Practice test

In which of the following examples would a contract between an insurer and prospective insured be legal? 1. The applicant is under the influence of medication at time of application. 2. The applicant has a prior felony conviction 3. The applicant is intoxicated at the time of application 4. The applicant is a 12 year old student

2. The applicant has a prior felony conviction

Assuming the insurer and the insured agree to the amount payable for a loss covered under a dwelling policy, how soon after the insurer has received proof of loss must it make payment? 1. 30 days 2. 45 days 3. 60 days 4. 90 days

3. 60 days

Which of the following example of a product liability claim? 1. Someone tampers with the insureds product causing it to be recalled. 2. the insureds product has to be recalled because of the expiration date. 3. faulty packaging of a cereal causes spoilage that resulted in someone getting sick. 4. an insured while delivering product to a customer hits another car with the delivery truck.

3. faulty packaging of a cereal causes spoilage that resulted in someone getting sick.

With in how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? 1. 3 days 2. 5 days 3. 10 days 4. 14 days

1. 3 days

Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement? 1. Property damage liability policy 2. Bodily injury liability policy 3. Contractual liability policy

3. Contractual liability policy

Which is not a contract bond? 1. Performance bond 2. Maintenance bond 3. Bid bond 4. Litigation bond

4. Litigation bond

Every automobile liability insurance policy must provide bodily injury liability insurance coverage of not less than 1. $50,000 per accident 2. $75,000 per accident 3. $100,000 per accident 4. $25,000 per accident

1. $50,000 per accident

Builder risk is most often written on which form? 1. Completed value form 2. Scheduled form 3. Reporting form 4. Specific value form

1. Completed value form

Who is NOT an insured for Liability on a BAP? 1. The owner of a car the insured borrows 2. Anyone using a covered auto with permission 3. Anyone liable for the conduct of the insured 4. The named insured in any covered auto

1. The owner of a car the insured borrows

Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage? 1. This coverage must be written as part of farm coverage 2. It relates to devices used in everyday farm operation 3. it covers detach parts and accessories of mobile devices 4. It insures eligible equipment for open perils

1. This coverage must be written as part of farm coverage

Which term describes an individual who is domicile and licensed as a resident producer in a state other than Washington? 1. Alien Producer 2. non residential producer 3. Foreign Producer 4. Commissioned producer

2. non residential producer

Which authority is NOT stated in an agents contract but is required for agent to conduct business: 1. Assumed 2. Express 3. Implied

3. Implied

In dwelling policies, automatic increase in insurance is 1. automatic coverage 2. Coverage without additional premium. 3. coverage for newly acquired property 4. Coverage by endorsement

4. Coverage by endorsement

Professional liability coverage protects the insured against legal liability resulting from? 1. Liability assumed under contract 2. Dishonest acts 3. The unprofessional conduct of an employee 4. Errors and omissions

4. Errors and omissions

Which of the following losses would NOT be covered by the homeowners policy? 1. A coin collection valued at $500 lost in fire 2. A $550 utility trailer blown away by a tornado 3. A stolen silver tea set worth $2000.00 4. A $800 outboard motor destroyed by hail

1. A coin collection valued at $500 lost in fire

A ranch owners policy is similar to which of the following? 1. Homeowners 2. Commercial property 3. Business owners 4. Dwelling

1. Homeowners

Which of the following is not an element of negligence? 1. Libel 2. Duty 3. Breach 4. Unbroken Chain

1. Libel

What insurance policy provision defines how the policy will respond if there is more than one insurance policy written on the same risk? 1. Primary and excess 2. Other insurance 3. Valid insurance 4. Nonconcurrency

2. Other insurance

All of the following are characteristics of the dwelling policy EXCEPT: 1. Coverage includes the dwelling only, contents only, or both 2. Incidental occupancy of limited service type exposure is permitted. 3. Dwellings up to four family units are eligible 4. The dwelling must be owner occupied

4. The dwelling must be owner occupied

What provision in a property policy applies when the insurer broadens coverage, but does not increase the premium? 1. insuring clause 2. Appraisal clause 3. Subrogation clause 4. Liberalization clause

4.Liberalization clause

Under the Fair Credit Reporting Act, if the consumer challenges the correctness of the information contained in his/her report, the reporting agency must: 1. Respond to the consumer complaint. 2. defend the report if the agency feels it is accurate. 3. change the report

1. Respond to the consumer complaint.

Records that must be kept by an agent must include all of the following EXCEPT 1. The amount of any deductible or co payment 2. The amount of premium 3. The statement of the subject of insurance 4. The name of the insured and the insurer

1. The amount of any deductible or co payment

When the insureds auto is damaged by a collision with an at-fault underinsured motorist, what is the maximum deductible amount that may be applied to the loss paid under the underinsured motorist property damage. 1. $200 2. $100 3. $0 4. $300

