Texas Practice Exam 7
A common element that links inland marine and ocean marine risks is:
Transportation
Under a dwelling broad or special form, what is the maximum that would be paid for "loss of use" if Coverage A was $60,000? a. $12,000 b. $2,500 c. $6,000 d. $5,000
a. $12,000 20% of Coverage A
A Personal Automobile policy provides liability coverage on a single limit basis for $100,000. A covered accident caused by Mr. Jones involves a $75,000 liability judgment to Mr. Allen for his injuries and $25,000 liability judgment for the damage to his car. In addition, $20,000 in legal bills are incurred defending the insured. The company will pay: a. $120,000. b. $25,000. c. $75,000. d. $100,000.
a. $120,000.
Under the BOP, how long is business income covered in case of an insured direct loss? a. 12 months b. 6 months c. 15 months d. 9 months
a. 12 months
Which of the following property is excluded under homeowner personal property coverages? a. A valuable baseball card collection owned by the named insured's son that is covered under a separate personal articles floater. b. A suitcase full of clothes while the named insured is vacationing in Russia. c. A suitcase full of clothes while the named insured is vacationing in Mexico. d. A valuable baseball card collection that the named insured's young son owns, but the agent is unaware of.
a. A valuable baseball card collection owned by the named insured's son that is covered under a separate personal articles floater.
What is covered by a SP-23 protection and indemnity policy? a. All of the responses are correct. b. Loss of life, injury and illness c. Collision liabilities including defense costs. d. Damage to docks, buoys and other structures.
a. All of the responses are correct.
Which of the following would NOT be covered under a workers compensation policy for injury? a. An intoxicated employee injures an innocent bystander because of horseplay. b. A person injured in a work related accident. c. A person who contracts a disease as a result of his/her job. d. A truck driver working for his/her employer.
a. An intoxicated employee injures an innocent bystander because of horseplay.
Which of the following types of property may not be insured under the valuable papers and records coverage form? a. Money and securities b. Books, maps, and film c. Property of others d. Mortgages and manuscripts
a. Money and securities
The commercial property Business Income Coverage Form covers all of the following, EXCEPT: a. Non-continuing operating expenses. b. Actions of a civil authority. c. Loss of business income. d. Continuing operating expenses.
a. Non-continuing operating expenses.
The principle of indemnity is designed to avoid: a. Overpayment of a claim. b. Two policies sharing payment for a loss. c. The return of earned premiums. d. A coinsurance clause of less than 80 percent.
a. Overpayment of a claim.
What is the purpose of the Nationwide Definition for inland marine exposures outlined in specific detail: a. The coverage that marine insurers could write. b. The classes of property not eligible for inland marine coverage. c. What types of insurance companies could issue inland marine policies. d. The role of the National Association of Insurance Commissioners.
a. The coverage that marine insurers could write.
Under an HO form with replacement cost coverage, what is the maximum amount that will be paid in case of a covered loss? a. The limit of coverage b. Limit of liability c. Actual cash value d. Depreciated value less the deductible
a. The limit of coverage
Jim drives Linda's car. Both Jim and Linda have a personal auto policy. Which of the following statements is CORRECT concerning coverage if Jim causes an accident? a. The policy Linda owns is primary and the policy Jim owns is excess. b. Only the policy Jim owns will pay for damages. c. Only the policy Linda owns will pay for damages. d. The policy Jim owns is primary and the policy Linda owns is excess.
a. The policy Linda owns is primary and the policy Jim owns is excess.
A Property insurance policy is issued with the Standard Mortgagee Clause. All of the following would apply, EXCEPT: a. The property suffers a fire loss due to an increase in hazard known to the mortgagee but the mortgagee is still paid up to the amount of their insurable interest. b. The insured sets fire to the insured property, but the mortgagee is still covered. c. The insured has failed to pay the premium but the mortgagee has that right. d. The insured has failed to provide a proof of loss but the mortgagee has that right.
a. The property suffers a fire loss due to an increase in hazard known to the mortgagee but the mortgagee is still paid up to the amount of their insurable interest.
