QUIZ

In which of the following situations would off-premises coverage in a broad theft endorsement apply?

.The insured's camera is stolen from his vacation home while he is there.

All of the following are excluded in the equipment breakdown basic policy EXCEPT

Explosion of steam boilers Equipment breakdown coverage covers the sudden and accidental breakdown of the vessel. Business interruption may be added by endorsement.

Robbery is

Taking of property by use of force, violence, or fear. When one's property is taken by another by use of force, violence, or fear, it is robbery.

An insured owns a large dog. The first day he has to leave the dog home alone to go to work, the insured comes back to find his $400 couch torn apart, his $100 coffee table chewed up, his $50 window curtain shredded, and a $200 window pane shattered where his dog jumped through. The insured has personal property coverage under a special form of dwelling policy. How much of this loss will the policy cover?

$0

A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by motor carriers arc of 1980, what is the minimum amount of insurance the company must carry on all vehicles that transport oil?

$1 million The minimum requirements for haulers of oil and certain categories of hazardous waste in interstate commerce is $1 million.

The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records?

$2,000 The cost of restoring farm records is covered up to $2,000.

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000 A premium discount is when an insured owes a total standard premium greater than $5,000.

A producer has been notified by the Commissioner to stop using an unapproved trade name. How many days does the producer have to change the trade name before facing a fine?

10 days A producer who continues to use a unapproved trade name for 10 or more days after being notified will face a fine of up to $5,000.

In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person?

1st limit Split limit coverage uses 3 dollar amounts. The First limit indicates the maximum amount the policy will pay for BI for each person

Continuing education requirements must be met every

2 YEARS Continuing education instruction must be completed every 2 years.

WHICH BONDS ARE ISSUED TO SECURE THE RELEASE OF A PERSON FROM JAIL PENDING A COURTROOM APPEARANCE?

BAIL BONDS Bail bonds are issued to secure the release of a person from jail pending a courtroom appearance. They guarantee that the person will appear when so specified.

A businessowner has a building and personal property policy that covers a shed in which he stores extra parts. If he buys a second shed for the same purposes, this will be automatically covered for how long?

30 days Coverage is for 30 days for newly acquired buildings and personal property that are similar in use to the property insured.

Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sale transactions until the conclusion of their next examination by the insurance dept. or for a period of at least

5 years Louisiana insurance laws require insurers to keep such records for a minimum of 5 years.

Which of the following is eligible for a business owners policy?

A 6-story office building with less than 100,000 square feet total area Maximum eligibility requirements for a businessperson policy (BOP) are 6 stories high, 25,000 square feet mercantile space in apartment building, 100,000 square feet for the office building, and $3 million gross sales.

Following an injury, loss of wages benefits are paid after the injured worker has been unable to work for...

A week Loss of time benefits will not be paid for the first week of disability. If disability last beyond 6 weeks, benefits for the first week will be paid.

Which of the following is NOT considered an insured contract under the Commercial General Liability Policy?

A written agreement which indemnifies a person for fire damage to the premises rented to the insured General liability covering premises includes automatic coverage for written lease of premises, sidetrack agreements, elevator maintenance agreements, easement agreements, and municipality indemnification. Protection from claims arising from fire damage to nonowned property would need to be covered by fire damage (legal) liability.

All of the following are penalties for violating the statutes pertaining to sharing of commissions EXCEPT

Additional continuing education in ethics Any person who violates the state statutes pertaining to sharing of commissions, upon conviction, may be fined an amount between $1,000 and $5,000, and/or imprisoned for a maximum of 2 years. The producer's license will also be suspended or revoked.

Which would NOT be covered by the inside the premises-robbery or safe burglary of other property coverage?

An employee is caught stealing cash from the register Dishonest or criminal acts of any employee or representative are specifically excluded

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold Although a cold could have been caught as a result of the working environment, it is not specific enough to that environment for it to be considered causal.

