MS Final Exam
Eloise borrows Uriah's car while her car is in the shop, and while she is running errands, she rear-ends a minivan, injuring the driver and 3 other passengers. Each of the passengers suffers $45,000 in injuries, and the driver suffers $40,000. Uriah has a liability policy with limits of 50/100/50, while Eloise carries the minimum liability coverage for Mississippi. The primary policy will pay __________ and the secondary policy will pay __________ for this occurrence, and Eloise will have to pay __________ out-of-pocket.
$100,000; $50,000; $25,000
As Seth is driving along a country road, a deer jumps out in front of him. This causes Seth to veer off the road and crash into Cassie's wood fence and a brick mailbox. As a result of the crash, Seth suffers $3,700 in damage to his sedan and causes $1,800 in damage to Cassie's property how much of the damage will be covered by Seth's liability insurance?
$1800
Graham has an auto liability policy with limits of 30/60/25. While heading to the grocery store, Graham turns onto 2nd street and slams into a stopped vehicle. The driver of the car, Jeremy, is not hurt, but Graham has totaled Jeremy's $30,000 SUV. How much, if any, of the damages will Graham have to pay out of pocket?
$5,000
How much of a limit is included for Credit Card Fraud or Forgery, an additional coverage in a homeowners policy?
$500
Watson makes $550 a week as a waiter in Mississippi. When he trips over a customer's briefcase and breaks his leg, he can't wait tables for 9 months. The restaurant decides to pay him $100 per week to roll silverware until his leg heals. How much would Watson's Temporary Partial Disability benefits pay?
300
Under the Longshore and Harbor Workers' Compensation Act, how much would the surviving spouse of a deceased worker receive in benefits?
50% of the deceased worker's Average Weekly Wage
On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration resulted from the earlier accident with the exercise bike. Which of the following CGL policies may cover Ryan's claim filed January 25, 2011?
A claims-made policy from Jan 31 2009-Jan 31 2011
The Hometown Paint Store burns down one night and almost everything is destroyed. Which of the following items would NOT be covered under Coverage B in the store's commercial property policy?
A large paint mixer permanently affixed to the floor
Acme Insurance has decided to cancel John's homeowners policy because he has not paid his premium. John has a mortgage on his home through IBC Bank, so the bank is listed as a creditor loss payee on John's policy. Which of the following is TRUE?
Acme Insurance must send notification of the cancellation at least 10 days before the effective day
According to the Assignment condition in an insurance policy?
An insurer may reassign a policy to another insurance company but only with the policyholder's notarized written permission
In order to adjust claims for the NFIP, adjusters must meet several requirements. Which of the following is NOT one of these requirements?
Attend an NFIP claims presentation every 3 months
What is the most common type of Time Element Insurance?
Business Interruption Insurance
Assuming Ernie holds a BOP with a Selected Per Occurrence limit of $300,000, what would Ernie's Completed Operations and General Aggregate limits equal?
Completed Operations: $600,000; General Aggregate: $600,000
Most states require businesses to purchase worker's compensation insurance to cover their employees. Workers comp in those states is:
Compulsory
Which of the following statements about Electronic Data Processing (EDP) insurance coverage is FALSE?
EDP excludes coverage for all "intangible" electronic data.
Gary bought a foreclosed home and plans to fix it up and eventually use it as a rental property. But for now he just looking for basic insurance coverage. He buy's a DP-1 and opts out of the extended coverages. Which perils Gary protected himself from?
Fire, lightning, and internal explosion
We will provide the insurance described in this policy in return for the premium and compliance with all applicable provisions of this policy. " In which section of the insurance policy would this statement be found?
Insuring Agreement
Henry suspects that some of his employees have been stealing from his company. He purchases a commercial crime insurance policy, which will cover any losses that actually occur during the policy period. Under which coverage form of commercial crime insurance is Henry's company insured?
Loss sustained form
Which of the following may be covered under a DP-3?
Power failure on the premises
As a result of a recent business decision, Company Q's insurer has broadened mold coverage in a new standard commercial property policies without increasing the premium rate. Which of the following is true?
The Liberalization clause requires that this broadened coverage automatically apply to Company Q's existing policy.
Generally speaking, which of the following has the broadest coverage?
