Study Questions - Casualty

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? 1. 3 days2. 5 days3. 10 days4. 14 days

3 days

Binders can last for up to

90 days

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 of the following would be considered an insured under a business auto coverage form?

Anyone while using, with permission, a covered auto owned by the named insured

Perceived/Assumed authority

Apparent

What is issued as evidence of insurance?

Certificate of Insurance

What line of insurance restricts the authority of a license compared to those associated with major lines?

Limited Lines

The type of professional liability coverage a medical doctor needs is

Malpractice coverage.

Symbol 29

Nonowned autos used in your garage business (for vehicles not owned, leased, hired rented, or borrowed by the insured also applies to vehicles owned by employees, partners, and members of an LLC)

provision in an insurance policy that defines how the policy will respond if there is other valid insurance written on the same risk

Other insurance

The commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for?

Premises

Which of the following symbols is available to an insured with owned auto only?

Symbol 2

Which of the following is NOT a characteristic of an insurable risk?

The loss must be catastrophic

What is the business auto coverage territory for?

United States and its territories, Canada, or worldwide for private passenger hired autos

When a parent is required to pay for damages caused by his or her children, this is an example of

Vicarious liability.

Release if attachment bond

When a court order requires the attachment of assets of another party (the defendant), the defendant uses this type of bond to have the property returned by posting a release of attachment bond to serve in lieu of the property as security for the plaintiff's claim

Attachment bond

When a court order requires the attachment of assets of another party, this bond may be used to guarantee that if the action to attach property was wrong, any damages suffered will be paid for

Generally, policies of property and casualty insurance covering a risk in a particular state may not be issued unless they are countersigned

a resident producer

if an insurance policy prohibits the insured from relinquishing ownership of insured property that has been damaged, it is prohibiting

abandonment

With respect to auto insurance, the term owned autos includes all of the following EXCEPT a. a pickup or van titled to and used in the named insured's business b. any private passenger auto titled to the name insured c. a pickup or van acquired by the named insured during the policy period d. any private passenger

a. a pickup or van titled to and used in the named insured's business *can't be used primarily for a business

Who acts on behalf of the principal?

agent

temporary auto coverage provision

allows the personal auto policy to provide coverage for an insured while using any vehicle as a temporary substitute for any other vehicle described in the policy that is out of normal use because of breakdown, repair, or servicing

Symbol 21

any auto

an insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends than her knows would be possible. What term describes what the agent has done?

misrepresentation

which of the following liability exposures is most likely for a small specialty retail clothing boutique?

premises Liability exposure

when an insured owes a total standard premium greater than $5,000

premium discount

What information is found in the conditions part of an insurance policy?

the description of the duties and obligations of the insured

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

An executive is accused of sexual harassment. What type of coverage would respond?

Employment practices liability

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement

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

Temporary total disability

Which federal act that covers crews of ships the same as railroad workers?

The Jones Act

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

The SIR

In order to receive a commission, a person is required to

be licensed as an insurance producer

Medical payment only provide coverage to the insured and any passengers in the insured's vehicle. Injuries to other persons are covered by

personal auto policy liability coverage

An automobile policy has limits of 100/300/50. The number 100 means?

the maximum limit for bodily injury claims that can be paid for one person

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to 1. 3 years.2. 5 years.3. 10 years.4. 12 years.

10 years

Which bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits?

2. License and permit bonds

A producer must report the the Director any administrative action or criminal prosecution taken against the producer within how many days?

30

Two men are partners in a moving company. They have two trucks used to move property of others. They should insure their trucks under a? A. Commercial auto fleet policy B. Business Auto policy C. personal auto policy D. garage liability coverage form

B. Business Auto policy

What does the Guaranty Association guard against?

Insurer insolvency

Symbol 31

Dealer's autos (physical damage coverage)

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

Federal Employees Compensation Act

The federal act that provided more favorable benefits for interstate railroad workers by allowing the injured worker to sue the employer for negligence is the

Federal Employers Liability Act (FELA)

Premiums collected on behalf of the insurance company by an agent will be held in what capacity?

Fiduciary

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

Sole representative

Symbol 27

Specifically described autos

_____ liability is commonly applied in product liability cases

Strict liability

Which of the following symbols is available to an insured with owned private passenger autos only?

