P&C
FRAUD
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?
b) $60 the policy will pay $20 per day after 48 hours, not to exceed 30 days total
An insured has a personal auto policy with both comp and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay? a) $45 b) $60 c) $75 d) $100
Coverage E - additional living expense
An insureds house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have?
Are paid in addition to the liability limit
First aid costs for others injured on the insureds premises...
Annual assessments paid by member insurers
Funding for the operation and administration of the Louisiana Insurance Guaranty Association comes from...
5 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
c) a partial premium refund insured is eligible for dividends (partial refund) if the experience during the policy term falls within guidelines established by the insurer at the inception of the policy term. They are not guaranteed.
In a participation plan, the insured may be eligible for which of the following? a) lower premiums b) gauranteed dividends c) a partial premium refund d) an increase in insurance over time
b) 30 days of receiving a satisfactory proof of loss
Insurers are required to pay the amount of any claim within a) 60 days after the date the loss is reported b) 30 days of receiving a satisfactory proof of loss c) 60 days after receiving a satisfactory proof of loss d) 30 days of the occurrence of the loss
$250
Uninsured Motorist property damage coverage is subject to a deductible of...
b) explosion of steam boilers equipment breakdown coverage covers the sudden and accidental breakdown of the vessel. Business interruption may be added by endorsement
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? a) twisting b) rebating c) false financial statement d) business interruption
A) motor truck cargo - owners form a business using its own trucks to move its own cargo would insure the cargo using the owners form
A business using its own trucks to move its own cargo would insure the cargo using a) motor truck cargo - owners form b) motor truck cargo - truckers form c) motor carrier form d) trip transit coverage
60 days
A commercial policy has been in effect for less than 60 days and is not a renewal policy. If the insurer decides to cancel the policy for any reason other than nonpayment of premium, how much notice must it give the first named insured?
Within 1 year of the revocation
A producers license has been revoked for a violation of the insurance code. When can the producer apply for a new license?
b) if he receives a deferred commission from insurance that he transacted while he was licensed
Bill made his living as an insurance producer at one time but is no longer licensed. Under which of the following circumstances would it be acceptable for him to accept a commission?
b) losses due to the insureds negligence
Coverage A - Bodily Injury and property damage in the commercial general liability policy will cover a) damage to the insured product b) losses due to the insured negligence c) liquor liability d)
$50,000 The difference between the At fault drivers bodily injury limits and the UIM limits. ($100,000 minus $50,000)
Driver A has a personal auto policy with Part C: UM/UIM limits of 100/300. He is injured by Driver B who has Part A: Bodily injury liability limits of 50/100. It is determined Driver B is at fault. Driver A has $125,000 in medical expenses. How much will his UM/UIM coverage pay?
c) misrepresentation making false or misleading statements with the intent to defraud another is misrepresentation
During a sales presentation a producer intentional makes a statement which may mislead the insurance applicant. This describes: a) twisting b) coercion c) misrepresentation d) defamation
animals and birds!
Dwelling policy Coverage C - Personal Property will cover all of the following EXCEPT
c) Louisiana insurance rating commission if the corporation for any reason denies an application, the applicant may appeal to the Louisiana insurance rating commission
If the Louisiana Citizens Property Insurance Corporation denies an application, the application may appeal to the a) commissioner b) Louisiana department of insurance c) louisiana insurance rating commission d) louisianas citizens property insurance corporation
b) it must be added as a supplemental or written as a separate policy unlike the homeowners policy, the dwelling does not include any coverage for personal liability. The coverage form includes two major coverages: personal liability and medical payments
In a dwelling policy, which of the following is true regarding personal liability coverage? a) it is the same as in a homeowners policy b) it must be added as a supplemental or written as a separate policy c) it does not cover medical payments to others d) it is included in all dwelling policies
$5,000
In the computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records?
