Insurance Fundamentals: Quiz Answers, Exams of Property Law

Download Insurance Fundamentals: Quiz Answers and more Exams Property Law in PDF only on Docsity! Georgia PROPERTY & CASUALTY GA EXAM LATEST UPDATE 100+ QUESTIONS AND AMSWERS A bond guaranteeing the obligation of one party to another by a third party is known as a: A. surety bond B. guarantee bond C. fiduciary bond D. municipal bond - CORRECT ANSWER: A. surety bond A building to an insured's business is severely damaged by fire. bc of the nature of the damage to the adjoining property, the insured is denied access to the business by the fire dept. If the insured's property is covered under a business income coverage form, the insurer will cover loss of earnings for a MAX of: A. 6 months B. 3 weeks C. 60 days D. 30 days - CORRECT ANSWER: B. 3 weeks A business insured under a commercial general liability policy has a general aggregate limit of $100,000,000 and an occurrence limit of $100,000. An injured party is awarded $100,000. What remain available to the insured? A. General aggregate of $100,000,000; Occurrence limit of $0 B. A. General aggregate of $900,000; Occurrence limit of $100,000 C. A. General aggregate of $100,000,000; Occurrence limit of $100,000 D. A. General aggregate of $900,000; Occurrence limit of $0 - CORRECT ANSWER: B.A. General aggregate of $900,000; Occurrence limit of $100,000 A candidate for licenses as property ins producer must have completed a MIN of how many of preliencsing education? A. 45 B.10 C.15 D.30 - CORRECT ANSWER: C.15 A candidate for licensure as a casualty ins producer must have complete a MIN of how hours of prelicensing education? A. 45 B.15 C.30 D.7.5 - CORRECT ANSWER: B.15 A Commercial General Liability policy provides coverage for which of the following hazards? A. Pollutions Liability B. Premises Liability C. Employee injury Liability D. professional liability - CORRECT ANSWER: B. Premises Liability A deer jumps through the window of an insured's home, damaging the interior and exterior walls. Which of the following HO Forms listed below is the LEAST comprehensive form that will still provide coverage for the loss? A. HO-1 B. HO- 2 C. HO-3 D.HO-5 - CORRECT ANSWER: C. HO-3 A dwelling has been vacant for more than 60 consecutive days. Which of the following would most likely NOT be covered? A. Vandalism B. Smoke C. Fire D. Falling Objects - CORRECT ANSWER: A. Vandalism A legal obligation for injuries that are sustained due to failure to preform a duty is known as: A. negligence B. Physical hazard C. Liability D. claims payment - CORRECT ANSWER: C. Liability A personal automobile policy's medical payments coverage will pay for A. damage to the insured's car caused by a collision with another car B. intentional injuries to a passenger caused by the insured C. injury to a family member who is struck by the insured's car A. Must be certified by the secretary of the Treasury, the secretary of Homeland security, and US attorney general B. is defined as any act causing property damage and loss of lives in a foreign country C. in which TRIPRA responds, place a cap on federal liability not to exceed $100million D. triggers the Terrorism Risk Ins Program Reauthorization Act (TRIPRA) - CORRECT ANSWER: A. Must be certified by the secretary of the Treasury, the secretary of Homeland security, and US attorney general An Ins policy covers fire, will not cover nuclear contamination, and loss must be reported as soon as possible. In this order, where are these facts found in the policy? A. Dec pages, insuring agreement, and conditions B. Insuring agreement, exclusions, and conditions C. Conditions, endorsements, and declarations D. Insuring agreement, Exclusions, ans proof of loss - CORRECT ANSWER: B. Insuring agreement, exclusions, and conditions An insurance binder is A. a temporary short-term evidence of coverage B. a large bound volume of rules, rates, and forms C. a temporary agreement to pay a claim pending final settlement D. a rate manual supplied by one of the rating organization - CORRECT ANSWER: A. a temporary short-term evidence of coverage An insurance policy that contains unclear language will be? A. interpreted against the party who wrote the contract B. interpreted by the party who wrote the contract C. interpreted against the insured who accepted the policy D. rewritten by the ins department - CORRECT ANSWER: A. interpreted against the party who wrote the contract An insured owns a set of six drawing pens designed and by Benjamin Franklin. Each pens is worth $1,000 alone, but the set is worth $12,000. One pen is destroyed by a covered peril. Under the pair and set clause, the insurer will pay MAX of which of the following amts? A. $1000 B $2000 C. $7000 D. $12,000 - CORRECT ANSWER: C. $7000 An insured's HO-2 Form has a $100,000 coverage limit on the dwelling and a $50,000 Personal Property limit with the standard deductible. If a sailboat valued at $1,500 is stolen from the insured's premises, the insured will collect a MAXIMUM of which of the following amounts? A. $1,000 B. $1,400 C. $1,250 D. $1,500 - CORRECT ANSWER: C. $1,250 AN insurer