2 - Practice Test Ques

Question 0

Which of the following is NOT a type of “fiduciary” bond?

Administrator bond

Executor bond

Guardian bond

Appeal bond

Answer 0

APPEAL BOND

Question 1

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

Answer 1

Periodontics!!!

Question 2

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

Answer 2

A policy that requires the insured to report the value of the property insured at certain time intervals!!!

Question 3

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.

Answer 3

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)

Question 4

In aviation insurance, which of the following would cover crew members?

Medical Payments (by endorsement)

Bodily Injury

Extended Liability

Passenger Liability

Answer 4

Medical Payments (by endorsement).

There is a provision under medical payments coverage that adds coverage for crew members for an extra charge

Question 5

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.

Answer 5

The earliest date an injury can occur for coverage to apply.

Question 6

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

Answer 6

The two appraisers and the umpire!!!

Question 7

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.

Answer 7

“Warehouse to warehouse” clause

Question 8

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.

Answer 8

$25/50/10 with a wrongful death limit of $50/100.

Question 9

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.

Answer 9

Covers a building tenant, when a favorable lease is cancelled because of loss or damage.

Question 10

What is “break-bulk” cargo as respects ocean marine cargo coverage?

Loose cargo, such as cartons.

Containerized cargo.

Bulk shipments.

Tanker cargo.

Answer 10

Loose cargo, such as cartons.

Question 11

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

Answer 11

FIELD REPORT

Question 12

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.

Answer 12

Black’s, Inc., a department store using its own trucks to deliver merchandise!!!

Question 13

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.

Answer 13

It is the insureds option to complete.

Question 14

A threat of violence or injury in the act of stealing is called:

Robbery.

Burglary.

Theft.

Violent theft.

Answer 14

Robbery!!!

Question 15

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

Answer 15

All of the responses are correct

Question 16

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.

Answer 16

An insurance company cancels a policy mid-term.

Question 17

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

Answer 17

One in which coverage can only be purchased through the state’s fund!!!

Question 18

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

Answer 18

Robbery of an employee!!!

Question 19

______ is a progressive narrowing and hardening of the arteries over time.

Osteoarthritis

Tachycardia

Atherosclerosis

Thrombosis

Answer 19

Atherosclerosis

Question 20

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.

Answer 20

6 years

Question 21

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

Answer 21

$1500

Question 22

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

Answer 22

Full Release Settlement!!!

Question 23

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.

Answer 23

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)

Question 24

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.

Answer 24

Endorsement PP 05 92 can be added to the employees personal auto policy.

Question 25

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

Answer 25

An employee was injured during a lunch break in the factory parking lot

Question 26

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.

Answer 26

Gas stations

Question 27

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

Answer 27

Cargo Liability!!!

Question 28

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

Answer 28

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!!!

Question 29

Virtually all inland marine named perils forms include coverage for:

Theft.

Gradual deterioration.

Fire and lightening.

Dampness and extremes of temperature.

Answer 29

Fire and lightening.

Question 30

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

Answer 30

Refusing to complete a claim until the insured has paid his or her renewal premium!!!

Question 31

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.

Answer 31

To add coverage for a spouse without providing proof of insurability.

Question 32

Which of the following causes a dislocation of cells in the membrane, usually in the skin?

Glaucoma

Burns

Stroke

Dislocation

Answer 32

Dislocation!!!

A dislocation of a joint or muscle will cause cells to dislocate in the membranes usually apparent in the skin

Question 33

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.

Answer 33

Replacement cost does not make a deduction for depreciation, while actual cash value does.

(Actual cash value is defined as replacement cost less depreciation)

Question 34

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.

Answer 34

One year after the revocation.

Question 35

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

Answer 35

Property damage

Question 36

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

Answer 36

The perils insured against!!!

Question 37

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.

Answer 37

Amounts owned to the insured but left uncollected because of billing errors..

(Billing errors are not covered under this form)

Question 38

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

Answer 38

Included with the application for license!!!

Question 39

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.

Answer 39

Is intentionally set and remains within its intended limits!!!

Question 40

Under a surety bond, the owner of the project is called the:

Obligee.

