4 - Practice Test Ques

Question 0

Evergreen Lawn Care has two lawn maintenance crews on separate job sites. Coverage for the lawn maintenance equipment on the way to the site, while at the site and in transit back to the shop can be covered by which of the following forms?

Commercial Articles Coverage Form

Contractors Equipment Floater

Floor Plan Coverage Form

All the Responses are Correct

Answer 0

Contractors Equipment Floater

Question 1

Which of the following is a covered water peril under property insurance policies?

A backup of a sewer

A tidal spray

Breakage of pipes

Flood

Answer 1

Breakage of pipes

Question 2

Under the specified causes of loss coverage in the garagekeeper’s coverage, which of the following losses is excluded as a covered loss?

Several teenagers use baseball bats to break out windshields of covered autos when dared to do so as part of initiation into a club.

A suppliers auto suffers flood damage when torrential rains cause a stream to overflow as he is making a delivery.

Answer 2

A suppliers auto suffers flood damage when torrential rains cause a stream to overflow as he is making a delivery. .

(The supplier would have to carry comprehensive coverage on his owned vehicle)

Question 3

Which of the following losses to perishable stock would be covered by the commercial property Spoilage Endorsement?

Power Outage

Mechanical Breakdown or Contamination

Changes in temperature, humidity, or contamination resulting from a power outage on or off the premises

All of the responses are correct

Answer 3

All of the responses are correct!!!

Question 4

A contractor in need of a bid bond to obtain a contract is an example of a(n):

Principal.

Obligee.

Surety.

Fiduciary.

Answer 4

PRINCIPLE

Question 5

Which of the following would be covered under a multi-peril crop policy?

Crop Revenue Insurance

Group Risk Plan

Low Yields

Revenue Assurance

Answer 5

Low Yields!!!

(The multi-peril crop insurance program provides protection against low yields and poor quality crops as well as prevented planting, late planting and replanting costs for most crops subject to the perils insured against. The coverage applies to income protection. Crop revenue insurance goes a step further than multi-peril crop insurance by guaranteeing farms a certain income, which allows them to manage both yield and price risk)

Question 6

Offering any return of premium, valuable consideration or inducement when purchasing an insurance policy is an example of:

I. Illegal Inducement

II. Rebating

III. False Advertising

I only

I and II only

I and III only

I, II, and III

Answer 6

I and II only

Question 7

A medical expense policy would cover expenses for all of the following, EXCEPT:

Charges covered under workers compensation.
Doctor’s fees for an operation.

Hospital room and board charges.

Charges for cosmetic surgery necessitated by an accident.

Answer 7

Charges covered under workers compensation!!!

Question 8

When an insurance company broadens coverage under a homeowners policy, that change automatically applies to those policies currently in effect under a policy provision called the:

Waiver of Change of Policy Provisions

Liberalization Clause

Severability of Insurance

Insurable Interest and Limit of Liability

Answer 8

Liberalization Clause

This is the Definition!

Question 9

Under the HO-3 form, an “insured location” includes all of following, EXCEPT:

A furnished garage used as a residence

A hotel room where the insured is temporarily residing

Family cemetery plots

Property in an apartment rented to others away from the insured’s residence premises.

Answer 9

Property in an apartment rented to others away from the insured’s residence premises.

Question 10

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 10

Dishonest acts of customers!!!

DUH!!!!!

Question 11

Medical coverage under a Personal Auto policy will cover the insured if he/she is injured while:

Passenger on a streetcar

Passenger on a bus

Passenger on a subway

Passenger on an airplane

Answer 11

Passenger on a bus!!!

Question 12

In a contract of adhesion, how are disputes between the parties generally resolved in court?

Unclear provisions in the contract will be resolved in favor of the non-writing party’s reasonable interpretation of those provisions.
Both parties must adhere strictly to the contract terms for the contract to be valid.

The party which most closely adhered to the contract provisions will win the dispute.

The dispute must be resolved by binding arbitration.

Answer 12

Unclear provisions in the contract will be resolved in favor of the non-writing party’s reasonable interpretation of those provisions.

Question 13

What are the legal implications of the mandatory health provision “physical examination and autopsy?”

This provision is used by the insurer to determine claim malingering or claim denial for injury sustained through intoxication or illegal drug use.

