Master Quiz

All of the following are valid reasons for an insurer to cancel an auto insurance policy, EXCEPT AThe named insured obtains a divorce. BThe named insured fails to pay the premium when due. CThe named insured uses the insured auto in the commission of a felony. DRegistration of the insured auto is revoked.

The named insured obtains a divorce.

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? A$80,000 B$120,000 C$160,000 D$200,000

$160,000

When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover AThe loss on a primary basis. BA share of the loss. CAll of the loss. DThe loss on an excess basis.

A share of the loss.

Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage? ATwo men break a window during an attempted robbery. BSomeone breaks in after business hours, pries open a wall vault and steals several valuable paintings. CA store clerk is forced into the storage room and locked in while the intruder steals high-value merchandise. DAn employee is caught stealing cash from the register.

An employee is caught stealing cash from the register.

Which coverage form would provide coverage for all incoming and outgoing shipments? AMail coverage BAnnual transit CTrip transit DMotor truck cargo

Annual transit

Business personal property coverage form covers all of the following EXCEPT AMachinery that is not permanently installed. BStock. CAutomobiles held for sale. DFurniture and fixtures.

Automobiles held for sale.

A builder's risk form is most often written as which of the following? AScheduled form BReporting form CSpecific value form DCompleted value form

Completed value form

Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item? ALegal action against the insurer BPrivilege to adjust with the owner CTransfer of rights of recovery DReinstatement of limit

Reinstatement of limit

Which of the following would be covered by the broad theft endorsement on a dwelling policy? AFabric and patterns in a clothing designer's studio at her home BAn antique car CA camera the insured has with him on vacation DA pedigreed show dog

A camera the insured has with him on vacation

Which of the following risks would NOT be eligible for coverage under a homeowners policy? AAn applicant who owns and lives on a commercial farm BAn applicant who lives in a duplex that she does not own CAn applicant who owns and lives in a duplex DAn applicant who owns and lives in a single-family dwelling that also contains incidental business activities

An applicant who owns and lives on a commercial farm

Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as ARescission. BNonrenewal. CCessation. DCancellation.

Cancellation.

The part of a property policy that shows the amount of insurance, premium, and policy term is the AEndorsements. BDeclarations. CInsuring clause. DConditions.

Declarations.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? AIndemnity BRepresentation CWarranty DConcealment

Warranty

Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? A$1,000 B$5,000 C$10,000 D$25,000

$5,000

What is the maximum number of boarders per unit that would be allowed in the homeowners policy? A2 B3 C4 D5

2

If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for A90 days. B5 days. C30 days. D60 days.

30 days.

Vandalism and malicious mischief would be covered if the insured's premises have been vacant for no more than how many days? A30 B60 C100 D365

60

Under the dwelling policy form, what is the maximum time limit during which multiple volcanic activities would be considered part of one occurrence? A24 hours B36 hours C48 hours D72 hours

72 hours

All of the following would be eligible for coverage under the dwelling policy EXCEPT AA house that has 5 residential units. BA tenant-occupied dwelling. CA dwelling in the course of construction. DA duplex with one primary owner. Correct! Eligibility requires that the dwelling have not more than 4 family units.

A house that has 5 residential units.

Which of the following statements regarding coverage for the flood and earthquake perils is true? AFlood and earthquake coverage is available only through government insurance. BFlood insurance is usually provided in property policies, but earthquake coverage is available by endorsement only. CBoth flood and earthquake are excluded perils in all property policies. DFlood and earthquake coverage is available in all policies.

Both flood and earthquake are excluded perils in all property policies.

In order for an insurer to legally transact insurance, it must obtain which of the following? ACertificate of Insurance BCertificate of Authority CPower of Attorney DDirector's Decree

Certificate of Authority

A producer who fails to segregate premium monies from his own personal funds is guilty of

Commingling

In a farm policy, which of the following coverages would reimburse the insured for loss of rental income following damage to the insured dwelling by an insured peril? ACoverage A BCoverage C CCoverage D DCoverage E

Coverage D

In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss? ACoverage E BCoverage A CCoverage B DCoverage C

Coverage E

Which of the following would modify the original insurance contract by either adding or removing coverage? AAdditional coverage form BConditions CFlexible policy DEndorsements

Endorsements

All of the following are found in the declarations section of a policy EXCEPT the AExclusions. BPolicy premiums. CName of the insured. DLimits of insurance.

Exclusions.

