1 - Practice Test Ques

Question 0

Which of the following companies is not a contract carrier, nor a common carrier?

The Make Your Own Frame Company uses its own trucks to deliver supplies to each of its company-owned frame shops in 15 different locations in a tri-state area.

Pronto Trucking makes deliveries in a five state area.

The Dandee Delivery Company transports goods for the public over a set delivery route for a set fee.

Pronto has a subsidiary company, Fast Track, separately insured under a Truckers Form which also hauls goods for the public over a set route and a set fee, but only in one state.

Answer 0

The Make Your Own Frame Company uses its own trucks to deliver supplies to each of its company-owned frame shops in 15 different locations in a tri-state area.

Question 1

Which of the following would be excluded under Personal and Advertising Injury Liability Coverage of a CGL policy?

I. Breach of contract.

II. Incorrect price descriptions of goods, products or services.

III. Failure of goods, products or services to perform as advertised.

IV. Any offense committed by an insured who is in the business of advertising or publishing.

I, II, III, and IV

I and II only

II and III only

I, II, and III only

Answer 1

I, II, III, and IV!!!

They are all excluded!!!!

Question 2

When no beneficiary exists and the principal sum would otherwise go to the insured’s estate, the insurance company can pay up to $1,000 to any relative, by blood or marriage, who appears equitably entitled to the money under the:

Facility of payment clause.

Primary beneficiary clause.

Contingent beneficiary clause.

Irrevocable beneficiary clause.

Answer 2

Facility of payment clause

Question 3

Which of the following would NOT be a prospect for errors and omissions insurance?

Dentists

Insurance Agents

Real Estates Agents

Lawyers

Answer 3

DENTISTS!!!

Question 4

In New York, continuing education requirements for agents must be satisfied:

Annually

Biannually

Every three years

Every four years

Answer 4

BIANNUALY!!!

Question 5

The limit of a bond is known as its:

Penalty.

Face amount.

Policy limit.

Goal.

Answer 5

Penalty!!!

(In bonding, the limit of the bond is called the penalty. The penalty is the obligation or obligations assumed by the contractor in the contract)

Question 6

Agent Rice informs the insured that he needs to secure motor vehicle records on all of the drivers in the household based on company requirements. This is an example of Agent Rice’s:

Fiduciary Authority

Expressed Authority

Apparent Authority

Implied Authority

Answer 6

Implied Authority!!!

(Implied authority is the authority the agent believes he has in order to do his job properly. In order to write auto insurance, the agent needs to know what is on the motor vehicle driving record of all the drivers in the household)

Question 7

How is the property causes of loss changed from risks of “direct physical loss” to “named perils” coverage under the BOP?

State it on the declarations

Attach the Named Perils form endorsement

It cannot be done

Use a different ISO Businessowners Coverage Form

Answer 7

Attach the Named Perils form endorsement

The named peril endorsement must be attached to the policy

Question 8

Which of the following types of property may be insured under a furriers block policy?

Stocks of furs owned by the insured furrier.

Customer’s furs entrusted to the furrier for storage.

Furs or pelts on the premises of a breeder.

Fur garments sold and delivered to customers.

Answer 8

Stocks of furs owned by the insured furrier..

The furriers block policy is used to cover stocks of furs owned by the insured furrier and held for sale

Question 9

A Property Value Reporting form is used to:

Present a new claim to the insurer

Report a property theft to police

List and valuate business personal property at an insured location

Present home appraisal value to the insurance company

Answer 9

List and valuate business personal property at an insured location!!!

Question 10

In TORT law, strict liability is the imposition of liability on a party without a finding of fault (such as negligence or tortuous intent).

The claimant need only prove that the tort occurred and that the defendant was responsible. The law imputes strict liability to situations it considers to be inherently dangerous.

Which of the following would not fit into the definition of strict liability but would be absolute liability?

A blasting contractor

Ericting dams

Drilling oil wells

A restaurant selling seafood

Answer 10

A BLASTING CONTRACTOR!!!!

