Insurance 5A Flashcards
Unless revoked by the Commissioner, the license and any renewal will expire on October 1 of the:
Second calendar year after its issue.
Which of the following persons is EXEMPT from insurance licensing requirements?
A personal officer who enrolls agency employees in a group health insurance program.
Company car for an employee is permitted for personal use.
Extended Nonowned Liability Coverage.
Which of the following statements is true regarding controlled forms?
Issued according to published rules and rates.
Lisa Smith insures a truck using a “stated value” approach for physical damage coverage. The truck is appraised for $20,000. Nine months later the vehicle is totaled. The truck depreciated $2,000 since the insurance was effective. How much will she receive disregarding any deductible?
$18,000. She will not receive more than the value of the truck at the time of the loss..
What does the “identity fraud expense” endorsement to a homeowner policy cover?
Covers expenses up to $15,000. This includes attorney fees to cover defense costs,
Mr. Jamison owns a summer home in the woods that he rents to others. During his absence bears enter the home and do considerable damage. The insured reports the claim to his insurance company. The adjuster advises Mr. Jamison to report the claim as vandalism damage. The claim report is investigated by the insurance department. How should the Department of Insurance treat this action on the part of the adjuster?
Charge the adjuster with an unfair claims act.
Which of the following would be covered by the Sign Coverage Form for Newman Sign Company?
Customer signs in there care custody and control.
The amount of loss under a fire insurance policy will be due and payable in______ days after receipt by the insuring company of proof of loss, and the insured may commence an action after the expiration of that time to recover the same.
60 days
A road construction contractor has mobile equipment used in his business. The state has changed the law and now requires some of the equipment to carry liability insurance to comply with the financial responsibility laws of the state. What symbol will the insurance company use to add these items to the insured’s commercial auto policy?
symbol 19, mobile equipment subject to compulsory auto financial responsibility.
An auto is described in the schedule of the hired autos endorsement to a business auto policy. For purposes of BAP coverage, this auto will be considered:
A covered auto owned by the named insured.
Which statement is correct under the Commercial General Liability policy?
The insurer generally has the right to settle for damages.
The “outside the premises” policy insuring agreement covers:
Loss of money and securities and other property outside the premises.
The insured sets a fire to his home and is found to be guilty of arson. There is a lien on the burned property by a mortgage company in the amount of $150,000. The property is insured for $300,000 and is a total loss. The personal property of the insured, covered separately in a homeowner policy for $150,000, is also a total loss. How will this claim most likely be paid?
The mortgagee is paid $
The Homeowners deductible does not apply to which of the following?
Liability.
The liability exposure of the We-Cure-Em Drug Company is:
Virtually unlimited
Is a neighbor who moves into the named insured’s house with all of his belongings an insured under the homeowner policy?
no
Under the BOP, name a coverage that is not automatic.
Hired and non-owned automobile coverage. it is an elective coverage
In order to issue a written binder for a commercial property policy, what is the minimum consideration an agent must secure from an applicant?
A promise to pay the premium
Under the commercial building and personal property coverage form, which of the following is correct regarding the appraisal clause?
No time limits are required
Which of the following is not a claim settlement option in a property loss?
Pay only market value for the loss
If building coverage is provided under the BOP, the coverage will automatically increase each renewal by what percentage?
8%
Which of the following coverages may be added by endorsement to an Equipment Breakdown Policy?
Business income
How are losses settled under a typical inland marine policy?
Actual cash value
The proximate cause of loss often involves a chain of events where the actual cause of loss is difficult to determine. In this situation, what is the adjuster attempting to determine?
The initial cause that started it all.
Under the livestock coverage form, how must livestock be covered?
Livestock is 80%
Which of the following is true regarding debris removal under the dwelling forms?
coverage is included in the dwelling and contents coverage.
James purchases an outboard motor boat. He will have automatic coverage for the boat under his homeowner policy under which of the following circumstances?
boat is stored on his property, it is reported within 45 days.
Roger has his golf clubs stolen out of the trunk of Sam’s car. Which policy will pay?
Rogers HO policy
Which of the following statements is FALSE concerning business auto coverage?
Medical payments coverage is automatically provided.
The insured owns a motor home that is not covered by the insured’s personal auto policy. This vehicle can be added to the policy by using which of the following endorsements?
Miscellaneous type vehicle endorsement.
Which crime coverage form would cover embezzlement?
Forgery and alteration.
In the case of a covered loss under a fire policy the company must begin the adjustment of the loss within _____days after receipt of notice of loss.
15
If any person engages in activities in violation of the Federal Insurance Fraud and False Statements regulation, he or she may be subject to which of the following?
civil penalty of $50,000.
The CAN-SPAM act of 2003 requires which of the following?
Senders of mail cant mislead recipients.
An insured has received actual cash value payment from the adjuster for a covered loss. At the time he is satisfied with the payment. He later changes his mind and wants the full replacement value. How many days does he have to submit the receipts to get the replacement cost payment under a HO-3 form?
180 days
What is the major intent of liability coverage offered under the Personal Automobile policy?
To provide indemnification of the insured in the event of a covered loss.
The insured owns a four family dwelling insured on a HO-5 Form. The dwelling is insured for $500,000. What is the percentage of Coverage A for contents?
25%
Which of the following is a not a common exclusion in inland marine insurance?
earth movement
Isaac owns a home with an older furnace in need of repair. He leaves his home for a month to avoid the cold weather. He returns to find that the furnace had stopped working. Water pipes have frozen and burst and his property has been damaged. Since the water ran for almost a month, his water bill is extremely high. What will the adjuster pay?
water damage
What does the “employer’s non-ownership coverage” under a business auto policy cover?
it covers the employer when the employee uses the employers car for business.
Medical Payments on a CGL will pay for all of the following EXCEPT:
pain and suffering
Garagekeeper’s coverage excludes all of the following losses, EXCEPT:
loss of a stereo permanently installed.
An insurer whose place of incorporation is Toronto, Canada and is doing business in the United States would be identified as a/an:
an alien insurer
Lawful economic interest in the preservation of the subject of insurance, free from loss or destruction or monetary impairment is the definition of:
insurable interest
All of the following are exclusions under Section I - Forms HO-2 and HO-3, EXCEPT:
colapse
The insured has a communication failure at his premises due to a lightning strike at the phone company. The insured’s phone system is damaged and he is out of business for four days. Which endorsement is necessary to provide coverage for the loss of business income?
utility service - time element
The payment of a claim in exchange for a release indicating that the claim was paid as a result of a settlement agreed to by all parties is called a:
payment discharge
What is the purpose of the New Hampshire Automobile Reinsurance Facility Plan?
provide an alternative market for auto insurance
The insured is conducting business on the premises of his bank. He is depositing checks and money into his account. Before the transaction is completed a thief comes in and holds up the bank and takes the insured’s property. The insured is covered under Insuring Agreement 3 “Inside the Premises Theft of Money and Securities.” What will the insurance company do?
The loss is covered because the definition of premises includes premises where the insured is conducting business.
