Insurance Coverage Quiz Answers and Explanations, Exams of Property Law

Download Insurance Coverage Quiz Answers and Explanations and more Exams Property Law in PDF only on Docsity! Louisiana Property and Casualty Exam (400 Questions and Answers). In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy peri - Correct Answers Robbery is: - Correct Answers Taking of property by use of force, violence, or fear The crime of forced entry into the premises of another by a persons with felonious intent is defined as: - Correct Answers Burglary Erroneous Publishing copied all the material from Angel's Inc book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc filed a claim against Erroneous and seeks damages. Will a commercial policy cover the claim? - Correct Answers No, because the claim results from copyright infringement and is not in an advertisement Supplemental payments on a CGL provide all of the following EXCEPT: - Correct Answers Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds The occurrence form trigger is based on which of the following? - Correct Answers When notice is received and recorded by any insured or the insurer, whichever comes first The transfer of money from inside a banking premises to a person other that the messenger outside those premises or to a place outside those premises is covered under which commercial crime coverage? - Correct Answers Computer Fraud • - Correct Answers A written agreement which indemnifies a person for fire damage to the premises rented to the insured Rita drops off her wedding gown at Vicky's Dry Cleaners for a final pressing. The store's press breaks so Vicky takes Rita's dress to her other store across town. On the way to the other store, Vicky is held at gunpoint until she gives the man the wedding dress. What crime coverage form would pay for the loss of the gown in this situation? - Correct Answers Extortion - Commercial Entities 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 is called: - Correct Answers • - Correct Answers Claims-made form All of the following conditions must exist for injury or damage to be included in the products and completed operation hazard of a commercial general liability policy EXCEPT: - Correct Answers • - Correct Answers The injury or damage must occur within 90 days after the insured's work is complete All of the following statements concerning liability coverage are true EXCEPT: - Correct Answers • - Correct Answers The policy holder can sue the insurer whether or not all conditions and provisions of the policy have been met. The insured with a claims-made commercial general liability 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: - Correct Answers • - Correct Answers Within 45 days In computer fraud crime coverage form, what limit is placed on each occurrence of the loss of manuscripts, drawings, or records? - Correct Answers • - Correct Answers $5,000 with another injury, could be disabled to a greater degree than that of a single injury? - Correct Answers • - Correct Answers Second injury fund Which of the following terms refers to such disabilities as the loss of a limb, hearing, or eye sight? - Correct Answers • - Correct Answers Permanent partial disability Which of the following terms refers to a person's ability to do some work or the need to do alternative work? - Correct Answers • - Correct Answers Temporary partial disability If an employer in a state with elective works compensation laws chooses not to be subject to those laws, what does the employer lose? - Correct Answers • - Correct Answers Its common law defense against liability suits The voluntary compensation endorsement provides statutory coverage for which types of employees? - Correct Answers • - Correct Answers Farmworkers Employment practices liability insurance (EPLI) would NOT cover claims arising from: - Correct Answers • - Correct Answers Deliberate law violation An insured invites his neighbor out for a day on the water in his boat powered with a 150hp outboard motor. While attempting to tie the boat to the dock, his neighbor's hand is broken when caught between the boat and the dock. What coverage would apply to the broken hand? - Correct Answers • - Correct Answers The insured's boatowner's policy Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation? - Correct Answers • - Correct Answers Attachment bond Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? - Correct Answers • - Correct Answers The insured would be responsible for the amount required as underlying limits in the event of a claim To be eligible for business owners policy (BOP) coverage, an office building cannot be higher than: - Correct Answers • - Correct Answers 6 stories All of the following statement regarding a boatowners policy are true EXCEPT: - Correct Answers • - Correct Answers Replacements for the boat listed in the Declarations are automatically covered, if the insured notifies the insurer within 60 days and pays the additional premium Which professional liability form provides form coverage from liability arising out of malpractice, error, or mistakes made in rendering professional services? - Correct Answers • - Correct Answers Physicians, surgeons, and dentist malpractice If an insured has an umbrella policy in addition to his personal auto policy, which would be considered the underlying policy? - Correct Answers • - Correct Answers Auto policy (underlying is the primary) What is the deductible of a personal liability umbrella policy called: - Correct Answers • - Correct Answers The SIR Which bond guarantees that the recipients of permits will comply with the ordinances associated with the use of such permits? - Correct Answers • - Correct Answers License and permit bonds A professional who wants coverage for all liability exposures