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P&C final exam > All > Flashcards

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1
Q

Which would not be covered under section II-Personal Liability in homeowners policy?

A

Injury cause by an insured to a third party away from the residence premises

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2
Q

Garage Keeper’s liability covers which of the following

A

Damage to a customer’s car in the care custody and control of the insured

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3
Q

On what basis can a liquor liability policy can be sold

A

Both occurrence and claims made

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4
Q

Which would not be included in Coverage A-Dwelling in a dwelling policy?

A

A toolshed on premises the insured uses to keep a lawnmower

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5
Q

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?

A

Conditional

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6
Q

Which is not excluded in Section II-Personal Liability in a homeowners policy

A

Someone injured by a 15 foot motorboat stored in your garage

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7
Q

All of the following are a covered cause of loss under the homeowners HO-2 broad EXCEPT

A

discharge or overflow of water from a sump

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8
Q

Which is not true regarding the nonrenewable of a homeowners policy

A

You can non renew if the property has been vacant for 45 days

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9
Q

Which is true regarding building limits in a flood policy

A

The maximum for residential is $250,000 and commercial is $500,000

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10
Q

Which of the following losses is covered under Coverage A Dwelling

A

Lightening strike on home’s chimney

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11
Q

Which of the following watercraft would not be eligible for a boat owners policy

A

28 foot cabin cruiser

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12
Q

Which of the following best describes the policy conditions

A

The responsibilities and obligations of insured and insurer

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13
Q

Which of the following professionals would purchase directors and officers insurance to manage the liability risk associated with their activities

A

Chief executive officer

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14
Q

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?

A

10 days

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15
Q

Which is covered in the liability section of a Business owners policy

A

Advertising injury

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16
Q

Which factor would NOT be considered when evaluating a property risk

A

Fees charged by the owner

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17
Q

Which of the following is eligible for a business owners policy

A

A convince store with a gasoline pump

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18
Q

Which is not a type of hazard in property insurance

A

Mental

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19
Q

The Michigan Property and Casualty Guaranty Association would cover all of the following losses except

A

Homeowners property claim

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20
Q

Which of the following best describes the wage loss benefit provided by Michigan Workers Compensation

A

It pays 80% of the employees after-tax weekly wage

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21
Q

A house is destroyed by a fire. The insured’s costs for renting another house while repairs are being made is an example of

A

Indirect loss

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22
Q

Determining adequate indemnification after a loss is a principle duty of the

A

Insurer

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23
Q

Coverage F-Medical Payments to others in a homeowners policy will not pay for

A

Pain and suffering

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24
Q

The experience modification factor is determined by which of the following

A

The insurer’s loss ratio

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25
Q

Which statement concerning supplementary payments is not true?

A

They are subtracted from the limit of liability

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26
Q

Which definition is not correct

A

All theft is robbery

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27
Q

Which best describes the exchange of value that takes place during an insurance transaction

A

Insurer makes a promise and the insured pays money

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28
Q

Which statement is not true regarding the termination of nonrenewable of a home of auto policy?

A

The notice must be 55 days long

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29
Q

Which would not be covered in a HO-2 policy

A

Your five year old spray paints the wall

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30
Q

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

A

Any occupant of the other not at fault vehicle

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31
Q

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?

A

Company A pays $4,000 and Company B pays $8,000

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32
Q

The liability section in a farm policy would not apply to which of the following claim situations

A

Injury to a farm employee

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33
Q

The business owners policy covers specified medial expenses

A

Without regard to who is at fault

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34
Q

How is coverage provided in an HO-3 for coverages A,B, and C

A

Open peril for A and B with named peril for C

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35
Q

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

A,B, and C

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36
Q

Which of the following actions can the Director take

A

Revoke the producer’s license after finding them guilty in a hearing

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37
Q

Purchasing boat owners insurance is an example of which method of handling risk

A

Transfer

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38
Q

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

A

$120,000

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39
Q

Which of the following actions would require notification to the Department of Insurance and Financial Services

A

Change of name

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40
Q

The co-insurance clause is designed to punish insureds who

A

Don’t buy adequate limits

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41
Q

The standard fire policy begins at what time

A

12:01am

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42
Q

The business pursuits endorsement adds what kind of coverage

A

Liability only

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43
Q

Which is not a coverage in Personal Protection Insurance

A

Pain and Suffering

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44
Q

Someone is texting while driving and runs into a tree. The collision would be which of the following

A

Peril

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45
Q

An insured filed a collision claim and does NOT have to pay a deductible, which type of collision coverage did they have

A

Broad

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46
Q

Which of the following is NOT defined as an auto under commercial auto policy

A

Mobile equipment

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47
Q

The wage loss benefits provided in Personal Protection Insurance is best described as

A

85% of your gross monthly wage paid for maximum of three years

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48
Q

The claims-made liability form provides coverage from a date that precedes the policy effective date. Which of the following defines that date

A

Retroactive date

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49
Q

Which statement regarding surplus lines is NOT true

A

You can use surplus lines just to get a lower premium

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50
Q

Gunther buys a car and finances it through his bank. Who would nOT have an insurable interest in the car