Which of the following is the federal body that regulates truckers who travel across state lines? AFederal Motor Carrier Safety Administration BMotor Carriers Commerce Agency CTruckers and Trade Commission DFederal Trade Commission

Federal Motor Carrier Safety Administration

When an insured has multiple autos insured, what effect does the stacking of UM and UIM coverage have in terms of the benefits available? AIncreases the limit of bodily injury coverage available to an insured to a total equal to the sum of the bodily injury available on all autos insured BDecreases the limit of bodily injury coverage available to an insured to minimum amounts required by law CIncreases the property damage liability coverage only, but does not change the bodily injury limits DNone

Increases the limit of bodily injury coverage available to an insured to a total equal to the sum of the bodily injury available on all autos insured

The pro rata liability clause is designed to protect the principle of AWaiver and estoppel. BIndemnity. CSubrogation. DInsurable interest.

Indemnity.

The process of determining the premium charged and how much insurance is required for a particular loss is called AAgreed value. BLoss payment. CCoinsurance. DLoss valuation.

Loss valuation.

According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss? AInsurance company BGovernor CPolicyholder DMortgagee

Mortgagee

Limited fungi, wet or dry rot, or bacteria endorsement in HO policies applies to ALiability losses only BProperty and liability losses CSpecified losses DProperty losses only

Property and liability losses

While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? AProperty damage liability BCollision coverage COther-than-collision coverage DThis loss would not be covered.

Property damage liability

In what way can an agent demonstrate a high standard of ethics? ARecommending qualified retirement plans to each client BPutting the client's best interests before their own CMaking enough commissions to cover personal expenses DSetting and meeting monthly production goals

Putting the client's best interests before their own

Which of the following persons may be covered under farm Coverage J? AResident employees BFirst named insured CAdditional insureds DFarm employees

Resident employees

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? AAppraisal BSubrogation CArbitration DSalvage

Subrogation

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called ASubrogation. BConsent to settle loss. CRight of salvage. DAppraisal.

Subrogation.

The individual named insured endorsement under a commercial auto policy provides coverage for which of the following? AThe sole proprietor of the business and his or her employees BThe sole proprietor of the business and his or her spouse only CThe sole proprietor of the business and his or her family members DThe sole proprietor of the business only

The sole proprietor of the business and his or her family members

A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if AThe damage is more than $1,000. BThe neighbor has no homeowners insurance. CThe tree has caused damage to the insured's vehicle. DThe tree is blocking the driveway.

The tree is blocking the driveway.

Under Crime Coverage Form I - Lessees of Safe Deposit Boxes, securities are only covered in the event of ARobbery BVandalism CBurglary DTheft

Theft

What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy? A$20,000 all expenses incurred during a 12-month period B$5,000 for all expenses incurred during a 12-month period C$10,000 for all expenses incurred during a 12-month period D$15,000 all expenses incurred during a 12-month period

$10,000 for all expenses incurred during a 12-month period

The commercial property declarations page contains which of the following information? ACommon policy conditions BInterline endorsements CCause of loss forms DDescription of the property insured

Description of the property insured

Which of the following homeowners policies covers those who rent their dwelling? AHO-2 BHO-4 CHO-6 DHO-1

HO-4

Which of the following is true regarding the fire department service charge under the builders risk form? AIt is a high-deductible endorsement. BIt is an additional coverage. CIt is an automatic coverage for $500. DIt is not available in this form.

It is an additional coverage.

Which of the following statements concerning the builders risk coverage form is correct? AIt covers the interest of the builder only and cannot include coverage for the owner. BIt may not be written for perils other than fire and extended coverage. CIt may be written on a reporting form for the completed value of the structure. DIt usually continues in effect for one year after completion of the structure.

It may be written on a reporting form for the completed value of the structure.

HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year? AValue reporting BSpoilage CInventory increase DPeak season

Peak season

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? ASplit BPer occurrence CPer person DAggregate

Per occurrence

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT ASubmitting to a medical exam when requested. BProviding prompt written notice of any claim or suit actually filed against the insured. CFurnishing the insurer with copies of any demands, notices, or other legal papers received in connection with a claim or suit. DAssisting the insurer upon request in the enforcement of any right against any person or organization that may be liable to the insured.

Submitting to a medical exam when requested.

A commercial property special form covers property in transit up to AFull replacement cost. B$5,000. CACV. D$500.

$5,000.