The general property policy form is used for other-residential and non-residential structures and their contents such as

Any of the above would be covered under this form The general property policy form is used for other residential and non-residential structures and their contents. Eligible structures include other residential structures, commercial structures, and cooperative associations.

the garage coverage form is used to insure

Auto businesses, such as auto dealers, service stations, and auto repair shops The garage coverage form is used for businesses that regularly have autos of others in their care, custody or control. These types of businesses would include auto dealerships, auto repair and service garages, and businesses that park vehicles for others.

According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties

Automatically transfer to a legal representative The Insurance Services Office, Inc. (ISO) common policy conditions for the commercial package policy states that in the event of the insured's death, rights and duties are automatically transferred to the insured's legal representative.

Business personal property coverage form covers all of the following EXCEPT...

Automobiles held for sale Automobiles held for sale are among the exclusions in the BPP form. The rest are covered types of property.

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefit will be provided if the state was listed on the policy information page. Employers must list all states in which they do business on the policy information page for coverage to apply in those states.

Which of the following would be included in the farm liability coverage forms?

Bodily injury to a residence employee Just like HO liability, farm liability does not pay for injuries of anyone normally at the insured location except residence employees not covered by workers comp.

Which of the following endorsements under and Equipment Breakdown policy is used for calculating the amount to be paid on a lost business claim after a direct loss?

Business income- report of values The information is used for calculating amount to be paid on a lost business claim after a direct loss is in the Business Income - Report of Values form.

THE PART OF THE POLICY THAT SETS FORTH THE RULES OF CONDUCT, DUTIES, AND OBLIGATIONS OF THE PARTIES IS CALLED THE

CONDITIONS

Which of the following best describes liberalization clause in a policy?

Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium. Liberalization clause states that if the insurer adopts any changes that broaden coverage in the policy, those changes will automatically apply to the policy at no additional premium as of the date the insurer implements the change in the insured's state, provided that this implementation date falls within 60 days prior to or during the policy period stated in the declarations.

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as:

Coercion These are all considered to be Unfair Trade Practices, which are major violations that can lead to heavy penalties. Coercion, for example, is when the bank won't give you an auto loan unless you agree to buy auto insurance from them.

The ABC corporation has $100,000 of coverage on its building through insurance company A, and $50,000 of identical coverage on the same building through insurance Company B. Assuming coinsurance is not an issue, when a $24,000 loss occurs and the pro rata method is used, how much will each insurer pay?

Company A will pay $16,000; Company B will pay $8,000

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.

Complete operations The plasterer's completed operations pays because his negligence led to the loss. It does not pay to redo the job.

An insured's business is damaged because of a fire, and he is forced to close the business temporarily for repairs. As a result, the insured lost income. What type of loss is this?

Consequential. Consequential loss, also known as indirect loss, is a second financial loss caused by a covered direct loss.

Which of the following Dwelling coverage would provide coverage to a garage not attached to the primary insured dwelling?

Coverage B

Which of the following statements is true concerning under insured motorist coverage under a personal auto policy?

Coverage applies only on the extent that the under insured motorist limits exceed the bodily injury limits carried by the operator of the other vehicle Under insured motorist coverage will act as excess over the at fault motorist's bodily injury coverage.

In terms of parties to a contract, which of the following does NOT describe a competent party?

D The person must have at least completed secondary education. The parties to a contract must be capable of entering into a contract in the eyes of the law. Generally, this requires that both parties be of legal age, mentally competent to understand the contract, and not under the influence of drugs or alcohol.

Which of the following is a mandatory part of an insurance policy that varies with each individual policy?

Declarations

WHICH OF THE FOLLOWING TERMS BEST DESCRIBES A TREMBLING OR SHAKING OF THE EARTH THAT IS VOLCANIC OR SEISMIC IN ORIGIN?

EARTHQUAKE Earthquakes are excluded by most standard property forms, but coverage for may be added by endorsement to most property policies. Coverage may also be written in a Difference in Conditions policy.

WHAT TYPE OF COVERAGE DO UMBRELLA POLICIES PROVIDE?

