P&C Guarantee Exam Questions
An uninsured motorist
A driver who has an auto policy with limits of liability lower than the required by state law would be considered
Package Policy
A farmowner policy is usually what type of policy
The golfer's homeowners liability coverage
A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass is paid for by
An additional 5% of the policy limit may be paid for debris removal
A house insured with a homeowners policy has been blown off its foundation by a tornado. It must be demolished and removed so a replacement house can be built. Which of the following is true about debris removal?
$5000
A producer continues to use an unapproved trade name for 10 days after being notified by the Commissioner to stop using the unapproved name. What is the maximum fine the producer may face?
Higher limits of coverage for fire arts items
A scheduled personal property endorsement will be used to insure
The appliance was manufactured in the United States
A small appliance manufacturer in this state provides products around the globe. A customer is Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?
Misrepresentation
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends he knows would be possible. Which term describes what the agent has done?
The coinsurance penalty applies
Due to appreciation, the amount of insurance on a business is less than 80% of its actual value on the date of the loss. What is true?
Damages claimed by third parties
Employers liability coverage under a workers comp policy includes
90 days prior to expiration
How long is the period of time in which a licensee must renew his or her license?
There is no additional premium
If an insurance policy has the additional coverage provision, how does it affect the policy premium?
Stop committing a particular violation
If the Commissioner issues a cease and desist order, that means the insurer must?
Without limit
Medical benefits under workers compensation statutes are provided
Indemnity
Restoring an insured financially after a claim is known as
Physical damage on a customer's auto
The Garage Coverage Form is written to cover the insurance needs of an insured in the business of selling, repairing, servicing, or storing automobiles. Which of the following coverages are not included in a garage policy?
Comparative Negligence
The statutory law defense that reduces injury and awards for damages proportionately when the plaintiff and defendant are both responsible is called
Up to $1500
What amount of coverage is provided on HO policies for watercraft?
No benefit to bailee clause
Which of the following clauses excluded assignment or granting policy provisions to any person who repairs property for a fee?
DP-2 DP-3
Which of the following dwelling policies require insurance equal to at least 80% of the replacement value of the dwelling at the time of loss in order to provide replacement cost coverage?
Electric equipment required for the normal operation of the car
Which of the following is covered by auto other- than - collision (comp) coverage
Fire caused by an earthquake
Which of the following is covered under a dwelling policy?
Convenience stores
Which of the following is eligible for a business owners policy?
Real property
Which of the following types of property is NOT moveable?
Defintions
Which part of the policy clarifies the terms that are used throughout the policy?
One party accepts the exact terms of the other party's offer
Which statement best describes agreement as it relates to insurance contracts?
Elimination
all of the following are ways to handle risk EXCEPT
Employee theft
the commercial crime coverage that would cover losses resulting from the theft of money, securities and other property by employees is
Loss payable clause
which of the following covers the interest of a secured lender in personal property?
A vehicle purchased 90 days ago
which of the following would NOT be eligible for coverage under a personal auto policy?
Promptly hire an adjuster to evaluate the property of damage
According to the Insured Duties after a loss provision in homeowners policies, in the event of a loss, the insured must do all except?
Occupation
Among the applicants in the same class and life expectancy, which of the following factors can be used to influence premium rates?
Immediately notify the insurer when the insured has filed for bankruptcy
Which of the following duties is NOT required of the insured in the event of a loss?
Medical payments to an insured
Which of the following exposures is NOT covered under a homeowners policy?
The company will reimburse the insured for all loss of earnings
Which of the following is FALSE concerning liability coverage of a business auto policy?
Specific
Which of the following is NOT a cause of loss form for commercial property coverage?
It is a standard policy
Which of the following is NOT a characteristic of a difference in conditions policy?
The Jones Act
Which of the following is a federal act that covers crews of ships the same as railroad workers?
Symbol 7
Which of the following symbols in a business auto policy indicates that coverage for newly acquired vehicles applies if the insurer already covers all autos owned by the insured?
Unoccupied
Which of the following terms best describes the home of an insured who goes on vacation for 3 months?
Nonrenewal
Which of the following terms means termination of an insurance policy at its expiration date by not offering a policy continuation or replacement?
A full time maid
Which of the following would be eligible for Homeowners Coverage F - Medical Payments in the event of injury at the insured's premises
One party accepts the exact terms of the other policy party's offer
Which statement best describes agreement as it relates to insurance contracts
$0
You open your locked safe this morning and find $4000 worth of property is missing with no signs of forced entry. How much does your safe burglary policy pay?
60 Days
An agent suspects that his insurer is committing insurance fraud. Within how many days of that discovery must the agent report the fraud to the Department of Insurance?
Twisting
An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change, or surrender a life insurance policy or annuity has committed an illegal practice known as
Sharing commissions with another agent
An agent's license may be suspended or revoked for all of the following reasons except
$1100
An insured and his spouse were traveling down an icy road and hit a sign, accumulating $1350 damage to their car. They have a $250 deductible. They already collected on a $1500 claim earlier this year. How much will they collect on this claim ?
$10000
An insured has a personal umbrella with $2000 self insured retention SIR. Assuming no other policy is involved, how much would the umbrella policy pay after a $12000 personal injury claim
$125,200
An insured has an automobile policy with limits 100/300/50 and a deductible of $1000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded $125,000 for his injuries and $25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1200. The total payment made under the insured's policy is
$1050
An insured rents out a bedroom in his residence for $50 per week. The residence is badly damaged by fire. During the weeks the insured pays $900 in rent for a short term apartment, and the renter is forced to find other accommodations. Disregarding any extra expenses would an HO-3 pay under Coverage - D?