This provision enables the insurer to use a physical examination in the underwriting process and autopsy to determine cause of death.

This provision enables the insurer to accumulate demographic data.

This provision is significant only in reinstatement underwriting.

Answer 13

This provision is used by the insurer to determine claim malingering or claim denial for injury sustained through intoxication or illegal drug use.

Question 14

Which of the following pollution losses would be covered by garage policy liability coverage?

Pollution of a stream caused by gasoline
leaking from the ruptured fuel tank of a covered auto following a collision.

Escape of toxic sludge from a dump site used by the named insured to store waste produced in its garage operations.

The cost of a governmentally ordered clean-up of the pollution from a dump site used by the named insured.

None of the losses described would be covered.

Answer 14

Pollution of a stream caused by gasoline

leaking from the ruptured fuel tank of a covered auto following a collision.

Question 15

Under the farm forms, theft of certain types of property has a theft coverage limitation. The theft limitation on firearms and other related equipment is:

$1,500.

$500.

$3,000.

$5,000.

Answer 15

$3000!!!

Question 16

The claims made form of the CGL is designed to cover losses that are reported during the policy period. In order to limit the insurer’s exposure to events that happened prior to the inception of the current policy, a ________is used to excldue coverage for anything that occurred prior to that point.

Pre-existing condition clause

Retro active date

Prior acts exclusion clause

None of the choices are correct

Answer 16

Retro active date

(retro active date is negotiated at the inception of the policy and would deny coverage for anything that occurred prior to that date even if the incident was reported during the current policy period)

Question 17

hich of the following is correct regarding the Foreign Coverage Endorsement?

Coverage applies to employees that are hired within the limits of the USA while they are traveling or temporarily residing outside the United States, its territories or possessions, or Canada.

All of the answer choices are correct.

Employees hired outside the limits of the United States are not covered.

Employees hired within the United States can be covered abroad for 90 days or less.

Answer 17

All of the answer choices are correct.

Question 18

The root word “pathos” means:

Growth or formation

Abnormal condition

Sickness or disease

Tumor or swelling

Answer 18

Sickness or disease!!!

Question 19

Which one of the following is a key factor in determining workers compensation premium?

Annual sales

Annual payroll

Federal tax liability

Number of employees

Answer 19

Annual payroll!!!

Question 20

Homeowner policies provide additional coverage for loss of trees, shrubs and other plants. However, the coverage is limited to:

$500 for any one tree, shrub, or plant.

$250 for any one tree, shrub, or plant.

$750 for any one tree, shrub, or plant.

$1,000 for any one tree, shrub, or plant.

Answer 20

$500

(Most homeowner policies provide a maximum limit of 5% of coverage A and a maximum of $500 for any one tree, shrub or plant)

Question 21

On an unendorsed special form BOP, how much coverage is there for theft of money & securities?

$5000 on the premises only

$5000 on the premises but only $2500 off

$1000 on and off the premises

Nothing

Answer 21

Nothing!!!

(Even though the special BOP is “open peril” coverage which includes theft, the loss of money and securities are still not a covered form of property. The endorsement for Money & Securities is necessary to cover this exposure)

Question 22

A new home costing $500,000 to build would have to be covered for what minimum limit according to the loss settlement provision of the policy in order for the insured to receive full replacement cost coverage in the event of a $50,000 fire loss?

$400,000

$50,000

$250,000

$500,000

Answer 22

$400,000

(The loss settlement provision requires a home to be covered with a limit of at least 80% of the home’s full replacement value)

Question 23

The ABC Office Supply Co. carries $100,000 insurance on a storage building held under a $50,000 mortgage acknowledged in the policy. ABC stores dynamite in the building without informing the insurance company. An explosion destroys the building. What is the maximum the mortgagee can recover?

$50,000

$0

$25,000

$100,000

Answer 23

$50,000!!!

Question 24

The National Flood Insurance Program provides coverage for losses caused by all of the following occurrences, EXCEPT:

Water-main breakage.

Mudflow.

Runoff from heavy rain.

Overflow of tidal waters.

Answer 24

Waster main Breakage!!!

