Exam practice questions Flashcards
In a commercial general liability policy, medical payments pay for medical expenses
a. Incurred and projected
b. For injuries reported within 2 years from the date of the incident
c. Only if the insured is legally liable
d. Without regard to fault
d Without regard to fault
- Which type of insurance protection guarantees protection against legal liability from any risk arising from the ownership, maintenance, or use
a. Errors and omission insurance
b. Professional liability
c. Employment related practices liability
d. Commercial general liability
b. Professional liability
- In PA, what is the minimum amount required for damages for liability to cover motor vehicles accidents?
a. 5K,10K,3K
b. 10K, 20K, 5K
c. 15K, 30K, 5K
d. 25K, 50K, 10K
C. 15K, 30K, 5K
- Under an equipment breakdown coverage form, a breakdown would include
a. Wear and tear
b. Leakage of valves
c. Explosion of a pressure vessel
d. Failure of a safety device
C. Explosion of a pressure vessel
- Which of the following benefits are not paid under workers comp laws?
a. Medical
b. Rehabilitation
c. Pain and suffering
d. Disability income
c. Pain and suffering
- What is the effect on a personal automobile policy in PA, if an insured switches from a $250 deductible for a $500 deductible
a. The physical damage premium is reduced
b. The physical damage limits are increased
c. There is no deduction for depreciation when losses are settled
d. The policy no longer satisfies the commonwealths financial responsibility law
A. The physical damage premium is reduced
- Which of the following is covered under the builder’s risk form
a. A contractor’s pickup truck
b. A contactor’s tools
c. A sig on the property advertising a contractor’s work
d. Lumber stored on site to be used in framing
b. A contactor’s tools
- The coverage that covers beyond the expiration of a liability policy written on a claims made basis is referred to as
a. Extension coverage
b. Umbrella coverage
c. Extended reporting periods
d. Shop base provisions
c. Extended reporting periods
- The main purpose of the Nationwide Maritime Definition is to
a. Define the categories of risk for which underwriters can write coverages.
b. Describe the imports that are allowed to be sold and delivered.
c. Allow producers to customize coverage for a variety of perils.
d. Define the insurable interest of shippers.
a. Define the categories of risk for which underwriters can write coverages.
- Which is not an exclusion from a commercial automobile insurance policy
a. Work related injuries to employees including these covered under workers comp.
b. Operating a covered vehicle of a speed deemed reckless by authorities.
c. War or war like activates.
d. Intentional injuries
b. Operating a covered vehicle of a speed deemed reckless by authorities.
- Which is covered by the outside the premises crime insuring agreement?
a. Motor vehicles owned by the insured
b. Property owned by the insured being transported without authorization or under threat
c. Property owned by the insured lost through deception or trickery
d. Securities in the possession of an armored car service
d. Securities in the possession of an armored car service
- In a homogenous policy which of the following would not be contained in the conditions section of the policy
a. The amount of the premium
b. The duties of an insured after a property loss
c. The settlement options
d. The subrogation right of the insurer
a. The amount of the premium
- In the workers compensation policy part 2 provides the employer for
a. Workers comp benefits
b. Employee liability
c. Employee theft
b. Employee liability
- An insurance contract is a contract of utmost good faith because the insurer relies on the truthfulness of the applicant and the insured relies on the promise to
a. Issue a policy.
b. File reports with the insurance policy.
c. Pay the claims.
d. Charge a fair premium
c. Pay the claims.
- Under a dwelling policy, which coverage part insures buildings on the premises that are connected to the dwelling only by a fence?
a. Coverage A
b. Coverage B
c. Coverage C
d. Coverage D
b. Coverage B (Coverage B covers other separate structures at the same location, such as detached garages and outbuildings (fences, sheds, etc.)
- The federal law that requires insurance companies to explain their information sharing practices to their customers is the
a. Fair Claims Act
b. Gramm Leach Bliley Act
c. Terrorism risk insurance act
d. Patient protection and affordable care act
b. Gramm Leach Bliley Act
- Which of the following statements about uninsured motorist coverage for personal automobile insurance policies in PA is true?
a. Is mandatory in all personal automobile policies.
b. It must be offered to an insured who can reject signing a waiver.
c. It is available only if an insured signs a separate application for coverage and meets an insurer underwriting standards.
d. It eliminates the need for an insurance applicant to purchase any type of liability insurance on an automobile that has such coverage.
b. It must be offered to an insured who can reject signing a waiver.
- The standard mortgage clause states a loss is payable to the
a. Insured only
b. Mortgagee only
c. Mortgage and the insured
d. Contractor performing the repairs
c. Mortgage and the insured
- The broad theft coverage endorsement on a dwelling policy includes coverage for all of the following except
a. Vandalism
b. Attempted theft
c. Personal injury
d. Malicious mischief
c. Personal injury
- A temporary insurance producers license may be insured without examination to
a. The executor of the estate of a deceased licensed insurance producer.
b. Any individual upon discharge from the United States armed forces.
c. A producer requesting authority to represent an additional carrier.
d. An individual applying to sit for an insurance licensing exam.
a. The executor of the estate of a deceased licensed insurance producer.
- A producer who offers a potential insured $50 from their commission as an incentive to buy insurance is guilty of
a. Coercion
b. Inducement
c. Redlining
d. Twisting
b. Inducement
- Falsifying the terms benefits advantages or conditions of an insurance policy is an example of the following
a. Forgery
b. Coercion
c. Concealment
d. Misrepresentation
d. Misrepresentation
- The national flood insurance program policies cover
a. Property against all from a flood.
b. Water damage caused by a burst pipe.
c. Sewer backs up into a dwelling.
d. Loss of use
a. Property against all from a flood.