(Strict liability is a tort law and means a party is liable for all damages as a result of his or her dangerous actions or products. Absolute liability involves claims for which there is no defense involving extremely hazardous activities such as a blasting contractor)

Question 11

Under workers compensation insurance, bodily injury by disease must be caused by:

The conditions of employment that caused the injury or disease.

Any reason regardless of fault.

An occupational injury.

Any illness incurred while the worker was on the job.

Answer 11

The conditions of employment that caused the injury or disease!!!

Question 12

Cathy’s employer pays 60% of the premium for the group LTD plan in which she participates. She becomes disabled and receives a monthly benefit of $2,000. How much of this monthly benefit must she report as income?

$2,000

$1,200

$600

0

Answer 12

$1200!!!

The percentage of the benefit that is taxable is the exact percentage of the premium that the employer pays(60%

Question 13

Which of the following would NOT be covered under the Personal Auto Policy?

Damage caused to another car when the insured backs into it

The insured drives off the road and over the neighbor’s sprinkling system several times over a period of months; as a result one day several of the pipes break. The neighbor demands that the damage to the sprinkling system be paid.
Mr. Jones, in a burst of temper, runs his car into his neighbor’s house.

Injury caused when the insured hits a pedestrian.

Answer 13

Mr. Jones, in a burst of temper, runs his car into his neighbor’s house.

(Intentional acts are always excluded under policies that cover automobile liability. Accidental acts are covered)

Question 14

Under the Equipment Breakdown Protection form that covers boilers and machinery, what is considered to be one loss event?

The initial breakdown causes other breakdowns

One piece of machinery is damaged

Three separate losses occur during the week

When expediting expenses are paid

Answer 14

The initial breakdown causes other breakdowns !!!

(The breakdown of one covered piece of equipment that causes other breakdowns of covered equipment will be considered one event)

Question 15

What is the difference between a “vacant” building and an “unoccupied” building?

Vacant means no furnishings or habitation by people.

Unoccupancy means there are furnishings but no people present.

A vacant building affects certain perils.

All responses listed are correct.

Answer 15

All responses listed are correct!!!

Question 16

Under the BOP, apartment buildings are eligible, including residential condominium associations, along with offices, mercantile, service or processing agencies or contractors as long as they do not exceed:

15,000 sq. feet

35,000 sq. feet

30,000 sq. feet

40,000 sq. feet

Answer 16

35,000 sq. feet

Question 17

The deductible on the Equipment Breakdown form can be stated in which of the following ways?

Fixed dollar deductible

Time deductible

Percentage of loss deductible

All of the responses are correct

Answer 17

All of the responses are correct

Question 18

An attorney will provide notice of deposition to an individual when the attorney wishes to secure from that individual:

A recorded statement under oath

Any form of statement

A written statement

A feeling for how he or she will appear as a witness

Answer 18

A recorded statement under oath

Question 19

All of the following would be considered “bodily injury” under liability coverage, EXCEPT:

A dog owned by a customer is injured in the parking lot of the a store.

A caterer’s customer is hospitalized with food poisoning.

A shopper trips over an exposed cable at a mall.

A clerk demonstrating a barbell drops it on a customer’s foot.

Answer 19

A dog owned by a customer is injured in the parking lot of the a store.

(Bodily injury, which includes both accident and sickness, requires injury to a human being. The dog is property and would be covered under property damage)

Question 20

All of the following are true regarding the limit of insurance shown on the declarations page, except:

The limit of coverage applies to each vehicle
listed on the declarations page

The number of vehicles involved in the accident does not affect the limit of coverage per accident

The number of claims per accident does not change the limit of coverage for the accident

All of the responses are correct

Answer 20

The limit of coverage applies to each vehicle
listed on the declarations page!!

(The limit of coverage does not apply to each vehicle, it applies to each accident)

Question 21

A professional liability policy can be:

Covered automatically under a Commercial General Liability policy

Added by endorsement to a Commercial Liability policy

Purchased separately for an additional premium

Added to an umbrella policy

Answer 21

Purchased separately for an additional premium

Question 22

The insured has an HO-3 policy. He is robbed and the thief stole $500 in cash. What amount, if any, can the insured collect under his homeowner policy disregarding any deductibles?