The insured, who is a chair manufacturer, produced a new line of lift chairs with electric heat and massage for people who are disabled. After the chairs had been on the market for several months, it was discovered that the control panel had been designed with a glitch in it that could be powerful enough to cause injury. The chairs were withdrawn from the market. The retailer who had purchased the chairs lost a great deal of money because of the recall. Under what circumstances, if any, will the insured's commercial umbrella liability policy cover those losses? a. Under no circumstances. b. If it is discovered there was no glitch in the control panels. c. If it is discovered why there was a glitch in the control panels. d. If the manufacturer voluntarily withdrew the chairs from the market.
a. Under no circumstances.
The first effort to provide insurance for land transportation risks involved an extension of ocean marine coverage known as the: a. "Inland waters" condition. b. "Warehouse to warehouse" clause. c. "Overland rail" extension. d. "Overland transit" clause.
b. "Warehouse to warehouse" clause.
Jim Johnson has an automobile policy with a combined single limit of $50,000. He has an at-fault accident and incurs the following expenses: $30,000 bodily injury judgment; $30,000 property damage judgment; $5,000 damage to traffic light; $6,000 attorney's fees for his defense; $300 in premiums for appeal bond; and $75 in bail bond premiums for related traffic violations. What is the maximum amount his insurance company will pay? a. $50,000 b. $56,375 c. $65,000 d. $71,375
b. $56,375
Herb is a licensed Texas adjuster. He has been very busy and forgot to take the continuing education courses required for him to renew his license. How long does Herb have after the date his license expires to complete the required continuing education courses? What is the fine that he will have to pay? a. 60 days / $30 per deficient CE credit hour. b. 90 days / $50 per deficient CE credit hour. c. 6 months / $150 flat fine. d. 3 months / $200 flat fine.
b. 90 days / $50 per deficient CE credit hour.
Which of the following are NOT required to hold an adjuster license in Texas? a. A person working for a third-party administrator who adjusts workers' compensation claims. b. A person who works for an insurer and adjusts claims on losses that do not exceed $500. c. A person who works for a surplus lines company adjusting yacht losses. d. A person working for an insurer who adjusts automobile liability claims.
b. A person who works for an insurer and adjusts claims on losses that do not exceed $500.
Which of the following basic coverages are provided under a Standard Fire policy? a. Fire, lightning and hail. b. Fire, lightning and removal. c. Fire, lightning and smoke damage. d. Fire, lightning and internal explosion.
b. Fire, lightning and removal.
Misrepresentation is: a. Encouraging a prospect to drop an existing policy in order to sell another policy. b. Leading a client to believe that an insurance policy provides benefits that it does not provide. c. Offering an inducement for the purchase of insurance. d. Suggesting that the insured's carrier is inferior and does not pay claims promptly.
b. Leading a client to believe that an insurance policy provides benefits that it does not provide.
Scott lives in Texas and has submitted a claim to his insurance company. He has received notice from the insurer that the claim is covered under the policy and they will be paying the claim. How long does the insurer have to pay Scott's claim according to Texas law? a. Not later than the tenth business day after the notice was made. b. Not later than the fifth business day after the notice was made. c. Not later than the 30th business day after the notice was made. d. Not later than the 30th business day after the claims report was received in all circumstances.
b. Not later than the fifth business day after the notice was made.
Which of the following is NOT an unfair claims settlement practice? a. Misrepresenting the terms of a policy. b. Not paying an unsubstantiated or unreported loss. c. Compelling the insured to file a lawsuit in order to recover amounts due under an insurance contract by offering substantially less than the amounts ultimately recovered in the action. d. Failing to confirm or deny coverage within a reasonable time after receiving proof of loss.
b. Not paying an unsubstantiated or unreported loss.
The Protect & Indemnify (P & I) insurance company is formed and domiciled in the state of Rhode Island, but applies for a certificate of authority to write insurance policies in the state of New Hampshire. Which of the following statements is true regarding P & I insurance company? a. P & I insurance company is considered a domestic company in the state of New Hampshire. b. P & I insurance company is considered a domestic company in the state of Rhode Island. c. P & I insurance company is considered a foreign company in the state of Rhode Island. d. P & I insurance company is considered a foreign company in the state of New Hampshire.
b. P & I insurance company is considered a domestic company in the state of Rhode Island.