When an insurer cancels an auto policy for an allowable reason, they must give notice to the named insured of possible eligibility for coverage through the Pennsylvania Auto Insurance Plan, unless the reason for cancellation is ADriving record. BMisrepresentation on the application. CFraudulent claim. DNonpayment of premium.

Nonpayment of premium.

Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises? ASpecial limit of liability BProfessional liability CBusiness income - report of values DPermitted incidental occupancies

Permitted incidental occupancies

Under a dwelling policy, which of the following is NOT a factor in determining a loss? AThe amount necessary to repair or replace the property BThe amount negotiated by the insured CThe policy limit DThe amount reflecting the insured's interest in the property at the time of loss

The amount negotiated by the insured

The amount an insurer will pay under Coverage D (Loss of Use) depends on AThe length of time the dwelling is uninhabitable. BThe amount of coverage on the dwelling. CHow long a dwelling has been occupied. DIf the dwelling is owner-occupied or rented out. Correct! Loss of use is usually limited to a percentage of the overall dwelling or personal property coverage (when dealing with HO-4 and HO-6).

The amount of coverage on the dwelling.

A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicles that transport oil? A$500,000 B$750,000 C$1 million D$5 million

$1 million

The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the AExclusions. BDeclarations. CInsuring agreement. DConditions.

Insuring agreement.

A building is insured, but no one has lived or worked in it for 10 years. The building is completely empty of any furniture or personal belongings. From an insurance standpoint, the building is considered ACondemned. BClosed. CVacant. DUnoccupied.

Vacant.

Liability imposed on one party as a result of the actions of another person is known as AAbsolute liability. BVicarious liability. CComparative negligence. DStrict liability.

Vicarious liability.

When a parent is required to pay for damages caused by his or her children, this is an example of AStrict liability. BIntervening cause. CAssumption of risk. DVicarious liability.

Vicarious liability.

An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay A$500. B$1,000. C$500 minus the deductible. D$1,000 minus the deductible.

$1,000 minus the deductible.

A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? A$175,000 B$180,000 C$200,000 D$100,000

$175,000

A businessowner has a building and personal property policy that covers a shed in which he stores extra parts. If he buys a second shed for the same purposes, this will be automatically covered for how long? A15 days B20 days C30 days D45 days

30 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? A30 days B45 days C60 days D90 days

60 days

An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for? A80% of the property's replacement cost or more B100% of the market value C$400,000 D$32,000

80% of the property's replacement cost or more

When an insurance company uses a policy form that has been developed by an organization, such as ISO, what is usually required to be added to the form so that the policy will conform to the state's insurance regulation? AA special provisions endorsement BA disclaimer CNothing DA waiver

A special provisions endorsement

What is a binder? AA condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure BWritten evidence showing the amounts and types of insurance provided by an insurance policy or policies that have been issued CA temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued DA contract for lease of premises

A temporary contract of insurance issued by the insurer that places insurance in effect prior to the policy being issued

Which of the following types of valuation works best for property whose value does not fluctuate much? AStated amount BInflation guard CAgreed value DMarket value

Agreed value

Dwelling coverage includes all of the following EXCEPT ABuilding and outdoor equipment used to service the described location. BLand on which the dwelling is located. CThe dwelling used principally for residential purposes. DMaterials on the described location used to alter or repair the dwelling.

Land on which the dwelling is located.

Under Commercial Crime Coverage Form K - Liability for Guests' Property - Safe Deposit Box, which covered is included? ADamage caused by inherent vice, insects, animals, wear and tear, and gradual deterioration BLoss resulting from acts of employee dishonesty CLiability assumed under a written agreement DLoss resulting from the insured's release of any other negligent party from their legal liability

Loss resulting from acts of employee dishonesty

In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period? ARetroactive form BMysterious disappearance form CDiscovery form DLoss sustained form

Loss sustained form

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT APhysical damage. BUninsured motorist. CNo-fault medical payments. DLiability.

Physical damage.

What is the term for the entity that an agent represents regarding contractual agreements with third parties? AClient BDesignee CInsured DPrincipal

Principal

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a APersonal injury claim. BContractual liability claim. CProduct liability claim. DPremises and operations claim.

Product liability claim.

If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept? AIndemnity BReasonable expectations CCease and desist DNonforfeiture

Reasonable expectations

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? AA temporary substitute vehicle is damaged while the insured is driving it. BThe insured's vehicle is damaged when it collides with a deer. CA passenger in the insured's vehicle is injured following an accident caused by the insured. DThe insured damages a rented garage when he failed to stop in time.

