P&C Simulation Questions
physical damage
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT - physical damage - uninsured motorist - no-fault medical payments - liability
claims-made form
A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called: - bodily injury/property damage form - occurrence form - premises coverage - claims-made form
A licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible.
A licensee serving in the military is unable to fulfill her continuing education requirement. What would the licensee have to do to renew the license?
morale
A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard? - moral - legal - physical - morale
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours cannot be carried over.
A producer has successfully completed 52 hours of CE. How many hours can the producer apply to her current reporting period, and how many hours can she carry forward to the next reporting period?
there is no coverage
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
Peril
A tornado that destroys property would be an example of....
trailer interchange coverage
A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession?
No the driver had taken reasonable measures to protect the property by locking the truck
ABC Trucking hauls products for ACME Inc. as a contract carrier. On one shipment, the driver stopped at a truck stop for lunch. Leaving the truck in the parking lot, he made certain that the truck was locked before leaving it. Upon returning to the truck, he discovered that someone had broken into the truck and stolen the cargo. Is ABC legally liable for this loss?
costs the insured incurred in hiring an attorney
All of the following are supplemental payments found in liability policies EXCEPT - reasonable expenses incurred by the insured - limited amounts for bail bonds and other bonds related to a claim - costs the insured incurred in hiring an attorney - all expenses and defense costs incurred by the insurer
it's imposed on defendants engaged in hazardous activities
All of the following statements describe the concept of strict liability EXCEPT: - it's imposed on defendants engaged in hazardous activities - claimants may need to provide proof that a product defect caused an injury - it's imposed regardless of fault - it's applied in product liability cases
Yes, none of the exclusions will apply
An advertising company has its annual holiday party for employees and customers, after which a customer who had too much to drink is involved in an auto accident. Occupants of the other car involved in the accident sue the company for serving the customer too much alcohol. Will the company's businessowner's policy provide coverage? - no, accidents outside the company premises aren't covered - no, liquor liability is exclused - yes, none of the exclusions will apply - yes, employer liability obligates the company to pay
combined single
An insured is driving her car through a residential area when she loses control and crashes into a neighbor's front porch. The neighbor, who was sitting on the porch, is injured. The insured's liability policy has a limit of $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does the insured have? - split - aggregate - per occurence - combined single
higher limits
An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay? - only the limits specified in the policy - higher limits - lower limits - the insurer will not pay for out-of-state accidents
$30,000
An insured's building has an ACV of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? - $0 - $30,000 - $32,000 - $40,000
10 years
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to - 3 years - 5 years - 10 years - 12 years
all-risk
Crime insurance is usually written on what basis?
business property while on the residence premises
Homeowners policies provide coverage for - losses caused by off-premises power failure - the land under the residence - property of tenants, roomers, boarders not related to any insured - business property while on the residence premises
every 5 years
How often must the commissioner examine rating organizations?
within 30 days
How soon after the due date should the insurer pay the agent appointment fees? - immediately - within 10 days - within 30 days - within 60 days
$3,000
In addition to income benefits, how much will a dependent survivor receive as a funeral benefit for a deceased employee covered under Workers Comp?
2
Maximum number of boarders per unit that would be allowed in the homeowners policy?
$5,000 for each violation
Once it has been reasonably proven that a person has knowingly the Insurance Code regarding unfair methods of competition, the department may impose a civil
do not allow private insurers to be licensed to write workers comp coverage
States with monopolistic state workers comp funds - provide workers comp insurance through managed risk plans - require all employers in their state to purchase workers comp insurance regardless of their financial capacity - sell workers comp insurance through private insurers that are in the state and receive kickback for all policies sold on an annual basis - do not allow private insurers to be licensed to write workers comp coverage
time element
The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? - occurrence - direct damage - time element - claims made
declarations
The part of the property policy that shows the amount of insurance, premium, and policy term is the
exclusive remedy
The provision in PA workers compensation that requires an employer to pay compensation, without regard to negligence, according to a compensation schedule set by law, and for the injured-employee to agree to limit the employer's responsibility to the amount of workers compensation to which he or she is entitled, is called
$250,000
The regular national flood insurance program would insure an eligible single-family dwelling for up to - $150,000 - $200,000 -$250,000 - $100,000
MCS-90
To comply with requirements for public liability under the Motor Carrier Act of 1980, which endorsement is added to motor carrier coverage form? - MCS-80 - Garage - MCS-70 - MCS-90
property coverage
Under Section I, homeowners insurance must include
the insurer does not have the right to inspect the insured's property and operations
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 - the insurer does not make safety inspections for the insured - the insurer does not guarantee that conditions are safe or healthful - the insurer does not guarantee that the insured is meeting all required safety regulations
$80,000
What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000.
