Insurance Quiz
when farther returned to her after class, another driver who left no name or phone number had damaged the rear bumper. damage to the car was $400. under what coverage under her personal automobile policy should she collect? a. collision b. comprehensive c. uninsured motorists d. property damage
a
which form of the homeowners program is tailored for condominium owners? a. unit-owners form b. broad form c. special form d. contents form
a
the _______ permits an insurer to transact insurance in NC a. agent's agreement b. certificate of authority c. agent's appointment d. binder
b
under the broad from homeowners policy, all of the following are covered EXCEPT: a. unschedules personal property b. liability in excess of the deductible c. additional living expenses d. medical payments to other
b
what is the meaning of actual cash value (ACV)? a. replacement cost (new for old) without any reductio for deprecation b. replacement cost less depreciation c. today's appraisal value less depreciation d. the appraised value
b
which of the following structures would NOT be insured under coverage B? a. a garage connected to the dwellings by utility lines b. a tree house built in the back yard c. a free standing utility building d. a gazebo connected to the dwelling by a wood deck
d
a dwelling is insured under two fire policies. policy A is for $12,000 and policy B is for $8,000. if a lost off $10,000 occurs: a. policy A pays the entire $10,000 b. policy A pays $7,500; policy B pays $2,500 c. policy A pays $5,000; policy B pays $5,000 d. policy A pays $6,000; policy B pays $4,000
d
a mutual insurance company is: I. controlled by stockholders II. owned by policyholders III. controlled by trustees and officers a. I only b. II only c. III only d. II and III
d
all of the following are essential elements in an insurance contract EXCEPT: a. agreement b. consideration c. comptent parties d. counteroffer
d
all of the following are true concerning the medical payments to others coverage found in the homeowners policy EXCEPT: a. it pays on a per person occurrence basis b. it is part of the section II coverage found in all homeowners polices c. it has a standard limit of $1,000 per person d. it covers injuries to family members of the name insured residing at the insured premises
d
all professional liability insurance is a form of malpractice insurance. which of the following statements are correct? a. the term "malpractice" is used when the nature of the claim involves bodily injury, such as those involving medical practitioners b. the term "errors and omissions" is used for all types of claims where bodily injury is not normally factor c. insurance agents would buy errors and omissions coverage d. all of the above
d
contents coverage in homeowner's insurance: a. must be purchased in addition to coverage on the dwelling structure b. restricts the coverage area to on premises only c. covers the personal property of the insured's unrelated roommate d. limits the amount payable for a theft loss of jewelry
d
each of the following possess a valid insurable interest EXCEPT: a. a person who owns a home b. a bank holding a mortgage on someone's house c. a condominium unit owner d. a father concerned about insuring the home of his son
d
examples of direct losses covered under the standard fire policy include: I. damage to the insured's home caused by lighting II. damage to the insured's furniture due to fire cased by sparks from the fireplace III. damage to property removed within 3 days to protect it from damage after a fire a. I only b. II only c. I and II d. I, II, III
d
in the personal automobile policy, supplementary payments refer to which of the following? a. payments made by the insured for damages exceeding the policy limit b. payments received by the insured directly from the person or persons who casued the loss c. payments made by the insurance company for the insured's medical expenses to supplement any other medical insurance d. payment of defense costs and other expenses by the insurance company beyond the limits of liability
d
john's automobile dealership loans him a car while his vehicle is being repaired. the "loaner" vehicle would be classified as a: a. nonowned b. uninsured c. underinsured d. temporary substitute
d
the broad form homeowners policy restricts coverage of money and securities to:
money - $200 securities - $1,500
all of the following are included in the definition of personal injury EXCEPT: a. slander b. defamation c. bodily injury d. libel
c
under a homeowners policy, what is the maximum amount that will be paid for the theft of manuscripts on all forms? a. $250 b. $1,000 c. $1,500 d. $2,500
. c
*a dwelling and detached garage are insured under a homeowners policy which a $250 section I "all peril" deductible. in event both buildings are damaged by fire, which of the following statements would be correct? a. one $250 deductible would apply since the deductible does not apply to each building separately b. the $250 deductible applies to each building separately c. no deductible applies unless the loss exceeds $500 d. no deductible applies if the insurance carried is 80% of the building's value
a
*an insured has a HO 00 05 homeowners policy with a $100,000 coverage A limit, a $250 deductible and a $300,000 coverage E limit. an individual has won a $500,000 bodily injury award from the insured with defense costs equaling $70,500. how will the HO 00 05 policy pay? a. $375,000 b. $374,000 c. $300,000 d. $175,000
a
a part claiming that a child was injured by an abusive action of the insured has been awarded a judgement in a civil action. section II of the homeowners policy would pay: a. nothing b. legal defense costs only c. the medical payment limit only d. up to the full limit of liability coverage afforded by the policy
