2 - Practice Test Ques Flashcards
Which of the following is NOT a type of “fiduciary” bond?
Administrator bond
Executor bond
Guardian bond
Appeal bond
APPEAL BOND
The treatment of the surrounding and supporting tissue of the teeth for gum disease is considered what type of service?
Endodontics
Oral surgery
Restorative care
Periodontics
Periodontics!!!
What is a Reporting Form policy?
The form that must be filled out to report a loss of personal property to the insurer
A policy that requires the insured to report the value of the property insured at certain time intervals
The same as a personal articles floater in that it specifically lists each jewelry item
None of the responses are correct
A policy that requires the insured to report the value of the property insured at certain time intervals!!!
An insurance policy is issued as a policy having two unequal parts, the liability assumed by the insurer and the premium paid by the insured. Therefore, an insurance policy is referred to as:
An aleatory contract.
A conditional contract.
A contract of adhesion.
A contract of estoppel.
An aleatory contract!!!
(A contract of insurance is known as an “aleatory contract” because the amount at risk between the parties is unequal. The insured pays a small premium compared to the insurance company’s promise of something of greater value in the future in case of a loss)
In aviation insurance, which of the following would cover crew members?
Medical Payments (by endorsement)
Bodily Injury
Extended Liability
Passenger Liability
Medical Payments (by endorsement).
There is a provision under medical payments coverage that adds coverage for crew members for an extra charge
The retroactive date which can be used in the claims-made version of the CGL policy is:
The earliest date an injury can occur for coverage to apply.
The latest date a claim can be made for coverage to apply.
The earliest date a claim can be excluded.
The latest date an injury can occur for coverage to apply.
The earliest date an injury can occur for coverage to apply.
Who are the three parties to the “appraisal clause”?
The insured, the insurer, and the appraiser
The two appraisers and the Insurer
The two appraisers and the umpire
The two appraisers and the insured
The two appraisers and the umpire!!!
The first effort to provide insurance for land transportation risks involved an extension of ocean marine coverage known as the:
“Inland waters” condition.
“Warehouse to warehouse” clause.
“Overland rail” extension.
“Overland transit” clause.
“Warehouse to warehouse” clause
The minimum limits of auto coverage required in New York are:
$25/50/10 with a wrongful death limit of $50/100.
$50/100/25.
$20/40/10.
$50/100/25 with a wrongful death limit of $100/300.
$25/50/10 with a wrongful death limit of $50/100.
What does the Leasehold Interest Endorsement provide?
Covers a building tenant, when a favorable lease is cancelled because of loss or damage.
Covers the landlord for their loss of rents under a lease when the structure is destroyed by an insured peril.
Guarantees the continuation of a favorable lease to the tenant when premises are damaged by an insured peril.
Provides moving and relocation expenses of a tenant when the lease is cancelled because of damage to the building caused by an insured peril.
Covers a building tenant, when a favorable lease is cancelled because of loss or damage.
What is “break-bulk” cargo as respects ocean marine cargo coverage?
Loose cargo, such as cartons.
Containerized cargo.
Bulk shipments.
Tanker cargo.
Loose cargo, such as cartons.
Which of the following is the type of report indicating the initial results of the investigation of a claim?
Field Report
Interim Report
Full Report
Claims Report
FIELD REPORT
Each of the following would qualify as a “trucker” under the trucker’s policy, except:
Black’s, Inc., a department store using its own trucks to deliver merchandise.
Litton Transport, a company operating in States A and B over a set route for set fees and hauling goods for the public at large.
Jordon Trucking, a firm operating only in State B. It hauls goods for the public over set routes at set fees.
Miller Freight, a firm under contract with a quarry to haul gravel.
Black’s, Inc., a department store using its own trucks to deliver merchandise!!!
Which of the following statements is NOT correct regarding proof of loss?
It is the insureds option to complete.
The insurance company requests it.
It confirms the insureds opinion of the loss.
It is often a sworn statement.
It is the insureds option to complete.
A threat of violence or injury in the act of stealing is called:
Robbery.
Burglary.
Theft.
Violent theft.
Robbery!!!
Which of the following coverages are available in the ISO Equipment Breakdown protection coverage form?
