Exam practice 4 Flashcards
- What is covered under commercial crime coverage K
a. Loss resulting from employee dishonesty
- In Homeowners policy, what is NOT covered under personal liability
a. Slander/libel
- Commissioners can do all of the following EXCEPT?
a. Set rates
- Difference between insurance and surety bonds?
a. Insurance has two parties and a surety bond has three parties
- No active insurance license will be revoked until
a. The producer has been afforded the right to a hearing on the changes.
b. At least three violations have occurred.
c. A jury has decided upon such action.
d. A cease-and-desist order has been issued.
a. The producer has been afforded the right to a hearing on the changes.
- Property insurance that provides coverage for both building and personal property at one location is?
a. Specific
b. Blanket
c. Monoline
d. Lump Sum
a. Specific
- According to the PA law, upon notification of a claim an insurer must acknowledge receipt within
a. 10 working days, unless no response is required.
b. 30 working days, unless no response is required.
c. 45 working days, unless no response is required.
d. 60 working days, unless no response is required.
a. 10 working days, unless no response is required.
- On a Commercial General Liability Policy, Bodily Injuries and Property Damage Liability covers bodily injury as a result of
a. an intentional injury
b. a work-related injury
c. pollution liability
d. a premises exposure
d. a premises exposure
- Difference in conditions policies are usually written on ***
a. small risks with no deductibles
b. small risks with a coinsurance requirement
c. large risks with reinsurance requirement
d. large risks with unusual exposure
d. large risks with unusual exposure
- Under worker’s compensation, experience modification factor is based on ***
a. insurer loss experience
b. employer’s safety program
c. the statewide average rate
d. employer’s individual loss experience
d. employer’s individual loss experience
- Which of the following is TRUE about the Terrorism Risk Insurance Act of 2007?
a. It’s direct insurance coverage provided by the government for any act committed by any terrorist anywhere in the U.S.
b. It ensures the availability of Commercial Property and Casualty Coverages from described acts of terrorism.
c. It provides coverage for the World Trade Center and Pentagon in the event of future terrorist activities.
d. It can be offered for any type of insurance written, or not offered if the insurer
a. It’s direct insurance coverage provided by the government for any act committed by any terrorist anywhere in the U.S.
- According to the PA Assigned Risk Plan, all of the following are true EXCEPT?
a. all motor vehicle liability insurers shall subscribe and participate in the plan
b. the rates for the plan shall not be inadequate, excessive, or unfairly discriminatory
c. the plan may provide for the transfer of individuals into the ordinary market at higher rate.
d. the program was established to provide motor vehicle liability insurance for those are.
c. the plan may provide for the transfer of individuals into the ordinary market at higher rate.
Which statement is true regarding the Motor Carrier Act of 1980? **
a. The required liability are divided into four categories………
b. Vehicles subject to the Motor Carrier Act of 1980 must provide limits of $500k……
c. Vehicles subject to the Motor Carrier Act of 1980 must provide limits of $700k……
d. It required trucking companies to certify that they are able to meet
d. It required trucking companies to certify that they are able to meet
- If a company cancels an auto policy mid-term, the refund will be made on a
a. pro rata basis
b. short rate basis
c. retroactive basis
d. coinsurance basis
a. pro rata basis
- Loss settlement that takes a deduction for depreciation is called ***
a. Actual cash value
b. Expense incurred value
c. Replacement cost value
d. Repair cost value
a. Actual cash value
- Which authority does a principal intend to grant an agent by means of the agent’s contract in writing? ***
a. Direct
b. Apparent
c. Implied
d. Express
d. Express
- A single property insurance policy that can provide coverage for multiple classes of property at one location, or one or more classes of property at MULTIPLE locations, with one total amount of coverage and no single item assigned a specific amount of coverage is called? ***
a. Strict
b. Specific
c. Blanket
d. Additional
c. Blanket
- Specific amounts of insurance that is provided to specific locations would be considered: ***
a. Specific
b. Blanket
c. Scheduled
d. Additional
c. Scheduled
- In order to reject uninsured motorist coverage, the first named insured must make the rejection
a. Orally to the producer who wrote the application.
b. Orally to the insurer that issued the policy.
c. Uninsured motorist coverage is not included on a policy unless specifically requested, in writing.
d. In writing at the time of the application.
d. In writing at the time of the application.