It is not the intent of flood insurance to cover losses such as water-main breakage

Question 25

You and your son, who lives with you, are crossing the street when both of you are struck by a drunk driver. The Medical Payments coverage under your auto policy will:

Provide coverage for you, but not your son

Provide coverage for both you and your son

Will not apply as you were pedestrians when struck

Will be deferred to the driver of the vehicle that struck you

Answer 25

Provide coverage for both you and your son!!!

Auto medical payments cover the insured and members of the household who are relatives

Question 26

What is the income tax consequence to Marissa if her employer pays for her group disability income coverage?

I. The premium payments are taxable income to her.

II. The premium payments are tax deductible by her.

Neither I nor II

I only

II only

Both I and II

Answer 26

Neither I nor II

(Premium payments, under this arrangement, are neither income nor tax deductible by the employee. However, any claim benefit received is taxed as income to the insured)

Question 27

Employers in New York have _____days from the date of the initial penalty for failing to comply with the compliance provisions of workers compensation coverage for eligible employees to appeal the penalty.

10

30

15

20

The employer has 30 days to appeal the penalty for non-compliance in the providing of workers compensation coverage.

Answer 27

30

The employer has 30 days to appeal the penalty for non-compliance in the providing of workers compensation coverage

Question 28

An insurance company may change the wording of a Uniform Policy Provision in its health insurance policies only if:

The modified provision is not less favorable to the insured.

The company’s board of directors approves the change.

The modified provision is not less favorable to the insurer.

The applicant directs that it be changed.

Answer 28

The modified provision is not less favorable to the insured!!!

Question 29

What is the difference between a witness and an expert witness?

An expert witness can draw conclusions from observations.

A witness can testify as to his or her observations.

In the eyes of the court there is no difference.
An expert witness can deviate from his or her field of expertise.

Answer 29

An expert witness can draw conclusions from observations.

Question 30

The doctrine of reasonable expectations is based primarily on:

Canon Law

Contract Law

Negligence Law

Criminal Law

Answer 30

Contract Law!!!

(The doctrine of reasonable expectations is a part of contract law where the insured can reasonably expect coverage to apply without having to read the contract)

Question 31

All of the following statements regarding the Commercial Package Policy are correct, EXCEPT:

It can include Ocean Marine and Aviation Insurance.

Almost all commercial risks are eligible for coverage under the Commercial Package Policy.

The insured can choose a variety of eligible commercial coverages to tailor the package to specific business insurance needs.

A complete Commercial Package Policy includes Common Policy Declarations, Common Policy Conditions and two or more coverage parts.

Answer 31

It can include Ocean Marine and Aviation Insurance.

Question 32

The payment of a claim in exchange for a release indicating that the claim was paid as a result of a settlement agreed to by all parties is called a:

Payment and Discharge.

Full Settlement.

Full Release.

Full Payment.

Answer 32

Payment and Discharge!

(When all parties agree, the insurer pays the claim and the insured signs the release. It is referred to as “payment and discharge.”)

Question 33

A deductible that is commonly used in aircraft physical damage insurance is usually:

A percentage of the value

A flat deductible

A disappearing deductible

A franchise deductible

Answer 33

A percentage of the value!!!

Question 34

Which of the following is correct regarding the discovery clause in a commercial crime policy?

I. Losses that occur during the policy period but that are not discovered for up to one year after expiration are covered under the loss sustained form.

II. Losses that occur during the policy period or within 60 days of expiration are covered under the discovery form.

Both I and II

I only

II only

Neither I nor II

Answer 34

Both I and II

(Both provisions protect the insured if losses are not immediately discovered. Neither extends coverage for losses that occur beyond the policy period. These forms both cover losses only for discovery purposes. The actual loss must occur during the policy period and maybe not discovered until after the policy expiration)

Question 35

Which of the following types of carriers must assume the broadest liability under common law?

Contract carriers

Common carriers

Private carriers

Owner-operator carriers

Answer 35

Common Carriers!!!

(Common carriers must assume the broadest liability under common law. They are not responsible for acts of God such as floods, hurricanes or for the negligence of the shipper (poor packing)

Question 36

The minimum liability amount per occurrence for bodily injury and property damage claims available under the BOP is:

$500,000

$1,000,000

$100,000

$300,000

Answer 36

$300,000!!!