a
all of the following are methods of handling risk EXCEPT: a. risk elimination b. risk transfer c. risk retention d. risk reduction
a
an insurer may cancel a personal automobile liability policy for non-payment of premium by giving the insured how many days notice? a. 10 b. 15 c. 30 d. 60
a
dwelling forms may extend coverage to all of the following EXCEPT: a. personal property of an unrelated tenant b. personal property of a servant c. peresonal property of guests d. persona property borrowed by the insured
a
if a bat does damage to another vessel's hull, which coverage indemnifies for the loss? a. protection and indemnity b. inland marine c. hull insurance d. medical payments
a
the clause in the standard fire policy that specifies the amount of recovery when more than one policy exists on the same property is called: a. pro-rate liability b. co-insurance c. actual cash value d. pro-rate distribution
a
the national flood insurance program (NFIP) contains all of the following requirements and benefits EXCEPT: a. provides open peril dwelling coverage to property owners unable to purchase property insurance in the normal market due to the increased risk b. provides back-up reinsurance through FEMA allowing private insurers to provide the coverage at subsidized rates c. eligibility for the regular plan is restricted to communities meeting FEMA's requirements for flood control practices d. rates paid by insureds for flood insurance will vary in accordance with the location of the property on the Flood Insurance Rate Map
a
the personal article float provides: a. open peril, scheduled coverage on personal property anywhere in the world b. open peril, blanket coverage on limited amounts of personal property c. open peril, itemized coverage on personal property anywhere in the US, canada, or puerto rico d. broad form, named peril coverage on scheduled personal property anywhere in the world
a
the personal articles floater provides: a. open peril, scheduled coverage on personal property anywhere in the world b. open peril, blanket on limited amounts of personal property c. open peril, itemized coverage on personal property anywhere in the United States, Canada, or Puerto Rico d. broad form, named peril coverage on scheduled personal property anywhere in the world
a
the standard fire policy without endorsements provides coverages for: a. fire, lightning, and removal of endangered property b. fire only c. fire and lightning only d. none of the above
a
under the Insurance Information and Privacy Protection Act, an authorization for information disclosure in property and casualty insurance is in effect for: a. one year b. two years c. three years d. four years
a
uninsured motorists coverage: a. covers injuries caused by hit-and-run drives b. applies when the insured vehicle is used to cary persons for a fee c. permits the insured to settle the claim without the insurer's consent d. covers someone who steals the insured's value
a
which of the following is covered by flood insurance? a. contents of a dwelling damaged in a mudslide b. structural damage to a duplex caused by a landslide c. growing crops and livestock destroyed when a river overflows its banks d. looting of personal property in a flooded area
a
which of the following items would be covered under a broad form homeowners policy? a. neighbor's lawnmower borrowed by the insured b. property of an unrelated tenant c. a detached garage damaged during an earthquake d. cassette tapes in the trust of the insured's vehicle
a
which of the following perils would NOT be covered under a DP - 1? a. falling objects b. explosion c. vandalism d. lighting
a
which of the following statements is FALSE concerning financial responsibility laws? a. financial responsibility laws make insurance compulsory b. financial responsibility laws require proof of the ability to respond to damages following certain occurrences c. driving privileges may be lost if financial responsibility laws cannot be met after an accident d. proof of future financial responsibility is sometimes required
a
which of the following statements is true? a. agents can bind coverage b. agents and brokers represent insurance companies c. brokers can bind coverage d. agents in the field or property and casualty insurance issue conditional receipts
a
which of the following statements regarding uninsured/underinsured motorist coverage in the personal automobile policy is correct? a. uninsured motorist coverage provides protection if an insured is injured by a hit-and-run driver b. uninsured motorist coverage applies when an at-fault motor vehicle operator's limit of liability coverage is less than the actual damage inflicted c. the total amount of uninsured motorist coverage afforded by the PAP is determined by multiplying the stated limits of this coverage by the number of vehicles insured under the policy d. uninsured motorist coverage equal to the limits expressed in part A, liability will be included in the policy unless the named insured rejects this limits
a
*under coverage d of the basic dwelling form, how much can be recovered for one month a of $60,000 policy with a $100 deductible? a. $400 b. $500 c. $5,900 d. $6,000
b
a peril can be defined as: a. the transfer of pure risk b. the cause of a loss c. a one-time event definite in time and place d. a condition increasing the change of loss
b
all of the following statements regarding the HO 00 02 are correct EXCEPT: a. the dwelling structure is covered b. this form provides open peril coverage c. other structures are covered d. losses covered by vandalism are covered
b