a) dwelling policy form dwelling policy form is used to insure residential structures and their contents including individual condos
Residential structures, including individual condominium units, and their contents are insured by what part of the national flood insurance program? a) dwelling policy form b) basic coverage form c) residential condominium building association policy d) general property policy form
nonpayment of premium
The insurer must advise the named insured of possible eligibility coverage through the Assigned Risk Plan when an auto policy is canceled for a reason other than
c) indemnity if more than one policy is in force on the same property at the same time, this is concurrent coverage. The intent of insurance is that after a loss the insured is restored to the condition before the loss (indemnified). Each policy pays a percentage of a loss directly to the amount of insurance it provides compared to the total amount of coverage
The pro rata liability clause is designed to protect the principle of a) insurable interest b) waiver and estoppel c) indemnity d) subrogation
d) computer fraud The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered by computer fraud
The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside premises is covered under which commercial rime coverage? a) money orders and counterfeit paper currency b) other crime coverage c) outside premises d) computer fraud
Premium
The value placed on property insured under a fire insurance policy is used to determine the policy's...
Theft
Under Crime Coverage Form 1 - Lessees of Safe Deposit Boxes, securities are only covered in the event of
$5,000
Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurring limit that applies to loss or damage to precious metal, precious & semiprecious stones, pearls, furs, manuscripts, drawings, or records?
Insurance placed with an unauthorized insurer
What is surplus lines insurance?
Experience modification factor
What method of premium computation relates an employers losses, payroll and premiums to the rating bureaus classifications of operations?
a) bodily injury to a residence employee Just like HO liability, farm liability does not pay for injuries of anyone normally at the insured location except residence employees not covered by workers comp
Which of the following would be included in the farm liability coverage forms? a) bodily injury to a residence employee b) any obligation of the insured under a workers comp law c)bodily injury to any person who is an insured
c) Symbol 9 - non owned autos only symbol 1 is used for any auto, symbol 2 is used for owned autos only, symbol 7 is used for specifically described autos
Which one of the following symbols used in business auto coverage is correctly described? a) symbol 2- owned autos subject to no-fault b) symbol 7 - hired autos only c) symbol 9 - non owned autos only d) symbol 1 - owned auto only
When the damages result from the intentional acts of the employer
While Workers Compensation is intended to be the exclusive remedy for work related injuries, under which of the following circumstances may an employee or an employees dependent sue the employer?
b) damage to the dwelling caused by ash or dust from volcanic eruption an HO-3 covers losses on an open peril basis. An HO-2 covers losses on a named peril basis. Both forms cover damage to the dwelling caused by ash or dust from volcanic eruption
which of the following examples of losses paid under an HO-3 also would be paid under and HO-2 homeowners policy a) interior damage caused by water seeping under the shingles b) damage to the dwelling caused by ash or dust from volcano c) damage to the dwelling caused by insured moving furniture d) accidental scorching caused by a hot iron placed on counter top
a) backdating policies to secure a lower premium for the insured it is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, or the payment of dividends
which of the following would NOT be considered a misrepresentation on the part of the insurer?
d) the drivers policy would be primary medical payments coverage pays all necessary medical and funeral expenses incurred and services rendered to the insured or passengers in the insured vehicle, regardless of fault
A passenger in a friends car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? a) the drivers policy will act in excess of the passengers b) the passengers policy would be primary c) both policies will share equally d) the drivers policy would be primary
c) safe depository or direct loss Safe depository or direct loss will pay such losses, regardless of legal liability. Other forms cover the guests property losses only if the insured is legally liable
Jim owns and operates the "No-Tell Motel". He wishes to purchase a crime coverage that will pay for the loss of a property left in the motels safe for safe keeping, whether or not the motel is legally responsible for such loss. He should purchase.... a) liability for guests property premises form b) liability for guests property safe deposit form c) safe depository or direct loss d) safe depository liability
b) slander slander is an oral untrue statement that damages a persons reputation
Local sportscaster Fred Fillmore states on air during a news telecast that the local pro football coach has a lousy record, which is untrue. This is an example of a) libel b) slander c) no tort at all- freedom of speech d) invasion of privacy
c) The amount of coverage on the dwelling loss of use is usually limited to a percentage of the overall dwelling or personal property coverage (when dealing with HO4 and HO6)
The amount an insurer will pay under Coverage D ( Loss of use) depends on a) if the dwelling is owner-occupied or rented out b) the length of time the dwelling is uninhabitable c) the amount of coverage on the dwelling d) how long a dwelling has been occupied
Up to $1000 per occurrence
Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?
