Insurance Stuffs Flashcards
1
Q
Under the commercial crime coverage part, loss resulting from employee dishonesty is: a. always excluded b. always covered c. excluded unless an employee dishonesty coverage form is attached d. always covered
A
c. excluded unless an employee dishonesty coverage form is attached
2
Q
What is true about COBRA? a. the company can terminate health insurance at the time of termination b. once the employee is not part of the group he will need to qualify as an individual c. dependents of an employee must be given the same rights as the employee d. all of the above
A
c. dependents of an employee must be given the same rights as the employee
3
Q
An individual who owns a duplex has damage to his rental and has loss of income. His insurance would cover this loss of rent under: a. basic, broad, and special forms b. broad and special forms only c. there is no coverage d. not covered as he isn’t part of the homeowners association
A
a. basic, broad, and special forms
4
Q
Who can sell Medicare supplement policies? a. property and casualty agents b. life analyst c. any licensed agent d. life agents only
A
d. life agents only
5
Q
Which commercial crime coverage form provides risk coverage for money and securities? a. robbery and sage burglary coverage b. premises theft and robbery outside the premise coverage c. theft, disappearance and destruction coverage d. premises burglary coverage
A
c. theft, disappearance and destruction coverage
6
Q
Medicare supplement policies regulated by the code must: a. market anything they want b. sell only additional coverage’s c. whatever federal law allows d. offer the core benefits
A
d. offer the core benefits
7
Q
Which of the following may not be covered under a dwelling? a. tenant improvements or additions b. detached garage c. the insured’s stamp collection d. rent money that could be lost under damage to a rental property
A
c. the insured’s stamp collection
8
Q
- Medicare Part B requires additional premiums a. true b. false
A
a. true
9
Q
Which of the following perils are covered by a basic coverage form of a dwelling? a. fire and smoke b. fire, smoke and rain c. fire, lightning and internal explosion d. all of the above
A
c. fire, lightning and internal explosion
10
Q
Which of the following is correct in regards to a Business Owner Policy for an office building? a. cannot exceed gross sales of $3 million in a year b. cannot exceed 6 stories an 60 dwelling units c. cannot exceed 6 stories or 100,000 square feet d. all of the above are correct
A
c. cannot exceed 6 stories or 100,000 square feet
11
Q
A worker is injured and can only complete 60% of duties that his job requires; he is considered to be which: a. permanently, partially disabled b. totally disabled c. temporarily disabled d. does not qualify for disability
A
a. permanently, partially disabled
12
Q
The Loss Sustained Form covers losses that occur during the policy period and losses are discovered and reported during the policy period or up to 1 year after the policy expires. a. true b. false
A
a. true
13
Q
What does a Mexican liability endorsement cover? a. excess liability for accidents within 50 miles of the US border on trips of 30 days or less. b. excess liability for accidents within 25 miles of the US border on trips of 10 days or less. c. excess liability for accidents within 100 miles of the US border on trips of 10 days or less d. None of the above
A
b. excess liability for accidents within 25 miles of the US border on trips of 10 days or less.
14
Q
Which of the following has the most stringent definition of a total disability? a. Partial disability b. Temporary disability c. total disability under the social security disability d. all of the definitions are universal
A
c. total disability under the social security disability
15
Q
Which of the following dwelling forms does not include burglary of the insured’s personal property? a. Basic b. Broad c. Special d. named perils
A
a. Basic
16
Q
Which of the following homeowners forms has the broadest coverage? a. Basic b. Broad c. Named Peril d. Special
A
d. Special
17
Q
Why does boiler and machinery coverage need to be added to a commercial package? a. Boiler and machinery is too dangerous for regular commercial lines b. Boiler and machinery is too expensive for regular insurance companies c. a separate coverage is needed due to the fact that most lines of insurance exclude boiler and machinery d. all of the above.
A
c. a separate coverage is needed due to the fact that most lines of insurance exclude boiler and machinery
18
Q
In order to sell long term care, a licensed agent must do how many hours pertaining solely to long term care? a. 6 hours b. 4 hours c. 8 hours d. 24 hours
A
c. 8 hours
19
Q
Majority of the premium for a boiler and machinery policy is used for: a. inspection b. clean up c. Underwriting d. Company expenses
A
a. inspection
20
Q
Theft of inventory and shortage of inventory would be covered by Employee Dishonesty a. true b. false
A
b. false
21
Q
Which of the following has the broadest definition? a. theft b. larceny c. burglary d. steeling
A
a. theft
22
Q
Employee dishonesty does not cover: a. theft from a safe b. burglary of the store c. shortages of inventory d. theft out of the register
A
c. shortages of inventory
23
Q
An insurer can do an audit of the insured’s records during a policy and for how long? a. 5 years b. 2 years c. 3 years d. depends upon insurance retroactive date
A
c. 3 years
24
Q
A commercial policy can only be amended and waived: a. with consent and endorsement from the insurer b. only by the insurer and attached to the policy c. only before insurance is in effect d. all of the above
A
a. with consent and endorsement from the insurer
25
Commercial packages must contain: a. conditions b. declarations c. two or more coverage forms (modules) d. all of the above
d. all of the above
26
Why purchase a commercial package policy vs. several monoline policies? a. ease of coverage under one policy b. reduces ambiguous language c. reduces gaps in coverage d. all of the above.
d. all of the above
27
What is a monoline policy? a. Not found in the ordinary insurance market only through surplus lines b. any insurance that is a single line (single module) c. only contains business property coverage d. all of the above.
b. any insurance that is a single line (single module)
28
The general aggregate limit: a. does not apply to the products and completed operation aggregate limit b. most an insured will have to pay during a policy period c. it applies to the whole amount an insurer will pay during a policy period d. none of the above.
a. does not apply to the products and completed operation aggregate limit
29
Who can write insurance through the FAIR plan? a. Property/casualty agents b. solicitors c. life and health agents d. any insurance agent
a. property/casualty agents
30
Who can purchase insurance through the fair plan? a. insured's who fall in the areas that are not reasonable risks or too expensive to insure profitably b. anyone that can't obtain insurance for non-payment c. young drivers with little to no driving history d. all of the above
a. insured's who fall in the areas that are not reasonable risks or too expensive to insure profitably
31
A house that falls in a designated brush fire area could not obtain insurance through the fair plan. a. true b. false
b. false
32
Which of the following are coverage's provided by inland marine? a. domestic shipments b. personal property risks c. transportation and communications equipment d. all of the above
c. transportation and communications equipment
33
What type of coverage does inland marine provide? a. basic b. broad c. open peril d. named peril
c. open peril
34
An automobile kept for a customer in a parking structure would be covered by what coverage: a. inland marine b. garage keepers c. business personal property d. commercial auto insurance
b. garage keepers
35
A provision in liability insurance that created the implementation of inland marine insurance is: a. care custody and control exclusion b. open peril c. special form d. coinsurance clause
a. care custody and control exclusion
36
36. An employee working in a customer's home trips and injures the customer causing property damage. The employee and business would be covered under: a. inland marine b. commercial property insurance c. commercial general liability d. personal liability policy
c. commercial general liability
37
Liquor liability form is only for companies/businesses that's sole business is serving and selling liquor a. true b. false
a. true
38
A customer falls and trips on the insured's business property what would cover this? a. workers comp b. commercial general liability c. products completed operations d. none of the above
b. commercial general liability
39
The main purpose of insurance is to: a. transfer the risk from one person to an insurance company b. retain the risk c. reduce risk exposure d. none of the above
a. transfer the risk from one person to an insurance company
40
All of the following must be present to be an insurable risk except a. loss must cause financial hardship b. cost must be affordable c. loss must be calculable d. speculative risk
d. speculative risk
41
How do we calculate actual cash value in a home a. stated value b. replacement cost minus depreciation c. replacement cost d. selling price
b. replacement cost minus depreciation
42
When a policy is cancelled and the insurer only retains the earned premium, this is said to be: a. short rate b. flat cancellation c. pro rata d. none of the above
c. pro rata
43
An insured purchased furniture for $8,000. There was a fire destroying the furniture that had depreciated $3,000 in value. The replacement cost of the furniture is $9,000. The actual cash value is valued at: a. $4,000 b. $3,000 c. $6,000 d. $5,500
c. $6,000
44
What does aggregate limit apply? a. Total amount an insurance company will pay per occurrence b. Total amount an insurer will pay out during a policy period c. Total amount of insurance an insured can purchase d. Total amount an insurer can distribute in policies
b. Total amount an insurer will pay out during a policy period
45
Coinsurance is: a. coverage for all policies that an insured carries b. a requirement of the amount of insurance that an insured needs to carry in order to be fully insured c. a monoline policy coverage form d. applies per occurrence
b. a requirement of the amount of insurance that an insured needs to carry in order to be fully insured
46
Rates must be filed and approved before issued, this is known as: a. the pre-approval method b. file and use c. monopolistic d. short rate
a. the pre-approval method
47
The insured and the insurer can both cancel a policy as long as it doesn't break any laws a. true b. false
a. true
48
What effect does increasing a deductible have on the premium: a. increases the premium b. decrease the premium c. increases the chance of obtaining insurance d. decreases the chance of obtaining insurance
b. decrease the premium
49
Compensation for losses returning an insured to a financial position that is as if the loss never occurred: a. indemnity b. absolute liability c. second party losses d. underwriting
a. indemnity
50
A house located next to a plant that makes bombs is what kind of hazard? a. moral b. legal c. personnel d. physical
d. physical
51
If a covered loss occurs and the insured does not handle the loss appropriately, the mortgage holder will not receive compensation: a. true b. false
b. false
52
Under a dwelling policy personal property away from the premises is covered under what percent: a. 10 b. 20 c. 15 d. none
a. 10
53
The coverage form that provides protection for all perils except those specifically excluded is known as: a. all risk b. named peril c. broad coverage d. basic coverage
a. all risk
54
Risk can be defined as: a. chance of loss b. chance of gain or loss c. certainty of loss d. proximate cause
a. chance of loss
55
The number 7 as it appears in a commercial auto policy refers to: a. specific autos b. non owned c. owned d. none of the above
a. specific autos
56
The number 9 as it appears in a commercial auto policy refers to: a. specific autos b. non-owned c. owned d. livery conveyance
b. non-owned
57
Liability of the employer arising out of an employee's actions is: a. vicarious liability b. broad liability c. gross negligence d. assumed liability
a. vicarious liability
58
A binder provides temporary coverage and can be written for what amount: a. $20,000 b. $100,000 c. $250,000 d. $1,000,000
d. $1,000,000
59
All of the following are not true of an insurable risk except: a. loss must be catastrophic in nature b. risk must be uncertain c. loss must not be definite and definable d. there must be the possibility of loss or gain
b. risk must be uncertain
60
If the claims made form is attached to a commercial policy, the first date that event may occur and be covered is the: a. retroactive date b. discovery date c. inception date d. residual date
a. retroactive date
61
The homeowners from that covers the dwelling all risk and the personal property as broad coverage is: a. HO4 b. HO6 c. HO5 d. HO3
d. HO5
62
Medical payments and liability fall under section 2 of the homeowners form a. true b. false
a. true
63
Which of the following does a Homeowners policy provide that a dwelling policy does not a. other structures b. personal property c. dwelling d. liability
d. liability
64
Scheduled personal property would include a. autos and trailers b. the building and other structures c. jewelry, furs, and other structures d. all of the above
c. jewelry, furs, and other structures
65
What coverage is the same on an HO3 and an HO8 a. liability and medical payments b. dwelling and other structures c. loss of use d. theft coverage
a. liability and medical payments
66
Which of the following homeowners forms will cover a condo a. HO4 b. HO3 c. HO8 d. HO6
d. HO6
67
Which of the following homeowners forms will cover a rental property a. HO3 b. HO5 c. HO8 d. HO4
d. HO4
68
An HO4 provides coverage for? a. the building b. the other structures c. tenants personal property d. all of the above
c. tenants personal property
69
What Homeowners form provides all risk coverage on personal and real property? a. HO5 b. HO3 c. HO6 d. HO8
a. HO5
70
An HO1 is most similar to a: a. HO4 b. JO6 c. HO8 d. HO1
c. HO8
71
Personal property away from the premises under a homeowners policy is covered up to: a. 50% b. 25% c. 10% d. full limit of personal property
d. full limit of personal property
72
All insurance companies selling homeowners insurance must offer earthquake insurance a. true b. false
a. true
73
An HO3 provides coverage for: a. damage from an earthquake b. damage to furniture while being removed during a fire c. damage to personal property cause by flood d. all of the above
b. damage to furniture while being removed during a fire
74
Which of the following would be covered by an HO3? a. an office building b. an apartment building c. single family, owner occupied d. single family, renter occupied
c. single family, owner occupied
75
If a homeowner wants coverage for such things as libel and slander, what should the agent tell his client? a. It is included in the liability section of a homeowners policy b. Have the client add a personal injury endorsement to the contract c. This cannot be covered under a homeowners policy. The client will need a commercial general liability policy.