Question 37

The type of long term care rider that will refund all or some of the premium paid if the policy is not used is:

Waiver of premium rider

Guaranteed insurability rider

Return of premium rider

Guaranteed renewability rider

Answer 37

Return of premium rider

(Under the return of premium rider, the insured’s estate or a designated beneficiary will be entitled to the return of some or all of the premium if the policy is not used during the insured’s lifetime)

Question 38

Which of the following is covered property under the HO-3 form?

I. Belongings of the insured’s daughter while she is away at college.

II. The insured’s garage.

III. The insured’s dog.

IV. Personal property of a tenant.

I and II only

I, II, and III only

II and III only

I, II, III, and IV

Answer 38

I and II only!!!

Pets, no matter how valuable, are excluded under Coverage C, as is the property of boarders or renters

Question 39

An insurance company notifies an insured that his $100,000 homeowner policy is being cancelled. The insurer fails to notify the mortgagee of the cancellation. The mortgagee has a $40,000 interest in the property. In case of a total loss to the property, what could the mortgagee collect?

$100,000

Nothing

affect the mortgagee’s coverage. In case of a covered loss the insurer is still liable.

Answer 39

$40,000!!!

(Failure to notify the mortgagee of a non-renewal or cancellation of the policy does not affect the mortgagee’s coverage. In case of a covered loss the insurer is still liable)

Question 40

When can two insurance companies arbitrate a subrogation question?

When approved by the court

With the consent of both companies

Only with the insured’s consent

Only with the third party claimant’s consent

Answer 40

With the consent of both companies!!!

Question 41

Which of the following losses would be covered under garagekeeper’s legal liability coverage?

Theft of a customer’s AM/FM stereo radio permanently installed.

Theft of equipment from a covered auto. The theft was committed by a garage employee.

Faulty work performed by the named insured.
Loss to CD’s from a covered auto.

Answer 41

Theft of a customer’s AM/FM stereo radio permanently installed.

(Losses caused by the dishonest acts of employees are excluded under this coverage. Losses caused by faulty work are covered under garage liability coverage. CD’s are excluded under garage keeper’s legal liability coverage)

Question 42

An inland marine coverage which covers the insured’s merchandise held for sale, such property that is sold but not delivered, customers property in the care and custody of the insured, and property being transported to or from the insured, is a:

Dealers form

Commercial articles floater.

Floor plan merchandise coverage form.

Bailee’s customers policy.

Answer 42

Dealers form

Question 43

Which of the following vehicles qualifies for towing coverage under the trucker’s policy?

A sedan

A trailer

A truck-trailer

A van used for business purposes

Answer 43

A sedan!!!

Only private passenger type vehicles qualify for the towing coverage under the trucker’s policy

Question 44

Employee dishonesty protection would be provided under which of the following?

A Fidelity Bond

The Theft, Disappearance and Destruction
Coverage Part

A Surety Bond

The malicious mischief peril in a property insurance policy

Answer 44

A Fidelity Bond

The fidelity bond covers the dishonest acts of employees

Question 45

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 45

Is called demurrage!!!

Question 46

Under the farm forms, theft of certain types of property has a theft coverage limitation. The theft limitation on firearms and other related equipment is:

$1,500.

$500.

$3,000.

$5,000.

Answer 46

$3000

Question 47

While traveling in a rented car in Spain, Mr. Brown has his personal property stolen. What kind of coverage should he have to cover this loss?

Homeowner Personal Property

Excess Coverage

Trip Transit Insurance

Auto Theft Coverage

Answer 47

Homeowner Personal Property

Question 48

dwelling insured under an HO-3 is destroyed by fire, what amount should the insured expect to be paid for the loss?

Up to the policy limits.

A depreciated value of the dwelling.

The market value of the dwelling.

The assessed value of the dwelling.

Answer 48

Up to the policy limits.

Question 49

Under the Uniform Policy Provisions applicable to individual health insurance policies, if misstatement of an insured’s age causes an insurer to accept premiums and continue coverage beyond a stated age limit and a claim is then made:

The liability of the insurer is limited to a refund of premium.

The insurer may pay the claim and then seek recovery from the insured.

The insurer may pay the claim and then cancel the policy.

The insurer must pay the claim.

Answer 49

The liability of the insurer is limited to a refund of premium!!!