$100

Nothing

$500

$200

Answer 22

$200

The homeowner policy limits the theft of money to $200

Question 23

the insurance industry, which of the following terms refers to continuous or repeated exposure to conditions that may result in bodily injury or property damage neither expected nor intended?

An occurrence

An accident

An event

A condition

Answer 23

An occurrence

(The definition of “occurrence” includes accident which is bodily injury and/or property damage that is sudden and unforeseen)

Question 24

In a standard workers compensation insurance policy, premiums are based on which of the following?

Work classifications and annual payroll

Type of work and average weekly wage

Premium discount and basis modification

Expense constant and weekly payroll

Answer 24

Work classifications and annual payroll!!!

Question 25

Compensation payable for the delaying a vessel carrying freight:

Is called demurrage.

Not payable under an ocean marine contract

Not subject to any deductible to negotiation.

Limit is predetermined prior to the voyage.

Answer 25

Is called demurrage!!!

Question 26

David has damaged his vehicle by striking a tree. He can:

I. Take the car to a repair garage recommended by the insurer.

II. Take the car to a garage of his choice.

III. Accept payment based on the adjuster’s estimate.

I, II and III

I and II only

I and III only

I only

Answer 26

I, II, III

All of them!!!

Question 27

Which of the followings items are covered under the homeowner forms?

Firearms

Stamps

Rare coins

All of the items are covered

Answer 27

All Items are Covered

Question 28

Both medical and nonmedical care which might include housework and meal preparation is:

Intermediate care.

Home health care.

Adult day care.

General nursing care.

Answer 28

Home Healthcare!!!

Question 29

An insured that had a $500,000 primary liability policy purchased a $1 million umbrella liability policy with a $2,000 self-insured retention limit. Later, the insured allowed the required underlying primary policy with a limit of $100,000 to expire. A week after that, the insured became liable for a $100,000 loss that is not excluded by the provisions of either the primary policy or the umbrella policy. How will this loss likely be settled?

The insured will pay the full $100,000 loss.

The umbrella policy will pay the full $100,000 loss.

The underlying policy will pay the full $100,000 loss.

The insured will pay $2,000, and the umbrella policy will pay the remainder of the loss.

Answer 29

The insured will pay the full $100,000 loss!!!

Question 30

What part of the policy contains the promises made by the insurance company to the insured?

The Insuring Agreement

The Conditions Clause

The Definitions

Exceptions to the Exclusions

Answer 30

The Insuring Agreement

The insuring agreement contains the promises made by the insurer to the insured in exchange for a premium

Question 31

Tearing of a muscle results in an injury known as a:

dislocation

sprain

strain

fracture

Answer 31

STRAIN!!!

Question 32

John pays his annual premium and then decides to cancel the policy halfway through the coverage year. He will:

Not receive a refund as he opted to cancel the policy.

Receive a 10% refund of the policy premium.
Receive a refund for the unearned premium (that portion of the premium not yet used).

Receive a refund for the entire annual premium.

Answer 32

Receive a refund for the unearned premium (that portion of the premium not yet used)..

(John will receive a refunded of the unearned portion of the premium. When the insured cancels the policy, the premiums are short rated and when the insurer cancels the premiums are pro-rated.)

Question 33

In settling a claim on a dwelling fire policy with a $10,000 loss, the following companies are involved, Company A - 50%; Company B - 45% and Company C - 5%. What will Company C pay?

$10,000

$1,000

$4,500

$500

Answer 33

$500

Question 34

An insured owns a motor cycle, a moped and a motor home. What endorsement is added to the personal auto policy to provide coverage?

Recreational vehicle endorsement

Miscellaneous type vehicle endorsement

A separate endorsement for motor homes called the “motor home” endorsement

All terrain vehicle endorsement

Answer 34

The Miscellaneous Type Vehicle Endorsement

The Miscellaneous Type Vehicle Endorsement is added for these types of recreational vehicles

Question 35

What is the appropriate manner in which to sign a “release of all claims?”

A business may use its d.b.a.

An individual may use an a.k.a.

Must use of full legal name

All of the responses are correct

Answer 35

Must use of full legal name!!!

Question 36

How many days does the liberalization clause provide for under the BOP prior to or during the policy?