b. Have the client add a personal injury endorsement to the contract
76
Under a homeowners policy the dwelling is valued at $100,000 and the garage at $20,000. In order to maintain the proper amount offer coinsurance, the insured needs to carry what amount of insurance? a. dwelling $100,000; garage $16,000 b. dwelling $100,000; garage $8,000 c. dwelling $80,000; garage $16,000 d. dwelling $80,000; garage $8,000
c. dwelling $80,000; garage $16,000
77
Why would an insured purchase a homeowners policy instead of a dwelling company? a. he does not need liability b. he owns six units and occupies one of the units c. he wants broader coverage
c. he wants broader coverage
78
What do the numbers 15/30/5 mean in an auto policy? a. bodily injury per person/property damage per occurrence/medical payments per person b. bodily injury per person/bodily injury per occurrence/property damage per occurrence c. property damage per person/property damage per occurrence/medical payments per person d. none of the above
b. bodily injury per person/bodily injury per occurrence/property damage per occurrence
79
Which of the following would be covered under the "other than collision" coverage a. contact with an animal b. vandalism c. falling object d. all of the above
d. all of the above
80
Damage as it applies to a personal auto policy will exclude which of the following? a. mechanical breakdown b. fire c. hail d. all of the above
a. mechanical breakdown
81
Make and model of the car do not have a factor in determining the premium for liability in an auto policy a. true b. false
a. true
82
Which of the following constitutes cancellation of an auto policy on behalf of the insurer? a. the inured turns 76 (age) b. failure to notify the insurer of an accident in a timely fashion c. suspension of the insured license or someone who regularly drives the car d. the insurer cannot cancel a policy
c. suspension of the insured license or someone who regularly drives the car
83
Choose the best definition of collision: a. two cars collide on the highway b. a car collides with any form of nature (i.e. dear, birds) c. a car collides with an object or the upset of a car d. a car collides with any object that is moving
c. a car collides with an object or the upset of a car
84
In a personal auto policy supplemental payments include all of the following except: a. cost of defense in excess of liability coverage b. up to 250 for the cost of bail c. costs incurred due to attending a court hearing at the request of the insurer d. increase in premium due to financial hardship
d. increase in premium due to financial hardship
85
A personal auto policy would cover negligence of the insured which inherently causes property damage to others a. true b. false
a. true
86
A personal auto insured wants coverage for his motorcycle, why is an endorsement needed? a. the insured does not have a motorcycle license b. no endorsement exists that can cover a motorcycle under a personal auto policy c. the personal auto policy does not cover a motorcycle under a personal auto policy d. none of the above
c. the personal auto policy does not cover a motorcycle under a personal auto policy
87
If an insured borrows a car and gets in an accident. The owner of the automobile also has insurance, what is true? a. both policies apply equally splitting costs b. the insured's policy pays for the damage only c. both policies apply, the owner of the automobile's insurance is primary and the borrowers is secondary d. the owners insurance pays the claims
c. both policies apply, the owner of the automobile's insurance is primary and the borrowers is secondary
88
Damage caused by an earthquake to an automobile is covered only if the car has: a. other than collision b. supplementary payments c. collision d. none of the above will cover earthquake
a. other than collision
89
At what age do individuals qualify for social security benefits a. 65 b. 60 c. depends upon date of birth d. 70
c. depends upon date of birth
90
Medicare Part B requires a premium payment. After this the insured also is responsible for what percent of the bills? a. 10% b. 15% c. 30% d. 20%
d. 20%
91
What is not a good reason for the purchase of a long term care policy a. intelligibility for a Medicare supplement policy b. Deafness runs in your family c. Did not qualify for medical d. Medicare refused to cover a claim
a. intelligibility for a Medicare supplement policy
92
Who is affected by a blackout period a. surviving spouse b. the surviving children c. the surviving parents
a. surviving spouse
93
At what age does the blackout period end a. 65 b. 60 c. 55 d. 70
b. 60
94
Under the Mexico endorsement on a personal auto policy how long does the insured have coverage a. 5 days b. 10 days c. 15 days d. 7 days
b. 10 days
95
Long-term care is least needed by the very rich and the very poor a. true b. false
a. true
96
Low cost auto insurance requires the insured to carry what limits a. 5/30/15 b. 10/20/3 c. 15/30/5 d. 100/300/100
b. 10/20/3
97
How is a HO3 similar to an HO5 a. both provide open peril coverage on the dwelling b. both provide open peril coverage on personal property c. both provide broad coverage on the dwelling d. all of the above
a. both provide open peril coverage on the dwelling
98
In insurance terms, what term is mandatory a. May b. Shall c. Waiver d. Thus
b. Shall
99
If fraud is committed by either party f a contract, what is the option of the injured party? a. sue for slander b. rescind the contract c. cancel the contract pro rata d. all of the above
b. rescind the contract
100
The commissioner of insurance is an elected official he can serve up to how many years a. 6 years b. 4 years c. 8 years d. 10 years
c. 8 years
101
Under an H-O policy, which of the following would be covered under Coverage B? a. a garage that is attached to the house b. a deck on the back of the house c. swimming pool d. none of the above
c. swimming pool
102
The effort to decrease the dollar aount of a loss would be a. reduction b. loss retention c. pure risk d. loss prevention
d. loss prevention
103
Anyone can buy flood insurance through the NIFP (National Insurance Flood Program) a. true b. false
b. false
104
Legal liability case would apply to all of the following except a. general b. proximate c. special d. punitive
b. proximate
105
Under the CA code of regulation, governing claim settlement practices prohibits all the following for unfair discrimination, except a. denied the claim based on gender b. denied the claim based on annual income c. denied the claim based on race d. denied the claim based on reckless behavior
d. denied the claim based on reckless behavior
106
Homeowners policies provide additional coverage, which of the following is not one of additional coverage's a. reasonable repairs b. fire department charges c. plants, shrubs, and trees d. additional living expenses
d. additional living expenses
107
Under a Homeowners policy when would mudslides be covered a. Only if its caused by an earthquake b. volcanic eruption c. when you file the claim within 30 days d. Never
d. Never
108
When can an insurer refer a body shop to the insured a. only when a special accident occurs b. never c. when the shop is listed to be used d. none of the above
c. when the shop is listed to be used
109
Can animals be covered under a homeowners policy? a. yes b. no
b. no
110
The purpose of the California fair plan would apply to all the following except a. To give the availability of basic property insurance in California b. To encourage competition among insurers who write business in CA c. To encourage maximum use of the normal insurance market provided by admitting insurers d. All of the above
b. To encourage competition among insurers who write business in CA
111
Under Ocean Marine all the following are claims that are covered by P&I Except a. Injury to an employee of the ship b. Injury to a passenger c. Damage to the ship and fuel d. All of the above
c. Damage to the ship and fuel
112
The purpose of the California fair plan apply to all the following except a. To help stability in the California insurance market b. To encourage maximum use of the normal insurance market provided by admitted insures c. To provide insurance to people who live in a brush fire area d. encourage insurance companies to compete
d. encourage insurance companies to compete
113
Under a homeowners policy Subsidence is a. always covered b. excluded under earthquake exclusion c. there's no such thing d. covered because its not listed on the exclusion
b. excluded under earthquake exclusion
114
Business income form, the extended business income coverage pertains to a. coverage applies to continue after the premises are restored b. this coverage only applies to new buildings c. this coverage only applies to new locations d. none of the above
a. coverage applies to continue after the premises are restored
115
Ed ran a red light and damages a claimants BMW. What type of coverage would he need to cover the BMW a. Physical damage b. Homeowners insurance c. Auto liability insurance d. CGL
c. Auto liability insurance
116
All the following are not covered under CGL except a. employee fighting with another employee b. employee being injured while working c. employee injuring a customer d. employee gets in a car accident that is owned by the owner of the business
c. employee injuring a customer
117
The purpose of CAARP is to a. protect the insured b. make auto insurance available to residents of the state c. make auto insurance available to everyone in the US d. Give homeowners to buy insurance when denied in a voluntary market
b. make auto insurance available to residents of the state
118
A primary reason for an umbrella policy is? a. to provide excess coverage for first party losses b. to provide investment capital c. provide gap coverage for first party losses d. none of the above
a. to provide excess coverage for first party losses
119
When must insurable interest exist in property insurance? a. only at the time of application b. only at the time of loss c. when the policy takes an effect and at the time of loss d. all of the above
c. when the policy takes an effect and at the time of loss
120
Workers compensation provides which of the following a. provides retirement income b. provides compensation for work related accidents regardless at fault c. provides major medical with a co-insurance of 80/20
b. provides compensation for work related accidents regardless at fault
121
Who has the authority to investigate an agent for unfair trade/claim practices? a. the district attorney b. the commissioner of insurance c. the police of the city you conduct business d. the insurance services office (ISO)
b. the commissioner of insurance
122
Which CA program would provide protection for property owner for basic coverage if the owner wasn't able to obtain coverage in the ordinary insurance market a. TSA plan b. dwelling program c. fair plan d. all of the above
c. fair plan
123
Insurable interest would apply to all of the following EXCEPT a. ownership b. reduce moral hazards c. prevent gambling d. none of the above
c. prevent gambling
124
Which of the following would not be a state insurance program a. workers compensation b. california fair plan c. social security d. unemployment insurance
c. social security
125
Business income coverage form would provide for which of the following: a. income minus expenses b. net profit or loss before taxes c. net income and noncontinuing expenses d. net income and continuing expenses
d. net income and continuing expenses
126
Which of the following would be excluded under coverage d of an HO-3 a. Ed is forced to leave the house due to a forest fire threatening the area b. Ed is forced to leave the house due to damage caused by a car c. Ed is forced to leave the house due to an impending flood d. all of the above
c. Ed is forced to leave the house due to an impending flood
127
A company that negotiates and binds ceding reinsurance on behalf of an insurer is a a. broker b. specialist c. TPA d. managing general agent (MGA)
b. specialist
128
CAARP does not provide which of the following a. liability insurance b. medical payments c. collision d. none of the above
c. collision
129
All of the following are true statements regarding payment of loss under a valued policy EXCEPT a. the insurer must make payment for the full amount of the loss even if there has been a substantial increase in the risk b. the insurer will make payment of the full amount of the partial loss c. if there are two policies covering the insureds interests, each policy will contribute pro-rata to the loss payment d. in case of a total loss, the insurer will make payment for the whole amount stated in the policy
a. the insurer must make payment for the full amount of the loss even if there has been a substantial increase in the risk
130
What is one reason a PAP may be cancelled by the insurer a. driving while intoxicated b. change of address c. material misrepresentation d. serious auto accident
c. material misrepresentation
131
An administrator provides what service for the insured's policy a. advance credit for policy fees b. collects policy premiums c. pays brokers fees d. covers prepaid debts
b. collects policy premiums
132
Under a building and personal property coverage form, what is an additional coverage a. ordinance or law coverage b. valuable papers and records c. property off premises d. property of others
c. property off premises
133
Which of the following items would be eligible for coverage under the personal property replacement cost, loss settlements endorsement a. sports memorabilia b. awnings c. antiques d. paintings
b. awnings
134
When the claimant and the company are unable to agree on the amount due after a loss and the matter is submitted to a separate entity for a solution a. assignment b. liberalization c. subrogation d. arbitration
d. arbitration
135
When would a loss caused by a mudslide be covered a. only when the mudslide is cause by a volcanic eruption b. never, mudslides are excluded c. only when the mudslides is caused by earth movement d. only when the mudslide is caused by a flood
b. never, mudslides are excluded
136
All of the following are considered consequential losses except which one? a. the cost to repair a structure damaged by wind b. the cost involved in notifying a company's clients of a temporary location c. the cost of renting a substitute vehicle because a covered auto was damaged by a covered cause of loss d. additional expenses incurred to maintain a household with a normal standard of living while their home is being restored
a. the cost to repair a structure damaged by wind
137
All of the following apply to insurable risk except a. losses must be catastrophic in nature b. there must be a large number of homogeneous exposure units c. any loss that occurs must be measurable d. the premium must be economically feasible
a. losses must be catastrophic in nature
138
Extended non-owner liability provides coverage for which of the following a. liability and medical payments b. liability and physical damage c. liability only d. liability and uninsured motorist
c. liability only
139
All of the following would be considered a cost of insurance except a. premiums paid by the insured b. decrease lawsuits c. opportunity cost d. increased in losses
c. opportunity cost
140
All of the following entities must adhere to the promises made in a contract of insurance EXCEPT a. insured b. insurer c. agent d. commission
d. commission
141