all of the following violations could result in subcharges under the safe drive incentive plan EXCEPT: a. driving while imparied b. illegal parking in a designated fire lane c. speeding in excess of 15 MPH over the posted speed limit d. death by vehicle
b
auto comprehensive covers all of the following EXCEPT: a. flood b. upset c. theft d. hail damage
b
automobile limits of liability expressed as 50/100/50 means: a. $50,000 bodily injury, $100,000 property damage, $50,000 medical payments per occurrence b. $50,000 bodily injury, $100,000 bodily injury per occurrence, $50,000 property damage per occurrence c. $50,000 property damage per occurrence, $100,000 bodily injury per occurrence, $50,000 bodily injury per person d. none of the above
b
covered items in a dwelling policy do NOT include: a. T.V. aerials b. stock certificates c. materials and supplies on the premises intended for use in the construction of the dwelling
b
if a proposed automobile rate riling is not felt to be in compliance with the regulators of the state of NC, the insurance commissioner must notify the north carolina rate bureau within: a. 30 days of filing b. 50 days of filing c. 60 days of filing d. 210 days of filing
b
if two structures insured at the same premises under the same dwelling policy were damaged in one windstorm, the deductible would: a. apply separately to each structure b. apply as one loss c. no deductible would apply d. none of the above
b
territorial limits of the personal articles floater are: a. usually the US and canada b. usually worldwide c. usually the continental US d. usually the US and its territories and possessions
b
the definition of rental value includes: I. gross rental income from tenant occupancy II. fair rental value of the portion of a dwelling occupied by the insured held for rental III. expenses charged to tenants a. I only b. I and II only c. I and III d. I, II, III
b
the extended coverage endorsement: a. increases the recovery limits of the SFP b. has a premium stated for the broadening of perils c. suspends its coverage after 30 days of unoccupancy d. covers any explosion
b
what is the purpose of the national flood insurance program? a. to provide open peril property insurance in flood prone areas b. to encourage communities to implement flood control measures and plan future growth c. to enable property owners to purchase basic property insurance at unsubsidized rates d. to allow federal intervention in the regulation of property insurance rates
b
when the commissioner intends to hold a hearing concerning an agent's trade practices, notice of the hearing must be given at least: a. 5 days in advance d. 10 days in advance c. 20 days in advance d. 30 days in advance
b
which of the following acts is legal concerning property insurance policies and business practices? a. providing a 10-year policy renewal period b. listing the rates charged for specific types of property coverage c. issuing a policy that insures property for amounts greater than the value of the property d. adjusting losses according to the company rules not stated in the policy
b
which of the following forms have no (or very limited) amounts of coverage A? I. 02 II. 03 III. 04 IV 06 a. I & IV b. III & IV c. II & III d. II & IV
b
which of the following homeowners forms are purchased by an amount of coverage A? a. forms 04 and 06 b. forms 02 and 03 c. forms 02 and 04 d. forms 02 and 06
b
which of the following is NOT an insurance company adverse underwriting decision under the "insurance information and privacy protection act"? a. canceling a policy b. charging a higher rate because of changing loss exposure at the insured's property c. declining an application for insurance coverage d. pacing coverage in a residual market mechanism
b
which of the following losses would be covered under a HO 00 02? a. food spoilage due to a power interruption that occurs from the premises b. a garage damaged by the named insured backing a vehicle into it c. theft of cassette tapes while the insured's car d. first aid provided to an insured person injured on the premises
b
which of the following parts of an insurance contract would identify the nature of the coverage provided by the insurer? a. endorsements b. insuring agreements c. conditions d. exclusions
b
which of the following results of an application would be considered an adverse underwriting decision? a. reinsuring the risk with another insurer b. denying coverage of the property c. charging a higher premium for property insurance due to exposure changes to the property d. providing for back-up protection through the postassessment guaranty association
b
*smith carries $60,000 fire insurance on his building with company A and $40,000 with company B. smith suffers a loss of $10,000 and B goes bankrupt. smith will collect how much from company A? a. nothing b. $4,000 c. $6,000 d. $10,000
c
a building, insured under a standard fire policy, is damaged by fire for which another person is responsible. from whom will the insured receive payment for the loss? a. the insured has to try to collect from the person responsible b. the insured can collect from the person responsible and also from the insurance company c. the company will pay for the loss, and will require the insured to assign to them their right of recovery from the person responsible for the loss, to the extent paid by the company d. the company will pay the insured the amount of the loss, and will expect the insured to collect from the person responsible and then reimburse the company
c
a flood policy goes into effect at which of the following times? a. when the agent binds coverage b. upon the date of application c. thirty days after the date of the application d. sixty days after the date of the application
