Property Insurance Exam
When the appointment of an individual agent is terminated, the insurer must notify the Office of the Commissioner with appropriate forms within how many days after the termination date? A)20 B)30 C)10 D)15
30
How long are oral contracts valid in Wisconsin? a)30 days b)Oral contracts are not valid. c)48 hours d)3 business days
30 days
In this state, insurers must pay a claim within how many days of receiving proof of loss? A)10 days B)15 days C)30 days D)90 days
30 days
Jean owns a craft store. The protective safeguards endorsement of her BOP requires the store to have a functional automatic sprinkler system. A winter storm freezes the pipes to the sprinkler system, causing the system to shut down. How many hours does Jean have to restore the system before she must notify her insurer? a)12 hours b)24 hours c)36 hours d)48 hours
48 hours
During a house fire, an insured moves an antique chair listed on the policy to a storage unit. In the Standard Fire Policy, how many days will the antique chair be covered at the new location? a)3 days b)5 days c)15 days d)30 days
5 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A)5 days B)7 days C)10 days D)3 days
5 days
An insurer decides to renew a life policy but at a higher premium rate, starting on the renewal date. How many days in advance must the insured be notified? A)30 B)60 C)90 D)100
60
An insurance policy is considered a "new policy" if it has been in effect for what maximum time period? A)10 days B)30 days C)60 days D)90 days
60 days
Which of the following would NOT be classified as personal property for insurance purposes? A)Equipment B)Furniture C)A house D)A vehicle
A house
A tornado that destroys property would be an example of which of the following? A)A peril B)A pure risk C)A loss D)A physical hazard
A peril
Which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?a)Exclusions b)Declarations c)Insuring agreement d)Additional coverage
Additional coverage
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does the describe?
Apparent
Homeowners policies provide coverage for a)Property of tenants, roomers, or boarders not related to any insured. b)Business property while on the residence premises. c)Losses caused by off-premises power failure. d)The land under the residence.
Business property while on the residence premises.
An insurance producer who by contract is bound to write insurance for only one company is classified as a/an a)Captive agent. b)Solicitor. c)Broker. d)Independent producer.
Captive agent.
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as A)Rebating. B)Misleading advertising. C)Defamation. D)Coercion.
Coercion.
What term best describes the act of withholding material information that would be crucial to an underwriting decision? A)Breach of warranty B)Concealment C)Withholding D)Leading
Concealment
What term includes damage where the insured peril was the proximate cause of loss? A)Consequential loss B)Negligent loss C)Direct loss D)Indirect loss
Direct loss
All of the following are purposes of insurance EXCEPT to a)Limit the adverse effects of competition on the cost of insurance. b)Regulate insurance marketing practices. c)Earn commissions. d)Protect the best interests of the public.
Earn commissions.
All of the following are conditions commonly found in the insurance policy EXCEPT a)Subrogation. b)Appraisal. c)Insuring agreement. d)Cancellation and nonrenewal.
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 A)Conditions. B)Exclusions. C)Declarations. D)Insuring agreement.
Insuring agreement.
Which of the following coverages is included in an unendorsed homeowners policy? a)Medical payment to others b)Personal property replacement coverage c)Fungi, wet or dry rot, or bacteria d)Earthquake
Medical payment to others
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report A)Must be advised that a copy of the report is available to anyone who requests it. B)May sue the reporting agency in order to get inaccurate data corrected. C)Must be informed of the source of the report. D)Are entitled to obtain a copy of the report from the party who ordered it.
Must be informed of the source of the report.
What type of coverage is Coverage E in homeowners policies? a)Personal liability b)Additional coverage c)Loss of use d)Personal property
Personal liability
What is the term for the entity that an agent represents regarding contractual agreements with third parties? A)Client B)Designee C)Insured D)Principal
Principal
Which of the following statements is an accurate comparison between private and government insurers? A)Private insurers provide insurance in areas where the government will not. B)Private insurers may be authorized to transact insurance by state insurance departments. C)Insurance provided by the government is called federal insurance. D)Private insurers offer fewer lines of insurance than government insurers.
Private insurers may be authorized to transact insurance by state insurance departments.
Which method of loss valuation is contrary to the basic concept of indemnity? a)Market value b)Agreed value c)Replacement cost d)Functional replacement cost
Replacement cost
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a)Rebating b)Twisting c)Defamation d)Misrepresentation
Twisting
Which amount is figured by subtracting depreciation from the replacement cost of a covered item? A)Actual cash value B)Interest of the insured C)Repair cost D)Pro rata percentage
Actual cash value
Which of the following coverages is NOT included in the basic form dwelling policy? A)Dwelling coverage B)Other structures C)Loss of fair rental value D)Additional living expense
Additional living expense
Which of these is defined as the maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur? a)Per occurrence limit b)Split limit c)Aggregate limit d)Per person limit
Aggregate limit
Who must be a member of the Wisconsin Insurance Plan?a)Membership is voluntary b)All insurance companies authorized to write basic property insurance in the state c)All insurers authorized to write motor vehicle insurance in the state d)All insurance companies doing business in Wisconsin
All insurance companies authorized to write basic property insurance in the state
An insured works outside the home. The insured's sister lives with him and cares for his four children. When the insured's home is severely damaged by fire, the family moves into an apartment while repairs are being made. The largest apartment available in the area has two bedrooms, so the insured's sister has to stay at a motel. How much will the HO-3 form pay for these additional living expense? a)Nothing b)All of the expense up to the Coverage D limit c)The cost of renting an apartment, but not the cost of the motel room d)The cost of renting an apartment, and 50% of the cost of the motel
All of the expense up to the Coverage D limit
All of the following would be considered rebating EXCEPT a)An agent offers tickets to a baseball game as an inducement to buy insurance. b)An agent misrepresents policy benefits to convince a policyowner to replace policies. c)An agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him. d)An agent offers to share his commission with a policyholder.