encourage insured to insure the property closer to its full value
What is the purpose of the coinsurance clause found in property insurance policies?
a cost bond
When Mary decided to sue her neighbor for damages to her yard, she was told to get a bond that would guarantee she would be able to pay court costs and resulting damages if she loses the case. What kind of bonds is this?
department of insurance
Which of the following authorities monitors the financial strength of insurers? - department of insurance - national association of insurance commissioners - financial industry regulatory authority - insurance companies
federal motor carrier safety administration
Which of the following is the federal body that regulates truckers who travel across state lines? - federal motor carrier safety administration - motor carriers commerce agency - truckers and trade commission - federal trade commission
it's an additional coverage
Which of the following is true regarding the fire department service charge under the builders risk form? - it's an automatic coverage for $500 - it's not available in this form - it's a high-deductible endorsement - it's an additional coverage
replacement cost
Which of the following is used in the formula for calculating the ACV of a property? - replacement cost - stated value - fair market value - agreed value
fair credit reporting act
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial info? - unfair trade practices law - the guaranty association - consumer privacy act - fair credit reporting act
calls based from outside the US
Which of the following would NOT be considered an exception to the National Do Not Call List? - calls which are not commercial or do not include unsolicited ads - calls by or on behalf of tax-exempt nonprofit organizations - calls based from outside the US - calls for which the consumer has given prior written permission
the state
Which of the following would determine the minimum and maximum limits for FAIR plan rates? - the federal government - the NAIC - individual insurers - the state
apparent
Which type of agent authority is also called "perceived authority"?
the owner of a car the insured borrows
Who is NOT an insured for liability on a BAP? - the owner of a car the insured borrows - anyone using a covered auto with permission - anyone liable for the conduct of the insured - the named insured in any covered auto
temporary worker
Who is NOT considered an employee in a commercial general liability policy? - temporary worker - leased worker - full-time worker - part-time worker
physical damage coverage
all of the following are parts of a personal auto policy EXCEPT: - duties after an accident or loss - liability coverage - physical damage coverage - medical payments coverage
Drive other car coverage
an employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?
coverage that will permit the insured to continue in business w/o interruption following a property damage loss
the extra expense coverage form provides
the sole proprietor of the business and his/her family members
the individual named insured endorsement under a commercial auto policy provides coverage for which of the following? - sole proprietor of the business and his/her employees - sole proprietor of the business and his/her spouse only - sole proprietor of the business and his/her family members - sole proprietor of the business only
apply to injuries of any guests/visitors
the insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will
insuring agreement
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...
theft
under coverage form I - lesses of safe deposit boxes, securities are only covered in the event of
$25
what is the basic limit for costs incurred at the place a vehicle is disabled provided by towing and labor costs endorsement? -$25 -$50 -$75 -$100
negligence
what other term is used to refer to unintentional torts?
on the date construction starts
when does the coverage begin under the builders risk form?
attachment bond
which bond is required by a court before allowing one to take assets of another to satisfy a legal obligation?
commissioner
which of the following authorities is authorized to issue a temporary insurance producer's license? - federal insurance licensing association - State Insurance Board - Commissioner - NAIC
issue policies
which of the following does a producer NOT have the authority to do? - negotiate contracts of insurance - issue policies - deliver policies - solicit insurance contracts
individual named insured
which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle? - hired autos specified as covered autos you own - individual named insured - drive other car - additional insured - lessor
8 am to 9 pm
According to telemarketing sales rules, what are the permissible calling hours for telemarketing calls?
