Insurance Quiz Answers and Related Topics, Exams of Marketing Business-to-business (B2B)

Download Insurance Quiz Answers and Related Topics and more Exams Marketing Business-to-business (B2B) in PDF only on Docsity! Fx property and casualty Exam Questions and Answers 2024 1. In dwelling policies, automatic increase in insurance is (Choose from the following options) 1. Coverage for newly acquired property. 2. Coverage by endorsement. 3. Automatic coverage. 4. Coverage without additional premium. - correct answer 2. Coverage by endorsement. 2. Personal business property out in the open is covered under Commercial Property Policy only while (Choose from the following options) 3. Located on the described premises. 4. Specifically described on the declarations. - correct answer 2. Within 100 feet of the described premises. 3. Under a Commercial Crime Coverage Part, following a covered loss, the insured must submit a written proof of loss within (Choose from the following options) 3. 120 days. 4. One year. - correct answer 3. 120 days. 4. Which of the following provisions requires an insurer to document all correspondence with an insured? (Choose from the following options) 1. Claims settlement 2. Entire contract 1. 60 days. 2. 90 days. 1. Within 150 feet of the described premises. 2. Within 100 feet of the described premises. 3. Errors and omissions 4. Unfair trade practices - correct answer 3. Errors and omissions 5. Which statement is true regarding Workers Compensation law in California? (Choose from the following options) 1. Injured workers may sue an employer for negligence only when fault is clearly established against the employer. 2. Injured workers may always sue an employer for negligence regardless of the degree of fault against the employer. 3. Injured workers cannot sue an employer for negligence. 4. Injured workers may sue an employer for negligence when any degree of fault is established against the employer. - correct answer 3. Injured workers cannot sue an employer for negligence. 6. In order to determine whether to test a life insurance applicant for HIV or AIDS, the insurer may do which of the following: I. Base its decision to test on the incidence of AIDS in the person's ZIP code; II. Test only persons who are single and under age 30; III. Establish minimum uniform standards for testing all applicants for insurance; or IV. Not test anyone for HIV or AIDS, because it is discriminatory. (Choose from the following options) 4. I, II, III and IV. - correct answer 1. III only. 7. A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called (Choose from the following options) 1. Extension of coverage. 2. Supplemental extended reporting period. 3. Grace period. 4. Basic extended reporting period. - correct answer 4. Basic extended reporting period. 8. The personal injury liability endorsement to an HO policy applies to all the following EXCEPT (Choose from the following options) 1. III only. 2. I and II. 3. IV only. (Choose from the following options) 1. Insurance company 2. Governor 3. Policyholder 4. Mortgagee - correct answer 4. Mortgagee 18. Which of the following defenses attests that if a person recognizes and understands that there is danger involved in an activity and voluntarily chooses to encounter it, he or she may be barred from seeking recovery for injuries due to negligence? (Choose from the following options) 1. Assumption of risk 2. Proximate cause 3. Comparative negligence 4. Intervening clause - correct answer 1. Assumption of risk 19. The homeowners policy covers collapse caused by all of the following EXCEPT (Choose from the following options) 1. Weight of snow. 2. Hidden insect or vermin damage. 3. Weight of too many people attending en event hosted in the house. 4. Foundation cracks. - correct answer 4. Foundation cracks. 20. Which of the following best describes liberalization clause in a policy? (Choose from the following options) 1. Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium. 2. The insurer is relieved of its contractual obligations to the insured. 3. The insured may assign the policy to any person without their written consent. 4. The policy cannot be cancelled. - correct answer 1. Changes adopted by the insurer that broaden coverage automatically apply to the policy at no additional premium. 21. The other insurances clause of an ocean marine policy allows coverage for which reasons? (Choose from the following options) 1. To obtain coverage for war, strikes, and related risks not covered by the policy 2. To replace an existing policy 3. To add endorsements 4. To expand existing coverages such as earthquake, fire, and hail - correct answer 1. To obtain coverage for war, strikes, and related risks not covered by the policy 22. There are over 200 different crops that may be insured under crop insurance policies; however, the eligibility list varies (Choose from the following options) 1. According to weather patterns. 2. Annually. 3. Geographically. 4. Seasonally. - correct answer 1. According to weather patterns. 23. The purpose of the California residential property disclosure statement includes all of the following EXCEPT (Choose from the following options) 1. Becomes a part of your residential property insurance policy. 2. Describes the principal forms of insurance coverage in California for residential dwellings. 3. Identifies the form of dwelling coverage you have purchased or selected. 4. Contains only a general description of coverages. - correct answer 4. Contains only a general description of coverages. 24. What is the maximum number of roomers or boarders for properties insured under the dwelling policy? (Choose from the following options) 4. 6 - correct answer 4. 6 25. Which of the following statements is true regarding Workers Compensation law in California? (Choose from the following options) 1. If the employee was partially responsible for causing his/her own injury, there is no coverage. 2. If the employee was partially responsible for causing his/her own injury, damages awarded will be lowered. 1. 2 2. 3 3. 5 3. In cases where pain and suffering is involved and fault is clearly established against the employer, the employer may also be held liable for additional damages. 4. None of the above are true. - correct answer 4. None of the above are true. 26. Under which of the following conditions can broad theft coverage be added to a dwelling policy? (Choose from the following options) 1. If permission is granted by the department of insurance 2. Broad theft coverage cannot be added to a dwelling policy. 3. If the policy has been in effect for 60 days 4. If the insured is owner-occupant of the dwelling - correct answer 4. If the insured is owner- occupant of the dwelling 27. All of the following are supplemental payments found in liability policies EXCEPT (Choose from the following options) 1. Costs the insured incurred in hiring an attorney. 2. All expenses and defense costs incurred by the insurer. 3. Reasonable expenses incurred by the insured. 4. Limited amounts for bail bonds and other bonds related to a claim. - correct answer 1. Costs the insured incurred in hiring an attorney. 28. Which of the following organizations has the primary responsibility forms for the standard market? (Choose from the following options) 1. Insurance Services Office 2. Office of Financial Services 3. National Association of Insurance Commissioners 4. Governor's Office - correct answer 1. Insurance Services Office 29. Which of the following is a statutory defense? (Choose from the following options) 1. Intervening cause 4. Assumption of risk - correct answer 2. Contributory negligence 3. Comparative negligence 39. A small trucking company stops transporting hay for area farmers and begins to haul hay for its own farm exclusively. In regard to the coverage on its trucks, which of the following is true? 1. Equipment breakdown coverage 2. Farm coverage 3. Dwelling coverage 4. Commercial crime coverage - correct answer 3. Dwelling coverage (Choose from the following options) 1. Business auto coverage form may apply. 2. Any coverage form applies. 3. Coverage can continue under the truckers coverage form. 4. Farm liability coverage applies. - correct answer 1. Business auto coverage form may apply. 40. An insurance company receives an application with some information missing and issues the policy anyway. What is this called? (Choose from the following options) 1. Subrogation 2. Aleatory 3. Waiver 4. Estoppel - correct answer 3. Waiver 41. In a Commercial Property, Business Income policy, which section would explain which losses are covered? (Choose from the following options) 1. Provisions 2. Insuring Agreement 3. Declarations 4. Exclusions - correct answer 3. Declarations 42. What is the limit for the forgery or alteration coverage in the businessowners policy? (Choose from the following options) 3. $500 4. $5,000 - correct answer 1. $1,000 2. $2,500 43. The additional living expense coverage on homeowners policies (Choose from the following options) 1. Automatically paid after any loss to the covered house. 2. Does not begin to pay until the family has been out of the house for at least 7 days. 3. Is intended to allow the family to stay in the least expensive accommodations available. 4. Is intended to allow the family to maintain its normal standard of living. - correct answer 4. Is intended to allow the family to maintain its normal standard of living. 44. All of the following are parts of a personal auto policy EXCEPT (Choose from the following options) 1. Physical damage coverage 2. Medical payments coverage 3. Duties after an accident or loss 4. Liability coverage - correct answer 1. Physical damage coverage 45. Who are the parties to a bond? (Choose from the following options) 1. Principal - obligor 2. Principal - obligee - surety - obligation 3. Principal - obligee - surety 4. Obligee - surety - obligation - correct answer 46. All of the following statements regarding a Boatowners policy are true EXCEPT (Choose from the following options) 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required. 2. Watercraft liability coverage provides protection up to specified limits, for claims against a "covered person" for damages because of bodily injury caused by a watercraft occurrence. 3. Physical damage coverage is provided on an actual cash value (ACV) basis. 4. The perils insured against is on an open-peril basis, providing that the insurer will pay for direct and accidental loss to the property insured. - correct answer 1. Automatic coverage is provided on replacements for the boat listed in the declarations provided the insured notifies the insurer within 60 days of purchase and pays any additional premium required. 47. What is the primary difference between a surety and a guaranty? (Choose from the following options) 1. A guarantee pays only after the obligee tries to obtain restitution from the principal. 2. A surety bond is issued by an insurance company. 3. A guaranty bond is issued on behalf of the obligee to cover the performance of the principal. 4. A surety pays only if the principal's performance fails to comply contractually. - correct answer 1. A guarantee pays only after the obligee tries to obtain restitution from the principal. 48. Which of the following is NOT a requirement for purchasing a Good Driver Discount policy? (Choose from the following options) 1. A person has no more than one dismissal of charges in the last 3 years that would have resulted in the imposition of more than one violation point count. 2. A person must have been licensed to drive a motor vehicle for the previous 5 years. 3. A person has no more than one violation point count of the Vehicle Code in the last 3 years. 4. A person has not been in an accident in which he or she was principally at fault, and that resulted in bodily injury or in the death of any person. - correct answer 2. A person must have been licensed to drive a motor vehicle for the previous 5 years. 49. An apartment occupant's personal property would be insured under which homeowners form? (Choose from the following options) 1. Unit-owners form (HO-6) 2. Tenant broad form (HO-4) 3. Comprehensive form (HO-5) 4. Broad form (HO-2) - correct answer 50. Which of the following would be covered under the physical damage coverage of a Personal Auto Policy? (Choose from the following options) 1. A cellular phone located in a locked vehicle 2. Custom furnishings or equipment in a pick up or van 3. Sound reproduction equipment permanently installed in the covered auto 4. A covered auto which is seized and destroyed by a government authority - correct answer 3. Sound reproduction equipment permanently installed in the covered auto 51. Another person has alleged that you are responsible for damage to their property. You notify your homeowners insurer. The insurer will 60. Which of the following would the livestock coverage form NOT insure against? (Choose from the following options) 1. Death of livestock caused by accidental drowning 2. Death of livestock caused by a tornado 3. The euthanasia of livestock after being hit by a vehicle 4. The euthanasia of livestock suspected of carrying mad cow disease - correct answer 3. The euthanasia of livestock after being hit by a vehicle 61. Under the HO-4 and HO-6 homeowners policy forms, property is insured against (Choose from the following options) 1. Comprehensive form perils. 