Insurance test
Under the commercial property coverage program, the basic causes of loss form insures against loss caused by
Sprinkler leakage
When does an insured qualify to receive disability-related income?
When the insured is unable to perform his or her job duties
What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy?
$10,000 for all expenses incurred during a 12-month period.
An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?
$14,000
The insured purchased a $200,000 Extra Expense Policy. If the percentages applying to the limit of insurance are 40%, 80%, and 100%, what would be the maximum payable for a 47-day loss?
$160,000
A policy owner wants to purchase as much additional personal injury protection (APIP) coverage as he can. Wha tis the maximum APIP available?
$50,000
In addition to examinations that are specifically authorized by the Insurance code, the superintendent may examine each domestic life insurer as often as it is deemed necessary for the protection of the consumers the code requires examination of domestic life insurers every....
5 years
How log after the date of issue may an insurer cancel an accident and health policy
90 days
An installation floater is used to insure:
Appliances intended to become a permanent part of the building
Professional liability coverage protects against legal liability resulting from:
Errors and omissions
The voluntary compensation endorsement provides statutory coverage for which types of employees?
Farmworkers
Which federal act provides benefits to injured civilians who are employed by the federal government?
Federal Employees Compensation Act
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
Guaranteed
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
The termination of an insurance contract with the premium charge being adjusted in proportion to the exact time the protection has been in force is considered a:
Pro rata cancellation
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy?
They do not change
An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an automobile accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's business owners policy provide coverage?
Yes, none of the exclusions will apply.
If an individual's license has been revoked, how soon can he or she obtain a new license?
a) after 1 year of the revocation
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?
transfer of rights and duties under the policy
Crime insurance is usually written on what basis?
all-risk
Which of the following would NOT be classified as personal property for insurance purposes? a) a vehicle b) equipment c) furniture d) a house
d) a house
Which of the following is used in the formula for calculating the actual cash value of a property? a) stated value b) fair market value c) agreed value d) Replacement cost
d) replacement cost
Erroneous Publishing copied all the material from Angels inc's book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels inc files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?
it is included automatically
If an employer in a state with elective workers compensation laws chooses not to be subject to those law, what does the employer lose?
its common law defenses against liability suits
A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain?
license and permit bonds
If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing what?
scheduled personal property endorsement
A covered watercraft was damaged in an accident. The actual cash value of the damaged property was assessed at $10,000. The cost of repairs for the watercraft was assessed at $5,000. The insured's watercraft policy is written with a $25,000 limit. How much will the insurer pay for coverage to damage to the watercraft?
$5,000
Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?
$500
How long is a waiting period upon purchase of flood coverage through NFIP?
30 days
The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long?
30 days
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured with how many days of receiving proof of loss?
30 days
The extra expense coverage form provides:
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
The pro rata liability clause is designed to protect the principle of:
Indemnity
Crews of ships are covered by the :
Jones Act
What type of coverage does a homeowners policy include that a dwelling policy does not?
Liability
Under the dwelling policy, Coverage C - Personal Property is
Limited to covering a servant's property wile at the insured location
To comply with requirements for insurance for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form?
MCS-90
When is a hired and nonowned auto liability endorsement available in a business owners policy (BOP)
Only if he insured does not have commercial auto coverage
The Federal Fair Credit Reporting Act does what?
Regulates consumer reports
For insurance purposes, when an insured loses property to another because the person used violence or threat of violence to gain the property, this is defined as
Robbery
In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called?
Self-insured retention
in order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the:
Situs and status test
A company has a business owners policy on a building with an estimated replacement cost of $300,000. The company carries $150,00 of insurance. If a loss occurs, how much will the insured company be paid?
The coinsurance formula would apply
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?
