Test 1234 Test
How many continuing education hours must be completed on the subject of ethics every license renewal period? a) 2 b) 4 c) 5 d) 10
a) 2
A trucking company has a $1 million umbrella policy in place. The businessowner agrees to mantain a 200/500/100 limit on auto liability, and a personal liability of $400,000. After a car accident, the business sued. Injuries are awarded to a single injured party in the amount of $300,000. It turned put that the busienss actually carried only 100/250/50 auto liability limits. What is the total amount the umbrella policy will pay? a) 50,000 b) $100,000 c) 200,000 d) $300,000
b) $100,000
The Texas Property and Casualty Insurance Guaranty Association will cover all other claims arising from the same occurrence, except Workers Compensation claims, up to what limit? a) The full amount of any covered claim b) $10,000 c) $1,000 d) $300,000
d) $300,000
The limited theft endorsement designed for a landlor excludes all of the following EXCEPT a) A lawnmower the landlord owns and keeps at rented premisesdlord owns and keeps at rented premises b) Jewelry stolen from the landlord's home c) Money stolen from the tenant's apartment d) Silverware stolen from the landlord's china cabinet
a) A lawnmower the landlord owns and keeps at rented premisesdlord owns and keeps at rented premises
Under Coverage B - Other Structures, a homeowners policy provides coverage for other structures on the residence premises. Which of the following statements is NOT true of this coverage? a) Any loss paid under Coverage B reduces the Coverage A limit of liability b) Other structures covered under coverage B must be set apart from the dwelling by clear space c) a detachable garage may be covered if rented to others as a private garage d) Other structures may not be used to store business property of others, even though a business is not conducted from the structure.
a) Any loss paid under Coverage B reduces the Coverage A limit of liability
Late one night on his way home from a local bar, a man runs his covered auto into an insured's car. The man was operating his vehicle while under the influence of alcohol. The insured had no personal injuries, but her car had damage. Her insurance policy paid for the damages to her car. The subrogation provision in her policy allows a) The insurer to attempt to recover the damages from the man and/or his insurance company b) The insured to sure 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 recovrer any damages she sees fit
a) The insurer to attempt to recover the damages from the man and/or his insurance company
Reports required by the Texas Department of Insurance based on complaints about unfair settlement practices must contain information about all of the following EXCEPT a) The resident state of the claimants b) The total number of claims c) The total number if complaints d) How the claim was settled
a) The resident state of the claimants
The defendant being released on a surety bail bond is the a) principal b) Surety
a) principal
Which would not be covered by an insured's uninsured motorist coverage? a) The insured's car is hit by someone whose auto insurer is insolvent. b) The insured's son is struck by a hit-and-run driver c) The insured causes a head-on collision with the car of an uninsured motorist d) The insured's neighbor borrowed theinsured's car and was hit by an uninsured motorist
c) The insured causes a head-on collision with the car of an uninsured motorist
Restoring an insured financially after a claim is known as a) Adhesion b) Restoration c) Reasonable expectations d) Indemnity
d) Indemnity
What amount of coverage is provided on HP policies for watercraft? a) Up to $1,500 b) Up to $10,000 c) Up to $2,000 d) None
a) Up to $1,500
An insurance policy form that lists specific covered perifils provides a) Special peril coverage b) Blanket coverage c) Named peril coverage d) Open peril coverage
c) Named peril coverage
An applicant for a disability insurance policyhas a heart condition of which they are unaware and therefore they answer no to the question pertaining to heart problems on their applicatio. Their answer is considered to be a a) Fraudulent answer b) Representation c) Warranty d) Concealment
b) Representation
The supplementary payments section of the commercial general liability policy would cover a) Court costs assessed against the insured in a suit b) Loss of the insured's earnings, up to $300 a day c) Up to the policy limit for bodily injury or property damage d) up to $500 for the cost of the required bail bonds
a) Court costs assessed against the insured in a suit
An insured was judged at fault in an automobile accident. He has the 100/300 bodily injury liabilitty coverage. Three other individuals were injured in the vehicle hit by the insured. They were awarded damages of $150,000, $75,000, and $75,000. What amount, if any, was not covered by his insurance policy? a) All of the damages were covered by his insurance policy b) $50,000 c) $100,000 d) 150,000