EXCESS COVERAGE OVER AN UNDERLYING OR PRIMARY POLICY Umbrella policies, sometimes called catastrophe insurance, provide excess coverage over the underlying or primary liability policy.

How often must producer licenses renew in Louisiana?

Every 2 years Licenses in Louisiana must be renewed every 2 years. Licensees must submit a renewal application, pay the required fees, and complete continuing education requirements.

What method of premium computation related an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor An experience modification factor is developed by a rating bureau. The calculations relate an employer's losses, payroll, and premiums, segregated according to classifications of operations, all as reported to the bureau by the employer's insurance company.

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file bankruptcy. Which of the following terms best describes the advertisement?

False financial statement False financial statements are made when insurance companies attempt to hide their financial troubles from the public and government officials.

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act The Federal Employees Compensation Act provides benefits to injured civilians who are employed by the federal government; no private insurers are involved.

FAULTY WIRING IN A HOME IS AN EXAMPLE OF A

HAZARD

WHICH OF THE FOLLOWING BUSINESSES WOULD BE ELIGIBLE FOR A BUSINESS OWNERS POLICY?

HILL & MORTON FUNERAL HOME Specifically excluded from eligibility on a business owners policy (BOP) are bars and grills, financial institutions, and amusement places.

A MOBILE HOMEOWNERS POLICY IS STRUCTURED THE SAME AS

HOMEOWNERS POLICY The coverage structure of the Mobile Homeowners Policy follows the structure of the Homeowners policy.

WHICH OF THE FOLLOWING TERMS DESCRIBES THE CONCEPT OF DISRUPTING THE CHAIN OF EVENTS

INTERVENING CAUSE

CGL coverage B (personal and advertising injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product. Personal and advertising injury coverage does not apply to professional advertisers or intentional injury, and does not guarantee the product will perform as advertised.

According the Workers compensation and employer liability policy form a state should be listed in part three - "Other States insurance of the WC&EL policy

Insured expects to extend operations to that state. By naming a state in Part Three of a workers compensation and employers liability (WC&EL) policy, an employer provides that company operations may be conducted in that state.

A deliberate act that causes harm to another person, regardless of whether the harm is intended is called a(n)

Intentional tort

If an employer in a state with elective workers compensation laws chooses not be to subject to the state's workers compensation laws, what does the employer lose?

Its common law defenses against liability suits Elective law means the employer does not have to be subject to the state's workers compensation laws, but if the employer chooses not to be subject to the laws, it loses its common law defenses against liability suits.

If a guest's property is lost or damaged while on the insured premises or in their control, Crime Coverage Form L- Liability for guest property- premises covers the insureds

Legal liability This coverage is similar to Coverage K, except that it covers the insured's legal liability for loss or damage to guest's property while on the insured's premises or in their control.

Which of the following would be covered under the crime coverage inside the premises - theft of money and securities?

Loss or damage to a locked safe, vault, or cash register Inside the premises - theft of money and securities would cover loss or damage to a locked safe, vault, or cash register.

If the Louisiana Citizens Property Insurance Corporation denies an application the applicant may appeal to the

Louisiana Insurance Rating commission If the corporation for any reason denies an application, the applicant may appeal to the Louisiana Insurance Rating Commission.

Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance?

Monoline A monoline policy contains only one coverage part.

WHICH OF THE FOLLOWING DOES THE TERM PROXIMATE CAUSE REFER TO

NEGLIGENCE THAT LEADS TO AN INJURY

A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?

Occupational disease caused or aggravated by a condition of employment Occupational disease, like bodily injury, that arises out of or during employment is covered under workers compensation insurance.

A producer was originally licensed on April 1st, 2001. The producer's birthday is on October 17th. The producer last renewed her license in 2012. By what date must the producer renew her license again?

October 31, 2014 Producers need to submit a license renewal application every 2 years. License renewals must be completed by the last day of the producer's birth month.

The causes of loss insured against in an insurance policy are known as...

PERILS

WHAT HAZARD WOULD YOU BE CONCERNED ABOUT IF YOU LIVED NEXT TO AN EXPLOSIVES CONTRACTOR?