should purchase what form of liability insurance? - Correct Answers • - Correct Answers Commercial general and professional Professional liability coverage protects the insured against legal liability resulting from: - Correct Answers • - Correct Answers Errors and omissions How much coverage can be available for watercraft damage in the homeowner's policy? - Correct Answers • - Correct Answers Up to $1500 A ranchowners policy is most similar to which of the following: - Correct Answers • - Correct Answers Homeowners An insured purchases a Difference in Conditions policy. It may contain all of the following characteristics except: - Correct Answers • - Correct Answers Low deductible The party to a surety or fidelity bond who promises to fulfill the obligation is the: - Correct Answers • - Correct Answers Principal Continuing education requirements must be met every: - Correct Answers • - Correct Answers 2 years • - Correct Answers A vehicle being used for public livery In the event of a loss covered by the policy, if the insurer requests a signed sworn proof of loss, the named insured is required to submit it within: - Correct Answers • - Correct Answers A specified time (usually 60 days...but may vary) Which of the following statements would be an example of a product's liability claim? - Correct Answers • - Correct Answers Faulty packaging of a cereal caused spoilage that resulted in someone getting sick Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45min each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? - Correct Answers • - Correct Answers Reduction A policy holder has an equipment breakdown 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 Answers • - Correct Answers $175,000 (expediting cannot exceed $25K) 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: - Correct Answers • - Correct Answers Product liability claim All of the following are excluded in the equipment breakdown basic policy EXCEPT: - Correct Answers • - Correct Answers Explosion of steam boiler If an insured is in the process of moving to a new location, his personal property coverage under the dwelling policy will apply on a pro rata basis at both locations for: - Correct Answers • - Correct Answers 30 days Liability imposed on one party as a result of the actions of another person is known as: - Correct Answers • - Correct Answers Vicarious liability According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss? - Correct Answers • - Correct Answers 60 days Which would NOT be covered by the inside the premises-robbery or safe burglary of other property coverage? - Correct Answers • - Correct Answers An employee is caught stealing cash from register The commercial property declarations page contains which of the following information - Correct Answers • - Correct Answers Description of property insured If a person demands hearing, the Commissioner of Insurance must set the hearing within - Correct Answers • - Correct Answers 30 days An insured suffers a windstorm loss in which the insured's driveway is blocked by two of the insured's trees and two of the neighbor's trees. The total amount of the removal adds up to the following: three trees at $300/tree, and one tree at $600. How much will the insurer pay for the loss? - Correct Answers • - Correct Answers $1,000 (pay attention to max coverage limit) In the split limit coverage in personal auto policies, which limit indicates the maximum amount the policy will pay for bodily injury per person? - Correct Answers • - Correct Answers 1st limit An insured with a homeowner's policy has removed property from the insured location to protect it from loss that could be caused by covered peril. The removal coverage applies for: - Correct Answers • - Correct Answers 30 days Which policy condition in HO policies states that insurance applies separately to each insured? - Correct Answers • - Correct Answers Severability of insurance Which of the following best describes the amount of loss assessment coverage included under a homeowner's policy liability section? - Correct Answers • - Correct Answers Up to $1,000 per occurrence The insured owns an older home with lath and plaster walls. Following a kitchen fire, the insurance company pays to have the walls replaced with drywall that is just as functional, but costs less than lath and plaster. Which loss valuation allows the insurance company to have plaster replaced with drywall? - Correct Answers • - Correct Answers Functional replacement cost Mike Armstrong is a producer and wants to operate under the name The Insurance Palace. What kind of license would this require? - Correct Answers • - Correct Answers Agency • - Correct Answers It must be added by endorsement to a homeowners policy The Residential Condominium Building Association Policy is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true? - Correct Answers • - Correct Answers Which of the following would modify the original insurance contract by either adding or removing coverage? - Correct Answers • - Correct Answers Endorsement All of the following are true regarding physical damage coverage EXCEPT: - Correct Answers • - Correct Answers The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle 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 - Correct Answers • - Correct Answers Computer fraud An insured has a personal auto policy with both comprehensive (other than collision) and collision coverage. His car is stolen and recovered 5 days later. If the insured claims transportation expenses of $20/day, how much will his policy pay? - Correct Answers • - Correct Answers $60 Driver A has personal auto policy with Part C - UM/UIM limits of 100/300. He is injured by Driver B who has Part A - Bodily Injury Liability limits of 50/100. It is determined