Umbrella coverage
An adjuster who has been found guilty of committing an unfair trade practice, and who has willfully violated a finalized cease and desist order is subject to:
a fine of up to 1,000 per violation and/or license suspension or revocation
Janine's hair salon was already having a bad year when a client slipped, broke her hip, and sued the salon for $100,000. Relieved that she had just purchased an excess liability policy last month, Janine hopes she can use that, leaving her base liability policy untouched. This is not possible because:
an excess liability policy pays only when the base policy limit has been exhausted.
In a garage policy, PIP coverage is:
available with an endorsement.
When Sally applies for an auto policy, her agent issues her a ________ so that she can benefit from insurance protection while he underwrites the policy.
binder
A motor carrier that offers transportation services to the public on a regular basis (rather than only for hire) is known as a:
common carrier
UM/UIM coverage excludes:
government vehicles.
All of the following causes of loss are excluded from coverage in an Equipment Breakdown Protection Coverage Form, EXCEPT:
mechanical failure.
States that have special legislation that requires workers' compensation coverage to be provided exclusively by the state's workers' comp program are:
monopolistic.
Ava owns a duplex by the beach, which she rents out in the summer. She has a Flood insurance policy which cover her duplex at:
replacement cost
Who is responsible for paying premiums on a worker's compensation policy?
the employer
In a BOP, the General Aggregate Limit is:
twice the per occurrence limit.
In a homeowners policy the additional coverage " Tree and Shrub Replacement " will pay:
up to $500 per tree
An adjuster must report a change of address to the Insurance Commissioner:
within 30 days.
Bill lives in Mississippi and has the minimum auto liability coverage required for the state. He causes an accident that results in $35,000 in property damage and $50,000 in bodily injury to another person. How much will Bill have to pay out of pocket for this accident
$10,000 in property damage and $25,000 in medical expenses
Sherrie's roof and fence are damaged in a violent windstorm. Sherrie has a typical HO-3 policy with a $150,000 limit for Coverage A - Dwelling. Assuming she has no endorsements, how much coverage does she have available for the damage to her fence?
$15,000
Sarah's two-year old refrigerator is destroyed in afire, the fridge 's total depreciation was $500. A new one will cost Sarah $2,000. If Sarah's policy covers the fridge at ACV , how much will her insurer pay her for her loss?
$1500
Jeremy owns a business with several machines covered under an Equipment Breakdown Protection Coverage Form with a $500,000 limit. He has three deductibles on his policy: 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss?
$2,550
Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a per occurrence limit of $250,000, what is the maximum that ABC's insurer will pay for Jerome's injuries?
$250,000
While Andrea was grocery shopping in BB Mart, the large Dairy sign fell off the wall and landed on her. Because of her extensive injuries, Andrea sued BB Mart and was awarded $375,000 in damages. BB Mart's Commercial General Liability policy has a general aggregate limit of $1,000,000 and a per occurrence limit of $300,000. What is the per occurrence limit after this claim is settled?
$300,000
In Mississippi, what is the current minimum amount of liability coverage required for a commercial auto?
100/300/100
Francis owns a small shoe store. Since his business isn't particularly risky, he has a commercial property policy that provides named-peril coverage to his building and personal property, without any additional coverages. Which Causes of Loss form does Francis have attached to his coverage form?
Basic Form
Ken is getting his certification to adjust large commercial claims for the NFIP. Which of the following is NOT required of Ken in order to qualify for this certification?
Be able to accurately adjust RCBAP losses of $1,000,000 or more.
Which of the following actions is NOT grounds for the Commissioner to suspend or revoke an adjuster's license?
Being more than 60 days late on payments to any realtor
Bob has been paying his premiums, but his insurer has decided to cancel his dwelling policy. Because Bob has a mortgage on the house through Sunrise Bank, the bank is listed as a creditor loss payee on Bob's policy. Which of the following is TRUE?
Bob's insurer may cancel his policy, but must notify both Bob and Sunrise Bank at least 30 days before the effective date of the cancellation.
Which of the following would NOT be covered under Errors and Omissions insurance?
Bodily injury claim
In which section of an insurance policy might you find the following statement? "Damage to insured property must be reported within 15 days of the damaging occurrence."
Conditions
Where in the Standard Fire Policy might one find the phrase, "Policy Period Effective Nov 1 2015 to Nov 30 2016?