55 days

30 days

45 days

35 days

Answer 36

45 Days!!!

Question 37

The period of time from the effective date of reinstatement of a health policy until coverage is available for sickness related claims is called the:

elimination period.

open enrollment.

probation period.

recurrent disability.

Answer 37

Probation period

Question 38

Which of the following terms would describe a situation where a building is not a total loss but the cost to repair the building is greater than the value of the building?
Answer Choi

A constructive total loss.

A constructive partial loss.

A loss of market value loss.

A loss where debris removal may be more than the policy coverage provided.

Answer 38

A constructive total loss!!!

Question 39

Which of the following contractors would be eligible for a businessowners policy?

A carpenter doing all of his own work building kitchen cabinets in people’s homes and earns $75,000 per year.

A General Contractor

A roofing contractor with an annual payroll of $400,000.

A Tree Removal Service

Answer 39

A carpenter doing all of his own work building kitchen cabinets in people’s homes and earns $75,000 per year!!!

Question 40

Typically, how are defense costs handled under an aviation policy?

Covered under the policy’s insurance limit

A separate limit applies

Handled as a supplementary payment

Paid after a deductible is applied

Answer 40

Handled as a supplementary payment

Question 41

The required standard deductible for auto physical damage coverage in New York is:

$200.00 per occurrence.

$100.00 per occurrence.

$500.00 per occurrence.

$250.00 per occurrence.

Answer 41

$200!!!

Question 42

The rights and duties of both parties to the insurance contract are specified in which section of the homeowner forms?

Declarations

Insuring agreement

Conditions

Exclusions

Answer 42

CONDITIONS!!!

Question 43

An insured can collect on his automobile medical payments coverage in all of the following situations, except:

While injured in an owned vehicle

While struck as a pedestrian by a vehicle licensed for on road use

As a paying passenger in a taxi cab

While in an owned vehicle used as a livery

Answer 43

While in an owned vehicle used as a livery!!!

Question 44

ll of the following statements about the Medical Information Bureau are true, EXCEPT:

It is obligated to automatically provide applicants with information it holds about them.

It is a not-for-profit organization established by life and health insurance companies that provides information to member firms about insurance applicants.

The individual applicant must authorize the release of any medical information to the member companies.

It contains records of prior applications and claims.

Answer 44

It is obligated to automatically provide applicants with information it holds about them!!!

Question 45

The suffix “osis” refers to:

An abnormal fear.

The formation or development of somthing.

An abnormal condition.

An inflammation.

Answer 45

An abnormal condition!!!

Question 46

The insured has suffered a covered loss under his DP-3 dwelling form. He fails to protect the property from further loss. The additional loss that occurs as a result of his inactions may be denied because of what clause in the policy?

Intentional loss

Removal clause

Neglect

Fraud

Answer 46

Neglect

Question 47

Each of the following is true about farm coverages, EXCEPT:

The principal residence may be covered by farm forms or homeowner forms.

Farm coverage may be written as a monoline policy or part of a package.

Livestock may be insured.

Property and liability coverages may be included.

Answer 47

The principal residence may be covered by farm forms or homeowner forms.

Question 48

If a crop insurance policy does not cover loss of the first 10% of a crop’s value, but does cover a fixed percentage of any additional loss, the policy is said to be written:

On an excess over basis.

With a disappearing deductible.

With an increasing payment feature.

On a standard basis.

Answer 48

On an Excess over Basis!!!

Question 49

An insured has taken a physical inventory of his merchandise and discovers a substantial shortage of valuable stock. He turns a claim in to the insurance carrier that provides his coverage under a Businessowners Policy. What coverage is provided by the BOP for merchandise that has mysteriously disappeared?

Full replacement cost coverage

Full actual cash value coverage

The loss is paid on an agreed amount basis

No coverage would apply

Answer 49

No coverage would apply!!!!

There is no coverage for missing property when there is no physical evidence to show the cause of loss

Question 50

A non-admitted company sells insurance in the state of New York. This is known as:

Certificate of authority

Surplus lines insurance

An illegal act

A limited lines company

Answer 50

Surplus lines insurance!!!