that Driver B is at fault for the accident. Driver A has $125K in medical expenses. How much will his PART C - UM/UIM coverage pay? - Correct Answers • - Correct Answers $50,000 All of the following are conditions commonly found in the insurance policy EXCEPT: - Correct Answers • - Correct Answers Insuring agreement Under 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 semiprecious stones, pearls, furs, manuscripts, drawings, or records? - Correct Answers • - Correct Answers $5,000 A commercial policy has been in effect for less than 60 days and it is not a renewable policy. If the insurer decides to cancel the policy for any reason other than nonpayment of premium, how much notice must it give the first name insured? - Correct Answers • - Correct Answers 60 days All of the following are true regarding physical damage coverage EXCEPT: - Correct Answers • - Correct Answers The limit of liability is greater than the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle? Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting? - Correct Answers • - Correct Answers Stock 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 Answers • - Correct Answers Liability coverage Which of the following other coverages is NOT included in the basic form dwelling policy? - Correct Answers • - Correct Answers Breakage of glass A farmer is remodeling his 100year old farmhouse. He is in the process of painting the porch and hanging shutters. He keeps his ladder, paint, and other materials used to remodel his home under his porch. Which of the following provides coverage for his remodeling materials? - Correct Answers • - Correct Answers Coverage A The livestock coverage form covers which of the following losses? - Correct Answers • - Correct Answers Names peril for death of livestock Losses that result from the freezing of a plumbing system while the dwelling is vacant would be EXCLUDED under a homeowners policy unless: - Correct Answers • - Correct Answers The insured has drained the plumbing system The Louisiana Guaranty Association Board of Directors are placed in office by: - Correct Answers • - Correct Answers Election and appointment Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement? - Correct Answers • - Correct Answers Contractual liability policy 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 section of the policy? - Correct Answers • - Correct Answers The first named insured may cancel the policy at any time by giving written notice to the insurer Which of the following would NOT be classified as personal property for insurance purposes? - Correct Answers • - Correct Answers A house (personal property is moveable) How much coverage is provided under a homeowners policy for theft or unauthorized use of a credit card? - Correct Answers • - Correct Answers $500 According to the Workers Compensation Act, if the deceased employee has no dependents and no dependent parents, who would be considered next in line to receive the benefit? - Correct Answers • - Correct Answers The employee's brother or sister A specialized type of insurance that guarantees the faithful performance of a trustee of employee benefit plan is called - Correct Answers • - Correct Answers Fiduciary liability insurance All of the following are true of Coverage B - Other Structures EXCEPT - Correct Answers • - Correct Answers It must be added by endorsement to a homeowners policy Under coverage C of a farm policy, what is the limit payable on business property located away from the premises? - Correct Answers • - Correct Answers $500 Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT - Correct Answers • - Correct Answers Damage to a third party property for which the insured is legally liable 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 Answers • - Correct Answers Worker's compensation coverage According to the standard mortgage clause, who has the right to bring suit in their own name to recover damages, pay policy premiums, and submit a proof of loss - Correct Answers • - Correct Answers Mortgagee A producer has completed 40 hours of CE this licensing period. How many credit hours may be carried over to the next licensing period? - Correct Answers • - Correct Answers 10 hours Under the Crime Coverage Form I - Lessees of Safe Deposit Boxes, securities are only covered in the event of - Correct Answers • - Correct Answers Theft A participating insurance policy may do which of the following - Correct Answers • - Correct Answers Pay dividends to the policyowner The extra expenses coverage form provides: - Correct Answers • - Correct Answers Coverage that will permit the insured to continue in business without interruption following a property damage loss If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's - Correct Answers • - Correct Answers Ancestry An insurer has just cancelled an insured's policy. How long does the insurer have to explain this? - Correct Answers • - Correct Answers 6 months On a DP-3 Dwelling Property Special Form policy, the coverage provided for personal property is - Correct Answers • - Correct Answers The same as provided in the DP-2 Broad Form Which coverage form would provide coverage for all the incoming and outgoing shipments? - Correct Answers • - Correct Answers Annual transit An employee who has a pre-existing permanent partial disability was injured in a work related accident in 2012. All of the following benefits will be available from the Second Injury Fund EXCEPT: - Correct Answers • - Correct Answers Death benefits Which of the following would not be covered under the Directors and Officers liability coverage? - Correct Answers • - Correct Answers Reimbursements for fines and penalties Who is considered a nonresident agent? - Correct Answers • - Correct Answers An agent who