Under the commercial property condominium association form, coverage is based on: a. The commercial property form b. The association agreement and bylaws c. The special cause of loss form d. State and local ordinances
b. The association agreement and bylaws
The Texas Workers Compensation code defines "health care" as including all of the following, EXCEPT: a. Medical evaluations. b. Vocational rehabilitation. c. Physical rehabilitation. d. Psychological services.
b. Vocational rehabilitation.
The maximum payable for damage or loss to signs attached to the building covered under a BOP issued to the tenant of a building is: a. $2500 b. The building limit because the sign is attached to the building. c. $1000 d. $5000
c. $1000
Calculate the Supplemental Income Benefit (SIBs) for Sandra, an injured worker in Texas. Sandra has been given an IR of 20% and has been actively seeking a new job. She has not accepted a lump-sum payment for her injuries and she has returned to work in a modified position. Sandra's AWW before her injury was $522.00. Her weekly wages after the injury in her modified position are $242.00. a. $175.60 b. $224.00 c. $140.48 d. $417.60
c. $140.48 80% of the injured workers average weekly wage before the injury, and subtract the weekly wages the injured worker made after the work-related injury. Then, 80% of that number is the amount of the Supplemental Income Benefits.
If a named insured obtains "newly acquired property" such as a new outboard motor after their Personal Watercraft policy period begins, that property is covered under the policy for a maximum of ____ days after the date it came into the insured's possession. a. 5 b. 30 c. 14 d. 10
c. 14
What is an administrator's bond? a. A bond that can only be approved by a judge b. A bond purchased by government to cover employees handling tax monies c. A bond required by the court of the administrator of the estate of the deceased d. A bond to guarantee the performance of one in an administrative position
c. A bond required by the court of the administrator of the estate of the deceased
The doctrine of adhesion gives one party power over the other party because it authored the contract. This often results in: a. Subrogation b. Problems with claims c. Ambiguity d. Non-renewal
c. Ambiguity
Which of the following statements is TRUE regarding the automatic fines assessed by the Texas Department on licensees who do not comply with the continuing education requirement? a. All automatic fines assessed must be paid by check or money order payable to the Texas Guaranty Fund. b. All automatic fines assessed must be within 45 days after the fine was issued. c. If a licensee fails to obtain the required number of continuing education hours for their license type, an automatic fine of $50 per credit hour not completed will be assessed. d. If the licensee would like to contest the automatic fine, they must make a written request for a contested case hearing within 45 days after the fine was issued.
c. If a licensee fails to obtain the required number of continuing education hours for their license type, an automatic fine of $50 per credit hour not completed will be assessed.
If the Navigational Limits or Lay-Up period shown on the Declarations page of a standardized Yacht policy is breached because of something out of the control of the insured: a. No action needs to be taken unless the breach is ongoing for more than 30 days. b. No action is necessary at all. c. The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid. d. The insurer must be notified within 10 days after the breach and no additional premium is assessed.
c. The insurer must be notified within 10 days after the breach and any additional premium that is due must be paid.
A "full release settlement" when properly prepared, should include: a. The name of the attorney of record. b. The name of the insurance company. c. The names of the releasee and releasor. d. The name of the adjuster resolving the claim.
c. The names of the releasee and releasor.
