PA Property Questions
a trucking company owns a large fleet of trucks that transport oil across state line. 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 and certain categories of hazardous waste?
$1 million
an insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. the new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and his policy is ACV, how much will it pay toward the insured's new roof?
$5,000
how long does a temporary producer's license last for a surviving spouse of a deceased producer?
180 days
a producer licensed in PA must notify the Insurance Dept. of any change of address in their address within how many days?
30
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
30 days
under businessowners policy Section I, if an insurer wants to cancel a policy for any reason except nonpayment of premium, how many days before the effective cancellation date must the insurer notify the mortgageholder?
30 days
when a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
30 days
what is the max number of roomers or boarders for properties insured under the dwelling policy?
5
Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of
80%
what is the required limit of insurance in the coinsurance clause for Coverage F - Unscheduled Farm Personal Property?
80%
the ABC Corporation has $100,000 of coverage on its building through insurance Coverage A, and $50,000 of identical coverage on the same building through insurance Company B. assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?
Company A will pay $16,000 and Company B will pay $8,000
with regards to a homeowners policy, which coverage provides for indirect or consequential losses?
Coverage D
which of the following coverages will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damage caused by an occurrence to which the coverage applies
Coverage E - Personal Liability
the homeowners policy form that covers condo unit owners is
HO-6
what was created to keep telemarketers from calling consumers who do not wish contacted?
National Do Not Call Registry
which of the following acts created a federal program that would share the risk of loss from potential terrorist attacks with the insurance industry?
TRIA
professional photographers and musicians may insure their equipment with
a commercial articles floater
which of the following would NOT be considered an insured under a homeowners policy?
a divorced spouse living in another state
which of the following would NOT be classified as personal property for insurance purposes?
a house
a businessowners policy is
a self-contained complete package policy
what documentation grants express authority to an agent?
agent's contract with the principal
how much is covered for debris removal under the HO property additional coverages?
all reasonable costs
the inspections and surveys condition in a businessowners policy
allows the insurer the right to inspect the insured's premises
which of the following risks would NOT be eligible for coverage under a homeowners policy?
an applicant who owns and lives on a commercial farm
which of the following could be covered by an HO policy?
an oriental rug in an on-premises apartment
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
which of the following types of agent authority is also called "perceived authority"?
apparent
in equipment breakdown coverage, all accidents would be considered a single accident if they occur
at a single location at the same time and from the same cause
a producer's license must be renewed
biennially
a policy that insures all property at multiple locations for a single amount is referred to as
blanket
when the Commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation?
cease and desist order
a banker is ready to close on a customer's loan. the bank is prepared to offer the loan but only if the customer purchases a life insurance policy from the bank in the amount of the loan. this is an example of
coercion
because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT: -legal purpose -offer and acceptance -conditions -consideration
conditions
the part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the
conditions
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?
consideration
a unique feature in a bailee form is that it covers
customer's property whether or not the insured has been negligent
ABC insurance company receives an incomplete application and issues the policy anyways. six months later ABC realizes the missing information. what term is used that prevents ABC from forcing the policyowner to answer further questions?
estoppel
all of the following are found in the declarations section of a policy EXCEPT the: -limits of insurance -exclusions -policy premiums -name of the insured ex
exclusions
which of the following are the authorities that an agent can hold?
express and implied
producers are responsible to collect and disperse premiums, and return premiums or other funds. what insurance term is associated with this?
fiduciary capacity
in a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
first named insured
the homeowners policy covers collapse caused by all of the following EXCEPT: -weight of snow -hidden insect or vermin damage -weight of too many people attending an event hosted in the house -foundation cracks
foundation cracks
an insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. however, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. what term best describes this act?
fraud
under which of the following conditions can broad theft coverage be added to a dwelling policy?
if the insured is owner-occupant of the dwelling
how soon after direct loss does the period of restoration for extra expenses coverage under buisnessowners property insurance begin?
immediately
the PA Property and Casualty Insurance Guaranty Association provides protection to insureds in the event of
insurance company insolvency
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
insuring agreement
which of the following would NOT be covered by HO liability insurance?
intentional tort
in which of the following situations is it legal to limit coverage based on marital status?
it is never legal to limit coverage based on marital status
which of the following is the type of property NOT covered by the homeowners policy?
land on which the property is located
a policy condition that states if a policy is broadened with no additional premium, then the expanded coverage will be automatically applied to all polices of the same type is known as
liberalization clause
what provisions in a property policy applies when the insurer broadens coverage but does not increase the premium?