resides in another state but it licensed to write insurance in this state Under the employee theft coverage, when a covered employee is found to have participated in a dishonest act, the coverage for that employee will terminate: - Correct Answers • - Correct Answers Immediately A scheduled personal property endorsement will be used to insure - Correct Answers • - Correct Answers Higher limits of coverage for fine arts items A golfer slices a tee shot and the ball goes through the window of a house beside the fairway. The broken glass will be paid for by: - Correct Answers • - Correct Answers The golfer's homeowners liability coverage What two policy components are part of every commercial package policy? - Correct Answers • - Correct Answers Common policy declarations and common policy conditions An insurance company that is owned by policyholders is called a - Correct Answers • - Correct Answers Mutual insurer (owned by policy holders and issue participating policies) What is the maximum fine a producer will face for using unapproved trade name? - Correct Answers • - Correct Answers $5,000 Which of the following types of property is NOT moveable? - Correct Answers • - Correct Answers Real Property When an insured purchased his home 10 years ago for $80,000 it had a replacement cost of $100,000. Today the home has a replacement cost of $200,000 and it has depreciated by 4% each year. The insured's home has an ACV of: - Correct Answers • - Correct Answers $120,000 ($200,000 - (200,000 x .04%) x 10yrs = 120,000 - Correct Answers An insured was judged at fault in an automobile accident. He has the 100/300 bodily injury liability coverage. Three other individuals were injured in the vehicle by the insured. They were awarded damages of $150,000, $75,000, and $75,000. What amount, if any, was not covered by his insurance policy? - Correct Answers • - Correct Answers $50,000 (most any one individual can be awarded is $100,000) A driver who has an auto policy with limits of liability lower than those required by state law would be considered? - Correct Answers • - Correct Answers An uninsured motorist If a car is stolen and left in a snow bank and the radiator freezes and does a lot of damage, is the damage covered by the auto policy? - Correct Answers • - Correct Answers Yes, freezing exclusion is removed if the car is stolen Supplementary payments under the personal auto policy include all of the following EXCEPT: - Correct Answers • - Correct Answers Unlimited cost of bail bonds (BB limit is $250) A stock insurer is defined as an insurer: - Correct Answers • - Correct Answers Owned by its stockholder What does the application of contract of adhesion mean? - Correct Answers • - Correct Answers Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured What kind of coverage does a DP-3 form provide? - Correct Answers • - Correct Answers Open peril What is the purpose of the Terrorism Risk Insurance Act? - Correct Answers • - Correct Answers To share the risk of loss from terrorist attacks with the insurance industry Which of the following would NOT generally be included in the supplementary payments portion of a liability policy? - Correct Answers • - Correct Answers Damage to property owned by the insured Anthony has insured his dwelling under two fire polices. If Anthony suffers a fire loss, what provision in the polices will prevent Anthony from collecting more than the actual amount of the fire damage? - Correct Answers • - Correct Answers Apportionment clause What is an insured contract? - Correct Answers • - Correct Answers Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract Which of the following clauses excludes assignment or granting of policy provisions to any person who repairs property for a fee? - Correct Answers • - Correct Answers No benefit to the bailee Which of the following is a federal act that covers crews with the same remedy available to railroad workers? - Correct Answers • - Correct Answers The Jones Act A home is insured for $200,000 under a HO-3. Last week, the owner purchased a new home and began to move his personal property to the new residence. Last night vandals did $8,000 of damage to the property that had been moved to his new residence. Disregarding any deductible, how much will the HO-3 pay: - Correct Answers • - Correct Answers $8,000 Space Age Rockets makes model rocket supplies and has 12 employees. The company is located in Atlanta, GA. GA has compulsory workers compensation laws. Space Age's owner thinks that the company is too small and unprofitable to carry the workers compensation plan mandated by the state. Possible consequences noncompliance include all of the following EXCEPT: - Correct Answers • - Correct Answers Forced payment of billing for services rendered by any private insurer that "binds" coverage based on employee's request for coverage An agent tells an insured that if he replaces his current insurance policy with a newer one, his dividends will be higher and his premiums will be significantly lower. The policy however would not offer either of those things. What type of misrepresentation is being committed? - Correct Answers • - Correct Answers Twisting Which of the following types of bonds guarantees that a supplier will furnish supplies, materials, products, and equipment as specified in the written contract? - Correct Answers • - Correct Answers Supply bond All of the following are considerations in determining which state law applies when a worker is required to travel into another state and injured while working in the other state EXCEPT: - Correct Answers • - Correct Answers The insurer's chartered location or domicile Which is NOT true of Workers compensation coverage? - Correct Answers • - Correct Answers Medical payment benefits are limited