The insured has a communication failure at his premises due to a lightning strike at the phone company. The insured's phone system is damaged and he is out of business for four days. Which endorsement is necessary to provide coverage for the loss of business income? a. Non owned and Hired Auto b. Earthquake c. Utility Services - Time Element d. Utility Services - Direct Damage
c. Utility Services - Time Element
Unfair claims practices include all the following, EXCEPT: a. Requesting a claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment. b. Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language releasing an insurer or its insured from its total liability. c. Compensating a reviewing physician on the basis of a percentage of the amount by which a claim is reduced for payment. d. Actively pursuing a full release on a claim
d. Actively pursuing a full release on a claim
Which of the following would be considered a "collision" peril under auto physical damage coverage? a. Riot b. Striking an animal c. Missiles or falling objects d. Hitting a pot hole
d. Hitting a pot hole
Other structures are excluded from coverage under the HO-3 when they are: a. Smaller than 100 square feet or larger than 1,000 square feet b. Smaller than 100 square feet or larger than 500 square feet c. Used for storage purposes d. Used for business purposes
d. Used for business purposes
A typical boatowners policy includes all of the following coverages EXCEPT: a. Passenger liability (except when for hire) b. Flotilla coverage c. The operation of the boat (for pleasure purposes) d. When used to carry cargo for others for a fee
d. When used to carry cargo for others for a fee
Under the Commercial Building and Personal Property Coverage form, if no optional coverages are selected, loss valuation/settlement is based on: a. Actual cash value. b. Market value. c. Original cost. d. Replacement cost.
a. Actual cash value.
Which of the following are always included in a Commercial Package Policy (CPP)? I. Common Policy Declarations. II. Common Policy Conditions. a. Both I and II b. Neither I nor II c. II only d. I only
a. Both I and II
Which of the following is true regarding the ability of employees to exempt themselves from workers compensation coverage? a. Employees who exempt themselves retain the right to sue the employer if a work-related accident occurs. b. Employees who exempt themselves have no rights to sue the employer if a work-related accident occurs. c. Employees may exempt themselves only after an accident takes place. d. Employees may not exempt themselves from coverage.
a. Employees who exempt themselves retain the right to sue the employer if a work-related accident occurs.
Which of the following is the type of report indicating the initial results of the investigation of a claim? a. Field Report b. Interim Report c. Full Report d. Claims Report
a. Field Report
Which of the following components MUST be included in the definition of a hostile fire: I. Rapid oxidation accompanied by a flame or at least a glow. II. Must be sudden and unexpected. III. Must have been intentionally set by the insured. IV. Must spread beyond its intended place. a. I, II and IV only b. I, II, III and IV c. I and II only d. I, III and IV only
a. I, II and IV only
The Homeowners deductible does not apply to which of the following? a. Liability b. Theft loss c. Glass loss d. Vandalism loss
a. Liability
What is "break-bulk" cargo as respects ocean marine cargo coverage? a. Loose cargo, such as cartons. b. Containerized cargo. c. Bulk shipments. d. Tanker cargo.
a. Loose cargo, such as cartons.
Adele Sullivan's car is hit from the rear by Clarence Brown's car. Mrs. Sullivan's insurance company pays her claim under her physical damage coverage and makes a claim against Mr. Brown's insurance company for the same amount. This process is called: a. Subrogation. b. Matriculation. c. Reciprocity. d. Arbitration.
a. Subrogation.
All of the following are covered under the Equipment Breakdown coverage form, EXCEPT: a. The breakdown of any structure or materials supporting the equipment. b. A structure. c. Business personal property. d. Personal property of others.
a. The breakdown of any structure or materials supporting the equipment.
On December 31st of each year, the Texas Department of Insurance computes the reinsurance reserves for all unexpired risks of domestic, foreign and alien insurers doing business in Texas. All of the following types of insurance are EXEMPT from these calculations, EXCEPT: a. Life insurance. b. Commercial property insurance. c. Commercial inland marine insurance. d. Lightning insurance.
b. Commercial property insurance.
The insured has purchased a new building and has yet to advise the agent of the acquisition. The building is covered on a limited basis because of the "newly acquired building coverage" clause. This coverage is found in the ________ section of the commercial property form. a. Additional coverage b. Extensions of coverage c. Other insurance clause d. Supplementary payments clause
b. Extensions of coverage
Which of the Commercial Property causes of loss forms provides theft coverage? I. The Basic form. II. The Broad form. III. The Special form. a. II only b. III only c. I, II and III d. II and III only
b. III only
Which statement is true concerning auto Physical Damage coverage in a Personal Auto Policy? a. Can be endorsed to pay on a replacement cost basis. b. It can cover owned and nonowned automobiles. c. Applies only when the insured is at fault in an accident. d. Excludes physical damage to cars over 10 years old.
b. It can cover owned and nonowned automobiles.