that generally fails to affirm or deny coverage of claims within reasonable period of time after receiving Proof of Loss may be found guilty of : A. a breach of fiduciary responsibility B. an improper claims practice C. defamation D. misrepresentation - CORRECT ANSWER: B. an improper claims practice Assume lighting strikes a home and starts a fire that destroys the structure and its contents. By definition, the fire is the A. Risk B. Hazard C. indirect loss D. Peril - CORRECT ANSWER: D. Peril Blanket dishonesty bonds cover all A. theft by employees at a single location B. employees of the insured C. acts of dishonestly committed at 2 or more locations D. Acts of dishonesty by 2 or more employees - CORRECT ANSWER: B. employees of the insured Commercial umbrella policies are written over all of the primary liability coverages EXCEPT A. Employers' liability B. commercial general liability C. business auto D. Workers' comp - CORRECT ANSWER: D. Workers' comp A. operates in this state but is incorporated in another state B. operates in this state but is domiciled in another state C. is headquarters in this state D. is incorporated in this state - CORRECT ANSWER: D. is incorporated in this state Information provided by the insured in a proof of loss is concerned A. a warranty B. an assignment C a representation D. an agreement - CORRECT ANSWER: C. a representation Insurers that deal directly with insureds without the use of agents are known as A. Direct Response B reciprocals C. mass marketers D. Independent Insurers - CORRECT ANSWER: A. Direct Response Investment consultants should purchase which of the following policies themselves from errors and omissions claim? A. owners and contractors protective liability B. premises and operations liability C. Products and completed operations liability D. professional liability - CORRECT ANSWER: D. professional liability Making a false or misleading statement about dividends or shares of surplus previously paid on an ins policy is known as; A. unfair discrimination B. rebating C. coercion D. misrepresentation - CORRECT ANSWER: D. misrepresentation Misrepresentation is A. Encouraging policyowners to drop existing Ins for another similar policy B. Information that is not true, but will not void an Ins contract C. offering an inducement for the purchase of Ins. - CORRECT ANSWER: B. Information that is not true, but will not void an Ins contract Off premises dwelling property coverage provides up to A. 10% of coverage C B. 10% of coverage A C. 50% of coverage A D 50% of coverage C - CORRECT ANSWER: A. 10% of coverage C Once an injured employee has received benefits provided under workers' compensation, that employee may not file a suit against her employer to gain additional benefits. This is the def. of A. Contributory negligence B. the fellow servant rule C. Assumption of risk D. Exclusive remedy - CORRECT ANSWER: D. executive remedy Premium computation is found in which section of the workers' compensation policy? A. Part 3 B. Part 5 C. Part 1 D. Part 2 - CORRECT ANSWER: B. Part 5 Premium costs for standard Workers Compensation insurance are paid by: A. employers only B. employees only C. employers and employees jointly D. the Workers Compensation Board - CORRECT ANSWER: A. employers only primary obligation of an insurer is to; A. pay the claims covered under the policy B. provide a financial statement with each policy C. prepare an inventory after a loss D. make inspections and surveys of insured property - CORRECT ANSWER: A. pay the claims covered under the policy Product liability coverage would insure damage that arise from which of the following situations? A. A bicycle rider is injured when a wheel malfunctions B. A contractor installs inferior-grade siding on a building C. A malfunctions is required to recall a defective product. D. A customer receives an electrical shock from a curing iron during a in- store demonstration - CORRECT ANSWER: A. A bicycle rider is injured when a wheel malfunctions Proof of Financial Responsibility for damages caused by an accident may be shown by all of the following documents EXCEPT: A. an automobile insurance policy B. a certification of self-insurance C. a deposit of securities D. a certified financial statement - CORRECT ANSWER: D. a certified financial statement Proof of motor vehicle liability ins is required of a driver: A. when registering a vehicle B. when applying for a driver's license C. after acquiring a vehicle D. after an automobile accident involving bodily injury - CORRECT ANSWER: A. when registering a vehicle Purchasing insurance is an example of risk A. Rentention B. avoidance C. Sharing D transfer - CORRECT ANSWER: D. Transfer Self-insurance is an example of what type of risk management A. Retention B. Sharing C. transfer D. Avoidance - CORRECT ANSWER: A. Retention Senior vice President of ABC corporation has a company and does not carry personal auto Ins. When she is driving the car for personal use, how is the coverage provided in the event of a loss? A. Additional insured endorsement B. Drive other care- broadened coverage for named individual