TEST

3 years B 1 year C 48 hours D 6 months

A

All of the following are true of a Yacht Policy, except: A A yacht is covered regardless of its location B Includes coverage for fuel spills and commercial towing C Includes both property and liability coverage D Lay up warranties are permitted

A

An insured's CGL has a Products and Completed Operations Aggregate Limit of $100,000 with a $20,000 limit per occurrence. Following claims for two separate occurrences in the amounts of $35,000 and $25,000, how much of the aggregate remains for all other claims in the policy period? A $60,000 B $20,000 C $100,000 D $65,000

A

Choose the correct answer regarding Coverage F of the Farm Property Coverage Form. A It will cover farm machinery both on and away from described premises B It does not cover unscheduled livestock, but does cover show horses and ponies, if scheduled C It covers farm buildings, including silos and fences, as well as home furnishings and office furniture in a home office D Each item of farm machinery to be covered must be scheduled

A

In surety bonding, the party whose obligation is guaranteed is called the: A Principal B Surety C Obligee D Guarantor

A

M has a liability policy insuring her flower shop. After M sells the shop, the buyer asks if she can transfer her liability policy as part of the sale. Which provision prevents M from making this transfer without the insurer's consent? A Assignment B Subrogation C Assumption of risk D Liberalization

A

The Commercial Property policy applies a limit of what dollar amount for business personal property temporarily away from the premises? A $10,000 B $15,000 C $2,500 D $5,000

A

The standard policy structure for insurance policies includes all of the following sections, except: A Duties B Insuring agreement C Conditions D Exclusions

A

Under the Broad Form Dwelling Policy (DP-2), which peril is not included for coverage without an endorsement? A Theft B Volcanic Eruption C Falling Objects D Damage to appliances by artificially generated electricity

A

What is the difference between the Commercial General Liability Occurrence and Claims-Made forms? A The coverage trigger point B The types of occurrences they cover C The deductible D The policy period

A

What is the term for tangible property, that cannot be used because it is defective, inadequate, deficient, or dangerous? A Impaired property B Fungible property C Abandoned property D Assumed property

A

Which of the following describes the term General Average under Ocean Marine Insurance? A A partial loss where the loss is shared B The average value per item of all the cargo on the ship C A partial loss where the loss is not shared D The average freight charges on the entire cargo of the ship

A

Which of the following is an example of vicarious liability? A An employer's liability for the acts of an employee B Liability of members of the clergy C The liability of any group of people, acting together D The liability of a negligent party whose identity cannot be determined

A

Which of the following is correct concerning the Commercial Property Special Causes of Loss Form? A Coverage is provided for all losses except as specifically limited or excluded B Coverage is included for the peril of Earthquake C Coverage is included for loss of Business Income D Other than coverage for some additional perils, the coverage is identical to that of the Broad Form

A

Which of the following is not an insured contract under CGL? A An advertising contract B Sidetrack agreement C Lease for a new store location D Elevator maintenance agreement

A

Which of the following losses would be covered by a commercial crime policy? A Vandalism occurring in the course of a burglary B A fire resulting from the aftermath of a robbery C The mysterious disappearance of important papers previously stored in a safe D Damage to company computers due to an act of vandalism

A

Which one of the following would be disqualified from licensure in Texas? A Any person who commits a violation of the Texas insurance code B Any person who does not have an insurance degree from a qualified higher institution of learning C Any person who is new to the business of insurance D Any person who recently moved to this state

A

Which statement is false regarding the Businessowners Policy? A Supplementary Payments include first aid expenses B Auto dealers, banks and places of amusement are not eligible C Hired and non-owned autos may be included by endorsement D Supplementary Payments do not affect the policy limits

A

Which statement is true concerning Homeowners policies? A Property usually located in a student dormitory is limited to 10% of Coverage C or $1,000, whichever is greater B Animals. Birds, and fish are considered covered personal property under Coverage C C Dwellings under construction are covered for theft D Coverage is provided for Other Structures used to store business property owned by someone other than the insured or a tenant

A

Which term describes the equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first. A Contribution by Equal Shares B Pro rata liability C Excess insurance D Primary insurance

A

ection II of a Homeowners policy may cover which of the following incidents? A Bodily injury caused by an insured's activities while picnicking at a city park B The homeowner's family dog bites their 2 year old son C An insured's guest damages the stair railing during a visit D The insured hits and injures a swimmer while enjoying a ride in an owned inboard motorboat

