Missed Practice Exam Questions

In addition to the basic covered perils, the BOP standard coverage form also covers....

Transportation

T/F: Fire legal liability is not subject to the general aggregate limit in a GL policy

True

The personal property off premises coverage in the BOP will insure such property for up to $____________

$10,000

What property can be insured for replacement cost under the flood program?

A single family home, if 80% insurance to value is carried.

T/F: Earthquake coverage cannot be added by endorsement to homeowners policies

False

T/F: In order to be considered an appraisal, both parties appraisers must select an umpire.

False. Appraisers can come to an agreement on a price without an umpire.

T/F: Life insurance policies are taxable and not guaranteed

False. They are *not* taxable. They are also not guaranteed. These are issued by mutual insurers.

The NFIP is administered by _________

Federal insurance administration (FIA)

While most homeowners forms do not cover loss from mysterious disappearance, which HO form does?

HO-5 extends the theft definition to include mysterious disappearance

An insurance applicant storing explosives near their fireplace would be, from an underwriting standpoint, a __________ hazard

Morale. The applicant is careless.

If two or more policies provide coverage for the same loss, would the valued policy apply?

No

Is medical coverage under a personal auto policy paid out per accident or per person?

Per person

Under the conditions of a Film Coverage Form, how long must the insured maintain records of each production? a) 3 years after the policy expires b) 5 years after the policy expires c) 7 years after production completion d) 1 year after production completion

a) 3 years after the policy expires

The Physicians and Surgeons Equipment Floater in NOT intended for which of the following? a) Medical supplies located in a hospital b) Surgeon's supplies located in the surgeon's office c) Waiting room furniture in a doctor's office d) Office equipment located in a dentist's office

a) Medical supplies located in a hospital Coverage is *not* intended for hospitals, schools or other institutions.

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within a) 90 days. b) 1 year. c) 3 years. d) 5 years.

c) 3 years.

Workers who miss more than _____ consecutive days of work will be paid for the first 7 days missed

21 days

Apportionment Clause

Determining the insurer's portion of liability for loss where property is covered by other insurance. Prevents insureds from recovering more than they are owed for fire damage under a dwelling fire policy

Which of the following is a method of claim settlement used when the insured and insurer cannot agree on how to settle a claim? a) Appraisal b) Arbitration c) Proof of Loss d) Restoration

b) Arbitration

Georgia requires that all owners and operators of motor vehicles in the state carry which type of auto insurance as evidence of security in complying with the state's financial responsibility law? a) Uninsured motorist coverage b) Auto liability coverage c) Spousal coverage d) Personal auto insurance

b) Auto liability coverage

Which of the following other coverages is NOT included in the basic form dwelling policy? a) Tenant's improvements, alterations, and additions b) Breakage of glass c) Removal coverage d) Personal property temporarily away from the insured premises

b) Breakage of glass Breakage of glass is included in the DP-2 and DP-3 only.

What term is used for replacing insurance policies for the sole purpose of making commissions? a) Coercion b) Churning c) Misrepresentation d) Replacement

b) Churning "Churning" is defined as replacing insurance policies for the sole purpose of making commissions.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) Adhesion b) Consideration c) Good faith d) Representation

b) Consideration The binding force in any contract is consideration.

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance? a) Slandering b) Defamation c) Undercutting d) Twisting

b) Defamation Defamation is making statements that are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance.

Which of the following would be named on the declarations page of a property or liability policy? a) Additional insureds b) First named insured c) Beneficiaries d) All insureds

b) First named insured

All of the following are conditions commonly found in the insurance policy EXCEPT a) Appraisal. b) Insuring agreement. c) Cancellation and nonrenewal. d) Subrogation.

b) Insuring agreement Insuring agreement provides information on the policy's coverages. Conditions state the legal obligations and duties of the parties to the contract.

All of the following are essential elements of a commercial package policy (CPP) EXCEPT a) Policy conditions b) Valuations and/or settlement provisions c) Interline endorsements d) Declarations page

b) Valuations and/or settlement provisions Regardless of how the policy is written, it will be comprised of the following essential elements: declarations page, conditions, interline endorsements, and coverage parts.

If the premiums for a policy will be increased by more than 15 percent, how much warning must the insured get? a) 15 days b) 60 days c) 45 days d) 30 days

c) 45 days

Homeowners policies provide coverage for: a) The land under the residence. b) Property of tenants, roomers, or boarders not related to any insured. c) Business property while on the residence premises. d) Losses caused by off-premises power failure.

c) Business property while on the residence premises. contents coverage will cover up to a $2,500 for loss of business property on premises.

All of the following are conditions commonly found in the insurance policy EXCEPT a) Subrogation. b) Appraisal. c) Insuring agreement. d) Cancellation and nonrenewal.

c) Insuring agreement. The insuring agreement provides information on the policy's coverages. Conditions state the legal obligations and duties of the parties to the contract.

Which professional liability endorsement covers claims caused by the negligence of a contractor or subcontractor hired by the insured? a) Contractual Liability b) Foreman's Protective Liability c) Owners and Contractors Protective Liability d) Contractors and Subcontractors Liability

c) Owners and Contractors Protective Liability

If an applicant pays an initial premium but refuses to submit a statement of good health, the applicant violated which term: a) adhesion b) contractual agreement c) consideration d) appraisal

c) consideration consideration on the part of the insured entails premium payments and representations of health on the application

The main difference between an HO-4 and an HO-6 is a) HO-4 does not cover additional living expenses. b) HO-6 does not cover additional living expenses. c) HO-4 provides limited dwelling coverage as well as contents coverage. d) HO-6 provides limited dwelling coverage as well as contents coverage.

d) HO-6 provides limited dwelling coverage as well as contents coverage. HO-4 provides no dwelling coverage because a tenant does not own the dwelling

Insurance is a contract by which one seeks to protect another from a) Exposure. b) Uncertainty. c) Hazards. d) Loss.

d) Loss.

A worker received a concussion after getting hit on the head at work and missed work for 5 days. At what point will the worker receive workers compensation benefits for the missed work? a) The seventh day after the accident b) The 21st day after the accident c) Within 30 days of the accident d) Never; benefits start once a worker has been unable to work for more than 7 days.

d) Never; benefits start once a worker has been unable to work for more than 7 days.

Which of the following is an example of apparent authority of an agent appointed by an insurer? a) The agent accepts a premium payment during the grace period. b) The agent has business cards and stationery printed. c) The agent puts up a sign with the insurer's logo without express permission. d) The agent accepts a premium payment after the end of the grace period.

d) The agent accepts a premium payment after the end of the grace period. An agent who accepts a premium after the end of the grace period appears to the client to have the authority to prevent the policy from lapsing

The claims-made trigger is based on which of the following? a) The date the claim is first made in writing against an insurer for injury or damage that occurred after the policy's retroactive date b) The date the claim is first made orally against an insurer for injury or damage that occurred after the policy's retroactive date c) The date the claim is first made orally against an insured for injury or damage that occurred after the policy's retroactive date d) The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date

d) The date the claim is first made in writing against an insured for injury or damage that occurred *on or after* the policy's retroactive date