Insurance 2A

Question 1

All of the following are excluded under the Commercial Crime “Inside the Premises - Theft of Money and Securities” insuring agreement, EXCEPT:

Answer 1

Dishonest acts of customers. Fire, vandalism, and accounting errors are specifically excluded in this insuring agreement.

Question 2

What kind of contract is an insurance policy considered to be?

Answer 2

Conditional contract. Insurance policies are based on conditions which are rules of conduct that apply to both parties.

Question 3

How many symbols are there in a business auto policy?

Answer 3

there are 10 symbols that trigger coverage. Coverage is tailored to the need of the insured.

Question 4

“Books of original entry” refers to:

Answer 4

Ledgers and journals

Question 5

The custom farming endorsement is usually attached to a farmowners policy when receipts exceed:

Answer 5

$5,000

Question 6

In crime insurance, which of the following individuals is NOT considered to be a custodian?

Answer 6

A janitor. Only the insured, employees, partners, or a night watchman are considered to be custodians,

Question 7

A covered loss has damaged the property belonging to the owner. Property belonging to a customer is also damaged. The customer brings suit against the insured for this damage. The insurer may do which of the following?

Answer 7

Negotiate settlement with the owners of the damaged property and pay the defense costs incurred during the suit against the insured

Question 8

Why would a driver be insured under the assigned risk plan?

Answer 8

The driver has a poor driving record, DUI charges and is usually declined by the standard insurance markets. It is very expensive

Question 9

No insurer may issue checks or drafts or partial settlement of a loss or claim that is still being negotiated that:

Answer 9

Releases the insurer from additional liability.

Question 10

A policy has replacement cost for damaged carpet and counter tops. If replacement will not match up in quality and appearance with the undamaged property, what must the adjuster do?

Answer 10

replace some of the undamaged property along with the damaged carpet and counter tops within reasonable site lines.

Question 11

Which of the following would not be “other structures” in the HO forms?

Answer 11

A separate building on the insured premises that is used for business.

Question 12

Depreciation of a total loss to a vehicle as a result of normal wear and tear and rust is limited to:

Answer 12

$1000.00

Question 13

Commercial property insurance covers what kind of losses?

Answer 13

Direct or indirect loss. Physical losses and loss of income/business interruption resulting from direct damage.

Question 14

The definition of a vacant building is:

Answer 14

When 65% of the buildings floor space is not being utilized.

Question 15

The term “ subrogation” refers to:

Answer 15

Substitution,(transfer of right of recovery), substitutes the insured party with the insurer. The insurer collects from the party responsible for the damage.

Question 16

If an insurance company covered an excluded claim it may have to continue paying other such claims because of:

Answer 16

Estoppel. If an insurer allows payment on an excluded claim, the right to exclude similar claims in the future may be waived.

Question 17

What auto endorsement would include family members as insureds?

Answer 17

Extended non-owned auto.

Question 18

In the contractual agreement under which a business auto insured rents a car, she is obligated to assume all liability to third parties in connection with the operation of the rented car. The insured’s BAP liability coverage may cover:

Answer 18

liability the insured would have had with or without the rental contract.

Question 19

The “outside the premises” policy insuring agreement covers:

Answer 19

loss of money, securities and other property outside of the premises.

Question 20

Under the Terrorism Risk Insurance Program Reauthorization Act of 2015, what is the “trigger limit” before claims are paid for the year 2017?

Answer 20

140 million. The trigger increases by 20 million each year.

Question 21

In commercial property what is the effect of exercising the “agreed value” option?

Answer 21

It negates coinsurance. Agreed value is an option on the Building and Personal Property Coverage form.

Question 22

Does the HO-3 provide coverage for floods?

Answer 22

No, HO coverage does not include coverage for floods.

Question 23

Which of the following is not considered a “breakdown” under Equipment Breakdown coverage?

Answer 23

Lack of power, light, heat, steam, or refrigeration. Breakdown is a direct physical loss that causes damage to covered equipment, requiring it to be repaired or replaced.