Question 51

Commercial Property Insurance usually imposes a penalty if, at the time of loss, the insured failed to maintain a minimum amount of coverage. This penalty may apply because of the:

Coinsurance clause.

Valuation clause.

Deductible provision.

Value policy law.

Answer 51

Coinsurance clause.

(Commercial property forms contain an 80% coinsurance clause. This means the insured must insure the property for 80% of its value or risk a penalty in case of a partial loss)

Question 52

Which of the following would be eligible to purchase a BOP?

Movie Theater

Automobile repair shop

A six unit apartment building

A credit union

Answer 52

A six unit apt building!!!

Question 53

If an insured conceals a material fact, makes false statements or engages in a fraudulent act, he or she is guilty of:

Estoppel

Misrepresenting

Concealment

——-?????

Answer 53

Concealment!!!

Question 54

You have an HO-3 policy on your home. Coverage F will pay medical expenses for:

Anyone invited onto your property and injured while there

A son or daughter away at college

You and all resident relatives

Roomers and boarders

Answer 54

Anyone invited onto your property and injured while there

Question 55

All of the following types of signs can be covered by the Sign Coverage Form, except:

Neon

Fluorescent

Electrical, not attached to a building

Signs carved in stone or brick

Answer 55

Signs carved in stone or brick!!!

Question 56

If an insurer intends to cancel a workers compensation policy issued in New York for other than nonpayment of premium, a ___ day advance notice must be sent to the insured.

10

15

20

30

Answer 56

30

Question 57

What will happen when an adult child, who is disabled and a covered dependent under an employer-sponsored group plan covering the child’s parent, reaches the plan’s limiting age?

A mentally or physically disabled child may continue group coverage as a dependent as long as he or she remains a legal dependent of the insured parent/guardian.

All coverage will cease automatically.

The child must convert to individual coverage.
The child must be enrolled in Medicare.

Answer 57

A mentally or physically disabled child may continue group coverage as a dependent as long as he or she remains a legal dependent of the insured parent/guardian.

Question 58

What does “Transfer Of Your Rights And Duties Under This Policy” refer to in the BOP?

The Other Insurance Clause

The Assignment Clause

The Coinsurance Clause

The Subrogation Clause

Answer 58

The Subrogation Clause!!!

Question 59

Fidelity bonds which apply their “limit” to each employee involved in a covered loss are called:

Commercial blanket bonds.

Scheduled bonds.

License and bid bonds.

Blanket position bonds.

Answer 59

Commercial blanket bonds.

Question 60

Phillip suffers severe pain after exercising. His doctor prescribes an EMG. An EMG:

Is a test that measures muscle response to nerve stimulation.

Is a test that records the electrical activity of the heart.

Is a test that records electric currents developed in the brain.

Is a test that provides pictures of structures inside the body using a magnetic field and pulses of radio wave energy.

Answer 60

Is a test that measures muscle response to nerve stimulation.

(An EMG (electromyography) is a test which measures muscle response to nerve stimulation. It is used to evaluate muscle weakness and to determine is the weakness is related to the muscles themselves or a problem with the nerves that supply the muscles)

Question 61

The plumbing in Mrs. Jones’ home suddenly burst and the ceilings were damaged by water. All of the following homeowner forms would cover the loss, EXCEPT:

HO-8 form.

HO-2 form.

HO-3 form.

HO-5 form.

Answer 61

H-08 form

(All current HO forms except the HO-8 cover “accidental discharge or overflow of water or steam” from a plumbing, heating, air conditioning, or fire protective sprinkler system or from within a household appliance)

Question 62

All of the following information is included on a general liability declarations page, EXCEPT:

Non renewal provisions

The policy inception date

The aggregate limit of liability

The insurance company name

Answer 62

Non-Renewal Provisions

(The non renewal provision is not contained in the declarations page of the policy. It is found in the common policy provisions)

Question 63

Which of the following is not covered under aircraft hull insurance?

Personal Effects

Fuselage

Wheels

Propeller

Answer 63

personal Effects!!!

Question 64

A drug store has an ice cream counter and someone spills ice cream on the floor. Both the employee and the store manager are aware of the situation. The store can be held legally liable when:

Someone falls while the store employee is mopping the floor.