PHYSICAL

WHO MIGHT RECEIVE DIVIDENDS FROM A MUTUAL INSURER?

POLICYHOLDERS

Which of the following terms refers to such disabilities as the loss of a limb, hearing, or eye sight?

Permanent partial disability Permanent partial disabilities refer to such disabilities as the loss of a limb, hearing, or eye sight.

All of the following property is insured under Coverage A of a Farm Policy EXCEPT:

Personal lawnmower of a tenant used to service the described location. Property belonging to a tenant is not covered.

Which professional liability form provides form coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services?

Physicians, surgeons, and dentists malpractice The physicians, surgeons and dentists malpractice form provides coverage for liability arising out of malpractice, error, or mistakes made in rendering or failing to render professional services.

A customer was injured in a supermarket parking lot when a grocery cart collided with the customer's leg. Coverage for this claim would be provided under

Premises and operations Premises and operations would cover claims arising from injuries that occur on the insured's premises or because of the insured's business operations

Who would participate in a Write Your Own (WYO) flood insurance program?

Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis A WYO program is made up of private insurers that write and service National Flood Insurance policies on a no risk-bearing basis through a special arrangement with the Federal Insurance Administration. WYO programs retain part of the flood insurance premium to pay for commissions and administrative costs. The remaining premiums, plus investment, are used to cover losses.

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a

Product liability claim Product liability provides coverage against loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor due to injury or damage resulting from the use of a covered product.

The Gramm-Leach-Bliley Act was passed to

Protect private customer information filed with a financial institution. The Gramm-Leach-Bliley Act was passed to protect private customer information that is filed with a financial institution. Customers must be given two disclosure notices (one at the onset of business and one before information is disclosed), as well as a yearly updated disclosure notice.

IF A COURT ORDERED PAYMENT FOR A LOSS THAT WAS NOT COVERED IN THE POLICY EVEN IF IT WAS CLEARLY WORDED, IT WOULD BE AN EXAMPLE OF WHICH LEGAL CONCEPT?

REASONABLE EXPECTATIONS

A producer in another state wants to become a producer in Louisiana. The other state gives the same privileges to Louisiana producers wanting to be licensed in that state as it does to its own producers. Louisiana, therefore, extends the licensing privileges to the prospective producer of the other state. What is this called?

Reciprocity "Reciprocity" occurs when the state in which the person resides accords the same privilege to residents of Louisiana

WHEN AN INDIVIDUAL PURCHASES INSURANCE, WHAT RISK MANAGEMENT TECHNIQUE IS HE OR SHE PRACTICING?

TRANSFER

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the

Situs and status test A worker is covered under the U.S. Longshore and Harbor Workers Compensation Act (LHWCA) only if he or she meets a situs and a status test. The injury must occur on the navigable waters or on an adjoining wharf, pier, dock, or similar facility used in the loading, unloading, building, or repairing of vessels. In addition, the individual must have been engaged in maritime employment when injured.

Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?

Sole representative Sole representative states that the first named insured will act on behalf of all insureds under the policy.

Which one of the following symbols used in the Business Auto Coverage Form (BACF) is correctly described?

Symbol 9 — Non-owned Autos Only Symbol 1 is used for any auto, Symbol 2 is used for owned autos only, and Symbol 7 is used for specifically described autos only.

AN INSURANCE AGENCY COULD PURCHASE AN ERRORS AND OMISSION INSURANCE POLICY WHICH WOULD PROVIDE PROTECTION IN THE EVENT OF ANY OF THE FOLLOWING EVENTS EXCEPT

THE AGENCY LOSES COMMISSION INCOME FROM POLICIES THAT WERE NOT ISSUED BY THE INSURER. Errors and omissions insurance protects an insured against actions claiming the insured has failed to act in a professional manner. It does not cover claims arising out of criminal wrongs.

What is the deductible of a personal liability umbrella policy called?

THE SIR The self-insured retention (SIR) is an initial part of a loss the insured pays before the umbrella pays if no other policy covers the loss.

