Practice Exam

what is the liability limit for injury to any one person in a single accident in personal auto insurance policies issued in this state? a. 15,000 b. 20,000 c. 25,000 d. 30,000

15,000

what is the maximum number of borders per unit that would be allowed in the homeowners policy? a. 2 b. 3 c. 4 d. 5

2

Equipment breakdown coverage is written with a single limit of insurance per accident. What is the sublimit for hazardous substance cleanup or repair or replacement of contaminated property? a. 15,000 b. 20,000 c. 25,000 d. 50,000

25,000

Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter? a. 10 b. 30 c. 60 d. 90

30

For the purpose of examination by the department, insurers must keep a record of all financial files for at least A 4 years. B 5 years C 7 years. D 3 years.

5 years

A premium discount is the term that describes when an insured owes a total standard premium greater than a) $10,000. b) $15,000. c) $1,000. d) $5,000.

5000

According to the financial responsibility requirement set by the motor carriers act of 1980, what is the minimum amount of insurance the company must carry for the transportation of non-hazardous property? a. 250,000 b. 500,000 c. 750,000 d. 1 mil

750,000

Ocean marine policies commonly refer to the person covered by the policy as the: A Master .B Policy owner. C Inchmaree. D Assured.

Assured

Which of the following would NOT be considered an exception to the National Do Not Call List? - Calls for which the consumer has given prior written permission - Calls which are not commercial or do not include unsolicited advertisements - Calls by or on behalf of tax-exempt nonprofit organizations - Calls based from outside of the United States

Calls based from outside of the US

Which of the following best describes liberalization clause in a policy? A) Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium B) The insurer is relieved of its contractual obligations to the insured. C) The insured may assign the policy to any person without their written consent D) The policy cannot be cancelled

Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium

Which of the following includes information regarding a person's credit, character, reputation, and habits? A. Agent's Report. B. Consumer Report. C. Consumer History. D. Insurability Report.

Consumer report

According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT A. Late payments B. Failure to pay off a loan C. Disputes regarding consumer report information D. Tax delinquencies

Disputes regarding consumer report info

All of the following are licensing requirements for a business entity, except: A applying for a license in the same lines of authority as held by licensed designees B having all of the employees complete continuing education once every 2 yrs C demonstrating general fitness, competence, and reliability D maintaining on staff at least 1 licensed person in good standing

Having all employees complete continuing education once every 2 years

Under a personal auto policy, in which of the following locations would a vehicle primarily garaged in California be covered? a. anywhere in the world b. only the US and Mexico c. only in California d. In California and any other state

In California and any other state

All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT a)It provides coverage for all employees, even those employees who were terminated in the past 90 days b)It provides coverage for direct loss or damage to business personal property c)Losses result from dishonest acts of any of the insured's employees. d)Coverage includes all property, including money and securities owned or held by the insured.

It provides coverage for all employees, even those employees who were terminated in the past 90 days

Which of the following is the type of property NOT covered by the homeowners policy? Dwellings Materials and supplies Attached structures Land on which the property is located

Land on which the property is located

A meteorite(or deer) hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid? a. uninsured motorist b. collision c. other-than-collision d. liability

Other than collision

Workers compensation statutes require employers to meet to capital reserves requirement sufficient to play any claims that might arise. Employers can meet such obligations through all of the following except: a. Assigned risk plans b. competitive state funds c. second injury funds programs d. self-insurance plans

Second injury funds programs

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? a) The insured would have to pay the self-insured retention limit. b) The insured would be responsible for the amount required as underlying limits in the event of a claim. c) It would have no effect on the umbrella policy. d) The policy will be cancelled.

The insured would be responsible for the amount required as underlying limits in the event of a claim.

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? A. the licensee must complete the continuing education requirements and pay the lapse renewal fees. Requirements cannot be waived. B. The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible C. Nothing; the license is automatically reinstated for an additional 6 months following return from military service. D. Nothing; licenses of active duty military service personnel are automatically reinstated for a full licensing term

The licensee may submit a request to the department to have requirements and fees waived. The department will then determine if the request is permissible

The Individual Named Insured endorsement under a Commercial Auto Policy provides coverage for which of the following? A The sole proprietor of the business and his/her employees B The sole proprietor of the business and his/her spouse, only C The sole proprietor of the business and his/her family members D The sole proprietor of the business only

The sole proprietor of the business and his/her family members

Which of the following is an example of a producer's fiduciary duty? a. An obligation to state every known fact about the policy the producer is selling. b. A duty to base all transactions upon the principle of Utmost Good Faith. c. The obligation to tell the truth to the best of one's knowledge. d. The trust that a client places in the producer in regard to handling premiums.