(Health contracts provide that coverage expires at a given age. Therefore, a misstatement of age causing acceptance of premium beyond the limiting age requires a refund of that premium because the policy does not extend coverage beyond the limiting age)

Question 50

Mr. Jones has a contracting business in his state. He has been the successful bidder on a construction job in another state. What should he do to properly provide worker compensation benefits for his employees while working outside his state?

Maintain general liability coverage

Nothing

Add the other states to his workers
compensation policy

Purchase an umbrella policy

Answer 50

Add the other states to his workers

compensation policy

Question 51

For successful negotiation, the adjuster must develop strong technical expertise in all of the following areas, EXCEPT:

Appraising property at a lower rate than fair market value.

Knowledge of the contracts of the insurer.

The typical types of losses.

The legal system and basic concepts of contract law.

Answer 51

Appraising property at a lower rate than fair market value!!!

(The adjuster needs expertise in all of the areas listed except appraising property at a lower rate than fair market value)

Question 52

Workers compensation for an independent contractor is the responsibility of:

The entity for whom the work is being
performed.

Guaranty Association.

The state of New York.

Independent contractor.

Answer 52

Independent contractor!!!

Question 53

An insured purchased a 10-year-old building for $50,000 that would cost $100,000 to rebuild today. If the physical value of the building has depreciated $2,000 each year, the building’s present actual cash value is:

$100,000

$50,000

$80,000

$70,000

Answer 53

$80,000!!!

Question 54

The building limit of insurance is $100,000 and the deductible is $1,000. The building loss amount is $110,000. The insured is covered under a BOP. Which of the following is the correct loss payment?

$89,000

$110,000

$99,000

$100,000

Answer 54

$100,000

(The deductible is subtracted from the loss and not the limit of coverage. The loss exceeded the limit of coverage. Had the loss been less than the limit of the policy the deductible would still be deducted from the loss amount)

Question 55

All of the following would be excluded under Coverage D - Physical Damage of a Personal Automobile Policy, EXCEPT:

Permanently-installed telephones.

Radar or laser detection equipment.

Camper bodies or trailers owned by the named insured but not listed on the declarations page.
Custom furnishings or equipment in a van.

Answer 55

Permanently-installed telephones.

(Permanently installed electronic equipment (except radar detectors) is covered, but no custom equipment is covered in a van)

Question 56

An applicant’s statement that property to be insured has an operable sprinkler system is considered to be:

A warranty.

An agreement.

A representation.

An affidavit.

Answer 56

A warranty

Question 57

Livestock, under a livestock floater, is covered while the property is in the custody of a common carrier for a limit of:

$1,000.

$500.

$1,500.

$2,000.

Answer 57

$1,000.

Question 58

The requirements of the Employment Retirement Income Security Act compel employers to cover their professional liability exposure for honest errors and omissions regarding employee benefit plans by purchasing:

Environmental Liability

Employment Practices Liability

Fiduciary Liability

Directors and Officers Liability

Answer 58

Fiduciary Liability!!!

(The ERISA laws would compel an employer to purchase Fiduciary Liability coverage for honest errors and omissions when administering employee benefit plans)

Question 59

Which of the following is/are covered under the Commercial Building and Property Policy?

Fire extinguishing equipment

Outdoor furniture

Permanently installed equipment

All are covered

Answer 59

All are covered

Question 60

The insured is operating his boat on a fresh water lake and runs over a water skier. What coverage would apply to this claim under the boatowners policy?

The claim is not covered

The hull insurance

Liability coverage

Medical payments

Answer 60

Liability coverage

Question 61

Which of the following dwelling forms provides “open peril” coverage for dwellings and other detached structures?

The Special Form only

The Basic, Broad and Special Forms

The Basic and Broad Forms only

The Broad and Special Forms only

Answer 61

The Special Form only!!!

The special form provides “open peril” coverage. All the other forms are “named peril” forms

Question 62

Which of the following is NOT covered under most commercial crime policies?

Legal expenses

Employee theft

Computer fraud

Forgery and alteration

Answer 62

Legal Expenses!

(The commercial crime policy does not provide legal defense coverage with one exception. Under the forgery or alteration coverage, legal expense coverage is provided)

Question 63

Which of the following is considered a “garage operation”?