A

A business individual that carries people and property belonging to the general public for a fee from one place to another is called which of the following? A Motor carrier B Common carrier C Contract carrier D Livery carrier

B

A state requiring that the commissioner agree that a company's rates are appropriate before they are made effective uses which type of rating approval? A Open Competition B Prior approval C Mandatory D File and use

B

All insurance carriers authorized in Texas must be examined by the Department at least once every how many years? A 1 B 5 C 3 D 7

B

All of the following are additional coverages under the Building and Personal Property Coverage Form, except: A Fire department service charge B Peak season C Preservation of property D Debris removal

B

All of the following are true of Builders Risk forms, except: A Coverage does not apply to outside radio and television antennas B Coverage is always written on an open perils basis C Coverage terminates when the policy expires or it is cancelled D There is no vacancy provision

B

All of the following are true of Dwelling Special Form, except: A Mobile homes are not eligible B Both the dwelling and contents are covered on an open perils basis C The dwelling must be used principally for residential dwelling purposes D Losses to the dwelling are paid on a replacement cost basis

B

Choose the false statement about a Homeowners Policy. A Coverage C allows Coverage for loss due to theft of jewelry up to $1,500 B Earth movement is covered in all Homeowners policies C Trees, shrubs, and plants are covered up to $500 each D Theft from a dwelling under construction is not included

B

D's neighbor H keeps a venomous snake as a pet. D's son is bitten after teasing the snake with a stick. After being sued by D's parents, H's insurance company claimed that the boy was acting negligently, and therefore, H was not liable. The boy's lawyer claimed that the pet was so dangerous that it did not relieve the owner of liability, an example of which principle? A Respondeat Superior B Absolute liability C Last clear chance D Assumption of risk

B

FOB (Free on Board) point of destination is best described as which of the following? A The buyer owns the property when it leaves possession of the seller B The seller is responsible for the property being transported until it has been delivered C The seller is responsible for property until it is placed on board the ship D The buyer owns the property when it is delivered to shipside

B

Insurer G decides to increase the first aid benefits for one of its insureds for no extra premium. What is the name of the provision which automatically applies this broader coverage without additional premium to all policies currently in effect by the same insurer? A Assignment B Liberalization C Assumption of risk D SubrogationB

B

J has a personal auto policy with Liability limits of 50/100/25, UM/UIM limits of 50/100, a Medical Payment limit of $5,000 and Comprehensive and Collision deductibles of $500. J's vehicle slides on ice and hits a guardrail causing $9,500 in damage to the vehicle and $11,000 damage to the guardrail. J also sustains $1,000 in injuries. How much will the policy pay for all damages? A $9,500 B $21,000 C $11,000 D $21,500

B

M and C both have Personal Auto policies with liability limits of 20/30/10. If M borrows C's car and injures a pedestrian, causing injuries that will cost $5,000 to treat, which policy will provide coverage for the injured party? A Neither policy, since C's car was not on M's policy B C's policy C M's policy D Both policies will share the loss pro-rata

B

Once an agent in Texas is certified to sell Long-term Care partnership policies or Medicare-related products, they must complete how many hours of continuing education (CE) per licensing period? A 6 B 4 C 8 D 10

B

Risk is defined as: A Insurable interest in property B Uncertainty or chance of loss C Specific cause of loss D Amount of loss

B

The DP-3 provides what coverage for damage to the insured's dwelling due to a power failure when lightning strikes a power transformer 2 miles away? A 10% of Coverage A B No coverage C Coverage A amount D 10% of Coverage C

B

The Mobile Agricultural Machinery and Equipment Coverage Form does not include coverage for: A Farm tractors B Irrigation equipment C Hay balers D Combines and cotton pickers that are specifically described with a limit of insurance for each

B

The Outdoor Property Extension under the Building and Personal Coverage Form insures against which perils? A Fire, lightning, windstorm, hail, explosion, aircraft, and vehicles B Fire, lightning, explosion, riot, civil commotion and aircraft C Fire, lightning, riot, civil commotion, aircraft, and vandalism D Fire, lightning, windstorm, hail, riot, civil commotion and aircraft

B

The definition of an uninsured motor vehicle under the Personal Auto Policy includes all of the following, except: A A vehicle insured by an insolvent company B A vehicle newly acquired by the named insured that has not been reported to the insurer C A hit and run vehicle that cannot be identified D A vehicle for which there is no liability policy