An agent misrepresents policy benefits to convince a policyowner to replace policies.
Which of the following is NOT covered under accounts receivable coverage form? A)Expenses to reestablish the records, if possible, and collection expenses that are in excess of normal costs B)Any loans required to offset uncollectible amounts C)Interest on loans required to offset uncollectible amounts pending payment of the insurance proceeds D)Sums due the insured that are uncollectible due to a covered loss
Any loans required to offset uncollectible amounts
An installation floater is used to insure A)All types of for-sale merchandise. B)Dams, power plants, water plants, and other such installations. C)Appliances intended to become a permanent part of the building. D)Buildings under construction.
Appliances intended to become a permanent part of the building.
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 A)Pay only if the mother-in-law has no health insurance of her own. B)Share equally in the cost with the mother-in-law's health insurance. C)Apply to injuries of any guests or visitors. D)Pay as excess over the mother-in-law's health insurance.
Apply to injuries of any guests or visitors.
A property form must contain all of the following clauses EXCEPT A)Effect of other insurance on the coverage provided by the policy. B)Termination of the insurance contract. C)Assignment clause. D)Location and description of the insured property.
Assignment clause.
Under a businessowners policy, an insured can cancel the policy A)Only at the time of policy renewal. B)At any time by mailing a written notice of cancellation. C)At any time with 10 days' advance written notice. D)Only after the policy has been in force for 120 days.
At any time by mailing a written notice of cancellation.
Under which of the following would the Commissioner grant a requested re-hearing? A)The aggrieved person files a claim against the Office of the Commissioner of Insurance's errors and omissions in insurance coverage. B)New evidence is discovered. C)The aggrieved person supplies a petition of 50 intermediaries licensed to transact insurance in Wisconsin. D)The Governor files an appeal.
B)New evidence is discovered.
Which of the following terms describes a situation in which an agent and policyholder act together to defraud the insurer? A)Coercion B)Teaming C)Collaboration D)Collusion
Collusion
If an insurer develops a new policy form, which authority must approve it? A)Department of Insurance B)Federal Board of Insurance Regulation C)Commissioner D)None
Commissioner
Who will transport the property of anyone who hires them? A)Common carriers B)Private carriers C)Motor truck carriers D)Commercial carriers
Common carriers
A builder's risk form is most often written as which of the following? A)Specific value form B)Completed value form C)Scheduled form D)Reporting form
Completed value form
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A)Aleatory. B)Personal. C)Unilateral. D)Conditional.
Conditional.
The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the A)Conditions. B)Exclusions. C)Declarations. D)Insuring clause.
Conditions.
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)Representation B)Adhesion C)Consideration D)Good faith
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)Adhesion b)Consideration c)Good faith d)Representation
Consideration
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
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-5, and ACV on HO-3. B)Contents are covered for replacement cost on HO-3, and ACV on HO-5. C)Contents are covered open peril on HO-5, and named peril on HO-3. D)Contents are covered open peril on HO-3, and named peril on HO-5.
Contents are covered open peril on HO-5, and named peril on HO-3.
Which of the following statements is true concerning the special form dwelling policy? A)Both Coverage A and Coverage C are provided for the broad form perils. B)Coverage A is for all-risk perils, and Coverage C is for basic perils only. C)Coverage A is for all-risk perils, and Coverage C is for the broad form perils. D)Both Coverage A and Coverage C are provided on an all-risk basis.
Coverage A is for all-risk perils, and Coverage C is for the broad form perils.
In a farm policy, which of the following coverages would reimburse the insured for loss of rental income following damage to the insured dwelling by an insured peril? a)Coverage A b)Coverage C c)Coverage D d)Coverage E
Coverage D
Which of the following would provide coverage for loss of income when an insured rental dwelling is rendered uninhabitable because of a covered loss? A)Coverage B B)Coverage C C)Coverage D D)Coverage A
Coverage D
In a dwelling policy, which of the following provides coverage for additional living expenses incurred by an owner-occupant in the event a covered peril makes the premises uninhabitable due to a covered loss? A)Coverage E B)Coverage A C)Coverage B D)Coverage C
Coverage E
An insured's house is damaged by a fire and is uninhabitable. As a result, the insured has to rent an apartment until repairs are made. A dwelling insurance policy will pay for the expense of renting the apartment. Which type of broad or special form coverage does the insured have? A)Coverage B - Other Structures B)Coverage D - Fair Rental Value C)Coverage E - Additional Living Expense D)Coverage A - Dwelling
Coverage E - Additional Living Expense
The basic dwelling form (DP-1) provides all of the following coverages without endorsement EXCEPT A)Coverage for other structures. B)Coverage for additional living expense. C)Coverage for personal property. D)Coverage for the dwelling.
Coverage for additional living expense.