d) completed value form a building under construction could be insured on reporting forms, but the value of the building should only increase during the policy period. To prevent all the administrative work required for reporting forms, most often completed value forms are used
A builders risk form is most often written as which of the following? a) scheduled form b) reporting form c) specific value form d) completed value form
c) $1000 statutes limit the fine to "uo to $1000" unless the person knew the act was in violation, in which case it may be increased to as much as $25000
A producer didn't realize that he had committed an act in violation of the insurance code. How much would he probably be penalized? a) $0 b) $500 c) $1000 d) $25000
Lost revenues from the restaurant -Business income policy will provide this coverage
A restaurant is out of business for 3 days after an insureds automobile hits an electrical pole. The pole falls and hits the building, knocking out all electrical power supply. Which of the following is NOT covered under the insured drivers auto policy?
Large pleasure boats
According to the Nationwide Marine definitions, risks that may be the subject of inland marine insurance include all of the following EXEPT
Twisting
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insureds best interest are guilty of
Costs the insured incurred in hiring an attorney
All of the following are supplemental payments found in liability policies except...
Up to $100 for the cost to secure the release of a vehicle from an impound lot following a covered accident A personal auto policy does not pay the cost of the realease of a vehicle impounded by a law enforcement agency
All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT
a) the limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle the limit of liability is the lesser of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
All of the following are true regarding physical damage coverage EXCEPT a) the limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle b) losses to non owned autos will be covered the same as the broadest coverage available for any covered auto c) the policy will pay up to $20 a day up to a max of $6000 for rental transportation d) the insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible
c) the injury or damage must occur within 90 days after the insureds work is completed The products and completed operations hazard includes injuries or damage that occur after the insured has completed its job and left the site, or relinquished control of a product it manufactured or sold. There is no time limit on injury or damages
All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT
a)replacement for the boat listed in the declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 45 days pf purchase and pays any additional premium required
All of the following statements regarding a boat owners policy are true EXCEPT a)replacement for the boat listed in the declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium b) watercraft liability protects up to specified limits for claims against a "covered person" for damages due to bodily injury caused by watercraft c) physical damage coverage is provided on an actual cash value basis d) perils are insured on an open-peril basis, providing the insurer will pay for direct and accidental loss to the property insured.
c) tools 50 feet away from the building
All of the following types of property are covered by a standard builders risk form EXCEPT: a) temporary structures b) machinery that will be permanently attached to the building c) tools 50 feet away from the building d) the building itself
Indirect loss
An additional loss that results from a direct loss of property is called a/an
b) Cuba the policy must provide coverage in any state of the US and Canada
An automobile policy, in addition to providing coverage to the insured while within the state of Louisiana, must provide coverage for the insured while operating the vehicle in all of the following places EXCEPT: a) hawaii b) cuba c) canada d) alaska
b) foreign foreign is in different state. domestic is in domiciled state. alien is in another country.
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurers classification in Wyoming a) unauthorized b) foreign c) alien d)domestic
$14,000 The limit is not more than $5,000 per person, per accident
An insured has $5000 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 $7000 for the insured, $4000 for the first passenger and $8000 for the second passenger. How much will the policy pay under medical payments coverage?
d) Nothing the personal property replacement cost endorsement excludes property such as art and antiques
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 insureds home, what will the insured receive on the claim under that endorsement? a) 70% of replacement cost b) 80% of the replacement cost c) 100% of the actual cash value d) nothing
b) $6000 would be paid under the other-than-collision coverage
An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered? a)this would not be a covered loss b) $6,000 would be paid under other-than-collision coverage c) $3,000 would be paid under other-than-collision, $3000 would be paid under collision d)$6000 would be paid under collision coverage
Aleatory In an aleatory contract, unequal amounts are exchanged between payments and benefits.
