PROPERTY & CASUALTY QUESTIONS GA EXAM
The principle of indemnity is designed to avoid A two policies sharing payment for a loss B. the return of earned premiums C. Overpayment of a claim D. a coinsurance clause of the less 80%
. Overpayment of a claim
Off premises dwelling property coverage provides up to A. 10% of coverage C B. 10% of coverage A C. 50% of coverage A D 50% of coverage C
A. 10% of coverage C
The principle of actual cash value is applied to claims for which of the following? A. Auto physical damage B. Variable annuity C. workers' comp D. accidental death
A. Auto physical damage
Which of the following auto coverages insures only the policyholder's legal liability ? A. Bodily injury/property damage B. Comprehensive C. Uninsured motorist D. Collision
A. Bodily injury/property damage
Insurers that deal directly with insureds without the use of agents are known as A. Direct Response B reciprocals C. mass marketers D. Independent Insurers
A. Direct Response
Truckers who transport hazardous materials are required to have an endorsement called A. Form MCS-90 B. Form W-2 C. Form MCS-70 D. Form 1099
A. Form MCS-90
Which of the following statements best describes a representation in an insurance application? A. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term. B. It is a statement made by the insured that certain conditions exist at the time of the application C. It explains the promise of the insurance company. D. It is part of the insurance agreement.
A. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term
Which is a characteristic of the businessowners policy (BOP? A. It is an alternative to a commercial package policy B It may be written monoline only. C It may only be written as part of a commercial package policy. D. It may be written monoline pr part of a commercial package policy.
A. It is an alternative to a commercial package policy
an act of terrorism A. Must be certified by the secretary of the Treasury, the secretary of Homeland security, and US attorney general B. is defined as any act causing property damage and loss of lives in a foreign country C. in which TRIPRA responds, place a cap on federal liability not to exceed $100million D. triggers the Terrorism Risk Ins Program Reauthorization Act (TRIPRA)
A. Must be certified by the secretary of the Treasury, the secretary of Homeland security, and US attorney general
While in her backyard, Susan injuries her foot on a rake left by her landscapers. What part of the CGL policy will protect the owner of the landscaping company? A. Operations exposure B. Products Liability C. Completed operations liability D. Premises exposure
A. Operations exposure
Self-insurance is an example of what type of risk management A. Retention B. Sharing C. transfer D. Avoidance
A. Retention
To obtain coverage from state's FAIR plan, an application MUST; A. Show that a diligent search was made through established markets B. apply at least 30days prior to the desired effective date of the coverage C. pay a premium surcharge based on the applicant's past claims experience D. Pay a premium surcharge based on the type of property to be insured
A. Show that a diligent search was made through established markets
Under a commercial policy, personal and advertising injury liability coverage does NOT apply to damages resulting from: A. Slanderous statements made by an advertising firm B. copyright infringement by a department store Harmful,truthful information published by a realtor D. invasion of an individual's privacy
A. Slanderous statements made by an advertising firm
A dwelling has been vacant for more than 60 consecutive days. Which of the following would most likely NOT be covered? A. Vandalism B. Smoke C. Fire D. Falling Objects
A. Vandalism
In order to issue a written binder for commercial property policy, what is the MIN consideration producer must secure from an applicant? A. a promise to pay the premium B. A signature on a premium finance agreement C. payment of 6 months premium D payment of 12 months premium
A. a promise to pay the premium
An insurance binder is A. a temporary short-term evidence of coverage B. a large bound volume of rules, rates, and forms C. a temporary agreement to pay a claim pending final settlement D. a rate manual supplied by one of the rating organization
A. a temporary short-term evidence of coverage
Which of the following terms describes an insurance company that has been organized outside the US or its possessions? A. alien B. remote C. reciprocal D. foreign
A. alien
Premium costs for standard Workers Compensation insurance are paid by: A. employers only B. employees only C. employers and employees jointly D. the Workers Compensation Board
A. employers only
All of the following risk exposures are covered by the liability sections of the BOP EXCEPT ? A. employers' liability B. adverting injury C. product liability D. premises liability
A. employers' liability
Which of the following is not a category of the nationwide definition for marine risks ? A. excess liability B. instrumantalities of transportation C. Exports D. Commercial property floater risks
A. excess liability
Equipment breakdown insurance covers direct physical damage to covered equipment due to A. failure of pressure or vacuum equipment B. damage to vacuum tubes C. Valve, shaft seal or fitting leakage D. Malfunction of equipment calibration
A. failure of pressure or vacuum equipment
The attempt to restore an insured to his pre-loss condition is known as A. indemnification B. self-insurance C. Subrogation D. Coinsurance
A. indemnification
An insurance policy that contains unclear language will be? A. interpreted against the party who wrote the contract B. interpreted by the party who wrote the contract C. interpreted against the insured who accepted the policy D. rewritten by the ins department
A. interpreted against the party who wrote the contract
All of the following are insured contract under the commercial general Liability (CGL) policy EXCEPT A. lease of business equipment B. elevator maintenance agreement C. agreement to indemnify a municipality D railroad sidetrack agreement
A. lease of business equipment
Which of the following statements are true about the standard mortgagee clause is TRUE? A. nothing the insured does can prevent the mortgagee from collecting under the policy . B. The mortgagee has no right under the policy. C. The mortgage is the only party that can submit claims under the policy D. The mortgagee can only collect from the policy with prior written consent of the policyholder.