B

The taking of property from inside the premises by a person committing forcible entry defines a: A Robbery B Burglary C Borrowing D Mysterious disappearance

B

Under a Building and Personal Property Coverage Form, up to what percent of a partial loss would be available for debris removal? A 5% B 25% C 15% D 10%

B

Under the Homeowners Policy, an unrelated resident in the care of the insured is covered up to what age? A 24 B 21 C 18 D 16

B

Under the Personal Auto Policy, medical payments do not apply to passengers occupying which of the following? A A van being used for shared car pools B A van used in the insured's business in the course of employment C A non-owned vehicle D A newly acquired vehicle

B

What is the term for continuous exposure to the same harmful conditions? A Risk B Occurrence C Proximate cause D Accident

B

Which association covers wind and hail losses in designated areas in Texas? A AIP B TWIA C FAIR D JUA

B

Which crime insuring agreement covers acts committed when using a computer? A Computer insurance B Computer fraud C Fraud insurance D Fund Transfer Fraud

B

Which of the following best describes a liability policy that is written on a primary basis? A It pays only after other insurance covering the same loss is exhausted B It is the policy that pays first with respect to other policies C It provides only basic coverage D It shares the loss with other policies covering the same loss

B

Which of the following best describes the situation when a property has neither contents nor occupants? A Abandonment B Vacancy C Ordinance or Law D Unoccupancy

B

Which of the following is not an example of contingent liability exposure? A Liability exposure of an insured's sub-contractors B Premises liability exposure C Owners and Contractors Protective liability exposure D Contractual liability exposure

B

Which of the following is true regarding the Fine Arts Floater? A It settles losses on an ACV basis B It provides automatic coverage on newly acquired items for 90 days C Coverage is primarily for stamps and coins D Coverage is worldwide, with some exceptions

B

Which of the following is true regarding the Products exposure of the CGL? A Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises B Coverage applies to the bodily injury (BI) and property damage (PD) the product causes but not to the product itself C Products liability Coverage includes Liquor Liability and Dram Shop Liability insurance D Products Liability Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises

B

Which of the following is true regarding the Yacht Policy? A It is designed for boats that can be towed by automobiles B It has navigational limits that describe the area where the yacht is allowed to operate C It covers damage to the hull and fittings. Liability coverage may be attached by endorsement D It is written on an Inland Marine form

B

Which of the following statements about the National Flood Insurance Program is false? A Two deductibles apply separately to the building and contents B Coverage becomes effective after a 24-hour waiting period C Property removed to protect it from flood is covered for 45 days at other locations D Mudflow is covered; mudslide is not covered

B

Which of the following would not be a covered auto under the Business Auto Policy Mobile Equipment endorsement? A Forklift B Truck operated on public roads C Bulldozer D Truck with a mounted power crane

B

Which statement about the BOP Utilities Services Time Element Endorsement is true? A It pays for loss to covered property described in the schedule caused by interruption of service B It pays for loss of business income or extra expense at the described premises caused by the interruption of service at the described premises C It increases the limit of insurance by the amount shown in the endorsement D It pays for loss to overhead transmission lines indicated in the schedule

B

Which type of Workers' Compensation do not have a limit? A Scheduled injuries B Medical benefits C Death and survivor benefits D Temporary Total Disability benefits

B

All of the following are true of medical payments under the Commercial General Liability Coverage Forms, except: A Coverage applies to injuries that occur on the premises that the insured owns or rents B Coverage applies to injuries that occur because of the insured's operations C Coverage applies to the insured's injuries D Coverage applies to expenses that are incurred and reported to the insurer within 1 year of the accident

C

All of the following statements are correct regarding the Fire Department Service Charge in Dwelling Policies, except: A The policy deductible does not apply to this coverage B The coverage is additional insurance C The policy will pay up to $1,000 D Coverage is not provided if the premises is within the same jurisdiction as the fire department

C

All of the following statements is correct about a Homeowners Policy, except: A Coverage D of a Homeowners Policy covers additional living expenses B Home schooling is covered under a Homeowners Policy C Coverage D of a Homeowners Policy includes loss of income from an incidental business D A Homeowners Policy will not cover theft of a boat away from premises

C

Choose the true statement regarding the Value Reporting Form. A The form may be attached to any Commercial Property coverage forms B The final premium is based on the values reported in the last report of the policy term C Late reporting or under-reporting will result in a penalty in the event of a loss D The Value Reporting Form contains an 80% coinsurance clause