Which of the following is a characteristic of improvements and betterment a. must be approved in advance by the building owner b. the tenant can remove them when the lease expires c. they can be insured as business personal property d. they are made by the building owner
c. they can be insured as business personal property
142
Which of the following is a common condition under a commercial package policy a. short rata b. inspections c. subrogation d. cause of loss
b. inspections
143
Under a personal auto policy, which of the following would be covered a. brief case b. lap top c. portable radio d. permanently installed radio
d. permanently installed radio
144
Informs insurance clients about their right to privacy? a. illustration b. policy summary c. notice of information practice d. buyers guide
c. notice of information practice
145
When an insured is involved in a collision, the personal auto policy requires that the insured do which of the following a. press charges against the other party b. allow the insurer to inspect the damaged property before it is repaired c. submit a written notice of the loss to the insurer d. none of the above
b. allow the insurer to inspect the damaged property before it is repaired
146
The insurer cancels a homeowner's policy, how soon must the insurer return the premium to the insured. a. 30 days b. 15 days c. 25 days d. 10 days
c. 25 days
147
What is the penalty when an agent violates an advertisement rule pertaining to identification on printed material a. 500 fine for every offenses b. 1,000 fine c. 200 fine for the first offense, up to 1,000 for the third d. 5,000 fine for each violation and possible imprisonment
c. 200 fine for the first offense, up to 1,000 for the third
148
How are expectant interests insured, according to the code a. they are not insurable b. they are insurable for the full expect value c. they are insurable for half of the stakeholders expected value d. they are insurable for the stakeholder share of the full expected value
a. they are not insurable
149
Pays for bodily injury or property damage, which occurs or is discovered during the policy period a. claims made commercial general liability policy b. occurrence general liability policy c. pollution liability policy d. auto liability policy
a. claims made commercial general liability policy
150
All of the following statements regarding independent agents are TRUE EXCEPT a. they have full ownership of expirations b. they represent the insured first and foremost c. they can transfer the business written to another insurer d. much of their income is derived from the retention of current accounts
b. they represent the insured first and foremost
151
Under the California Insurance Code it is a violation to act as a producer for a non-admitted carrier unless a. the producer is a surplus lines broker b. the producer is a solicitor c. the producer is dually license d. it is always a violation no matter what type of producer
a. the producer is a surplus lines broker
152
The value report form is used for what purpose a. may be used to modify the insurance provided by the building and personal property coverage form b. may be used to modify the insurance provider by the business income c. may be used with commercial auto fleet program d. none of the above
a. may be used to modify the insurance provided by the building and personal property coverage form
153
Miscellaneous type vehicle endorsement provides which of the following a. all coverage under a pap b. physical damage only c. liability only d. physical damage liability
d. physical damage liability
154
Under the doctrine of contributory negligence, plaintiffs who are partially at fault a. cannot recover damages from their own insurer b. cannot recover damages from a negligent defendant c. can recover partial damages from a negligent defendant d. can recover the full amount of damages from a negligent defendant
a. cannot recover damages from their own insurer
155
The exchange of the possibility of a large loss for the certainty of a premium payment a. avoidance b. transferring c. sharing the risk d. becoming self insured
b. transferring
156
Under the broad cause of loss form, which of the following is an additional peril that would be covered a. ice and weight of snow b. smoke c. volcanic eruption d. riot or civil commotion
a. ice and weight of snow
157
Which of the following would be an example of Execution of a contract a. receiving premiums b. giving an insurance quote c. signing a binding receipt d. talking to a client about their insurance needs
c. signing a binding receipt
158
Which of the following would be an example of solicitation under transaction of insurance a. signing a binder b. giving an insurance quote c. meeting with a prospective client d. none of the above
b. giving an insurance quote
159
According to the code, a judgement against an applicant who pleased nolo contendere is considered to be a. conviction b. innocent with the department of insurance c. innocent d. none of the above
a. conviction
160
Which of the following would be considered an additional coverage under an HO-3 a. loss of use b. liability coverage c. ordinance or law d. additional living expense
c. ordinance or law
161
The clause in a policy that states that the amount of the insured's interest in the structure has been fixed is the a. assigned value clause b. expected value clause c. valuation clause d. liberalization clause
c. valuation clause
162
Driver A was in an auto collision with driver B. Driver A sustained $10,000 worth in damages. Driver A was at fault 30%. Under the doctrine of contributory negligence, how much can driver A receive from driver B? a. nothing b. $10,000 c. $3,000 d. $7,000
a. nothing
163
The provision of the insurance contract that places limitation on the insurers promise to perform are the a. insurable interest b. insuring clause c. exclusions d. all of the above
b. insuring clause
164
Personal lines agents are licensed to sell all of the following except a. auto insurance b. yacht insurance c. life insurance d. earthquake insurance
c. life insurance
165
Designated to cover an owner-occupied dwelling in which the replacement cost significantly exceeds its market value? a. HO-2 b. HO-4 c. HO-6 d. HO8
HO-6
166
Protection and Indemnity under Ocean marine would cover all of the following except a. liability b. workers comp c. merchandise d. none of the above
c. merchandise
167
Exclusions are found in what part of the insurance policy? a. declaration b. insuring agreements c. cause of loss form d. endorsements
c. cause of loss form
168
A scheduled personal property endorsement provides what type of coverage? a. basic b. broad c. open peril d. all of the above
c. open peril
169
A driver is driving on the road and falls asleep at the wheel, the driver rolls the car over without hitting anything or anyone. What coverage applies? a. OTC b. homeowners liability c. not covered d. collision
d. collision
170
Under the commercial crime coverage part loss resulting from employee dishonesty is: a. always excluded b. always covered c. excluded unless an employee dishonesty coverage form is attached d. always covered
c. excluded unless an employee dishonesty coverage form is attached
171
A monoline policy: a. is a policy that is written to cover property only b. is any insurance written as a single line policy c. is a policy that covers only lines of insurance which cannot be part of package policies d. there is no such thing
b. is any insurance written as a single line policy
172
A risk is: a. a peril b. certainty of loss c. proximate cause d. uncertainty of loss (chance of loss)
d. uncertainty of loss (chance of loss)
173
A pure risk involves a chance of a. gain b. loss c. both a & b d. neither a or b
b. loss
174
A risk management technique that eliminates a loss exposure and reduces the chance of loss to zero is a. loss prevention b. retention c. loss reduction d. avoidance
d. avoidance
175
When suffering a covered loss, an insured individual should do which of the following? a. send a list of items damaged stating the quantity and receipts of purchase b. Submit to an interview with the insurer's representative without any other person present c. notify the policy if there is a theft loss d. all of the above
d. all of the above
176
How many days does an insurer have to return unearned premiums to an insured a. 10 days b. 15 days c. 25 days d. 30 days
c. 25 days
177
The amount to replace property with like property of the same quality and construction is the: a. Replacement cost B. Actual cash value C. Market value D.Stated value
A. Replacement cost
178
What is actual cash value (ACV)? a. replacement cost + depreciation b. market value-depreciation c. replacement cost-depreciation d. stated value-depreciation
c. replacement cost-depreciation
179
If an individual or a family suffers a loss due to death or disability of a member, what type of loss is it? a. personal loss b. personnel loss c. human loss d. needs loss
a. personal loss
180
Insurance has a number of characteristics. Which of the following is NOT one of them? a. If there is ambiguous language in an insurance contract, it will be resolves in favor of the insured b. parties to a contract should be able to rely upon the honest representations of the other party c. it involves a catastrophic exposure d. the insurer is bound to perform under the contract
c. it involves a catastrophic exposure
181
Which of the following is an example of loss retention? a. buying health insurance b. not purchasing collision insurance on your auto c. placing a watercraft endorsement on your homeowner's policy d. removing dried bush from your house's premises
b. not purchasing collision insurance on your auto
182
If it is proven that another person's negligence contributed to an injury, what gives the injured party the right to seek compensation? a. case law b. contract law c. criminal law d. tort law
d. tort law
183
Which of the following statements is true regarding compensatory damages? a. general damages have specific economic value b. punitive damages are awarded to a person for actual pain and suffering c. special damages do not have a specific economic value d. there is usually no direct correlation between the amount of general and special damages awarded to the victim
d. there is usually no direct correlation between the amount of general and special damages awarded to the victim
184
Liability losses are referred to as a. first party losses b. second party losses c. third party losses d. none of the above
c. third party losses
185
In an insurance contract, D.I.C.E. refers to: a. Declarations, insurable interest, conditions, and exclusions b. Declarations, insurable interest, conditions, and endorsements c. Declarations, insuring clause, conditions, and endorsements c. Declarations, insuring clause, conditions, and exclusions
c. Declarations, insuring clause, conditions, and exclusions
186
An insured purchased new furniture for $6,000. At the time of a fire loss, it had depreciated $2,000. At current rates, the same furniture will cost $7,000 to replace. The actual cash value of the destroyed furniture is: a. $7,000 b. $8,000 c. $6,000 d. $5,000
d. $5,000
187
When an insurer cancels a policy and only retains earned premium, this is: a. flat cancellation b. short rate cancellation c. pro-rata cancellation d. continuous cancellation
c. pro-rata cancellation
188
An insurer's loss reserve for a claim is: a. equal to claims paid divided by earned premium reserve, not including loss adjustment expense b. the maximum amount the insurer will have to pay to close to the claim c. the exact amount the insurer will have to pay to close the claim d. an estimate of the amount that the insurer will pay
d. an estimate of the amount that the insurer will pay
189
What is the process called whereby insurers decide which customers to insure and what coverage to offer? a. adverse selection b. rate making c. marketing d. underwriting
d. underwriting
190
A reduction in the value of property that results immediately from damage to the property is known as: a. additional living expense b. consequential loss c. extra expense d. direct loss
d. direct loss
191
The process whereby an insured suffers a loss and is paid to return him to his prior financial condition is: a. insurable interest b. pure risk c. indemnity d. ceding
c. indemnity
192
What is a hazard? a. anything that increases the chance of loss b. a broken promise c. any possibility of financial loss d. a peril or loss of property
a. anything that increases the chance of loss
193
A policy may NOT be transferred to another without: a. oral consent b. oral consent of the insurer c. written consent of the insured d. written consent of the insurer
d. written consent of the insurer
194
Which of the following is a true statement about insurance? a. it is a method of transferring risk b. it is for the low income/high risk persons c. it is sold by government officials d. it's a method of retention
a. it is a method of transferring risk
195
Grouping people by similar characteristics is: a. unfair discrimination b. prejudice c. fair discrimination a basic principle of insurance
c. fair discrimination
196
A peril is defined as: a. a cause of loss b. increases the chance of loss c. a hazard d. an accident
a. a cause of loss
197
The main purpose of insurance is to: a. transfer the risk b. reduce perils c. avoid hazards d. reduce the risk
a. transfer the risk
198
The insured should be compensated for his loss, returning him to the condition that existed prior to the loss. This is the principle of indemnity. Which of the following is correct? a. it is based on the law of small numbers b. it is a basic principle of insurance c. it is based on the law of supply and demand d. it involves the principle of adhesion
b. it is a basic principle of insurance
199
Which of the following is an example of loss retention? a. buying life insurance b. not purchasing collision insurance on your auto c. placing a motorcycle endorsement on your homeowner's policy d. removing dried bush from your house's premises
b. not purchasing collision insurance on your auto
200
Which of the following is an example of reducing risk probability? a. buying OTC b. reducing premium payments c. increasing deductibles d. putting a fence around the pool
d. putting a fence around the pool
201
Which of the following is not a benefit of insurance? a. it can be a source of investment funds b. it transfers loss c. it reduces risk exposure d. it reduces out of pocket expenses
c. it reduces risk exposure
202
A house located next to a dynamite plant is considered what kind of hazard? a. moral b. legal c. physical d. liability
c. physical
203
Where is a policy personalized to say who is covered, what is covered, limit of insurance and policy period? a. insuring clause b. declarations c. conditions d. endorsements
b. declarations
204
Insurance has a number of characteristics. Which of the following is NOT one of them? a. if there is ambiguous language in an insurance contract, it will be resolved in favor of the insured b. parties to a contract should be able to rely upon the honest representations of the other party c. it involves a catastrophic exposure d. the insurer is bound to perform under the contract
c. it involves a catastrophic exposure
205
An insured suffers a loss caused by a third party. How will the insured's insurance company handle the claim? a. the company will not cover the loss b. the insured will have to seek reimbursement himself from the third party c. the insurer will cover a portion of the loss d. the insurer will pay the insured for a covered loss and seek reimbursement from the party at fault with the cooperation of the insured.