Declarations
The Standard Fire Policy had four main parts. They were:
Declarations, Insuring Agreement, Conditions, and Exclusions
Jim drops his car off at ABC Garage to have his exhaust system repaired and takes the train to work. When he returns, he finds that his car has been vandalized. Jim has comprehensive coverage, but feels the garage is responsible for the damage since Jim entrusted the car to ABC Garage. Which coverage type under ABC's garagekeepers policy would split the cost of the loss with Jim's own insurer without placing blame on ABC Garage?
Direct Primary Coverage
Daniel has had his homeowners policy with ABC Insurance Co. for six months. In a recent review Insurance Co. decided to remove one of the standard exclusions without changing the premium. How does this expansion in coverage affect Daniel?
Due to the Liberalization clause, this expansion in coverage automatically applies to Daniels policy.
Why has Pollutant Cleanup and Removal coverage become more popular recently?
EPA fines and penalties have increased.
David just opened his own consulting business, and has taken on several new clients. He's having difficulty managing his schedule on top of all the other responsibilities related to owning his own business, so he hires Tina via contract to work as his full-time office manager for $15 per hour. According to the definitions in David's Commercial General Liability policy, which of the following best describes Tina?
Employee
Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes?
Employee as Additional Insured
Farmer Bob would like to sell his recent harvest of lettuce to a local wholesaler. The wholesaler agrees, but only if Bob can prove he has insurance protection in the event that his lettuce causes people to become ill. What type of insurance does Bob need in this situation?
Farm Product Liability insurance
Jim is completely "upside down" financially on his car. He owes the finance company $8,000. If he sells the car, he knows he'll only get about $4,000 for it. But Jim knows that if the car was somehow stolen, his insurance company would pay him somewhere in the neighborhood of $7,000. Jim decides to have a friend steal the car and "make it disappear." Jim then files a claim with his insurance company to report his car stolen. Which best represents Jim's actions?
Hard Fraud
Which ISO is known as the Condominium form?
Homeowners 6
When Zach purposefully burned down Matt's restaurant, Matt's insurer paid the claim and then went after Zach for the damages. Matt is furious about what Zach did and wants to sue him as well. Why is it NOT possible for Matt to sue Zach?
Matt has already received indemnification from his insurer.
Stan has a personal auto policy to cover his two vehicles, but he recently purchased a custom built motorcycle as well. Which type of endorsement will Stan need to cover the motorcycle?
Miscellaneous Vehicle Endorsement
States that have special legislation that requires workers' compensation coverage to be provided exclusively by the state's Workers' Comp program are?
Monopolistic
What is it called when states require employers to buy coverage from a state - designed workers' compensation program?
Monopolistic
What type of commercial auto policy would best suit a taxi company?
Motor Carrier Policy
_____________________ Covers losses to ships and their cargo
Ocean Marine Insurance
In a personal auto policy Collision coverage:
Pays for physical damage to the vehicle caused by a rollover.
A garage policy is almost identical to a BAP, but it covers which two additional hazards?
Premises & Operations and Products & Completed Operations
As a result of a recent business decision, Company Q' insurer has broadened mold coverage in new standard commercial property policies without increasing the premium rate. Which of the following is true?
The Liberalization clause requires that this broadened coverage automatically apply to Company Q's existing policy.
Henry suspects that some of his employees have been stealing from his company. He purchases a commercial crime insurance policy, which will cover any losses that actually occur during the policy period. Under which coverage form of commercial crime insurance is Henry's company insured?
The Loss Sustained Form works very similarly to a claims made form. It provides coverage from the start of the policy period, and will cover any occurrences of employee dishonesty (within the policy limits) while the policy is in force. It will also cover claims for up to one year after the policy expiration.
ABC Masonry, Inc. has an aggregate liability policy with limits of 100,000/300,000. One day, an accident at a construction site leads to $150,000 in damage to public property. Assuming the cause of loss is covered under ABC Masonry's liability policy, how will this claim be paid?
The insurer pays $100,000; the aggregate limit is now $200,000; and ABC Masonry must pay $50,000.
After a rain storm, Nancy realizes that she left her bedroom windows open the entire time. Now there is extensive water damage to her area rug and furniture, and the laptop that had been sitting on her desk is ruined. Nancy has a Broad Form homeowners policy, so she calls her insurance company and files a claim. What is the likely result of Nancy's claim?
The insurer will not cover any of the damage, since Nancy left the windows open.