The floor has been moped but is still wet.

No provisions for cleaning up have been made.
All responses listed are correct.

Answer 64

All responses listed are correct!!!

Question 65

An insurance company can send a notice to the first named insured canceling a businessowners policy for all of the following, EXCEPT:

Buildings with 69% or more of the rental units or floor area vacant or unoccupied.

The building has been vacant or unoccupied 60 or more consecutive days.

Concealment or fraud before or after the policy has been issued.

A large liability loss has occurred and the limits are exhausted.

Answer 65

A large liability loss has occurred and the limits are exhausted.

Question 66

Which of the following policies does not include flood coverage?

A Homeowner HO-3 Policy

A Personal Auto Policy with “other than collision” Coverage

A Personal Articles Floater

A floater covering fine arts

Answer 66

A Homeowner HO-3 Policy

Question 67

The insured company manufactures outboard motors. A faulty manufacturing process produced several defective motors, which were sold with the manufacturer unaware of the defects at the time of sale. The insured became aware of the defects when the events described below occurred to one purchaser. The insured was found liable for the damages. Which of the damages would likely be excluded by the insured’s commercial umbrella liability policy?

The outboard motor itself was destroyed in a fire caused by a faulty fuel connection that spread gasoline over the motor.

The owner of the motor and two bystanders who tried to help extinguish the fire were burned.

Most of the boat to which the motor was attached was damaged.

When the owner attempted to get away from the fire, she fell backwards over the edge of the boat and broke her arm on a submerged tree stump.

Answer 67

The outboard motor itself was destroyed in a fire caused by a faulty fuel connection that spread gasoline over the motor!!!

Question 68

hose responsibility is it to see that a ship is seaworthy?

The Ship Owner

The Shipper

The Captain

Both the Captain and the Crew

Answer 68

The Ship Owner

Question 69

Which of the following statements best defines “manager” under a commercial crime insurance policy?

Employee with no supervisory duties.

Employee with supervisory duties.

Director of a limited liability company.

Someone with custody of property inside premises of the insured.

Answer 69

Director of a limited liability company.

Question 70

Under business income coverage, what coverage clause continues payment of income after the period of restoration is complete?

Maximum period of Indemnification

Extension of coverage

Agreed value

Extended business income

Answer 70

Extended business income!!!

Question 71

Which of the following is used to minimize small property claims and help to keep insurance premiums low?

A deductible.

A valued policy.

Coinsurance.

Insurable interest.

Answer 71

A deductible!!!

Deductibles represent the self-insured portion of a property claim. As deductibles increase, premiums decrease

Question 72

Under what circumstances does an insurer allow the transfer of an insured’s rights and duties under a Commercial Package Policy without the permission of the insurer?

When the named insured dies

When the named insured is in the hospital

When the named insured is out of the United States

None of the responses listed are correct

Answer 72

When the named insured dies!!!

Question 73

The BOP provides liability coverages. Which of the following is a correct statement regarding the limits of coverage?

The BOP only provides a Per Occurrence limit.
The BOP only provides Aggregate Limits of Liability coverage.

The BOP Liability section provides for Split Limits of Liability coverage.

The BOP contains two Aggregate limits, one for Premises and Operations Liability and one for Products and Completed Operations.

The coverage also has a Per Occurrence limit.

Answer 73

The BOP contains two Aggregate limits, one for Premises and Operations Liability and one for Products and Completed Operations. The coverage also has a Per Occurrence limit.

Question 74

Major medical policies may include a type of deductible wherein the insured pays a new deductible amount for each separate event that causes medical expenses to be incurred. This is known as the:

Per-cause deductible.

All-cause deductible.

Common accident or illness provision.

Carryover provision.

Answer 74

Per- Cause deductible!!!

Question 75

Which of the following would be considered a “supplementary payment” in a liability policy?

All post-judgment interest in a suit defended by the insurer.

Payment for an insured employee’s truck being used by the employee on a business-related trip.

Costs for a private investigator hired by an employee to prove he was not involved in a hit and run accident of which he has been accused.

Up to $2,000 for the cost of bail bonds for an employee involved in an accident while he was on a trip to Mexico that he won for exceeding sales goals set by the company.