d. the insurer will pay the insured for a covered loss and seek reimbursement from the party at fault with the cooperation of the insured. Also, subrogation (give me my money, bitch)
206
The insurer's right to recover its claim payment to an insured from a negligent 3rd party is known as: a. arbitration b. liberalization c. subrogation d. assignment
c. subrogation
207
If an insured voluntarily relinquishes his rights, this is an example of: a. estoppel b. coercion c. waiver d. warranty
c. waiver
208
The amount to replace property with like property of the same quality and construction is the: a. replacement cost b. actual cash value c. market value d. stated value
a. replacement cost
209
When an insurance policy is cancelled by the insured, and the company retains premium for the protection provided plus expenses, cancellation is said to be on a: a. flat basis b. short rate basis c. pro rata basis d. fixed basis
b. short rate basis
210
An insurer cancels a policy and returns the entire premium. This is: a. short rate b. pro-rata c. flat cancellation d. no fault
c. flat cancellation
211
How many days does an agent have to return unearned premium to an insured? a. 25 days b. 10 days c. 30 days d. 15 days
d. 15 days
212
How many days does an insurance company have to give unearned premium back to an agent? a. 10 days b. 15 days c. 25 days d. 30 days
a. 10 days
213
Insurers may purchase reinsurance for a variety of reasons. Which of the following is NOT a good example of the use of reinsurance? Insurer purchases reinsurance: a. only on the below average business submitted to them, keeping the good business for themselves b. to avoid capacity problems by reducing the amount of unearned premium c. to more safely insure an exceptionally large account
a. only on the below average business submitted to them, keeping the good business for themselves
214
Which insurance company is owned and formed for the benefit of its members? a. Lloyds of London b. A mutual insurer c. demutualization d. captive companies
b. A mutual insurer
215
What effect does increasing a deductible have on a policy? a. increases the premium payment b. reduces the premium payment c. increases likelihood of getting insurance d. increases insurance policy benefits
b. reduces the premium payment
216
The method in which insurance companies receive approval from the DOI before using certain rates a. prior approval b. underwriting c. reinsurance d. coinsurance
a. prior approval
217
Which of the following is not a method for risk management? a. transfer b. avoidance c. retention d. variance
d. variance
218
The system in which insurers determine who to insure and that rates to charge is known as: a. insurance b. underwriting c. indemnify d. reinsurance
b. underwriting
219
Insurance companies transfer part of a particularly large risk through what process a. reinsurance b. indemnify c. underwriting d. transfer
a. reinsurance
220
Insurance contracts are between how many parties a. 4 b. 3 c. 1 d. 2
d. 2
221
The total amount an insurance company is liable to pay out is: a. policy total b. limit of insurance c. aggregate limit d. indemnity
b. limit of insurance
222
A speculative risk, like a pure risk is insurable a. true b. false
b. false
223
To qualify as an insurable risk: a. losses must be definable b. losses must be accidental c. losses must be enough to cause hardship to the insured d. all of the above
d. all of the above
224
Aleatory in nature refers to: a. ambiguous language b. enforceable c. unequal exchange by two parties d. waiver of promise
c. unequal exchange by two parties
225
Because insurance is a contract of adhesion, ambiguous language in a contract will show which party at fault a. insurance company b. MGA c. insured d. agent
a. insurance company
226
Failure to disclose material fact is: a. concealment b. fraud c, waiver d. estoppels
a. concealment
227
Misrepresentation, deceit or trickery can be defined as: a. materiality b. false warrant c. conditional concealment d. fraud
d. fraud
228
Provisions that deny coverage for certain perils: a. exclusions b. declarations c. endorsements d. conditions
a. exclusions
229
The insuring agreement contains all of the following except a. perils insured against b. persons/property covered c. location d. exclusions
d. exclusions
230
Assignment/transfer cannot be made without written consent from: a. additional insured b. agent c. first named insured d. insurer
d. insurer
231
A deduction is the portion of a loss retained by the insured before the insurer will cover a claim a. true b. false
a. true
232
To what does lapse refer? a. the insurer decides not to continue insuring a customer b. the insured voluntarily cancels their coverage c. termination due to non-payment d. a policy that is cancelled upon its effective date
c. termination due to non-payment
233
Insureds must comply with certain provisions when submitting a claim, these include: a. prompt notice of loss or damage b. submitting claims c. notifying the police if theft is involved d. all of the above
d. all of the above
234
Coinsurance refers to the amount of insurance an insured must carry in order to be fully insured a. true b. false
a. true
235
What is unoccupied? a. there are people living in the building but no furniture b. there may be furniture but no people in a building c. there are no people and no furniture d. the same as vacant
b. there may be furniture but no people in a building
236
Which of the following must be on ALL insurance policies? a. parties of the contract b. insurable interest c. term of the policy d. all of the above
d. all of the above
237
To what does insurable interest mean? a. a loss to the property would have some financial loss for the person b. a loss that the insured would like to cover through insurance c. property taken over by an insurer to reduce loss d. all of the above
a. a loss to the property would have some financial loss for the person
238
A term that refers to a situation in which two or more perils cause a loss a. peril b. open peril c. consequential loss d. concurrent causation
d. concurrent causation
239
A consequential loss is not directly caused by a peril but assumed as a result of a direct loss. a. true b. false
a. true
240
In order for negligence to exist which of the following must be present? a. breach of the duty to act b. occurrence of injury or damage c. duty to act d. all of the above
d. all of the above
241
Compensatory damages in a hearing will generally determine the amount of punitive damages. a. true b. false
b. false
242
An event that results in a loss to an insured at a definite time and place or due to repeated exposure can be defined as a. negligence b. occurrence c. accident d. none of the above
b. occurrence
243
Through what kind of liability can a person be held responsible for the actions of others... i.e. negligent acts of a child or employee a. strict b. absolute c. vicarious d. intentional
c. vicarious
244
An insurer organize in a state outside the state of California can be referred to as what kind of insurer a. Domestic b. Foreign c. Alien d. Admitted
b. Foreign
245
What department is set up in order to regulate insurance rates? a. DOI b. the FAIR plan c. CAARP d. ISO
d. ISO
246
A person that solicits, negotiates and effects contracts on behalf of an insurer is a: a. agent (producer) b. captive agent c. solicitor d. independent agent
a. agent (producer)
247
A person that sells insurance for only one company is a. agent b. broker c. captive agent d. independent agent
c. captive agent
248
A fiduciary must hold funds and property, in a position of trust. They must also a. act in a prudent fashion b. act as an agent c. commingle money d. misappropriate funds
a. act in a prudent fashion
249
An illegal practice which occurs when an agent mixes personal funds with the insured's or insurer's funds a. theft b. stealing c. commingling d. robbery
c. commingling
250
An incorporated insurer owned by its policy holders and formed for their benefit is called a. stock insurer b. mutual insurer c. independent insurer d. broker insurer
b. mutual insurer
251
A way for insurers to avoid having to pay for large or catastrophic losses a. claims handling b. avoidance c. reinsurance d. underwriting
c. reinsurance
252
What has a separate aggregate limit under CLG?
Products completed
253
What is a deductible?
A specified amount of money that is paid by the insured before the insurer pays any money on a claim
254
What is embezzlement?
Employee dishonesty, which isn't covered by a crime policy unless an Employee Dishonesty form is attached (Doesn't cover shortages, theft only)
255
Who is a broker?
A person who represents the client in transaction. Property & Casualty only.
256
What is Errors & Omissions insurance?
Liability insurance that covers agents and insurance companies if they make mistakes or forget to include information in a contract.
257
What is Code: Section 770?
When buying a property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker.
258
What is the Law of Large Numbers?
The greater the number of insured, the more accurately the prediction.
259
What is standard risk
Classification of risk that is normal
260
What is a loss sustained form?
Covers losses that occur during the policy period and losses are discovered and reported during the policy period or up to one year after the policy expires.
261
What is a Discovery Form?
Covers losses that occur either prior to the policy inception or during the policy period and losses are discovered and reported during the policy period or up to 60 days after the policy expires.
262
What is a substandard risk?
Classification or risk that is more than the normal acceptable risk.
263
What is an underwriter?
A person whose job it is to asses risk and determine classification of the insured (an agent is a field underwriter).
264
What are surplus lines?
Found in property and casualty insurance. A surplus line broker places insurance with a non-admitted insurer.
265
What is a non-admitted insurer?
An insurer that is not licensed to do business in a particular state. (a surplus lines broker works with non-admitted carriers)
266
What does section 2 on homeowner's policy cover?
Liability and medical payments. Paid to others only.
267
What pays excess liability amounts?
Umbrella, after underlying policy or retention is paid. Liability only; does not cover property.
268
What is worker's compensation insurance?
Insurance purchase by employers to cover their employees in case the employee is hurt on the job.
269
What is excluded under CGL?
Pollution - with the exception of fuel spilled during normal operations. Pollution is normally covered under CPP policies or Builders' risk
270
Parking lots, dealerships, and repair garages need...
Garagekeepers coverage
271
What is symbol #7?
Specifically described autos
272
What is a retroactive date?
The first date an occurrence would be covered under a claim made CGL policy.
273
What is symbol #4?
Owned autos, other than private passenger vehicles
274
Under crime insurance, the employee dishonesty endorsement never covers...
shortages of inventory
275
Worker compensation in a yacht policy
Part of the protection and indemnity (the liability portion)
276
What is symbol #9?
Non-owned autos
277
A, B and C of Commercial Liability (CGL) are:
a. bodily injury and property damage b. personal and advertising injury c. medical payments
278
"Protection and Indemnity" on an ocean marine or yacht insurance
Liability & workers comp. portion
279
Hull covers
Physical damage to insured's ship or yacht
280
What is a peril?
Cause of loss
281
Open peril
All perils are covered except those specifically excluded
282
What is vicarious liability?
Coverage that an employer has for employees, for when they are held responsible but not directly.
283
What is risk?
Uncertainty of loss
284
What is pure risk?
A chance of loss
285
Who is the third party?
The insured party, to whom liability pays claims
286
What is a hazard?
Anything that increases a chance for loss
287
What is collision?
Colliding with another car, an object or upset of a car
288
What is absolute liability?
Liability imposed when hazardous materials or dangerous animals are involved.
289
What is strict liability?
Another term for absolute liability, when a product causes injury or death.
290
Real Property
Land, buildings... anything attached (does not move)
291
What is a physical hazard?
Distinct characteristic arising from material, structural, or operational features that increase a chance for loss. (i.e. being next to explosives)
292
What is the declaration?
a contract section stating who or what is covered, the amount of coverage, the policy period and the premium.
293
What is personal property?
Property that can move (furniture, clothes, paintings...etc)
294
What are exclusions?
Things that are not covered
295
What is an insurable interest?
a financial interest
296
What is judgement rating?
It is based on best judgement of underwriter in classifying a risk
297
What is an HO-6?
Broad form coverage for personal property of a condo owner
298
What is pure risk?
The insured has only a chance for loss and never gain
299
What is experience rating?
Method used to determine rate based in insured's loss experience
300
What is a binder?
Confirms that coverage is bound. Temporary insuring contract (written or oral)
301
What is contributory negligence?
When a person is at all negligent, and they cannot file or collect for a claim.
302
What is comparative negligence?
A person can file a claim, but damages are reduced based on that party's negligence.
303
What is replacement cost?
