss.

A producer will be receiving compensation directly from a customer for an issued policy. The producer discloses to the applicant the fact that he will receive a commision; however, he does not have the exact amount at this time. What else should the producer disclose? A. An estimated based on average commissions for similar policies issued in the past. B. Producer's rate scale C. A list of all charges that may be imposed as part of the underwriting process. D. The method for compensation calculation and a reasonable estimate

The method for compensation calculation and a reasonable estimate

Robbery is:

The taking of property by use of force, violence and fear.

In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for __. A. Collision Coverage B. Uninsured Motorist Coverage C. Towing Coverage D. Comprehensive Coverage

Uninsured Motorist Coverage

A person who is not named as an insured on the declarations page of a policy but is protected by the policy is known as the __. A. first named insured B. additional insured C. policyowner D. named insured

additional insured

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered __. A. controlled business B. adverse selection C. discrimination D. twisting

discrimination

When submitting an application for coverage under the CT FAIR Plan, agents are __. A. temporarily authorized representatives of the insurer. B. not considered authorized representatives of the insurer C. considered authorized representatives of the insurer. D. appointed representatives of the insurer.

not considered authorized representatives of the insurer

Insurance procured from an unauthorized insurer is called __. A. unauthorized insurance B. credit insurance C. illegal D. surplus lines insurance

surplus lines insurance