All Flashcards
Which would not be covered under section II-Personal Liability in homeowners policy?
Injury cause by an insured to a third party away from the residence premises
Garage Keeper’s liability covers which of the following
Damage to a customer’s car in the care custody and control of the insured
On what basis can a liquor liability policy can be sold
Both occurrence and claims made
Which would not be included in Coverage A-Dwelling in a dwelling policy?
A toolshed on premises the insured uses to keep a lawnmower
If a covered loss occurs, the insured must provide proof of loss, and the insurer must respond within a specified time period following the loss. This is because insurance contracts are which type of contract?
Conditional
Which is not excluded in Section II-Personal Liability in a homeowners policy
Someone injured by a 15 foot motorboat stored in your garage
All of the following are a covered cause of loss under the homeowners HO-2 broad EXCEPT
discharge or overflow of water from a sump
Which is not true regarding the nonrenewable of a homeowners policy
You can non renew if the property has been vacant for 45 days
Which is true regarding building limits in a flood policy
The maximum for residential is $250,000 and commercial is $500,000
Which of the following losses is covered under Coverage A Dwelling
Lightening strike on home’s chimney
Which of the following watercraft would not be eligible for a boat owners policy
28 foot cabin cruiser
Which of the following best describes the policy conditions
The responsibilities and obligations of insured and insurer
Which of the following professionals would purchase directors and officers insurance to manage the liability risk associated with their activities
Chief executive officer
How many days notice does an insurer have to give to the first named insured in a commercial package policy if they are being cancelled for nonpayment of premium?
10 days
Which is covered in the liability section of a Business owners policy
Advertising injury
Which factor would NOT be considered when evaluating a property risk
Fees charged by the owner
Which of the following is eligible for a business owners policy
A convince store with a gasoline pump
Which is not a type of hazard in property insurance
Mental
The Michigan Property and Casualty Guaranty Association would cover all of the following losses except
Homeowners property claim
Which of the following best describes the wage loss benefit provided by Michigan Workers Compensation
It pays 80% of the employees after-tax weekly wage
A house is destroyed by a fire. The insured’s costs for renting another house while repairs are being made is an example of
Indirect loss
Determining adequate indemnification after a loss is a principle duty of the
Insurer
Coverage F-Medical Payments to others in a homeowners policy will not pay for
Pain and suffering
The experience modification factor is determined by which of the following
The insurer’s loss ratio
Which statement concerning supplementary payments is not true?
They are subtracted from the limit of liability
Which definition is not correct
All theft is robbery
Which best describes the exchange of value that takes place during an insurance transaction
Insurer makes a promise and the insured pays money
Which statement is not true regarding the termination of nonrenewable of a home of auto policy?
The notice must be 55 days long
Which would not be covered in a HO-2 policy
Your five year old spray paints the wall
When an insured is driving, their covered automobile causes an accident that results in injury. The automobile medical payments pay medical expenses for all of the following except
Any occupant of the other not at fault vehicle
A building is insured by 2 property policies that are the same type of insurance. Company A has a limit of $50,000 and Company B has a limit of $100,000. The building sustains a covered loss in the amount of $12,000. Which of the following accurately describes how the loss will be paid?
Company A pays $4,000 and Company B pays $8,000
The liability section in a farm policy would not apply to which of the following claim situations
Injury to a farm employee
The business owners policy covers specified medial expenses
Without regard to who is at fault
How is coverage provided in an HO-3 for coverages A,B, and C
Open peril for A and B with named peril for C
Under a commercial general liability policy, the general aggregate limit is the most that will be paid for the sum of which coverage during a policy period
A,B, and C
Which of the following actions can the Director take
Revoke the producer’s license after finding them guilty in a hearing
Purchasing boat owners insurance is an example of which method of handling risk
Transfer
A house has a replacement cost of $150,000. What is the minimum amount of Coverage A-Dwelling that would need to be purchased to have a claim paid on a replacement cost basis
$120,000
Which of the following actions would require notification to the Department of Insurance and Financial Services
Change of name
The co-insurance clause is designed to punish insureds who
Don’t buy adequate limits
The standard fire policy begins at what time
12:01am
The business pursuits endorsement adds what kind of coverage
Liability only
Which is not a coverage in Personal Protection Insurance
Pain and Suffering
Someone is texting while driving and runs into a tree. The collision would be which of the following
Peril
An insured filed a collision claim and does NOT have to pay a deductible, which type of collision coverage did they have
Broad
Which of the following is NOT defined as an auto under commercial auto policy
Mobile equipment
The wage loss benefits provided in Personal Protection Insurance is best described as
85% of your gross monthly wage paid for maximum of three years
The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date
Retroactive date
Which statement regarding surplus lines is NOT true
You can use surplus lines just to get a lower premium