Transfer of rights and duties under the policy
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for:
Uninsured motorist coverage
All of the following are reasons to terminate an agent's certificate of appointment EXCEPT: a) An agent becomes disabled and is unable to complete his duties for the duration of the disability b) An agent's license expires and is not renewed c) An appointment is terminated by the insurer under the terms of agent's contract. d) An agent's license is suspended or revoked.
a) An agent becomes disabled and is unable to complete his duties for the duration of the disability
Which of the following is NOT considered an insured contract under the commercial general liability policy? a) A written agreement which indemnifies a person for fire damage to the premises rented to the insured b) An elevator maintenance agreement c) An obligation as required by ordinance to indemnify a municipality, except for work for a municipality d) A written lease agreement on the insured premises
a) a written agreement which indemnifies a person for fire damage to the premises rented to the insured
How much is covered for debris removal under the HO property additional coverages?
a) all reasonable costs
All of the following people would be considered insureds under the liability section of a homeowners policy EXCEPT? a) the 22-year-old niece of the insured who is visiting b) A 15-year old foster child residing in the premises. c) the mother of the insured who is residing in the household. d) the legal representative of a decreased insured.
a) the 22-year old niece of the insured who is VISITING
All of the following are other coverages included in both the broad and speak form dwelling policy EXEPT: a) theft of personal property b) collapse c) breakage of glass d) lawns, trees, shrubs, and plants
a) theft of personal property
All of the following statements are true regarding fire department service charge additional coverage under the business owners policy EXCEPT: a) this coverage limit pays in place of the limit of insurance shown in the declarations b) this coverage limit is payable in addition to the limit of insurance shown in the declarations c) this coverage is not subject to any deductible d) this coverage provides an additional $2,500 and is payable in addition to the limit of insurance shown in the declarations and is not subject to any deductible.
a) this coverage limit pays in place of the limit of insurance shown in the declarations.
All of the following types of property are covered by a standard builders risk form EXCEPT: a) Tools 50 feet away from the building b) the building itself c) temporary structures d) machinery that will be permanently attached to the building
a) tools 50 feet away from the building
All of the following are exclusions to benefits under the New York State Disability law EXCEPT? a) up to 26 wks of benefits during 52 consecutive calendar weeks of one period of disability b) any period of disability during which an employee is not under the care of a physician c) a disability commencing before the employee became eligible d) a disability due to an act of war.
a) up to 26 wks of benefits during 52 consecutive calendar weeks of one period of disability
Employers liability insurance, part two of a standard workers compensation and employers liability (WC&EL) policy form, excludes:
an intentional act that is caused by the insured
If an insurance company makes a statement that its policies are guaranteed by the existence of the insurance guaranty association, that would be considered....
an unfair trade practice
Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered?
any other state
All of the following statements describe the mission of the New York State insurance FUND (NYSIF) and the New York Workers Compensation Fund EXCEPT? a) maintain a solvent state insurance fund that is always available for businesses in this state b) ensure that all New York businesses have access to adequate coverage provided by private insurers or through self-insurance c) Provide timely and appropriate indemnity and medical payments to injured workers. d) Decrease the cost of workers compensation insurance for businesses operating in the state
b) Ensure that all New York businesses have access to adequate coverage provided by private insurers or through self-insurance
Which of the following would be covered under the Garage Liability Coverage Form? a) Loss of use b) Insured's business premises c) Product recalls d) Fellow employees
b) Insured's business premises
All of the following statements are true regarding employee dishonesty optional coverage under the business owners policy (BOP) EXCEPT: a) Coverage includes all property, including money and securities owned or held by the insured. b) It provides coverage for all employees, even those employees who were terminated in the past 90 days. c) It provides coverage for direct loss or damage to business personal property d) Losses result from dishonest acts of any of the insured's employees
b) It provides coverage for all employees, even those employees who were terminated in the past 90 days.