ASSESSABLE INSURERS PARTICIPATE IN THE FAIR PLAN AND COASTAL PLAN IN PROPORTION TO

THEIR PREMIUMS They participate in proportion to their premiums during the preceding calendar year.

Which of the following terms refers to a person's total inability to work for a temporary amount of time?

Temporary total disability Temporary total disability refers to a person's total inability to work for a temporary amount of time.

Under a dwelling policy, which of the following is NOT a factor in determining a loss?

The amount negotiated by the insured

The Claims-Made Trigger is based on which of the following?

The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date The claims-made trigger is based on the date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date.

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention Retention is the equivalent of a deductible in property insurance.

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy except

The injury or damage must occur within 90 days after the insured's work is completed. The products and completed operations hazard includes injuries or damage that occur after the insured has completed its job and left the site, or relinquished control of a product it manufactured or sold. There is no time limit on the injury or damage.

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy?

The insured would have to pay the self-insured retention limit The amount of insurance required as underlying limits in other policies is treated as a deductible amount to the umbrella for that particular exposure, so if underlying limits are not maintained, it is the insured's responsibility.

Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy?

The insurer may inspect the workplace after giving the insured 5 days' notice. The insurer has the right to inspect the workplace at any time without giving notice.

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract?

The obligee may engage another contractor and then seek reimbursement from the surety The bonding company would have to see that the job was completed and then seek recovery for its expenses from the bonded contractor (principal).

Who is NOT an insured for liability on a BAP?

The owner of a car the insured borrows A business auto policy defines who is not an insured; the owner of a car the insured borrows is one of them.

All of the following statements concerning liability coverage are true except

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. The legal action against the insurer condition states that the policyholder cannot sue the insurer unless he or she has met all conditions of the policy.

Which of the following is an example of a producer's fiduciary duty?

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

Under crime coverage form I lessees of safe deposit boxes securities only covered in the event of

Theft Securities are only covered for theft, disappearance or destruction.

They type of insurance used to cover goods for one specific trip is called

Trip transit Trip transit policies cover a single shipment of goods for a specific trip.

what is the business auto coverage territory for

United States and its territories, Canada, or worldwide for private passenger hired autos The defined coverage territory for both business auto policies and personal auto policies is the United States, its territories and possessions, and Canada, or worldwide for private passenger hired autos.

The supplementary payments of a CGL policy will cover all of the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds Supplementary payments will cover only $250 for these

A claim is considered to have been made

When the notice of claim is received and recorded by any insured or by the insurer, whichever comes first This is a standard claims-made condition.

in Louisiana, automobile liability insurance is considered to be

compulsory coverage Every motor vehicle registered in Louisiana must be covered by an automobile liability insurance policy or binder.

Section 1 of a boat owners policy covers

physical damage Section I of a boat owners policy covers physical damage.

To be eligible for coverage under the National Flood Insurance Program, an insured must live in which of the following communities?

that has met the minimum floodplain management guidelines To be eligible for the flood program an insured must live in a community that has met the minimum floodplain management guidelines.

Federal law makes it illegal for an individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce

without receiving written consent from an insurance regulatory authority Title 18, US Code, sections 1033-1034 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 without receiving written consent from an insurance regulatory authority.

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?

30 days The insurer has 30 days to tell the insured that it has chosen to repair or replace the covered property.

WHAT IS MATERIAL MISREPRESENTATION?

A STATEMENT BY THE APPLICANT THAT, UPON DISCOVERY, WOULD EFFECT THE UNDERWRITING DECISION OF THE INSURANCE COMPANY

Which of the following would NOT be considered an insured under a homeowners policy?

A divorced spouse living in another state

INSURABLE INTEREST IN THE PROPERTY COVERED IN A POLICY MUST BE PROVEN

AT TIME OF LOSS

An additional loss which results from a direct loss to property is called

An indirect loss

In dwelling policies automatic increase in insurance is?

Coverage by endorsement

An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?

Foreign -a foreign insurer is domiciled in one state and transacts in another state

WHAT IS A DEFINITION OF A UNILATERAL CONTRACT?