A. nothing the insured does can prevent the mortgagee from collecting under the policy .
primary obligation of an insurer is to; A. pay the claims covered under the policy B. provide a financial statement with each policy C. prepare an inventory after a loss D. make inspections and surveys of insured property
A. pay the claims covered under the policy
All statements and descriptions is any application for an ins. policy by an insured are deemed to be A. representations and not warranties B. neither warranties nor representations C. both warranties and representations D. warranties and not representations
A. representations and not warranties
A bond guaranteeing the obligation of one party to another by a third party is known as a: A. surety bond B. guarantee bond C. fiduciary bond D. municipal bond
A. surety bond
after an insurer receives a satisfactory proof of loss from an insured on a fire loss, payment is due within a MAX of how many days? A.5 B. 30 C.60 D.90
A.5
Coverage for fungi, wet rot, and bacteria on a business-owner policy is limited to A. 12k per policy limit B. 15k per policy limit C. 15k per occurrence D. 25K per policy period
B. 15k per policy limit
Which of the following situations is considered an ins. transaction? A. 2 ins parties companies share actuarial data B. 2 parties negotiate the term of coverage when executing an ins contract. C. An independent audit company reviews a domestic insurer's records for a fee D. An insured sends a policy to the bank in preparation for a mortgagee closing
B. 2 parties negotiate the term of coverage when executing an ins contract.
A building to an insured's business is severely damaged by fire. bc of the nature of the damage to the adjoining property, the insured is denied access to the business by the fire dept. If the insured's property is covered under a business income coverage form, the insurer will cover loss of earnings for a MAX of: A. 6 months B. 3 weeks C. 60 days D. 30 days
B. 3 weeks
Which of the following vehicles is considered a covered auto under a Personal Auto Policy? A. A vehicle used by the insured to insured to transport passenger to and from an airport for fee B. A replacement car purchased by the insured a week ago but not yet reported C. The insured's all terrain vehicle with three wheels D. A company car provided to the insured by an employer
B. A replacement car purchased by the insured a week ago but not yet reported.
Which of the following injuries is covered under the Medical Payments section of an insured's Commercial general liability policy? A. An individual is injured while participating in an athletic events on the insured's property. B. A supplier is injured while visiting the insured's showroom. C. A tenant in the insured's Apt. building slips In their Apt. and requires x-rays D. An employee breaks an ankle in the insured's warehouse
B. A supplier is injured while visiting the insured's showroom.
the purpose of the FAIR plan is to provide A. property ins on recreational vehicles for which for such coverage is unavailable in the regular market B. Basic property ins for which coverage is not available in the regular market C. automobile ins for high-risk drivers D. crime ins for residents of highrisk neighborhoods
B. Basic property ins for which coverage is not available in the regular market
The limits of liability are found in which of the following sections of a casualty policy? A. insuring agreement B. Declarations C. conditions D. Definitions
B. Declarations
Senior vice President of ABC corporation has a company and does not carry personal auto Ins. When she is driving the car for personal use, how is the coverage provided in the event of a loss? A. Additional insured endorsement B. Drive other care- broadened coverage for named individual endorsement C. supplementary payments D. individual named endorsement
B. Drive other care- broadened coverage for named individual endorsement
A restaurant has clogged heating and cooling ducts. This an example of A. Risk B. Hazard C. exclusion D. Peril
B. Hazard
Under a homeowners policy, an insured is required is required to take all of the following actions when a covered loss occurs EXCEPT: A. Give prompt notice to the insurer or its producer B. Hire an appraiser to determine the amt of loss C. notify the police if the loss is the result of theft D. protect the property from further loss
B. Hire an appraiser to determine the amt of loss
Commingling refers to A. violating state rules on transacting controlled business B. Improperly mixing personal funds with insurer or the insured's funds C. violating the Ins company's privacy protection rules D. improperly mixing funds in the insurer's general and separate accounts
B. Improperly mixing personal funds with insurer or the insured's funds
Misrepresentation is A. Encouraging policyowners to drop existing Ins for another similar policy B. Information that is not true, but will not void an Ins contract C. offering an inducement for the purchase of Ins.