b) $50,000
Under the Garment Contractor Floater of an Inland-Marine policy, coverage while the property is in transit between the insured and the subcontractor is usually written on which basis? a) Unnamed Peril b) All-risk c) Unfiled d) Named perils
B) All-risk
Which of the following is a method of establishing a premium on large commerical accounts? a) Merit rating plan b) Experienced modification factor c) Retrospective rating d) Premium discount
c) Retrospective rating
Which of the following entities is considered the principal? a) The director if the insurance company b) The head of the Department of Insurance c) The insurer issuing a policy d) The producer or agent soliciting the policy
c) The insurer issuing a policy
How is the premiuim paid for the businessowners policy? a) Itemized premium b) Pro rata liability premiuim c) Separate premium for property and for liability d) One indivisible premium
d) One indivisible premium
The owener of a rental dwelling, isnured under a DP-2, turns off the heat in the insured dwelling during the winter months because the dwelling is not occupied. The building's water pipes freeze and break, causing damage. How will the policy react to this loss? a) The DP policy will pay for the labor, but not the pipes b) Their loss is excluded from coverage c) This loss is covered d) The DP policy will pay for the pipes, but not the labor
b) Their loss is excluded from coverage
a) Section II with no deductible b) Section I with no deductible c) Section I, subject to the deductible d) Section II, subject to the deductible
a) Section II with no deductible
All authorized property and casualty insurers must be members of all of these organizations EXCEPT a) Texas Department of Insurance b) Texas Automobile Insurance Association c) Property and Casualty Insurance Guaranty Association d) FAIR Plan Association
a) Texas Department of Insurance
Which of the following statements is CORRECT regarding the replacement cost coverages under the businessowners policy (BOP)? a) There are no coninsurance requirements for the BOP b) An 80% insurance-to-value requirement in in place c) a coinsurance percentage varies from risk and will be found on the declarations page. d) Damage of property belonging to others is indemnified on the same replacement cost basis
b) An 80% insurance-to-value requirement in in place
John had an disagreement with his insurer on the calue of damaged property. After making a written demand both, John and the insurer each selected an appraiser. The appraisers then agreed on a fair value without having to select an umpire. What condition did John use? a) Fair Vlue b) Appraisal c) Arbitration d) Notice of Claim
b) Appraisal
Which of the following is covered by auto other-than-collision (comprehensive) coverage? a) Awning attached to car for camping b) Electric equipment required for the normal operation of the car c) Radar detector d) Portable CD player
b) Electric equipment required for the normal operation of the car
Which of the following statements is correct regarding the debris removal coverage under the businessowners policy (BOP)? a) The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductable amount. b) It pays for cleanup or removal of pollutants from land of water. c) It pays for removal of the debris of the insured's damaged automobile. d) The debris of covered property must be reported in writing within 270 days of the loss.
a) The insured's limit of liability is 25% of the sum of the direct loss payment plus the deductable amount.
Claims from which of the following types of insurance will be covered by the Texas Property and Csualty Insuranc Guaranty Association? a) Workers Compensation b) Credit Insurance c) Title Insurance d) Fidelity or surety bonds
a) Workers Compensation
All of the following are TRUE regarding the cancellation condition of a policy EXCEPT a) The insurer may cancel the policy by mailing a written notice to the first names insured b) The insurer is required to give advance notice of its cancellation to the insured c) The insurer must provide proof that the insured received the notice d) The insured may cancel the policy at any time by mailing a written notice of cancellation to the company
c) The insurer must provide proof that the insured received the notice
A commissioner of Insurance tool Office on February 1. 2009. When will the Commisioner's term end? a) August 1, 2012 b) February 1, 2010 c) August 1, 2011 d) February 1, 2011
d) February 1, 2011
Which of these would be covered by the medical payments coverage in a personal auto policy? a) An insured trips over the curb while crossing the street on the way to her car and sprains a wrist b) An insured slams a hand in a car door while getting in, breaking the hand c) An insured falls down while-skiing and is run over by a boat d) A runuway shopping cart in a mall parking lot knocks an insured down, breaking his leg.