Symbol 3

to which of the following could a producer pay part of her commission without violated any insurance regulation? a. another producer who has a like license b. any client who buys insurance from her c. a relative who brought insurance from her d. an employee who brought insurance from her

a. another producer who has a like license

Which of the following is an example of a physical hazard a. lying b. bankruptcy c. diabetes d. carelessness

c. diabetes

In contrasting stock insurers with mutual insurers, which statement is true? a. Stock dividends are tax free while policy dividends are taxable b. nonparticipating policies can pay out dividends to the policyholders c. mutual insurers are owned by the shareholders and issued participating policies d. stock insurers are owned by the shareholders and issued nonparticipating policies

d. stock insurers are owned by the shareholders and issued nonparticipating policies *Stock insurers are owned by their shareholders/stockholders. Their policies are labeled nonparticipating since the insureds do not share in the divisible surplus.

miscellaneous-type vehicle endorsement includes what motorized vehicles?

motorcycles, motor homes, golf carts, dune buggies, and other recreational vehicles

Why don't commercial auto coverage forms automatically include medical payment coverage?

often, any person occupying a commercial vehicle would be covered under a workers compensation policy

Which statement best describes agreement as it relates to insurance contracts?

one party accepts the exact terms of the other party's offer

The extended nonowned coverage provides protection to

only the person(s) named on the policy

Symbol 22

owned autos only

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?

personal and Advertising injury liability *this suit would fall under the coverage of personal injury, damage to the character of the claimant

Damage due to wear and tear, freezing, mechanical or electrical breakdown and road damage to tires are common exclusions to what coverage?

the physical damage coverage section

if an applicant submits the initial premium with an application, which constitutes acceptance?

the underwriters approve the application

What is the purpose of the miscellaneous type of vehicle endorsement in personal auto policies?

to expand the definition of a covered auto to include various motorized vehicles

Prior to state-directed workers compensation statutes being enacted, employees had

to sue an employer for the "loss" and prove that the employer was at fault

Auto liability policies are required to include Uninsured Motorist coverage in Idaho...

unless rejected in writing by the insured

Joint Ownership Coverage Endorsement

used when a vehicle is owned by 2 or more persons (other than husband and wife), including individuals who are not related.

An insured has a personal umbrella with a $2,000 self-insured retention (SIR). Assuming no other policy is involved, how much would the umbrella pay after a $12,000 personal injury liability claim?

$10,000

An insured has an automobile policy with the limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another diver's auto. The other driver is awarder $125,00 for his injuries and $25,000 for the damage to his car. The insured's vehicle has damage in the amount of $1,200. The total payment made under the insured's polocy is

$125,200

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and 3 passengers are injured. Medical treatment costs $8,000 for the insured $4,000 for the first passenger and $6,500 for the second passenger and $1,200 for the third passenger. How much will the policy pay under medical payments coverage?

$15,200

if an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

$2,500

What is the minimum required per-occurrence limit for auto insurance policies issued in this state?

$50,000

An insured has a personal auto policy with both comprehensive (other-than-collision) and collision coverage. His car is stolen and recovered five days later. If the insured claims transportation expenses of $20 per day, how much will his policy pay?

$60 * The policy will pay $20 per day after 48hrs, not to exceed 30 days in total

Business auto coverages apply to only those autos that are identified as covered autos in the declarations by entry of the appropriate numerical symbol. Which symbol afford the broadest coverage?

1

All of the following statements concerning liability coverage are true EXCEPT 1. The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. 2. The insurer cannot refuse to pay a claim even if the insured is bankrupt. 3. Liability policies normally include supplementary payment provisions. 4. Liability policies defend the insured against claims, real or alleged.

1. The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.

When cancelling an auto policy for nonpayment of premium, how much advance notice must the insurer give to the insured?

10 days

After an insurer has notified the Director that they have terminated employment with a producer, the insurer is required to mail a copy of the notification to the producer at the producer's last known address within how many days?

15

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

2. Errors and omissions

all insurance policies written in the state must be countersigned by licensed agents. In these instances, the agent may grant the power of attorney to individuals over the age of?

21

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization? 1. Stock company 2. Reciprocal association 3. Fraternal benefit society 4. Mutual company

3. Fraternal benefit society

The actual cost of burial expenses will be paid by Workers Compensation to the induvial(s) legally entitled to recover if death results from the injury within

4 years

Which of the following would be covered under the Garage Liability Coverage Form? 1. Product recalls 2. Fellow employees 3. Loss of use 4. Insured's business premises

4. Insured's business premises

What is the major difference between a stock company and a mutual company? 1. Amount of death benefit 2. Number of producers 3. Types of whole life policies 4. Ownership

4. Ownership

A trucking business swaps trailers with other carriers. What coverage is necessary to cover loss to the other's trailer while in the borrower's possession? 1. Interstate carrier coverage 2. Mobile equipment 3. Owner-operator motor carrier coverage 4. Trailer interchange coverage

4. Trailer interchange coverage

In the event of theft of a covered vehicle, expenses are covered beginning _____ hrs after the theft

48 hrs

At what age is a driver eligible for auto insurance discounts assuming that the driver has completed an approved motor vehicle accident prevention course?