Expediting Expenses
Business Income and Extra Expense or Extra Expense Only
Spoilage Damage
All of the responses are correct
All of the responses are correct
Pro-rata cancellation occurs when:
An insurance company cancels a policy mid-term.
A policy is nonrenewed.
A mortgage has been satisfied.
An insured cancels a policy after inception.
An insurance company cancels a policy mid-term.
In regards to workers compensation, what is a monopolistic state?
One in which coverage can be purchased from the state fund or a private insurer
One in which coverage can only be purchased through the state’s fund
One in which only employers with no in-state competition can self-insure
One in which private carriers are allowed to operate a monopoly
One in which coverage can only be purchased through the state’s fund!!!
Employee dishonesty coverage does not include:
Money stolen by the employee on the way to the bank
Inventory shortage caused by the employee
Embezzlement of money by an employee
Robbery of an employee
Robbery of an employee!!!
______ is a progressive narrowing and hardening of the arteries over time.
Osteoarthritis
Tachycardia
Atherosclerosis
Thrombosis
Atherosclerosis
In New York, insurers must maintain records pertaining to claims, rating, underwriting, marketing and other pertinent information for a period of:
6 years.
10 years.
5 years.
15 years.
6 years
Coverage C of the homeowner’s policy covers ______ on watercraft, including their trailers, furnishings, equipment and outboard motors.
$1,500
$1,000
$2,500
$500
$1500
Which of the following results in immediate payment when the claimant signs a release relinquishing his or her right to sue?
Scheduled Payment Release
Full Release Settlement
Advanced Payment
Structured Settlement
Full Release Settlement!!!
The limit of liability for business auto coverage may be paid:
For each separate accident.
Only once during the policy term.
Until the aggregate limit is exhausted.
Only once for each involved automobile.
For each separate accident!!!
(The entire liability limit applies per accident. The commercial auto policy does not have an aggregate limit so no matter how many claims occur during the policy period the entire per accident)
Duplicate recovery under New York No-Fault coverage is not permitted. If the employee is covered under the employer’s auto policy what might be done to the employee’s personal auto insurance coverage:
Nothing. The policies will pay the claims under basic economic loss on a non contributory basis.
Endorsement PP 05 92 can be added to the employees personal auto policy.
The employer’s policy will be primary, and the employee’s policy is excess for the no-fault benefits.
The employee’s policy is primary, and the employer’s policy is excess for the no-fault benefits.
Endorsement PP 05 92 can be added to the employees personal auto policy.
Which of the following circumstances would most likely not be covered under most states’ workers compensation law?
An employee was injured during a lunch break in the factory parking lot
A work-related accident occurred when the risk of injury was well known to the employee
An injury to an employee was caused by the carelessness of another worker
A workplace injury was caused by an employee’s own negligence
An employee was injured during a lunch break in the factory parking lot
The BOP is designed to cover all of the following, EXCEPT:
An office complex with 7,500 square feet in total floor area.
Small apartment houses.
Medium size clothing stores.
Gas stations.
Gas stations
Which of the following protects against legal liability for loss or damage to baggage?
Hangarkeeper’s Liability Coverage
Cargo Liability
Aircraft Liability Coverage
Aircraft Hull Coverage
Cargo Liability!!!
How long will the Businessowners Policy pay for “extra expense coverage” used to reduce the loss of income when the insured has suffered a loss from a covered peril?
Six consecutive months
Twelve consecutive months
Until the repairs are complete and the business re-opens, Until the repairs are complete and the business re-opens, subject to a 12 consecutive month limitation
Only until the policy expiration date
Until the repairs are complete and the business re-opens, Until the repairs are complete and the business re-opens, subject to a 12 consecutive month limitation!!!
Virtually all inland marine named perils forms include coverage for:
Theft.
Gradual deterioration.
Fire and lightening.
Dampness and extremes of temperature.
Fire and lightening.
Which of the following would be considered a deceptive act on the part of an adjuster?
Refusing to complete a claim until the insured has paid his or her renewal premium
Paying a claim based on a properly completed proof of loss
Paying a claim in a timely manner
Denying an uncovered claim
Refusing to complete a claim until the insured has paid his or her renewal premium!!!