The insured damages a rented garage when he failed to stop in time.

Which of the following endorsements is used to insure Coverage C (personal property) for values beyond the limitations of the homeowners policy? ABlue skies endorsement BPersonal property injury endorsement CScheduled personal property endorsement DPersonal property replacement cost endorsement

Personal property injury endorsement

What fundamental principle in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the resultant damage is all a part of the occurrence? AProximate cause BConcurrent causation CIndemnity DCommon cause

Proximate cause

According to the first-party benefits provision, which of the following would NOT be covered for injuries in an auto accident? AThe vehicle owner who does not have proof of financial responsibility BA named insured CA person outside the vehicle struck during the accident DA vehicle occupant injured in the accident who is not a named insured

The vehicle owner who does not have proof of financial responsibility

The declarations page of the homeowners policy provides all of the following information EXCEPT AWhat deductible amount applies to each loss covered by the policy. BA statement that earthquake damage is not covered. CThe amount of premium charged for each coverage. DThe insured's address.

statement that earthquake damage is not covered.

Transportation expenses are covered under a personal auto policy for A$25 per day, for a maximum of $500. B$50 per day, for a maximum of $500. C$50 per day, for a maximum of $750. D$20 per day, for a maximum of $600.

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

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? A$20,000 B$30,000 C$40,000 D$60,000

$30,000

An insured relocated to another state for work. However, she still owns and insures a house in this state, but has had no one living in it for 3 months. She is also storing some furniture and clothes in the house. From an insurance standpoint, the insured's house is considered ACondemned. BUnder repair. CVacant. DUnoccupied.

Unoccupied.

Which of the following may NOT be included in an insurance company's advertisement? AThat its policies are covered by a state Guaranty Association BThe policies' limitations or exclusions CThe name of a specific agent DAn identification of a limited policy as a limited policy

That its policies are covered by a state Guaranty Association

An insured runs a day care in her home. She has purchased the home day care endorsement under her homeowners policy. Which of the following losses would her coverage cover? AA child is playing in the insured's car, puts it in drive, and backs into the neighbor's mail box. BA child has bruises on her legs from receiving a spanking from the insured and must be seen by her pediatrician. CA child riding the insured's horse falls off, breaking his collar bone. DA child trips over a toy in the driveway, cuts her knee, and requires stitches.

A child trips over a toy in the driveway, cuts her knee, and requires stitches.

When an insurer cancels, midterm, a commercial property or casualty insurance policy for an allowable reason, they must ASend or deliver a "Notice of Nonrenewal" 30 days prior to the effective date of cancellation. BSend or deliver a "Notice of Cancellation" at least 60 days prior to the effective date of cancellation and state the reason for the cancellation. CRefund unearned premiums prior to the effective date of cancellation. DNone of the above

Send or deliver a "Notice of Cancellation" at least 60 days prior to the effective date of cancellation and state the reason for the cancellation.

What is the legal defense that can be used in most states in which proportionate damages may be awarded when both the plaintiff and defendant were negligent? AContributory negligence BProximate cause CComparative negligence DRelative degree of damage statute

Comparative negligence

Which of the following is a mandatory part of an insurance policy that varies with each individual policy? AInsuring agreement BDeclarations CConditions DExclusions

Declarations

An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have? ASpecific BSchedule CBlanket DSpecial

Specific

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an ACertified insurer. BSelf-insurer. CAuthorized insurer. DLocal insurer.

Authorized insurer.

What term includes damage where the insured peril was the proximate cause of loss? AConsequential loss BNegligent loss CDirect loss DIndirect loss

Direct loss

Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy? A5 days B10 days C15 days D20 days

10 days

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? AAdditional coverage BExclusions CDeclarations DInsuring agreement

Additional coverage

Which of the following is the closest term to an authorized insurer? ACertified BLicensed CLegal DAdmitted

Admitted

Which of the following could be covered by an HO policy? AProperty of a tenant not related to the insured BAn oriental rug in an on-premises apartment CBirds, fish, and animals DA sports car kept in an attached garage

An oriental rug in an on-premises apartment

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? AAssumed BApparent CExpress DImplied Incorrect! Apparent aut

Apparent

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe? ASharing BRetention CAvoidance DReduction

Avoidance

For the purpose of insurance, an owner-occupied residential dwelling is AA single family dwelling only. BA structure of not more than four units, one of which is occupied by the owner. CAny structure that includes at least one family unit. DA one or two family unit that is occupied solely by tenants.

structure of not more than four units, one of which is occupied by the owner.