Workers’ compensation laws provide all of the following types of benefits EXCEPT**
a. Medical benefits
b. Rehabilitation benefits
c. Death benefits
d. Compensatory benefits
d. Compensatory benefits
An individual is shopping at the local supermarket and slips on a wet floor. The supermarket’s GLP will cover payments EXCEPT?**
a. First aid
b. Lost wages
c. Dental expense
d. Ambulance expense
b. Lost wages
- Which of the following is the purpose of the Property and Casualty Insurance Guaranty Fact in PA? ***
a. Establish and regulate rates.
b. Avoid excessive delay in payment.
c. Determine that an insurer is insolvent.
d. Provide for the payment of covered claim of an insolvent insurer
d. Provide for the payment of covered claim of an insolvent insurer
- Under commercial inland marine, transportation coverage does NOT include goods shipped by ***
a. Sea
b. Air
c. Land
d. Rail
b. Air
- Toy stores typically stock up much more than usual during the holiday season, which types of endorsement would toy stores use to cover inventory?
a. Peak season
b. Excess inventory
c. Brands and labels
d. Fluctuating inventory
a. Peak season
- The location where coverage under a policy applies is referred to as the policy:
a. Jacket
b. Provision
c. Territory
d. Vicinity
c. Territory
- Which of the following properties is NOT eligible for Business owners’ coverage?
a. A six-unit apartment building
b. An insurance agency
c. A municipality
d. An office
c. A municipality
- What does the Fair Credit Reporting Act give the consumer the right to do? ***
a. Deny the insurer access to their credit report.
b. Ask the producer for a copy of their credit report with an explanation.
c. Decide which credit agency the insurer can pull their information from.
d. Question the validity and source of any credit information collected and retained by the insurer.
b. Ask the producer for a copy of their credit report with an explanation.
- In PA law, personally identifiable financial information includes all of the following information EXCEPT:
a. Information from a consumer report.
b. Account balance information and payment history.
c. Information a consumer provides to a license in an insurance application.
d. Information such as a blind date that does not include names and addresses
d. Information such as a blind date that does not include names and addresses
- Which one of the following is an optional coverage under the Businessowners policy?
a. Nuclear hazard
b. Employee dishonesty
c. Earth movement
d. Wear and tear
b. Employee dishonesty
- What must a party have before applying for insurance?
a. Property title
b. Insurable interest
c. Ownership contract
d. Financial agreement
b. Insurable interest rates
- An example of the insured’s consideration is?
a. An insurance application
b. A paid premium
c. A contract signing requirement.
d. A notice of beneficiary
b. A paid premium
- An insurance licensee must do all of the following in order to renew an insurance license EXCEPT?
a. Pay the required renewal fee.
b. Hold active insurer appointment.
c. Submit to the department a completed renewal form.
d. Complete the continuing education requirements, if applicable.
b. Hold active insurer appointment.
- Aviation Hull Comprehensive Coverage includes all of the following EXCEPT: ***
a. Loss of use
b. Wear and tear on the aircraft
c. Collision with another aircraft
d. Fire damage while in flight
b. Wear and tear on the aircraft
- Which of the following water damage losses are NOT covered by an unendorsed dwelling policy special form?
a. Sewer backup
b. Broken water pipes
c. Appliance overflow
d. Leaky fire sprinkler heads
d. Leaky fire sprinkler heads
- Returning part of the commission or giving anything of value to the insured for purchasing a policy is
a. Coercion
b. Rebating
c. Defamation
d. Controlled business
b. Rebating
- A commercial inland marine coverage form for valuable papers does NOT cover:
a. Manuscript
b. Maps
c. Deeds
d. Securities
d. Securities
- A binder for a new homeowner’s policy MUST include all of the following EXCEPT? ***
a. A paid receipt for the full amount of the premium.
b. The name and address of the lender, if applicable.
c. A provision regarding the cancellation of the binder.
d. A description of the insured residential real property
c. A provision regarding the cancellation of the binder.