c
a property insurance policy that provides open peril coverage will: a. pay loses caused by only those perils which are named in the insuring agreement b. be issued spending the addition of an endorsement which will establish the perils to be covered c. pay for any loss except those caused by peril that have been specifically excluded in the insuring agreement d. place no restrictions on the types of losses that will be covered but will restrict loss settlement to ACV
c
after a loss has occurred, proof of loss must be filed with the company within: a. 30 days b. 45 days c. 60 days d. no time limit
c
*john insured his home on an HO 00 02 for $100,000. in the case of a total loss, what would be the most he could collect under coverage a, b, c d? a. $100,000 b. $110,000 c. $150,000 d. $180,000
d
all of the following coverage extensions are provided in the various HO polices EXCEPT: a. coverage for plants, trees, and shrubs up to a maximum of 5% of the coverage A limit b. additions and alternations made by a tenant are covered up to $1,000 c. business structures on the premises are covered for up to 50% of coverage B limits d. expenses incurred to provide temporary protection of the property is covered
c
all of the following statements regarding property insurance are true EXCEPT: a. all other applicable property insurance must be considered when determining the amount of insurance available to be written on property b. the maximum time between renewals may be 7 years c. policies written in violation of the laws governing property insurance are not binding on the company issuing the policy d. property coverage written in this state may provide for a settlement of claims on a basis other than the ACV of the property at the time
c
an insured driver is involved in an accident in which she avoids hitting an animal, loses control of the vehicle and hits a telephone pole. the damage to the insured's vehicle would be covered: a. under the comprehensive coverage since the loss involved an animal b. under the property damage coverage c. under the collision coverage d. there would be no coverage for this accident
c
coverage b of the homeowners program would apply to which of the following losses? a. damage to building materials to be used to remodel the kitchen of the dwelling b. damage to a heat pump unit located on a conrete pad next to the dwelling c. damage to an in-ground pool d. damage to a wood deck connected under a HO 00 02
c
documentation required by an insurer from an insured to substantiate the specifics of a claim is known as: a. certificate of authority b. endorsement c. proof of loss d. none of the above
c
in regards to personal property coverage in the homeowners program, all of the following statements are correct EXCEPT: a. money and bullion are limited to $200 b. scheduled personal property coverage of greater than the established limit is available through a personal articles floater c. the special form (HO 00 03) provides open perils coverage on personal property d. personal property coverage is usually 50% of the limit provided for coverage A
c
insurance companies incorporated under the laws of foreign countries are called: a. domestic companies b. foreign companies c. alien companies d. none of the above
c
under a personal articles floater, a set of antique salt and pepper shakers are insured for $1,000. when one of the shakers is broken the remaining shake is only worth $200. how much will the insured receive for this loss? a. $200 b. $500 c. $800 d. $1,000
c
when the extended coverage endorsement is attached to a standard fire policy: a. it is not written for the same amount as the fire policy b. it does not apply to all items covered by the fire policy c. it must apply to all items covered by the fire policy d. it does not cost additional premium
c
which of the following acts of an agent would be considered an unfair trade practice? a. offering to review the applicant's insurance coverages annually b. allowing an existing customer to use the agent's season tickets to a sporting event c. stating that the marketing activities of another agent are under investigation d. information the applicant that having a pool on the property may increase premiums
c
which of the following coverages are NOT found in all homeowner's policies? a. personal property (coverage C) b. loss of use (coverage D) c. dwelling (coverage A) d. personal liability (coverage E)
c
which of the following coverages are NOT found in all homeowners policies? a. personal property (coverage c) b. loss of use (coverage d) c. dwelling (coverage a) d. personal liability (coverage e)
c
which of the following examples best describes a consequential loss? a. a tree falling on the roof b. a TV antenna blown off a roof c. a dwelling fire causing a loss of rental income d. a fire in a detached storeroom destroying accounts receivable records
c
which of the following is generally considered to be a definition of "vacancy" in respect of a dwelling? a. a dwelling that contains furniture or contents, but is not being used by a person b. property of the insured surrendered to the insurance company after a loss of demand of payment c. a dwelling form which the contents and occupants are removed d. both a and b
c
which of the following occupancies would NOT be acceptable under a homeowners policy? a. an office for the insured inside the dwelling b. the daughter of the insured providing baton lessons for a fee c. a beauty prior operated by the next door neighbor d. a part-time computer typesetting service operated by the insured
c