C

Policyholder S has a HO-5 policy with a $250,000 Coverage A limit. After a strong wind blows a mailbox into S's front picture window, causing $2,500 damage, S immediately buys $250 of wood and plastic sheeting to cover the damaged window and prevent further damage. How much will S's policy pay? A $250 B $500 C $2,750 D $2,500

C

The concept that the insured should not profit from an insurance transaction is called: A The principle of personal aspect B The principle of utmost good faith C The principle of indemnity D The principle of subrogation

C

The insured would be required to pay which of the following in the event of a Workers' Compensation claim? A Expenses the insured spends to appear in court to assist the defense B Premiums for the appeal bonds when the insurer appeals to a higher court C Any excess amounts incorrectly paid by the insurer D Interest applied to the final judgment for the delay in payment

C

Umbrella policies provide coverage on which basis? A Aggregate B Primary C Excess D Open perils

C

What is the name for insurance covering the amount an insured is legally obligated to pay for loss to a customer's vehicle in the insured's care? A Garage coverage form B Business auto coverage C Garagekeepers coverage D Garage product liability

C

When a building has physical contents but no occupants, the building is said to be: A Suspended B Uninhabited C Unoccupied D Vacant

C

Which is not included in the general section of the Workers' Compensation policy? A State Workers' Compensation law B State C Other insurance D Work locations

C

Which of the following coverages is not included in the Basic Dwelling Form? A Property moved to a Newly Acquired Residence B Fair Rental Value C Additional Living Expenses D Personal Property Coverage on a World-Wide basis

C

Which of the following incidents is not covered under the Inside The Premises Theft of Money and Securities Form? A Disappearance of money by a customer B Damage to the bank itself caused during a theft C Attempted robbery of a custodian D Damage to a locked safe

C

Which of the following insurance forms is designed for the person who has the potential for a liability exposure caused by negligent acts of the contractor or subcontractor he hires to make repairs, construction, or alterations? A Completed Operations Insurance B Contractors Liability Insurance C Contingent Liability Insurance D Contractual Liability Insurance

C

Which of the following is correct regarding Umbrella Liability policies? A The umbrella policy coverage territory is the same as that of the underlying policy B Their coverage is identical to that provided by the underlying policy C They are designed to cover losses excluded by the underlying policy D No underlying policy is required

C

Which of the following is covered by Coverage E of the Farm Property Coverage Part? A Unscheduled farm personal property B Loss of use C Scheduled farm personal property D Other farm structures+

C

Which of the following is not an element of negligence? A Duty of care B Forseeable consequence C Assumption of risk D Proximate cause

C

Which of the following is not covered by commercial crime insurance? A Safe burglary B Computer fraud C The mysterious disappearance of property D Embezzlement

C

Which of the following is not true concerning Section II of the Homeowners Policy? A The coverage for Damage to Property of Others excludes property that is covered in Section I B Payment under Damage to Property of Others is made regardless of negligence C The Damage to Property of Others duplicates coverage that is included in Section I D The coverage for Damage to Property of Others pays the replacement cost of the property damaged up to $1,000 per occurrence

C

Which of the following perils is not covered by Crop/Hail insurance? A Lightning B Drought C Failure to harvest D Fire

C

Which one of the following would be considered controlled business in Texas? A An agent writing a policy on their own life B An agent writing insurance on a corporation in which they own 1% of the voting stock C An agent writing insurance on a partnership in which he/she manages, directs or controls the business of the partnership D An agent writing an auto or home owners policy on his/her children after being in the business for 10 years

C

Which provision specifies that no coverage applies if the loss benefits a person who has care, custody, or control of the insured's property? A Claim Settlement B Appraisal C No Benefit to Bailee D Assignment

C

A Builder's Risk policy automatically ends within how many days after construction is complete? A 30 B 120 C 60 D 90

D

A managing general agent (MGA) is: A A salaried employee who only performs assigned duties in a property and casualty agent's office B A person who causes an insurance contract to be issued with an eligible surplus lines insurer C A person who, for compensation, examines, assesses, or evaluates risks for, and provides advice for reduction of risks D Any person or entity responsible for supervising the local agency and field operations of an insurance company

D

All of the following are considered implied warranties in an Ocean Marine policy, except: A Legality B Seaworthiness C No Deviation in Voyage D Protection clause