- Strict liability is best defined as:
a. Liability without regard to fault.
b. Liability split between two offering parties.
c. Total liability attributed to the party most at fault.
d. Liability attributed to a party by a court decision or order.
a. Liability without regard to fault.
- A producer’s action or deeds demonstrate what kind of authority?
a. Inherent
b. Apparent
c. Delegated
d. Express
b. Apparent
- For a contract to be valid it must
a. Be in writing.
b. Be notarized.
c. Include a deposit and receipt.
d. Include an offer and an acceptance.
d. Include an offer and an acceptance.
- All of the following incidental businesses would be eligible for under a dwelling policy EXCEPT? ***
a. A beauty parlor
b. Photography studio
c. Professional office
d. Hardware store
d. Hardware store
- What is included in Farm Coverage D? ****
a. Livestock
b. Crops
c. Trees
d. Loss of use
d. Loss of use
- The cost of restoring farm records is additional coverage offered under a farm policy. How much will the policy pay to restore the records? ***
a. $1,000
b. $1,500
c. $2,000
d. $2,500
c. $2,000
- Who can cancel a producer’s appointment?
- Insurer
- All of the following are covered perils under the extended coverage part of the DP-1 except:
c. Weight of ice, snow, or sleet
- All of the following types of property may be covered by a personal article’s floater EXCEPT?
- Buildings
- What is consisted in the tort coverage in PA?
- Full or limited.
- How would underinsured motorist coverage best be defined?
a. This is optional coverage that applies to you, your family, and your passengers for bodily injury if you are hit by an at-fault motorist who does not have enough insurance to your claim
- Which of the following exposures would be necessary in purchasing a garage coverage form?
d. Franchise auto dealer
- Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? ***
a. Concealment
b. Indemnity
c. Representation
d. Warranty
d. Warranty
- The transfer of a legal right or interest in an insurance policy is called? ***
a. Subrogation
b. Liability
c. Assignment
d. Recission
c. Assignment
- What is the minimum age for obtaining insurance producer’s license in PA? ***
a. 16
b. 18
c. 21
d. 25
b. 18
- Prior to license renewal, all insurance producers must successfully complete how many hours of continuing education?
a. 15 credit hours
b. 18 credit hours
c. 20 credit hours
d. 24 credit hours
d. 24 credit hours
- With regards to a homeowner’s policy, which coverage provides for indirect or consequential losses?
a. Coverage D
b. Coverage A
c. Coverage B
d. Coverage C
a. Coverage D
- A dwelling policy has a standard deductible that applies to all property coverage, expect fair rental value, additional living expense, and the fire department service charge. How much is this deductible?
a. $100
b. $250
c. $500
d. $1,000
b. $250
- What is the liability limit for injury to any one person in a single accident in personal auto insurance policies issued in this state?
a. $15,000
b. $20,000
c. $25,000
d. $30,000
a. $15,000
- A customer at a local deli trips over a folded rug while entering the establishment. This would be considered what type of business liability? ***
a. Products exposure.
b. Completed operations exposure.
c. Operations exposure.
d. Premises exposure
d. Premises exposure
- According to the assignment condition, a policy can only be transferred to another person with the ***
a. Producer
b. Insured
c. Assignee
d. Insurer
d. Insurer
- A subrogation clause allows an insurer to ***
a. Replace lost or damaged goods.
b. Take legal action against the insured.
c. Take legal action against the responsible third party.
d. Take legal action against the responsible second party.
c. Take legal action against the responsible third party.