What is the purpose of establishing loss reserves? a. To determine the exact amount the company expects to pay. b. To establish an estimate of the total amount the insurer expects to pay on a claim. c. To determine ultimate legal liability. d. To estimate the legal expenses to be incurred in a claim situation.
b. To establish an estimate of the total amount the insurer expects to pay on a claim.
Under a Businessowners policy, the "Hired Non-Owned" coverage endorsement would cover: a. The employer who uses his/her auto for personal use. b. Vehicles borrowed by the insured. c. The employee who uses his/her vehicle on personal business. d. The owner of a hired or non-owned vehicle.
b. Vehicles borrowed by the insured.
All of the following are rating factors used to calculate the premium that will be charged for a personal auto policy, EXCEPT: a. Age/sex and marital status. b. Driving record - accidents or traffic violations. c. Nationality of the owner. d. Use - used for pleasure, driven to work, etc.
c. Nationality of the owner.
Axel Jamison contacts an insurance agent to purchase a Homeowners policy. The agent advises Axel that he will stop by later that day to inspect the home and take the policy application. Before the agent arrives, Axel hides his collection of venomous snakes and does not disclose them on his policy application. The Homeowners policy, with personal liability coverage is issued later that week, and the next day a snake escapes and bites a neighbor. How will the adjuster handle this claim? a. The claim will be paid because the policy provides personal liability coverage. b. The claim will be denied based upon soft fraud. c. The claim will be denied because Axel is guilty of concealment. d. A reservations of rights letter will be issued to the insured while the adjuster continues the claims investigation.
c. The claim will be denied because Axel is guilty of concealment.
Most inland marine "all risk" forms exclude loss or damage caused by: a. Smoke. b. Vandalism. c. War. d. Vehicles.
c. War.
The standard deductible on the Commercial Property Earthquake Causes of Loss form is: a. A percentage of the loss. b. $1,000. c. $5,000. d. A percentage of the building value.
d. A percentage of the building value.
All of the following bonds guarantee the payment of certain taxes, EXCEPT: a. Hunting and fishing license bonds b. Fuel bonds c. Liquor and tobacco d. Contract surety bonds
d. Contract surety bonds
All of the following are true of the liability coverage in a Businessowners policy, EXCEPT: a. Coverage is provided for products and operations liability. b. Coverage is provided for both bodily injury and property damage from business operations and premises. c. Coverage comes with a series of separate aggregate limits. d. Coverage is provided on a "claims-made" basis.
d. Coverage is provided on a "claims-made" basis.
A written modification of an insurance policy is known as: a. Rider b. Supplement c. Clauses d. Endorsement
d. Endorsement
Part D of the personal auto policy does NOT cover: a. Earthquake. b. Explosion. c. Wind. d. Freezing.
d. Freezing.
Which of the following Homeowners forms is intended to cover renters? a. HO-8 b. HO-5 c. HO-3 d. HO-4
d. HO-4
The insured carries a yacht policy. One of the crew members is injured while performing a work related task. What coverage must be added under the policy that would respond to cover the crew member's injuries? a. Hull insurance b. Medical payments c. Liability coverage d. Jones Act (crew coverage)
d. Jones Act (crew coverage)
The most common method of settling liability insurance claims is through: a. ADRs. b. Arbitration. c. Mediation. d. Negotiated settlement.
d. Negotiated settlement.
Why do insurers file declaratory judgment actions with the courts? a. To determine the merits of the case b. To determine negligence c. To determine the tortfeasor or joint tortfeasors d. To determine if a claim falls within the insuring agreement of a policy
d. To determine if a claim falls within the insuring agreement of a policy
What is the limit of insurance that applies to "property in transit" under the ISO standard BOP policy? a. $1,000 b. $2,500 c. $5,000 d. $10,000
d. $10,000
Under an Equipment Breakdown Protection policy with $500,000 in coverage, a covered "accident" resulted in the following: I. $500,000 worth of damage to the property. II. $10,000 damage to the property of another in the insured's care. III. $5,000 in legal fees to defend the insured in this case. The policy will pay a total of: a. $505,000. b. $500,000. c. $510,000. d. $515,000.
a. $505,000.