I. Ownership, maintenance or use of garage premises.

II. Sale of products or services in connection with garage operations.

III. Ownership or maintenance of covered autos.

IV. Production or support of racing or competitive operations.

I, II, and III only.

I and II only.

I and III only.

I, II, III and IV.

Answer 63

I, II, and III only!!!

(Garage operations includes auto and business liability for covered autos, the premises and its associated operations, but specifically excludes all forms of racing)

Question 64

Anne has been diagnosed with a disease characterized by degenerative and sometimes hypertrophic changes in the bone and cartilage of the joints and a progressive wearing down of apposing joint surfaces. Anne has been diagnosed with:

Tachycardia

Atherosclerosis

Osteoarthritis

Diabetes

Answer 64

Osteoarthritis

Question 65

If the insured carries a DP-2 dwelling form and insures the dwelling for 80% of its replacement cost value, what will he be paid if his 30 year old roof sustains $10,000 in damages (disregarding any deductible)?

$333

$5,000

$10,000

$8,000

Answer 65

$10,000!!!

If the insured carries 80% to value he would be entitled to full replacement cost coverage for his damaged roof

Question 66

Pre-existing conditions are referred to in which of the following required accident and health policy provisions?

Time Limit on Certain Defenses

Claims Forms

Payment of Claims

Legal Actions

Answer 66

Time Limit on Certain Defenses!!!

(The “time limit on certain defenses” provision reads: The insurer can not deny a claim on the basis of pre-existing conditions after expiration of a two year time limit unless the condition(s) were excluded by name or specific condition.”)

Question 67

Suspecting a customer is shoplifting collectible sports cards, a security guard at the Too-High Toy Store takes the customer and his child to the office to await police.

The toy store is sued for wrongful detention and the court awards damages to the customer.

The CGL coverage for the damages:

Are covered under personal injury liability.

Are covered under bodily injury liability.

Are covered under supplementary liability.

Are not covered by the CGL.

Answer 67

Are covered under personal injury liability.

(The wrongful detaining of a customer is a covered personal injury claim. False arrest, as well as malicious prosecution is also covered under personal injury)

Question 68

Under the terms of a homeowner policy, a dwelling in which people are not currently living and which contains no furniture or contents is considered:

Abandoned

Unoccupied

Deserted

Vacant

Answer 68

Vacant!!!

Question 69

The FAIR Plan is designed to serve those entitled to insurance coverage, but unable to secure it in the voluntary market. Both commercial and personal risks may be placed through the FAIR Plan. Farm risks and automobiles are not eligible. All of the perils can be purchased, EXCEPT:

Earthquake

Fire and lightning

Riot and civil commotion

Windstorm

Answer 69

Earthquake

Question 70

After an insured’s out-of-pocket payments for eligible medical expenses reach a specified total, a stop loss provision in a major medical policy provides for payment by the insurer of what percentage of covered expenses?

75%.

100%.

80%.

50%.

Answer 70

100%.

(The term “stop-loss” provides for a stopping of continued participation by an insured in a claim, and the excess amount above the stop-loss limit is generally paid at 100% by the insurer, considering the internal limits for that claim stated in the policy)

Question 71

Under the conditions section of the BOP, which of the following would not be considered vacant?

A 100 unit apartment building of which 70 units are not rented

An office building containing two empty units and these two empty suites represent 25% of the total floor space.

A mercantile building with a print shop on the ground floor but the second and third floors are not being utilized

A new building which has not been rented out at all

Answer 71

An office building containing two empty units and these two empty suites represent 25% of the total floor space.

Question 72

An insurance company that generally fails to affirm or deny coverage of claims within a reasonable period of time after receiving proof of loss may be found guilty of:

An unfair claims settlement practices.

A breach of fiduciary responsibility.

Defamation.

Misrepresentation.

Answer 72

An unfair claims settlement practices!!!

(Most states have passed laws outlining time restrictions regarding claim payment. A violation can cause an insurer to be guilty of unfair claims settlement practices)

Question 73

All of the following can be gathered from an air sampling test, EXCEPT:

Comparison between a factory reading and OSHO requirements.

Amount of toxic chemicals in the air.

General health and safety of the plant.

Skin exposure to toxic chemicals.