Answer 75

All post-judgment interest in a suit defended by the insurer!!!!

Question 76

Inland marine policies can cover all of the following, EXCEPT:

Property of a moveable nature

Bridges, Piers and Decks

Radio and TV Towers

Aircraft

Answer 76

Aircraft!!!!

Airplanes are covered under an aviation policy and not inland marine insurance contracts

Question 77

Under a farm policy, which of the following would be covered under Coverage A?

A structure attached to the dwelling

A structure detached from the dwelling

Dwelling Contents

Livestock

Answer 77

A structure attached to the dwelling

Question 78

The health insurance policy that should be recommended as part of a buy-sell funding arrangement would be:

A disability buy-out policy.

Disability income insurance.

A residual disability rider.

A major medical policy.

Answer 78

A disability buy out policy!!!

Question 79

What is an insurance producer’s “implied authority?”
Answer Choices: Select the Correct Answer
The authority that the public reasonably believes the producer has.
The authority that the producer believes it has.
Authority given by the principle to the agent that is not formally expressed or communicated.
Those specified in a contract with the insuer.

Answer 79

Authority given by the principle to the agent that is not formally expressed or communicated.

(Implied authority is an element of the law of agency that is not formally express or communicated. This allows the agent to perform all the usual tasks required to sell and service the insurance policies)

Question 80

Which of the following watercraft would be covered for liability under Section II (liability)of the homeowner policy?

A 28 foot sailboat owned by an insured.

A 100 HP jet ski rented to the insured.

An outboard motor boat with a 50 horsepower motor.

None of the responses listed are correct.

Answer 80

None of the responses are correct!!!

Question 81

All of the following are examples of the types of exclusions found in professional liability insurance policies, EXCEPT:

Compensatory damages.

Uninsurable exposures.

Contractual liability.

Exposures covered under other policies.

Answer 81

Compensatory damages

One of the purposes of this coverage is to provide protection for compensatory damages

Question 82

If one is found guilty of federal insurance fraud, who can permit the guilty individual to return to the insurance business?

Only an insurance regulatory official.

Only a court of law after a proper hearing.

A federal official.

No one since this is a federal offense.

Answer 82

Only an insurance regulatory official!!!!

Question 83

All of the following are excluded under the commercial crime “Inside the Premises - Theft of Money and Securities” insuring agreement, except:

Dishonest acts of customers.

Fire.

Vandalism.

Accounting errors.

Answer 83

Dishonest acts of customers.

Question 84

Which of the following causes more property damage in the United States than any other natural disaster?

Floods

Tornados

Earthquakes

Wildfires

Answer 84

Floods!!!

Question 85

A long term care insurance policy must include a provision that provides for reinstatement of coverage in the event of lapse if the insurer is provided proof of cognitive impairment or the loss of functional capacity. This provision must be available for_______, and must allow for the collection of any past due premiums.

3 months after termination

5 months after termination

6 months after termination

12 months after termination

Answer 85

5 months after termination

Question 86

The head of each state’s insurance department (the Commissioner, Superintendent, or Director) is empowered to:

Enforce state laws relating to insurance.

Write state laws relating to insurance.

Write policy forms for mandatory insurance coverages.

Develop rates for mandatory insurance coverages.

Answer 86

Enforce state laws relating to insurance

Question 87

Dwelling forms provide what amount of coverage for grave markers and mausoleums?

Nothing

$5,000

$1,000

$2,000

Answer 87

NOTHING!!!

Question 88

Which of the following is not an “insured” under business auto liability coverage?

The owner of a trailer borrowed by the named insured.

Employees of the named insured while loading a truck owned by the insured’s business.

A contractor who uses one of the insured’s vehicles to travel to a job site with the insured’s business.

A partner of the named insured (if the insured is a partnership).

Answer 88

The owner of a trailer borrowed by the named insured.

Question 89

Which of the following best describes the purpose of the Automobile Assigned Risk Plan?

To provide auto insurance to people unable to obtain it in the voluntary market.

To obtain automobile accident and claim statistics.

To distribute to the public comparisons of auto insurance rates.