The owner of a medical expense policy has all of the following rights, EXCEPT:
To add coverage for a spouse without providing proof of insurability.
To assign the benefits to the provider of the medical services.
To sue the insurance company if there is a disagreement over a claim.
To return the policy to the insurance company within the free look period.
To add coverage for a spouse without providing proof of insurability.
Which of the following causes a dislocation of cells in the membrane, usually in the skin?
Glaucoma
Burns
Stroke
Dislocation
Dislocation!!!
A dislocation of a joint or muscle will cause cells to dislocate in the membranes usually apparent in the skin
What is the difference between replacement cost and actual cash value?
Replacement cost does not make a deduction for depreciation, while actual cash value does.
Actual cash value is the amount one is willing to pay in cash for an item of property while replacement value equals market value.
They are substantially similar in the context of insurance policies.
Replacement cost takes market appreciation into account, while actual cash value does not.
Replacement cost does not make a deduction for depreciation, while actual cash value does.
(Actual cash value is defined as replacement cost less depreciation)
Any insurance adjuster whose license has been revoked for cause will not be entitled to apply for any other insurance license in New York until at least:
One year after the revocation.
Two years after the revocation.
Three years after the revocation.
Four years after the revocation.
One year after the revocation.
Under which policy provision will an insurer pay for damage to a neighbor’s window caused by an insured under a homeowner policy?
Loss Assessment
Property damage
Claim Expenses
Reasonable Repairs
Property damage
What is the main difference between a DP-1 and a DP-2?
The property covered
The perils insured against
The coverage territory
The eligibility requirements
The perils insured against!!!
Accounts receivable insurance will not pay:
Customer’s unpaid balances made uncollectible by the insured’s loss of account records.
The cost of reconstructing the insured’s lost or damaged account records.
Amounts owned to the insured but left uncollected because of billing errors.
Excess collection costs due to the destruction of account records.
Amounts owned to the insured but left uncollected because of billing errors..
(Billing errors are not covered under this form)
An applicant for an adjuster’s license must be approved by five reputable citizens of the community where the adjuster resides. This documentation must be:
Notarized
Included with the application for license
Witnessed
Provided in duplicate
Included with the application for license!!!
In the property insurance field, a “friendly fire” is one which:
Is intentionally set and remains within its intended limits.
Has an accidental origin but causes no damage.
Has an unknown origin and only causes minor damages.
Is the type of fire covered by fire insurance.
Is intentionally set and remains within its intended limits!!!
Under a surety bond, the owner of the project is called the:
Obligee.
Surety.
Principal.
Administrator.
Obligee!!!!
Sam’s home located in a rural area is insured under a DP-2 dwelling form with a $500 deductible. He experiences a fire at his home and has to call the local volunteer fire department to put out the fire. He receives a bill from the fire department in the amount of $800. How much of the bill from the fire department will his policy pay?
Nothing
$300
$500
$800
$500!!!
(The policy will provide $500 to pay for fire department charges incurred when the fire department is called to save or protect covered property from a peril insured against. This coverage is additional insurance and no deductible applies)
Which of the following is not considered a “breakdown” under Equipment Breakdown coverage?
Mechanical failure
Rupture or bursting caused by centrifugal force
Electrical failure
Lack of power, light, heat, steam or refrigeration
Lack of power, light, heat, steam or refrigeration!!!
The insured has a primary liability policy with a limit of $300,000 per occurrence and a $1 million umbrella liability policy with a $10,000 self-insured retention limit.
The insured became liable for $800,000 in damages that are excluded by the underlying policy, but not by the umbrella policy.
How would this case likely be settled?
The primary policy would pay nothing, the insured would pay $10,000, and the umbrella policy would pay $200,000.
The insured would pay $10,000, and the umbrella policy would pay $790,000.
The primary policy would pay $300,000, and the insured would pay $500,000.
The primary policy would pay $300,000, and the umbrella policy would pay $500,000.
The insured would pay $10,000, and the umbrella policy would pay $790,000!!!
(Since the underlying policy excludes coverage and assuming the umbrella provides the coverage, the umbrella policy would pay the claim less the $10,000 self insured retention limit)
The basic limit for medical payments under coverage F of the HO forms is normally:
$1,000 per person.