b) An insured slams a hand in a car door while getting in, breaking the hand
Answers to questions in an insurance application are called representations and, as such, they are a) Warranties b) Believed to be true to the best of the applicants knowledge c) Absolutely not true d) Not true
b) Believed to be true to the best of the applicants knowledge
A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of a) Illegal inducement b) Coersion c) Misrepresentation d) Unfair discrimination
b) Coersion
To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policy owner face? a) Illness b) Financial loss c) Physical Injury d) Property damage
b) Financial loss
Which of the following describes an insurer's responsibility for payment under a policy, as stated in the common policy provisions? a) Premiuims b) Limits of Liability c) Consideration d) Utmost good faith
b) Limits of Liability
An insured and his spouse were traveling down an icy road and hit a sign, accumulating $1,350 damage to their car. They have a $250 deductible. They already collected on a $1,500 claim earlier this year. How much will they collect on this claim? a) $0 b) $250 c) $1,100 d) $1,350
c) $1,100
What is the maximum amount of time an insurer may delay payment of a claim without having to pay an additional interest? a) 10 days b) 30 days c) 60 days d) 90 days
c) 60 days
All of the following are ways to handle risk EXCEPT a) Elimination b) Avoidance c) Reduction d) Transfer
a) Elimination
What are the types of compensatory damages? a) Special and punitive b) Special and general c) Punitive and reward d) Unique and general
b) Special and general
Which of the following statements is true regarding personal injury protection (PIP) coverage in auto liability policies issued in this state? a) PIP does not cover funeral expenses b) Insurers may offer the coverage upon the insured's request c) The insured may reject this coverage in writing d) The maximum allowed amount of coverage is $1,000
c) The insured may reject this coverage in writing
The purpose of the Fair Credit Reporting Act is to a) Ensure coverage for all applicants b) Protect consumers against the circulation of innacurate or obsolete personal or financial information c) Protect the insurer from adverse selection d) Ensure the consumers receive a copy of investigative consumer reports
b) Protect consumers against the circulation of innacurate or obsolete personal or financial information
Homeland Housing Corp holds a mortgage on a property that John and Carol Thomas purchased. John and Carol have a Homeowners policy with Home Protection Insurance which has a mortgagee clause naming Homeland as a Loss payee. If John and Carol suffer a fire to their home a) The Thomases will be considered sole claimants and receive loss reimbursement from Home Protection Insurance b) John and Carol will be considered co-claimants and receive loss reimbursement from Home Protection Insurance c) The Thomases and Homeland will be considered co-claimants and receive loss reimbursement from Home Protection Insurance d) Homeland be considered the sole claimant and receive loss reimbursement from Home Protection Insurance
c) The Thomases and Homeland will be considered co-claimants and receive loss reimbursement from Home Protection Insurance
An insured has an automobile policy with limits of 100/300/50 and a deductible of $1,000. He is involved in an auto accident and crashes into another driver's auto. The other driver is awarded $125,000 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 policy is a) $126,200 b) $100,200 c) $150,200 d) $125,200
d) 125,200
Homeowners policies consider all of the following insured locations EXCEPT a) Land owned byt he insured on which his new home is under construction b) An mindividual cemetery plot c) The hotel ballroom rented by the insured for a family reunion d) A strawberry patch owned by the insured
d) A strawberry patch owned by the insured
A personal umbrella policy may act as excess over any of the following insurance coverage policies EXCEPT a) Homeowners Section II coverage b) Auto liability coverage c) Comprehensive personal liability d) Auto collision coverage
d) Auto collision coverage
In order to receive transportation expenses under the personal auto policy following damage to an auto caused by collision, an insured must have a) Uninsured motorist property damage b) Supplementary payments c) Other-than-collision coverage d) Collision coverage
d) Collision coverage
Which of the following provisions is usually found in homeowners policies and provides a replacement cost settlement to policyholders who carry adequate insurance? a) Coinsurance b) Axtual cash value c) Pro rata d) Insurance to value
d) Insurance to value
A structure may be eligible for coverage under the National Flood Insurance Program if it meets all of the following requirements EXCEPT a) It is not located within the Coastal Barrier Resource System b) Has 2 solid walls and a roof c) Is principally above ground d) Is entirely over water
d) Is entirely over water
If an insurance policy has the additional coverage provision, how does this affect the policy premium? a) Premiuim will be recalculated when a specific loss covered by this provision occurs b) Additional premiums will be assessed c) Premiuim will be calculated on a pro rata basis on the amount of additional coverage d) There is no additional premium
d) There is no additional premium