To assist insurance companies in processing claims.

Answer 89

To provide auto insurance to people unable to obtain it in the voluntary market!!!

(The plan is designed to assist those that have had driving problems such as too many accidents or violations and are unable to obtain coverage in the standard market and must go into the Assigned Risk Plan. Sometimes an underage driver with no driving violations or accidents will be unable to obtain coverage in the standard)

Question 90

All of the following are true of the change of occupation provision, EXCEPT:

Permits the insurer to adjust premiums upward if the insured changes to a more hazardous occupation.

Permits the insurer to reduce the premium if the insured changes to a less hazardous occupation.

Permits the insurer to cancel the insurance if the insured changes occupations.

Provides for a prorated refund from the date of change.

Answer 90

Permits the insurer to cancel the insurance if the insured changes occupations!!!

Question 91

Which of the following vehicles is considered a temporary substitute auto under a Personal Auto Policy?

An auto loaned by the garage while the vehicle of the insured is being repaired.

A pickup truck owned by a neighbor and borrowed by an insured to run an errand.

An auto purchased by an insured to replace a previously owned vehicle.

An auto rented by an insured when the insured is on vacation.

Answer 91

An auto loaned by the garage while the vehicle of the insured is being repaired!!!

Question 92

The standard deductible on Section I of the homeowner forms is:

$500

$250

$100

$1000

Answer 92

$500!!!!

Question 93

In claims adjusting, the discovery doctrine provides that the statute does not begin until:

The accident occurs.

Anytime.

The injury is discovered.

After a full claim investigation has concluded.

Answer 93

The Injury is Discovered!!!

Question 94

Under the Commercial Property Liberalization Clause, if the insurer makes any coverage revision which broadens the coverage without an additional premium charge, it will automatically apply to existing policies if the revision is adopted during the policy term or within:

45 days prior to the effective date.

30 days prior to the effective date.

60 days prior to the effective date.

75 days prior to the effective date.

Answer 94

45 days prior to the effective date!!!

Question 95

All of the following are included in an insurance property estimate of damages, EXCEPT:

Cost of materials

Overhead and profit

Cost of labor

Depreciation

Answer 95

DEPRECIATION!!!!

Question 96

Which of the following best describes “covered property” under the Equipment Breakdown coverage form?

Any property that the insured owns or is in the insured’s care

Buildings and personal property owned by the insured

Boilers and machinery owned or operated by the insured

Electronic data processing equipment

Answer 96

Any property that the insured owns or is in the insured’s care!!!

Question 97

Dwelling forms include a liberalization clause. It says that any revision of coverage which broadens the insurance without an additional premium charge will be automatically applied to existing policies, if the revision is adopted during the policy period or within:

60 days prior to the effective date.

30 prior to the effective date.

45 prior to the effective date.

90 days prior to the effective date.

Answer 97

60 days prior to the effective date!!!

Question 98

In ocean marine insurance, what is the purpose of the IVEL clause?

To provide excess hull and collision liability coverage.

To cover bulk shipments.

To require the insured to take all reasonable steps to protect the property from further loss.
To pay for the loss of shipper’s fees.

Answer 98

To provide excess hull and collision liability coverage!!!

Question 99

If the insured has failed to pay the premium for a worker compensation policy issued in New York, how many days notice of cancellation must be sent to the insured?

A 15 day notice.

A 30 day notice.

A 20 day notice.

A 10 day notice.

Answer 99

A 10 day notice.

Question 100

The most comprehensive coverage provided by the Dwelling Property program is found in the:

DP-3.

DP-1.

DP-2.

DP-4.

Answer 100

DP-3!!!

Question 101

In New York, property damage to a rental car is paid under which of the following automobile coverage?

The insured’s property damage coverage.

The insured’s physical damage coverage.

By the attachment of a special endorsement.

Coverage can only be purchased and provided by the rental car company.

Answer 101

The insured’s property damage coverage

Question 102

Employer group dental expense plans:

Seldom contain a conversion privilege.

Always contain a conversion privilege.

Are exempt from COBRA.

Are only marketed in stand-alone plans.

Answer 102

Seldom contain a conversion privilege!!!