Which of the following insurers are owned by stockholders? a) Fraternal b) Stock c) Mutual d) Reciprocal
b) Stock
If a contractor defaults on a performance contract, all of the following statements would be true EXCEPT? a) the surety will attempt to seek reimbursement from the contractor for any amounts they pay b) The surety may cancel the bond so as to avoid having to pay losses and expenses. c) The obligee may hire another contractor to complete the job and have the surety repay them. d) the principal's obligations end.
b) The surety may cancel the bond so as to avoid having to pay losses and expenses.
To legally transact insurance in this state, an insurer must obtain which of the following? a) certificate of insurance b) certificate of authority c) Power of Attorney d) Business license
b) certificate of authority
A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured business in a CPP, the business owner may select from all of the following types of coverage EXCEPT? a) general liability coverage b) workers compensation coverage c) crime coverage d) boiler and machinery coverage
b) workers compensation coverage
Which of the following statements is true concerning the special form dwelling policy? a) Both coverage A and Coverage C are provided for the broad form perils. b) Coverage A is for all-risk perils, and Coverage C is for basic peril only c) Coverage A is for all-risk perils, and overage C is for the broad form perils d) Both Coverage A and coverage C are provided on an all-risk basis.
c) Coverage A is for the all-risk perils, and coverage C is for the broad form perils.
Which of the following includes information regarding a person's credit, character, reputation, and habits? a) insurability report b) agent's report c) consumer report d) consumer history
c) consumer report
Which of the following is true of dwelling policy coverage? a) there are no exclusions in basic forms b) special forms only have special exclusions c) exclusions apply to all three policy forms d) exclusions only apply to broad policy forms
c) exclusions apply to all three policy forms
Which of the following is used in the formula for calculating the actual cash value of a property? a) fair market value b) agreed value c) replacement cost d) stated value
c) replacement value
The general property policy form is used for other-residential and non-residential structures and their contents such as: a) Commercial structures b) Cooperative associations c) Apartment buildings d) Any of the above would be covered under this form
d) any of the above would be covered under this form.
Which of the following statements is true concerning underinsured motorist coverage under a personal auto policy? a) it will pay up to the limits of insurance for an loss which involves an underinsured driver b) limits must equal the bodily injury limits of the policy c) limits may differ from the limits for uninsured motorist coverage d) Coverage applies only to the extent that the underinsured motorist limits exceed the bodily injury limits carried by the operator of the other vehicle.
d) coverage applies only to the extent that the underinsured motorist limits exceed the bodily injury limits carried by the operator of the other vehicle.
An insured unintentionally accepted forged currency during the course of regular business. Which of the following crime coverages protects against such a loss? a) Employee theft b) inside the premises- theft of money or securities c) Forgery or alteration d) Money order and counterfeit paper currency
d) money orders and counterfeit paper currency
ABC trucking company recently purchased XYZ manufacturing company. ABC wants to transport the new company's freight with their trucking division. The company also wants to continue to haul freight for the clients it has served for many years. In regard to coverage, which of the following is true? a) The company must choose btw being a private carrier and a common or contract carrier. b) Truckers coverage form is needed. c) A truckers coverage form is needed along with the business auto coverage form. d) Motor carrier coverage is needed
d) motor carrier coverage is needed
States with monopolistic state workers compensation funds:
do not allow private insurers to be licensed to write workers compensation coverage
The major portion of the premium for an equipment breakdown policy pays:
for inspections and examinations
In Insurance transactions, fiduciary responsibility means:
handling insurer funds in a trust capacity
A BOP (business owners policy) is most similar to:
homeowners
Under the fair credit reporting act, individuals rejected for insurance due to information contained in a consumer report:
must be informed of the source of the report
When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays
the excess over the self-insured retention.
In insurance terms, what are components?
the factors that determine rates
An insurance contract made btw an insured and an excess line insurer is NOT considered
to be an insurance policy and is not protected by the New York State securities funds
Under the automobile assigned risk plan, how much coverage must be provided to the insured for liability arising out of the death of two persons caused by a single auto accident?
up to $100,000