Surety.

Principal.

Administrator.

Answer 40

Obligee!!!!

Question 41

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

Answer 41

$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)

Question 42

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

Answer 42

Lack of power, light, heat, steam or refrigeration!!!

Question 43

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.

Answer 43

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)

Question 44

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.

Answer 44

$1,000 per person!!!

Question 45

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

Answer 45

Will cover claims made during the policy period regardless of when the occurrence took place!!!

Question 46

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.

Answer 46

Defamation

Question 47

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

Answer 47

Cannot be assigned to Tom unless the insurance company consents in writing!!!

Question 48

The deductible under the “regular” flood insurance program for each coverage (building and contents) is:

$1,000

$5,000.

$2,000.

$750.

Answer 48

$1000

Question 49

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

Answer 49

I Only!!!

Question 50

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.

Answer 50

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)

Question 51

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

Answer 51

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)

Question 52

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

Answer 52

A neighbor helping the insured to lay carpet!!!

Question 53

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.

Answer 53

Excluded before that date!!!

Question 54

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.

Answer 54

One year after the accident date!!!

Question 55

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

Answer 55

$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)

Question 56

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

Answer 56

The collapse must be such that the building can not be used as intended

Question 57

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

Answer 57

Coverage can be voided by the insurer under any circumstance involving a mistake!!!

Question 58

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.

Answer 58

Legal purposes.

Question 59

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

Answer 59

Claims under a private insurance risk are paid by the insurance company whereas claims under a self-insured risk are paid by the employer. .

Question 60

Which procedure allows one to view the inside of a joint?

CAT Scan

MRI.

X-Ray

Answer 60

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)

Question 61

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

Answer 61

The Loss is NOT covered!!!

Question 62

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’.

Answer 62

Only one party shares in the loss!!

Question 63

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.

Answer 63

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.

Question 64

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.

Answer 64

Coverage is included under the building coverage and would apply since the materials are next to the insured’s premises.

Question 65

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

Answer 65

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

Question 66

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

Answer 66

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)

Question 67

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

Answer 67

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)

Question 68

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.

Answer 68

A temporary entrustment of the property to another!!!

Question 69

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.

Answer 69

Is covered up to $2,500 on the premises and up to $1,500 off premises.

Question 70

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

Answer 70

Coverage for loss of use of the premises

Question 71

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

Answer 71

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)

Question 72

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

Answer 72

Obsolete property!!!

The insurance company does not pay for damaged property that is obsolete and useless to the named insured

Question 73

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

Answer 73

Missing and not reported for sixty days after a flight begins

Question 74

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.

Answer 74

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)

Question 75

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%

Answer 75

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)

Question 76

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.

Answer 76

Inflation guard coverage.

Question 77

All of the following are uniform optional provisions, EXCEPT:

Grace Period

Illegal Occupation

Intoxicants and Narcotics

Relation of Earnings to Insurance

Answer 77

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)

Question 78

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.

Answer 78

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)

Question 79

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.

Answer 79

Higher limits.

Question 80

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.

Answer 80

Action was taken against a construction company for faulty materials in a flood wall that collapsed and resulted in the destruction of five homes.

Question 81

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

Answer 81

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

Question 82

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

Answer 82

$100,000,000

Question 83

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

Answer 83

I and III only

Question 84

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.

Answer 84

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)

Question 85

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.

Answer 85

The insured hired Max to drive a truck the insured’s company leases from a trucking company.

Question 86

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

Answer 86

$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)

Question 87

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.

Answer 87

Garagekeeper’s legal liability

Question 88

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”

Answer 88

Vandalism, while “not in- motion”

Question 89

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

Answer 89

Explosion, Smoke and Vehicles

Question 90

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

Answer 90

Extra Expense Coverage

Question 91

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

Answer 91

$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)

Question 92

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.

Answer 92

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)

Question 93

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

Answer 93

$250,000

Mr. Owens has an insurable interest of 50% and can only collect up to $250,000

Question 94

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

Answer 94

I, II, and III only

Question 95

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.

Answer 95

actual cash value.