the consumer directs the licensee not to disclose the consumer's nonpublic personal financial info to a third party
According to the privacy of consumer financial info regulation, if a consumer decides to opt out, this means - the consumer has declined the nonforfeiture options available in the policy - the consumer directs the licensee not to disclose the consumer's nonpublic personal financial info to a third party - the consumer gives the licensee an unconditional right to share the consumer's nonpublic financial info with a third party - the consumer has chosen not to participate in insurance contracts with the insurer
The dwelling must be owner occupied
All of the following are characteristics of the dwelling policy EXCEPT: - dwellings up to four family units are eligible - The dwelling must be owner occupied - coverage includes the dwelling only, contents only, or both - incidental occupancy of limited service-type exposure is permitted
premiums
All of the following are examples of risk retention EXCEPT: - self-insurance - premiums - deductibles - copayments
up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident
All of the following are supplemental payments included in the liability section of a personal auto policy except: - up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident - up to $200 a day for loss of earnings due to attendance of hearings/trials - premiums on appeal bonds in any suit the insurer defends - up to $250 for bail bonds required because of a covered accident
HO-6
An insured condo unit owner wants to purchase fire and extended coverage for personal property and liability coverage for himself and his family members. He should purchase - HO-2 - HO-3 - HO-4 - HO-6
$1,000
An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay?
$50,000 (first limit = injuries to one person, second limit= all injuries if more than one person is injured in a single accident, third limit = property damage)
An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A" $15,000 "B" $30,000 "C" $35,000. How much will her insurer pay in total for all injuries? - $50,000 - $105,000 - $25,000 - $30,000
$6,000 from 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? - $3,000 from other-than-collision, $3,000 from collision - $6,000 from collision coverage - this would not be a covered loss - $6,000 from other-than-collision coverage
Collision
An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverages would pay for damage to the insured's automobile? - comprehensive coverage - collision - other than collision - property damage liability coverage
loss sustained form
In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period?
Bodily Injury
Under farm liability, Coverage H includes: - loss of use - medical payments - other farm structures - bodily injury
Injury incurred while the person was under the influence of drugs or alcohol
Under the Motor Vehicle Financial Responsibility Law, First Party Benefits would NOT be denied for which of the following injuries? - injury incurred while attempting to elude apprehension by a law enforcement official - injury incurred during the commission of a felony - injury that was intentionally self-inflicted - injury incurred while the person was under the influence of drugs and alcohol
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 - are entitled to obtain a copy of the report from the party who ordered it - must be advised that a copy of the report is available to anyone who requests it - may sue the reporting agency in order to get inaccurate data corrected - must be informed of the source of the report
provided by the insured's policy on an excess basis
Under the personal auto policy, liability for the bodily injury resulting from the insured's use of a nonowned auto is - shared on a pro rata basis - provided by the insured's policy on a primary basis - provided by the insured's policy on an excess basis - not covered
transfer of rights and duties under the policy
Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company? - transfer of rights and duties under the policy - subrogation - reassignment and modification - changes
an oriental rug in an on-premises apartment
Which of the following could be covered by an HO policy? - property of a tenant not related to the insured - an oriental rug in an on-premises apartment - birds, fish, and animals - a sports car kept in an attached garage
proof of carelessness
Which of the following is NOT one of the four primary elements considered in establishing negligence? - proximate cause - legal duty - standard of care - proof of carelessness
theft of a renter's lawnmower used to service the premises
Which of the following would most likely NOT be covered under Coverage A in the dwelling policy? - outdoor personal property of the insured - supplies used for repair of the dwelling - fire damage to building material on the premises - theft of a renter's lawnmower used to service the premises
having all employees complete continuing education courses once every 2 years
All of the following are licensing requirement for a business entity EXCEPT - applying for a license in the same lines of authority as held by licensed designees - having all employees complete continuing education courses once every 2 years - demonstrating general fitness, competence, and reliability - maintaining on staff at lease 1 licensed person in good standing