$500 per person.
$2,500 per person.
$5,000 per person.
$1,000 per person!!!
A claims-made CGL policy is written without a retroactive date. The policy:
Is void
Will not cover loss from any occurrence before the beginning of the policy period
Must also contain an exclusion of specific accidents, product, work, or locations
Will cover claims made during the policy period regardless of when the occurrence took place
Will cover claims made during the policy period regardless of when the occurrence took place!!!
A person who makes maliciously critical or derogatory statements about another person with the intent of causing injury is guilty of:
Defamation.
Discrimination.
Coercion.
Illegal inducement.
Defamation
Ms. Hoover sells her only car to her son, Tom. Tom does not live in the household. Ms. Hoover’s Personal Auto Policy:
Is automatically assigned to Tom
Cannot be assigned to Tom unless the insurance company consents in writing
Will automatically extend coverage to Tom while continuing to insure Ms. Hoover
Will be extended to include Tom upon notification of the insurance company
Cannot be assigned to Tom unless the insurance company consents in writing!!!
The deductible under the “regular” flood insurance program for each coverage (building and contents) is:
$1,000
$5,000.
$2,000.
$750.
$1000
Which of the following is considered an uninsured motorist:
I. A hit and run in which the driver cannot be identified.
II. The insured’s neighbor who backs out of his driveway into the fender of the insured’s car.
I Only
II Only
Neither I nor II
Both I and II
I Only!!!
What is the purpose of an adjuster’s initial report?
Provides interim claim status
Gives the results of the initial investigation of the claim.
EXPLANATION:
This report merely details the result of the initial investigation and not the anticipated end result or even if coverage is applicable.
Gives the results of the initial investigation of the claim.
(This report merely details the result of the initial investigation and not the anticipated end result or even if coverage is applicable)
The HO-3 provides _____ coverage on the dwelling and ____ coverage on personal property.
open peril / broad peril
broad peril / open peril
basic peril / basic peril
named peril / open peril
open peril / broad peril
(The HO-3 (special form) provides open peril coverage for loss to the dwelling and other structures. It provides broad peril coverage for personal property)
Under Section II of a homeowners policy which of the following would be covered under medical payments coverage?
A neighbor helping the insured to lay carpet
A roomer or tenant
The insured’s five year old son who falls down the steps of the insured dwelling
The insured is bitten while playing with the family dog
A neighbor helping the insured to lay carpet!!!
The retroactive date indicated on the declarations of a claims made commercial umbrella liability policy provides that coverage for injury or damage will be:
Excluded after that date.
Included before that date under every circumstance.
Excluded before that date.
Included before that date if a supplemental extended reporting period has been purchased.
Excluded before that date!!!
Medical payments coverage under a BOP applies to expenses incurred by non-insureds for bodily injury and reported to the insurer within:
Four years after the accident date.
Three years after the accident date.
One year after the accident date.
Two years after the accident date.
One year after the accident date!!!
An insured who is covered under a PAP has severely damaged his vehicle. The insured rents a car for 11 days. What would be the reimbursement to the insured provided Physical Damage coverage is carried?
$220
$200
$165
$250
$200!!
(The policy provides $20 per day for transportation expenses. However there is a 24 hour waiting period for other than theft. Therefore the coverage would pay for 10 days of transportation costs or $200.00)
Which of the following is correct in order for the additional coverage of “collapse” to be available under special BOP?
The collapse must be such that the building can not be used as intended
The remaining part of the structure standing must be demolished
The remaining part of the structure must be judged unsound to rebuild on
The building must be leaning, settling or in danger of collapsing
The collapse must be such that the building can not be used as intended
Which of the following is NOT true regarding the legal effect of a mistake in an insurance contract?
Coverage can be voided by the insurer under any circumstance involving a mistake
Coverage is not necessarily voided by a mistake
A mistake does not constitute a defense for the insurance company
The insurer can void coverage if the mistake was due to misrepresentation or concealment
Coverage can be voided by the insurer under any circumstance involving a mistake!!!
In order for a contract to be binding in a court of law, it must be designed for:
Two parties.
Legal purposes.
Res ipsa loquitor.
Easy interpretation.
Legal purposes.