2. $100

a plasterer has finished a job. what type of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly. 1. products 2. professional E&O 3. Complete operations 4. Medical Payments

3. Complete operations

Which of the following entities helps applicants obtain property insurance? 1. The industry placement Facility 2. The join Reinsurance Association 3. The National Association of Insurance Commissioners

1. The industry placement Facility

Personal injury protection will pay for medical and hospital expenses within: 1. 2 years of accident 2. 3 years from accident 3. 5 years from accident 4. 1 year from accident

2. 3 years from accident

What is the maximum penalty for habitual willful non compliance with the fair credit reporting act? 1. $1,000 2. $100 per violation 3. $2,500 4. Revocation of license

3. $2,500

The insured with claims made CGL may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information 1. within 60 days 2. As soon as practical 3. Within 45 days 4. Within 30 days

3. Within 45 days

Which of the following lists all the required elements for establishing a charge of negligence? 1. legal duty owed, proximate cause, intervening cause, damages. 2. legal duty owed, deliberate attempt to cause harm, damages. 3. Breach of reasonable person rule and proximate degree of care. 4. legal duty owed, breach of legal duty owed, proximate cause, damages.

4. legal duty owed, breach of legal duty owed, proximate cause, damages.

When a notice of nonrenewal is furnished to an insured, how soon does the copy of the notice must be provided to the insured agent? 1. Within 5 calendar days 2. Within 30 business days 3. Within 30 calendar days 4. within 5 business days

4. within 5 business days

In a personal auto policy, the medical payments coverage is similar to: 1. Accident insurance, because it has the same limits. 2. Bodily injury coverage, because it provides legal protection if the insured causes injury to others 3. Bodily injury coverage because it pays the insureds doctors bills. 4. Accident insurance, because it pays medical expenses regardless of fault.

4. Accident insurance, because it pays medical expenses regardless of fault.

A policy that insures all property at multiple locations for a single amount is referred to as 1. Reporting 2. Special 3. Specific 4. Blanket

4. Blanket

Which of the following would NOT be covered as an additional coverage in Section II Homeowners policy? 1. Cost of ambulance for an friend hurt on premise 2. The broken leg of a guest who fell through a rotted det of steps. 3. The insured dropped and broke the neighbors borrowed punch bowl

2. The broken leg of a guest who fell through a rotted det of steps.

If an insurance company makes a payment to the insured because the at fault motorist insurance company is insolvent the insureds insurance company must have the subrogation rights against? 1. The at fault motorist 2. The insolvent insurance company 3. The department of motor vehicles

2. The insolvent insurance company

A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business in a CPP, the business owner may select from all of the following EXCEPT 1. General liability coverage 2. Workers compensation coverage 3. Crime coverage 4. Broiler and machinery coverage

2. Workers compensation coverage

When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ lawn and garden. ABC's coverage would come from which part of its general liability coverage? 1. product liability 2. personal and advertising injury liability 3. The claim would not be covered

2. personal and advertising injury liability

Which of the following other coverages is NOT included in the basic from dwelling policy? 1. Breakage of glass 2. Removal coverage 3. Personal property temporarly away from the insured premises

1. Breakage of glass

In which of the following sections of a commercial auto policy will you find specific information about the policy period? 1. Conditions 2. Additional Coverages 3. Selected Endorsements 4. Definitions

1. Conditions

CGL Coverage B (personal injury and advertising injury) will cover: 1. Inadvertent injury to others caused in the course of advertising in the insured product. 2. The failure of goods to conform to advertised quality or performance. 3. Oral or written publication of material the insured knows is fake. 4. An offense committed by an insured whose business is advertising.

1. Inadvertent injury to others caused in the course of advertising in the insured product.

An insurance carrier decides to leave the state and cancels all of its insurance policies. Which one of the following are TRUE? 1. Insureds receive unearned premiums. 2. insureds have 45 days to obtain new coverage. 3. policy premiums and benefits become forfeited.

1. Insureds receive unearned premiums.

Essential property insurance includes coverage against 1. direct damage to property under construction 2. farm dwellings 3. manufacturing risks

1. direct damage to property under construction

What type of compensatory damages will pay for pain and suffering and disfigurement? 1. Normal 2. General 3. Special (specific) 4. Tort

2. General

An insurance company can make changes to premium rates on policy terms 1. Concurrently at the time of any loss payment made under the policy. 2. Prospectively only 3. At any time during the policy period 4. Retroactive to the effective date of the policy or renewal.