suggesting negotiations in settling the claim
All of the following are unfair claims settlement practices EXCEPT: - failing to adopt and implement reasonable standards for settling claims - failing to acknowledge pertinent communication pertaining to a claim - suggesting negotiations in settling the claim - refusing to pay claims without conducting a reasonable investigation
uninsured motorist coverage
In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for: - towing coverage - comprehensive (other than collision) coverage - collision coverage - uninsured motorist coverage
Safe Depository or Direct loss
Jim owns and operates the "No-tell Motel". He wishes to purchase a crime coverage that will pay for the loss of a customer's property left in the motel's safe for safe-keeping, whether or not the motel is legally responsible for such loss. He should purchase - Safe Depository Liability - Liability for Guest's Property Premises Form - Liability for Guest's Property Safe Deposit Form - Safe Depository or Direct loss
Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds
Supplementary payments on a CGL provide all of the following except: - the cost of bonds to release attachment - Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds - $100 in gasoline costs by the insured driving a witness to and from court - pre-judgment and post-judgment interest
All of these are covered
which of the following may be covered by electronic data processing coverage form under an inland marine policy? - computer hardware that's specifically scheduled - extra expense the insured incurs to continue the business following a loss - data processing media, including magnetic tapes or paper tapes, punch cards and discs - all of these are covered
resident employees
which of the following persons may be covered under farm Coverage J? - resident employees - first named insured - additional insureds - farm employees
special and general
2 types of compensatory damages? - pure and speculative - tort and general - normal and punitive - special and general
seaworthiness admitted
A company wants its cargo policy to provide coverage for losses caused by crew members. Which of the following is a clause that would NOT provide this type of coverage? - seaworthiness admitted - theft, pilferage, and nondelivery - malicious damage - dangerous drugs
blanket
A policy that insures all property at multiple locations for a single amount is referred to as: - reporting - special - specific - blanket
drive other car coverage
An employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use? a) Bobtail coverage b) Rental car coverage c) Personal injury protection d) Drive other car coverage
$1,000 minus the deductible
An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay - $500 - $1,000 - $500 minus the deductible - $1,000 minus the deductible
accident insurance, because it pays medical expenses regardless of fault
In a personal auto policy, the medical payments coverage is similar to - accident insurance, because it has the same limits - bodily injury coverage, because it pays the insured's doctor bills - bodily injury coverage, because it provides legal protection if the insured causes injuries to others - accident insurance, because it pays medical expenses regardless of fault
department of insurance
In an insurer appoints a producer, which authority must be notified?
coverage by endorsement
In dwelling policies, automatic increase in insurance is: - coverage for newly acquired property - coverage by endorsement - automatic coverage - coverage without additional premium
up to $500 a day for lost earnings and $2,000 for the cost of bail bonds
Supplementary payments on a CGL provide all of the following EXCEPT - the cost of bonds to release attachment - up to $500 a day for lost earnings and $2,000 for the cost of bail bonds - $100 in gasoline costs by the insured driving a witness to and from court - pre-judgment and post-judgment interest
Send or deliver a "Notice of Cancellation" at least 60 days prior to the effective date of cancellation and state the reason for the cancellation.
When an insurer cancels, midterm, a commercial property or casualty insurance policy for an allowable reason, they must a) Send or deliver a "Notice of Nonrenewal" 30 days prior to the effective date of cancellation. b) Send or deliver a "Notice of Cancellation" at least 60 days prior to the effective date of cancellation and state the reason for the cancellation. c) Refund unearned premiums prior to the effective date of cancellation. d) None of the above
A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
Which of the following statements is INCORRECT? 1. A licensee is barred from charging a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business. 2. No insurance producer may charge a fee for the completion of an application for a contract of insurance. 3. The fee charged by the licensee must be disclosed in advance in writing to the person and must be reasonable in relationship to the services provided. 4. A licensee may charge a fee in addition to a commission to a person for the sale, solicitation or negotiation of a contract of insurance for commercial business.