Which of the following is NOT true about earthquake coverage? A)Coverage may be written in a Difference of Conditions policy. B)Coverage is commonly provided through a federally-funded program. C)Coverage is excluded by most property forms. D)Coverage may be added to property policies by endorsements.
Coverage is commonly provided through a federally-funded program.
In Wisconsin, Fire insurance provides coverage for losses to insured property that result from fire or lightning, as well as a)Damage caused by vandalism. b)Damage caused by floods. c)Damage caused by the insured. d)Damage caused by smoke and water.
Damage caused by smoke and water.
Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy A)During the policy period and for up to 5 years after the termination of the policy. B)Only after the policy period. C)During the policy period and for up to 3 years after the termination of the policy. D)Only during the policy period.
During the policy period and for up to 3 years after the termination of the policy.
Residential structures, including individual condominium units, and their contents are insured by what part of the National Flood Insurance Program? A)Basic coverage form B)Residential Condominium Building Association Policy (RCBAP) C)General property policy form D)Dwelling policy form
Dwelling policy form
All of the following are optional coverages that may be attached to an HO-3 policy EXCEPT A)Dwelling replacement cost. B)Home day care coverage. C)Earthquake coverage. D)Personal property replacement cost.
Dwelling replacement cost.
Which of the following causes of loss would NOT be covered under a BOP form? a)Earth movement, power failure, and flood b)Riot, sprinkler leakage, or sinkhole collapse c)Fire or lightning d)Tornado
Earth movement, power failure, and flood
All of the following are found in the declarations section of a policy EXCEPT the a)Policy premiums. b)Name of the insured. c)Limits of insurance. d)Exclusions.
Exclusions.
All of the following actions can be described as twisting EXCEPT a)Making an incomplete comparison between the existing and proposed policies b)Explaining to client the advantages of permanent insurance over term and suggesting changing policies c)Misrepresenting the terms and conditions of the existing policy to make the new one more attractive d)Embellishing the terms of the proposed policy in order to convince the insured to switch
Explaining to client the advantages of permanent insurance over term and suggesting changing policies
Which of the following is a unit of measurement an underwriter uses when determining the premium rates for insurance? a)Hazard b)Risk c)Exposure d)Loss
Exposure
All funds collected by an intermediary for prompt payment to insureds, insurers, or producers as entitled are received in what is known as A)Fiscal responsibility. B)Accepted accounting principal. C)Fiduciary capacity D)Premium accountability.
Fiduciary capacity
Which of the following claims would be included under the dwelling policy? A)Death to the insured's pet caused by smoke inhalation B)Fire damage to the insured's rowboat stored in the attached garage C)Fire damage to a garage located on the insured premises used as an auto repair shop D)Theft of the insured's auto from the detached garage
Fire damage to the insured's rowboat stored in the attached garage
All of the following are exclusions that apply in all three types of Dwelling Policies EXCEPT A)Earth movement B)Fire or lightning C)Government action D)Water damage
Fire or lightning
The major portion of the premium for an equipment breakdown policy pays A)For inspections and examinations. B)For repairs after a loss. C)For coverage for bodily injury and property damage of others. D)For replacement parts.
For inspections and examinations.
The homeowners policy covers collapse caused by all of the following EXCEPT A)Foundation cracks. B)Weight of snow. C)Hidden insect or vermin damage. D)Weight of too many people attending an event hosted in the house.
Foundation cracks.
An ocean marine loss that occurs through the voluntary sacrifice of a part of the vessel or cargo to save the ship, crew, or other cargo is known as a)Particular average. b)Inchmaree clause. c)Protection and indemnity. d)General average.
General average.
Which of the following homeowners policies covers those who rent their dwelling? A)HO-6 B)HO-1 C)HO-2 D)HO-4
HO-4
A Mobile Homeowners Policy is structured the same as a a)Dwelling Policy. b)Commercial Package Policy. c)Homeowners Policy. d)Personal Auto Policy.
Homeowners Policy.
The policy conditions define A)The amount of coverage. B)How parties to the contract must act following a loss. C)The basic underwriting information. D)The excluded perils.
How parties to the contract must act following a loss.
What type of ocean marine insurance provides physical damage coverage for the ship while it is in transit? A)Protection and indemnity B)Hull C)Cargo D)Freight
Hull
Under which of the following conditions can broad theft coverage be added to a dwelling policy? A)Broad theft coverage cannot be added to a dwelling policy. B)If the policy has been in effect for 60 days C)If the insured is owner-occupant of the dwelling D)If permission is granted by the department of insurance
If the insured is owner-occupant of the dwelling
How soon after a direct loss does the period of restoration for extra expense coverage under businessowners property insurance begin?a)Immediately b)Within 24 hours c)Within 48 hours d)Within 72 hours
Immediately
Insurance premium rates are unfairly discriminatory if a)An insurer charges a different rate for insurance based upon the difference in the expense factors between risks insured. b)Different insurers charge different rates for the same coverage. c)In the same class, rates clearly fail to equitably reflect the differences in expected losses and expenses. d)An insurer charges a different rate for insurance based upon differences in the risk insured.
In the same class, rates clearly fail to equitably reflect the differences in expected losses and expenses.
The pro rata liability clause is designed to protect the principle of a)Insurable interest. b)Waiver and estoppel. c)Indemnity. d)Subrogation.
Indemnity.