D

All of the following are true of the Occurrence Form, except: A For coverage to apply, the injury or damage must occur during the policy period B Supplementary payments are automatically included C As long as the injury or damage occurred during the policy period, the claim date is immaterial D The length of the retroactive date will depend upon the insurer

D

DChoose the claim that would be covered under Coverage E of a Homeowners Policy. A Bodily Injury arising out of the application of corporal punishment by an insured B The transmission of a communicable disease by an insured C Bodily injury to an insured D Bodily injury to a guest caused by the insured's pet dog

D

Driver D slid into another car causing an accident in which three people in the other car were injured. Two injured parties claimed $15,000 in medical expenses and the third person claimed $25,000. How much will D's insurance company pay if her policy has 25/50 limits for bodily injury? A $75,000 B $45,000 C $60,000 D $50,000

D

Employees exempted from Workers' Compensation laws include all of the following, except: A Casual workers B Farm laborers C Independent contractors D Part-time employees

D

Short rate cancellation occurs when: A The policy is non-renewed B An insurer cancels the policy mid-term C A policy is flat cancelled D The insured cancels the policy mid-term

D

The amount of insurance provided to cover personal property under Coverage C of a Homeowners Policy, is: A 40% of Coverage A B 20% of Coverage A C 60% of Coverage A D 50% of Coverage A

D

Under Coverage A of a Dwelling Policy, all of the following are covered, except: A Fire or lightning damage to outdoor television antennas B Outdoor equipment on the location used to service the dwelling C Materials for repairing the dwelling, located on the described location D Land, including the land on which the dwelling is located

D

Under Coverage B of a Homeowners Policy, all of the following are included, except: A A building containing the insured's hobby woodworking shop B A detached carport C The insured's garage rented to a neighbor for private garaging D The renting of a garage to a neighbor for a woodworking business

D

Under the Businessowners Policy, if there is other insurance covering the same loss how will the policy respond? A The Businessowners Policy will pay its proportional share of the loss or damage B The Businessowners Policy does not pay if there is other insurance applicable to the loss or damage C The Businessowners Policy pays 50% of the loss or damage D The insurer will pay only for the amount of covered loss or damage in excess of the amount due from that other insurance

D

What is the name of the uniform document that common carriers are required to issue to the shipper of the goods being transported? A Bill of Transportation B Bill of Acceptance C Shipping Receipt D Bill of Lading

D

When an insured's boat is in storage, which warranty allows for a return on premium? A Houseboat B Storage C Dry Dock D Lay Up

D

Which coverage form may not be added to the Commercial Property Coverage Part? A Legal Liability Coverage Form B Commercial Builders Risk Coverage Form C Building and Personal Property Coverage Form D Homeowners Special Form

D

Which coverage is not available under the Garage Coverage Form? A Product liability B Garagekeepers C Physical damage D Advertising liability

D

Which coverage is not included in a standard Businessowners Policy? A Business Income and Extra Expense B Automatic 8% increase for Buildings C Seasonal increase of 25% D 72 hours Direct Damage from Utility Services

D

Which of the following is true about the Assigned Risk Plan? A Private insurers compete with the Assigned Risk Plan B It is intended for employers who have high claims volume C Insurers with income over $10 million can opt out of participating in the Plan D It is intended for employers who are unable to purchase in the voluntary market

D

Which of the following is true regarding the HO-4 and HO-6 forms? A They provide open perils coverage on the personal property B The amount of insurance on the dwelling containing personal property is 10% of the Coverage C amount of insurance C Losses are paid on a replacement cost basis D They are used to insure the personal property and personal liability of the insured, but do not include the structure itself

D

Which of the following statements about medical payments is true? A They apply to all persons, including the insured on the premises for any reason B They apply to members of amateur athletic teams sponsored by the insured C They apply to all expenses incurred within 5 years of the accident D Payments are made regardless of fault or negligence

D

Which of the following statements is true concerning the National Association of Insurance Commissioners? A The NAIC regulates the insurance industry in the United States and has enforcement powers B Regulations and laws are passed at its meetings C The NAIC was responsible for passage of the McCarran Act D The association promotes uniformity among states

D

hich vehicle would not be covered under an unendorsed Personal Auto Policy? A An eight passenger van with a gross vehicle weight of 8,600 pounds B A pickup truck with a gross vehicle weight of 7,600 pounds C An owned trailer D A motorcycle

D