a house
Which of the following would NOT be classified as personal property for insurance purposes? a) Equipment b) Furniture c) A house d) A vehicle
Rented to a neighbor for use as a private garage
in a dwelling policy, which of the following other structures would be covered? - used by the insured in which to operate a retail business - used by the insured to house a manufacturing operation - rented to a neighbor for use as a private garage - used as part of a farming operation
open peril coverage on the dwelling and broad form coverage on personal property
the HO-3 homeowners policy provides: - open peril coverage on the dwelling and broad form coverage on personal property - open peril coverage on the dwelling and basic form coverage on personal property - basic coverage for the dwelling and broad form coverage for personal property - all-risk coverage for both the dwelling and personal property
judgment
using an air-cooled engine, a proposed insured has developed a new, experimental aircraft. If the inventor applies for liability insurance, what rating type will the insurer most likely use? - schedule - merit - judgment - class
making comparisons between different policies
which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? - exaggerating the benefits provided in the policy - stating that the competitors will arbitrarily increase their premiums each year - making comparisons between different policies - stating that the insurance policy is a share of stock
failure to promptly settle a claim when liability has been clearly established
which of the following is an example of an unfair claims settlement practice? - making claim payments which clearly indicate under which coverage payment has been made - using arbitration when the insured cannot reach agreement - failure to promptly settle a claim when liability has been clearly established - denying coverage after a reasonable investigation has been conducted
per person
which of the following limits, shown in the declarations of a policy, applies to medical expenses? - per incident - per person - per occurrence - per injury
none
Damage to insured property caused by earth movement or earthquake is covered under which of the following homeowners forms? a) None b) HO-2 c) HO-3 d) HO-5
$5,000 for each violation
Once it has been reasonably proven that a person has knowingly
apparent
which of the following types of agent authority is also called "perceived authority" - implied - fiduciary - apparent - express
General liability written with an aggregate limit
which policy does NOT contain an automatic reinstatement provision? - homeowners - general liability written with an aggregate limit - business auto liability - personal auto liability w/ split limits
the amount negotiated by the insured
Under a dwelling policy, which of the following is NOT a factor in determining a loss? a) The amount negotiated by the insured b) The policy limit c) The amount reflecting the insured's interest in the property at the time of loss d) The amount necessary to repair or replace the property
2 weeks
Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to a) 2 weeks. b) 1 month. c) 90 days. d) 1 week.
when being carried or towed by a covered auto
Under the business auto coverage form, mobile equipment is covered for liability insurance - when coverage is written as Symbol 1 - when being carried or towed by a covered auto - on an excess basis - when listed on the declarations
When being carried or towed by a covered auto.
Under the business auto coverage form, mobile equipment is covered for liability insurance a) When being carried or towed by a covered auto. b) On an excess basis. c) When listed on the declarations. d) When coverage is written as Symbol 1.
The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first.
Under the provisions of the business income coverage form, all of the following are true EXCEPT a) The insured is reimbursed for payroll that continues after the loss begins. b) The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first. c) If the insured and insurer are unable to come to agreement as to the value of the loss, either party may make a written demand for an appraisal. d) The insured agrees to resume all or part of operations as quickly as possible.
If a consumer does not sign and return the notice of disclosure within 30 days
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? a) Under no circumstances; nonpublic personal financial information cannot be shared with third parties b) If a consumer decides to opt out c) If a consumer does not sign and return the notice of disclosure within 30 days d) Whenever it is requested by the Commissioner
$30,000
A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?