55

Symbol 30

Autos left with you for service, repair, storage, or safekeeping (used to provide garagekeepers coverage for customers or employees and members of their household who pay for services)

An endorsement to the Business Auto, Business Auto Physical Damage, Garage, and Motor Carrier coverage forms to vehicles not owned, hired, or borrowed by the named insured, and puts no stipulation that use must be in the course of business

Drive other Car Coverage

If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)

Experience Rating Plan

An insurer that operates for one or more social, educational, charitable, benevolent, or religious purpose for the benefit of its members is known as

Fraternal Insurer

What type of compensatory damages will pay for pain and suffering and disfigurement?

General General compensatory damages are for intangible elements that cannot be specifically measure in terms of dollars

Symbol 28

Hired autos only (leased, hired, rented, or borrowed by the insured, but not autos owned by employees, partners, or members of an LLC)

CGL Coverage B (Personal and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising the insured's product

Hazards are conditions or situations that

Increase the likelihood of a loss occurring

What endorsement is used by individual business owner who use company vehicles for personal use rather than purchasing a personal vehicle?

Individual named insured

Persons covered under an insurance policy, whether named or not, are known as the

Insureds

Lost Treasures has a guard dog in a fenced lot to protect the salvage yard. The dog scared a passerby , who now claims that it was a traumatic experience and that he now suffers from recurring nightmares. A claim for personal injury of $5000 is filled against Lost Treasures. Why will the personal and advertising injury liability section (coverage B) of the CGL policy cover this claim? a. animals are excluded from coverage b. the injury was expected or intended c. the occurrence was off premises d. mental anguish is a covered injury

Mental anguish is a covered injury

An insurance company that is owned by the policyholders is called a

Mutual Insurer

Symbol 24

Owned autos other than private passenger autos only

Symbol 26

Owned autos subject to a compulsory uninsured motorist law

Symbol 25

Owned autos subject to no-fault

Symbol 23

Owned private passenger autos only

The exact, direct, uninterrupted cause of loss is the

Proximate cause

Injunction Bond

Required by courts whenever someone seeks an injunction against another; guarantees that id the injunction should not have been issued, damages will be paid to the injured party

The designation symbols used in commercial auto policies can be found in which policy section?

Section I - Covered Auto

The amount of loss the insured is willing to absorb without insurance protection is known as

Self-insured retention

When an employee benefit plan pay the premium for a fiduciary liability policy, what provision must be included in that policy?

Subrogation * if the premiums are paid from the fund, the policy must allow for subrogation against the individual trustees involved in any loss

Insurer right to recover payment (subrogation)

Subrogation rights apply to all coverages except physical damage coverage if the damage is caused by a person using the auto with a reasonable belief that they were entitled to do so.

Apparent Authority

The appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of circumstances the principal created.

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?

The appliance was manufactured in the United States.

Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. Georgia has compulsory workers compensation laws. Space Age's owner thinks that his company is too small and unprofitable to carry the workers comp plan mandated by the state. Possible consequences of noncompliance include all of the following EXCEPT a. Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage b. closure of the business as a public nuisance by state officials c. payment for injuries in monetary amounts stipulated by the state with respect to workers compensation plans. d. payment of fines and penalties as dictated by state compliance authorities

a. Forced payment of billing for services rendered by any private insurer that "binds" coverage based on an employee's request for coverage

What types of injuries could incur additional penalties and/or increased benefits paid by the employer? a. employer's willful failure to provide required safety goggles b. loss of a limb while following safety procedures c. an injury that occurred while on a dangerous job site d. a fall is the result of a slippery workplace floor

a. employer's willful failure to provide required safety goggles

Which of the following duties is NOT required of the insured in the event of a loss? a. immediately notify the insurer when the insured has filed for bankruptcy b. authorize the insurer to obtain records and assist the insurer in its investigation c. notify the insurer as soon as possible of the possibility of a claim d. immediately record the specifics of any claim and notify the insurer

a. immediately notify the insurer when the insured has filed for bankruptcy

The insurer may suspect that a moral hazard exists if the policyholder a. is not honest about his health on an application for insurance b. is prone to depression c. is indifferent to activities that may be dangerous d. always drivers over the speed limit