An insured pays $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for covered loss. What characteristic of an insurance contract does this describe?
All of the expense up to the Coverage D limit
An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insureds home is severely damaged by fire, the family moves into an apartment. Te largest apartment available in the area has two bedrooms. So the insureds sister has to stay at a motel. How much will the HO-3 form pay for these additional living expenses?
6 months
An insurer has just cancelled an insured policy. How long does the insurer have to explain this cancellation?>
$25,000
Andy the producer violates the insurance code very intentionally, in order to substantially increase his commissions. How much would he likely be penalized?
b) apparent apparent authority (known as perceived authority) is the appearance or assumption of authority
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? a) assumed b) apparent c) express d) implied
c) automobiles held for sale automobiles held for sale are among the exclusions in the BPP form.
Business personal property coverage form covers all of the following EXCEPT: a) machinery that is not permanently installed b) stock c) automobiles held for sale d) furniture and fixtures
No because the claim results from copyright infringement and is not in an advertisement. Because the copyright infringement was in a product and not an advertisement, the coverage is specifically excluded.
Erroneous Publishing copied all the material from Angel Inc's book. The only changes made by Erroneous were to rename the title and chapters, put a different cover, 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?
Coercion These are all considered unfair trade practices, which are major violations that can lead to heavy penalties. Coercion is when the bank won't give you an auto loan unless you agree to buy auto insurance from them
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as: a) rebating b) misleading advertising c) defamation d) coercion
a) all reasonable costs if the debris was caused by a peril that is insured against, the reasonable cost of debris removal is paid by the insurer
How much is covered for debris removal under the HO property additional coverages a) all reasonable costs b) 90% of the total cost of clean up c) everything after $200 deductible d) nothing, unless added by endorsement
Ancestry
If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information except the applicants....
The customers associates, friends, and neighbors provide the reports data.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
d) Declarations the insuring agreement is the part of the policy structure that describes the insured perils and the method of indemnification
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 a) insuring agreement b) conditions c) exclusions d) declarations
Limited to covering a servants property while at the insured location. Coverage C is limited to covering property owned by a guest or servant while the property is at the insured location. Under a homeowners policy, the property would be covered the same while on or off the premises.
Under the dwelling policy, Coverage C - personal property is:
c) must be informed of the source of the report
Under the fair credit reporting act, individuals rejected for insurance due to information contained in a consumer report a) must be advised that a copy of the report is available to anyone who requests it b) may sue the reporting agency in order to get inaccurate data correct c) must be informed of the source of the report d) are entitled to obtain a copy of the report from the party who ordered it
d) To provide disclosure to consumers regarding the use and costs of those parts The purpose of this law is to regular the use of aftermarket crash parts by requiring disclosures
What is the purposes of the regulation on aftermarket crash parts? a) to protect consumers from unfair trade practices b) to provide practical options to repair facilities c) to protect insurers from fraudulent claims for using non original equipment manufacturers parts d) to provide disclosure to consumers regarding the use and costs of those parts
c) personal liability Coverage E is personal liability coverage
What type of coverage is Coverage E in homeowners policies? a) loss of use b) personal property c) personal liability d) additional coverage
Underinsured motorist.
What type of coverage protects the insured in an accident caused by a driver with insufficient coverage?
b) renewal dates Insuring agreement lists the parties to the contract, effective and renewal dates, the description of coverage provided, and perils.
What type of information would be found in a policy's insuring agreement ? a) insurers address b) renewal dates c) location of premises d) policy limits
Absolute Any conduct that is inherently dangerous imposes absolute liability.
What type of liability would a person who owns a swimming pool have?
When the injured worker is unable to earn wages equal to what they earned before the injury
When is an employee entitled to rehabilitation services under Workers Compensation?
d) employees are insureds The employees as insured endorsement will provide the insureds employees additional protection while using a vehicle not owned, hired, or borrowed for the insured business.