If the insured purchases a new aircraft to replace a scheduled aircraft, there is automatic coverage provided the insurance company is notified within ____ days of the purchase and premium payment is made. a. 30 b. 45 c. 60 d. 10
a. 30
An insurer whose place of incorporation is Toronto, Canada and is doing business in the United States would be identified as a/an: a. Alien insurer. b. Non-admitted insurer. c. Foreign insurer. d. Domestic insurer.
a. Alien insurer.
Of the following businesses, which one is NOT eligible for a Businessowners Policy? a. An auto dealership b. A barbershop c. A beauty salon d. A pizza parlor
a. An auto dealership
In which of the following cases of alleged negligence is there no legal duty owed? a. Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. He charged Bill for damages. b. Jack was having a walkway at his business replaced. There were still several large spaces to be filled when a mail carrier, whose back was broken from the fall, charged jack for damages. c. Irene purchased several jars of crabapple jam from a gourmet jam and jelly company. She suffered severe gastric disturbance as a result of eating the jam and claimed damages from the jam and jelly company. d. Susan accidentally dropped a bowling ball on the foot of another bowler.
a. Bill was restoring an antique auto at his auto store's garage when Jeff drove by the garage. Jeff slowed his car and looked over his shoulder to admire the antique car. Suddenly his car struck a telephone pole. He charged Bill for damages.
Brittany is a licensed adjuster in Texas. She failed to renew her license at the specified time, and now her license has been expired for 60 days. Which of the following best describes the next step Brittany should take? a. Brittany can still apply to renew her license, subject to an automatic fine. b. Brittany will be required to apply to the Department for a new license. c. Brittany will be required to take the state licensing exam again. d. Brittany will need to do nothing because Texas Adjuster licenses are perpetual and her renewal will come through within 90 days of her license expiration date.
a. Brittany can still apply to renew her license, subject to an automatic fine. only because her license has been expired for less than 90 days.
When Chris' car is stolen from his apartment's parking lot, he heads down to the local dealership and buys a new car. Three months later, Chris decides he may as well report the stolen car to his insurer, so he can get some money for it. What is the most likely reason the insurer might deny his claim? a. Chris did not promptly report the stolen vehicle. b. Chris was not listed as an "insured." c. Chris didn't protect his vehicle from being stolen. d. Chris already bought a new car.
a. Chris did not promptly report the stolen vehicle.
For which of the following does the deductible apply under the aircraft hull policy? a. Collision b. Theft c. Lightning d. Explosion
a. Collision
Which of the following is covered under the personal auto policy? a. Damage to a private garage rented by the insured. b. Intentional acts by the insured. c. Damage to insured's property in the vehicle. d. Damage to property of others in the vehicle.
a. Damage to a private garage rented by the insured.
Claims filed against the insurance company by the insured are known as: a. First-party claims. b. Third-party claims. c. Self-insured claims. d. Subrogation claims.
a. First-party claims.
Which of the following ISO Homeowners forms does not provide full coverage on Dwelling - Coverage A? a. HO-4 b. HO-5 c. HO-2 d. HO-3
a. HO-4
A ship has negligently collided with another ship and caused severe damage. What coverage would apply to cover this claim? a. Hull insurance with the "running down clause". b. Protection and Indemnity. c. Inchmaree clause. d. Towage clause.
a. Hull insurance with the "running down clause".