Gunther buys a car and finances it through his bank. Who would nOT have an insurable interest in the car
Driver
All of the following types of personal property are covered under Coverage C EXCEPT
Motor vehicles
Jeffery has underinsured motorist coverage with a limit of $300,000. Susan has a coverage A liability limits of $100,000. Susan injures Jeffery in an auto accident and Jeffery sues Susan for $250,000. How much will Jeffery collect from his Coverage C-underinsured motorist coverage
$150,000
Which business characteristic is not eligible for a Business owners policy
A municipality
According to consumer privacy laws, the producer must disclose all privacy information when
During the initial transaction
Which of the following best defines the law of large numbers
A large group of similar risks
A personal injury endorsement added to a homeowners policy provides for coverage for liability caused by the insured
Intermittently entering his tenant’s apartment to see if the tenant is harboring a cat, which violates the tenant’s lease
Which of the following is attached to and used to modify or change the original policy in some way
Endorsement
A contract has an offer and an acceptance. Which is also required
Consideration
Which would not qualify you as “your covered auto”
A newly acquired vehicle purchased 20 days ago
Which factors can not be used by an insurer to determine whether or not a risk is acceptable for auto insurance
Marital status of the insured
Which scenario would qualify for Personal Protection Insurance Coverage
A person injured while occupying someone else’s uninsured auto
The Michigan Property and Casualty Guarantee Association would NOT deal with which type of insurer
Unauthorized foreign insurer
A customer is injured while using a chainsaw in the power tool aisle of a local hardware store. Considering the hardware stores CGL policy, this would be what kind of exposure
Premises
Which is the amount of rehab benefit provided by a Workers Compensation policy
52 weeks
Coverage B-Other structures would include
A detached garage connected by a fene
How does an unendorsed homeowners policy pay for losses to personal property
Actual cash value
Which of the following is how the transportation expenses coverage on a personal auto policy will respond when an insured rents a car while on vacation and the vehicle is subject to a total theft loss
There is a 48-hour waiting period
Under a commercial package policy, the common ;policy delarations page shows the who, what, when, where, and
How much
Bodily injury is most accurately described as
Physical injury to the body including sickness and death
Which is not in the coverage territory of the commercial building and personal property coverage form
Great Britain
If a producer misrepresents the terms of a policy to convince a prospect to a replace one policy with another the producer has committed
Twisting
A property policy has an other insurance provision that states that the policy will only pay once the primary policy has exhausted its limit. This provision means the policy will be
Excess
Farm policy Coverage E scheduled farm property provides coverage when property is
Class be listed with a general amount for each class
Which of the following automobiles is covered when an insured selects Symbol 7 on the declarations page
Specifically described autos
If a producer knowingly violates the insurance code, the Director can impose a MAXIMUM of how much per violation
$5,500
A homeowner keeps a stack of newspapers next to the fireplace, this is an example of
Hazard
Which endorsement would allow a leasing company to be added as an insured to a business auto policy
Lessor as insured
Which type of insurer is an incorporated group of people agreeing to uninsured each other’s losses under a contract
Reciprocal
A liability policy could pay for all of the following EXCEPT
Punitive damages
Which of the minimum form of dwelling policy necessary to cover the peril of falling objects
DP-2
Which would be found on the Common Declarations page of a Commercial Package Policy
Description of the Business
How many days does a producer have to inform the Director of a change of name
30 days
Which is not true
Work loss has a waiting period of two weeks
Which is true regarding an insured’s duties in the event of a loss
The insurer must be allowed to inspect the damage before the repairs are made
Which is not excluded in Part D-damage to your auto
An at fault accident committed by the insured
If a producer does not turn over money to the insurer in a timely manner, they have breached what duty
Fiduciary
In the protective safeguard endorsement found in a Business owners policy, which is true
The insured warrants that they will maintain the equipment in good working order
What type of insurance do insurers use to transfer risk among themselves
Reinsurance
In the pair and set loss provision, how would a loss be paid
Value of the the set before the loss minus the value after the loss at AVC
Residual Liability in a Personal Auto Policy would Respond to which of the following claims
The injured party’s loss of income
How many days of a producer signing a contract to represent an insurer must an insurer file a notice of appointment
15 days
Which is not an exclusion in the property section of an HO-3 policy
Damage done by a raccoon
Which is a valid reason to deny a Workers Compensation claim
The employee willfully and intentionally injured themselves
The uncertainty of financial loss could be best described as
Risk
When does the coverage begin for a builders risk form
At the time the insured becomes legally responsible for the property if that date occurs after the policy’s effective date
Grandpa Jones moved from his house to a nursing home. He took most of his belongings. His house is now
Unoccupied
Which of the following conditions best describes the type of home the HO-8 modified coverage form was designed
Replacement value far exceeding market value
Which of the following best describes the definition of a “name insured” in a homeowners policy