a. is not honest about his health on an application for insurance

Coverage B - Personal and Advertising Injury Liability responds to claims arising from a. suits alleging infringement of a copyright b. scope of patent protection c. failure of products to perform as advertised d. premises and operations injury claims

a. suits alleging infringement of a copyright

Late one night on his way home from a local bar, Sam runs his covered auto into Sally's car. Sam was operating his vehicle while under the influence of alcohol. Sally had no personal injuries, but her car had damage. Sally's insurance policy paid for the damages to her car. The subrogation provision in Sally's policy allows a. the insurer to attempt to recover the damages from the man and/or his insurance company b. the insured to sue the man to recover only the damages not paid by her own insurance company c. The insurer to increase her premiums because of being a higher risk d. the insured to sue the man to recover any damages she sees fit

a. the insurer to attempt to recover the damages from the man and/or his insurance company

which statement is an accurate description of life insurance policy dividends? a. they are not taxable and are not guaranteed b. they are paid as return of premium to policyowners by stock insurers c. they are guaranteed to be paid and are taxable as income d. they are likely to be larger in nonparticipating policies

a. they are not taxable and are not guaranteed

what is the main distinction between a hired auto and a nonowned auto? a. who owns the auto b. the length of time the insured uses the auto c. the amount of premium d. whether a payment is made for the use of the auto

a. who owns the auto

Which of the following would be considered a covered auto on your personal auto policy? a. your farm wagon being towed by your pick up truck b. your pickup truck used for deliveries of your retail business c. your farm tractor d. your farm wagon being towed by your tractor

a. your farm wagon being towed by your pick up truck

A general liability policy will respond to claims against an insured when bodily injury or property damage is caused by

an insured's negligence

While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy?

any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use due to repair (temporary auto coverage provision)

Who would be considered an insured under a business auto coverage form?

anyone while using, with permission, a covered auto owned by the named insured

The transfer of a legal right or interest in an insurance policy is called

assignment

You are at fault in an auto wreck out of state. How does your company adjust?

at least to the minimum required by that state

type of bond that is used to guarantee that if the action to attach property was wrong, any damage suffered will be paid

attachment bond

Under a commercial general liability policy, which of following is NOT considered mobile equipment? a. The bulldozer used by an excavating company b. An automobile used as a company car by a real company c. a combine used on a farm d. The Department of Transportation's resurfacing equipment

b. An automobile used as a company car by a real estate company

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto? a. a vehicle rented for the insured's personal use b. a vehicle that it titled to another person, but is being used with permission by an insured c. a vehicle leased to the named insured for 12 months by a leasing company d. a vehicle that is titled and insured by the named insured, but is driven principally by the named insured's son, who is a resident of the household

b. a vehicle that it titled to another person, but is being used with permission by an insured

Which of the following components is NOT part of a policy structure? a. definitions b. benefits c. declarations d. additional coverage

b. benefits

All of the following are ways to handle risk EXCEPT a. transfer b. elimination c. avoidance d. reduction

b. elimination

which of the following statements does NOT describe endorsements? a. endorsements must be signed by an executive officer b. endorsements may only add coverage to a current policy, not remove c. endorsements may be added during the policy term d. endorsements are printed addenda to a policy

b. endorsements may only add coverage to a current policy, not remove

An insured just purchased an auto policy for his new car. He wants to understand what perils are not insured against. Which section of his policy should the insured check?

b. exclusions

Which of the following injuries would be covered under Coverage C - Medical Payments of a commercial general liability policy? a. injuries to an independent contractor on the premises b. injuries to a member of the general public that occurs on premises c. injuries to an employee due to participation in an athletic event d. injuries to an employee during performance of his or her job

b. injuries to a member of the general public that occurs on premises

Which of the following statements is NOT true of a commercial umbrella liability policy? a. it provides protection as primary coverage where there is no other existing coverage b. it would automatically cover all losses as they occur c. it can be issues with a professional liability policy d. it would provide excess insurance over an existing general liability policy

b. it would automatically cover all losses as they occur

a common exclusion found under physical damage to your auto includes a. towing and labor b. mechanical breakdown c. glass breakage d. riot or civil commotion

b. mechanical breakdown

A corporation is insured under a CGL policy and is named in a lawsuit to recover expenses for bodily injury and property damages from a claim. The insurance company is obligated to provide coverage for all of the following named in the suit EXCEPT a. employees of the corporation b. spouses of officers and stockholders c. officers of the corporation d. stockholders

b. spouses of officers and stockholders

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that it was necessary to blast the rock formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbors home several blocks away. Who pays for this damage? a. the insured's insurer, regardless of fault b. the contractor c. the neighbor's insurer d. the insured's insurer, if the neighbor proves that the insured was negligent

b. the contractor

Which commercial auto coverage form provides protection for most commercial auto exposures except truckers, garages, and motor carriers?