- What type of coverage limits apply to an insured’s property at any location? ***
a. Blanket
b. Specific
c. Localized
d. Additional
a. Blanket
- A purpose of underwriting is to protect the insurer against ***
a. Direct loss
b. Indirect loss
c. Risk retention
d. Adverse selection
d. Adverse selection
- Under which of the following coverage forms would a barn be covered on a farm policy? ***
a. Other private structures.
b. Scheduled farm personal property.
c. Unscheduled farm personal property.
d. Other farm structures.
d. Other farm structures.
- Which of the following would be a component of a rate?
a. Service bureaus
b. Loss costs
c. Dividends
d. Ratification
b. Loss costs
- Under which portion of the physical damage on a business automobile policy will you find perils such as explosion, theft, and glass breakage? ***
a. Other than collision (comprehensive)
b. Collision
c. Property damage liability
d. Garage keepers’ liability
a. Other than collision (comprehensive)
- The standard deductible under the businessowners policy (BOP) is $500 and applies to which of the following coverage? ***
a. Fire department service charge
b. Business personal property
c. Civil authority
d. Extra expense
b. Business personal property
- Which type of construction is least favorable for fire? ***
a. Frame.
b. Noncombustible.
c. Jointed masonry.
d. Modified fire resistive.
a. Frame.
- In a personal automobile policy, the coverage territory includes all of the following EXCEPT ***
a. The United States
b. Mexico
c. Puerto Rico
d. Canada
b. Mexico
- Actual cash value is
a. Replacement cost minus depreciation.
b. Depreciation minus replacement cost.
c. Market value minus depreciation.
d. Agreed value minus depreciation.
a. Replacement cost minus depreciation.
- Homeowners policies exclude coverage for ***
a. Earth movement
b. Debris removal
c. Property removed to protect it from covered peril.
d. Fire department service charge.
a. Earth movement
- One limit for all bodily injury and property damage for which an automobile insurer may be liable is from ***
a. A combined single limit
b. A per-person limit
c. An aggregate limit
d. A split limit
a. A combined single limit
- Which of the following is an example of an unfair claim settlement practice? ***
a. Delaying the settlement claims submitted in which liability has become clear.
b. Replacing a policy when it is in the best interest of the insured.
c. Adopting and implementing standards to settle claims in a timely manner.
d. Disclosing the settlement terms and provisions of the contract of insurance
a. Delaying the settlement claims submitted in which liability has become clear.
- Personal articles floater covers which of the following items? ***
a. Boats
b. Automobiles
c. Golf equipment
d. Business property
c. Golf equipment
- According to the No Benefit to Bailee condition of a policy, the bailee under the insured’s policy is ***
a. Covered if the bailee has no policy.
b. Not covered if the bailee has no policy.
c. Covered if the bailee has possession of the insured’s property.
d. Not covered under the insured’s policy while the bailee has possession of the insured’s property.
d. Not covered under the insured’s policy while the bailee has possession of the insured’s property.
- Under a homeowner’s policy, coverage for injuries to others regardless of fault is known as ***
a. Compensatory damages
b. Vicarious payments
c. Personal liability
d. Medical payments
d. Medical payments
- A DP-2 coverage form covers all of the following perils EXCEPT
a. Vandalism
b. Falling objects
c. Theft of property
d. Weight of ice and snow
c. Theft of property
- What element of an insurance contract demonstrates that each party is giving something of value? ***
a. Offer
b. Consent
c. Consideration
d. Agreement
c. Consideration
- Which of the following does a producer NOT have the authority to do?
a. Issue a policy.
b. Deliver policies.
c. Solicit insurance contracts.
d. Negotiate contracts of insurance.
a. Issue a policy.
- An out of state resident that applies in PA would be consider what type of producer? ****
a. Foreign producer
b. Alien producer
c. Nonresident producer
a. Foreign producer
- A person decides not to get physical damage coverage on their snowmobile. What form of risk management is this? ***
a. Avoidance
b. Retention
c. Reduction
d. Sharing
b. Retention
- A commercial umbrella policy is designed to do which of the following?
- Provide for catastrophic liability.