The person named on the declaration
The concept in contract law where the receiver of a contract must accept or reject the contract in its entirety can be described as
Adhesion
In Insuring Agreement 6- Computer Fraud, which is covered
Hacker breaks in and transfers funds to their own bank account
Why would someone want to purchase Underinsured Motorist Coverage
The other driver doesn’t have enough insurance
Authority that is given to a producer either in writing or verbally is which of the following
Expressed authority
Which one of the following is an example of pure risk
Storing your new motorcycle outside
Which type of crime best describes the unlawful act of taking property from the care and custody of another person while threatening to cause bodily harm
Robbery
In the insurance industry, who is the principal
The insurer
Business owners policy is a combination of what two coverage types
Property and Liability
Under a commercial general liability policy, which language states coverage may be written as primary or as excess
Other insurance
In a DP-2 policy, which of the following water losses would not be covered
Flood
Which of the following policy assignment right occurs when the names insured dies
The insured’s legal representatives take over the policy
In a builder’s risk policy, which of the following is not covered
Theft of the contractors equipment
What is the required limit for hauling hazardous material according to the Motor Carrier Act of 1980
$5 million
Which of the following is correct for amounts paid as supplementary payments covered in the personal auto policy part A- liability
They include defense attorney cost to the insured
Someone who holds a counselors license and no other license. What can they do
Give advice about insurance for a fee
In insuring Agreement 5-Theft outside the premises, which is covered.
Theft from an armored car
Which of the following is covered by a commercial package policy
Loss due to crime
Which factor is used to determine the rate for a Workers Compensation Policy
Occupation
The owners of a condominium would buy which homeowners policy
HO-6
Under a homeowners policy Coverage C is what percent of Coverage A
50%
Which is required for an employee to collect on a Workers Compensation claim
Prove that it was an employment related injury or illness
The condition for examination of books and records states that WHO will be responsible for conducting the examination
The insurer
All of the following would be included in the definition of an insured in a Commercial General Liability policy, Except
Any current business entity not listed on a declarations
What cause of loss form is used in an unendorsed Business owners policy
Special
Which insurer operated within the United States, but outside of the state in which it is incorporated
Foreign
Which of the following is an example of risk avoidance
Not driving a car to prevent getting in an accident
What does an application for insurance contractually represent for the insured
An offer
All of the following are true regarding torts EXCEPT
A tort is always unintentional
When two perils occur at the same time and one of them is excluded, this is referred to as
Concurrent-causation
When one party of a contract has greater power over the other party in drafting the contract, what type of contract is it
Contract of adhesion
Which statement about the limits in a CGL policy is NOT true
The Aggregate limit refreshes itself after each occurrence
Which of the following persons is covered for accidental injury on the insured’s premises under the commercial general liability medial payments
A volunteer worker
Which of the following is NOT covered under Coverage B-Personal Injury and Advertising Injury
Medical Prosecution
In a Commercial Property Policy, which defines the amount of necessary to keep a business operating after suffering a direct loss to their property from a covered cause of loss
Extra Expense
Compensatory damages are awarded
For actual loss suffered
A car stolen and smashed into a tree, which statement is true
This is other than collision only
Which is true regarding the peril of theft in a commercial property policy
Theft is only automatically covered under special
Which best describes perils and hazards
Hazards are inactive, perils are active
Under the National Flood Insurance Program, coverage becomes effective on which calendar day after the application is completed and the premium is paid
30th
If a producer forges someone else’s name on an application, the Director has the power to do all the following, EXCEPT
Make the producer inform all of his other clients
Eric buys a car from Ford and took out a car loan from MSU Federal Credit Union. Eric drives the car to his place of work, the Jumbo Corporation. Who has an insurable interest in the car
Eric and MSU Federal Credit Union
Coverage E-Personal Liability in a homeowners policy would cover all of the following, EXCEPT
Loss of use of the insured’s property
Which is not true regarding the requirement of coverage under Michigan Worker’s Compensation Statues
A private employer must provide coverage if they have at least two part-time employees
If a producer does not pay their fine, the Director could do which of the following
Revoke the producer’s license
A contract in which the insurer must perform certain duties is
Unilateral
Which is not included in the definition of an Uninsured Motorist
A car furnished or available for your regular use
What forms the basis of a loss under an insurance policy
A loss
With regard to property insurance, consideration is the
Payment of premium by the insured in return for the promise to pay covered claims
Who would be covered for a liability in a Personal Auto Policy
A six year old who is not licensed while driving the car around the block
Which is an optional coverage in a Business owners policy
Employee dishonesty
The main purpose of the Michigan Automobile Placement Facility is
To make sure coverage is available