Which of the following is considered an uninsured motorist under a standard personal automobile policy: I. A hit and run in which the driver cannot be identified. II. The insured's neighbor who backs out of his driveway into the fender of the insured's car. a. I only b. II only c. Neither I nor II d. Both I and II
a. I only
All of the following are considered unfair claims practices, EXCEPT: a. Knowingly representing the pertinent facts or policy provisions relating to coverages at issue b. Requesting a claimant to sign a release that extends beyond the subject matter that gave rise to the claim payment c. Issuing checks or drafts in partial settlement of a loss or claim under a specified coverage which contain language releasing an insurer or its insured from its total liability d. Denying a claim for failure to exhibit the property without proof of demand and unfounded refusal by a claimant to do so
a. Knowingly representing the pertinent facts or policy provisions relating to coverages at issue
Which of the following would be a violation regarding the sharing of commissions? a. Sharing commissions or paying a finders fee to an unlicensed person b. Sharing commissions with a licensed producer c. Voluntarily reducing the commission rate on a commercial property policy d. Not sharing commissions with an unlicensed producer
a. Sharing commissions or paying a finders fee to an unlicensed person
Which one of the following statements regarding workers compensation insurance in Texas is false? a. Workers compensation provides compensation to employees who are injured on the job, without regard to fault or negligence on the part of either the employer or employee. b. All Texas employers are required to obtain workers compensation coverage for their employees. c. Providing workers compensation protects the employer from tort liability. d. Workers compensation's primary advantage for the injured employee is that it provides a quick and certain means of compensation.
b. All Texas employers are required to obtain workers compensation coverage for their employees.
Failure of a Texas licensee to obtain the required number of continuing education credit hours during the required biennium will result in: a. A fine of $200 per uncompleted credit hour(s) and a license suspension. b. An automatic fine of $50 per credit hour not completed. c. A fine of $100 per credit hour not completed and a license revocation. d. An automatic fine of $200 per credit hour not completed.
b. An automatic fine of $50 per credit hour not completed.
A department store has a large inventory of costume jewelry and watches. No single item is valued for more than $100.00. A customer steals most of the items and flees the scene. What theft coverage would be provided by an unendorsed ISO standardized BOP policy? a. $500 b. Full contents limit c. $2,500 d. No coverage for the theft of jewelry and watches
b. Full contents limit
What is an insurance producer's "implied authority"? a. The authority that the public reasonably believes the producer has. b. The authority that the producer believes it has. c. Authority given by the principal to the agent that is not formally expressed or communicated. d. Those specified in a contract with the insurer.
c. Authority given by the principal to the agent that is not formally expressed or communicated.
Liability coverage under the personal auto policy includes: a. Bodily injury coverage. b. Property damage coverage. c. Both bodily injury and property damage coverage. d. Damage to personal property of others in the insured's vehicle and damaged in an accident.
c. Both bodily injury and property damage coverage.
An item is covered on a personal articles floater. Under which of the following circumstances would the item be covered? a. Wear and tear b. Inherent vice c. Breakage d. Deterioration
c. Breakage
Under the HO-5, if the insured carries insurance coverage that falls between 80 to 100% of the full value of the structure, which of the following would NOT be covered under the replacement cost coverage? a. The dwelling. b. Other structures. c. Personal property (contents). d. An attached garage.
c. Personal property (contents).
Mikela is walking from her car, across a dark parking lot, to her apartment one evening after work. Suddenly, a masked man jumps out from between two cars and holds a gun to Mikela's head. The man tells Mikela that he will kill her if she does not give him her purse. Mikela has just experienced a: a. Larceny b. Theft c. Robbery d. Burglary
c. Robbery
Ellie's Engineering Inc. has several warehouses and it is necessary for employees to transport different items between the warehouses, depending on what products are being manufactured at any given time. One day Bill, Karen, and Josh were required to load several containers of an explosive chemical onto a truck to transport it across town to another warehouse. Karen knew that the chemical must be handled carefully to prevent it from exploding, but she did not refuse to move the containers nor did she indicate to Bill and Josh that the chemical was dangerous. After loading the containers, Josh is moving the truck out of the loading zone and negligently backs it into a brick wall, injuring all three workers. Bill died from the injuries several days after the accident. Which of the following statements most accurately describes the common-law defense(s) that Ellie's Engineering might use to defend themselves against a lawsuit filed by Karen? a. The contributory negligence doctrine only. b. The assumption of risk, contributory negligence, and fellow worker doctrine. c. The assumption of risk and the fellow worker doctrine only. d. The assumption of risk only.
c. The assumption of risk and the fellow worker doctrine only.