Which of the following would NOT be covered by HO liability insurance? a)First aid expenses b)Property damage c)Intentional tort d)Bodily injury
Intentional tort
A basic dwelling policy automatically provides coverage against fire, lightning, and A)Internal explosion. B)Smoke. C)Riot. D)Windstorm.
Internal explosion.
The Residential Condominium Building Association Policy (RCBAP) is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true? A)It does not protect the individual owner from loss to personal property owned exclusively by the unit owner. B)It provides limited coverage for personal property owned exclusively by the unit owner. C)It is designed to provide exclusive coverage for the individual owner and provides not coverage for the unit owner. D)This policy form is not approved for use in the states of New York or New Jersey.
It does not protect the individual owner from loss to personal property owned exclusively by the unit owner.
Which if the following is true regarding a risk retention group?
It is a liability insurance company owned by its members
Which of the following is true regarding the fire department service charge under the builders risk form? A)It is an automatic coverage for $500. B)It is not available in this form. C)It is a high-deductible endorsement. D)It is an additional coverage.
It is an additional coverage.
All of the following statements describe the concept of strict liability EXCEPT a)It is imposed on defendants engaged in hazardous activities. b)Claimants may need to provide proof that a product defect caused an injury. c)It is imposed regardless of fault. d)It is applied in product liability cases.
It is imposed on defendants engaged in hazardous activities.
In a dwelling policy, which of the following is true regarding personal liability coverage? a)It does not cover medical payments to others. b)It is included in all dwelling policies. c)It is the same as in homeowners policies. d)It must be added as a supplement or written as a separate policy.
It must be added as a supplement or written as a separate policy.
All of the following are true of Coverage B - Other Structures in homeowners policies EXCEPT A)This coverage is not applicable on the HO-4 policy form. B)The amount of coverage provided by Coverage B is an amount equal to 10% of Coverage A. C)Land where the other structures are located is not covered. D)It must be added by endorsement to a homeowners policy.
It must be added by endorsement to a homeowners policy.
All of these are excluded losses under ocean marine policies EXCEPT A)Intentional acts of the assured. B)Jettison. C)Demurrage. D)Wars and strikes.
Jettison.
Which of the following would NOT be considered causes for flood conditions covered by the National Flood Insurance Program? A)Landslides B)Overflow of inland or tidal waters C)Unusual and rapid accumulation or runoff of surface waters from any source D)Mudflow and collapse
Landslides
Which rating method provides an insurer with that portion of a rate that does not include provisions of expenses (other than adjusting expense) or profit and is based on historical aggregate loss and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time? a)Loss costs rating b)Provision rating c)Profit rating d)Components rating
Loss costs rating
Which of the following would be covered under the Utility Services - Time Element endorsement? A)Injuries to employees resulting from a utility service disruption B)Damage to the insured's property caused by utility service disruption C)Loss of business income arising from loss of utility service caused by an insured peril D)Extra expense incurred to remain open for business following the loss of utility service caused by an unnamed peril
Loss of business income arising from loss of utility service caused by an insured peril
An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true? a)The mortgagee must settle with the mortgagor in the event of a loss. b)The additional premium required for the mortgage endorsement must be paid by the mortgagee. c)Losses will be paid to the mortgagee and mortgagor as their interest appears. d)Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness.
Losses will be paid to the mortgagee and mortgagor as their interest appears.
Rates that are established based on the similarities of the risk with other risks are known as A)"A" rates. B)Merit rates. C)Manual rates. D)Experience rates.
Manual rates.
Which of the following is the use of false, misleading, or deceptive statements to describe the terms or benefits of any policy? A)False advertisement B)Defamation C)Fraudulent disclosure D)Misrepresentation
Misrepresentation
An agent is selling a client a Variable Life Insurance policy and as an inducement shows the client a projection based upon shares or dividends paid on a similar policy. This is A)Misrepresentation. B)Twisting. C)Defamation. D)Unacceptable business practice.
Misrepresentation.
An agent who includes a statement or omits a statement which, when taken in context of the whole presentation, may tend to mislead or deceive the persons addressed has committed A)Twisting. B)Coercion. C)Misrepresentation. D)Defamation.
Misrepresentation.
Which of the following will be covered by the contractors equipment floater in an unfiled inland marine insurance? A)Mobile equipment only while it is located on the job site B)Mobile equipment owned by construction equipment dealers C)Any type of mobile equipment D)Mobile equipment during transportation to and from the job site
Mobile equipment during transportation to and from the job site
Illegal use of narcotics would be an example of a a)Moral hazard. b)Physical hazard. c)Pure hazard. d)Morale hazard.
Moral hazard.
According to the standard mortgage clause, who has the right to bring a suit in their own name to recover damages, pay policy premiums, and submit a proof of loss? a)Policyholder b)Mortgagee c)Insurance company d)Governor
Mortgagee
Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? a)Motor truck cargo policy - owners form b)Trip transit policy c)Truckers coverage form d)Motor truck cargo policy - carriers form
Motor truck cargo policy - carriers form
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? A)Reciprocal B)Nonprofit service organization C)Stock D)Mutual
Mutual
The livestock coverage form covers which of the following losses? a)Sheep died after an attack by the family dog b)A cow died after it ran into a moving tractor c)All risk coverage for death of livestock by any cause except those excluded d)Named peril coverage for death of livestock
Named peril coverage for death of livestock
All of the following coverages are included in the BOP without requesting coverage extensions EXCEPT A)Newly acquired or constructed property. B)Pollutant cleanup and removal. C)Civil authority. D)Debris removal.