Answer 73

Skin exposure to toxic chemicals!!!

Question 74

An adjuster has just completed taking the statement of a witness. Which of the following must be done?

The witness must sign each page and have his or her signature witnessed.

Initial each page and have the adjuster witness each page.

Sign the last page and have the attorney witness the signature.

Have the adjuster and the attorney attest to the statement.

Answer 74

The witness must sign each page and have his or her signature witnessed.

Question 75

While in England an insured has her purse stolen and files a claim for $500 of cash, $1,000 in airline tickets, $250 for miscellaneous items and $50 for the value of the purse.

How much of this loss would be covered under a DP-1 dwelling form?

Nothing

$1,050

$1,800

$1,750

Answer 75

Nothing

(None of the dwelling forms provide theft coverage of personal property unless the theft coverage endorsement is purchased)

Question 76

What is the purpose of the various classifications used in the rating of workers compensation coverage?

Assigning rate classifications reflecting work exposures to the employee.

Providing methods of separating payroll for various employers

Establishing rating systems for the various states.

Separating rating systems for the various states.

Answer 76

Assigning rate classifications reflecting work exposures to the employee.

(Rates differ based on the job description of the work performed by the employee. Some types of work are obviously more hazardous than others and rates vary by type of work)

Question 77

In crime insurance terminology, a salesperson having possession of the insured’s property on-premises is known as a:

Insurer

Watchperson

Custodian

Answer 77

Custodian.

(A custodian means the named insured, any of the insured’s partners, or any employee, while having care and custody of the property inside the premises. It does not mean a watchman or a janitor)

Question 78

What are the unique features of the Businessowners policy form?

It provides owned auto and ocean marine coverage

The premium is adjustable and is based on number of employees

The property coverage is open peril with no coinsurance requirement

It has fewer exclusions

Answer 78

The property coverage is open peril with no coinsurance requirement

Question 79

coverage for towing and labor costs is included in a Personal Auto Policy, labor costs will be covered only if the labor is performed:

At the place of disablement.

Within 24 hours of the disablement.

Within 48 hours of the disablement.

At a garage by an experienced mechanic.

Answer 79

At the place of disablement.

Payment under this optional coverage only applies at the place of disablement

Question 80

What commercial auto form is used to cover taxis and bus companies?

Business auto form

Garage liability form

Trucker’s auto form

Motor carrier form

Answer 80

Motor carrier form

(The Motor Carrier form would be used to cover these types of vehicles. This form is used for a risk carrying persons or property)

Question 81

Flood insurance can be purchased from:

Any licensed property agent.

Any insurance agent.

The federal authorities only.

Your local community.

Answer 81

Any licensed property agent!!!

In order to sell flood insurance, an agent must hold a property insurance license

Question 82

Which section of the spine is comprised of five fused vertebra?

Lumbar vertebrae

Cervical vertebrae

Thoracic

Sacral

Answer 82

SACRAL

Below the lumbar area are five sacral vertebrae. These comprise the sacrum. These five vertebrae fuse into one bone.

Question 83

Disregarding defense and settlement costs (supplementary payments), a general aggregate limit:

Applies separately to commercial auto coverage, but is the most that will be paid for the sum of Bodily Injury and property Damage liability coverage.

Applies separately to Bodily Injury Liability coverage and Property Damage Liability coverage.

Is the most that will be paid for the sum of Bodily Injury and Property Damage Liability coverage and Personal and Advertising Injury Liability coverage under the products-completed operations exposure.

Is the most that will be paid for the sum of Bodily Injury and property Damage Liability coverage and Personal and Advertising Injury Liability coverage.

Answer 83

Is the most that will be paid for the sum of Bodily Injury and property Damage Liability coverage and Personal and Advertising Injury Liability coverage. .

Question 84

a health insurance policy is issued in violation of the Uniform Policy Provisions law and a claim for benefits is filed:

The policy must respond as if it conformed to the law.

The insurer must issue a corrected policy.

The insurer must pay the benefits claimed plus a penalty.

There is no insurance and the premium shall be returned.

Answer 84

The policy must respond as if it conformed to the law.

Question 85

What is the automobile property damage limit that is required in New York to satisfy the financial responsibility law?