A

Driver

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51
Q

All of the following types of personal property are covered under Coverage C EXCEPT

A

Motor vehicles

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52
Q

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

A

$150,000

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53
Q

Which business characteristic is not eligible for a Business owners policy

A

A municipality

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54
Q

According to consumer privacy laws, the producer must disclose all privacy information when

A

During the initial transaction

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55
Q

Which of the following best defines the law of large numbers

A

A large group of similar risks

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56
Q

A personal injury endorsement added to a homeowners policy provides for coverage for liability caused by the insured

A

Intermittently entering his tenant’s apartment to see if the tenant is harboring a cat, which violates the tenant’s lease

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57
Q

Which of the following is attached to and used to modify or change the original policy in some way

A

Endorsement

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58
Q

A contract has an offer and an acceptance. Which is also required

A

Consideration

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59
Q

Which would not qualify you as “your covered auto”

A

A newly acquired vehicle purchased 20 days ago

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60
Q

Which factors can not be used by an insurer to determine whether or not a risk is acceptable for auto insurance

A

Marital status of the insured

61
Q

Which scenario would qualify for Personal Protection Insurance Coverage

A

A person injured while occupying someone else’s uninsured auto

62
Q

The Michigan Property and Casualty Guarantee Association would NOT deal with which type of insurer

A

Unauthorized foreign insurer

63
Q

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

A

Premises

64
Q

Which is the amount of rehab benefit provided by a Workers Compensation policy

A

52 weeks

65
Q

Coverage B-Other structures would include

A

A detached garage connected by a fene

66
Q

How does an unendorsed homeowners policy pay for losses to personal property

A

Actual cash value

67
Q

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

A

There is a 48-hour waiting period

68
Q

Under a commercial package policy, the common ;policy delarations page shows the who, what, when, where, and

A

How much

69
Q

Bodily injury is most accurately described as

A

Physical injury to the body including sickness and death

70
Q

Which is not in the coverage territory of the commercial building and personal property coverage form

A

Great Britain

71
Q

If a producer misrepresents the terms of a policy to convince a prospect to a replace one policy with another the producer has committed

A

Twisting

72
Q

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

A

Excess

73
Q

Farm policy Coverage E scheduled farm property provides coverage when property is

A

Class be listed with a general amount for each class

74
Q

Which of the following automobiles is covered when an insured selects Symbol 7 on the declarations page

A

Specifically described autos

75
Q

If a producer knowingly violates the insurance code, the Director can impose a MAXIMUM of how much per violation

A

$5,500

76
Q

A homeowner keeps a stack of newspapers next to the fireplace, this is an example of

A

Hazard

77
Q

Which endorsement would allow a leasing company to be added as an insured to a business auto policy

A

Lessor as insured

78
Q

Which type of insurer is an incorporated group of people agreeing to uninsured each other’s losses under a contract

A

Reciprocal

79
Q

A liability policy could pay for all of the following EXCEPT

A

Punitive damages

80
Q

Which of the minimum form of dwelling policy necessary to cover the peril of falling objects

A

DP-2

81
Q

Which would be found on the Common Declarations page of a Commercial Package Policy

A

Description of the Business

82
Q

How many days does a producer have to inform the Director of a change of name

A

30 days

83
Q

Which is not true

A

Work loss has a waiting period of two weeks

84
Q

Which is true regarding an insured’s duties in the event of a loss

A

The insurer must be allowed to inspect the damage before the repairs are made

85
Q

Which is not excluded in Part D-damage to your auto

A

An at fault accident committed by the insured

86
Q

If a producer does not turn over money to the insurer in a timely manner, they have breached what duty

A

Fiduciary

87
Q

In the protective safeguard endorsement found in a Business owners policy, which is true

A

The insured warrants that they will maintain the equipment in good working order

88
Q

What type of insurance do insurers use to transfer risk among themselves

A

Reinsurance

89
Q

In the pair and set loss provision, how would a loss be paid

A

Value of the the set before the loss minus the value after the loss at AVC

90
Q

Residual Liability in a Personal Auto Policy would Respond to which of the following claims

A

The injured party’s loss of income

91
Q

How many days of a producer signing a contract to represent an insurer must an insurer file a notice of appointment

A

15 days

92
Q

Which is not an exclusion in the property section of an HO-3 policy

A

Damage done by a raccoon

93
Q

Which is a valid reason to deny a Workers Compensation claim

A

The employee willfully and intentionally injured themselves

94
Q

The uncertainty of financial loss could be best described as

A

Risk

95
Q

When does the coverage begin for a builders risk form

A

At the time the insured becomes legally responsible for the property if that date occurs after the policy’s effective date

96
Q

Grandpa Jones moved from his house to a nursing home. He took most of his belongings. His house is now

A

Unoccupied

97
Q

Which of the following conditions best describes the type of home the HO-8 modified coverage form was designed

A

Replacement value far exceeding market value

98
Q

Which of the following best describes the definition of a “name insured” in a homeowners policy

A

The person named on the declaration

99
Q

The concept in contract law where the receiver of a contract must accept or reject the contract in its entirety can be described as