What is the difference between being “self insured” versus private insurance with respects to workers compensation coverage?
The employer pays the claims under private insurance
Claims under a private insurance risk are paid by the insurance company whereas claims under a self-insured risk are paid by the employer.
The self insured risk provides less coverage
The self insured risk always pays lower premiums
Claims under a private insurance risk are paid by the insurance company whereas claims under a self-insured risk are paid by the employer. .
Which procedure allows one to view the inside of a joint?
CAT Scan
MRI.
X-Ray
MRI
(An MRI is used to look inside a joint and other structures inside the body by using a magnetic field and pulses of radio wave energy)
an employee accidentally turns off the restaurant’s freezer and the entire inventory of ice cream is ruined, does the Businessowners Coverage Form cover the loss?
The loss is covered
The loss is not covered
The coverage is limited to $500.00 as an extension of coverage
The loss is covered for ACV value
The Loss is NOT covered!!!
The clause in an ocean marine policy that refers to “particular average” means:
Only one party shares in the loss.
Damage to cargo losses will be shared by all parties.
Payment must be made under the freight insurance coverage.
Payment must be made under the ‘running down clause’.
Only one party shares in the loss!!
Hired car liability under the business auto policy will cover all of the following for liability, except:
A new SUV owned by an employee, that he is using until the insured company can make a purchase of an SUV to be used in the department of the employee.
A pick-up truck leased to the Service Department for use in making service calls.
A rental car that the named insured rents at the airport when he arrives in Any City for a sales seminar.
A service van that the named insured rents for two months while waiting for delivery of a new van, which is on backorder from the manufacturer.
A new SUV owned by an employee, that he is using until the insured company can make a purchase of an SUV to be used in the department of the employee.
The insured is insured under a DP-3 dwelling form and is remodeling the dwelling. He does not have a place to store the materials. His next door neighbor permits the insured to store the materials in his garage. The garage is destroyed by fire and the materials are also destroyed. Which of the following applies?
The policy has a special limit under an extension of coverage that applies.
Coverage is included under the building coverage and would apply since the materials are next to the insured’s premises.
The policy would not pay the claim since the materials were off the insured’s residence premises.
The materials must be in an enclosed structure for coverage to apply.
Coverage is included under the building coverage and would apply since the materials are next to the insured’s premises.
Which statement best describes defense coverage in the liability section (Section II) of the BOP?
Not subject to a limit
Included in the aggregate limit of insurance
Limited to claims made during the policy period
Twice the limit of insurance
Not subject to a limit!!!!
Defense coverage is not subject to a policy limit. The insurer can spend whatever it desires in the defense of a claim
In which part of an insurance contract would you expect to find a description of the duties and obligations of the insured?
Conditions
Insuring Agreement
Exclusions
Definitions
Conditions!!!
(The conditions clause spells out the duties and obligations of the parties to the contract. For example, in case of a property loss the insured is obligated to protect and save the property from further loss)
n adjuster has a relationship with the legal profession. What can the adjuster NOT do with respects to this relationship in the adjusting of a claim?
Negotiate with the attorney
Write the draft for payment of the claim directly to the claimant
Contact the claimant without the consent of the attorney
Have an attorney prepare releases
Contact the claimant without the consent of the attorney
(Once the claimant has hired an attorney to represent the claimant in a claim, the adjuster may not contact the claimant directly without the consent of the attorney)
A bailment is:
A transfer of title from one person to another.
A conditional sale of the property from one to another for their use.
A temporary entrustment of the property to another.
A pending sale of personal property to another.
A temporary entrustment of the property to another!!!
Under homeowner policies personal property used for business purposes:
Is covered up to $2,500 on the premises and up to $1,500 off premises.
Is covered up to $3,000 on the premises and $600 off premises on the.
Is covered only if an additional premium is paid.
May be covered only while on the resident’s premises.
Is covered up to $2,500 on the premises and up to $1,500 off premises.
Which of the following is not an optional property coverage under homeowner policies?
Coverage for loss of use of the premises
Inflation Guard Coverage
Personal Property Replacement Cost
Increased limits for jewelry, watches, and furs
Coverage for loss of use of the premises
hich of the following losses would be covered under a crime policy’s “Inside the Premises - Robbery or Safe Burglary of Other Property?”