B. Information that is not true, but will not void an Ins contract
The fair reporting act requires the: A. Ins company to review the applicant's credit history prior to underwriting a policy B. Ins company to inform the applicant a credit report may be obtained C. ins producer to review the applicants credit history prior to issuing a policy D. Ins producer to summarize a policy for the insured
B. Ins company to inform the applicant a credit report may be obtained
An Ins policy covers fire, will not cover nuclear contamination, and loss must be reported as soon as possible. In this order, where are these facts found in the policy? A. Dec pages, insuring agreement, and conditions B. Insuring agreement, exclusions, and conditions C. Conditions, endorsements, and declarations D. Insuring agreement, Exclusions, ans proof of loss
B. Insuring agreement, exclusions, and conditions
Premium computation is found in which section of the workers' compensation policy? A. Part 3 B. Part 5 C. Part 1 D. Part 2
B. Part 5
What is the purpose of the employer's liability section of a workers' comp plicy ( part 2) ? A. pay for lawsuits filed by an employer B. Pay for benefits that are normally required by state workers' comp laws C. Pa for 3rd-party claims filed against a negligent employer
B. Pay for benefits that are normally required by state workers' comp laws
A Commercial General Liability policy provides coverage for which of the following hazards? A. Pollutions Liability B. Premises Liability C. Employee injury Liability D. professional liability
B. Premises Liability
The arbitration clause in a personal auto policy would be used in which of the following circumstances? A. The ins company and a pedestrian struck by the insured's auto cannot reach an agreement regarding the settlement of a claim. B. The insured and an injured 3rd party cannot reach an agreement regarding the settlement of a claim. C. The court have ruled against an injured 3th party.
B. The insured and an injured 3rd party cannot reach an agreement regarding the settlement of a claim.
Which of the following is NOT a use of auto symbols in the commercial auto policy? A. To determine how coverage will apply to vehicles acquired after the policy effective date B. To determine which rating territory applies to the covered autos C. To custom the policy to the insured's needs by selective the appropriate coverage
B. To determine which rating territory applies to the covered autos
Which of the following policies is intended to broaden the coverage and increase the limits of underlying insurance ? A. Excess liability B. Umbrella C. Owners and contactors protective liability D. commercial general liability
B. Umbrella
AN insurer that generally fails to affirm or deny coverage of claims within reasonable period of time after receiving Proof of Loss may be found guilty of : A. a breach of fiduciary responsibility B. an improper claims practice C. defamation D. misrepresentation
B. an improper claims practice
In insurance, which of the following terms refers to continuous or repeated exposures to conditions that may result in bodily injury or damage neither expected nor intended? A. An accident B. an occurrence C. an event D. a condition
B. an occurrence
Blanket dishonesty bonds cover all A. theft by employees at a single location B. employees of the insured C. acts of dishonestly committed at 2 or more locations D. Acts of dishonesty by 2 or more employees
B. employees of the insured
Which of the following coverages may be added by endorsement to a boiler and machinery policy? A. Expediting expenses B extra expenses C property damage liability D damage to property of the insured
B. extra expenses
ALL of the following items contained in a basement are covered under the standard flood ins policy EXCEPT; A. Drywall for walls and ceilings and the cost of labor to nail it, unfinished/ unfloated and not taped to the framing B. functioning electrical outlets and switches C. carpet permanently installed over unfinished flooring D. fuel tanks, if installed in their functioning locations and connected to a power source
B. functioning electrical outlets and switches
Under the businessowner policy, collapse of a building A. is covered when it is caused by rising waters due to a flood B. is subject to the limits of ins C. is covered only by endorsement and an additional premium D. does not decrease the amount of ins
B. is subject to the limits of ins
In a commercial General liability policy, medical payments expenses MUST be: A. caused by the negligence of the insured B. reported within one year of the date of the accident C. caused by a product manufactured by the insured D. reported within two years of the policy expiration
B. reported within one year of the date of the accident
Which of the following perils is covered under the Commercial Property Basic Cause of Loss form? A. Collapse B. sinkhole collapse C. Falling objects D. Breakage of glass
B. sinkhole collapse
under the standard flood ins policy, all of the following loss avoidance measures are covered up $1000 when damage to the insured property due to flooding is imminent EXCEPT: A. sandbags, including the sand to fill them B. tools required to secure the property C. plastic sheeting and lumber D. The value of work, at the funeral minimum wage, that a member of the household performs