2. Prospectively only

Compared with other drivers in his own age group, a driver has had more accidents and traffic violations. Which of the following rating types would most accurately reflect the other drivers true insurance risk? 1. Experience 2. Retrospective 3. Special 4. Schedule

2. Retrospective

Instead of purchasing an auto with the required minimum limits of $25/$50/$10, Pete purchased a policy with a single limit of $60,000. When Pete caused an accident that does not injury anyone, but causes $37,500 damage to the new lexus that he struck, how much will his policy pay for the property damage? 1. $35,000 2. Up to $60,000 3. $10,000 4. $25,000

2. Up to $60,000

Which of the following is NOT a valid reason to deny an insurance claim under a personal injury protection endorsement? 1. the injury claim was not incurred within 3years of the accident. 2. the injury claim was related to an automobile accident. 3. the injury claim is not necessary

2. the injury claim was related to an automobile accident.

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: 1. 3 years 2. 5 years 3. 10 years 4. 12 years

3. 10 years

Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured . Lilys liability insurance policy has a limit set at $500.00. 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 Lily have? 1. Aggregate 2. Per occurrence 3. Combined Single 4. Split

3. Combined Single

The pro rata liability clause is designed to protect the principal of: 1. Insurable interest 2. Waiver and estoppel 3. Indemnify 4. Subrogation

3. Indemnify

Daisy is driving her automobile and strikes a large "pot hole" which causes a flat tire. Which coverage of her personal auto will pay for the repair? 1. Comprehensive 2. Collision 3. Loss is not covered 4. None of the above

3. Loss is not covered

Which f the following symbols used in business auto coverage is correctly described? 1. Symbol 2- owed auto subject to no fault. 2. Symbol 7- hired autos only 3. Symbol 9- nonowned autos only

3. Symbol 9- nonowned autos only

All of the following are true statements regarding the supplementary payments of a Commercial Liability policy EXCEPT: 1. They pay pre-judgment and post judgement interest 2. they pay all the reasonable cost incurred by the insured in helping investigate or defend a claim. 3. They pay defense cost even after the aggregate limit has been reached.

3. They pay defense cost even after the aggregate limit has been reached.

The application of 2 or more coverages to the same loss in order to increase the amount of coverage available is called? 1. A split limit 2. spreading of risk 3. stacking

3. stacking

Under the provisions of the business income coverage form, all the following are TRUE except: 1. the insured agrees to resume all of the part of operations as quickly as possible. 2. the insured is reimbursed for the payroll that continues after the loss begins. 3. the insured is reimbursed for the loss from the data of restoration or policy expiration date, whichever comes first.

3. the insured is reimbursed for the loss from the data of restoration or policy expiration date, whichever comes first.

The property conditions that precludes the insured from simply turning over damaged property to the insurer and claiming a total loss is called? 1. assignment 2. appraisal 3. Arbitration 4. Abandonment

4. Abandonment

Which of the following coverages will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damage caused by an occurrence to which the coverage applies? 1. Coverage F- Medical payments to others 2. Coverage C- Personal property 3. Coverage D- Loss of use 4. Coverage E- Personal liability

4. Coverage E- Personal liability

What fundamental doctrine in property insurance holds that when there is an unbroken connection between an occurrence and damage that grows out of the occurrence, then the result damage is all part of the occurrence? 1. Doctrine of concurrent causation. 2. Doctrine of indemnity 3. Doctrine of common cause 4. Doctrine of proximate cause

4. Doctrine of proximate cause

A producer has established a separate account for premiums collected on life insurance policies sold by the producer. Who is entitled to the interest earned on the deposits in the separate account. 1. policy owner 2. guaranty fund 3. insurance company 4. Producer

4. Producer

The claims-made trigger is based on which of the following? 1. The date the claim is first made in writing against an insurer for injury or damage that occurred after the policy's retroactive date. 2. The date the claim is first made orally against an insurer for injury or damage that occurred after the policys retroactive date. 3. The date the claim is first made orally against an insured for injury or damage that occurred after the policys retroactive date 4. The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policys retroactive date

4. The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policys retroactive date

Which of the following is an agreement between an insured and a insurer, where the insurer agrees to indemnify the insured for specif losses in exchange for premium? 1. The insurance guaranty 2. Reciprocity 3. The indemnity clause 4. The insurance contract

4. The insurance contract

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? 1. A temporary substitute vehicle is damaged while the insured is driving it. 2. The insureds vehicle is damaged when it collides with a deer. 3. A passenger in the insureds car is injured following an accident caused by the insured. 4. The insured damages a rented garage when he failed to stop on time.

4. The insured damages a rented garage when he failed to stop on time.

Which of the following is true regarding the fire department service charge under the Builders Risk Form? 1. It is automatic coverage for $500. 2. It is not available on this form 3. It is a high deductible endorsement. 4. it is an additional coverage

4. it is an additional coverage