Broken windows and damage to a door
Theft of money and securities
Fire damage to the insured building caused by a burglar
Vandalism to a trailer on the insured premises caused by a burglar
Broken windows and damage to a door!!!
(The insuring agreement covers damage to the insured premises or its exterior, resulting directly from an actual or attempted robbery or safe burglary of property OTHER than money and securities)
The insurance company does not pay for certain damaged property under an Equipment Breakdown policy. Identify the property.
Property of others
Property of the insured
Obsolete property
Building damage caused by a steam boiler explosion
Obsolete property!!!
The insurance company does not pay for damaged property that is obsolete and useless to the named insured
Which of the following best describes the term “disappearance” under the definitions of an aircraft policy?
Disappears from a known location
There is the presumption of a crash or a theft after no contact for 24 hours
Missing and not reported for sixty days after a flight begins
No contact within the last 72 hours
Missing and not reported for sixty days after a flight begins
No insurer may issue checks or drafts or partial settlement of a loss or claim that is still being negotiated that:
Releases the insurer from additional liability.
Releases the insurer unless the policy or bond limit has been paid.
Releases the insurer unless a compromise has been made.
Releases the insurer from liability in one instance but leaves open future demands for payment in an agreement agreed to by all interested parties.
Releases the insurer from additional liability..
(An insurer cannot issue a check for partial payment of a claim that contains language that releases the insurer from total liability unless)
Loss of wages as a result of an auto accident, are paid under the New York no fault law on the basis of ___ of the wages.
80%
50%
100%
20%
80%
(The loss of wage benefit is based on 80% of the lost wages subject to a maximum of $2,000 per month for up to three years)
An Optional Commercial Property Coverage which automatically increases the limit of insurance by an annual percentage shown in the form is called:
Inflation guard coverage.
An extension of coverage.
Agreed value coverage.
Coinsurance coverage.
Inflation guard coverage.
All of the following are uniform optional provisions, EXCEPT:
Grace Period
Illegal Occupation
Intoxicants and Narcotics
Relation of Earnings to Insurance
Grace Period!!!
(The grace period is a uniform mandatory provision. Keep in mind, a provision that favors the insured is a mandatory provision. Optional provisions favor the insurer)
What term describes the concept that the insurer and the insured share in the cost of a covered claim with the insurer bearing the greater share?
Stop-loss limit.
Benefit restoration.
Deductible.
Coinsurance.
Coinsurance!!!
(The coinsurance provision is found in all major medical policies, and it’s purpose is to create a sharing of expenses by the insured and insurer to reduce unnecessary medical expenses)
Personal Excess Liability coverage provides which of the following?
Identical limits to the underlying policies.
The same limits as under primary policies for covered losses.
Higher limits.
Coordinates limits with other policies.
Higher limits.
Which one of the following example is a civil violation?
Irene was fined for being a jaywalker.
Action was taken against a construction company for faulty materials in a flood wall that collapsed and resulted in the destruction of five homes.
Dave must appear in court to answer charges that he is running a gambling casino in a residential area.
A judge sentenced Mike to six years in jail for robbery.
Action was taken against a construction company for faulty materials in a flood wall that collapsed and resulted in the destruction of five homes.
Under the basic dwelling form DP-1, which of the following water damages would be covered?
Sewer backup
Flood
Water used to put out a fire.
Leak
Water used to put out a fire.
The only water damage covered under the basic dwelling form would be damage caused by water used to extinguish a fire
The Federal Terrorism Act covers property and casualty losses that exceed ______in the aggregate.
$100,000,000
$1,000,000
$3,000,000
$10,000,000
$100,000,000
Long term care premums take into consideration:
I. Benefit period, elimination period and age of applicant
II. Type of renewal provision and coinsurance level
III. Health of applicant, deductible and selection of inflation protection option.
I, II and III
III only
I and III only
I and II only
I and III only
Under farmowners liability coverage, which of the following is covered under advertising injury coverage?
An insured farmer who unknowingly disparaged the crops grown by another farm.
Advertising the wrong price of the goods
Advertising the wrong description of the goods
Intentionally making disparaging remarks about another’s farm products.