B. tools required to secure the property
A business insured under a commercial general liability policy has a general aggregate limit of $100,000,000 and an occurrence limit of $100,000. An injured party is awarded $100,000. What remain available to the insured? A. General aggregate of $100,000,000; Occurrence limit of $0 B.A. General aggregate of $900,000; Occurrence limit of $100,000 C.A. General aggregate of $100,000,000; Occurrence limit of $100,000 D.A. General aggregate of $900,000; Occurrence limit of $0
B.A. General aggregate of $900,000; Occurrence limit of $100,000
Which of the following bonds protects an employer fro the actions of dishonest employees? A. Surety B. Fidelity
B.Fidelity
All of the following perils are covered under a Building and Business Personal Property Coverage Form with a Cause of Loss Form attached EXCEPT A. smoke B. sinkhole collapse C earth movement D. sprinkler leakage
C earth movement
An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts? A. $1,000 B. $1,400 C. $1,250 D. $1,500
C. $1,250
The insured had a pair of antique silver candlesticks valued at $2000. A thief stole one candlestick. because the set was " broken," the remaining candlestick's value was reduced to $250. Disregarding the deductible , the insurer would pay A. $1000 - depreciated value of the remaining candle stick B. $1000 C. $1000 + depreciated value of the remaining candlestick, totaling $1750 D. $2000
C. $1000 + depreciated value of the remaining candlestick, totaling $1750
An insured owns a set of six drawing pens designed and by Benjamin Franklin. Each pens is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the pair and set clause, the insurer will pay MAX of which of the following amts? A. $1000 B $2000 C. $7000 D. $12,000
C. $7000
The personal injury endorsement on a Homeowners policy would cover all of the following EXCEPT A. Libel/Slander B. False arrest C. Assault/Battery D. wrongful eviction
C. Assault/Battery
The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy? A. Declarations B. Insuring agreement C. Conditions D. Exclusions
C. Conditions
Which of the following sections of an insurance policy would explain the term "auto" ? A. Declarations B. insuring agreement C. Definitions D. Obligations of the insurance company
C. Definitions
A deer jumps through the window of an insured's home, damaging the interior and exterior walls. Which of the following HO Forms listed below is the LEAST comprehensive form that will still provide coverage for the loss? A. HO-1 B. HO- 2 C. HO-3 D.HO-5
C. HO-3
Which of the following is NOT a requirement for a valid contract? A. Agreement B. Contempt parties C. Legal Documents D. Consideration
C. Legal Documents
A legal obligation for injuries that are sustained due to failure to preform a duty is known as: A. negligence B. Physical hazard C. Liability D. claims payment
C. Liability
which of the following HO coverages does NOT generally contain a deductible? A. personal liability B. other structures C. Liability D. Dwelling
C. Liability
The insured's property ins policy has a deductible clause. This Means that A. the insured deducts any claim payment recieed from the next ins B. any losses paid a third party are deducted from the policy limit C. The insured must pay a certain amt for each loss incurred under the policy
C. The insured must pay a certain amt for each loss incurred under the policy
Information provided by the insured in a proof of loss is concerned A. a warranty B. an assignment C a representation D. an agreement
C. a representation
A personal automobile policy's medical payments coverage will pay for A. damage to the insured's car caused by a collision with another car B. intentional injuries to a passenger caused by the insured C. injury to a family member who is struck by the insured's car D. Damage to the insured's garage caused by the insured's car
C. injury to a family member who is struck by the insured's car
The ins commissioner may issue a limited ins representative license to an individual who wants to sell which of the following types of policies? A. fire B. automobile C. mortgage guaranty D. health
C. mortgage guaranty
All of the following are an insured's duties after a property loss EXCEPT A. provide proof loss info B. cooperate with the insurer C. vacate the property promptly D. Provide prompt notice of the claim
C. vacate the property promptly
A candidate for licenses as property ins producer must have completed a MIN of how many of preliencsing education? A. 45 B.10 C.15 D.30
C.15
The only newspaper in clarksville was severely damaged by a tornado. the paper must be printed for several weeks at another printing facility in a distant town. Under which ins policy is that covered ? A. dependent properties B. Business income C. contributing location coverage D Extra expense
D Extra expense
The purpose of the basic extended reporting period in a commercial general liability (CGL) " claims-made" policy is to provide A. additional time for the insured to make monthly reports of information for rating purposes B. coverage for events that have happened before the policy became effective C. coverage for events that happened up to 5yrs after a claims-made policy has expired D Coverage for events that have happened after the retroactive date, but which were not within 60days of policy expiration