2. Broad form perils. 3. Basic form perils. 4. Special form perils. - correct answer 62. In property and casualty insurance, insurable interest is defined as the right of a person or entity to property in that such a loss to that property would cause a direct monetary loss to the person or entity. Which of the following statements is TRUE regarding insurable interest in property and casualty insurance? (Choose from the following options) 1. Only the owner of the property has insurable interest. 2. Insurable interest also includes indirect monetary loss to the person or entity. 3. If the insured has no insurable interest, the contract is void. 4. The insurable interest must exist only at the time of application of insurance. - correct answer 3. If the insured has no insurable interest, the contract is void. 63. Which of the following kinds of property would be covered under a dwelling policy? (Choose from the following options) 1. Pontoon boats 2. Rowboats 3. Motor vehicles 4. Aircraft - correct answer 64. The key factor of representation that allows the injured party to rescind the contract is (Choose from the following options) 1. If the representation is false in an immaterial point. 2. Representations are statement's believed to be true and hold no legal consequences. 3. The promise or assurance of the representation. 4. If the representation is false in a material point. - correct answer 3. The promise or assurance of the representation. 65. Roger owned a grocery store and had a Reporting Form Policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has? (Choose from the following options) 3. $100,000 4. $25,000 - correct answer 1. $50,000 66. The rate charged for a Good Driver Discount policy should be at least what percent below the rate the insured would otherwise have been charged for the same coverage? (Choose from the following options) 4. 10% - correct answer 67. All of the following are examples of insurable interest in property insurance EXCEPT (Choose from the following options) 1. Harry who is waiting for his distant cousin's beach-front property as part of his inheritance. 2. Fred and Ethel's personally owned vacation home. 3. Sally's own personal automobile. 4. Joe who is a partner in a thriving business - correct answer 1. Harry who is waiting for his distant cousin's beach-front property as part of his inheritance. 68. With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT (Choose from the following options) 1. 15% 2. 20% 3. 30% 1. $50,000 2. $75,000 1. The insured's business autos. 2. The insured's business products and work performed. 3. The insured's business income losses due to personal injury. 4. The insured's business premises. - correct answer 3. The insured's business income losses due to personal injury. 69. The Individual Named Insured endorsement under a Commercial Auto Policy provides coverage for which of the following? (Choose from the following options) 1. The sole proprietor of the business and his/her spouse, only 2. The sole proprietor of the business and his/her family members 3. The sole proprietor of the business, only 4. The sole proprietor of the business and his/her employees - correct answer 70. The maximum penalty for failure to print an individual agent's license number on printed documents is (Choose from the following options) 1. $5,000. 4. $1,000. - correct answer 71. 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 (Choose from the following options) 1. The excess over the self-insured retention. 2. The amount specified in the policy under the additional coverage provisions. 3. The amount in excess of the underlying policy deductible. 4. A percentage of the loss as described on the declarations. - correct answer 1. The excess over the self-insured retention. 72. Under Additional Coverages for homeowners policies, what is the maximum amount that can be charged to the insured for fire department services? (Choose from the following options) 1. $500 2. $1,000 2. $500. 3. $200. (Choose from the following options) 1. Specific insurance. 2. Stated amount. 3. Replacement cost. 4. Actual cash value. - correct answer 2. Stated amount. 82. A basic dwelling policy automatically provides coverage against fire, lightning, and (Choose from the following options) 1. Smoke. 2. Riot. 3. Windstorm. 4. Internal explosion. - correct answer 4. Internal explosion. 83. Which of the following would NOT be an insured under the Business Auto Coverage Form? (Choose from the following options) 1. The policyholder using a borrowed, covered auto with permission 2. An employee using his own car for another business 3. The policyholder in a covered auto 4. An employee using a covered auto with permission - correct answer 84. If a person wants to include a newly-acquired auto in a policy that is already established for another vehicle, the insurer must be notified within (Choose from the following options) 4. 28 days. - correct answer 2. 14 days. 85. Events or conditions that increase the chances of an insured loss occurring are referred to as (Choose from the following options) 1. Exposures. 2. Risks. 3. Perils. 4. Hazards. - correct answer 1. 35 days. 2. 14 days. 3. 21 days. 86. Leo, an employee of the local "Shop A Lot" grocery store, suspects Betty of shoplifting. Leo escorts Betty through the crowded store to the back office and calls the local police. It is later determined that the Betty has not stolen any merchandise. Leo is guilty of (Choose from the following options) 3. False Arrest. 4. Invasion of Privacy. - correct answer 87. Which situation would NOT be covered by the Basic Causes of Loss Form under a Commercial Property Policy? (Choose from the following options) 1. Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone 2. The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant 3. Vandals throw rocks through the plate glass window of Piccolo Pete's Cafe 4. The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store - correct answer 88. A business using its own trucks to move its own cargo would insure the cargo using (Choose from the following options) 1. Motor carrier form. 2. Trip transit coverage. 3. Motor truck cargo - owners form. 4. Motor truck cargo - truckers form. - correct answer 89. Which of the following would be included in the farm liability coverage forms? (Choose from the following options) 1. Bodily injury to an employed farmhand 2. Bodily injury to a residence employee 3. Any obligation of the insured under a workers compensation law 4. Bodily injury to any person who is an insured - correct answer 2. Bodily injury to a residence employee 1. Assault. 2. Battery. 90. Which loss listed below would NOT be covered by a farm policy with a broad cause of loss form? (Choose from the following options) 1. 14-day old pigs fell in the pond and drowned 2. A fallen power line electrocuted a cow 3. A hunter who shot the prize bull, thinking it was a white-tail deer 4. Wild dogs attacked a mule - correct answer 1. 14-day old pigs fell in the pond and drowned 91. Which of the following best describes gross negligence? (Choose from the following options) 1. Unjustified physical restraint of another person's freedom 2. Engaging in hazardous activities 3. Disregard for the safety of others 4. Failure to use reasonable care - correct answer 3. Disregard for the safety of others 92. The type of insurance that guarantees the behavior of persons and the performance of contracts other than insurance policies is known as (Choose from the following options) 1. Performance Guaranteed insurance. 2. Behavioral Contract insurance. 3. Surety insurance. 4. Contract insurance. - correct answer 3. Surety insurance. 93. An insured's home is mortgaged by the local bank. The insured is required to carry insurance on the home, showing the bank as the mortgagee. If the home is damaged by a covered peril, which of the following is true? (Choose from the following options) 1. The mortgagee must settle with the mortgagor in the event of a loss. 2. The additional premium required for the mortgage endorsement must be paid by the mortgagee. 3. Losses will be paid to the mortgagee and mortgagor as their interest appears. 4. Coverage is suspended if the building is mortgaged and the insurer is not told of this indebtedness. - correct answer 94. Removal coverage under a standard fire policy remains in effect for 105. An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the agent talked to the insured's family, and they explained that the insured was recovering from a surgery and might have been under the influence of medication at the time of application. Which of the following is true? 103. All of the following are excluded from coverage under a standard fire policy EXCEPT (Choose from the following options) 1. Manuscripts and bullion. 2. Deeds and bills. 3. Stocks and bonds. 4. Money. - correct answer 1. Manuscripts and bullion. 104. An insured decides to store some heavy boxes in the attic. While moving them around, he accidentally drops a heavy box that crashes through the ceiling, causing $1,000 of damage. The insured's HO-3 policy form will pay (Choose from the following options) 1. $500. 2. $1,000. 3. $500 minus the deductible. 4. $1,000 minus the deductible. - correct answer 4. $1,000 minus the deductible. (Choose from the following options) 1. The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application. 2. The policy will remain in force as long as there are no material misrepresentations on the application. 3. The policy is legal since the applicant was able to give all required information. 4. The policy is not legal; agents cannot sell insurance over the phone. - correct answer 1. The policy may be voided if it can be proven that the applicant was not capable of making a buying decision at the time of application. 106. In a personal auto policy, Coverage C: Uninsured Motorist defines an insured person as any of the following persons EXCEPT (Choose from the following options) 1. Occupying a covered auto. 2. Injured in an auto accident. 3. Member of the named insured. 4. Member of the insured being struck as a pedestrian. - correct answer 107. According to the appraisal condition of a homeowners policy, what procedure may be followed if the insurer and insured do not agree as to the size of a loss? (Choose from the following options) 1. The policyholder is allowed to hire an appraiser, and the insurer will pay the amount etermined. 2. Each side selects its own appraiser, and the appraisers select an umpire to settle any differences between the appraisers. 3. The insured is required to accept what the insurer is willing to pay. 4. The parties must pursue a lawsuit. - correct answer 108. Which of the following statements is true regarding a mobile equipment endorsement in commercial auto policies? (Choose from the following options) 1. Mobile equipment is covered for property insurance. 2. The endorsement is available for additional premium. 3. The endorsement is automatic. 4. Liability coverage is not provided on equipment that is being towed. - correct answer 109. Even though the Standard Fire Policy is a named peril contract, under which of the following circumstances would the policy provide "all risk of loss" coverage on insured property? (Choose from the following options) 1. Always 2. Never 3. When the loss is caused by an "act of God" 4. When the loss is to insured property that has be removed because of endangerment by a peril insured against under the policy - correct answer 110. In a boiler and machinery policy, the items insured under the policy are defined in the (Choose from the following options) 1. Policy definitions as "covered equipment." 2. Boiler and machinery coverage form. 3. Declarations. 4. Conditions. - correct answer 1. Policy definitions as "covered equipment." 111. The 1980 Act requires FCIC to offer one price election that is not less than what percent of the projected market price for the commodity? (Choose from the following options) 4. 100% - correct answer 112. A situation in which a person can only lose or have no change represents (Choose from the following options) 1. Pure risk. 2. Speculative risk. 3. Adverse selection. 