The cost to replace without a deduction for depreciation. (NOT WHAT SOMEONE PAID FOR IT)
304
What are CAARP's minimum limits?
15/30/5
305
What are endorsements?
Written agreement attached to a policy to add or subtract insurance coverage's
306
What is a direct loss?
The first loss that occurs (a fire burns down the store)
307
What is a consequential loss?
A consequence of a direct loss... i.e. a store loses business income after a fire
308
What is OTC?
Other than collision - anything causing loss or damage to the car, except collision/upset
309
What is the Mexican liability endorsement?
Excess liability for accidents within 25 miles of the US border (trips of 10 days or less)
310
What is the purpose of insurance?
To transfer risk
311
What does OTC cover?
Earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)
312
What are HO-3 and HO-5?
Both are special, and cover all risk on the dwelling policy. Only HO-5 covers all risk on "C" (personal property)
313
What is market value?
selling price
314
What percentage must be vacant for a building to be called vacant?
70%
315
In a contract who is "we"?
The insurer
316
How much coverage does a dwelling policy give for personal property away from the premises?
10% of the personal property limit
317
Why is a yacht policy like an ocean marine policy, even though a yacht policy is a personal line?
The structure of the policy is the same, hull covers damage to the vessel, P&I covers liability and worker's comp. A yacht policy can be used for organized competitive racing...an ocean marine (boat) policy cannot.
318
What is not considered transacting?
Establishing a list of clients
319
"Did" over "Should"?
In coinsurance - "did" over "should" is the fraction of the loss the company pays. The remaining is paid by the insured. (Take what they "did" carry and place it over what "should" have carried)
320
What is livery?
A vehicle for hire, to transport people... i.e. limousines
321
What is GAP insurance?
It pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease.
322
What is the number of days to notify the insurer to add collision on a new car when replacing a car that only had liability?
4 days
323
What is the minimum good driver discount?
20%
324
Miscellaneous vehicle
Motorcycles, ATV's (not autos or mobile equipment)
325
How is hitting an animal on the road covered?
OTC (Animal movements are unpredictable)
326
What has a split limit on the auto liability section?
Bodily injury
327
What is a split limit?
Split limit liability separates these three parts. For instance, you might hold $25,000 personal injury per person, $50,000 personal injury per accident and $20,000 property damage. What that means is that if you are to blame in an accident, your insurance will cover up to $25,000 worth of medical bills per person, up to a total of $50,000. It will also cover up to $20,000 in damage bills. Anything over those amounts is your personal responsibility. If the cost of any one claim exceeds your limit, it is up to you to pay it. So if there is $30,000 in damage to a car, you are out $10,000. Likewise, if two people are injured, each with bills totaling $50,000. That’s $100,000 total with $50,000 being your out-of-pocket expense.
328
What is single limit liability?
Single limit liability combines all of the limits into one pool. The same type of coverage applies: personal injury per person, personal injury per accident and property damage. However, since there is no limit to any one of them by itself, as long as the total claim does not exceed the total coverage you own, your insurance will cover any combination of damages. The number you are concerned with is the aggregate limit liability–damages in total.
329
What has as single limit?
Property damage
330
You have liability only and borrow a car... and collide with another. Which pays?
The borrowed car's insurance is primary.
331
What are qualifying areas under the FAIR plan?
Designated brush fire and los income inner city areas (subject to civil unrest)
332
Is an object falling from an airplane covered?
Under extended coverage's
333
Where does a driver have coverage?
US, Canada and US Possessions (Puerto Rico, Guam)
334
Which of the following qualify to be considered insured for liability coverage under the personal auto policy? a. the named insured's resident son while driving a neighbor's car. b. the named insured's neighbor while taking the named insured for a drive in the neighbor's car. c. the named insured's father who, while visiting from another state, drives a car the named insured borrows from a neighbor. d. Desert Sun Co., which provides a company-owned car to the named insured.
a. the named insured's resident son while driving a neighbor's car.
335
Which of the following expresses the meaning of an automobile policy limit of liability specified as 100/300/100? a. B.I. per person/P.D. per occurrence/P.D. per person b. P.D. per person/P.D. per occurrence/B.I. per person c. B.I. per person/P.D. per person/B.I. per occurrence d. B.I. per person/B.I. per occurrence/P.D. per occurrence
d. B.I. per person/B.I. per occurrence/P.D. per occurrence
336
Referring to a personal auto policy, other than collision or OTC provides coverage for which of the following? a. collision b. towing and labor costs c. loss due to mechanical breakdown d. loss by theft
d. loss by theft
337
All of the following would be considered other than collision losses under the personal auto policy EXCEPT: a. collision with another car b. contact with a deer c. loss caused by a falling object d. vandalism
a. collision with another car
338
All of the following are eligible for coverage under the uninsured motorists coverage of the personal auto policy EXCEPT: a. an accident with a motorist who had less liability insurance than required by financial responsibility laws b. an accident in which a hit-and-run driver hits the insured's covered auto c. an accident with a driver who carries the minimum liability limits required by law, but whose insurance is not adequate to cover the damages d. an accident with an insured driver whose insurance company declines coverage
c. an accident with a driver who carries the minimum liability limits required by law, but whose insurance is not adequate to cover the damages
339
The damage to your auto section of the personal auto policy excludes: a. theft of the automobile b. ice damage c. mechanical breakdown d. fire damage
c. mechanical breakdown
340
An insured has a personal auto policy with all cars insured by one company. The insured sells one of the cars and buys a new one to replace it. What must the insured do to establish liability coverage for the new vehicle? a. notify the company within 40 days b. contact the insurance company to have a new policy issued c. nothing. coverage is automatic d. pay the additional premium due for the replacement car within 60 days
c. nothing. coverage is automatic
341
Which of the following is not a factor in determining the liability premium for a personal auto policy? a. make and model year of the vehicle b. age and marital status of the driver c. territory of garage d. use of the car for personal or business
a. make and model year of the vehicle
342
An insured has a personal auto policy with a liability coverage of $300,000 per occurrence. The insured causes an auto accident which results in $150,000 bodily injury to the other driver, $200,000 to a passenger, and $8,000 property damage to their car. To what extent would the insured's liability cover these losses? a. $300,000 b. $150,000 c. $450,000 d. $8,000
a. $300,000
343
The common method for complying with automobile financial responsibility laws is: a. auto insurance policy b. self-insurance c. a bank bond d. homeowners insurance
a. auto insurance policy
344
On which of these may cancellation of an automobile policy by the insurer be based? a. the age of the insured, such as turning 75 years old b. failure of the insured to give written notice to the insurer of an accident within 15 days in which he was at fault c. suspension of the driver's license of a person who is insured under the policy and who usually drives the insured automobile d. all of the above
c. suspension of the driver's license of a person who is insured under the policy and who usually drives the insured automobile
345
What is not covered under the physical damage section of an auto policy? a. hood ornament b. radio permanently installed in the dash c. lap top computer stolen from the car which was parked on the street d. breakage of glass
c. lap top computer stolen from the car which was parked on the street
346
What is not covered under OTC of a personal auto policy? a. hood ornament b. theft of necktie and briefcase from the car left at airport c. radio installed in the dash d. spare tire
b. theft of necktie and briefcase from the car left at airport
347
An insured has an HO policy and a personal auto policy. He just bought a 40" TV from electronic city and while driving home he is in an accident and the TV is destroyed. The TV will be covered by his auto policy. a. true b. false
b. false
348
An insured has an HO policy and a personal auto policy. He just bought a 40" TV from electronic city and while driving home he is in an accident and the TV is destroyed. How may the TV be covered? a. auto policy b. homeowner's policy c. liability policy d. not covered
b. homeowner's policy
349
The best definition of collision? a. two cars collide on a public highway b. a car collides with any object c. a car collides with an object, or upset of a car d. a car collides with a moving object
c. a car collides with an object, or upset of a car
350
If the insured is in an accident in a state which has higher limits, what will the insured's company do? a. refuse to pay the claim b. pay the claim, but only after the insured pays a retroactive premium c. pay up to the limits of the insured's policy d. will meet the minimum requirements of any other state with no additional premium due
d. will meet the minimum requirements of any other state with no additional premium due
351
In a personal auto policy, supplemental payments should include: a. cost of defense in excess of liability coverage b. up to $250 for the cost of bail bonds c. costs incurred because of attendance at hearings or trials at the company's request d. all of the above
d. all of the above
352
What is covered under collision in a personal auto policy? a. insured locks his keys in the car and breaks a window to get in the car b. veterinarian bills for a stray dog hit by the insured c. intentional damage done by the insured d. none of the above
d. none of the above
353
All are uninsured motorists EXCEPT: a. a hit and run driver who cannot be identified b. a car insured by a bonding company or insurance company, the company being insolvent c. a vehicle self-insured by a government agency d. a vehicle that is not covered by an insurance policy
c. a vehicle self-insured by a government agency
354
In settling a claim for an auto under a personal auto policy, the insurer can repair, replace with like kind and quality, or: a. provide replacement cost b. provide actual cash value c. provide replacement cost plus depreciation d. provide replacement cost with no depreciation
b. provide actual cash value
355
The insured has a personal auto policy (PAP) with medical payments of $1,000. Which of the following is an incorrect statement? a. the insured drives a neighbor's child to school and is in an accident. Both are covered for a total of $1,000 of medical payments b. the insured's son is hit by a car while walking to school and is covered for $1,000 of medical expenses c. the insured is hurt while driving with a neighbor who does not have medical payments. The insured's medical payment will cover him. d. the insured slams his daughter's hand in the car door and the injury is covered
a. the insured drives a neighbor's child to school and is in an accident. Both are covered for a total of $1,000 of medical payments
356
Under a personal auto policy where would the insured have coverage? a. Tokyo, Japan b. London, England c. Montreal, Canada d. Mexico City, Mexico
c. Montreal, Canada
357
The insured has a personal auto policy with bodily injury limits of 25/50. There were three injured parties in the other car with medical bills of (1) $30,000, (2) $9,000 and (3) $8,000. How much will the liability policy pay? a. $47,000 b. $42,000 c. $50,000 d. nothing
b. $42,000
358
Mike has a personal auto policy. Which of the following would be covered by his policy with additional premium and an endorsement attached? a. Mike's use of a temporary substitute vehicle while his own car is being repaired b. Mike pulls a rowboat on a trailer behind his car c. Mike's use of an unowned company car which is provided for his regular use d. Mike trades in his car and, while driving home in his new car, he is in an accident
c. Mike's use of an unowned company car which is provided for his regular use
359
Janet has a personal auto policy. Which of the following would not be covered by her policy without an additional premium and an endorsement attached? a. Janet's use of a temporary substitute vehicle while her own car is being repaired b. Janet pulls a rowboat on a trailer behind her car and trailer breaks loose, causing damage c. Janet runs over a mailbox while using an unowned company car that is provided for her regular use d. Janet trades in her car and while driving home in her new car, she is in an accident
c. Janet runs over a mailbox while using an unowned company car that is provided for her regular use
360
An insured has collision coverage. In which of the following cases would be he covered? a. the vehicle washed away in a flood b. a tree fell in the street two hours earlier due to a storm. The insured hit it and caused damage to the car c. the insured hit a pothole and damaged the car d. a rock flew off a truck and broke the insured's windshield
b. a tree fell in the street two hours earlier due to a storm. The insured hit it and caused damage to the car
361
A personal auto insured wants to add his motorcycle to his personal auto policy (PAP) by endorsement. Why is the endorsement needed? a. the PAP does not cover vehicles with two wheels b. the insured cannot add his motorcycle by endorsement c. motorcycles need an endorsement as they are dangerous to drive d. the insured has been driving for only two years
a. the PAP does not cover vehicles with two wheels
362
Other than collision (OTC) of a personal auto policy would cover: a. hood ornament b. radio that is installed in the dash c. spare tire in the trunk d. all of the above
d. all of the above
363
In determining rates to charge for auto insurance, a company may use the following three factors plus other factors approved by the commissioner: 1. driving experience 2. driving record 3. annual mileage a. true b. false
a. true
364
Art has a homeowner's policy. He does not own a car. He is planning on taking a trip and renting a car. Sometimes he borrows friends' cars. What would you suggest be added to a personal auto policy to cover his needs? a. named non-owner b. extended non-owner c. miscellaneous vehicle endorsement d. special vehicle endorsement
a. named non-owner
365
If the insured has auto insurance and he borrows a car on which there is auto insurance and he is in an accident. What is true? a. both policies apply but the insured's insurance is primary b. both policies apply but the owner of the car's insurance is primary c. the insured's policy will pay the claim d. the owner of the car's policy will pay the claim
b. both policies apply but the owner of the car's insurance is primary
366
Under OTC, what is the limit for transportation expense incurred by the insured in the event of the total theft of the insured's covered auto? a. coverage pays up to $20 a day to a maximum of $600 b. coverage pays up to $30 a day to a maximum of $450 c. coverage pays up to $15 a day to a maximum of $1,000 d. policy will pay nothing
a. coverage pays up to $20 a day to a maximum of $600
367
An insured woman has collision, OTS, and liability protection on her auto policy. She borrows an auto on which the owner carries only liability coverage. She is in an at fault accident. How will the claim be settled? a. the auto owner's liability is primary; no collision coverage applies b. the insured woman's liability is primary; no collision coverage applies c. the auto owner's liability is primary; the insured woman's collision coverage will cover the borrowed car d. the insured woman's liability insurance is primary and her collision coverage will cover the borrowed car.
