Insurance Part 1
I owns a building which is insured for $100,000. J legally stores dynamite and the building explodes with an $80,000 mortage on it. How was building paid for the total loss?
$80,000 to mortage and $20,000 to J
How many hours of continuing Education must be done in a Classroom or Class Equivalent?
12 hours
How many hours of continuing education hours must be ethics per renewal period?
2
What must be done to renew your license?
24 hours every 2 years or (24 months) or it will say (Continuing Education)
If a leader told a loan applicant, "to obtain the loan you must purchase your insurance from a specific insurer". That lender would be guilty of?
Coercion
Terrorism risk insurance act applies to which of these policies?
Commercial
A building is insured by 2 insurers. Company A has it insured for $60,000 and Company B has it insured for $40,,000. The building sustains a loss of $10,000 how will Company A handle the claim?
Company A pays its pro rata share of the loss $6,000
Which of these protects the public from overly intrusive information collection practices by making sure the data collected is kept confidential?
Fair Credit Reporting Act
A client must be informed that an investigation into their finances will be performed according to?
Fair credit reporting act
An insurance company has in their sales brochure that all future dividends in an insurance policy are guaranteed to be paid. This would be an example of?
False advertising
If an insurer deceives a prospect regarding the insurer's assests, corporate structure or financial standing. This would be?
False advertising
Which of these would be considered a direct loss?
Fire damage to a detached garage
A property has obsolete parts damaged by a covered peril. How will the claim be paid?
Functional replacement cost
Which of these can be used to determine insurance rates in Texas?
Gender
A situation, circumstance or product that increases the probability of a loss is?
Hazard
The gas stove in a kitchen starts a grease fire. The grease fire catches the curtains on fire. What would this be called?
Hostile fire
In a personal auto policy, the insuring agreement shows?
Insurer agrees to pay covered losses
In the ______ section of the policy is where you find the insurers promise to pay in the loss.
Insuring Agreement
Where in a policy would you find a general listing of all the perils?
Insuring Agreement
Terrorism risk insurance act of 2015 is designed to?
Makes terrorism insurance available through insurers
When the insurer pays a loss according to a negotiated price, what kind of settlement is this?
Market Value
The sharing of the personal information used in the underwriting of an insurance policy, is made available to the insured because of the?
McCarren Ferguson Act
A false statement made on a proof of loss or on an application and if found to be material voids the policy is?
Misrepresentation
A shop owner notices but does not clean a spill in his store. A customer slips and falls causing an injury. This is an example of?
Morale hazard
Carelessness would be which of these?
Morale hazard
All of these would be the elements of a legal contract EXCEPT?
Negotiation
Vacancy means which of these?
No property and no occupants
Vacancy means:
No property and no occupants
When an insurer no longer covers your property after the expiration of the existing policy this is called?
Non-renewal
Submission of an application for an insurance policy is best described as?
Offer
What is the insured's consideration in an insurance policy?
Payment of premium
When something causes a loss, this is called?
Peril
A dead tree next to your house would be best described as?
Physical Hazard
After an investigation, an insurer denies a false claim. The insurer must?
Provide a reasonable explanation
A volunteer fire department douses a fire to an insured's dwelling. The dwelling sustains severe fire, smoke, and water damage. The fire damage is what type of loss?
Proximate cause
Which of these is insurable?
Pure risk
Which of these would be considered an Unfair Claims Practice under Texas Law?
Refusing to pay claim without first conducting a reasonable investigation.
When the insurer agrees to pay the full cost of the repairs without a deduction for depreciation that would be what type of loss valuation?
Replacement Cost
A Homeowners policy that uses actual cash value would determine the claim payment on a loss how?
Replacement cost minus depreciation
A producer that has their license suspended must?
Report it to their insurer
A statement made in the application that is believed to be true to the best of the applicants' knowledge is known as?
Representation
A person selling insurance for one company wants to start selling for another company. What must they do?