4. Hazard. - correct answer 113. In order for the California Insurance Code to be changed in any way, what is required? (Choose from the following options) 1. The governor's signature is required on the bill. 2. The state senators vote on any bills and if they are approved, they become law. 3. A bill must be approved by both houses of the California legislature. 4. A bill must be presented to the residents of California who decide by popular vote. - correct answer 3. A bill must be approved by both houses of the California legislature. 114. If a policyholder contacts an insurance company about a claim and expects a response to the inquiry, within what span of time must the agent respond? (Choose from the following options) 4. 90 days - correct answer 1. 15 days 115. With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT 1. 15 days 2. 21 days 3. 31 days 1. 50% 2. 90% 3. 25% 3. Sharing 4. Retention - correct answer 1. Avoidance 124. An individual is worried about getting into a car accident. As a result, he chooses to stop driving. This is an example of which of the following methods of handling risk? (Choose from the following options) 1. Avoidance. 2. Transfer. 3. Reduction. 4. Sharing. - correct answer 1. Avoidance. 125. Under the Workers Compensation Reform Act, the Commissioner sets recommended, nonmandatory premium rates and then allows individual companies to add administrative overhead and expense costs which result in a final rate plan. This type of rating method is known as (Choose from the following options) 1. Closed rating plan. 2. Nonmandatory rate plan. 3. Reform rating plan. 4. Open rating plan. - correct answer 4. Open rating plan. 26. Which amount is figured by subtracting depreciation from the replacement cost of a covered item? (Choose from the following options) 1. Actual cash value 2. Interest of the insured 3. Repair cost 4. Pro rata percentage - correct answer 1. Actual cash value 127. If an insurer wants to recommend an auto repair facility to a claimant whose car has been involved in an accident, which of the following is true? (Choose from the following options) 1. The insured must be informed of his or her right to choose any repair center, and the insurer must cause the car to be restored to its pre-damaged state. 2. It is illegal for the insurer to make this recommendation unless it is requested by the policyowner. 3. Insurers are entitled to make such recommendations orally or in writing under any circumstance. 4. Insurers are only allowed to do this when the car lacks comprehensive and collision coverage - correct answer 1. The insured must be informed of his or her right to choose any repair center, and the insurer must cause the car to be restored to its pre-damaged state. 128. A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called (Choose from the following options) 1. Retroactive date. 2. Retrocedent date. 3. Effective date. 4. Retention date. - correct answer 1. Retroactive date. 129. Which of the following is true regarding renewability of a low cost auto insurance policy in California? (Choose from the following options) 1. It cannot be renewed. 2. It must be renewed annually. 3. It must be renewed every 2 years. 4. It is issued permanently; no renewal is required. - correct answer 2. It must be renewed annually. 130. All of the following are additional liability coverages automatically provided in a homeowners policy, EXCEPT (Choose from the following options) 1. Claims expenses. 2. Damage to the property of others. 3. Loss assessment coverage. 4. Personal injury protection. - correct answer 4. Personal injury protection. 131. With regards to a homeowners policy, which coverage provides for indirect or consequential losses? (Choose from the following options) 1. Coverage C 2. Coverage D 3. Coverage A 4. Coverage B - correct answer 2. Coverage D 132. Which of the following would NOT be covered by medical pay in Section II of your HO policy? (Choose from the following options) 1. You are walking your neighbor's dog and it bites someone. 2. You allow the neighborhood kids to play flag football in your yard; one is injured. 3. You cut your leg while whacking weeds in your backyard with your neighbor's weed whacker. 4. Your child's nanny falls while walking down your steps. - correct answer 133. Surety bonds are written for a definite limit called (Choose from the following options) 1. Loss costs. 2. The bond penalty. 3. Indemnity limit. 4. The limit of liability. - correct answer 2. 134. All of the following are characteristics of the dwelling policy EXCEPT (Choose from the following options) 1. Coverage includes the dwelling only, contents only, or both. 2. Incidental occupancy of limited service-type exposure is permitted. 3. Dwellings up to four family units are eligible. 4. The dwelling must be owner-occupied. - correct answer 4. The dwelling must be owner- occupied. 135. What type of property does a Personal Floaters policy cover? (Choose from the following options) 1. Movable personal property located in the insured's home, only 2. Movable personal property, wherever it may be located 3. Permanently attached property located on the insured's premises 4. None of these - correct answer 136. Under dwelling policy, if an insurer chooses to repair or replace damaged or lost property, it must inform the insured within how many days of receiving proof of loss? 147. A mortgage company is named as a loss payee on the insured's homeowners policy, under the standard mortgage clause. If the insured suffer a loss due to a fire, which of the following is (Choose from the following options) 1. The vehicle does not have comprehensive and collision coverages. 2. The vehicle has cosmetic damage only. 3. It is always illegal for an insurer to do this. 4. The insurer informs the insured of his/her choice to choose a repair shop and will cause the repair shop and will cause the vehicle to be restored to its pre-accident state at no extra cost (other than that which is stated in the policy). 145. How long is the waiting period after the application has been accepted before flood coverage goes into effect? (Choose from the following options) 1. 6 months 2. 12:01 am the next day 3. 5 days 4. 30 days - correct answer 4. 30 days 146. Which of the following additional perils is covered under both the basic form and broad form dwelling policies? (Choose from the following options) 1. Weight of ice, snow, or sleet 2. Freezing of plumbing, heating, or air conditioning systems 3. Internal explosion 4. Falling objects - correct answer 3. Internal explosion true? (Choose from the following options) 1. The mortgagee should submit a claim to its insurer, and the insured should submit a claim to the HO policy. 2. The entire loss is payable to the mortgagee. 3. The entire loss is payable to the insured. 4. The loss is payable to the insured and the mortgagee. - correct answer 4. The loss is payable to the insured and the mortgagee. vehicle to be restored to its pre-accident state at no extra cost (other than that which is stated in the policy). - correct answer 4. The insurer informs the insured of his/her choice to choose a 148. Because an insured owns a lot of expensive jewelry, her insurance agent has advised her to purchase a scheduled personal property endorsement. If the insured adds this endorsement to her homeowners policy, which of the following statements would be correct? (Choose from the following options) 1. Coverage C limits will no longer apply to the jewelry insured by the endorsement. 2. The amount of coverage will be doubled. 3. The endorsement becomes excess coverage. 149. A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be (Choose from the following options) 1. Incompetent. 2. Negligent. 3. Improperly trained. 4. Criminally negligent. - correct answer 4. Criminally negligent. 150. The insured's mother-in-law broke her leg falling down the front steps of the insured's premises. The insured's homeowners medical payments coverage will (Choose from the following options) 1. Share equally in the cost with the mother-in-law's health insurance. 2. Apply to injuries of any guests or visitors. 3. Pay as excess over the mother-in-law's health insurance. 4. Pay only if the mother-in-law has no health insurance of her own. - correct answer 2. Apply to injuries of any guests or visitors. A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain - correct answer License and permit bonds. Surety bonds are written for a definite limit called - correct answer The bond penalty. The U.S. Government requirement that public construction be completed in accordance with certain laws and regulations was mandated by the Heard Act. The requirement that a contractor doing this construction be bonded would be classified as a: - correct answer Federal bond 4. The endorsement becomes primary coverage, and the HO contract is secondary. - correct answer 1. Coverage C limits will no longer apply to the jewelry insured by the endorsement. Which bonds are required by courts whenever someone seeks a court order stating that another person must or must not do something? - correct answer Injunction bonds Jim has started a construction business and plans to specialize in remodeling and rewiring residential properties. Because the city where Jim is located and where he plans to operate his business has building codes, Jim will need to obtain a - correct answer License and permit bond. Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation? - correct answer Attachment bond The primary purpose of a surety bond is to - correct answer Make sure obligations are fulfilled. A business owner needs to purchase additional inventory in order to meet a customer's order. He contracts with a competitor, obtains the additional inventory, and satisfies his customer. Unfortunately, he does not have the money to repay his competitor. What type of guaranty should he have purchased? - correct answer Financial Securities or other valuable papers in the care of a principal have been lost or destroyed. Would any type bond reimburse the owner of the securities or other valuable papers? - correct answer Yes, a lost instrument bond A public official bond guarantees which of the following? - correct answer Elected officials will perform their duties honestly. Which bonds may be required when a person appeals to a higher court after a judgment already has been entered to guarantee that a judgment will be paid? - correct answer Appeal bonds What type of bond guarantees that a construction contractor will enter into a contract at a set price? - correct answer Bid bond Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? - correct answer Payment bond Who are the parties to a bond? - correct answer Principal - obligee - surety The form of payment bond that protects an owner contracting for work against liens from subcontractors, suppliers, or laborers who are not paid for their services and materials by the general contractor is called - correct answer Labor and material bond. Which bonds are issued to secure the release of a person from jail pending a courtroom appearance? - correct answer Bail bonds Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? - correct answer Make voluntary payments for treatment of the worker's injury limited payrolls Which of the following is not a factor in determining rates charged by the California State Compensation Insurance Fund for insurance issued by it? - correct answer The extent to which the employees in a particular establishment have or have not persons dependent on them for support. Which federal act provides benefits to injured civilians who are employed by the federal government? - correct answer Federal Employees Compensation Act Workers compensation laws provide all of the following types of benefits EXCEPT - correct answer Compensatory benefits. A premium discount is the term that describes when an insured owes a total standard premium greater than - correct answer $5,000. An employer that qualifies for a self-insured workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called - correct answer Aggregate excess coverage. Workers compensation rating is developed by applying a rating bureau job classification rate to each - correct answer $100 of payroll. Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases? - correct answer The employer, regardless of whether it was at fault for the injury or disease All of the following are factors in rating workers compensation insurance EXCEPT - correct answer Sales. If an employer in a state with elective workers compensation laws chooses not be to subject to the state's workers compensation laws, what does the employer lose? - correct answer Its common law defenses against liability suits BIts ability to provide group health insurance Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy? - correct answer The insurer may inspect the workplace after giving the insured 5 days' notice. What is the purpose of California's State Compensation Insurance Fund (SCIF)? - correct answer To make workers compensation insurance available, especially to smaller companies with more Which of the following is a true statement regarding who is responsible for paying the premium for Workers Compensation coverage? - correct answer The employer is responsible for paying the entire premium. In a participation plan, the insured may be eligible for which of the following? - correct answer A partial premium refund 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) - correct answer Experience rating plan. The voluntary compensation endorsement provides statutory coverage for which types of employees? - correct answer Farmworkers 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 - correct answer The insured expects to extend operations to that state. According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace - correct answer At any time. Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT - correct answer Second injury funds programs. What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations? - correct answer Experience modification factor Which of the following statements is true regarding Workers Compensation law in California? - correct answer None of the above are true. All of the following are true in regards to 24 Hour Coverage EXCEPT - correct answer It can be distributed through a life insurance policy. Which of the following statements is true regarding the premium computation for workers compensation insurance? - correct answer A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the - correct answer Situs and status test The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what? - correct answer The insured person must release the employer and the insurer from further liability. What is the dollar limitation for workers compensation benefits in the state of California? - correct answer 2/3 of a worker's weekly wage or a state-specified maximum payment. Under the Workers Compensation Reform Act, the Commissioner sets recommended, nonmandatory premium rates and then allows individual companies to add administrative overhead and expense costs which result in a final rate plan. This type of rating method is known as - correct answer Open rating plan. Employers liability insurance, Part Two of a standard WC&EL policy form, excludes - correct answer An intentional act that is caused by the insured. Shipbuilders and repairers are covered by - correct answer U.S. Longshore and Harbor Workers Compensation Act. Under the claims-made CGL the supplemental extended reporting period - correct answer Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called - correct answer Basic extended reporting period A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? - correct answer The driver's policy will pay The party to a surety or fidelity bond who promises to fulfill the obligation is the - correct answer Principal How are surety bonds different from insurance? - correct answer Surety bonds guarantee specific duties or obligations will be fulfilled: insurance pays for losses A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be - correct answer Criminally negligent Which of the following selections is true regarding the Workers Compensation medical care benefit? - correct answer Injured workers are entitled to receive all medical care reasonably required to cure or relieve the effects of the injury, with no deductible or coinsurance. Coverage for medical payments under a personal auto policy a lies to expenses following a covered accident that are incurred and services rendered within - correct answer 3 years Rental reimbursement is only available if the policy includes which coverage? - correct answer Other Than Collision Coverage In an auto policy, the medical payments coverage is similar to - correct answer Accident insurance, because it pays medical expenses regardless of fault In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for - correct answer Uninsured motorists coverage Which of the following statements concerning a personal auto policy is true? - correct answer Medical payments coverage applies per person, per accident An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment cost $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the third passenger. How much will the policy pay under medical payments coverage? - correct answer $14,000 Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? - correct answer Mechanical breakdown Which of the following is included under the physical damage coverage of a personal auto policy? - correct answer Sound reproduction equipment permanently installed in the covered auto A used car dealer takes a car in trade as partial payment for a car on its car lot. The customer promises to bring in the car's title but does not. Another customer take s the trade-in for a test drive and has an accident. In regard to the dealership's business auto physical damage coverage, which of the following is true? - correct answer There is no coverage All of the following statements are true regarding physical damage coverage EXCEPT - correct answer The limit of liability is the greater of the ACV of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle All of the following statements are FALSE regarding garage physical damage coverage EXCEPT - correct answer No coverage is provided for any auto stored for more than forty-five days at a location not shown in the declarations In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for - correct answer Uninsured motorists coverage Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage? - correct answer An employee is caught stealing cash from the register Under the limits of insurance provision found in the Physical Damage Coverage Form in a Commercial Auto policy, how much will an insurer pay to repair or replace a covered auto? - correct answer The lesser of the actual cash value or the cost to repair or replace a covered auto An insured is driving his or her automobile and strikes a large pothole, causing a flat tire. Which coverage of the insured's personal auto policy will pay for the repair? - correct answer Loss is not covered An auto dealer reported $500,000 worth of automobiles on its lot at the end of May to its insurer. On June 10, it received $200,000 worth of cars. By June 20, the dealership sold $100,000 worth of cars. A hail storm on June 21 caused $50,000 worth of damage to the inventory. Without considering any deductibles, how much will the insurer pa for damages? (Dollar amounts are rounded to the nearest hundred) - correct answer $41,700 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 - correct answer The insured expects to extend operations to that state A premium discount is the term that describes when an insured owes a total standard premium greater than - correct answer $5,000 All of the following are factors in rating workers compensation insurance EXCEPT - correct answer Sales If an employer in a state with elective workers compensation laws chooses not to be to subject to the state's workers compensation laws, what does the employer lose? - correct answer Its common law defenses against liability suits Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT - correct answer On his evening stroll, and employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site In a participation plan, the insured may be eligible for which of the following? - correct answer A partial premium refund Which of the following would be covered under the crime coverage inside the premises - theft of money and securities? - correct answer Loss or damage to a locked safe, vault, or cash register Which of the following statements would be an example of a product liability claim? - correct answer Faulty packaging of a cereal caused spoilage that resulted in someone getting sick Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stone, pearls, furs, manuscripts, drawing, or records? - correct answer $5,000 Which of the following Employee Fidelity Bonds would cover all employees? - correct answer A blanket position bond If an insured desires protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased? - correct answer Inside Premises - Robbery or Burglary of Other Property A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the - correct answer Penalty All of the following situations would be covered under a professional liability policy, EXCEPT - correct answer The failure of an attorney to properly defend a client due to his personal dislike of the client What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations? - correct answer Experience modification factor Employee fidelity may be written in all the following ways EXCEPT - correct answer Location schedule In a personal umbrella, the amount paid by the insured for certain losses not covered under the primary coverage is called - correct answer Self-insured retention The Occurrence form trigger is based on which of the following? - correct answer The date when injury or damage occurs 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 - correct answer The excess over the self- insured retention The Claims-Made Trigger is based on which of the following? - correct answer The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. The driver is - correct answer Considered underinsured When would uninsured motorists coverage apply? - correct answer When the other party is legally liable but has no insurance The garage coverage form is used to insure - correct answer Auto businesses, such as auto dealers, service station, and auto repair shop When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy? - correct answer Whatever coverage applied to the vehicle being replaced With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT - correct answer The insured's business income losses due to personal injury A dealership loans a car to its customer to use while the dealership is repairing the customer's car. If the dealership has business auto physical damage coverage and a customer's automobile insurance does not cover damages to loaner cars, which of the following is true? - correct answer The loaner vehicle is covered by the business auto policy Which of the following personal auto coverages would pay for damage to a covered auto due to contact with a deer? - correct answer Other-than-collision (comprehensive coverage) Transportation expenses are usually covered under a personal auto policy for - correct answer $20 per day, for a maximum of $600 A startup used car dealership buys cars at auto auctions in 30 states. It wants to be certain that damage coverage is provided when the cars are driven or transported from the auctions to the dealership. In regard to the business auto physical damage coverage, which is true? - correct answer Coverage is provided at additional premium Which of the following policies will help an auto dealership cover most of its liability exposures? - correct answer A garage liability coverage A parking garage owner completed major renovations to a parking garage just prior to selling it to another company. Three months later, overhead concrete fell onto cars in the second floor level. Under the garage coverage policy conditions, which of the following is true? - correct answer The damage occurred when the concrete fell What is the primary objective of workers compensation? - correct answer The payment of benefits to employees for injuries arising out of their employment Workers compensation will pay under which of the following situations? - correct answer Paid without consideration of fault or negligence on the part of either employee or employer Which of the following IS considered a work-related injury/occupational disease under Workers Compensation law? - correct answer Tom works as a painter in an auto body shop. The chemicals from the paint aggravated Tom's asthma to the point that he must be hospitalized Prior to state-directed workers compensation statutes being enacted, employees had - correct answer To sue an employer for the "loss" and prove that the employer was at fault Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions? - correct answer An employee of a medical facility who suffers from a common cold A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy? - correct answer Occupational disease caused or aggravated by a condition of employment Connor, an employee for Marble Tile, Inc., is injured outside of his home state. How will the workers compensation benefits be determined? - correct answer Benefits will be provided if the state was listed on the policy information page Workers compensation rating is developed by applying a rating bureau job classification rate to each - correct answer $100 of payroll Who are the parties to a bond? - correct