Ohio Auto Insurance and Property and Casualty Exam Questions with Answers, Exams of Business Statistics

Download Ohio Auto Insurance and Property and Casualty Exam Questions with Answers and more Exams Business Statistics in PDF only on Docsity! Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ The minimum required limits under Ohio law for auto insurance is 25/50/25. A cease and desist order will... A: allow a hearing to be held within 45 days after being served. B: provide proof that an agent is guilty. C: require the agent to stop all selling activities. D: restrict the selling activity in the area being contested. - correct answer ✅The answer is D. When the cease and desist order is received, the agent must discontinue just the area of selling under discussion in the order. She can continue other selling activities. Which is NOT an unfair claims settlement practice? A: failing to acknowledge pertinent communication within 15 days Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ B: failing to pay the amount finally agreed upon in settlement within five days of receipt of final agreement by the insurer C: not offering fair and reasonable amounts to first-party or third-party claimants when liability has become reasonably clear D: not paying an unreported and/or unsubstantiated claim - correct answer ✅The answer is D. If the insured never reports the loss or fails to prove or substantiate the claim, it cannot be unfair claim practice. An agent can charge a fee provided that the... A: agent can discriminate in charging the fee in certain situations B: consumer consents to the fee Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ The minimum required limits under the Ohio Financial responsibility Law are: A: 12.5/25/7.5 B: 25/50/25 C: 50/100/50 D: 100/300/100 - correct answer ✅The answer is B. Which of the following entities is responsible for governing insurance? A: federal government B: government of each state Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ C: government of each state, except if Congress passes a specific insurance law D: National Association of insurance Commissioners (NAIC) - correct answer ✅The answer is C. The business of governing insurance responsibility falls to the state, and to neither the National Association of Insurance Commissioners nor the federal government UNLESS Congress passes a specific law about insurance. An Ohio employer may be granted status as a self-insured employer by meeting certain state mandated conditions. Among these conditions is a requirement that the employer have at least _____ employees. A: 500 B: 1,000 Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ C: 2,500 D: 5,000 - correct answer ✅The answer is A. In order to qualify to be self-insured for Workers Compensation in Ohio, an employer must have at least 500 employees. A temporary license is good for ______ at the discretion of the Superintendent of insurance. A: 60 days B: 90 days C: 120 days D: 180 days - correct answer ✅The answer is D. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: agent placing before the public or supervisory body information concerning insurance or the financial condition of the insurer that is untrue. B: attempt to obtain information by pretending to be someone else or pretending to represent a person who is in fact not represented. C: conditional requirement for the client to obtain insurance from a depository institution, an affiliate of a depository institution, or from a particular insurer. D: deliberate falsehood or lie made for the purpose of inducing any policy owner or prospective policy owner to purchase, amend, lapse, forfeit, change, or surrender an insurance policy. - correct answer ✅The answer is A. The motive behind defamation involves an agent attempting to make a commision by lying to the prospective customer about the financial condition of a competing company. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A client justifiably demands a refund of premiums. How many days does a company have to comply with the request? A: 10 B: 30 C: 40 D: 180 - correct answer ✅The answer is B. The company must process the request immediately so as to not run afoul of the 30-day requirement. When an agents mailing address changes, the Superintendent of Insurance is to be notified within... A: 30 days Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ B: 60 days C: 90 days D: 6 months - correct answer ✅The answer is A. Each licenced agent shall notify the Superintendent of insurance, in writing, of any change in the agent's address, within 30 days after the change occurs. Address means residential, business, and any other address or addresses the Superintendent requires by rule. Which of the following would NOT be a reason for the Superintendent to grant inactivite status to a licensee? A:CE not completed on time B: extenuating circumstances Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ In Ohio, an employer may usually comply with the Workers' Compensation law by... A: creating a self-insurance fund acceptable to the State Industrial Commission B: purchase Workers Compensation insurance from a private insurer C: purchase Workers Compensation insurance from the State Compensation Fund D: both A and C - correct answer ✅The answer is D. In Ohio, an employer may comply with Workers' Compensation Law by purchasing coverage through the Bureau of Workers Compensation or by qualifying as a self-insurer, according to the laws of Ohio. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ The Federal government passed USC 1033 to do all of the following EXCEPT... A: allow the Federal Department of Insurance, to indict individuals it violated USC 1033 B: allow the State Superintendent to refuse to issue or renew any licence C: prohibit convicted individuals from engaging in the insurance business. D: prohibit embezzlement, false reporting of information in company books - correct answer ✅The answer is A. There is no Federal Department of Insurance. The Federal Government passes USC 1033, which prohibits embezzlement, false reporting of information in company books, and convicted individuals from engaging in the insurance business. A State Superintendent can refuse to issue or renew any license. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ Under the Federal Fraud laws (USC 1033) if the fraudulent acts cause an insurer to become insolvent the penalty imposed could be? A: 10 years imprisonment B: 15 years imprisonment and a $50,000 fine C: $10,000 fine D: $25,000 fine - correct answer ✅The answer is B. Under the Federal Fraud Laws (USC 1033) if the fraudulent acts cause an insurer to become insolvent the penalty imposed could be 15 years imprisonment and a $50,000 fine. Which term means permanent remination of all authority to hold any license as an agent in the state? Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ C: rebating D: twisting - correct answer ✅The answer is A. Defamation zeroes in on the issue of an insurance company's financial conditions as a tool to promote the company or policies. Any false information used in a sales promotion could be an unfair trade practice. As part of the requirement for applying for the Ohio FAIR Plan for Basic property coverage, a property owner must certify that... A: the owner has not had any property losses within the last year B: the property owner owns the property free and clear C: the remaining mortgage balance, if any, is less than $10,000 Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ D: two Ohio property insures declined to offer the property owner coverage - correct answer ✅The answer is D. In which part of an insurance policy is the insured-against perils located? A: additional coverages B: conditions C: declarations page D: insuring clause - correct answer ✅The answer is D. The insuring clause is a printed pledge of protection which represents the insurer's consideration in the contract. An insured's minor child drives her auto. The child causes an accident. Which issue of law makes the parent liable for the actions of the minor child. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: parental estoppel liability issue B: parental precedent liability issue C: strict liability issue D: vicarious liability issue - correct answer ✅The answer is D. being held liable for the actions of someone else is vicarious liability. Employers could be liable for the actions of employees on company time. A bartender could be liable for serving a patron alcoholic drinks if that patron subsequently causes an accident. Identify the TRUE statement regarding deductibles. A: After accumulating loss during the year equal to the deductible the policy pays, all future claims are paid in full. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ C: Company A and Company B share the loss equally, paying $5,000 each D: since there are multiple policies , the courts must step in and determine who pays what - correct answer ✅The answer is C. This is the other insurance clause (known as pro-rata liability) at work. In fact, because this clause is in both policies, it stops court litigation from being necessary. A method of indemnifying property loss where the insurer substitutes less expensive building material for very labor-intensive, expensive, original material is called... A: actual cash value (ACV) B: functional replacement cost C: replacement cost Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ D: stated amount - correct answer ✅The answer is B. Functional replacement cost overcomes the difficulty of repairing/rebuilding an ornate older building from the insurer's point of view by repairing or replacing with modern, less-expensive substitutes. A good example is substituting drywall for plaster walls. Consequential loss is another name for... A: direct loss B: indirect loss C: insured loss D: uninsured loss - correct answer ✅The answer is B. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ Consequential loss is, indeed, indirect loss. As a consequence of the direct loss, while without the property, the insured suffers additional expense until the property is returned. Why is co-insurance in Property insurance policies? A: It encourages the insured to do something he might not want to do voluntarily; insure to value B: It is an incentive to insure to value because the deductible is waived as a reward if the co-insurance is upheld at the time of loss C: To determine which company pays what, when there is more than one company co-insuring the property D: To require the insured to pay a portion of every loss, thus helping the insurer keep its claim expenses as low as possible. - correct answer ✅The answer is A. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ All auto policies must be for (1) year or guaranteed renewable for successive policy periods totaling not less than (1) year. How often must the Ohio Superintendent of Insurance examine an insurance company that does NOT conduct business in Ohio? A: at any time B: every three years C: never D: whenever the company refuses an examination - correct answer ✅The answer is C. The Ohio Superintendent of Insurance has no control over a company that does not do business in the state. The superintendent has the right to examine companies that do conduct business in the state, according to the three other options. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ In which company may policy owners receive policy dividends when there is a profit? A: assessment B: mutual C: service D: stock - correct answer ✅The answer is B. A mutual company may pay dividends to policy owners since it issues a "participating policy." Dividends, if paid, are not taxable and are never guaranteed. About warranties, it is important to remember that... Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: all statements the agent has said are true B: all statements on an application are not warranties C: it guarantees an applicant answers to the "best of my understanding and knowledge" D: it guarantees the company will perform at the time of claim - correct answer ✅The answer is B. Statements on an application are usually representations, only some statements on an application can be considered a warranty which is a statement guaranteed to be true 100% of the time. Which agent represents the client, owns control of all commissions, and sells the policy that best fits the customers needs? A: broker Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ D: transfer the risk - correct answer ✅The answer is A. Once a risk is identified, it can be dealt with in several ways. Self- insurance is risk retention. Insurance is defined as the transfer of risk. Avoiding risk is possible but difficult. The purpose of a rating service is to help a client... A: know which insurance companies are bad to do business with B: know which insurance companies are good to do business with C: obtain information about the company's financial strength D: obtain information about insurance agents and their abilities - correct answer ✅The answer is C. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ Rating services such as A.M. Best are concerned about the financial strength of the companies. They do not evaluate if a company or an agent is good or bad. An agent's obligation to act in an insurance applicant's or insured's best interest, based on the faith and trust placed on the agent by the insurance- buying public, is known as... A: the duty owed to a principal B: a fiduciary duty C: a presumption of agency D: the warranty of the agent - correct answer ✅The answer is B. A fiduciary is someone you have trust and confidence in, such as an insurance agent or banker. People who handle other people's money are considered fiduciaries. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A waiver is... A: the accidental giving up of a known right B: a protection for the client C: the relinquishment of a known right D: the result of an estoppel - correct answer ✅The answer is C. Either the company or the client can invoke a waiver. It must always be the purposeful action by either party. The authority of an insurance agent that is spelled out in the written words of the agency contract between the agent and the insurer is _____ authority. A: apparent Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A representation is the truth to the best of one's knowledge and is the basis for writing the contract. Insurance contracts are based on the Doctrine of Utmost Good Faith, which states that all parties to the application are expected to tell the truth. A moral hazard... A: arises from the condition, occupancy, or use of the property itself B: arises through an individual's carelessness or irresponsible action C: is not a consideration in insurable risk D: in the tendency to create a loss on purpose to collect from the insurance company - correct answer ✅The answer is D. A moral hazard is created by a dishonest person, such as someone who files a fraudulent claim to collect on Property insurance Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A Property and Casualty insurance agent frequently has the authority to provide temporary insurance coverage known as... A: binder B: certificate C: policy D: quotation - correct answer ✅The answer is A. A binder is temporary insurance until the policy or endorsement is issued. Binders can be oral or written and are usually good for 30 days. An insurance company whose home office is located in Ohio is referred to as a(n)... Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: alien insurer B: domestic insurer C: foreign insurer D: reinsurer - correct answer ✅The answer is B. An alien insurer is domiciled in another country. A foreign insurer is domiciled in another state. Which statement regarding fraud is TRUE? A: Clients who commit fraud cannot be prosecuted B: A company is the only party to a contract capable of committing fraud. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ Something that may increase the seriousness of a loss if loss occurs, or that increases the likelihood that a loss will occur, is called a ... A: catastrophe B: hazard C: peril D: risk - correct answer ✅The answer is B. An example of a hazard is a man who charges from a safe occupation, such as an accountant, to a more dangerous one, such as doing stunts involving falling from high buildings. He has a higher chance of being seriously injured due to his change of occupation. The Law of Large Numbers... Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: guarantees the projections will be met B: increases the predictability of future losses C: is used only for life insurance calculations D: requires small groups in order to work - correct answer ✅The answer is B. The Law of Large Numbers increases the predictability of future losses. Unintentional injury is known as the civil tort or... A: accidental harm B: battery C: bodily trespass Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ D: negligence - correct answer ✅The answer is D. Negligence is defined as an unintentional injury due to a lack of reasonable care. It is the issue covered by liability insurance policies. Choices A and C are nonsense terms. Choice B is a legitimate legal term, but it is an intentional tort. A policy which covers against all perils NOT specifically excluded is called a(n)... A: agreed value policy B: named peril policy C: open peril policy D: specific peril policy - correct answer ✅The answer is C. Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ responsibility. That breach, in an unbroken chain of events (the proximate cause), resulting in injury to the plaintiff. If an insured house, under a Homeowner policy, has a 100% replacement cost of $100,000, what is the minimum limit necessary to fulfill the co- insurance clause? A: $70,000 B: $80,000 C: $90,000 D: $100,000 - correct answer ✅The answer is B. The co-insurance clause in Homeowners demands insuring the dwelling to at least 80% to value. In this case, 80% of $100,000 is $80,000 Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A defense for negligence where the victim cannot collect from the person who caused injury, whatever percentage the court feels the victim did themselves, is known as... A: assumption of risk B: comparative negligence C: contributory negligence D: intervening cause - correct answer ✅The answer is B. For example, a driver goes left of center and hits another motorist. At trial, the victim was found to be driving east into blinding sun glare without sunglasses. The jury decides the victim was deemed to be at 10% partial fault. Therefore, the party going left of center is only responsible for 90% of the damages. These are compulsory parts of an insurance policy EXCEPT.... Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ A: definitions section B: declarations page C: endorsements D: insuring clause - correct answer ✅The answer is C. An endorsement is a legal optional document added to the insurance policy to modify or change the policy in some way. Remember, endorsements take precedence over the policy language. The owner of the insurance policy is the... A: additional insured B: extra insured Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ An aggregate caps the maximum payout in a given year arising from multiple claims. Remember, aggregate limits are found in Commercial Liability policies only. The other choices are Personal Lines policies. The condition that prevents the insured from suing a negligent third party who caused a loss after the insured made a claim, and was paid for the loss by his insurance policy, is... A: arbitration B: liberalization C: salvage D: subrogation - correct answer ✅The answer is D. Subrogation supports indemnification by making certain one is not paid twice for the same loss -- once by the insurance company and once by the Hondros College Ohio Property and Casualty Insurance Pre-Licensing – Exam Questions (Solved) Latest RATED A+ negligent third party who caused the loss. Any right to sue that person is transferred to the insurance company.