Simulator Pre Exam Questions
Every insurance Administrator must file a surety bond with the Commissioner which is written for an amount of at least
$100,000
A $100,000 house insured on a policy with an 80% coinsurance r requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?
$30,000
If a liability policy had split limits of 50/100/30, what is the maximum amount that would be payable in the event of injury to a single person?
$50,000
What is the min age for a person seeking a bail enforcement agent's license?
21
Professional photographers and musicians may insure their equipment with
A commercial articles floater
In which of the following situations would the jewelers block extension cover a loss?
A jeweler fixes a necklace and sends it by registered mail to the owner. When the necklace arrives, it has been damaged.
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?
Additional coverage
Which if the following types of valuation works best for property whose value does not fluctuate much?: Market value, Stated amount, Inflation guard, or Agreed value
Agreed value
Who must offer insurance to pay the market value of a mobile home?
All insurers providing property insurance for mobile homes
The inspections and surveys condition in a business owners policy
Allows the insurer the right to inspect the insured's premises
Which of the following is an example of an agent's fiduciary responsibilities
An agent promptly forwarding premiums to the insurance company
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice
Which of the following is NOT covered under accounts receivable coverage form?
Any loans require to offset uncollectible amounts
If the Commissioner fails to approve or disapprove a proposed rate within 60 days , the proposal can be considered
Approved
Which of the following must be obtained by someone who intends to function as an administrator?
Certificate of registration
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
All of the following are supplemental payments found in liability policies EXCEPT: Limited amounts for bail bonds and other bonds related to a claim, Costs the insured incurred in hiring an attorney, All expenses and defenses costs incurred by the insurer, or Reasonable expenses incurred by the insured
Costs the insured incurred in hiring an attorney
Which of the following coverages will respond if a claim is made or a suit is brought against an insured for damages due to bodily injury or property damages caused by an occurrence to which the coverage applies?
Coverage E
In Businessowners policies, which of the following additional coverages will require a deductible?: Fire department service change, Debris removal, Extra expenses, Business Income
Debris removal
Employment practices liability insurance (EPLI) would NOT cover claims arising from
Deliberate law violation
All of the following could be considered rebates if offered for the sake of insurance EXCEPT: An offer to share in commissions generated by the sale, Dividends from a mutual insurer, An offer of employment, or Stocks securities or bond
Dividends from a mutual insurer
Which of the following statements would be an example of a product liability claim? An insured, while delivering product to a customer, hits another car with the delivery truck causing bodily injury and property damage, Some tampers with the insured's product causing the insured to have to recall all products that are on the shelf, The insured's product has to be recalled because of an expiration date, or Faulty packaging of a cereal caused spoilage that resulted in someone getting sick
Faulty packaging of a cereal caused spoilage that resulted in someone getting sick
All of the following are considered pollutants, as defined under Section1- Property of the Businessowners policy, EXCEPT: Fire, Soot, Fumes,
Fire
The homeowners policy covers collapse caused by all of the following EXCEPT: Foundation cracks, weight of snow, hidden insect/vermin damage, or weight of too many people attending an event hosted in the house
Foundation cracks
replacement cost is defined as
Full replacement of property at its current cost, new and without reduction for depreciation.
All of the following are conditions commonly found in the insurance policy EXCEPT: Insuring agreement, Cancellation&nonrenewal, Subrogation, or Appraisal
Insuring agreement
Which of the following statements concerning the builders risk coverage form is correct? It usually continues in effect for one year after completion of the structure, It covers the interest of the builder only and cannot undue coverage for the owner, It may not be written for perils other than fire and extended coverage or It may be written on a reporting form for the completed value of the structure
It may be written on a reporting form for the completed value of the structure
What type of property would NOT be covered under the dwelling policy special form Coverage A - Dwelling?
Land on which the dwelling is located
The process of determining the premium charged and how much insurance is required for a particular loss is called
Loss valuation
Coverage A - Bodily injury and Property damage in the commercial general liability policy will cover
Losses due to the insured's negligence
Untrue statements on the application unintentionally made by insureds that, if discovered, would alter the underwriting decision of the insurance company, are called
Material misrepresentations
What type of property does a personal floaters policy cover?
Movable personal property, wherever it may be located
When is a hired and non-owned auto liability endorsement available in a business owners policy ?
Only if the insured does not have commercial auto coverage
Rental Reimbursement is only available if the policy includes which coverage
Other Than Collision Coverage
An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have?
Per occurrence
The party to a surety or fidelity bond who promises to fulfill the obligation is the
Principal
Whoa re the parties to a bond?
Principal, obligee, and guarantor
The proof of ability to cover any liability on account of accidents arising out of the ownership, maintenance, or use of a motor vehicle within the United States or Canada is the definition of
Proof of financial responsibility
Insurance is the transfer of
Risk
In a persoanl umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called
Self-insured retention
Which of the following is covered under the physical damage coverage of a personal auto policy?: A cellular phone in a locked vehicle, Custom furnishings or equipment in a pickup or van exceeding of $1,500, Sound reproduction equipment permanently installed in the covered auto, or A covered auto seized and destroyed by a government authority
Sound reproduction equipment permanently installed in the covered auto
An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have?
Specific
A property insurance policy that is not subject to any coinsurance requirements but has a set amount of insurance scheduled for the property would use what loss
Stated amount
The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called
Subrogation
All of the following statements concerning coinsurance are true EXCEPT: It is used help adequacy and equity in rates, The insured agrees to maintain insurance equal to some specified percentage of the value of the property, If the insurance carried is less than required, the insurance may not cover the whole loss, or The coinsurance formula will also be applied to total losses.
The coinsurance formula will also be applied to total losses.
The occurrence form trigger is based on which of the following?: The amount of the insured's deductible, The number of claims made during the policy period, The date when injury or damage occurs, or The place where the injury or damage occurs
The date when injury or damage occurs
Under a business owners policy, the inspections and surveys condition specifies all of the following EXCEPT:
The insurer does not have the right to inspect the insurer's property and operations
Under the limits of insurance provision found in the Physical damage coverage form in a commercial auto policy, how much will an insurer pay to repair or replace a covered auto?
The lesser of the actual cash value or the cost to repair or replace a covered auto
All of the following are true regarding physical damage coverage EXCEPT:Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except non owned trailers are limited to $1,500, The policy will pay up to $20 per day up to a max of $600 for rental transportation, The insurer will pay for direct and accidental loss to a coverage auto minus any applicable deductibles, or The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle
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
On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is
The same as provided on the DP-2 Broad Form
All of the following types of property are covered by a standard builders risk form EXCEPT: Machinery that will be permanently attached to the building, Tools 50 feet away from the building, The building itself, or Temporary structures
Tools 50 feet away from the building
Which of the following best describes the amount of loss assessment coverage included under a homeowners policy liability coverage section?: Up to $2,500 per occurrence, Up to $10,000 aggregate for the policy period, Up to $5,000 aggregate for the policy period, or Up to $1,00 per occurrence
Up to $1,00 per occurrence
The insured with a claims-made commercial general liability policy may request in wiring claim and occurrence information from the insurer any time up to 60 days after the policy period ends. The insurer must provide the information
Within 45 days