answer Principal - obligee - surety The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to - correct answer 90 days Which employee fidelity bond pays no more than its limit of liability for each separate occurrence to matter that several separately identifiable employees were involved in a single loss? - correct answer Commercial blanket position Employee theft coverage may be written as - correct answer Blanket, Name schedule, Position schedule coverage The primary purpose of a surety bond is to - correct answer Make sure obligations are fulfilled The type of professional liability coverage a medical doctor needs is - correct answer Malpractice coverage An insurance agency could purchase an errors and omission insurance policy, which would provide protection in the event of an of the following events EXCEPT - correct answer The agency loses commission income from policies that were not issued by the insurer What's the difference between a fidelity bond and a surety bond? - correct answer A surety bond guarantees something will happen; a fidelity bond guarantees something will not happen Most fidelity bonds have a period of time in which losses which occurred while the bond was in force are covered even though not found until after the coverage has terminated. This is known as - correct answer A discovery period Which professional liability form provides form coverage for liability arising out of malpractice, errors, or mistakes made in rendering professional services? - correct answer Physicians, surgeons and dentists malpractice A professional who wants coverage for all liability exposures should purchase what form of liability insurance? - correct answer Commercial general and professional Which of the following forms provides the broadest coverage under an employee theft coverage form? - correct answer Blanket position Professional liability coverage protects against legal liability resulting from - correct answer Errors and omissions Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim - correct answer Professional liability What type of coverage do umbrella policies provide? - correct answer Excess coverage over an underlying or primary policy Under the commercial crime coverage inside a premises-robbery or safe burglary of other property, what is the special occurrences limits that applies to loss or damage to precious metals, precious and semi precious stones, pearls and furs, manuscripts, drawing or records. - correct answer $5,000 Which of the following is NOT an essential element of an insurance contract? - correct answer counteroffer Who are parties to a bond? - correct answer principal-oblige-surety Negligence can be defined as? - correct answer the failure to use reasonable and prudent care Which of the following is covered under the mail floater of a commercial inland marine policy ONLY id it is sent by registered mail? - correct answer currency and unsold travelers checks Your accounts receivable records have been destroyed or damaged. Your loss may be covered with - correct answer the accounts receivable coverage form In forming an insurance contract when does acceptance usually occur? - correct answer when an insure approves a prepaid application Prior to state- directed workers compensation statues being enacted employees had? - correct answer to sue employer for the loss and prove that the employer was at fault What type of damages may be awarded by the court to create disincentives that discourage behavior that is deemed highly undesirable by society? - correct answer punitive Which of the following would be covered under the film coverage form? - correct answer none of these covered What is the purpose of the coinsurance clause found in the property insurance policy? - correct answer encourage insurance to value The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a - correct answer burglary What insurance policy provisions define how the policy will respond if there is more then one insurance policy written on the same risk? - correct answer other insurance An insured is driving his or her automobile and strikes a large pothole causing a flat tire which coverage of the insured personal auto policy will pay for the repair? - correct answer loss is not covered A pizza shop has a neon sign attached to it building during a severe thunderstorm the sign is damaged by wind and hail what is the maximum the business and personal policy will pay for the damage to the sign? - correct answer $2,500 An insured's building has an actual cash value of $200,000 and he has insured the property for $120,000 with an 80% coinsurance clause. a $40,000 loss occurs. how much will the policy pay? - correct answer $30,000 How does the mobile home coverage law or ordinance in a homeowners policy? - correct answer it removes the coverage Surety bonds are written for a definite limit called - correct answer the bonds penalty Termination of an in-force insurance policy prior to the expiration date shown in the policy is known as? - correct answer cancellation Which of the following definitions best defines the term accident? - correct answer a sudden, unplanned and unexpected event not under the control of the insured resulting in injury or damage neither expected nor intended Payments for medical expenses, loss of wages, funeral expenses or the cost to repair or replace damaged property are known as what type of compensatory damages? - correct answer an employee of a medical facility who suffers from a common cold In insurance an offer is usually made when? - correct answer the application is submitted What is the purpose of the NFIP? - correct answer to fill the gap left by the private insurers in flood coverage Which of the following is covered by the camera and musical instruments dealers floater? - correct answer a customers camera left at a camera shop for repair For the purpose of insurance risk is defined as - correct answer the uncertainty or chance of loss Motor truck cargo policy - truckers form - correct answer Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? Motor truck cargo policy - owners form Trip transit policy Truckers coverage form Motor truck cargo policy - truckers form Condominiums - correct answer Which of the following risks is eligible for coverage under a businessowners policy? Banks Automobile dealers d) All of the above could be considered flood sources - correct answer Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? Bars or taverns Condominiums The insured has violated the contract without the knowledge of the mortgage holder after a loss - correct answer the insured cannot collect but the mortgage holder will still be paid Within 45 days. - correct answer The insured with a claims-made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information a) Overflow of inland or tidal waters b) Unusual and rapid accumulation or runoff of surface waters from any source c) A mudflow d) All of the above could be considered flood sources $1,000 - correct answer A producer didn't realize that he had committed an act in violation of the Insurance Code. How much would he probably be penalized? $0 $500 $1,000 $25,000 Within 30 days - correct answer If a resident producer or solicitor has a change of residential or business address, how soon must the licensee notify the Commissioner? As soon as possible At license renewal The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. - correct answer All of the following statements concerning liability coverage are true EXCEPT a) Liability policies normally include supplementary payment provisions. b) Liability policies defend the insured against claims, real or alleged. c) The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. d) The insurer cannot refuse to pay a claim even if the insured is bankrupt. Within 60 days. As soon as practical. Physical damage coverage - correct answer All of the following are parts of a personal auto policy EXCEPT Within 45 days. Within 30 days. Within 15 days Within 30 days $14,000 $15,000 5 years. $14,000 - correct answer An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? $5,000 maximum for the accident $5,000 minus the policy deductible A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. - correct answer Which of the following statements is true regarding the premium computation for workers compensation insurance? The premium basis for workers compensation insurance varies by the type of industry in which the insured is involved. The insured pays a guaranteed premium based on an estimated value of the annual income received. The premium is set at the beginning of the policy period and will not change. A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. 3 years - correct answer 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? 90 days 1 year Up to $1,000 for each violation. - correct answer After a hearing, if the Commissioner finds that a licensee is using Unfair Methods of Competition, the Commissioner may issue a Cease and Desist order against that person and levy a fine of how much? $250 for each violation. Up to $500 for each violation. Up to $1,000 for each violation. Up to $2,000 for all violations. 3 years 5 years 5 days 15 days 30 days 60 days The tree is blocking the driveway - correct answer A neighbor's tree has fallen into the insured's yard. The insured's homeowners policy will only pay to remove the tree if The damage is more than $1,000. The neighbor has no homeowners insurance. The tree has caused damage to the insured's vehicle. The tree is blocking the driveway. Damage to the dwelling caused by lava or dust from a volcanic eruption - correct answer Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? Damage to the dwelling caused by lava or dust from a volcanic eruption Damage to the dwelling caused by the insured when moving furniture Accidental scorching caused when a hot iron is placed upon a built-in counter top Interior damage caused by water seeping under the shingles on the roof 30 days - correct answer The removal coverage that is included in the broad form dwelling policy will cover property temporarily removed from the premises to protect it from damage for how long? Computer fraud - correct answer The transfer of money from inside a banking premises to a person other than a messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? Computer fraud Money orders and counterfeit paper currency Other crime coverage Outside premises Fraud - correct answer An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? Defamation Unfair discrimination Errors and omissions Fraud Additional coverage - correct answer 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 Exclusions Declarations Insuring agreement Provide a method of insuring licensed drivers who are unable to purchase auto liability insurance in the voluntary market - correct answer The Louisiana Automobile Insurance Plan was established to Subsidize losses of insured who are insured under the Plan. Approve rates to be charged of high risk auto insureds. Provide a method of insuring licensed drivers who are unable to purchase auto liability insurance in the voluntary market. All of the above. .Motor truck cargo - owners form - correct answer A business using its own trucks to move its own cargo would insure the cargo using Motor truck cargo - owners form. Motor truck cargo - truckers form. Motor carrier form. Trip transit coverage. Losses due to the insured's negligence - correct answer Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover Contractual liability. Damage to the insured's product. Losses due to the insured's negligence. Liquor liability. It is an additional coverage. - correct answer Which of the following is true regarding the fire department service charge under the builders risk form? It is an automatic coverage for $500. It is not available in this form. It is a high-deductible endorsement. It is an additional coverage. Replacing the property with other property of a lesser kind or quality. - correct answer At the time of loss insured against in a property and casualty policy, the insurer's claim settlement options include all of the following EXCEPT Paying the value of the lost or damaged property. Replacing the property with other property of a lesser kind or quality. Paying the cost of repairing or replacing the lost or damaged property. Taking all or part of the property at an agreed or appraised value.. Situs and status test - correct answer 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. Maritime and navigable waters test. Wharf and pier test. Loading and unloading test. .Payment of a third physical damage claim in 5 years - correct answer Even though an insured maintains a valid driver's license and has paid the premium when due, an insurer may modify the deductible of an auto policy after Payment of a third physical damage claim in 5 years. The named insured files for divorce. The named insured is charged with a speeding ticket. Any of the above. A pickup or van acquired by the named insured during the policy period. - correct answer With respect to auto insurance, the term owned autos includes all of the following EXCEPT Any private passenger auto leased to the named insured for a period of more than 6 months. A pickup or van titled to and used in the named insured's business. Any private passenger auto titled to the named insured. A pickup or van acquired by the named insured during the policy period. 