- The PA insurance department is responsible for all of the following except
a. Insurers
b. Producers
c. Shareholders
d. Form approvals
c. Shareholders
- When the commissioner believes a producer is violated an insurance law the commissioner has the authority to
a. Terminate the producer’s appointment.
b. Cancel the producer’s fiduciary responsibility.
c. Issue a cease and desist order against the producer after a hearing.
d. Increase the producer’s continuing education.
c. Issue a cease and desist order against the producer after a hearing.
- A commercial general policy occurrence form covers claims that only
a. Occur within the policy period.
b. Occur outside the policy period.
c. Are reported within the policy period.
d. Are settled within the policy period.
a. Occur within the policy period
- Coverage E personal liability applies to which of the following
a. Motor vehicle liability involving a vehicle registered.
b. Watercraft owned by an insured and rented to others.
c. Defense costs if a suit is groundless, false or fraudulent.
d. Expected or intended injury.
c. Defense costs if a suit is groundless, false or fraudulent.
- Which of the following types of policies would cover a chief executive for suits by stockholders?
a. Directors and officers insurance
b. Trustees’ professional liability insurance
c. Fiduciary liability insurance
d. Malpractice insurance
a. Directors and officers insurance
- Which of the following would be a specific duty of the insurer in a liability policy?
a. Reporting a loss
b. Subrogation of a loss
c. Providing a legal defense
d. Protecting property from further loss
c. Providing a legal defense
- Which type of authority is not granted in the contract, but a producer is assumed to have in order to conduct
a. Implied
b. Express authority
c. Apparent authority
d. Licensee authority
a. Implied
- Leah provides transportation for her client to their business lunch. Leah’s client closes the car door on her own hand. What type of coverage applies
a. Physical damage
b. Liability
c. Medical Payments
d. Health Insurance
c. Medical Payments
- All the following are considered covered vehicle under a personal automobile policy except
a. Private passenger vehicle acquired during the policy period
b. Vehicle listed in the declarations
c. Trailer owned by the insured
d. Motorcycle
d. Motorcycle
- A temporary insurance producer license may be initially issued for a maximum of
a. 30 days
b. 90 days
c. 180 days
d. 365 days
c. 180 days
- Lightning strikes a house and causes a fire. The fire department extinguished the fire which results in water damage. The water damage represents which type of loss.
a. Direct
b. Excluded
c. Indirect
d. Residual
c. Indirect
- Which of the following is not covered under supplementary payment coverage of the liability section of the personal automobile policy?
a. Bail Bonds
b. Post judgment interest
c. Rental costs
d. Appeal bonds
c. Rental costs
- According to the assignment condition, a policy can only be transferred to another person with the written permission of the ***
a. Insured
b. Producer
c. Assignee
d. Insurer
a. Insured
- A producer fiduciary responsibility includes which of the following activities
a. Properly remunerating persons who furnish leads on products
b. Recording the receipt and remitting of premiums due to an insurer.
c. Guaranteeing payment to the insureds for losses covered by polices that the producer sold
d. Providing needed insurance to prospective insureds through any sources that are available
b. Recording the receipt and remitting of premiums due to an insurer.
- All of the following perils are included in an unendorsed Dwelling Basic Form DP1 except
a. Theft
b. Fire
c. Lightning
d. Internal explosion
a. Theft
- An insurance contracts states that when a loss occurs an individual should be restored to financial condition just prior to the loss. What principle is interested?
a. Adhesion
b. Warranty
c. Consideration
d. Indemnity
d. Indemnity
- Coverage D of the farm property provides additional coverage for which of the following?
a. Poultry and livestock incidental to farm use
b. Growing crops beyond 250 feet of the covered residence
c. Living expenses for the loss of use of living quarters in residence premises.
d. Barns or farm outbuildings or structures other than private garages that are used primarily for farming purposes
c. Living expenses for the loss of use of living quarters in residence premises.
- A limit of insurance that determines the maximum amount that can be paid out annually
a. A face amount
b. A single limit
c. An aggregate limit
d. An occurrence limit
c. An aggregate limit
- When can a producer share a commissioner with another producer
a. It is never a legal act
b. When both live in PA
c. When the unlicensed person does not live in PA
d. When the other producer is licensed in the same limit of business.
d. When the other producer is licensed in the same limit of business.
- What law do all insurers and their producers need to comply with in regards to information being obtained from a third party concerning the applicant
a. Dodd Frank Act
b. Mccarren Ferguson Act
c. Fair Credit Reporting Act
d. Unauthorized Insurers Service of Process act
c. Fair Credit Reporting Act
- A business can increase coverage limits temporary by way of ***
a. A peek season limit of insurance endorsement
b. A value reporting form endorsement
c. An extended reporting period
d. A retroactive date
a. A peek season limit of insurance endorsement
- In PA if an insurer withdraws from the market a notice of nonrenewal for a commercial policy must be sent to the insured a minimum of how many days in advance of the non-renewal of policy ***
a. 15
b. 30
c. 45
d. 60
d. 60
- The Jones act is a federal law that allows members of ships crews to sue for injuries caused by
a. Other people
b. Passengers’ negligence
c. Employer’s negligence
d. The employee other employees
c. Employer’s negligence
- A general liability policy covers bodily injury as a result of
a. An automobile injury
b. A work-related injury
c. An intentional injury
d. An injury on the premises
d. An injury on the premises
- Coinsurance encourages policyowners to insure property to
a. To value
b. Below value
c. Above value
d. To market value
d. To market value
- In a dwelling policy an unoccupied property refers to one that has no
a. Owner
b. Inhabitants
c. Furniture
d. Locks or alarms
b. Inhabitants
- A producer is required to report to the commissioner any charges filed against him or her in any jurisdiction within how many days of being charged ***
a. 15
b. 30
c. 45
d. 60
b. 30