An insured farmer who unknowingly disparaged the crops grown by another farm.
(The coverage would cover a farmer who unknowingly disparages the crops grown by another farm. Intentional acts, advertising incorrect prices or descriptions are not covered)
commercial umbrella liability policy would usually cover which of the following situations?
The insured hired Max to drive a truck the insured’s company leases from a trucking company.
Max took the company truck to a garage for repairs. A mechanic was moving the truck to park it outside and misjudged the distance between two other customers’ cars. The truck damaged both cars.
The owner of the hired vehicle is also an insured.
None of the responses are covered.
The insured hired Max to drive a truck the insured’s company leases from a trucking company.
The insured carries an unendorsed DP-3 dwelling policy on his home and personal contents. While traveling abroad someone broke into the home and stole $200 in cash, a shotgun valued at $1,000. and other household items valued at $2,000. Damage caused by the burglars is $1,500. Assuming no deductible applies to their coverage how much would be paid?
$3,200
$4,500
$1,500
$2,000
$1,500
(The DP-3 only provides damage to covered property caused by the burglars. Theft is excluded under the DP-3 unless endorsed with the theft endorsement)
What coverage is used to cover damage to a customer’s vehicle in the care and custody of a repair garage?
Garagekeeper’s legal liability.
Garage liability.
Drive other car coverage.
General liability.
Garagekeeper’s legal liability
Aircraft hull coverage covers which of the following losses?
Mechanical breakdown
War
Temporary travel out of the covered territory and involved in a crash
Vandalism, while “not in- motion”
Vandalism, while “not in- motion”
The DP-2 broadens which of the following extended coverage (EC) perils?
Explosion, Smoke and Vehicles
Explosion and Smoke Only
Smoke and Vehicles Only
Vehicles Only
Explosion, Smoke and Vehicles
It is essential that operations at some businesses be continued regardless of circumstances. In the event of property damage to the main facilities, arrangements could be made for use of other facilities. What type of coverage would be most appropriate to protect this business against consequential losses?
Extra Expense Coverage
Contingent Business Interruption Coverage
Leasehold Interest Coverage
Extended Business Income Coverage
Extra Expense Coverage
Stephen has a Personal Auto Policy with Liability limits of 25/50/25.
He strikes a car with four (4) occupants from Ohio, all of whom are injured. The first sues for $20,000, the second sues for $35,000, the third sues for $22,000, and the fourth sues for $18,000.
The car Stephen hit has $8,000 in damage.
The company spends $20,000 on a law firm for defense.
Ignoring any PIP or Med Pay coverage, what is the total cost to the company for the claim?
$50,000
$70,000
$78,000
$90,000
$78,000
(First, the most that can be paid for any one injury is $25,000. Secondly, the most that can be paid for all of the multiple injuries is the limit of $50,000. The policy will pay the $50,000 plus the $8,000 for the property damage and the defense costs of $20,000 for a total of $78,000)
An insurance professional that is accused of dishonesty or breach of trust involving interstate commerce under the Federal Fraud and False Statement Regulation of the United States Code (USC 1033) will be prosecuted by:
The New York State Attorney General
The Attorney General in the presiding location of residence of the accused
The U.S. Attorney general
The New York State appellate court.
The U.S. Attorney general
(This breach of trust or dishonesty involving interstate commerce is a violation of USC 1033 and therefore prosecuted by the United States Attorney General’s office)
Mr. Owens owns 50% of a building that is worth $600,000 and is insured for $500,000. What is the maximum that Mr. Ownes can collect in case of a total loss to the building?
$300,000
$500,000
$250,000
$240,000
$250,000
Mr. Owens has an insurable interest of 50% and can only collect up to $250,000
Which of the following expenses would be covered, in full or in part, by the Supplementary Payments section of the personal automobile policy?
I. Bail bonds.
II. Loss of earnings for attendance at trials or hearings.
III. Post judgment interest.
IV. Arbitrator’s fees.
I, II, and III only
I and II only
I and III only
I, II, III, and IV
I, II, and III only
The general property flood coverage form for commercial property will settle claims on the basis of:
replacement cost.
replacement cost if the building is insured for at least 80% of the cost to rebuild.
actual cash value.
functional replacement cost.
actual cash value.