Newly acquired or constructed property.
A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. This endorsement will cover all of the following expenses EXCEPT a)Any increased cost of repairs or reconstruction. b)Demolition and removal cost. c)Ordinance with which the insured was required to comply prior to the loss. d)Loss to the undamaged portion of the building.
Ordinance with which the insured was required to comply prior to the loss.
In a watercraft policy, which coverage part will respond to a claim for damages for bodily injury or property damage for which the insured becomes legally liable because of a watercraft accident? A)Part A - liability coverage B)Part B C)Part D D)Part E
Part A -liability coverage
Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises?a)Professional liability b)Business income - report of values c)Permitted incidental occupancies d)Special limit of liability
Permitted incidental occupancies
What type of coverage is Coverage E in homeowners policies? A)Personal liability B)Additional coverage C)Loss of use D)Personal property
Personal liability
Section I of a boatowners policy covers a)Liability. b)Medical payments. c)Death. d)Physical damage.
Physical damage.
Who would participate in a Write Your Own (WYO) flood insurance program? A)Businesses requiring National Flood Insurance policies B)Private insurers that write and service National Flood Insurance policies on a no risk-bearing basis C)Lloyd's associations D)Government insurance companies that write and service National Flood Insurance policies
Private insurers that write and service National Flood Insurance policies on a no risk-bearing basis
Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? A)Reinstatement of limit B)Legal action against the insurer C)Privilege to adjust with the owner D)Transfer of rights of recovery
Privilege to adjust with the owner
Which inland marine coverage condition says that an insurer will settle with the actual owners of property involved in a loss? a)Reinstatement of limit b)Legal action against the insurer c)Privilege to adjust with the owner d)Transfer of rights of recovery
Privilege to adjust with the owner
Which of the following is an example of a producer's fiduciary responsibilities? A)Offering additional coverage to his client B)Promptly forwarding premiums to the insurance company C)Helping clients to file claims D)Doing a review of their client's coverage
Promptly forwarding premiums to the insurance company
A sworn written statement that must be furnished by the insured to the insurer before any loss under a policy can be paid is called a)Binder. b)Proof of loss. c)Notice of claim. d)Claim report.
Proof of loss.
Under Section I, homeowners insurance must include a)Liability coverage. b)Immediate coverage. c)Negligence coverage. d)Property coverage.
Property coverage.
All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT a)Provides coverage for all employees, even those employees who were terminated in the past ninety days. b)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.
Provides coverage for all employees, even those employees who were terminated in the past ninety days.
Which of the following is NOT an optional coverage built into the condominium association coverage form? a)Replacement cost b)Real estate tax liability c)Agreed value d)Inflation guard
Real estate tax liability
All of the following are true regarding rebates EXCEPT a)Dividends are not considered to be rebates. b)Rebates are allowed if it is in the best interest of the client. c)Rebates are only allowed if specifically stated in the policy. d)Rebating can be anything of monetary value given as an inducement to purchase insurance.
Rebates are allowed if it is in the best interest of the client.
Which of the following insurance options would be considered a risk-sharing arrangement? A)Reciprocal B)Stock C)Mutual D)Surplus lines
Reciprocal
After a loss, an insured covered by a business property coverage is NOT required to A)Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation. B)Resume business operations as soon as possible. C)Send the insurer a sworn proof of loss within 60 days. D)Take all reasonable steps to protect property from further damage.
Reconstruct for the insurer a timeline of activities leading up to the loss for use in an investigation.
Carl's application for a life policy was rejected because of information disclosed in an inspection report. Carl reviewed the consumer reporting agency's file and found they had incorrect information concerning his personal life. Carl can legally require the reporting agency to A)Provide him with a written apology. B)Reinvestigate. C)To cease and desist. D)Delete the incorrect information.
Reinvestigate.
In a dwelling policy, which of the following other structures would be covered? A)Used by the insured to house a manufacturing operation B)Rented to a neighbor for use as a private garage C)Used as part of a farming operation D)Used by the insured in which to operate a retail business
Rented to a neighbor for use as a private garage
Which of the following is used in the formula for calculating the actual cash value of a property? a)Replacement cost b)Stated value c)Fair market value d)Agreed value
Replacement cost
Which of the following is NOT a mandatory provision for property policies issued in the state of Wisconsin? a)A mortgagee clause b)Obligations in the event loss occurs c)Replacement cost coverage d)A description of the location of the property covered
Replacement cost coverage
All of the following statements regarding a boatowners policy are true EXCEPT a)Watercraft liability protects up to specified limits for claims against a "covered person" for damages due to bodily injury caused by a watercraft. b)Physical damage coverage is provided on an actual cash value (ACV) basis. c)Perils are insured on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured. d)Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium.
Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium.
Which of the following statements is INCORRECT? a)Replacing insurance policies for the purpose of making commissions is legal. b)Misrepresenting the true nature or facts of a policy or its benefit in order to induce a policyholder to surrender one policy and replace it with another is illegal. c)It is illegal to be involved in any activity of boycott, coercion, or intimidation that is intended to restrict fair trade or to create a monopoly. d)Discrimination in rates, premiums, policy benefits, etc. for persons within the same class or with the same life expectancy is illegal.