business auto coverage form

All are legal defenses against a claim of negligence EXCEPT A. contributory negligence B. assumption of risk c. Absolute liability d. intervening cause

c. Absolute liability

The Second Injury Fund will pay the benefits in which of the following situations? a. a person is injured twice in the same year, as long as neither injury affects the other injury b. workers compensation benefits for an employee who has been injured while working for a previous employer, in case injury would occur again c. an employee with a previous injury suffers a second injury that causes the disability to be more serious d. the same injury occurs to a different person

c. an employee with a previous injury suffers a second injury that causes the disability to be more serious

What term includes losses caused by continuous or repeated exposure to conditions resulting in injury to persons or damage to property that is neither intended nor expected? a. incident b. additional coverage c. occurrence d. accident

c. occurrence

If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT a. no-fault medical payments b. liability c. physical damage d. uninsured motorist

c. physical damage

A single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one accident or occurrence.

combined single

under which legal defense is there an apportionment of damage based upon the degree of fault of each of the plaintiffs and the defendant?

comparative negligence

When Symbol 7 is provided, which of the following statements is true with regards to newly acquired autos? a) they are covered only until the end of the policy term b) they are not covered until the insurer is notified c) they are automatically covered only for 30 days d) they are covered if they are used to replace previously owned autos with that coverage

d) they are covered if they are used to replace previously owned autos with that coverage

A participating insurance policy may do which of the following? a. require 80% participation b. pay dividends to the policyowner c. provide group coverage d. pay dividends to the stockholder

d. Pay dividends to the policyowner

The insured's product under a commercial general liability policy does NOT include which of the following? a. containers furnished in connection with the product b. warranties made with respect to the fitness or quality of the product c. any goods or products manufactured by the insured d. vending machines rented to others

d. Vending machines rented to others (the renting of vending machines to others would be a contractual liability exposure)

Which of the following situations would be covered by workers compensation? a. a secretary chokes on an apple while on break in the break room b. a construction worker who refused to wear a hardhat gets hit on the head at a construction site c. a professional chef burns himself on his stove at home while preparing for a private dinner party d. a printer gets her hand crushed in a printing press at work

d. a printer gets her hand crushed in a printing press at work

An agent is acting ethically in all the of following situations EXCEPT a. working within the conditions of his/her contract b. representing the insurer, not the insured c. keeping customers' best interests in mind d. always representing the insured

d. always representing the insured

Which of the following is a statutory defense? a. assumption of risk b. intervening cause c. contributory negligence d. comparative negligence

d. comparative negligence many states, by statute, require that damages be apportioned based upon the degree of negligence of each party in an accident

Which of the following exposures is not covered under the garage liability coverage form? a. premises and operation liability b. products and completed operations liability c. auto liability d. contractual liability

d. contractual liability

Other-than-collision would cover financial losses due to a. damage to an insured's neighbor's mailbox that was caused by the insured's pickup b. damage to an insured's car in an accident for which the insured was found at fault c. legal action brought against an insured for an accident d. damage to an insured's car caused by wind or hail

d. damage to an insured's car caused by wind or hail

Which of the following statements is true concerning a workers compensation and employers liability policy? a. claims of surviving children are not covered b. claims of a surviving spouse are not covered c. punitive or exemplary damages are covered d. exposures in states listed on the information page are covered

d. exposures in states listed on the information page are covered *Coverage may be provided in all states name in Part Three of the information page, except those states that maintain a monopolistic fund

The other states' insurance section of a workers compensation policy provides coverage a. for new operations in other states if reported to the insurer within 60 days b. only for incidental operations in other states c. for any other state the insured may have operations in d. only for those states listed in the policy

d. only for those states listed in the policy

Which of the following would NOT be covered under the directors and officers liability coverage? a. wrongful acts while directors and officers are acting in an official capacity b. neglect and breach of duty c. misstatements made by the directors and officers d. reimbursement for fines and penalties

d. reimbursement for fines and penalties

All of the following are considerations in determining which state's law applies when a worker is required to travel into another state and is injured while working in the other state EXCEPT a. place where the accident occurred b. the normal location where the employee works c. the state where the employee was hired d. the insurer's chartered location or domicile

d. the insurer's chartered location or domicile *The insurer's location is irrelevant to the processing of workers compensation claims. The critical components relate to the employer and employee and their locations