c. the auto owner's liability is primary; the insured woman's collision coverage will cover the borrowed car
368
A personal automobile policy with a Mexican liability endorsement will cover: a. a driver anywhere in Mexico b. a person living within 25 miles of the Mexican border c. a Mexican national while driving in the U.S. d. an American while driving up to 25 miles into Mexico
d. an American while driving up to 25 miles into Mexico
369
A non-owned auto is covered on a PAP: a. if it is leased b. if it is for regular use c. if it is borrowed from a friend without permission d. all of the above
a. if it is leased
370
Damage to an automobile caused by an earthquake is covered under: a. collision b. other than collision c. supplementary coverage d. none of the above
b. other than collision
371
Damage caused to an auto by an earthquake is part of the OTC coverage in a personal auto policy: a. true b. false
a. true
372
Under the other than collision coverage, which of the following would be covered? a. the insured does property damage to another car b. the insured injures another person c. the tires are stolen from the insured's car d. collision damage to the insured's car
c. the tires are stolen from the insured's car
373
The insured's car is stolen. The thief totaled the car. What would provide coverage for the insured? a. other than collision b. collision c. property damage d. none of the above
a. other than collision
374
The owner of the car carried liability, medical payments, and other than collision. Her insurance will cover theft of the car. a. true b. false
a. true
375
If an individual droves his auto over broken glass and has a blowout, coverage would be provided by: a. collision b. other than collision c. physical damage d. none of the above
d. none of the above
376
The insured's unoccupied auto coasts down a hill and strikes a stop sign. How would damage of the car be covered, if at all? a. by the insured's liability policy b. by the insured's physical damage policy c. by the insured's underinsured motorists policy d. by the state guarantee insurance fund
b. by the insured's physical damage policy
377
The insured's unoccupied auto coasts down a hill and strikes a stop sign. How would damage to the sign be covered? a. by the insured's liability policy b. by the insured's physical damage policy c. by the insured's underinsured motorists policy d. by the state guarantee insurance fund
a. by the insured's liability policy
378
Which is an uninsured motorist? a. hit and run driver b. car insured by an insolvent company c. a driver with no insurance or bond d. all of the above
d. all of the above
379
The insured purchased a motorcycle and needs to insure it. How may the insurance cover the motorcycle on a personal auto policy? a. miscellaneous vehicle endorsement b. special motorcycle endorsement c. cannot be endorsed on a personal auto policy d. either "a" or "b"
a. miscellaneous vehicle endorsement
380
Which of these would be a covered auto under a personal auto policy? a. motorcycle b. trailer c. mobile home d. tractor-trailer
b. trailer
381
Bob purchased auto insurance. He has never been in an accident. He told the insurance company he had a ticket 36 months before. It was actually 34 months ago. Shortly afterward, Bob's car was stolen. The company will pay the claim and continue Bob's insurance in force because: a. the misrepresentation was immaterial, and the company would have issued the insurance to Bob b. Misrepresentations are ok in the eyes of the law if they are unintentional c. the company would have needed to discover the mistake prior to the loss in order not to cover the loss d. none of the above
a. the misrepresentation was immaterial, and the company would have issued the insurance to Bob
382
Bob purchased auto insurance. He never has been in an accident. He told the insurance company that he had a ticket 36 months ago. It was actually 34 months ago, but Bob believed it to be 36 months ago. Shortly afterward, Bob's car was stolen. The company will pay the claim and continue Bob's insurance in force because: a. the concealment was not material b. the concealment was unintentional c. the concealment would have to be discovered by the company before the loss occurred d. the loss would have to be paid by the insurer as it is a covered loss
a. the concealment was not material
383
Which of the following is true in regard to auto insurance? a. if an insurer is not going to renew a policy, it would have to give 20 days notice to the insured b. an insurer must give 10 days notice to the insured to cancel an auto policy for non-payment of premiums c. if a company wants to cancel a policy, it must give 20 days notice d. all of the above
d. all of the above
384
A company can cancel an automobile policy for all reasons, except non-payment of premium, with how many days notice? a. 5 days b. 10 days c. 20 days d. 30 days
c. 20 days
385
The insured's auto is damaged. The insurer: a. may offer a cash settlement b. pay to have the damage repaired c. replace the damage with like kind and like quality d. all of the above
d. all of the above
386
CAARP can cover the minimum liability limits of: a. 5/30/15 b. 15/30/5 c. 45/15/10 d.10/25/30
b. 15/30/5
387
In automobile insurance, what is meant by other than collision coverage? a. as the name implies, it is all inclusive. It combines property damage, bodily injury liability, property damage liability, medical payments and collision b. it covers any direct or accidental loss of, or damage to, the insured's automobile, except collision c. it covers all aspects of physical damage to the insured's automobile such as fire, theft, collision or flood d. it insures against direct and accidental losses
b. it covers any direct or accidental loss of, or damage to, the insured's automobile, except collision
388
Which of the following would be covered under OTC? a. impact with another vehicle b. collision with a pole c. driver lost control of car on a curve due to an ice storm and upset the vehicle d. none of the above
d. none of the above
389
Kelly has liability coverage on her auto. Which of the following would not be covered by her liability policy? a. Kelly's neighbor who is using her car with Kelly's permission b. Kelly's husband who has borrowed the neighbor's pick up truck c. Kelly when borrowing a friend's car d. Kelly's neighbor's son who is joy riding in Kelly's car
d. Kelly's neighbor's son who is joy riding in Kelly's car
390
Which of the following would be covered under collision? a. the car windshield is broken by a rock kicked up by a passing truck b. veterinary bills for a stray dog that the insured accidentally hit c. the insured locks his keys in his car and breaks a window to get inside d. none of the above
d. none of the above
391
What is covered under physical damage of a personal auto policy? a. earthquake b. flood c. violent windstorm blows a sign off a building and it hits the car causing damage d. all of the above
d. all of the above
392
Mary's car was stolen and she had to rent a car for two months until her car was replaced. How much of her rental expense will be covered by her insurance? a. all her rental expense will be covered if she has purchased extra transportation expense b. none of it will be covered c. it will be covered up to the limits stated in her policy d. it will be covered for one month only
c. it will be covered up to the limits stated in her policy (Note: $20 a day up to a maximum of $600)
393
In settling a claim under a personal auto policy, the company may replace the car with one of like kind and like quality a. true b. false
a. true
394
The insured has a $500 deductible on collision and a $50 deductible on OTC. She runs off the road and hits a light post doing $550 damage to her car. How much will she receive from the insurance company? a. $50 b. $250 c. $450 d. $500
a. $50
395
Automobile liability policies issued in California include coverage to protect against uninsured motorists. This coverage: a. may not be declined by the insured b. Is included in the policy, but is not effective unless the policy is so endorsed and an additional premium is paid c. must be included in the policy, but can be waived by supplemental agreement between the insurer and the insured d. is optional and automatically included when the limit of liability for bodily injury is increased
c. must be included in the policy, but can be waived by supplemental agreement between the insurer and the insured
396
All are covered under a personal auto policy EXCEPT: a. private passenger vehicle b. one-half ton pick-up truck used on a farm c. two-ton van used in part-time business d. trailer
c. two-ton van used in part-time business
397
Under a personal auto policy, towing and labor expenses: a. are never paid b. paid if endorsed onto the policy for an additional premium c. automatically included in all policies d. automatically endorsed onto the policy for an additional premium
b. paid if endorsed onto the policy for an additional premium
398
Damage to a rental car used on a temporary basis under a personal auto policy would be covered under: a. liability section b. miscellaneous vehicle endorsement c. not covered d. physical damage
d. physical damage
399
The insured has $100,000 worth of underinsured motorist projection. Another operator of an auto who carries $50,000 in liability insurance strikes the insured, causing $100,000 in injuries. What will the insured's company pay? a. $30,000 b. $50,000 c. $100,000 d. none of the above
b. $50,000
400
If you cannot purchase auto insurance in the normal market place, you may purchase insurance through the: a. CAARP b. California FAIR plan c. N.F.I.P. d. There is no insurance available
a. CAARP
401
Under the assigned risk plan: a. all the insurers selling that class of insurance must participate and they all share in the losses b. policies are assigned to the large insurance carriers c. policies are assigned to companies that wish to participate d. policies are randomly assigned to all companies selling that class of insurance
d. policies are randomly assigned to all companies selling that class of insurance
402
If an individual cannot get auto insurance through the normal market place, he may obtain insurance through the fair plan. a. true b. false
b. false
403
In a personal auto policy, in the physical damage section, coverage is provided for: a. insured's clothes stolen from the covered auto b. vandalism c. mechanical breakdown d. none of the above
b. vandalism
404
Collision coverage under a personal auto policy would cover cost incurred for rental expenses following damage caused by collision. a. true b. false
a. true
405
An auto is damaged in a hail storm. How is the loss covered? a. collision b. other than collision c. not covered due to the catastrophic exposure of hail d. only covered by the auto policy if the auto was garaged
b. other than collision
406
If an insured changes his deductible from $1,000 to $100, this will allow for: a. additional small claims b. lower premiums c. both a and b d. neither a or b
a. additional small claims
407
A woman purchases another car and adds it to her policy. She does not pay the additional premium and the insurer cancels the policy for non-payment. How many days notice is the insurer required to give to her? a. 10 b. 15 c. 20 d. 30
a. 10
408
An insured adds an additional car to his auto policy. What is true about an inspection? a. California code states nothing about inspections b. An inspection is required only if the insured wants collision coverage c. An inspection is required if the insured wants other than collision and collision coverage d. poop
c. An inspection is required if the insured wants other than collision and collision coverage
409
Tom has a personal auto policy with medical payments of $2,000. Which of the following is correct? a. Tom's daughter is struck while riding her bicycle. Tom's medical payments will not cover his daughter as she was riding a bicycle in the street at the time of the accident b. Tom's daughter is struck by a car while crossing the street. Tom's medical payments will not cover her as she was not in a vehicle at the time of the accident c. Tom gave his neighbor a ride to the store. They were involved in an accident and each sustained injuries over $2,000. Tom's medical payments paid each, Tom and his neighbor $2,000 d. Tom's neighbor gave Tom a ride to the store. They were involved in an accident and Tom sustained over $2,000 in injuries. Both Tom and his neighbor's polices will not pay more than a combined amount of $2,000
c. Tom gave his neighbor a ride to the store. They were involved in an accident and each sustained injuries over $2,000. Tom's medical payments paid each, Tom and his neighbor $2,000
410
The homeowners form which provides all risk coverage on the dwelling and broad coverage on personal property is: a. HO-3 b. HO-6 c. HO-8 d. HO-4
a. HO-3
411
Which of the following can be insured under an unendorsed homowners policy? a. farm or ranch b. a mobile home c. a dwelling which the owner rents to his distat relatives d. a residence in which the owner-occupant also maintains an office for her accounting business
d. a residence in which the owner-occupant also maintains an office for her accounting business
412
Each of the following is a coverage under section 1 of the homeowners form except: a. other structures b. dwelling c. personal property d. medical payments
d. medical payments
413
Which of the following coverage's is available under the homewoners policy but not under the dwelling policy? a. dwelling b. other structures c. personal property d. liability
d. liability
414
An insured's dwelling purchased two years ago for $58,000 has a replacement value of $60,000. In order to qualify for replacement cost coverage in the even of a loss, for what amount of insurance must be homeowners policy be written? a. $58,000 on coverage A b. $60,000 on coverage A minus 10% c. $60,000 on coverage A d. $48,000 on coverage A
d. $48,000 on coverage A
415
In a dwelling policy, what is coverage A?