Request appointment to the 2nd company
When there is a chance for a loss, this is known as>
Risk
An agent's license can be revoked or non-renewed for which of the following?
Selling insurance only to their family
When a policy protects a property by putting a single limit on it. This represents?
Specific
Which of these would be an example of speculative Risk?
Stock market losses and gains
How is an offer made for an insurance policy?
Submit an application
What is the requirement for acceptance in insurance?
Submit an application
An insured involved in an accident where another person is at fault, allowed his insurer to pay the damages. Which of these would apply?
Subrogation
M hit F with his personal auto causing damages. F filed on his own policy and his insurer paid the damages. F's insurer will go after M and M's insurer for the paid damages. This is called?
Subrogation
An insurer wishing to dissolve to dissolve their relationship with a producer would?
Terminate producer's appointment
An insurer wishing to dissolve their relationship with a producer would?
Terminate producer's appointmnet
Who can correct inaccurate information on a credit report?
The credit reporting agency used for the information
Market value is which of these?
The price a willing buyer pays a willing seller
Purchase of a property policy would be what type of risk management?
Transfer
If a misrepresentation is found to be material. The insurer would?
Void the policy
An insurance agent who has been in business 8 years has their insurance license revoked by Commissioner of Insurance. Which of these must they do?
Wait 5 years and reapply for license
A claimant that told their insurer they were sure that a certain piece of preoperty was in the building that burned, made a?
Warranty
A statement on a proof of loss or on an application which is guaranteedto be true in all respect and if found to be false could void the contract would be called?
Warranty
The wind blows a door open hitting a child and knocking him into a table, A lamp on the table falls off causing injury to the child. Which of these is the proximate cause?
Wind blows the door open
How much is the fee for not completing your continuing education on time per hour?
$50
A building bought 10 years ago, for $50,000 is now worth $100,000. The building has depreciated $2000 every year. What is the building's ACV actual cash value?
$80,000
In order for a home with damage to be paid replacement cost it would need to be insured for ____ or the cost to replace it at the time of loss?
89%
When a producer has a financial responsibility for funds collected while doing business. This would best be described as?
A fiduciary
When a producer must keep premiums in a separate account from their own personal account, that would make the producer?
A fiduciary
A was hit by B in a car accident. A, files on her own policy instead of filing through B's company. How will subrogation work in this event?
A gave up her rights to her own company to pursue for damages, since her damage paid
The Terrorism Risk Insurance Act will cover all of the following, EXCEPT?
A violent act that is dangerous to human life; property; or infrastructure and
Replacement cost minus depreciation would be called?
Actual cash value
What does Special - Open mean in an insurance policy?
All perils but exclusions
The Fair Credit Reporting Act does which of these?
Allows an insurer to use credit as part of the underwriting process
When must an applicant for insurance be informed that a credit report will be used in the underwriting of the insurance policy?
At the time of application
If a property has several locations or several buildings all insured under one single limit policy, it is?
Blanket
A producer refuses to do business with another person to cause public harm would be guilty of?
Boycott
The section of a property policy that specifies the obligations and duties of the insured and the insurer is the?
Conditions
When an insurance policy is known as a "Take it or Leave it" contract it is?
Contract Adhesion
The named insured is found in what section of a property policy
Declaratioms
Where would an insured find the expiration date of their property policy?
Declaration
In a property policy the premium would be found in the?
Declarations
A false statement in print about another company's financial condition is?
Defamation
If a person makes a false statement about another company's financial condition, this is
Defamation
If a neighbors' tree falls on your house causing damage to the home, this would becalled?
Direct loss
Which of these would be competent for contracting?
Elderly or (retired person)
How often must your insurance License be renewed?
Every 2 years
In which section of a property policy would you find the perils that are NOT covered in the policy?
Exclusions
Where fo you find what is not covered in an open peril policy?
Exclusions
Which of these would be considered an Unfair Claims Practice under law?
Failing to provide a reasonable explanation for the denial of a claim