Under which of the following circumstances, if ever, is an "intentional act" covered by insurance? a. Intentional acts committed by insureds who are found to be "mentally ill" are covered under General Liability policies. b. Intentional acts of bodily injury committed by insureds are covered under the personal automobile policy as long as the premium is paid. c. Intentional acts are never covered by insurance. d. "Defamation" is covered under the personal liability section of a Homeowners policy.
d. "Defamation" is covered under the personal liability section of a Homeowners policy.
An insured owns very old equipment. Much of it is no longer manufactured but is still functional. The insurer may wish to insure the equipment under an Equipment Breakdown policy by attaching the: a. Functional replacement cost endorsement b. Replacement cost endorsement c. Market value endorsement d. Actual cash value endorsement
d. Actual cash value endorsement
Henry is the first named insured on a $1 million Umbrella policy. His wife, Dorothy, is also an insured. Both Henry and Dorothy were sued for $1 million in separate, unrelated suits by separate third parties. Both insureds lost their suits on the same day. In this possible but rare situation, if the Umbrella policy is applicable and the self-insured retention is not applicable: a. Henry will receive more protection from the policy than Dorothy because he is the first named insured. b. The policy will pay $500,000 toward each award. c. The policy will only honor Henry's claim because he is the first-named insured. d. Henry and Dorothy would receive the same amount of coverage, and the policy could ultimately pay a total of the $2 million amount for the two awards, subject to the "aggregate limit".
d. Henry and Dorothy would receive the same amount of coverage, and the policy could ultimately pay a total of the $2 million amount for the two awards, subject to the "aggregate limit".
According to the Assignment Condition of insurance policies: a. An insurer may reassign a policy to another insurer, as long as it provides the insured with advanced notice. b. An insurer may reassign a policy to another insurer, but only with the insured's permission. c. An insured may transfer a policy to a spouse or dependent, but only if all terms and conditions remain the same. d. Insurance coverage may transfer to an insured's legal representative when the insured dies.
d. Insurance coverage may transfer to an insured's legal representative when the insured dies.
Joe's 21-pound cat runs into the neighbor's yard and severely scratches the neighbor's arms and face. Which of the following would respond to the neighbor's emergency room bills? a. The neighbor's homeowners policy under the Medical Payments to Others section b. The neighbor's homeowners policy under the Personal Liability section c. The damages are not covered d. Joe's homeowners policy under the Personal Liability section
d. Joe's homeowners policy under the Personal Liability section
On an unendorsed special form BOP, how much coverage is there for theft of money & securities? a. $5000 on the premises only b. $5000 on the premises but only $2500 off c. $1000 on and off the premises d. Nothing
d. Nothing
Emma carries Commercial Property insurance to cover her commercial building, her personal property and the property belonging to others in her care, custody and control. Emma's insurance agent tells her that in case of a loss where she is negligent, the owner of the property belonging to others may want their property covered on a replacement cost basis. What coverage must Emma purchase to be properly covered? a. She will need to purchase a "Bailee" policy, because her Commercial Property policy will not cover the personal property of others. b. It is not necessary for her to purchase any additional coverage because the Commercial Property form automatically covers the property of customers on a replacement cost basis. c. It is not necessary for her to purchase any additional coverage because the Commercial Property form automatically covers the property of others on an unlimited basis. d. She will need to carry a sufficient coverage limit to cover the amount of the personal property of others that she has on the premises, and then purchase additional replacement cost coverage for the customer's property.
d. She will need to carry a sufficient coverage limit to cover the amount of the personal property of others that she has on the premises, and then purchase additional replacement cost coverage for the customer's property.
If both the Condominium Association form and the Condominium Unit-Owners form cover the same property, how would a covered loss be handled? a. Each policy will pay on a pro-rata basis. b. Association policy will be excess over the Unit-Owner's policy. c. Each policy will share equally in the loss. d. The Unit-Owner's policy will be excess over the Association policy.
d. The Unit-Owner's policy will be excess over the Association policy.
In order for a "full release settlement" to become closed, what MUST occur? a. The release must contain the proper names of both the first and third party. b. The release must contain the date, time and place that the accident occurred. c. The release must be properly signed. d. The claim check must be cashed by the claimant.
d. The claim check must be cashed by the claimant.