Garagekeepers insurance provides coverage for the insured's liability for

damage to autos left in the insured's care for repair

Retention is the equivalent of a _______ in property insurance

deductible

Surety bonds

do not expect to pay for losses; guarantee specific duties or obligations will be fulfilled

The purpose of purchasing an umbrella liability policy is to provide

excess insurance over the primary liability limits

When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer? 1. Domestic2. Alien3. Nonadmitted4. Foreign

foreign

Contract bonds

guarantee performance of a written contract

Supply bonds

guarantee that a supplier will furnish supplies, materials, products, and equipment as specified in the written contract

Performance bonds

guarantee that the principal will complete the contract as agreed upon

Labor and Material Bonds

guarantee that work and materials will be delivered free and clear of any liens or other burdens

Completion bonds

guarantees that the money borrowed will be used to fund the construction project and that the project will be completed free of any other obligations

Cost bond

guarantees the person who brings legal action against another will be able to pay court costs and any resulting damages in the event

Appeal bond

if a person appeals to a higher court after a judgment already has been entered, this is used to guarantee that the judgment will be paid, as well as the cost of the appeal

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

implied

Bail Bond

issues to secure the release of a person from jail pending a courtroom appearance; guarantees the personal will appear when specified

The party to a surety or fidelity bond who promises to fulfill the obligation is the

principal *the principal purchases the bond and promises to perform

Personal and Advertising Injury coverage does not apply to...

professional advertisers or intentional injury, and does not guarantee the product will perform as advertised

Bid Bonds

promises that the contractor will actually accept the contract and a performance bond will be issued

The purpose of the Fair Credit Reporting Act is to

protect consumers against the circulation of inaccurate or obsolete personal or financial information

Bryan was stopped for speeding and could not find his proof of insurance. Bryan later avoided being convicted of violating the law by

providing proof of insurance at the time of the incident

An applicant for a disability insurance policy has a heart condition of which they are unaware and therefore they answer to the question pertaining to hear problems on their application.

representation

judicial bonds

required because of legal or fiduciary obligations

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

Legal Action Against Insurer states

that the policyholder cannot sue the insurer unless he or she has met all the conditions in the policy

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

Transportation expenses are covered under a personal auto policy for

$20 per day, for a maximum of $600.

Ownership or Operation of an auto involves 3 types of loss

-legal liability (for injuries and/or property damage) -Injury to the insured or members of the insured's family -damage or loss of the auto itself

A producer has completed 30 hours of continuing education for the current licensing period. That's 6 hours in excess of the required minimum. How many hours may the producer carry over to the next licensing period?

0 hours - CE hours cannot be carried over

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

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

All of the following are true regarding rebates EXCEPT 1. Rebates are allowed if it's in the best interest of the client. 2. Rebates are only allowed if specifically stated in the policy. 3. Rebating can be anything of economic value, given as an inducement to buy. 4. Dividends are not considered to be rebates.

1. Rebates are allowed if it's in the best interest of the client.

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? 1. The coverage is considered good will because payments are made without regard to fault. 2. The coverage applies to bodily injury to the named insured. 3. The coverage is liability insurance because it pays only if the insured is legally liable. 4. The coverage provides high limits of insurance for bodily injury losses.

1. The coverage is considered good will because payments are made without regard to fault.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT 1. The insured is injured while exiting a friend's mobile home. 2. The insured is injured by a motor vehicle while crossing the street. 3. The insured's child sustains injuries when the car she is in accidentally rolls down a hill. 4. A friend is injured while driving the insured's vehicle with permission.

1. The insured is injured while exiting a friend's mobile home

When the Director requests a hearing, written notice must be submitted how many days in advance?

14 days

Each violation of the Insurance Code can result in fines up to $1,000 or imprisonment for 1. 3 months. 2. 6 months. 3. 9 months. 4. 12 months.

2. 6 months.

A person who is convicted of failure to comply with the financial responsibility law more than once within a 5 year period may be punished by 1. Imprisonment in the county jail not exceeding 6 months. 2. Either a fine not exceeding $1,000 or imprisonment in the county jail not exceed 6 months, or both. 3. Both a fine not exceeding $5,000 and imprisonment in the county jail for up to 3 years. 4. A fine not exceeding $1,000.

2. Either a fine not exceeding $1,000 or imprisonment in the county jail not exceed 6 months, or both.

Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? 1. Provide the name and address of the injured worker and any witnesses to the injury 2. Make voluntary payments for treatment of the worker's injury 3. Provide immediate medical care required by the law 4. Notify the insurer at once

2. Make voluntary payments for treatment of the worker's injury

Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies? 1. Mobile equipment is covered for property insurance. 2. The endorsement is available for additional premium. 3. The endorsement is automatic. 4. Liability coverage is not provided on equipment that is being towed.