ONE-SIDED: ONLY ONE PARTY MAKES AN ENFORCEABLE PROMISE

An insured is driving his or her automobile and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair?

loss is not covered A flat tire that occurs from a cause other than vandalism is considered a road hazard and is specifically excluded from coverage in the policy.

Which of the following coverage is included in an unendorsed homeowners policy

medical payments to others

Under the business auto coverage form, mobile equipment is covered for liability insurance

when being carried or towed by a covered auto

Under the business auto coverage form, mobile equipment is covered for liability insurance

when being carried or towed by a covered auto Liability coverage is automatically provided on mobile equipment while being carried or towed by a vehicle insured as a covered auto. (There is a business auto endorsement that will provide auto coverages to mobile equipment upon payment of additional premiums.)

Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to what limits?

$20 per day; $600 max The physical damage section includes a coverage extension that would pay for substitute transportation, up to $20 per day for a maximum of $600, after the theft of a covered auto.

Under Coverage C of a farm policy, what is the limit payable on business property located away from the premises?

$500 Business property located away from the premises is covered for up to $500.

Within how many years of a loss may an insured bring a lawsuit against an insurer, according to dwelling policy?

2 years If an insured wants to bring a suit against an insurer, the insured must comply with all policy conditions and start action against the insurer within 2 years of the loss.

Equipment breakdown coverage is written with a single limit of insurance per accident. However, what is the sublimit for hazardous substance cleanup, or repair or replacement of contaminated property?

25,000 Equipment breakdown coverage is written with a single limit of insurance per accident. However, within this limit, the policy has the following sublimits: $25,000 for expediting expenses; $25,000 for hazardous substance cleanup, repair or replacement of contaminated property; $25,000 for ammonia contamination damage; $25,000 for water damage.

the minimum limits for bodily injury to 2 or more persons injured in a single accident is

30,000 Every automobile liability insurance policy written for delivery in Louisiana must provide a minimum of $30,000 for bodily injury to or death of 2 or more person in a single accident.

Driver A has a personal auto policy with Part C - UM/UIM limits of 100/300. He is injured by Driver B who has Part A - Bodily Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125,000 in medical expenses. How much will his Part C - UM/UIM coverage pay?

50,000 Underinsured motorist coverage acts as excess over the at-fault motorist's coverage. It will pay the difference between the insured's UIM limits and the at-fault driver's bodily injury limits (in this scenario, $100,000 of the insured's coverage minus $50,000 of the other driver's). Because of the per person limits of Driver A's underinsured motorist coverage, the policy will pay the amount necessary to bring payment up to the per person limit. The policy will not pay more than the limits of liability.

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60 DAYS All losses will be paid within 60 days of receiving the proof of loss.

In earthquake coverage provided by endorsement in a homeowners form, one or more earthquake shocks would be considered a single earthquake if they occur within what time period?

72 hours Earthquake coverage provided by endorsement in a homeowners form considers one or more earthquake shocks occurring within a 72-hour period as a single earthquake.

The dwelling insured on HO-2, 3 or 5 forms is covered for replacement provided that it is insured for at least what percentage of replacement cost on the date of loss?

80%

What is the minimum amount of coverage that should be carried on an HO-2 on a home that was purchased four years ago for $75,000, which today has a replacement value of $100,000?

80,000 A homeowner, at the time of loss, must be insured for at least 80% of replacement cost in order to collect the full replacement cost of a partial loss.

Which of the following would be covered by the broad theft endorsement on a dwelling policy?

A camera the insured has with him on vacation *All of these examples except the camera are types of property specifically excluded from coverage under the broad theft endorsement.

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the named insured's business. For eligibility, the personal auto policy will insure as covered autos those vehicles owned by the named insured and not used primarily for a business, other than farming. Vehicles leased to the named insured for periods of 6 months or longer also are classified as owned for insurance purposes.

In a dwelling policy, which of the following "other structures" would be covered?