D. Coverage for events that have happened after the retroactive date, but which were not within 60days of policy expiration
The hired auto and nonowned auto liability endorsement provides coverage for all of the following EXCEPT A. Rented auto B. lease autos C. borrowed autos D. Owned autos
D. Owned autos
Assume lighting strikes a home and starts a fire that destroys the structure and its contents. By definition, the fire is the A. Risk B. Hazard C. indirect loss D. Peril
D. Peril
Which of the following property forms should be used when it is difficult to provide the Ins. company with an accurate statement of values because of fluctuations in inventory from month to month ? A. Nonreporting form B. Schedule form C. Peaking season D. Reporting form
D. Reporting form
Which of the following homeowners endorsement is used to provide separate coverage for one or more of 9 categories of personal property? A. Personal articles B. Personal effects C. Personal property D. Scheduled personal property
D. Scheduled personal property
Which of the following statements about a mortgagee's rights under the Dwelling property Basic form (DP-1) is INCORRECT? A. the mortgagee may file a Proof of Loss if the insured fails to do so. B. No act by the insured will jeopardize the mortgagee's rights C. The mortgagee is entitled to receive prior notice of a policy's cancellation D. The may abandon the insured property to the insurer
D. The may abandon the insured property to the insurer
Purchasing insurance is an example of risk A. Rentention B. avoidance C. Sharing D transfer
D. Transfer
The National Flood Ins. Program provides coverage for losses caused by all of the following occurrence EXCEPT: A. Mudslides B. Runoff from heavy rain C. overflow of tidal waters D. Water-main breakage
D. Water-main breakage
Commercial umbrella policies are written over all of the primary liability coverages EXCEPT A. Employers' liability B. commercial general liability C. business auto D. Workers' comp
D. Workers' comp
Under a personal property floater, a loss is covered when it occurs when it occurs; A. in the US only B US or Canada C. in the insured's home only D. anywhere around the world
D. anywhere around the world
General Damage A. are monetarily quantifiable B. included all direct and specific expenses involved in a particular C. are awarded to punish defendants D. compensate for things such as pain, suffering, and mental anguish
D. compensate for things such as pain, suffering, and mental anguish
Which of the following coverages may be written with Workers' compensation? A. completes operations B. contractual C. products D. employers liability
D. employers liability
Once an injured employee has received benefits provided under workers' compensation, that employee may not file a suit against her employer to gain additional benefits. This is the def. of A. Contributory negligence B. the fellow servant rule C. Assumption of risk D. Exclusive remedy
D. executive remedy
In this state a domestic insurer is defined as a company that: A. operates in this state but is incorporated in another state B. operates in this state but is domiciled in another state C. is headquarters in this state D. is incorporated in this state
D. is incorporated in this state
Making a false or misleading statement about dividends or shares of surplus previously paid on an ins policy is known as; A. unfair discrimination B. rebating C. coercion D. misrepresentation
D. misrepresentation
Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured? A. Liability B. Negligence C. accident D. occurrence
D. occurrence
Under the commercial package policy, the person whose name is listed first in the declarations and is assigned certain responsibilities and obligations is A. the additional insured B. the names insured C. the primary insured D. the first named insured
D. the first named insured
All of the following statements regarding a DP-2 policy form are correct EXCEPT: A. Sections D "Fair rental Value" will pay up to 20% of section A policy limit B. detached structures on the covered property (section B) are covered for up to 10% of section A limit C. replacement cost is the basis used for paying claims covered by section A D. the personal property limit is automatically set at 50% of the dwelling coverage limit (section A)
D. the personal property limit is automatically set at 50% of the dwelling coverage limit (section A)
During a tornado, a barn is destroyed when a section of its wall is blown down, knocking over a lantern, which sets the barn on fire. The proximate cause of loss is the A. Fire B. collapse of the wall C. smoke D. tornado
D. tornado
G insures G's TV repairs shop under the Building and Personal Property Coverage form with limits of $100,000 on the building and $50,000 on business personal property. A fire causes $10,000 in damage to the building and $20,000 in loss to the contents. G also has to pay $1,000for debris removal If the policy has a deductible of $250, G will receive a MAX of which of the following amts from the insurer? A. $29,750 B. $30,000 C. $31,000 D.$30,750
D.$30,750
After an insurance producer license is issued, a licensee MUST complete how many hours approved continuing education courses every two years? A.15 B. 10 C.24 D.59
c.24