mechanical breakdown
A common exclusion found under physical damage to your auto includes:
all
A producer sold an insurance policy. Subsequently, his license was suspended. In this case, how much of the commission will the producer receive? a) 1/2 b) 1/4 c) None d) All
commingling
A producer who fails to segregate premium monies from his own personal funds is guilty of - larceny - embezzlement - theft - commingling
customers property whether or not the insured has been negligent
A unique feature in a bailee form is that it covers - fire and theft losses to the insured's stock held for sale without any deductibles - all loss and has no exclusions - the building occupied by insured whether it is owned or leased - customers property whether or not the insured has been negligent
the surety may cancel the bond so as to avoid having to pay losses and expenses
All are true if a contractor defaults on a performance contract EXCEPT: - the surety will attempt to seek reimbursement from the contractor for any amounts it pays - the surety may cancel the bond so as to avoid having to pay losses and expenses - the obligee may hire another contractor to complete the job and have the surety repay the obligee - the principal's obligations end
Tools 50 feet away from the building
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
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? a) Unfair discrimination b) Errors and omissions c) Fraud d) Defamation
$14,000 (the limit is not more than $5,000 per person, per accident)
An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and 2 passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? - $15,000 - $5,000 maximum for the accident - $5,000 minus the policy deductible - $14,000
$60
An insured has a personal auto policy with both comprehensive (other-than-collision) 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
Contributory Negligence
An insured is driving above the posted speed limit. As he rounds a curve, he crashes into an illegally parked car. This is an example of a) Comparative negligence. b) Vicarious liability. c) No-fault liability. d) Contributory negligence.
loss is not covered
An insured is driving her automobile and strikes a large pothole that causes a flat tire. Which coverage of the insured's personal auto policy will pay for the repair? a) Comprehensive b) Collision c) Transportation expenses d) Loss is not covered.
mutual
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? - reciprocal - nonprofit service organization - stock - mutual
consideration
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) Consideration b) Good faith c) Representation d) Adhesion
Experience
Compared with other drivers in his age group, a driver has had more minor accidents and traffic violations. Which of the following rating types would most accurately reflect the driver's true insurance risk? - special - schedule - experience - class
No, because the claim results from copyright infringement and is not in an advertisement.
Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, 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? a) No, because the claim results from copyright infringement and is not in an advertisement. b) No, because there is no bodily injury or property damage. c) Yes, because the claim is a result of Erroneous products and work. d) No, because this event does not meet the definition of infringement.
hazards
Events or conditions that increase the chances of an insured loss occurring are referred to as a) Exposures. b) Risks. c) Perils. d) Hazards.
reduction
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured also has eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? - transfer - avoidance - retention - reduction
appraisal
Following a property loss that is covered under a businessowners policy, if the insurer and insured cannot agree on the amount of the loss, what method is used to resolve the issue? a) Arbitration b) Adjudication c) No-fault procedure d) Appraisal
physical damage
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT a) Physical damage. b) Uninsured motorist. c) No-fault medical payments. d) Liability.
scheduled personal property endorsement
If the insured owns a watch valued at $10,000, full coverage can be provided on a homeowners policy by purchasing the - special limits of liability endorsement - personal property replacement cost endorsement - blanket personal property endorsement - scheduled personal property endorsement
A specified time
In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within a) 1 year. b) 5 business days. c) 30 days. d) A specified time.
representative of the consumer
Insurance producers that do not have company appointments are considered a/an: - agent - producer - representative of the consumer - managing general agent
12:01 am the day after the application and premium payment are mailed
Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective? a) 12:01 pm on the 5th day after the endorsement request has been mailed b) 5 days after the application and premium payment are mailed c) 12:01 am the day after the application and premium payment are mailed d) 30 days after the application has been accepted
all are exceptions to coverage
Loss of yield by any of the following events would be covered under a Federal Crop Insurance policy except - mismanagement by the insured - theft of crops by the insured - loss of yield because of failure by the insured to use approved farming practices for the area - all are exceptions to coverage
$5,000 for each violation
Once it has been reasonably proven that a person has knowingly the Insurance Code regarding unfair methods of
$5,000 for each violation
Once it has been reasonably proven that a person has knowingly the Insurance Code regarding unfair methods of competition, the Department may impose a civil penalty of - $1,000 for each violation - $2,000 for each violation - $3,000 for each violation - $5,000 for each violation
Fiduciary capacity
Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this? a) Brokering b) Monetary gatekeeping c) Fiduciary capacity d) Financial trust
90%
The 1980 Act requires FCIC to offer one price election that is not less than what percent of the projected market price for the commodity? a) 90% b) 25% c) 100% d) 50%
Company A will pay $16,000; Company B will pay $8,000.
