Direct Test Questions

Question 1

What is covered on an Agreed Value Basis?

Answer 1

Things that are standard. Like a stereo system not things like a rare collection of books or jewelry.

Question 2

If a company can not afford to stop working what is the best coverage for it?

Answer 2

Extra Expense Coverage

Question 3

A suit brought on by a competitor for Libel is covered by what?

Answer 3

Business Owners Liability coverage.

Question 4

The insured has less than 80% of the replacement insurance for a business owners policy. How will the loss be settled?

Answer 4

The loss will be paid on either an actual cash value basis or a proportionate basis which ever is greater

Question 5

What does a difference in conditions contract cover?

Answer 5

It covers things in a property policy that is normally excluded but does not cover things that have already been covered by the property policy

Question 6

Limits of Liability are found in which section of the insurance policy?

Answer 6

The declarations page.

Question 7

Can a farm house be covered under a dwelling policy?

Answer 7

No.

Question 8

What is implied authority?

Answer 8

Authority given without writing or professional documentation

Question 9

What is Subrogation?

Answer 9

The state which allows the insurance company to go after and collect form a negligent third party.

Question 10

The assigned risk pool provides insurance to employers who have been rejected by how man insurers?

Answer 10

Two

Question 11

Who could make an errors and omissions claim against an insurance agent?

Answer 11

Companies and agents the insured represents.

Question 12

If a customer knowingly recieves any type of rebate for purchasing insurance they can be fined for up to how much?

Answer 12

$1,000.00

Question 13

An insurance company can measure its underwriting profit by

Answer 13

The loss ration

Question 14

What is Arbitration?

Answer 14

A form to settle a dispute between the insurer and insured by having a non bias third party look at the situation.

Question 15

Vacant Means.

Answer 15

An empty building that is currently not being used.

Question 16

An agent can not earn more than

Answer 16

50% Commission in a calender year

Question 17

Personal property of the premise are covered up to

Answer 17

10% Worldwide

Question 18

If someone buys a new car does their insurance cover it?

Answer 18

Yes it does and starts on the date the vehicle is purchased

Question 19

The personal property replacement cost or endorsement does what?

Answer 19

Changes the replacement of things form ACV to a replacement cost

Question 20

Under a business income coverage form business income is

Answer 20

Net income plus continuing expenses, including payrole.

Question 21

Longshoremen Insurance is part of what type of insurance?

Answer 21

Workers compensation.

Question 22

If a contractor has coverage does it cover the employees of a subcontractor?

Answer 22

Yes

Question 23

Is out door furniture covered by the commercial package policy?

Answer 23

Yes anything used to service the building is covered

Question 24

Does the commercial property policy broad form cover earth movement?

Answer 24

No

Question 25

What is the purpose of the second injury fund?

Answer 25

To provide a source of funds for persons who have been injured and otherwise might be unemployable.

Question 26

What does coverage C off the HO policy cover?

Answer 26

This covers personal property under and personal property that may be located at a secondary location.

Question 27

What is the standard mortgage clause?

Answer 27

A policy provision noting that nay loss payment will be payable to the mortgage or lein holder as its finacncial interest may appear and that the mortage holders right of recovery will not be defeated by any aco of ingligence of the insured.

Question 28

Under the NM Workers Comp Act if you receive partial compensation how much of your pay check?

Answer 28

What you made before minus what you make now times 2/3.

Question 29

Is a performance bond a contract bond?

Answer 29

Yes.

Question 30

What is an experience modification factor?

Answer 30

It is applied as a method orf rewarding those employers with better than average loss experience and penalizing those with poorer experience.

Question 31

Insurance companies writing private passenger automobile insurance in New Mexico must provide a minium premium discount of what percentage to comprehensive coverage for motor vehicles with passive antitheft devices?

Answer 31

10%

Question 32

Commerical general liablity policies move with the location of the business. true or false?

Answer 32

True. Coverage is automatic until the end of the policy term.

Question 33

Under the NM Work Comp Act how long can an employ recieve funds for a disablity resulting form an injuring at work to any body part?

Answer 33

200 weeks or a little less than four years

Question 34

If someone is not happy with the admin of the FAIR plan they must appeal to the superintented within..

Answer 34

30 days

Question 35

If someone buys a $20,000 personal articles floater how much Jewelry is covered?

Answer 35

25% percent coverage is provide for things that are the same. i.e two rings both worth $2,500 even would be covered.

Question 36

Does a basic DP cover theft?

Answer 36

No.

Question 37

what is the minimum deductible for a single family dwelling insured?

Answer 37

$500 for both building and contents

Question 38

The NM Workers Comp law applies

Answer 38

to employers who have 3 or more employees

Question 39

What is an aleatory contract?

Answer 39

One in which the values exchanged are not equal.