endorsement C. supplementary payments D. individual named endorsement - CORRECT ANSWER: B. Drive other care- broadened coverage for named individual endorsement The amount of an injury employee's workers comp disability payments is based on the employee's ? A. dependent properties B. Business income C. contributing location coverage D Extra expense - CORRECT ANSWER: D Extra expense The personal injury endorsement on a Homeowners policy would cover all of the following EXCEPT A. Libel/Slander B. False arrest C. Assault/Battery D. wrongful eviction - CORRECT ANSWER: C. Assault/Battery The principle of actual cash value is applied to claims for which of the following? A. Auto physical damage B. Variable annuity C. workers' comp D. accidental death - CORRECT ANSWER: A. Auto physical damage The principle of indemnity is designed to avoid A two policies sharing payment for a loss B. the return of earned premiums C. Overpayment of a claim D. a coinsurance clause of the less 80% - CORRECT ANSWER: . Overpayment of a claim The procedure for resolving a disagreement between an insured and an insurer about a loss is described in which of the following parts of an insurance policy? A. Declarations B. Insuring agreement C. Conditions D. Exclusions - CORRECT ANSWER: C. Conditions The purpose of the basic extended reporting period in a commercial general liability (CGL) " claims-made" policy is to provide A. additional time for the insured to make monthly reports of information for rating purposes B. coverage for events that have happened before the policy became effective C. coverage for events that happened up to 5yrs after a claims-made policy has expired D Coverage for events that have happened after the retroactive date, but which were not within 60days of policy expiration - CORRECT ANSWER: D. Coverage for events that have happened after the retroactive date, but which were not within 60days of policy expiration the purpose of the FAIR plan is to provide A. property ins on recreational vehicles for which for such coverage is unavailable in the regular market B. Basic property ins for which coverage is not available in the regular market C. automobile ins for high-risk drivers D. crime ins for residents of highrisk neighborhoods - CORRECT ANSWER: B. Basic property ins for which coverage is not available in the regular market To obtain coverage from state's FAIR plan, an application MUST; A. Show that a diligent search was made through established markets B. apply at least 30days prior to the desired effective date of the coverage C. pay a premium surcharge based on the applicant's past claims experience D. Pay a premium surcharge based on the type of property to be insured - CORRECT ANSWER: A. Show that a diligent search was made through established markets Truckers who transport hazardous materials are required to have an endorsement called A. Form MCS-90 B. Form W-2 C. Form MCS-70 D. Form 1099 - CORRECT ANSWER: A. Form MCS-90 Under a commercial policy, personal and advertising injury liability coverage does NOT apply to damages resulting from: A. Slanderous statements made by an advertising firm B. copyright infringement by a department store Harmful,truthful information published by a realtor D. invasion of an individual's privacy - CORRECT ANSWER: A. Slanderous statements made by an advertising firm Under a homeowners policy, an insured is required is required to take all of the following actions when a covered loss occurs EXCEPT: A. Give prompt notice to the insurer or its producer B. Hire an appraiser to determine the amt of loss C. notify the police if the loss is the result of theft D. protect the property from further loss - CORRECT ANSWER: B. Hire an appraiser to determine the amt of loss Under a personal property floater, a loss is covered when it occurs when it occurs; A. in the US only B US or Canada C. in the insured's home only D. anywhere around the world - CORRECT ANSWER: D. anywhere around the world Under the auto ins plan (AIP), all of the following coverages are available to the eligible owner of a private passenger vehicle EXCEPT: A. Personal injury protections (PIP) B. underinsured motorists C. Rental reimbursement D. Bodily Injury - CORRECT ANSWER: C. Rental reimbursement Under the businessowner policy, collapse of a building A. is covered when it is caused by rising waters due to a flood B. is subject to the limits of ins C. is covered only by endorsement and an additional premium D. does not decrease the amount of ins - CORRECT ANSWER: B. is subject to the limits of ins Under the commercial package policy, the person whose name is listed first in the declarations and is assigned certain responsibilities and obligations is A. the additional insured B. the names insured C. the primary insured D. the first named insured - CORRECT ANSWER: D. the first named insured under the standard flood ins policy, all of the following loss avoidance measures are covered up $1000 when damage to the insured property due to flooding is imminent EXCEPT: A. sandbags, including the sand to fill them B. tools required to secure the property C. plastic sheeting