A structure rented to a neighbor for use as a private garage Under Coverage B, other structures may not be rented to anyone except a tenant of the main dwelling. However, a garage that is used for a private garage does not come under this exclusion of rented property and is covered even if it is rented to someone other than the occupant of the dwelling.

With respect to the personal auto policy, which of the following vehicles could be classified as a non owned auto?

A vehicle that is titled to another person, but is being used with permission by an insured Because the personal auto policy provides coverage on both owned and non owned autos, situations will exist in which two or more policies will apply in a given situation. If the auto is owned and insured by someone other than the operator, then that policy will be primary coverage for that auto, and the operator's insurance would act as excess.

Which of the following types of agent authority is also called "perceived authority"?

APPARENT

WHICH OF THE FOLLOWING DESCRIBES THE TRANSFER OF A LEGAL RIGHT OR INTEREST IN AN INSURANCE POLICY

ASSIGNMENT

If an insured operates a home day care business out of his house, how can he ensure the liability exposure coverage?

Attach the home day care coverage endorsement to the HO policy A home day care coverage endorsement may be attached to the homeowners policy to cover the liability exposure associated with the business.

Farm fences except field and pasture fences are covered by which farm coverage form?

Coverage g Fences, except pasture and field fences, are considered other farm structures and are covered by Coverage G - Other Farm Structures.

Which of the following dwelling coverage forms would pay replacement cost for the dwelling?

DP2 and DP3 DP-2 and DP-3 pay replacement cost as long as the house is insured for at least 80% of its value on the date of loss.

THE SECTION OF AN INSURANCE POLICY THAT DETAILS WHAT PERILS ARE NOT INSURED AGAINST AND WHAT PERSONS ARE NOT INSURED IS KNOWN AS THE

EXCLUSIONS

All of the following are other coverage under the dwelling policy EXCEPT

Earth movement

In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?

First named insured Some commercial policies may have more than one named insured. Complications and confusion over contractual duties are reduced by making the insurer and the first named insured the primary parties for carrying out responsibilities.

Which of the following policies does NOT contain an automatic reinstatement provision?

General liability with an aggregate limit

Melt Away Diet, circulates a flyer that falsely reports that its competitor, See Food Diet markets a product that causes hair loss and skin rashes... example of

Libel written or printed untrue statements that damages a persons reputation

Several insureds have become liable because of a single loss. How will the policy's limit of liability be affected?

No more than the per occurrence limit applies, no matter how many insureds are involved.

THE HO-3 HOMEOWNERS POLICY PROVIDES

OPEN PERIL COVERAGE ON THE DWELLING AND BROAD FORM COVERAGE ON PERSONAL PROPERTY

HMS Toys carries more inventory from October 1 to December 31. Which of these would provide higher coverage limits during those months and lower limits the rest of the year?

Peak season The peak season endorsement provides higher limits when needed for a known time period. Reporting forms are appropriate for risks whole value fluctuate both up and down throughout the policy period.

A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true?

The damage occurred when the concrete fell.

Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?

Up to $1,000 per occurrence

A nonadmitted insurer who provides unique insurance coverage that is not available from an admitted insurer is called a/an a) Surplus lines insurer. b) Assessment mutual insurer. c) Capital stock insurer. d) Reciprocal insurer.

a) Surplus lines insurer. Surplus lines insurers are those insurers that do not have a certificate of authority to transact business in the state, but are on the Commissioner's approved list to transact business under the state's surplus lines laws.

An insured was involved in an automobile accident for which the insured was at fault. Which of the following coverage would pay for damage to the insured's automobile?

collision The policy defines collision as the upset or impact of a covered vehicle with another vehicle or object.

Illegal use of narcotics would be an example of a a) Physical hazard. b) Pure hazard. c) Morale hazard. d) Moral hazard.

d) Moral hazard.

which of the following dwelling policy forms primarily ensures a structure on an actual value basis

dp-1 DP-1 insures the structure on an actual cash value basis. DP-2 and DP-3 insure the structure on a replacement cost basis.

an owner of a parking lot wants liability coverage for damage to vehicles while in her custody. she needs

garage keepers coverage Garagekeepers insurance provides physical damage coverage on customers' autos while in the care, custody, and control of the garage operation.