liberalization clause
bulk carriers are used to transport
loose cargo
which of the following would be covered under the Utility Services - Time Element endorsement?
loss of business income arising from loss of utility service caused by an insured peril
which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices?
making comparisons between different polices
which of the following best describes the unfair trade practices of defamation?
making derogatory oral statements about another insurer's financial condition
which of the following events causing financial loss to an insured would not be covered under Federal Crop Insurance?
market price decline
what is NOT a consideration when paying an inland marine claim?
market value when the property was first purchased
which of the following will be covered by the contractors equipment floater in an unfiled inland marine insurance?
mobile equipment during transportation to and from the job site
ABC Insurance Company wishes to begin transacting business in PA. before it can do so, it must do which of the following?
obtain a certificate of authority
which of the following is NOT correct regarding false statements by a person engaged in the business of insurance?
only written statements can considered fraud
what type of coverage is Coverage E in homeowners policies?
personal liability
who might receive dividends from a mutual insurer?
policyholders
the limited fungi, wet or dry, or bacteria coverage endorsement applies to which type of losses?
property and liability
all of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT: imprisonment license revocation re-examination a monetary fine
re-examination
the Federal Fair Credit Reporting Act
regulates consumer reports, also known as consumer investigative reports, or credit reports.
what type of information would be found in a policy's insuring agreement
renewal dates
at the time of loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following EXCEPT: -paying the value of the lost or damaged property -replacing the property with other property of a lesser kind or quality -paying the cost of repairing or replacing the lost or damaged property -taking all or part of the property at an agreed or appraised value
replacing the property with other property of a lesser kind or quality
adverse selection is a concept best described as
risks with higher probability of loss seeking insurance more often than other risks
under the commercial property coverage program, the basic causes of loss form insures against loss caused by
sprinkler leakage
the policy provisions found in property insurance policies that prevents the insured from collecting twice for the same loss is called
subrogation
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?
subrogation
which of the following perils is covered by the HO-2 and HO-3?
sudden and accidental rupture of a heating system
who is covered by an HO-4 policy?
tenants
to be eligible for coverage under the National Flood Insurance Program, an insured must live in which of the following communities?
that has met the minimum floodplain management guidelines
what is the max amount of protection available to insureds under the PA Property and Casualty Insurance Guaranty Association?
the amount of loss up to the amount of coverage in the original policy, not to exceed $300,000 (per claimant)
all of the following statements concerning are true EXCEPT
the coinsurance formula will also be applied to total losses
in insurance terms, what are components?
the factors that determine rates
which of the following entities established the do-not-call registry
the federal trade commission
under which of the following circumstances would be an insurer be allowed to cancel a dwelling policy midterm?
the insured knowingly lied about the year the property was constructed
in which of the following situations would off-premises coverage in a broad theft endorsement of the insured's dwelling policy apply?
the insured's camera is stolen from his suitcase while he is on vacation
under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT
the insurer does not have the right to inspect the insured's property and operations
a mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. if the insured suffers a loss due to a fire, which of the following is true?
the loss is payable to the insured and the mortgage
the cancellation provision in a businessowners policy specifies all of the following EXCEPT
the method of transferring the owner's rights
on a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is
the same as provided on the DP-2 Broad Form
which of the following is an example of a producer's fiduciary duty?
the trust that a client places in the producer in regard to handling premiums
who has the rights to veto the repair facility for a vessel?
the underwriter
all of the following are perils covered under the broad form dwelling policy EXCEPT: -theft -fire -lightning -collapse
theft
all of the following types of property are covered by a standard builders risk form EXCEPT: tools 50 feet away from the building the building itself temporary structures machinery that will be permanently attached to the building
tools 50 feet away from the building
when an individual purchases insurance, what risk management technique is he or she practicing?
transfer
agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
twisting
the process an insurer uses to evaluate applications and determine if a policy should be issued and on what terms, conditions, and rates is known as
underwriting
an insured relocated to another state for work. however, she still owns and insures a house in this state, but has had non one living in it for 3 months. she is also storing some furniture and cloths in the house. from an insurance standpoint, the insurerd's house is considered
unoccupied
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 belonging. from an insurance standpoint, the building is considered
vacant
an insured added the scheduled personal property endorsement to her homeowners policy to cover musical instruments. if the insured purchases a new musical instrument, when must the insurer be notified for the musical instrument to be covered?
within 30 days