Liability
416
In a dwelling policy, what is coverage B?
Medical Payments
417
In a dwelling policy, what is coverage C?
Uninsured motorist
418
Which of the following are true of the loss of use coverage of a homeowners policy? a. it covers additional living costs incurred when the dwelling becomes uninhabitable due to a peril insured against in the policy b. When part of the dwelling is rented to others, it covers loss of rent c. both a and b are true d. neither a nor b is true
c. both a and b are true
419
A homeowners endorsement used to provide stated value coverage for one or more on nine categories of personal property? a. scheduled personal property b. personal effects c. personal article d. personal property
a. scheduled personal property
420
Scheduled personal property would include: a. The building scheduled under the policy b. Jewelry, furs, firearms, cameras, etc. c. personal possessions such as furniture and cooking utensils d. autos and trailer
b. Jewelry, furs, firearms, cameras, etc.
421
A personal having homeowner's policy might wish to add an additional residence premises endorsement to cover a two-family home which she rents in order: a. to have protection for $50,000 of furnishings that she provides in her rentals b. to protect her from possible liability if a tenant is hurt on her premises c. in case someone coming to repair a broken window in the rental unit is hurt while working
b. to protect her from possible liability if a tenant is hurt on her premises
422
What coverage would be the same on an HO-3 and an HO-8? a. dwelling coverage and medical payments b. loss of use and dwelling coverage c. personal liability and medical payments d. theft and dwelling coverage
c. personal liability and medical payments
423
Jack owns a condominium and he wishes to insure his personal property, have liability coverage, and loss assessment coverage. What policy would meet Jack's needs? a. HO-2 b. HO-4 c. HO-6 d. DP-1
c. HO-6
424
A person had liability coverage on his car and an HO-3 on his house. An earthquake occurred and there was no sign of damage. An explosion happened several hours later and the garage and car burned. What would be covered? a. house, garage, and auto b. auto only c. garage only d. no coverage at all
c. garage only
425
A man had an HO-4 policy with limits of $60,000 on personal property. While traveling in Europe, he suffered the following THEFT loss: clothes and luggage - $20,000 jewelry - $20,000 There was a 20% depreciation. How much of the loss will be covered by his HO-4? a. $16,000 b. $17,500 c. $40,000 d. $36,000
b. $17,500
426
An HO-4 is sometimes referred to as: a. the condo form b. The renter's form c. special risk insurance d. all risk personal property
b. The renter's form
427
What type of homeowners policy would be purchased to protect a tenant? a. HO-4 b. HO-6 c. HO-8 d. HO-3
a. HO-4
428
An HO-4 would cover: a. apartment buildings b. an apartment tenant's personal property c. structural loss d. equipment belonging to the landlord
b. an apartment tenant's personal property
429
What coverage does an HO-4 provide? a. Broad form personal property b. all risk personal property c. all risk on structure; broad form on personal property d. all risk on personal property; all risk on structure
a. Broad form personal property
430
What coverage does an HO-6 provide? a. broad form coverage on a personal property of a condominium owner b. all risk coverage on a personal property of a condominium owner c. all risk on structure; broad form on personal property d. all risk on structure; all risk on personal property
a. broad form coverage on a personal property of a condominium owner
431
What provides all risk coverage on both personal and real property? a. HO-3 endorsed with an HO-5 b. HO-6 c. HO-4 d. HO-8
a. HO-3 endorsed with an HO-5
432
An HO-8 is similar to: a. HO-1 b. HO-2 c. HO-3 d. HO-4
a. HO-1
433
Which of the following would be correct about the minimum limits in section #2 of the homeowners policy? a. medical payments $1,000; personal liability $100,000 b. medical payments $2,000; personal liability $200,000 c. medical payments $3,000; personal liability $300,000 d. medical payments $4,000; personal liability $400,000
a. medical payments $1,000; persona; liability $100,000
434
Medical payments under a homewoners policy section #2 would cover: a. insured b. insured, spouse and all family resising in home c. insured, family and guests d. guests on the premises
d. guests on the premises
435
Who can never collect under section #2 of a homeowners policy? a. a person hurt on the premises b. a neighbor c. uninvitied guest d. a resident family member of the insured
d. a resident family member of the insured
436
Which of the following would be covered under section #2 of a homeowners policy? a. property damage b. professional liability c. the insured's son trips over a sprinkler and breaks his leg d. a neighbor's child trips over a sprinkler and breaks his leg
d. a neighbor's child trips over a sprinkler and breaks his leg
437
Which of the following would not be covered under the comprehensice liability section of a homeowners policy? a. an insured is at a country club, swings his golf club and hits another member over the head b. a guest at your home is hit by a swing on the porch c. your dog that is tied to a tree, butes the neighbor's child d. a house guest is injured while going to the country club in the insured's auto
d. a house guest is injured while going to the country club in the insured's auto
438
Under a homeowners policy, what is the limit for business equipment in the home and used for business purposes? a. 0 b. $500 c. $1,000 d. $2,500
d. $2,500
439
Which of the following would covered under a homeowners policy? a. flood daamge b. earthquake damage c. bodily injury to the insured's son d. an article falls off an airplane falying overhead and crashes into the insured's home
d. an article falls off an airplane falying overhead and crashes into the insured's home
440
if jewelry is stolen and the owner had a homeowners policy, what, if anything would the company pay? a. nothing b. pay up to the special limits in the policy c. pay unlimited amounts d. none of the above
b. pay up to the special limits in the policy
441
On a homeowners policy, personal property away from the premises will be covered up to what percent of personal property? a. 10% b. 20% c. 50% d. full limit of personal property
d. full limit of personal property
442
Which of these is true about personal article floater? a. it provides "all risk" coverage for personal possesions on an unscheduled basis b. it provides "all risk" coverage for personal possesions on a scheduled basis c. It rpovides coverage for personal possessions carried by tourists and usually only applies to such property while away from the insured's home d. it is urually an endorsement to a homeowner's policy
b. it provides "all risk" coverage for personal possesions on a scheduled basis
443
Companies that sell homeowners policies in California: a. must offer earthquake insurance b. must include earthquake insurance c. must offer earthquake insurance only in certain areas of california d. never offer such coverage
a. must offer earthquake insurance
444
Section 2 of a homeowners policy covers: a. personal liability of the insured on the insured's premises b. insured's 3 year old son who hits another child with a bat c. bodily injury to a guest on the insured's premises and insured's personal liability away from the premises d. all of the above
d. all of the above
445
Under a standard unendorsed homewoners policy, what would not be covered? a. fire damage b. other structures on the property c. personal liability d. loss due to changes in construction code (ordinance or law regarding construction)
d. loss due to changes in construction code (ordinance or law regarding construction)
446
An HO-3 would provide coverage for: a. damage cause by earthquake b. damage to furniture while being removed during a fire c. damage to personal property caused by flood d. all of the above
b. damage to furniture while being removed during a fire
447
Which of the following would an HO-3 cover? a. an office building b. an apartment building c. single family, owner occupied, detached dwelling d. single family, renter occupied, detaced dwelling
c. single family, owner occupied, detached dwelling
448
Ordinance or law coverage in a homeowner's policy applies to which of the following? a. City law requires dogs to be leashed. Your dog is unleashed and bites someone in the park b. city ordinance requires swimming pools to be fenced and have self-closing gates. Your gate is not self-closing and a neighbor's child falls in the pool and is seriously hurt c. your house burns down and you incur more costs as you must rebuild the house to code
c. your house burns down and you incur more costs as you must rebuild the house to code
449
A homeowners policy loss protection pays for small building losses to $500 at replacement cost even if replacement cost limits were not met a. true b. false
a. true
450
If a homeowner wants coverage for such things a libel and slander, what should the agent tell his client? a. not to worry. it is included in the liability section of the homewoner's policy b. have the client add a personal injury endorsement to the contract c. this cannot be covered under a homeowner's policy. the client will need a commercial general liability
b. have the client add a personal injury endorsement to the contract
451
Under a homeowner's policy, the dwelling is valued at $100,000 and the garage at $20,000. In order to maintain the proper amount of coinsurance, the insured needs to carry what amount of insurance? a. dwelling $100,000; garage $16,000 b. dwelling $100,000; garage $8,000 c. dwelling $80,000; garage $16,000 d. dwelling $80,000; garage $8,000
c. dwelling $80,000; garage $16,000
452
Why might a property owner purchase a homeowner's policy instead of a dwelling policy? a. he does not need liability coverage b. he owns six units and occupies one of the units c. he wants broader coverage
c. he wants broader coverage
453
Which of the following would be covered under the personal liability section of a homeowner's policy? a. personal liability away from the premises b. the insured's three year old child intentionally hits another child with a brat (que travieso!) c. the insured accidentally drops a neighbor's camera and damages it d. all of the above
d. all of the above
454
In a homeowner's policy, coverages A, B and C refer to: a. dwelling, medical payments and liability b. dwelling, other structures, and personal property c. dwelling, other structures, and loss of use d. dwelling, personal property and loss of use.
b. dwelling, other structures, and personal property
455
Under homeowner's policies HO-2, HO-4, and HO-6, the coverage for personal property virtually is the samE: a. true b. false
a. true
456
Who would not be considered an insured for liability protection under a homeowner's policy? a. the insured's resident son b. the insured's resident spouse c. the isured's resident 25 year old nephew d. the isnured's non-resident spouse
d. the isnured's non-resident spouse
457
An individual owns a duplex. Because of damage to one of the units, he has a loss of rental income. His insurance would be covered under: a. basic, broad, and special forms of dwelling policies b. broad and special forms only c. not covered as he did not become a member of the household as required in a homeowners policy d. there is no coverage for duplexes
a. basic, broad, and special forms of dwelling policies
458
Which of the following may not be covered by a dwelling policy? a. tenants improvements, alterations, or additions b. detached garage on the insured's premises c. the insured's coin collection d. rents an insured may lose if rental property is damaged
c. the insured's coin collection
459
An individual owns a duplex. Because of damage to one of the units, he has a loss of rental income. His insurance would be covered under: a. Basic, broad, and special forms of dwelling policies b. broad and special forms only c. not covered as he did not become a member of the household as required in a homeowners policy d. there is no coverage for duplexes
a. Basic, broad, and special forms of dwelling policies
460
Which of the following may not be covered by a dwelling policy? a. tenants improvements, alterations, or additions b. detached garage on the insured's premises c. the insured's coin collection d. rents an insured may lose if rental property is damaged
c. the insured's coin collection
461
The insured has two separate dwelling policies which cover the same property: policy a for $30,000 and policy b for $60,000. If the insured suffers a $12,000 loss, how much will be paid under policy b according to the other insurance clause? a. $12,000 b. $8,000 c. $4,000 d. $6,000
b. $8,000
462
What perils are covered under a basic dwelling policy? a. fire only b. fire and lightning c. fire, lightning and smoke damage d. fire, lightning, and internal explosion
d. fire, lightning, and internal explosion
463
A basic dwelling policy automatically provides coverage against fire, lightning and: a. windstorm b. internal explosion c. explosion d. riot
b. internal explosion
464
Which dwelling form excludes burglary of personal property? a. basic b. broad c. special d. none of the above, all include coverage for burglary of personal property
a. basic
465
Which of the dwelling (homeowners) policies provide the most coverage? a. basic b. broad c. special d. standard
c. special
466
Under a dwelling policy, personal property away from the premises would be covered for what percent of personal property? a. 5% b. 10% c. 50% d. 100%
b. 10%
467
All of the following are reasons that a dwelling policy might be used instead of a homeowners policy EXCEPT: a. to cover a rental property b. the insured does not need liability coverage c. the home did not qualify for a homeowners policy d. the insured wanted broader coverage for a lower premium
d. the insured wanted broader coverage for a lower premium
468
Which of the dwelling forms excludes damage due to burglary? a. basic b. broad c. special d. all of the above
a. basic
469
a basic dwelling policy includes all of the following EXCEPT: a. trees, shrubs, plants and lawn b. may include extended coverage c. may include vandalism and malicious mischief d. covers internal explosion
a. trees, shrubs, plants and lawn
470
A dwelling policy would not provide coverage for: a. a dwelling with 2 boarders b. a dwelling with 5 boarders c. a detached garage d. a dwelling used for occasional business by the insured
b. a dwelling with 5 boarders
471
Replacement cost coverage for dwellings is available under: a. all dwelling policy forms b. only the special dwelling forms c. only the basic and broad forms d. only the broad and special forms
d. only the broad and special forms
472
When a policy states coverage is based on an insured to value or replacement cost basis, how much insurance must you carry on the dwelling as compared to the total value of the dwelling? a. 75% b. 80% c. 90% d. 100%
b. 80%
473
Under the commercial property coverage part of the cpp, the cause of loss - broad form insures against: a. risks of direct physical loss unless specifically excluded b. a list of basic named perils c. a list of basic and extended coverage perils d. earthquake only
c. a list of basic and extended coverage perils
474
A builders risk coverage form can be written to provide an amount of insurance: a. based on the anticipated completed value of the building b. which increases gradually as the value of the building under construction increases c. based on either a or b d. equal to 50% of anticipated value during the entire construction period
c. based on either a or b
475
The primary purpose of business income coverage is to reimburse the insured for: a. Expenses incurred to prevent a suspension of business following a loss caused by a peril insured against b. the costs of debris removal following loss from a peril insured against c. Loss of income resulting from property damage at the insured's property d. loss due to employee's work-related injuries
c. Loss of income resulting from property damage at the insured's property
476
Which of the following is a coverage extension under the building and personal property form? a. debris removal b. business personal property c. property off-premises d. fire department service charge
c. property off-premises
477
The purpose of extra expense coverage is to provide: a. additional money to pay for property damage losses at a covered location b. payment for unforeseen expenses an insured may incur while the business is shut down following a property loss c. coverage which will permit the insured to continue in business without interruption following a property damage loss d. extra money for an insured whose accounts receivable records have been damaged
c. coverage which will permit the insured to continue in business without interruption following a property damage loss
478
Under the commercial property coverage form, breakage of glass is covered under what form? a. basic, broad, and special b. broad and special c. all forms d. not covered under any form
b. broad and special
479
A building was covered by insurance for such perils as fire and loss due to vehicles, but not for earthquake damage. The commercial property form had a provision in it which excluded concurrent losses. A man who had auto insurance lost control of his car due to an earthquake and collided with a building. Two hours later, gas leaking from the car, caused a fire that burned the building. It was determined that the damage was 25% due to the earthquake, 25% due to the car, and 50% due to the fire. What percent of the building would be covered by the fire policy? a. 20% b. 50% c. 75% d. nothing
b. 50%
480
A building that had been vacant for 60 consecutive days burned. How much will be paid by the fire policy? a. entire loss b. 50% c. 85% d. nothing
d. nothing
481
Builder's risk insurance is to cover? a. loss of earnings b. loss to building under construction, temporary structures, building materials and supplies. c. injury to an employee on the job d. loss of personal possessions from business premises
b. loss to building under construction, temporary structures, building materials and supplies.