The ABC Corporation has $100,000 of coverage on its building through insurance Company 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? a) Company A will pay $24,000; Company B will pay $0. b) Company A will pay $16,000; Company B will pay $8,000. c) Company A will pay $20,000; Company B will pay $4,000. d) Company A will pay $12,000; Company B will pay $12,000.
$1,000 on silverware
The broad theft coverage endorsement on the dwelling form specifies all of the following limitations EXCEPT a) $1,500 on jewelry. b) $1,000 on silverware. c) $200 on money. d) $1,500 on securities.
Contents are covered open peril on HO-5, and named peril on HO-3.
The difference in the contents coverage on an HO-3 and HO-5 is which of the following? a) Contents are covered for replacement cost on HO-3, and ACV on HO-5. b) Contents are covered open peril on HO-5, and named peril on HO-3. c) Contents are covered open peril on HO-3, and named peril on HO-5. d) Contents are covered for replacement cost on HO-5, and ACV on HO-3.
90 days
The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to...
$160,000
The insured purchased a $200,000 extra expense policy. If the percentages applying to the limit of insurance are 40%, 80%, and 100%, what would be the maximum payable for a 47-day loss? a) $80,000 b) $120,000 c) $160,000 d) $200,000
A written document showing the types and amounts of insurance that have been issued to the insured
What is a certificate of insurance? - A written document allowing the insurer to inspect the insured's books - A written document obligating the insurer to the person to which the insurance was issued - A written document naming the insured's beneficiary - A written document showing the types and amounts of insurance that have been issued to the insured
US and its territories, Canada, or worldwide for private passenger hired autos
What is the business auto coverage territory for?
the SIR (self-insured retention)
What is the deductible of a personal liability umbrella policy called?
they don't change
When a vehicle travels from one state to another, what happens to the limits of policy liability in a personal auto policy?
nonpayment of premium
When an insurer cancels an auto policy for an allowable reason, they must give notice to the named insured of possible eligibility for coverage through the PA Auto Insurance Plan, unless the reason for cancellation is
the excess over the self-insured retentions
When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays
Only if the insured does not have commercial auto coverage
When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)? a) Only in addition to commercial auto coverage. b) Only if the insured has 4 or more employees. c) Never d) Only if the insured does not have commercial auto coverage
appeal bonds
Which bonds may be required when a person appeals to a higher court after a judgment already has been entered to guarantee that a judgment will be paid? a) Cost bonds b) Appeal bonds c) Bail bonds d) Injunction bonds
annual transit
Which coverage form would provide coverage for all incoming and outgoing shipments? a) Mail coverage b) Annual transit c) Trip transit d) Motor truck cargo
$2,000 silver tea set stolen
Which loss would be fully covered by a homeowners policy? - $2,000 silver tea set stolen - $1,200 pedigreed golden retriever stolen - $24,000 bass boat destroyed in a tornado - $5,000 firearm collection stolen
medical payments to others
Which of the following coverages is included in an unendorsed homeowners policy? a) Personal property replacement coverage b) Fungi, wet or dry rot, or bacteria c) Earthquake d) Medical payment to others
Damage to the dwelling caused by ash or dust from a volcanic eruption
Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? a) Interior damage caused by water seeping under the shingles on the roof b) Damage to the dwelling caused by ash 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
Unintentional acts arising from the operation of a farming business
Which of the following exposures is insured under Coverage I - Personal and Advertising Injury Liability? a) Statements made by an insured during their farm radio show b) Breach of a written contract c) Unintentional acts arising from the operation of a farming business d) Failure of goods to perform
Any loans required to offset uncollectible amounts
Which of the following is NOT covered under accounts receivable coverage form? a) Any loans required to offset uncollectible amounts b) Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds c) Sums due the insured that are uncollectible due to a covered loss d) Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs
valuable papers and records
Which of the following is NOT settled on an ACV basis while covered under the business property coverage form? - works of arts or antiques - valuable papers and records - property of others - manuscripts
The application given to a prospective insured
