Study Questions
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
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
An executive is accused of sexual harassment. What type of coverage would respond?
Employment practices liability
What would modify the original insurance contract by either adding or removing coverage?
Endorsements
Professional liability coverage protects the insured against legal liability resulting from
Errors and omissions
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
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
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
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.
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?
Mental anguish is a covered injury
An insurance company that is owned by the policyholders is called a
Mutual Insurer
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
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.
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
The Underinsured Motorist coverage limit is capped by
The limit of coverage the insured selects for Underinsured Motorist coverage.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?
Twisting
Shipbuilders and repairers are covered by the
U.S. longshore and Harbor Workers Compensation Act
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
Underinsured Motorist coverage.
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?
Within 21 days
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
In order to receive a commission, a person is required to
be licensed as an insurance producer
Which commercial auto coverages provides protection for most commercial auto exposures except truckers, garages, and motor carriers?
business auto 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
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
Workers compensation rating is developed by applying a rating bureau job classification rate to each
$100 of payroll
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
When the Director requests a hearing, written notice must be submitted how many days in advance?
14 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
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
10 years
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
Transportation expenses are covered under a personal auto policy for
$20 per day, for a maximum of $600.
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
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
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
When cancelling an auto policy for nonpayment of premium, how much advance notice must the insurer give to the insured?
10 days
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
What 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
20 days
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?
21
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
Expense payments begin after a _____ waiting period for reasons other than theft.
24-hour
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
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
Binders can last for up to
90 days
A producer must report the the Director any administrative action or criminal prosecution taken against the producer within how many days?
30 days
How much notice to the insured is required when nonrenewing an auto policy?
30 days
What is the major difference between a stock company and a mutual company?
4. Ownership
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
Each violation of the Insurance Code can result in fines up to $1,000 or imprisonment for
6 months.
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
Perceived/Assumed authority
Apparent
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?
Business Auto policy
What is issued as evidence of insurance?
Certificate of Insurance
The part of the policy that sets forth the rules of conduct, duties, and obligations of the parties is called the
Conditions.
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
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
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
Fraternal benefit society
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
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
What does the Guaranty Association guard against?
Insurer insolvency
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
What term refers to such disabilities as the loss of a limb, hearing, or eye sight?
Permanent Partial disability
What term 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
The commercial general liability Coverage Part A - Bodily Injury and Property Damage provides coverage for?
Premises
which of the following liability exposures is most likely for a small specialty retail clothing boutique?
Premises Liability exposure
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?
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
The exact, direct, uninterrupted cause of loss is the
Proximate cause
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 amount of loss the insured is willing to absorb without insurance protection is known as
Self-insured retention
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.
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 auto only?
Symbol 2
Which of the following symbols is available to an insured with owned private passenger autos only?
Symbol 3
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
What term refers to a person's ability to do some work or the need to do alternative work
Temporary partial Disability
What term refers to a person's total inability to work for a temporary amount of time?
Temporary total disability
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
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
if an insurance policy prohibits the insured from relinquishing ownership of insured property that has been damaged, it is prohibiting
abandonment
Who acts on behalf of the principal?
agent
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)
The transfer of a legal right or interest in an insurance policy is called
assignment
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
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
Which of the following exposures is not covered under the garage liability coverage form?
contractual liability
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
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 _______ in property insurance
deductible
Which of the following is an example of a physical hazard
diabetes
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.
either a fine not exceeding $1,000 or imprisonment in the county jail not exceeding 6 months, or both
The purpose of purchasing an umbrella liability policy is to provide
excess insurance over the primary liability limits
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?
exclusions
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?
foreign
a common exclusion found under physical damage to your auto includes
mechanical breakdown
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
miscellaneous-type vehicle endorsement includes what motorized vehicles?
motorcycles, motor homes, golf carts, dune buggies, and other recreational vehicles
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?
occurrence
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
The other states' insurance section of a workers compensation policy provides coverage
only for those states listed in the policy
The extended nonowned coverage provides protection to
only the person(s) named on the policy
when an insured owes a total standard premium greater than $5,000
premium discount
Personal and Advertising Injury coverage does not apply to...
professional advertisers or intentional injury, and does not guarantee the product will perform as advertised
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
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
What are the two types of compensatory damages?
special and general
Coverage B - Personal and Advertising Injury Liability responds to claims arising from
suits alleging infringement of a copyright
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?
the contractor
What information is found in the conditions part of an insurance policy?
the description of the duties and obligations of the insured
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
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
unfair trade practice
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.
what is the main distinction between a hired auto and a nonowned auto?
who owns the auto
Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation?
Attachment Bond
States with monopolistic state workers compensation funds
Do not allow private insurers to be licensed to write workers compensation coverage
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.
The designation symbols used in commercial auto policies can be found in which policy section?
Section I - Covered Auto
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?
Trailer interchange coverage
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.
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