and lumber D. The value of work, at the funeral minimum wage, that a member of the household performs - CORRECT ANSWER: B. tools required to secure the property What is the purpose of the employer's liability section of a workers' comp plicy ( part 2) ? Which of the following homeowners endorsement is used to provide separate coverage for one or more of 9 categories of personal property? A. Personal articles B. Personal effects C. Personal property D. Scheduled personal property - CORRECT ANSWER: D. Scheduled personal property Which of the following injuries is covered under the Medical Payments section of an insured's Commercial general liability policy? A. An individual is injured while participating in an athletic events on the insured's property. B. A supplier is injured while visiting the insured's showroom. C. A tenant in the insured's Apt. building slips In their Apt. and requires x-rays D. An employee breaks an ankle in the insured's warehouse - CORRECT ANSWER: B. A supplier is injured while visiting the insured's showroom. Which of the following is not a category of the nationwide definition for marine risks ? A. excess liability B. instrumantalities of transportation C. Exports D. Commercial property floater risks - CORRECT ANSWER: A. excess liability Which of the following is NOT a requirement for a valid contract? A. Agreement B. Contempt parties C. Legal Documents D. Consideration - CORRECT ANSWER: C. Legal Documents Which of the following is NOT a use of auto symbols in the commercial auto policy? A. To determine how coverage will apply to vehicles acquired after the policy effective date B. To determine which rating territory applies to the covered autos C. To custom the policy to the insured's needs by selective the appropriate coverage - CORRECT ANSWER: B. To determine which rating territory applies to the covered autos Which of the following perils is covered under the Commercial Property Basic Cause of Loss form? A. Collapse B. sinkhole collapse C. Falling objects D. Breakage of glass - CORRECT ANSWER: B. sinkhole collapse Which of the following policies is intended to broaden the coverage and increase the limits of underlying insurance ? A. Excess liability B. Umbrella C. Owners and contactors protective liability D. commercial general liability - CORRECT ANSWER: B. Umbrella Which of the following property forms should be used when it is difficult to provide the Ins. company with an accurate statement of values because of fluctuations in inventory from month to month ? A. Nonreporting form B. Schedule form C. Peaking season D. Reporting form - CORRECT ANSWER: D. Reporting form Which of the following sections of a policy limits coverage ? A. policy summary B. exclusions C. conditions D. binder - CORRECT ANSWER: B. exclusions Which of the following sections of an insurance policy would explain the term "auto" ? A. Declarations B. insuring agreement C. Definitions D. Obligations of the insurance company - CORRECT ANSWER: C. Definitions Which of the following situations is considered an ins. transaction? A. 2 ins parties companies share actuarial data B. 2 parties negotiate the term of coverage when executing an ins contract. C. An independent audit company reviews a domestic insurer's records for a fee D. An insured sends a policy to the bank in preparation for a mortgagee closing - CORRECT ANSWER: B. 2 parties negotiate the term of coverage when executing an ins contract. Which of the following statements about a mortgagee's rights under the Dwelling property Basic form (DP-1) is INCORRECT? A. the mortgagee may file a Proof of Loss if the insured fails to do so. B. No act by the insured will jeopardize the mortgagee's rights C. The mortgagee is entitled to receive prior notice of a policy's cancellation D. The may abandon the insured property to the insurer - CORRECT ANSWER: D. The may abandon the insured property to the insurer Which of the following statements are true about the standard mortgagee clause is TRUE? A. nothing the insured does can prevent the mortgagee from collecting under the policy . B. The mortgagee has no right under the policy. C. The mortgage is the only party that can submit claims under the policy D. The mortgagee can only collect from the policy with prior written consent of the policyholder. - CORRECT ANSWER: A. nothing the insured does can prevent the mortgagee from collecting under the policy . Which of the following statements best describes a representation in an insurance application? A. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term. B. It is a statement made by the insured that certain conditions exist at the time of the application C. It explains the promise of the insurance company. D. It is part of the insurance agreement. - CORRECT ANSWER: A. It is a promise made by the insured that certain conditions will continue to exist throughout the policy term Which of the following terms BEST describes continuous and repeated exposure to conditions that are neither expected nor intended by the insured? A. Liability B. Negligence C. accident D. occurrence - CORRECT ANSWER: D. occurrence