30 - correct answer A nonresident producer moves to another state. The producer must notify the Department of Insurance of the address change within how many days? 5 Coverage is commonly provided through a federally-funded program. - correct answer Which of the following is NOT true about earthquake coverage? 10 20 30 Coverage may be written in a Difference of Conditions policy. Coverage is commonly provided through a federally-funded program. Coverage is excluded by most property forms. Coverage may be added to property policies by endorsements.program. False advertising - correct answer Circulating deceptive sales material to the public is what type of Unfair Trade Practice? False advertising Defamation Coercion Misrepresentation The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date - correct answer The claims-made trigger is based on which of the following? The date the claim is first made in writing against an insurer for injury or damage that occurred after the policy's retroactive date The date the claim is first made orally against an insurer for injury or damage that occurred after the policy's retroactive date The date the claim is first made orally against an insured for injury or damage that occurred after the policy's retroactive date The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date $1,000 - correct answer An insured has a homeowners policy and is required to be a member of the homeowners association in her neighborhood. The association's community house has burned down, and the insured has been assessed $1200 for her share of the rebuilding cost. How much of the assessment will her homeowners policy pay? None $500 $1,000 $1,200 Notify the insured in the event of financial difficulty. - correct answer Duties of the insurer found in property policy conditions include all of the following EXCEPT Return any premiums to the insured. Notify the insured in the event of financial difficulty. Pay covered losses. Provide advance notice of cancellation. Damage to the dwelling caused by ash or dust from a volcanic eruption - correct answer Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? Interior damage caused by water seeping under the shingles on the roof Damage to the dwelling caused by ash or dust from a volcanic eruption Damage to the dwelling caused by the insured when moving furniture Accidental scorching caused when a hot iron is placed upon a built-in counter top Covered Auto - correct answer The designation symbols used in commercial auto policies can be found in which policy section? Covered Auto Liability Coverage The surety may cancel the bond so as to avoid having to pay losses and expenses - correct answer All are true if a contractor defaults on a performance contract EXCEPT The surety will attempt to seek reimbursement from the contractor for any amounts it pays. The surety may cancel the bond so as to avoid having to pay losses and expenses. The obligee may hire another contractor to complete the job and have the surety repay the obligee. The principal's obligations end. Outside the premises - correct answer Which of the following commercial crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery? Outside the premises Forgery or alteration Robbery and safe burglary Inside the premises Turkeys - correct answer Which of the following is NOT covered under Coverage E - Scheduled Farm Personal Property? Fish Turkeys Portable structures Livestock Definitions Conditions Second Injury Fund - correct answer Which program was established to encourage employers to hire workers who may have suffered previous work related injury that, when combined with another injury, could be disabled to a greater degree than that of the single injury? Permitted incidental occupancies - correct answer Which of the following homeowners endorsements covers liability exposures arising from an incidental business conducted within a building on the residence premises? Professional liability Business income - report of values Permitted incidental occupancies Special limit of liability Social Security Disability Second Injury Fund Louisiana Guaranty Association Disabled Worker Act Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds - correct answer Supplementary payments on a CGL provide all of the following EXCEPT Pre-judgment and post-judgment interest. The cost of bonds to release attachment. Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds. $100 in gasoline costs by the insured driving a witness to and from court. Accident insurance, because it pays medical expenses regardless of fault. - correct answer In a personal auto policy, the medical payments coverage is similar to Bodily injury coverage, because it pays the insured's doctor bills. Bodily injury coverage, because it provides legal protection if the insured causes injuries to others. Accident insurance, because it pays medical expenses regardless of fault. Accident insurance, because it has the same limits. .The insured's camera is stolen from his vacation home while he is there. - correct answer In which of the following situations would off-premises coverage in a broad theft endorsement apply? The insured's jewelry is stolen from her vacation home after she returns home. The insured's vacuum cleaner is stolen from her apartment. The insured's camera is stolen from his vacation home while he is there. The insured's live-in maid's quarters are burglarized Discrimination. - correct answer When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered When the damages result from the intentional acts of the employer - correct answer While Workers Compensation is intended to be the exclusive remedy for work related injuries, under which of the following circumstance may an employee or an employee's dependent sue the employer? When the injury causes permanent impairment When the injury was inflicted by a fellow employee When the damages result from the intentional acts of the employer Any of the above Reinstatement of limit - correct answer Which inland marine coverage condition states that payment of any claim will not reduce the limit of insurance, except in case of a total loss on a scheduled item? Reinstatement of limit Legal action against the insurer Privilege to adjust with the owner Transfer of rights of recovery Discrimination. Twisting. Controlled business. Adverse selection. A residence employee who is injured on the job - correct answer Coverage F (medical payments) under a homeowners policy would cover A residence employee who is injured on the job. A tenant who is injured while on the premises. A family member who is injured while residing in the insured premises. The insured for injuries sustained while working at home.. .After the execution of the contract - correct answer The commercial general liability coverage form excludes bodily injury or property damage that the insured has assumed under any contract or agreement. However, the exclusion does not apply to certain types of contracts, as long as the injury or damage occurs After the execution of the contract. DP-1 DP-2 DP-3 The injury or damage must occur within 90 days after the insured's work is completed. - correct answer All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT After the contract expires. Before the execution of the contract. Before the contract expires. DP-1 - correct answer Which of the following dwelling policy forms primarily insures a structure on an actual cash value basis? All DP forms Implied - correct answer Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? Apparent Assumed The injury or damage must arise out of the insured's product or work. The injury or damage must occur after the insured has released physical possession of the product to another. The injury or damage must occur within 90 days after the insured's work is completed. The injury or damage must occur away from the insured premises. Certificate of Authority - correct answer A France-based insurer would like to do business in Louisiana. What document must it first receive? International Certificate of Incorporation Certificate of Authority Transcontinental Commerce Clearance Alien Insurer License All of these are covered - correct answer Which of the following may be covered by electronic data processing coverage form under an inland marine policy? Computer hardware that is specifically scheduled. Extra expense the insured incurs to continue the business following a loss. Data processing media, including magnetic tapes or paper tapes, punch cards and discs Express Implied The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? - correct answer Time element property policy will pay for the damage to the sign? - correct answer $2,500 In a Commercial Property, Business Income policy, which section would explain which losses are covered? - correct answer Declarations Where are most of the exclusions found in the Commercial Property policy? - correct answer Causes of Loss Forms Personal business property out in the open is covered under Commercial Property Policy only while - correct answer Within 100 feet of the described premises. An owner and operator of a commercial business has included a Business Income coverage form with his commercial package policy. When the business is severely damaged by fire, the business income coverage will pay for - correct answer Net income plus continuing expenses of the business. When does the coverage begin under the builders risk form? - correct answer On the date construction starts A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss? - correct answer $30,000 An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? - correct answer $30,000 A type of risk analysis used in commercial insurance in which the underwriter can give credits and debits for certain actions that an insured takes in the normal course of business that either increase the chance of loss or decrease the chance of loss is known as - correct answer Schedule rating method. A loss has occurred before the first report has been filed on a value reporting coverage form. Which is/are true? - correct answer Both A & B Which of the following is true regarding the fire department service charge under the Builders Risk form? - correct answer It is an additional coverage. A pizza shop has a neon sign attached to its building. During a severe thunderstorm, the sign is damaged by wind and hail. What is the maximum amount the business's building and personal Which of the following statements concerning the builders risk coverage form is correct? - correct answer It may be written on a reporting form or the completed value of the structure. A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. Following a loss to the structure, the endorsement would cover expenses incurred by the insured because of enforcement of any building, zoning, or land use law that result in - correct answer All of the above. Zachary is the proud owner of a 1998 sports car to which he has added a high performance engine costing several thousand dollars. Zachary has added an endorsement to his auto policy A commercial property special form covers property in transit up to - correct answer $5,000. Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called - correct answer Specific coverage. All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT - correct answer Replacement cost. Which item would NOT be covered under building coverage in a building and personal property policy? - correct answer The bulldozer being used as part of a business addition under construction that is parked 500 feet from the building Which of the following is an additional coverage provided under the Glass Coverage Form? - correct answer All of the above Vandals do damage to glass that is a part of a covered building. Under the broad form of a building and personal property policy, each glass plate will be covered for up to - correct answer $100 Matt, the insured, took out a 20-year lease, and at the time invested $25,000 for improvements and betterments to the property. What is Matt's monthly leasehold interest? - correct answer $104.16 What are the two causes of loss covered under the Glass Coverage Form? - correct answer Breakage and accidentally or maliciously applied chemicals Roger owned a grocery store and had a Reporting Form Policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has? - correct answer $50,000 A policy that insures all property at multiple locations for a single amount is referred to as - correct answer Blanket. Under the Personal Auto Policy, liability for bodily injury resulting from the insured's use of a non-owned automobile is - correct answer Provided by the insured's policy on an excess basis. California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the which will provide coverage against loss or damage to the engine. This type of endorsement is known as - correct answer Damage to your auto (customized equipment In the Personal Auto Policy, owned trailers being towed by an insured auto are automatically covered for - correct answer Uninsured Motorists Coverage. An automobile that is owned by a nontraditional household, not consisting of a husband and wife, may be insured under a personal auto policy if - correct answer A joint ownership coverage endorsement is added. All of the following are eligibility criteria for applicants in the CAARP EXCEPT - correct answer Anyone who does not owe money on any automobile insurance policy within the last 18 months. What is the name for the type of property damage coverage that protects the insured or the covered auto in an accident with someone who does not have coverage? - correct answer Uninsured motorist An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered policy pay under medical payments coverage? - correct answer $14,000 The bankruptcy provision found in the personal auto policy states that bankruptcy of the insured - correct answer Will not relieve the insurer of its policy obligations. Which of the following is true regarding renewability of a low cost auto insurance policy in California? - correct answer It must be renewed annually. Which of the following would be eligible for the California low-cost auto insurance? - correct answer An individual with a good driving record whose income is at 100% of the federal poverty level Which of the following would NOT qualify as a hired auto? - correct answer An auto borrowed from an employee Which of the following is NOT a limitation under Mexico Coverage? - correct answer Suits may be brought by either U.S or Mexican citizens. accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the third passenger. How much will the While Jake was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of Jake's auto policy would pay for the damage to the store? - correct answer license 2 years ago. Which of the following is true? - correct answer The Good Driver Discount will not apply to the motorcycle. How many vehicles per household can be covered by the California low-cost auto insurance program? - correct answer Not more than 2 Other than collision would cover financial losses due to - correct answer Damage to your car caused by wind or hail. Any person who claims that he or she meets the criteria based on a driver's license and driving experience acquired anywhere other than in the United States or Canada is presumed to be qualified to purchase a Good Driver Discount policy if that person has been licensed to drive in the United States or Canada and meets the criteria for that period for at least the previous - correct answer 18 months. What Personal Auto Coverage would pay for the insured's injuries sustained when struck by a hit-and-run driver while crossing a busy street? - correct answer Medical payments An insurer has the right of cancellation/nonrenewal of an existing insurance policy for all of the following EXCEPT - correct answer Arbitrary exclusion from coverage due to age of driver and type of vehicle to be insured. In an auto policy, the medical payments coverage is similar to - correct answer Accident insurance, because it pays medical expenses regardless of fault. Sarah has a Personal Auto Policy with split limits of $25,000/$50,000 bodily injury coverage. She hits a pedestrian who claims damages of $30,000. What is the maximum liability of her policy for this accident? - correct answer The first limit stated in the coverage is the limit that may be paid for injuries to one person. Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? - correct answer Supplementary payments, found in Part A - Liability, include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings. What is the basic limit for costs incurred at the place a vehicle is disabled provided by the towing and labor costs endorsement? - correct answer $25 Property Damage Liability If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT - correct answer Physical damage. All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT - correct answer Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. Which of the following would be considered the most important factor in determining the rates and premiums for an applicant for an auto policy? - correct answer The applicant's driving record With respect to auto insurance, the term owned autos includes all of the following EXCEPT - correct answer A pickup or van titled to and used in the named insured's business. The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT - correct answer The insured is injured while exiting a friend's mobile home. The procedure that allows Certified Producers to submit applications to the California Automobile assigned Risk Plan and obtain immediate coverage is known as - correct answer Electronic Effective Date Procedure (EEDP). Norm has a Personal Auto Policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered five days later. If Norm claims transportation expenses of $20 per day, how much will his policy pay? - correct answer $60 All of the following statements are true regarding the low-cost auto insurance program in California EXCEPT - correct answer It is only available in select counties. In a personal auto policy, Coverage C: Uninsured Motorist defines an insured person as any of the following persons EXCEPT - correct answer Injured in an auto accident. A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? - correct answer The driver's policy will pay. Lily is driving her car through a residential area. She loses control of the car, and crashes into Max's front porch. Max, who was sitting on the porch, is injured. Lily's liability insurance policy has a limit set at $500,000. This amount applies to the total of damages for any bodily injury and property damage resulting from one accident. Which type of limit of liability does Lily have? - correct answer Combined single Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within - correct answer 3 years. Jack and Jill each own a 50% interest in a dwelling that is insured under a standard fire policy issued to Jill to cover her interest in the structure. The amount of insurance is $40,000. Following a $10,000 fire loss to the structure, Jill will receive - correct answer $5,000. Larry invites his neighbors out for a day on the water in his boat powered with a 150hp outboard. While attempting to tie the boat to dock, his neighbor's hand is broken when caught Which of the following would NOT be covered under the liability section of a personal auto policy? - correct answer Bodily injury is caused by the insured's negligence while driving a three-wheel all-terrain vehicle. When would UM coverage apply? - correct answer Only when the other party is legally liable but has no insurance A common exclusion found under physical damage to your auto includes - correct answer Mechanical breakdown. All of the following are excluded from coverage under a standard fire policy EXCEPT - correct answer Manuscripts and bullion. Johanna purchased a National Flood Insurance policy 10 days after her community entered an emergency program. When would her coverage be effective? - correct answer 12:01 am the day after the application and premium payment are mailed How long is the waiting period after the application has been accepted before flood coverage goes into effect? - correct answer 30 days All of the following are classes of inland marine risks EXCEPT - correct answer Common Carrier Cargo Liability Which amount is figured by subtracting depreciation from the replacement cost of a covered item? - correct answer Actual cash value Removal coverage under a standard fire policy remains in effect for - correct answer 5 days. The standard fire policy only covers those perils specified in the policy for that reason it is known as a(n): - correct answer Named peril policy. The standard fire policy specifically excludes losses which occur when a building is vacant or unoccupied for - correct answer 60 days or more. According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties - correct answer Automatically transfer to a legal representative. 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 All of the following statements are TRUE regarding the California Earthquake Authority EXCEPT - correct answer The authority is authorized to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance, and is permitted to sell policies for any other line of insurance coverage. All of the following are true regarding flood insurance EXCEPT - correct answer Coverage may be provided for growing crops and livestock. All of the following are eligibility requirements for the FAIR plan EXCEPT - correct answer The property must be located in a riot-prone area. Which of the following is NOT true about earthquake coverage? - correct answer Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following, EXCEPT - correct answer Embezzlement. Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay? - correct answer $115,000 its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim? - correct answer No, because the claim results from copyright infringement and is not in an advertisement. The commercial property declarations page contains which of the following information? - correct answer Description of the property insured All of the following are true statements regarding the supplementary payments of a Commercial General Liability policy EXCEPT - correct answer They pay defense costs even after the aggregate limit has been reached. The Occurrence form trigger is based on which of the following? - correct answer The date when injury or damage occurs 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 will defend the suit? - correct answer Personal and advertising injury liability The Claims-Made Trigger is based on which of the following? - correct answer The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage? - correct answer Personal and advertising injury liability Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a - correct answer Product liability claim. The insured with a claims-made CGL may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information - correct answer Within 45 days. In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer? - correct answer First named insured A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT - correct answer Workers compensation coverage Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity? - correct answer Directors and officers liability A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called - correct answer Claims- made form. Which of the following would be covered by a commercial general liability coverage part? - correct answer Accidental bodily injury to a customer on the premises Which of the following would NOT be included in a commercial package policy? - correct answer Dwelling coverage All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT - correct answer The injury or damage must occur within 90 days after the insured's work is completed. A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called - correct answer Retroactive date. The common policy condition is a modular part combined with other parts to create the contract. The "common policy condition" section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? - correct answer The first named insured may cancel the policy at any time by giving written notice to the insurer. B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit? - correct answer Personal and advertising injury liability In liability insurance policies, supplementary payments are made - correct answer In addition to the limit of liability. A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be - correct answer Criminally negligent. A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly? - correct answer Completed operations CGL Coverage B (Personal Injury and Advertising Injury) will cover - correct answer Inadvertent injury to others caused in the course of advertising the insured's product. Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments? - correct answer The coverage is considered "good will" because payments are made without regard to fault. A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean? - correct answer There is no coverage. Retroactive dates in claims made CGL policies apply to - correct answer Both BI and PD and PIL and Advertising Liability. All of the following are essential elements of a commercial package policy (CPP) EXCEPT - correct answer Valuations and/or settlement provisions The Employee Theft crime policy coverage includes a coverage extension that applies to employees temporarily outside the coverage territory for up to - correct answer 90 days. Pollution Liability coverage under a General Liability Policy provides which types of coverage? - correct answer Both A and B The crime of forced entry into the premises of another by a person or persons with felonious intent, is defined as a - correct answer Burglary. If a loss sustained type of crime coverage policy is terminated, and if a loss is subsequently discovered that had occurred during the life of the policy, then which of the following would most likely happen? - correct answer The policy will pay for losses that are discovered within 1 year of policy termination. The major portion of the premium for an equipment breakdown policy pays - correct answer For inspections and examinations. Which would be considered a single accident in equipment breakdown coverage? - correct answer All accidents at single location at same time by same cause A policyholder has a boiler and machinery policy with a $200,000 limit. If a boiler explosion causes $100,000 damage to the boiler itself, $50,000 damage to the insured's building, and $30,000 of expediting expenses, how much will the insured collect under the policy? - correct answer $175,000 An installation floater is used to insure - correct answer Appliances intended to become a permanent part of the building. Under the Commercial Crime coverage part, loss resulting from employee theft is - correct answer Excluded unless a limit of insurance is shown in the Declarations for Employee Theft coverage. What is the maximum amount an insurer will pay under the equipment dealers pollution cleanup and removal extension of an inland marine policy? - correct answer $10,000 for all expenses incurred during a 12-month period All of the following are excluded in the boiler and machinery basic policy EXCEPT - correct answer Explosion of steam boilers. Robbery is - correct answer Taking of property by use of force, violence, or fear. Which coverage applies to losses caused by larceny, embezzlement, misappropriation, wrongful abstraction and other acts of theft by an employee? - correct answer Employee Theft Which of the following coverages would provide protection for the liability of an auto repair garage to owners of vehicles destroyed in the garage by fire? - correct answer Garagekeepers Burglary is defined as - correct answer Taking of property from within the premises leaving visible signs of forced entry. In a loss sustained type of crime coverage, losses that occurred during the policy period but were not found until after policy termination will be covered for how long after the policy ends? - correct answer 12 months Which of the following Commercial Crime coverages would cover a loss resulting from theft of the company's money and securities from the armored vehicle making a delivery? - correct answer Outside the premises Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck? - correct answer Motor truck cargo policy - truckers form All of the following are excluded in the equipment breakdown basic policy EXCEPT - correct answer Explosion of Steam Boilers. Which of the following would be covered under the crime coverage inside the premises - theft of money and securities? - correct answer Loss or damage to a locked safe, vault, or cash register In which of the following sections of a commercial auto policy will you find specific information about the policy period? - correct answer Conditions An owner of a parking lot wants liability coverage for damage to vehicles while in her custody. She needs - correct answer Garagekeepers coverage. With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT - correct answer The insured's business income losses due to personal injury. Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? - correct answer Symbol 5 A commercial auto coverage form that is designed for insureds engaged in the business of transporting goods for others is a - correct answer Truckers coverage form. Which endorsement under the commercial auto policy provides the insured's employees additional protection while using a vehicle not owned, hired, or borrowed for the insured business? - correct answer Employees as insureds With regard to the Commercial Auto Policy, all of the following autos would be classified as "owned autos", EXCEPT - correct answer A vehicle furnished for use to an insured by an auto repair shop, as a temporary substitute, while the insured's covered auto is being serviced. Tom's Truck Service's vehicle is stolen, the policyholder may obtain coverage for transportation expenses subject to which of the following limits? - correct answer $20 per day; $600 maximum A trucking company owns a large fleet of trucks that transport oil across state lines. According to the financial responsibility requirements set by the Motor Carrier Act of 1980, what is the minimum amount of insurance the company must carry on vehicle that transport oil? - correct answer $1 million 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? - correct answer Trailer interchange coverage The designation symbols used in commercial auto policies can be found in which policy section? - correct answer Covered Auto The individual Named Insured endorsement under a Commercial Auto Policy provides coverage for which of the following? - correct answer The sole proprietor of the business and his/her family members All of the following are optional coverages that may be attached to a Garage Policy EXCEPT - correct answer Owned Watercraft liability Which of the following would NOT be an insured under the Business Auto Coverage Form? - correct answer An employee using his own car for another business Under the business auto coverage form, mobile equipment is covered for liability insurance - correct answer When being carried or towed by a covered auto. Which of the following is the federal body that regulates truckers who travel across state lines? - correct answer Federal Motor Carrier Safety Administration What is the determining factor in classifying commercial autos as either owned, hired, or nonowned autos? - correct answer Ownership of the vehicle. Who is not an insured for liability on a BAP? - correct answer The owner of a car the insured borrows An insured is at fault in an auto accident in a state other than the state registered and insured in. The insured's business auto policy will - correct answer Adjust to at least that state's required minimums. Which of the following statements is NOT true regarding mobile agricultural machinery and equipment coverage? - correct answer This coverage must be written as part of farm coverage. A large antenna is damaged when a tree branch hits an insured farm dwelling during a storm. Coverage A of a farm property coverage form would insure damages for this occurrence up to - correct answer $1,000. What is the highest level of protection available under a Federal Crop Insurance policy? - correct answer 75 Coverage J under farm coverage agrees to pay reasonable medical expenses, regardless of fault, caused by an accident if the expenses are incurred and reported to the insurer within how many years of the accident date? - correct answer 3 years The livestock coverage form covers which of the following losses? - correct answer Named peril coverage for death of livestock Loss of yield from which of the following causes would be covered under a Federal Crop Insurance policy? - correct answer all of above All of the following are exclusions under farm property coverage EXCEPT - correct answer Loss of use. Pass Insurance sells a lot of crop insurance. Because they sell crop insurance, they are reinsured by who? - correct answer The FCIC Which loss listed below would NOT be covered by a farm policy with a broad cause of loss form? - correct answer 14-day old pigs fell in the pond and drowned Farm policy Coverage B - Structures would pay how much for loss of an outside antenna, tower, or satellite dish? - correct answer ect! A special limit of $1,000 per occurrence applies to such items. The cost of restoring farm records is an additional coverage offered under a farm policy. How much will the policy pay to restore the records? - correct answer Up to $2,000 Farm fences (except field and pasture fences) are covered by which farm coverage form? - correct answer Fences, except pasture and field fences, are considered other farm structures and are covered by Coverage G - Other Farm Structures. Which of the following exposures is insured under Coverage I - Personal and Advertising Injury Liability? - correct answer Unintentional acts arising from the operation of a farming business After a loss, an insured covered by a business property coverage is NOT required to - correct answer Reconstruct for the insurer a timeline of activities leading up to the loss for use in an According to the Federal Crop Insurance definitions, all of the following cereal grains are classified as "small grains" EXCEPT AWheat - correct answer Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT - correct answer The insurer does not have the right to inspect the insured's property and operations. All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT - correct answer Mental health counseling. The members of a limited liability company are insureds under a businessowners policy if - correct answer The limited liability company is designated as the named insured. Under businessowners policy Section I, if an insurer wants to nonrenew a policy, how many days before the expiration date must the insurer notify the mortgageholder? - correct answer 10 days The liability coverage of the businessowners policy is written on a - correct answer Businessowners liability coverage form. A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage automatically will be applied to all policies of the same type is known as - correct answer Liberalization clause. investigation. To be eligible for businessowners policy (BOP) coverage, an office building CANNOT be higher than - correct answer 6 stories. Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy - correct answer During the policy period and for up to 3 years after the termination of the policy. Which of the following businesses would be eligible for a businessowners policy? - correct answer Hill & Morton Funeral Home Which of the following limits, shown in the declarations of a policy, applies to medical expenses? - correct answer Per person Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company? - correct answer Transfer of rights and duties under the policy According to businessowners policy Section I, which of the following is NOT a condition to be met for the terms of the policy to apply to mortgageholders? - correct answer The mortgageholder must petition the state department of insurance for named status. Which of the following is eligible for a businessowners policy? - correct answer A 6-story office building with less than 100,000 square feet total area The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period? - correct answer 1 year In business income additional coverage in a BOP, the waiting period that must occur before the period of restoration may begin is - correct answer 72 hours. Under a businessowners policy, an insured can cancel the policy - correct answer At any time by mailing a written notice of cancellation. Which of the following is NOT an optional coverage available in a BOP? - correct answer Workers compensation Which of the following watercraft will NOT be covered by business liability insurance? - correct answer Owned watercraft 53 feet long The inspections and surveys condition in a businessowners policy - correct answer Allows the insurer the right to inspect the insured's premises. Which of the following is defined as a covered cause of loss in businessowners property coverage? - correct answer Leakage from fire-extinguishing equipment A businessowners policy is - correct answer A self-contained prepackaged policy. Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form? - correct answer Valuable papers and records A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? - correct answer The coinsurance formula would apply Expenses that an organization would not have incurred if business interruption had not existed are known as - correct answer Extra expenses.