Unless otherwise cancelled, suspended or revoked an adjuster license is valid until:
The last day of the licensee's birth month in the second year after issuance or renewal, with a minimum term of 13 months.
What is the total amount an employee can receive in income benefits through Worker's Compensation Insurance in Mississippi?
The multiple of 450 weeks times 2/3 of the statewide average weekly wage
The primary difference between a Claims- Made CGL form and an Occurrence CGL form involves:
the coverage trigger
Disability payments through workers' compensation insurance are primarily based on:
the employee's average weekly wage.
Workers' compensation premiums are based on all of the following EXCEPT:
the race of the employee.
All of the following are universal exclusions in a Commercial Crime policy, EXCEPT:
theft of money or securities outside the insured premises in the care of a messenger.
An insurance contract is an agreement between two parties where each side promises to be truthful, factual, and honest about their respective positions. Therefore, an insurance contract is said to be a contract of:
utmost good faith.
The Insurance Commissioner has determined that Edward, a licensed insurance professional, has been committing unfair trade practices. In addition to issuing a cease and desist order, the Commissioner can fine Edward up to:
$5,000 for each violation
Sue decides to get a valued insurance policy on her antique car. She and her insurance company agree to a value of $85,000. Three years later, the car is destroyed when a tree falls on it in a parking lot. The car depreciates at $2,000 a year, and its replacement cost is $100,000. Ignoring any deductible, how much can Sue expect her insurer to indemnify her?
$85,000
What is the current amount of liability coverage required by the state of Mississippi?
25/50/25.
Hank has a commercial property on his electronics store. Since he has invested in a sophisticated survelliance system, he chooses to add a Protective Safeguards Endorsement to his policy to save money on premiums. One day, he notices that several of his cameras are not functioning properly. How long does Hank have to report this problem to his insurer?
48 Hours
In Mississippi, an insurer may not issue fire insurance policies that last more than:
5 years.
Vinny owns a woodshop where he makes and sells custom items like chairs, tables, and bookcases. One night, Vinny's shop is destroyed by a fire, and he files a claim with his insurance company. Which of the following items would be covered under Coverage A - Buildings and Structures in the Building and Personal Property Coverage Form in his commercial property policy?
A bandsaw affixed to the floor
In the case of a fire loss that may have been caused by an incendiary fire, an insurance company must, if requested, provide all of the following to the investigating authority, EXCEPT:
A record of any current or previous insurance policies covering neighboring properties.
Which of the following would NOT be considered an "occurrence" accordof thing to a CGl policy
An employee is mopping the floor of a grocery store while numerous people are present.
Who is NOT eligible for a homeowners policy?
An owner of a house in which he does not live, but rents to a tenant
Which of the following situations does NOT involve misrepresentation?
Atticus manages an insurance agency and posts the salespeoples' numbers publicly each month, to promote competition.
Which of the following best describes inland marine insurance?
Insurance designed to protect property being transported on land and property related to transportation
We will provide the insurance described in this policy return for the premium and compliance with all applicable provisions of this policy. " In which section of the insurance policy would this statement be found?
Insuring Agreement
Which of the following statements does NOT apply to the Standard Fire Policy?
It automatically covers wind and vandalism.
Which of the following statements about a moral hazard is FALSE?
It is the result of an unconscious behavior.
Nancy and Drew borrow Joe's car so they can have a picnic at the old water tower. On their way to the picnic, Drew accidentally rear-ends Mr. Jackley, causing $2,900 in damage. Whose liability insurance will pay first for the damages?
Joe's
Craig is just starting out with his business. He needs an insurance policy to cover his liability against any unknown defects within his products. Of the four types of CGL policies listed below, which offers the best coverage for Craig's business, regardless of when a claim is filed?
Occurrence Policy. An occurrence policy will protect Craig for the period stated within the policy, regardless of whether the policy is currently active or inactive. If Craig's company finishes production and then shuts down, he will still be covered from any accidents that occurred while his policy was in effect, regardless of when the claim is filed.
Tom has two commercial property policies covering his warehouse. Policy A is the primary and has a $200,000 limit, and Policy B is an excess policy with a $100,000 limit. After a fire causes $140,000 in damage to his warehouse, how will each of Tom's policies respond ( ignoring any deductibles)?
Policy A will pay $93,333 and Policy B will pay $46,667. is correct.