Which endorsement under the commercial auto policy provides the insureds employees additional protection while using a vehicle not owned, hired, or borrowed for the insured business?
d) reinstatement of limit the reinstatement of limit condition states that payment of any claim will not reduce the limit of insurance, except in case of total loss on a scheduled item. In this case, the insurer will cancel the specific coverage and refund any unearned premium
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? a) legal action against the insurer b) privilege to adjust with the owner c) transfer of rights of recovery d) reinstatement of limit
Aleatory
Which of the following best describes the concepts that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?
An oriental rug in an on-premises apartment Homeowners coverage does not apply to animals, cars or property of those who pay to be at your house. It does provide up to $2500 for loss of landlords furnishings
Which of the following could be covered by an HO policy?
a) damage to the dwelling caused by lava or dust from a volcanic eruption an HO-3 covers losses on an open peril basis. An HO-2 covers losses on a named peril basis. Both forms cover damage to the dwelling caused by lava or dust
Which of the following examples of losses paid under an HO3 also would be paid under an HO-2 homeowners policy? a) interior damage caused by water seeping under the shingles of the roof b) damage to the dwelling caused by lava or dust from a volcanic eruption c) damage to the dwelling caused by the insured when moving furniture d) accidental scorching caused when a hot iron is placed upon a built-in counter top
a) vandalism the 4 additional coverages offered by builders risk form are debris removal, fire department services, pollutant cleanup and removal and preservation of property
Which of the following is NOT one of the available additional coverages in the builders risk form? a) vandalism b) debris removal c) fire department service charge d) pollutant cleanup
c) comparative negligence
Which of the following is a statutory defense? a) intervening cause b) contributory negligence c) comparative negligence d) assumption of risk
Sound reproduction equipment permanently installed in the covered auto Sound reproduction equipment is covered if installed by the manufacturer or installed later where the manufacturer would have installed it
Which of the following is covered under the physical damage coverage of a personal auto policy?
Effective hour that coverage commences
Which of the following is not included in a binder or temporary contract for a Standard Fire Policy?
All of the above: -Computer hardware that is specifically scheduled. -Extra expense the insured incures to continue the business following a loss -Data processing media including magnetic tapes, punch cards, and discs
Which of the following may be covered by electronic data processing coverage form under an inland marine policy
a) breakage of glass breakage of glass is included in the DP2 and DP3 only
Which of the following other coverages is NOT included in the basic form dwelling policy? a) breakage of glass b) removal coverage c) personal property temporarily away from the insured premises d) tenants improvements, alterations, and additions
d) any of the above the requirement of the insurer giving 30 days notice of nonrenewable does not apply to any of the above situations
Which of the following reasons for non renewing an insurance policy allows the insurer to non renew with giving notice of their intentions less than 30 days before the expiration date of the policy? a) in the case of nonpayment of premium b) if it is a commercial property policy c) in cases of fraud by the insured d) any of the above
FTC - Federal Trade Commission
Which of the following regulatory authorities participated in creating the national Do not call registry
This coverage must be written as part of farm coverage Mobile agriculture machinery and equipment coverage may also be written on a separate stand-alone policy
Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage
Coverage A is for all-risk perils, and Coverage C is for the broad form perils All risk coverage applies to Coverages A and B only
Which of the following statements is true concerning the special form dwelling policy?
c) a premium auditor has the right to examine the insureds compensation records at the end of the policy period to determine the actual premium basis because the initial premium calculation is based on estimated payrolls, a premium auditor may inspect actual payrolls paid to ensure that adequate premiums are being paid
Which of the following statements is true regarding the premium computation for workers compensation insurance? a) the insured pays a guaranteed premium based on an estimated value of the annual income received b) the premium is set at the beginning of the policy period and will not change c) a premium auditor has the right to examine the insureds compensation records at the end of the policy to determine the actual premium basis d) the premium basis for workers compensation insurance varies by the type of industry in which the insured is involved
d) 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 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) undercutting b) twisting c) slandering d) defamation
c) intentional tort insurance will not cover losses caused by intentional acts of the insured
Which of the following would NOT be covered by HO liability insurance? a) first aid expenses b) property damage c) intentional tort d) bodily injury