Replacing insurance policies for the purpose of making commissions is legal.
Events in which a person has both the chance of winning or losing are classified as a)Retained risk. b)Speculative risk. c)Insurable. d)Pure risk.
Speculative risk.
When the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the event of a covered loss, the coverage is said to be written as a)Actual cash value. b)Specific insurance. c)Stated amount. d)Replacement cost.
Stated amount.
Which of the following perils is covered by the HO-2 and HO-3? a)Flood b)War c)Sudden and accidental rupture of a heating system d)Loss due to power interruption that occurs off the premises
Sudden and accidental rupture of a heating system
The Commissioner conducts an examination of a domestic insurer and believes that the costs of examination places an unreasonable financial burden on the insurer. Which of the following will happen? a)The federal government will absorb the full cost. b)The federal government will absorb part of the cost, and the state government will absorb the rest of the cost. c)The costs will be reduced to the amount that the examinee can reasonably pay; the rest will be paid by the federal government. d)The Commissioner's office may pay all or part of the costs.
The Commissioner's office may pay all or part of the costs.
Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy? A)The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store. B)Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone. C)The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant. D)Piccolo Pete's Café has its door broken by vandals trying to get inside.
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.
What facility makes basic property insurance available to those who cannot obtain such coverage in the voluntary insurance market? A)The Wisconsin Insurance Guaranty Association B)The National Association of Insurance Commissioners C)The Wisconsin Insurance Plan D)The Wisconsin Assigned Risk Plan
The Wisconsin Insurance Plan
When an insurer is given an order of liquidation, which of the following will protect the insureds' unpaid claims? A)The Office of the Commissioner of Insurance B)The Wisconsin Insurers Association C)A reinsurance company D)The Wisconsin Insurance Security Fund
The Wisconsin Insurance Security Fund
When an insurer is given an order of liquidation, which of the following will protect the insureds' unpaid claims? a)The Office of the Commissioner of Insurance b)The Wisconsin Insurers Association c)A reinsurance company d)The Wisconsin Insurance Security Fund
The Wisconsin Insurance Security Fund
Under a dwelling policy, which of the following is NOT a factor in determining a loss? A)The amount necessary to repair or replace the property B)The amount negotiated by the insured C)The policy limit D)The amount reflecting the insured's interest in the property at the time of loss
The amount negotiated by the insured
As a condition to issuing a fire insurance policy, the Wisconsin Insurance Plan may require all of the following EXCEPT a)The applicant to make specific improvements on the property. b)The applicant to agree to a large or special deductible. c)The applicant to pay the cost of the property inspection. d)All are exceptions.
The applicant to pay the cost of the property inspection.
When the condominium association coverage form and the condominium commercial unit-owners form both cover the same loss, a)The association coverage form will be considered primary and pay the loss. b)The unit-owners coverage form will be considered primary and pay the loss. c)Each coverage form will pay a pro rata share. d)Neither will pay.
The association coverage form will be considered primary and pay the loss.
How much is the premium for the dwelling under construction endorsement under the dwelling policy? A)50% of the actual value premium B)The average amount of insurance during construction C)75% of the gross premium D)The full value of the house
The average amount of insurance during construction
Peril is most easily defined as A)The cause of loss insured against. B)An unhealthy attitude about safety. C)The chance of a loss occurring. D)Something that increases the chance of loss.
The cause of loss insured against.
A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? A)Nothing, because the company failed to carry the required insurance amount B)Up to $300,000 for the loss C)Up to $150,000 for the loss D)The coinsurance formula would apply
The coinsurance formula would apply
All of the following are characteristics of the dwelling policy EXCEPT a)Dwellings up to four family units are eligible. b)The dwelling must be owner-occupied. c)Coverage includes the dwelling only, contents only, or both. d)Incidental occupancy of limited service-type exposure is permitted.
The dwelling must be owner-occupied.
Which of the following would the livestock coverage form NOT insure against? a)The euthanasia of livestock suspected of carrying mad cow disease b)Death of livestock caused by accidental drowning c)Death of livestock caused by a tornado d)The euthanasia of livestock after being hit by a vehicle
The euthanasia of livestock after being hit by a vehicle
The common policy condition is a modular part combined with other parts to create the contract. The common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? a)Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained. b)Requests for any changes in the policy from the insured may be made by the second named insured. c)The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy. d)The first named insured may cancel the policy at any time by giving written notice to the insurer.
The first named insured may cancel the policy at any time by giving written notice to the insurer.
Under the provisions of the business income coverage form, all of the following are true EXCEPT A)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. B)The insured agrees to resume all or part of operations as quickly as possible. C)The insured is reimbursed for payroll that continues after the loss begins. D)The insured is reimbursed for the loss from the date of loss to the date of restoration or policy expiration date, whichever comes first.
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 which of the following circumstances would an insurer be allowed to cancel a dwelling policy midterm? A)The insured reached his or her limit on the number of claims. B)The insured knowingly lied about the year the property was constructed. C)The insured's claims have exceeded the amount of coverage. D)The insured wants to make suspicious increases to his or her coverage.
The insured knowingly lied about the year the property was constructed.