2. The endorsement is available for additional premium.

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 1. The injury or damage must occur after the insured has released physical possession of the product to another. 2. The injury or damage must occur within 90 days after the insured's work is completed. 3. The injury or damage must occur away from the insured premises. 4. The injury or damage must arise out of the insured's product or work.

2. The injury or damage must occur within 90 days after the insured's work is completed.

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

2. Warranty

After an insurer receives an itemized bill related to a valid motor vehicle policy claim, it must be paid within how many days?

20 days

What is the minimum age requirement for an adjuster license in Idaho? 1. 18 2. 19 3. 21 4. 25

21

Expense payments begin after a _____ waiting period for reasons other than theft.

24-hour

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period?

3 years

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered 1. A required disclosure. 2. A legal representation of the Association. 3. An unfair trade practice. 4. A misrepresentation.

3. An unfair trade practice.

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability? 1. Gender 2. Address 3. Sexual orientation 4. Age

3. Sexual orientation

In the event of a claim under a commercial general liability policy, the insured has all of the following duties to the insurer EXCEPT 1. Furnishing the insurer with copies of any demands, notices, or other legal papers received in connection with a claim or suit. 2. Assisting the insurer upon request in the enforcement of any right against any person or organization that may be liable to the insured. 3. Submitting to a medical exam when requested. 4. Providing prompt written notice of any claim or suit actually filed against the insured.

3. Submitting to a medical exam when requested.

The Underinsured Motorist coverage limit is capped by 1. The limit of coverage the insured selects for Underinsured Motorist coverage, less the limits required by financial responsibility laws. 2. The limit of coverage the insured selects for Underinsured Motorist coverage, plus the limits selected for Uninsured Motorist coverage. 3. The limit of coverage the insured selects for Underinsured Motorist coverage. 4. The limit of coverage the insured selects for Underinsured Motorist coverage, plus the limit of liability of the at fault motorist's auto insurance policy.

3. The limit of coverage the insured selects for Underinsured Motorist coverage.

The coverage that protects an insured against financial loss resulting from bodily injury caused by an at fault motorist who has insurance, but whose limits of coverage are less than the amount of bodily injury incurred by the insure, is called 1. Bodily injury liability insurance. 2. Uninsured Motorist coverage. 3. Underinsured Motorist coverage. 4. Financial responsibility insurance.

3. Underinsured Motorist coverage.

How much notice to the insured is required when nonrenewing an auto policy? 1. 10 days2. 30 days3. 15 days4. 20 days

30 days

After an insurer receives an itemized bill related to a valid motor vehicle policy claim, it must be paid within 1. 30 days. 2. 7 days. 3. 90 days. 4. 20 days.

4. 20 days.

States with monopolistic state workers compensation funds 1. Provide workers compensation insurance through managed risk plans 2. Require all employers in their state to purchase workers compensation insurance regardless of their financial capacity. 3. Sell workers compensation insurance through private insurers that are in the state and receive a kickback for all policies sold on an annual basis. 4. Do not allow private insurers to be licensed to write workers compensation coverage

4. Do not allow private insurers to be licensed to write workers compensation coverage

Excluded classification of employees under a Workers Compensation Policy are 1. Selected by the insurer. 2. Selected by the insured. 3. Are not defined in the policy. 4. Statutorily defined.

4. Statutorily defined.

Which of the following may NOT be included in an insurance company's advertisement? 1. The policies' limitations or exclusions 2. The name of a specific agent 3. An identification of a limited policy as a limited policy 4. That its policies are covered by a state Guaranty Association

4. That its policies are covered by a state Guaranty Association

Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? 1. Switching 2. False advertising 3. Rebating 4. Twisting

4. Twisting

A policyowner provides a check to the producer for her initial premium. How soon from receiving the check must the producer remit it to the insurer? 1. Within 3 days2. Within 7 days3. Within 14 days4. Within 21 days

4. Within 21 days

The declarations page of the homeowners policy provides all of the following information EXCEPT 1. The amount of premium charged for each coverage. 2. The insured's address. 3. What deductible amount applies to each loss covered by the policy. 4. A statement that earthquake damage is not covered.

A statement that earthquake damage is not covered.

Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation?