A

Adhesion

100
Q

In Insuring Agreement 6- Computer Fraud, which is covered

A

Hacker breaks in and transfers funds to their own bank account

101
Q

Why would someone want to purchase Underinsured Motorist Coverage

A

The other driver doesn’t have enough insurance

102
Q

Authority that is given to a producer either in writing or verbally is which of the following

A

Expressed authority

103
Q

Which one of the following is an example of pure risk

A

Storing your new motorcycle outside

104
Q

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

A

Robbery

105
Q

In the insurance industry, who is the principal

A

The insurer

106
Q

Business owners policy is a combination of what two coverage types

A

Property and Liability

107
Q

Under a commercial general liability policy, which language states coverage may be written as primary or as excess

A

Other insurance

108
Q

In a DP-2 policy, which of the following water losses would not be covered

A

Flood

109
Q

Which of the following policy assignment right occurs when the names insured dies

A

The insured’s legal representatives take over the policy

110
Q

In a builder’s risk policy, which of the following is not covered

A

Theft of the contractors equipment

111
Q

What is the required limit for hauling hazardous material according to the Motor Carrier Act of 1980

A

$5 million

112
Q

Which of the following is correct for amounts paid as supplementary payments covered in the personal auto policy part A- liability

A

They include defense attorney cost to the insured

113
Q

Someone who holds a counselors license and no other license. What can they do

A

Give advice about insurance for a fee

114
Q

In insuring Agreement 5-Theft outside the premises, which is covered.

A

Theft from an armored car

115
Q

Which of the following is covered by a commercial package policy

A

Loss due to crime

116
Q

Which factor is used to determine the rate for a Workers Compensation Policy

A

Occupation

117
Q

The owners of a condominium would buy which homeowners policy

A

HO-6

118
Q

Under a homeowners policy Coverage C is what percent of Coverage A

A

50%

119
Q

Which is required for an employee to collect on a Workers Compensation claim

A

Prove that it was an employment related injury or illness

120
Q

The condition for examination of books and records states that WHO will be responsible for conducting the examination

A

The insurer

121
Q

All of the following would be included in the definition of an insured in a Commercial General Liability policy, Except

A

Any current business entity not listed on a declarations

122
Q

What cause of loss form is used in an unendorsed Business owners policy

A

Special

123
Q

Which insurer operated within the United States, but outside of the state in which it is incorporated

A

Foreign

124
Q

Which of the following is an example of risk avoidance

A

Not driving a car to prevent getting in an accident

125
Q

What does an application for insurance contractually represent for the insured

A

An offer

126
Q

All of the following are true regarding torts EXCEPT

A

A tort is always unintentional

127
Q

When two perils occur at the same time and one of them is excluded, this is referred to as

A

Concurrent-causation

128
Q

When one party of a contract has greater power over the other party in drafting the contract, what type of contract is it

A

Contract of adhesion

129
Q

Which statement about the limits in a CGL policy is NOT true

A

The Aggregate limit refreshes itself after each occurrence

130
Q

Which of the following persons is covered for accidental injury on the insured’s premises under the commercial general liability medial payments

A

A volunteer worker

131
Q

Which of the following is NOT covered under Coverage B-Personal Injury and Advertising Injury

A

Medical Prosecution

132
Q

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

A

Extra Expense

133
Q

Compensatory damages are awarded

A

For actual loss suffered

134
Q

A car stolen and smashed into a tree, which statement is true

A

This is other than collision only

135
Q

Which is true regarding the peril of theft in a commercial property policy

A

Theft is only automatically covered under special

136
Q

Which best describes perils and hazards

A

Hazards are inactive, perils are active

137
Q

Under the National Flood Insurance Program, coverage becomes effective on which calendar day after the application is completed and the premium is paid

A

30th

138
Q

If a producer forges someone else’s name on an application, the Director has the power to do all the following, EXCEPT

A

Make the producer inform all of his other clients

139
Q

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

A

Eric and MSU Federal Credit Union

140
Q

Coverage E-Personal Liability in a homeowners policy would cover all of the following, EXCEPT

A

Loss of use of the insured’s property

141
Q

Which is not true regarding the requirement of coverage under Michigan Worker’s Compensation Statues

A

A private employer must provide coverage if they have at least two part-time employees

142
Q

If a producer does not pay their fine, the Director could do which of the following

A

Revoke the producer’s license

143
Q

A contract in which the insurer must perform certain duties is

A

Unilateral

144
Q

Which is not included in the definition of an Uninsured Motorist

A

A car furnished or available for your regular use

145
Q

What forms the basis of a loss under an insurance policy

A

A loss

146
Q

With regard to property insurance, consideration is the

A

Payment of premium by the insured in return for the promise to pay covered claims

147
Q

Who would be covered for a liability in a Personal Auto Policy

A

A six year old who is not licensed while driving the car around the block

148
Q

Which is an optional coverage in a Business owners policy

A

Employee dishonesty

149
Q

The main purpose of the Michigan Automobile Placement Facility is

A

To make sure coverage is available

P&C final exam (1 decks)

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