What will happen if a house covered by a standard mortgage clause is a total loss? A)The insurer pays the mortgagee according to the mortgagee's interest in the property. B)The mortgagee retains no rights to any contracts involving the policy. C)The insured receives the full benefit and passes the mortgagee's share to the mortgagee. D)The mortgagee receives the full benefit and passes the insured's share to the insured.
The insurer pays the mortgagee according to the mortgagee's interest in the property.
The most the insurer will pay for a loss under a businessowners policy is a)80% of the loss. b)20% of the loss. c)The limit of insurance after the deductible is paid. d)The amount of the loss minus the deductible.
The limit of insurance after the deductible is paid.
The most the insurer will pay for a loss under a businessowners policy is a)The amount of the loss minus the deductible. b)80% of the loss. c)20% of the loss. d)The limit of insurance after the deductible is paid.
The limit of insurance after the deductible is paid.
A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffers a loss due to a fire, which of the following is true? a)The loss is payable to the insured and the mortgagee. b)The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. c)The entire loss is payable to the mortgagee. d)The entire loss is payable to the insured.
The loss is payable to the insured and the mortgagee.
Which of the following is NOT a characteristic of an insurable risk? A)The loss exposure must be large. B)The loss must be catastrophic. C)The loss must be due to chance. D)The loss must be measurable.
The loss must be catastrophic.
According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders? A)The mortgageholder has the right to receive loss payment. B)The insurer will pay covered losses or damage to each mortgageholder shown in the declarations. C)The mortgageholder must petition the state department of insurance for named status. D)If the insurer denies the claim, the mortgageholder may still take steps to receive loss payment.
The mortgageholder must petition the state department of insurance for named status.
Which of the following losses would most likely NOT be covered under Coverage A in the dwelling policy? A)Outdoor personal property of the insured B)Supplies used for repair of the dwelling C)Theft of a renter's lawnmower used to service the premises D)Fire damage to building material on the premises
Theft of a renter's lawnmower used to service the premises
Which of the following best expresses the purpose of a stated value contract? a)To pre-establish the amount of coverage available for property items that are difficult to value b)To ensure that the principle of indemnification applies c)To establish the value of property subject to loss by theft or robbery d)To provide a maximum limit for which the insurance company may become liable in casualty losses
To pre-establish the amount of coverage available for property items that are difficult to value
What is the purpose of a binder of insurance? a)To ensure that the applicant will not apply for insurance with competing insurers b)To ensure that the insurer will accept the application for insurance with minimal underwriting c)Binders have no definite purpose d)To show the insurer's acceptance of the applicant's offer to buy insurance
To show the insurer's acceptance of the applicant's offer to buy insurance
All of the following types of property are covered by a standard builders risk form EXCEPT A)Temporary structures. B)Machinery that will be permanently attached to the building. C)Tools 50 feet away from the building. D)The building itself.
Tools 50 feet away from the building.
Which of the following endorsements could be added to a businessowners policy to protect against loss of income due to lightning striking an electrical grid making the business unable to operate? A)Utility services direct damage endorsement B)Named peril endorsement C)Protective safeguards endorsement D)Utility services time element endorsement
Utility services time element endorsement
Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? a)Works of art or antiques b)Valuable papers and records c)Property of others d)Manuscripts
Valuable papers and records
Which of the following is a statement made in an insurance application by the insured that is the absolute truth? A)Oath B)Claim C)Representation D)Warranty
Warranty
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
According to the conditions of a hull policy after a loss, when would wages and maintenance be paid for the master, officers, and crew? a)When moving the vessel from one port to another b)While laid up in port awaiting repair c)Within 15 days after filing claim for damages d)While on shore leave
When moving the vessel from one port to another
Even though the Standard Fire Policy is a named peril contract, under which of the following circumstances would the policy provide "all risk of loss" coverage on insured property?a)Never b)Always c)When the loss is classified as an "act of God" d)When the loss is to insured property that has to be removed because of endangerment by a peril insured against under the policy
When the loss is to insured property that has to be removed because of endangerment by a peril insured against under the policy
The insurer will NOT pay maintenance and wages for the master and crew A)When moving the vessel from one port to another for repairs. B)While underway to a repair port, as directed by the insurer. C)During a voyage to test repairs. D)While the ship is laid up for repairs.
While the ship is laid up for repairs.
An insured added the scheduled personal property endorsement to her homeowners policy to cover musical instruments. If the insured purchases a new musical instrument, when must the insurer be notified for the musical instrument to be covered? a)Within 10 days b)Within 20 days c)Within 30 days d)Within 90 days
Within 30 days
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce A)Without receiving written consent from a Federal Judge. B)Without receiving written consent from an insurance regulatory authority. C)Under any circumstances. D)Unless they have served an appropriate prison sentence.
Without receiving written consent from an insurance regulatory authority.
As you leave the dock in your yacht, you carelessly cut in front of another yacht, causing its crew to change course. They run into a buoy damaging their boat. What coverage takes care of the damages? A)Your Inchmaree clause B)The collision clause of your hull policy C)The other boat's hull policy D)Your P&I
Your P&I
Unless additional coverages are added to the businessowners policy (BOP) the maximum amount of coverage on any outdoor sign, regardless of whether it is attached to a building or not, is limited to A)$500. B)$1,000. C)$2,000. D)$4,000.
$1,000.