The trust that a client places in the producer in regard to handling premiums.

In forming an insurance contract, when does acceptance usually occur?A. When an insured submits an application B. When an insurer's underwriter approves coverage C. When an insurer delivers the policy D. When an insurer receives an application

When an insurer's underwriter approves coverage

Which of the following types of agent authority is also called "perceived authority"? Fiduciary Apparent Express Implied

apparent

A couple bought tickets to a college hockey tournament. At the game, a stray puck flies into the stands and hits the wife in the face, breaking her nose. Which legal defense may bar her from recovering damages for the injury she received at the hockey game? a. comparative negligence b. contributory negligence c. defense against negligence d. assumption of risk

assumption of risk

A policy that insures all property at multiple locations for a single amount is referred to as: a. blanket b. reporting c. special d. specific

blanket

A liability policy that provides coverage for a claim for injury or damage only if the claim is first reported or filed during the policy period is called? a. claims made form b. bodily injury/property damage form c. occurrence form d. premises coverage

claims made form

Which of the following reports will provide the underwriter the information about an insurance applicant's credit? a. inspection report b. agents report c. any federal report d. consumer report

consumer report

In dwelling policies, automatic increase in insurance is: a. coverage without additional premium b. coverage for newly acquired property c. coverage by endorsement d. automatic coverage

coverage by endorsement

Which of the following property coverages would provide protection to contents damaged by fire? A: Coverage C B: Coverage D C: Coverage A D: Coverage B

coverage c

professional liability coverage protects against legal liability resulting from: a. warranties b. misrepresentation c. unethical conduct d. errors and omissions

errors and omissions

the provision in pennsylvania 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 responbility to the amount of workers comp to which he or she is entitled is called: a. waiver of indemnification b. voluntary negligence assumption c. no loss no gain regulation d. exclusive remedy

exclusive remedy

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? a)Special b)Schedule c)Experience d)Class

experience

In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer? A Insurer B First named insured C Last named insured D Beneficiary

first named insured

If a farm building or structure is vacant or unoccupied, which is true? A If for 60 consecutive days, no coverage for vandalism and malicious mischief, glass breakage, or theft B If for 60 consecutive days, amount paid for covered losses is reduced by 15%. C If for 120 consecutive days, the limits applicable to the building and its contents are reduced by 50% D If for 30 consecutive days, no coverage for vandalism and malicious mischief, glass breakage, or theft.

if for 120 consecutive days, limits applicable and contents reduced by 50%

To purchase insurance, the policyowner must have financial interest in the property being insured. This is known as a. indemnity b. insurable interest c. pure loss d. loss valuation

insurable interest

Persons covered under an insurance policy, whether named or not, are known as the: a. additional insurereds b. insureds c. named insureds d. first named insureds

insured

All of the following may serve as proof of financial responsibility required for all registered motor vehicles except: a. self insurance b. medical insurance c. liability insurance d. an approved financial arrangement

medical insurance

how is property insured under the equipment breakdown coverage form? a. on a replacement cost basis b. on a valued basis c. on a blanket coverage basis d. on actual cash value basis

on a replacement cost basis

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? A Nonconcurrency B Primary and excess C Other insurance D Valid insurance

other insurance

A participating insurance policy may do which of the following? A. Pay dividends to the policyowner B. Provide group coverage C.Pay dividends to the stockholder D. Require 80% participation

pay dividends to the policyowner

An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does the insured policy have? a. split b. per occurrence c. per person d. aggregate

per occurrence

If a person 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. no fault medical payments b. liability c. physical damage d. uninsured motorist

physical damage

Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? a. transfer of rights to recovery b. reinstatement of limit c. legal action against the insurer d. privilege to adjust with the owner

privilege to adjust with the owner

what is the purpose of the assigned risk plan?

to provide auto insurance for applicants who are unable to obtain coverage through commercial insurers

Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes the building to lose refrigeration for 32 hours. The state inspectors will not allow the meat in the refrigerating units to be sold for human consumption, and Frank loses $18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover the loss? a) Utility service - time element b) Extra expense c) Protective safeguards d) Utility service - direct damage

utility service direct damage

Which of the following would NOT be considered part of the insured location under the liability section of a homeowners policy? a. vacant farmland owned by the insured b. a residence where an insured is temporarily residing c. a family cemetery plot d. a lakeside cabin rented by the insured for vacation

vacant farmland