Even though an insured maintains a valid driver's license and has paid the premium when due, an insurer may modify the deductible of an auto policy after

payment of a third physical damage claim in 5 years

Even though an insured maintains a valid driver's license and has paid the premium when due, an insurer may modify the deductible of an auto policy after

payment of a third physical damage claim in 5 years After payment of the third physical damage claim in 5 years, an insurer may modify the deductible on physical damage coverage.

All of the following are additional liability coverage automatically provided in a homeowners policy, EXCEPT

personal injury

limited fungi wet or dry rot or bacteria endorsement in ho policies applies to

property and liability losses Limited fungi, wet or dry rot, or bacteria coverage is an endorsement that may be used to add special limits for losses caused by fungi, dry and wet rot, and bacteria. This endorsement applies to both property and liability losses.

replacement cost coverage is provided in both the broad and special form dwelling policies when

the amount of insurance on the dwelling is at least 80% of its replacement cost at the time of loss It is always a requirement on property forms that provide replacement cost coverage that insurance on the dwelling be at least 80% of its replacement cost at the time of loss.

All of the following are characteristics of the dwelling policy, EXCEPT

the dwelling must be owner-occupied Dwelling policies insure residential exposures with only limited service-type business exposures allowed. The dwelling can be completed or under construction, and can be owner- or tenant-occupied. The dwelling policy can insure the dwelling only, contents only, or both.

Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies?

the endorsement is available for additional premium The mobile equipment endorsement will provide auto coverages to mobile equipment upon payment of additional premiums.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

the insured is injured while exiting a friends mobile home Medical payments only provide coverage to the insured and any passengers in the insured's vehicle. Injuries to other persons are covered by a personal auto policy (PAP) liability coverage.

when are the limits for uninsured motorist coverage set

when the coverage is purchased

WHICH OF THE FOLLOWING REASONS FOR NONRENEWING AN INSURANCE POLICY ALLOWS THE INSURER TO NONRENEW WITH GIVING NOTICE OF THEIR INTENTIONS LESS THAT 30 DAYS BEFORE THE EXPIRATION DATE OF THE POLICY

-IN THE CASE OF NONPAYMENT OF PREMIUM -IF IT IS A COMMERCIAL PROPERTY POLICY -IN CASES OF FRAUD BY THE INSURED

How much is covered for debris removal under the HO property additional coverage?

All reasonable costs If the debris was caused by a peril that is insured against, the reasonable cost of debris removal is paid by the insurer.

Which of the following would NOT qualify as a hired auto?

An auto borrowed from an employee Hired automobiles include those that are leased, hired, rented, or borrowed, excluding autos that are owned by employees.

Which of the following would modify the original insurance contract by either adding or removing coverage?

B Endorsement Endorsements change the policy's original terms, conditions, or coverages. Endorsements can add or delete coverage, or merely correct items such as the insured's name, address, etc.

THE AUTHORITY GRANTED TO AN AGENT THROUGH THE AGENTS CONTRACT IS REFERRED TO AS

EXPRESS AUTHORITY

AN INSURED HAS A PERSONAL PROPERTY REPLACEMENT COST ENDORSEMENT UNDER HER HOMEOWNERS POLICY. IF AN EXPENSIVE PAINTING AND AN ANTIQUE CHAIR ARE STOLEN FROM THE INSUREDS HOME, WHAT WILL THE INSURED RECEIVE ON THE CLAIM UNDER THAT ENDORSEMENT?

NOTHING The personal property replacement cost endorsement excludes property such as art and antiques.

which of the following would be covered under the broad form (dp-2) policy falling object peril?

interior building damage if the exterior was damaged first In DP-1 and DP-2 policy forms, loss or damage resulting from falling objects is covered, except for damage to awnings, fences, outdoor equipment, outdoor radio and television antennas or aerials, masts, or towers. Damage to the interior of the building is covered only if the exterior has been damaged first.