What is WIP's maximum limit of coverage for a fire policy on personal property at one location? a)$1,000,000 b)$1,500,000 c)$100,000 d)$500,000
$100,000
Under the businessowners policy, the coverage for the newly acquired property is limited to A)$10,000. B)$25,000. C)$50,000. D)$100,000.
$100,000.
The Wisconsin Insurance Plan's maximum limit of coverage against loss by burglary or theft on any eligible property, other than a dwelling, is A)$15,000. B)$25,000. C)$5,000. D)$10,000.
$15,000.
A policyholder has an equipment breakdown policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? A)$180,000 B)$200,000 C)$100,000 D)$175,000
$175,000
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? A)$1,000 B)$100 per violation C)Revocation of license D)$2,500
$2,500
What is the maximum limit of coverage that may be provided on any dwelling at one location under a fire policy issued by the Wisconsin Insurance Plan? A)$250,000 B)$500,000 C)$200,000 D)$150,000
$200,000
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and the insured's policy is written on the actual cash value(ACV), how much will the policy pay toward the insured's new roof? A)$1,000 B)$4,000 C)$5,000 D)$6,000
$5,000
If a person does not comply with an order issued within 2 weeks after the Commissioner has given notice, for each day that the violation continues, the Commissioner may issue a fine of up to A)$2,000. B)$3,000. C)$5,000. D)$1,500.
$5,000.
The Wisconsin Insurance Plan's maximum limit of coverage against loss by burglary or theft on any dwelling is a)$25,000. b)$5,000. c)$10,000. d)$15,000.
$5,000.
Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises? A)$250 B)$500 C)1,000 D)$100
$500
Under additional coverages for homeowners policies, what is the maximum amount that would be paid for fire department service charge? A)$500 B)$1,000 C)$5,000 D)Fire department service charges are not allowed.
$500
All of the following are special personal property limits under a homeowners policy EXCEPT A)$2,500 for theft of firearms. B)$500 for business personal property on the insured premises. C)$1,500 for securities, accounts, deeds, and evidences of debt. D)$1,500 for trailers not used with watercraft.
$500 for business personal property on the insured premises.
How long is the policy period for NFIP flood insurance? A)6 months B)10 months C)1 year D)2 years
1 year
An insured just suffered a loss. Within how many days should she file a claim with her insurer? a)20 b)30 c)60 d)10
10
Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy? A)5 days B)10 days C)15 days D)20 days
10 days
The insurer decided to cancel an insurance policy prior to its expiration due to nonpayment of premium. When can cancellation take place? A)10 days after the decision was made B)10 days after the notice was delivered to the policyholder C)10 days after the notice is sent out to the policyholder D)Immediately
10 days after the notice was delivered to the policyholder
Which of the following is correct regarding the amount of insurance that a lender may require as a condition to a loan on a property insured against risks to improvements? a)100% of the stated value b)100% of the replacement value c)100% of the actual cash value d)100% of the functional replacement cost
100% of the replacement value
An intermediary has just placed insurance on himself. He can receive compensation for this transaction only if he has placed insurance on other individuals with the same insurer within the last A)3 months. B)6 months. C)12 months. D)18 months.
12 months.
An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified? A)15 B)20 C)30 D)10
15
An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified? a)20 b)30 c)10 d)15
15
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)1 month. B)90 days. C)1 week. D)2 weeks.
2 weeks.
An intermediary holding a Wisconsin insurance license in any major line of insurance must complete how many credit hours of continuing education every 2 years? A)12 B)20 C)22 D)24
24
Under the dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss? A)10 days B)30 days C)45 days D)60 days
30 days
An insured with a homeowners policy has removed property from the insured location to protect it from loss that could be caused by a covered peril. The removal coverage applies for A)5 days. B)30 days. C)60 days. D)90 days.
30 days.
Chapter: Businessowners Policy Question 13 of 20 Under the additional coverages of a BOP, property removed to protect it from loss will be covered at another location for up to A)45 days. B)10 days. C)14 days. D)30 days.
30 days.
A shipment is covered under a cargo policy written on a "warehouse to warehouse basis." For how long is this shipment covered after discharge at the destination port? A)60 days B)24 hours C)2 weeks D)1 month
60 days
According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? A)30 days B)60 days C)90 days D)120 days
60 days
Coverage under the builders risk form will end in all of the following situations EXCEPT A)Construction has been abandoned. B)60 days after the building became occupied. C)The insured has sold the property. D)60 days after the construction has ended.
60 days after the construction has ended.
Coverage F - Unscheduled Farm Personal Property is subject to a coinsurance clause of a)50%. b)75%. c)80%. d)90%.
80%.
Which of the following persons is NOT required to complete CE? a)A property insurance intermediary with 40 years of continuous licensure b)Any licensee over 65 with more than 25 years of continuous licensure c)A limited lines intermediary with 40 years of continuous licensure d)A life insurance intermediary with 18 years of continuous licensure
A limited lines intermediary with 40 years of continuous licensure
A businessowners policy is A)A special policy designed for large retail operations. B)Part of a commercial package policy. C)A monoline policy. D)A self-contained prepackaged policy.
A self-contained prepackaged policy.
A business income coverage form would cover all of the following situations EXCEPT A)The building next door is damaged during a drug bust, and the area is barred from the public. B)A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time. C)A hurricane damages the insured's building; a temporary relocation to another building is necessary. D)A replacement part for necessary equipment is ordered with overnight delivery charges.
A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.