Which of the following is not one of the employer's duties if injury occurs?
Remain with the injured employee until emergency assistance or a family member arrives
Equipment Breakdown coverage losses are settled on what basis?
Replacement Cost
Which of the following is NOT an unfair trade practice in Mississippi?
Requiring that a homebuyer purchase insurance as a mortgage condition, but allowing the applicant to choose his own insurer
Russ wants to become certified to adjust residential claims for the NFIP. He can accurately adjust losses up to $50,000, and he's been an adjuster for three years. He also has a letter of recommendation from the last firm he worked for. Why is Russ not qualified to adjust residential claims for NFIP?
Russ does not have 4 consecutive years of full-time property adjusting experience.
Which endorsement to the Commercial Crime policy would protect a bank against its legal liability for burglary, robbery, destruction, or damage to customers' belongings kept in safe deposit at the bank?
Safe Depository
All of the following are types of Cargo Coverage in Ocean Marine insurance, EXCEPT
Single Risk Form
Which financial institution bond is designed for all types of insurance companies?
Standard Form 25
James is in the consulting business and frequently flies from city to city to meet clients and help them improve their business practices. Most cities have adequate public transit, but sometimes it's easier to rent a car. Which coverage symbol would specifically pertain to rental cars on James' Business Auto Policy?
Symbol 8
David's office assistant, Tina is about to have a baby and will be gone for three months on maternity leave, While she is gone David will need to hire someone to run the office but only until Tina Returns to work. According to the definition in Davids Commercial General Liability policy which type of worker is he needing to hire?
Temporary Worker
Which of the following statements about Equipment Breakdown Protection coverage is FALSE?
The period of restoration ends 15 consecutive days after the date when the damaged property is repaired or replaced
Which of the following best describes a "risk" according to the insurance definition?
The potential for a financial loss
Which of the following statements about emergency adjuster licenses is FALSE?
To be eligible for an emergency license in Mississippi, an applicant must be have an adjuster license in his home state.
Which of the following is NOT a reason to purchase umbrella liability coverage?
To reduce your insurance costs
Craig must close his business for three months after being injured in an auto accident. When Craig recovers, he returns to his shop where he finds broken glass and notices some of his supplies have been pilfered. Under what condition in his commercial property policy might the insurer deny coverage?
Vacancy
Farmer Steve barely escapes a massive tornado, but the storm does completely destroy one of the barns on his property. Luckily, Steve has an insurance policy on his barn with a replacement cost endorsement, and the barn was fully insured. At the time of the loss, the actual cash value of the barn was $65,000, and its replacement cost is currently $85,000. When will Steve receive full indemnification for his losses on the barn
When he replaces the barn and submits receipts to the insurer
Susan is insured with a homeowners policy. After someone destroyed her late husband's gravestone with a vehicle, Susan filed a claim against her homeowners policy. Which of the following statements is TRUE?
With Grave Marker coverage, Susan can receive a maximum of $5,000 to pay for the damaged gravestone.
Driving home after a 14-hour shift, Sam falls asleep at the wheel and plows into Sandra's home, causing extensive damage to the East wall and roof. As a result, Sandra and her family must move into a hotel until the repairs are completed. Sam's car crashing into the house would be considered:
an occurrence.
All of the following are typical exclusions in an insurance policy, EXCEPT:
explosion.
If, after a hearing, the Commissioner has determined that a person is committing an unfair trade practice that is not defined under Mississippi Insurance Code:
he must wait at least 30 days, and if the person is still engaging in the activity, the Commissioner may petition the Attorney General to issue a cease and desist order.
Insurable interest allows Rick to take out an insurance policy on all of the following Except:
his favorite restaurant
Bill holds a hull policy for his cargo ship which sails between China and the United States, transporting wooden toys. On voyage (i) his vessel is damaged by pirates. On voyage (ii) the vessel is damaged by striking employees. On voyage (iii) the vessel is destroyed when it strays into a war zone and is struck by a missile. Bill's losses will be covered by his hull coverage for which of these voyages?
i. only
In dwelling policies, Coverage D pays for:
lost rental income.
Workers' compensation insurance can provide compensation for all of the following, EXCEPT:
lost vacation time.
An adjuster whose license has been revoked:
must wait at least one year before applying for another license.
An insurance adjuster will do all of the following regarding a claim EXCEPT:
protect the insurer from the claim.