Attachment Bond

A trucking company has $1 million umbrella policy in place. The owner agrees to maintain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business is sued. Injuries are awarded to a single injured party in the amount of $300,000. It turned out that the business actually carried only 100/250/50 auto liability limits. What's the total amount the umbrella policy will pay? A) $50,000 B) $100,000 C) $200,000 D) $300,000

B) $100,000The umbrella policy pays as if the underlying limits were in effect. The business itself would be responsible for the difference.

All of the following statements describe the concept of strict liability EXCEPT: A. It is imposed regardless of fault B. It is applied in product liability cases C. It is imposed on defendants engaged in hazardous activities D. Claimants may need to provide proof that a product defect caused an injury

C. It is imposed on defendants engaged in hazardous activities

The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the

Conditions.

An employee drives a company auto, but does not own a vehicle herself. What endorsement could be added to the insurance policy covering the company auto that would provide coverage to the employee when she drives someone else's car for her personal use?

Drive other car coverage

Which of the following would modify the original insurance contract by either adding or removing coverage? 1. Additional coverage form 2. Conditions 3. Flexible policy 4. Endorsements

Endorsements

Which of the following statements would be an example of a product liability claim? 1. An insured, while delivering product to a customer, hits another car with the delivery truck causing bodily injury and property damage. 2. Someone tampers with the insured's product causing the insured to have to recall all products that are on the shelf. 3. The insured's product has to be recalled because of an expiration date. 4. 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. *Product liability covers damage done by the product not damage to the product

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

Libel

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

Loss is not covered.

An insured as involved in an accident that was caused by a tire blowing out. The insured was severely injured and incurred medical expenses of $100,000. The insured brought a recovery action against the manufacturers of the auto and the tires. The court held that the tire was the cause of the accident. Who is required to pay for this loss?

Manufacturer of the tire (it was implied the tire was safe to use, therefore, they are held strictly liable)

Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?

No, because the claim results from copyright infringement and is not in an advertisement.

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

Perils

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

Permanent Partial disability

Which of the following terms refers to a person's total inability to work ever again

Permanent total disability

If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?

Personal and advertising injury liability

A contractor who builds homes has never made a claim on his business insurance policy. His agent discovers that his policy is written on a scheduled rating. If the contractor changes to an experience rating policy, which is most likely? 1. Premiums would be unchanged. 2. Coinsurance would be necessary. 3. Premiums would go down. 4. Premiums would go up.

Premiums would go down.

While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store?

Property damage liability

What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society?

Punitive

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss.

Method by which employers manage the risks associated with the hiring of previously injured potential employees

Second injury funds program

The policy provision found in property insurance policies that prevents the insured from collecting twice for the same loss is called

Subrogation.

Which of the following symbols is available to an insured with any auto, including owned, leased, hired, or borrowed (used only for liability coverage?

Symbol 1

Which of the following symbols is available to an insured with mobile equipment subject to compulsory, financial responsibility, or other motor vehicle insurance law only

Symbol 19

Which of the following symbols is available to an insured with owned autos, other than private passenger autos only?

Symbol 4

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage?

Symbol 5

Which of the following symbols is available to an insured with owned autos subject to a compulsory uninsured motorists law?

Symbol 6

Which of the following symbols is available to an insured with specifically described autos only?

Symbol 7

Which of the following symbols is available to an insured with hired autos only (leased, hired, rented or borrowed other than form employees, partners or members of an LLC)

Symbol 8

Which of the following symbols is available to an insured with nonowned autos only (autos that are not leased, hired, rented, or borrowed. Coverage is included for autos owned by employees, partners and members, if an LLC, if used in the insured's business or personal affairs)

Symbol 9

Which of the following terms refers to a person's ability to do some work or the need to do alternative work

Temporary partial Disability

Which of the following is NOT the consideration in a policy? 1. The application given to a prospective insured 2. Something of value exchanged between parties 3. The premium amount paid at the time of application 4. The promise to pay covered losses

The application given to a prospective insured

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state

An insured has decided to never drive another vehicle and wants to transfer his auto insurance policy to his wife. What does the insured need to transfer the policy?

The written consent of the insurer

Shipbuilders and repairers are covered by the

U.S. longshore and Harbor Workers Compensation Act

An individual was involved in a head-on collision while driving home one day. His injuries were not serious, and he recovered. However, he decided that in order to never be involved in another accident, he would not drive or ride in a car ever again. Which method of risk management does this describe?

avoidance

workers compensation laws do NOT provide what type of benefits?

compensatory benefits *awards for pain and suffering are not compensated under workers compensation

Which of the following elements of an insurance contract requires paying premium & providing a statement of good health?

consideration

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

What are the two types of compensatory damages?

special and general