Which of the following is NOT the consideration in a policy? a) The promise to pay covered losses b) The application given to a prospective insured c) Something of value exchanged between parties d) The premium amount paid at the time of application
if the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge
Which of the following is NOT true if ownership changes, voluntary or otherwise? - if the vessel already has sailed from her loading port, automatic termination may be deferred until 15 days after arrival at final port of discharge - the ocean marine policy shall terminate automatically at the time of ownership change - if the vessel already has sailed from her loading port, automatic termination may be deferred until arrival at the final port of discharge - if voluntary temporary transfer occurs without prior written agreement by the assured, automatic termination shall occur 15 days after transfer
Federal Motor Carrier Safety Administration
Which of the following is the federal body that regulates truckers who travel across state lines? a) Motor Carriers Commerce Agency b) Truckers and Trade Commission c) Federal Trade Commission d) Federal Motor Carrier Safety Administration
Each DIC policy is an individually written contract that contains provisions unique to the particular risk that it covers.
Which of the following is true regarding the Difference in Conditions (DIC) policies? a) The DIC policy is a stand-alone contract; all perils are covered within it, and no further policies are needed. b) They must conform to the NAIC model. c) All DIC policies from a particular company must be identical to prevent unfair discrimination. d) Each DIC policy is an individually written contract that contains provisions unique to the particular risk that it covers.
a coin collection value at $500 lost in a fire
Which of the following losses would NOT be covered by a homeowners policy? - A $800 outboard motor destroyed by hail - a coin collection value at $500 lost in a fire - a $550 utility trailer blown away by a tornado - a stolen silver tea set worth $2,000
This coverage must be written as part of farm coverage.
Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage? a) It relates to devices used in the everyday farm operation. b) It covers detached parts and accessories of mobile devices. c) It insures eligible equipment for open perils. d) This coverage must be written as part of farm coverage.
a premium auditor has the right to examine the insured's compensation records at the end of the policy to determine the actual premium basis
Which of the following statements is true regarding the premium computation for workers comp insurance? - the premium basis for workers comp insurance varies by the type of industry in which the insured is involved - the insured pays a guaranteed premium based on a estimated value of the annual income received - the premium is set at the beginning of the policy period and will not chance - a premium auditor has the right to examine the insured's compensation records at the end of the policy to determine the actual premium basis
intentional tort
Which of the following would NOT be covered by HO liability insurance? a) Property damage b) Intentional tort c) Bodily injury d) First aid expenses
a salaried employee who advertises and solicits insurance
Which of the following would be required to be licensed as an insurance producer? - an insurance company director who performs executive, administrative, and managerial duties - a salaried employee who advertises and solicits insurance - a person whose activities are limited to producing insurance advertisements - a salaried full-time employee who furnishes info for group insurance
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant
Which situation would NOT be covered by the basic cause of loss form under a CPP? - Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone - The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant - Piccolo Pete's Cafe has its door broken by vandals trying to get inside - The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store.
Insureds cannot be randomly selected.
Which statement regarding insurable risks is NOT correct? a) An insurable risk must involve a loss that is definite as to cause, time, place and amount. b) Insureds cannot be randomly selected. c) Insurance cannot be mandatory. d) The insurable risk needs to be statistically predictable.
fire-resistive
With regard to fire insurance premiums, structures with which of the following type of construction would most likely have the most favorable premium rate for the peril of fire? a) Noncombustible b) Fire-resistive c) Frame d) Masonry
2 years
Within how many years of a loss may an insured bring a lawsuit against an insurer, according to the dwelling policy? a) 2 years b) 3 years c) 5 years d) 7 years
second injury funds programs
Workers comp statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT: - self-insurance plans - assigned risk plans - competitive state funds - second injury funds programs