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit? AProperty damage liability BCrime coverage part CPersonal and advertising injury liability DBodily injury liability

Personal and advertising injury liability

Which of the following is true of dwelling policy coverage? AExclusions only apply to broad policy forms. BThere are no exclusions in basic forms. CSpecial forms only have special exclusions. DExclusions apply to all three policy forms.

Exclusions apply to all three policy forms.

All of the following are characteristics of the dwelling policy EXCEPT ACoverage includes the dwelling only, contents only, or both. BIncidental occupancy of limited service-type exposure is permitted. CDwellings up to four family units are eligible. DThe dwelling must be owner-occupied.

The dwelling must be owner-occupied.

In which of the following situations would the jewelers block extension cover a loss? AAn employee of a jewelry store is wearing a cameo brooch and ring set to display to customers. During the day, she discovered the brooch has fallen off, and she can't find it. BA jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged. CA jewelry store is robbed while displaying bracelets and necklaces at a public exhibition. DA jeweler agrees to exhibit a necklace and earrings set in a showcase away from the premises. The case is broken into, and the set is stolen.

A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged.

Under farm liability, Coverage H includes ABodilyinjury. BLoss of use. CMedical payments. DOther farm structures.

Bodily injury.

Homeowners policies provide coverage for AProperty of tenants, roomers, or boarders not related to any insured. BBusiness property while on the residence premises. CLosses caused by off-premises power failure. DThe land under the residence.

Business property while on the residence premises.

An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of AFraud. BBreach of warranty. CConcealment. DWaiver.

Concealment.

What is a foreign insurer? AAn insurer with a home office in another country BAn insurer with licensed agents doing business in other countries CAn insurer with licensed agents who are citizens in more than one country DAn insurer with a home office in another state

An insurer with a home office in another state

Which of the following best describes an insurance company that has been formed under the laws of this state? ASovereign BAlien CForeign DDomestic

Domestic

A house insured under a dwelling policy has been vacant for 70 consecutive days. Which of the following statements is true? ALoss by theft is covered. BLoss by vandalism and malicious mischief is excluded. CGlass breakage as a result of vandalism is covered. DDamage to glass building blocks is not covered.

Loss by vandalism and malicious mischief is excluded.

An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true? AThe mortgagee must settle with the mortgagor in the event of a loss. BThe additional premium required for the mortgage endorsement must be paid by the mortgagee. CLosses will be paid to the mortgagee and mortgagor as their interest appears. DCoverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness.

Losses will be paid to the mortgagee and mortgagor as their interest appears.

An insured has a personal property replacement cost endorsement under her homeowners policy. If an expensive painting and an antique chair are stolen from the insured's home, what will the insured receive on the claim under that endorsement? A70% of the replacement cost B80% of the replacement cost C100% of the actual cash value DNothing

Nothing

A participating insurance policy may do which of the following? AProvide group coverage BPay dividends to the stockholder CRequire 80% participation DPay dividends to the policyowner

Pay dividends to the policyowner

Which of the following perils is covered by the HO-2 and HO-3? AFlood BWar CSudden and accidental rupture of a heating system DLoss due to power interruption that occurs off the premises

Sudden and accidental rupture of a heating system

Which of the following circumstances would be EXCLUDED under medical payments coverage of a personal auto policy? AThe insured is injured while driving his motorcycle on his resident premises. BThe insured's friend is injured in an accident while riding as a passenger in the insured's car. CThe insured's mother is injured while exiting from the insured vehicle. DThe insured is struck by another vehicle while crossing the street.

The insured is injured while driving his motorcycle on his resident premises.

In which of the following situations would off-premises coverage in a broad theft endorsement of the insured's dwelling policy apply? AThe insured's vacuum cleaner is stolen from her apartment. BThe insured's camera is stolen from his suitcase while he is on vacation. CThe insured's live-in maid's quarters are burglarized. DThe insured's china set is stolen from her home while she's traveling on business.

The insured's camera is stolen from his suitcase while he is on vacation.

An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the agent talked to the insured's family, and they explained that the insured was recovering from a surgery and might have been under the influence of medication at the time of application. Which of the following is true? AThe policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application. BThe policy will remain in force as long as there are no material misrepresentations on the application. CThe policy is legal since the applicant was able to give all required information. DThe policy is not legal; agents cannot sell insurance over the phone.

The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application.