which of the following occurrences would be provided a benefit under coverage e of the HO program? a. an insured person injuries another person while driving a golf cart to the golf course from the insured premises b. an insured, with the business pursuits endorsements, damages someone's property while conducting their home improvement business c. the insured does property damage to another person's boat while operating their 20 HP outboard motorboat at the lake d. an insured, while volunteering at a church day care center, spanks and injuries a child who is in the care of the center
c
with property insurance, an insurable interest: a. must be present at the time the policy is taken out and also the time of the loss b. must be present at the time the policy is written out but not necessary at the time of the loss c. it is not necessary at the time the policy is written but is necessary at the time of the loss d. it is not necessary at the time of the policy is written out or when the loss occurs
c
one of the following is considered to be a misrepresentation and is illegal: a. circulating any derogatory statement calculated to injure any person ended in the business of insurance b. issuing a true statement about the terms of policy issued or to be issued c. returning a portion of the premium to the insured on a basis not specified in the contract d. issuing a statement that is not entirely true about the terms of a policy issued or to be issued
d
professional liability coverage is likely to be purchased by any of the following EXCEPT: a. a doctor b. an accountant c. an insurance agent d. a manufacture
d
rebating is: a. issuing any statement that is not entirely true about the terms of a policy issued or to be issued b. committing any act that infringes on a purchase's freedom to choose insurers c. making untrue statements about a policyholder's present policy d. offering any special inducements or valuable consideration, whatever, not specified in the contract
d
smith and jones own a building equally with a ACV value of $100,000. it is insured for $100,000 in the name of smith only, and burns to the ground. I. smith gets all $100,000 II. smith and jones share equally in the $100,000 III. smith gets $50,000 IV. jones gets nothing a. I only b. I and IV c. III only d. III and IV
d
something that increases the chance of a peril occurring is a a. warranty b. deductible c. peril d. hazard
d
subrogation does all of the following except: a. gives the insurance company whatever rights the insured possessed against responsible third parties b. prevents the insured from collecting twice on the same loss c. when paying an insured for a loss, allows the insurer to attempt collection from the person whose negligence may have caused the loss d. allows the insurer to file suit against the insured
d
the basic form dwelling policy provides all of the following coverages EXCEPT: a. ACV recovery without an endorsement b. loss of rental value coverage in the amount of 1/12 of part D limits per month c. removal coverage for 5 days d. single limit liability coverage on a per occurrence basis
d
the homeowners policy may provide: a. moonlike property coverage on property valued over $15,000 b. replacement cost for personal property without endorsement c. property coverage for aircraft stored at the insured premises d. coverage on a secondary dwelling located in the same state if the coverage is written on a separate policy
d
the minimum split limits of liability on an automobile required by the state of north carolina are: a. 15/30/10 b. 10/20/5 c. 25/50/15 d. 30/60/25
d
the north carolina reinsurance facility a. assigns substandard drivers to insurers b. is done voluntarily by isurers c. takes only substandard drivers of private passenger cars d. makes motor vehicle insurance available for hard to place risk
d
which of the following acts may an agent legally conduct? a. depositing collected premiums into the agent's own bank account b. conduct a pretext interview to verify information supplied to an application c. represent multiple insurance companies d. charge an an application fee based upon a written notification posted in the office
d
which of the following best defines "risk"? a. the chance for gain or loss b. the original cause of loss c. the decrease in economic value d. the uncertainty of loss
d
which of the following dwellings may NOT be covered under the dwelling program? a. an apartment building with 3 apartments b. a frame structure considered too old to be insured on a homeowners policy c. a single family dwelling with a beauty parlor operated by the insured d. a single family dwelling on a farm of less than 30 acres
d
which of the following homeowners forms is tailored for apartment renters? a. unit-owners form b. broad form c. special form d. contents broad from
d
which of the following homeowners policies provide open peril coverage on personal property? a. 02 b. 03 c. 04 d. 05
d
which of the following losses would NOT be covered under the HO 00 02 policy? a. collapse of a building due to insect infestation b. theft of $100 of business property from a vehicle owned by the named insured c. damage to an appurtenant structure caused by a falling tree d. theft of a boarder's jewrly
d
which statement concerning the cancellation of a fire policy is true? a. if an insured requests cancellation of a fire policy, the unearned premium calculated on a pro-rated basis will be returned of the policy to the company b. when company cancels a fire policy, it must give the insured 45 days notice before cancellation becomes effective c. when a company cancels a fire policy, the unearned premium will be returned to the insured on a short-rate basis d. when the company cancels a fire policy, the unearned premium calculated on a pro-rated basis will be returned on the insured
d