$25,000

$15,000

$10,000

$7,500

Answer 85

$10,000

Question 86

Under the Equipment Breakdown policy loss settlement provisions, what date is used to determine value?

The date of the loss

The inception date of the policy

The original date of the equipment purchase

The market value of the equipment

Answer 86

The date of the loss

Question 87

A new definition of collapse has been included in the commercial property forms that provide this coverage. The main change is:

The collapse must involve an abrupt falling down or caving in of the structure, rather than a gradual sequence of damage.

The entire building must fall down or cave in.

Coverage is provided if caused by hidden insect or vermin damage even if the insured was aware of a problem.

The collapse can be a gradual falling down or caving in of the structure.

Answer 87

The collapse must involve an abrupt falling down or caving in of the structure, rather than a gradual sequence of damage.

Question 88

The prefix “neo” refers to:

Old.

New.

Flat.

After.

Answer 88

New.

Question 89

Under the special dwelling policy (DP-3), which of the following would be covered?

Earthquake

Theft of outside lighting attached to the building

Vandalism in a building vacant for 89 days

Frozen plumbing in a dwelling with a disconnected furnace.

Answer 89

Theft of outside lighting attached to the building

Question 90

A homeowner desires to have his personal property covered for losses not subject to depreciation. The insured would need:

Replacement cost endorsement.

Actual cash value coverage.

Market value coverage.

Functional replacement cost coverage.

Answer 90

Replacement cost endorsement!!!

Question 91

What does the Small Business Administration (SBA) surety bond program provide?

SBA reimburses the sureties that provide the bonds a percentage of the losses sustained if the contractor defaults.

Bonding for Small Contractors

Guarantees A Bond Will be Issued

Pays Premiums for Surety Bonds

Answer 91

SBA reimburses the sureties that provide the bonds a percentage of the losses sustained if the contractor defaults.

Question 92

If an insurer requires an application for reinstatement and it takes no action on that application for ____, the policy is:

30 days / reinstated

45 days / declined

60 days / reinstated

45 days / reinstated

Answer 92

45 days / reinstated

(Reinstatement is automatic if an application is not required and the delinquent premium is accepted. When an application is required, if not action is taken by the insurer in 45 days, the policy is reinstated)

Question 93

Ocean marine protection and indemnity (P&I) coverage usually insures the ship owner against liability for all of the following EXCEPT:

Damage to or loss of another ship caused by a negligent collision.

Injuries to seamen

Cargo lost or damaged through negligence.

Damage to piers.

Answer 93

Damage to or loss of another ship caused by a negligent collision.

Question 94

A commercial general liability form provides automatic coverage for newly acquired organizations for up to:

Thirty days.

Ninety days.

One year.

The policy expiration date

Answer 94

Ninety days.

Question 95

Under workers compensation coverage Part II, the employer is covered for:

Court decisions.

Income benefits.

Rehabilitation.

Death benefits.

Answer 95

Court decisions.

Question 96

A business auto policy has a $100,000 limit of insurance for liability coverage. As a result of an automobile accident involving a covered auto, two people are injured. The first injured party sues the named insured and wins a $150,000 judgment. The insurer pays its limit of insurance. If the other injured party later sues the insured, the insurer will:

Either defend or settle the suit.

Pay up to $100,000 of the damages the injured party is awarded.

Pay a negotiated amount.

Deny further obligations to the insured as a result of the other injured party.

Answer 96

Deny further obligations to the insured as a result of the other injured party..

(The duty of the insurer ends when it has exhausted its limits by the payment of claims as a result of a single covered claim)

Question 97

Which of the following are additional coverages under a Businessowners policy with the named peril form attached?

I. Debris removal.

II. Pollutant cleanup and removal.

III. Exterior glass.

IV. Collapse.

I, II, and III only

I and II only

III and IV only

I, II, III and IV

Answer 97

I, II, and III only

Question 98

Workers compensation insurance is a contract between:

Employer and employee.

State and employer.

Insurance company and the employee.

Insurance company and the employer.

Answer 98

Your answer: State and employer. is incorrect. The correct answer is: Insurance company and the employer..

(Workers compensation coverage is a contract between the insurance company and the employer. It is the employer that contracts with the insurance company to provide the statutorily required workers compensation benefits for the injured employee.)