$50000
An insured was judged at fault in an automobile accident. He has the 100/300 BI coverage. Three other individuals were injured in the vehicle insured. They were awarded damages of $150000 $75000. What amount if any was not covered by his insurance policy?
30 days
An insured was told to leave his home because of endangerment by a brush fire that was out of control. The insured was able to have his personal property moved into storage away form the endangered area. For how long will the homeowners policy provide coverage for the stored property?
Section II with no deductible
An insured's child ran into a neighbor's planter on his bicycle and broke the planter and ruined the plants. The cost to replace the plants was $100. Which section of the insured's homeowners policy would pay?
The loss of income for the time the diner was closed
An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took four weeks for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What would be paid?
Misrepresentation
Guaranteeing future dividends is considered to be an unfair or deceptive act known as
A strawberry patch owned by the insured
Homeowners policies consider all of the following insured locations EXCEPT
$1500
Homeowners policies limit the amount of property and liability coverage available for boatowners. How much coverage is provided in the homeowners policy form to watercraft, accessories, equipment, and trailers?
One indivisible premium
How is the premium paid for the businessowners policy
The insurer will be reimbursed for the excess costs by the NFIP
If the premiums collected by an insurer participating in the WYO flood program are insufficient to cover losses, which of the following would be true?
Personal
In reference to insurable interest, which of the following is NOT an element of insurable risk?
The amount of the loss or the limits as stated in the policy, whichever is less
In the event of a loss, the most the insurer will pay is
Policy
Policy limits are the maximum amount an insured may collect, or for which an insured is protected under the terms of use
The type of construction
Rates for earthquake coverage in property policies are generally determined by which of the following?
Premises
The commercial general liability Coverage Part A- Bodily Injury and Property Damage provides coverage for which of the following
Replacement Cost Basis
The equipment breakdown coverage form values on a/an
Absolute Liability
The obligation to compensate injured workers without regard to fault or negligence is known as?
Court costs assessed against the insured in a suit
The supplementary payments section of the commercial general liability policy would cover
A loss valuation method
The term "functional replacement cost" refers to
Business auto policy
Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under a
While it is any residence premises occupied by an insured
Under Coverage C, and at the request of an insured, personal property of a guest or residence employee is covered
The property repair or replacement is complete
Under a HO-2 policy, the insurer will pay no more than the actual cash value of the property damage until
65%
Under the workers comp act, what percentage of the employees wages will the surviving spouse with 2 children receive in the event of the employee's death
Intervening cause
What doctrine may reduce or bar the recovery from a defendant if another event, beyond the control of the defendant, sets in motion a new chain of events causing injury or damage?
A warranty
What guarantees that the information explained in the insurance contract is true
The description of the duties and obligations of the insured
What information is found in the conditions part of an insurance policy?
Property of others in his custody
What is a bailee responsible for?
Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract
What is an insured contract?
Intrastate truckers operate only within the boundaries of a single state; interstate truckers travel across state line
What is the difference between intrastate and interstate truckers?
To remove the exclusion of losses resulting from ordinances or laws
What is the purpose of the ordinance or law coverage endorsement?
24 Hours
What is the waiting period for transportation expenses coverage for a loss other than theft of a covered vehicle?
Open Peril
What kind of coverage does Form DP-3 Provide?
Insuring Agreement
What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured
Per occurance
What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident
To establish financial responsibility requirements for interstate motor carriers
What was the purpose of the Motor Carrier Act of 1980?
For the life of the policy
When a named insured files a form with the application selecting a different level or absence of Uninsured Motorist coverage, this selection is valid
Controlled business
When an agent obtains an insurance license for the primary purpose of writing insurance for himself , his spouse, or his business, this is called?
In the state the workers compensation law itself
When reviewing a standard workers comp and employee liability policy, the limits of coverage are described in Part One of the policy. The dollar limits on benefits provided are stated
HO -5
Which homeowners form insures both buildings and personal property on an open peril basis?
HO-5
Which homeowners form provides open peril coverage coverage for dwelling (Coverage A) and contents (Coverage C)?
It grants the insurer the right to make inspections regarding issued insurance
Which is true regarding inspection and surveys as a common policy condition?
Business auto coverage
Which of the following commercial auto coverages provides protection for the most commercial auto exposures except truckers, garages, and motor carriers?
Arbitration
Which of the following conditions is NOT included for farm liability in addition to the common policy conditions?
Limits of liability
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions?
1
Business auto coverages apply only to those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol affords the broadest coverage?
Collect premium for in force policies and explain coverages to clients that have existing policies written by her father
Chris, who is unlicensed, works part time in her father's insurance agency. She may perform all of the following except?
Suits alleging infringement of a copyright
Coverage B - Personal and Advertising Injury Liability responds to claims arising from
Other than perils, the difference in the three DP forms is in coverage provided. Which of the following coverage options is covered by the DP-2 and DP-3 but not DP-1?
Coverage E - Additional Living Expense
Within 90 days
an insured has the scheduled property endorsement attached to his homeowners policy. If the insured acquires new works of art, when must the insurer be notified for the new works of art to be covered under the endorsement?
Every 31 Days
how often must organizations consult the National Do Not Call Registry?