482
In a business income coverage form, business interruption is covered only if the loss is due to a peril insured against in the cause of loss form a. true b. false
a. true
483
Business income insurance covers: a. net income, continuing expenses and payroll b. gross income c. net income, continuing expenses minus payroll expenses d. net income minus taxes
a. net income, continuing expenses and payroll
484
Which of the following is a correct definition of coinsurance? a. two or more policies which apply to the same property b. a requirement that the insured carry insurance equal to a specified percentage of the property value, to be fully indemnified under the policy c. two or more buildings which are covered under a single policy d. a clause which allows the insurer to take action against a third party for reimbursement of loss settlements made with the insured
b. a requirement that the insured carry insurance equal to a specified percentage of the property value, to be fully indemnified under the policy
485
Which is the function of the coinsurance clause in fire policies? a. to require the insured to carry insurance to value b. to discourage the insured from insuring to value c. when more than one company is insuring the same subject of insurance, the coinsurance clause apportions the loss among them d. when a policy covers several buildings under one amount of insurance, the coinsurance clause distributes the amount of coverage on the buildings
a. to require the insured to carry insurance to value
486
Property is valued at $500,000 with an 80% coinsurance clause. If there is a $200,000 loss, the insurer will pay? a. $100,000 b. $150,000 c. $200,000 d. $500,000
b. $150,000
487
Which of the following forms is needed to make a commercial property policy complete: a. cause of loss form b. inventory c. obligations d. audit
a. cause of loss form
488
On commercial property policies, basic coverage insures against loss by all of the following perils EXCEPT: a. falling objects b. vandalism c. windstorm d. sprinkler leakage
a. falling objects
489
Under the commercial property basic form, what would be covered? a. falling objects d. flood c. earth movement d. sprinkler leakage
d. sprinkler leakage
490
Operations at ABC company depend on a steady flow of supplies from XYZ Inc. What coverage would protect ABC against income losses due to damage at XYZ which prevents shipments of supplies? a. coverage for contributing locations b. coverage for recipient locations c. coverage for leader locations d. coverage for manufacturing locations
a. coverage for contributing locations
491
In a business income coverage form, loss of income is covered while repairs are being made and for the subsequent 30 days after the business is resumed a. true b. false
a. true
492
Who may cancel a commercial property policy as long as it is not contrary to law? (choose the most complete answer) a. the insured b. the insurer c. first named insured d. first named insured or the insurer
d. first named insured or the insurer
493
A tenant is in the middle of a ten-year ;ease. He has spent $50,000 in improvements for such things as lighting fixtures, shelves and carpeting. Which of the following types of coverage would best suit his needs in the event of a claim? a. improvement or betterment b. building ordinance c. consequential losses d. extra expense
a. improvement or betterment
494
A building insured under a commercial property policy was left vacant for a period of 90 days. The owner notified the insurer of this prior to the vacancy. In the event of a 50% loss, how much will the insurer pay? a. nothing b. the entire loss c. 50% d. 85%
d. 85%
495
A commercial plan designed expressly to protect against losses during construction is: a. builder's risk b. leasehold interest c. legal liability d. extra expense coverage
a. builder's risk
496
A policy that has a single limit of insurance for all property at multiple locations is known as? a. schedule coverage b. blanket coverage c. specific coverage d. reporting form
b. blanket coverage
497
Under a commercial property policy if there are two or more policies covering the same property under the same plan, terms, and conditions, how will the claim be handled? a. each policy shall contribute pro rata to the payment of such whole or partial loss b. only the first policy issued will be responsible for the payment c. secondary carriers will only pay losses in excess of amounts due from the primary carrier d. no benefits will be paid as it is illegal to carry insurance with more than one carrier
a. each policy shall contribute pro rata to the payment of such whole or partial loss
498
A policy which provides an amount of insurance for specific types of property at a specific location is known as: a. blanket coverage b. scheduled coverage c. specific coverage d. named peril coverage
c. specific coverage
499
In a commercial property in the building and personal property coverage form, coverages a, b and c refer to: a. building, business personal property of the insured, and personal property of others b. business personal property of the insured, building, and personal property of others c. building, property off premises, and business personal property of the insured d. building, newly acquired or constructed property, personal property of others
a. building, business personal property of the insured, and personal property of others
500
The coverages under a dwelling form policy as compared to a homeowner's policy is similar to comparing a commercial property policy to a: a. business income policy b. businessowners policy c. business personal property d. commercial general liability
b. businessowners policy
501
In making sure a client has the proper coverage on a commercial property, there are three loss exposures to consider. The loss exposures are: a. the building to be covered / the perils to be covered / potential financial loss b. the building to be covered / fire prevention / maximum financial loss c. the building to be covered / the hazards to consider / maximum loss per occurrence d. the building to be covered / fire protection / financial loss
a. the building to be covered / the perils to be covered / potential financial loss
502
All of the following are categories of inland marine insurance EXCEPT: a. domestic shipments b. personal property floater risks c. furniture and fixtures d. Instrumentalities of transportation and communication
c. furniture and fixtures
503
Inland marine insurance commonly provides _______ coverage/ a. basic b. open peril c. broad d. standard
b. open peril
504
In a commercial package inland marine policy, which of the following would not be covered? a. accounts receivable from customers b. an automobile being kept for an individual in a parking lot c. jewelry and watched
b. an automobile being kept for an individual in a parking lot
505
A provision commonly found in liability insurance, thus creating a need for inland marine would be? a. a valuation provision b. debris removed c. a care, control, and custody exclusion d. a coinsurance requirement
c. a care, control, and custody exclusion
506
Why would someone be in need of adding a boiler and machinery coverage part to a commercial package policy? a. a separate coverage form is needed as most lines of insurance exclude boiler and machinery risks b. There is no need to add boiler and machinery as it is included in all commercial coverage forms c. boiler and machinery offers loss protection, but not loss prevention d. boiler and machinery can be written only as a monoline policy and never part of a commercial package policy
a. a separate coverage form is needed as most lines of insurance exclude boiler and machinery risks
507
The majority of the premium paid for the boiler and machinery coverage is used for: a. anticipated loss b. inspection c. company overhead d. underwriting
b. inspection
508
An important loss control feature of the boiler and machinery insurance program is: a. the audit function b. inspection c. a disappearing deductible d. retention
c. a disappearing deductible
509
A boiler and machinery policy would exclude all of the following EXCEPT: a. Interruption of business b. lack of power, light, heat, steam, or refrigeration c. boiler explosion d. flood
c. boiler explosion
510
All of the following are true about boiler and machinery EXCEPT: a. they can be either monoline or party of a commercial package policy b. the property must be owned by the insured c. it is written on a replacement cost basis except if changed to ACV d. supplemental payments provided with additional policy limits
d. supplemental payments provided with additional policy limits
511
Under a farm property coverage plan, what would be covered? a. liability b. property c. property but not liability d. liability and property
a. liability
512
Under the commercial general liability policy, a separate aggregate limit applies to the: a. products-completed operations hazard b. premises and operations hazard c. owners and contractors protective hazard d. contractual liability hazard
a. products-completed operations hazard
513
Under the commercial general liability coverage form, liability assumed under contract is: a. excluded b. excluded, except for contracts specifically defined as insured c. covered, except for incidental contracts d. covered, except for property leases
b. excluded, except for contracts specifically defined as insured
514
Under the commercial general liability coverage form, personal injury is: a. bodily injury suffered by the named insured b. bodily injury for which the named insured is liable c. injury, other than bodily injury, arising out of such things as slander, libel, and invasion of privacy d. injury arising out of the misappropriation of advertising ideas
c. injury, other than bodily injury, arising out of such things as slander, libel, and invasion of privacy
515
Under the commercial general liability coverage form, the term personal injury is defined as: "bodily injury such as the injury caused by wrongful eviction" a. true b. false
b. false
516
Under the claims-made commercial general liability coverage form, the first date that an event may occur and still be covered under the policy is the: a. retroactive date b. policy expiration date c. extended reporting period inception date d. policy inception date
a. retroactive date
517
Commercial general liability would cover an injury to: a. the insured b. the insured's employee c. a customer on the premises d. an employee while not working
c. a customer on the premises
518
Who would be in need of purchasing a liquor liability form? a. a company hosting a cocktail party on its premises b. a company that deals in the illegal manufacturing and distribution of alcohol c. a company that has a company sponsored picnic where alcohol will be served d. a company whose business is the selling and serving of alcoholic beverages
d. a company whose business is the selling and serving of alcoholic beverages
519
In a commercial general liability form the term your means: a. first named insured b. any insured c. all property for which the business has care, custody, and control d. any person who can show an insurable interest in the property
b. any insured
520
A commercial general liability policy would cover which of the following situations? a. an employee is hurt in the course of working b. an employee working in a customer's home does damage to the customer's property (causes an injury to the customer) c. injury intended by the insured d. liability of someone engaged in the alcoholic beverage business who serves alcohol to a minor
b. an employee working in a customer's home does damage to the customer's property (causes an injury to the customer)
521
Which of the following would be true under a commercial general liability policy if you switched from the claims made form to the occurrence form? a. there are no differences in the coverage b. there may be a gap in coverage c. there may be additional benefits d. none of the above
b. there may be a gap in coverage
522
Which is true about the cgl general aggregate limit? a. it applies to completed operations hazard b. it is the amount an insurer will pay for one loss c. it is the most an insurer will pay for an occurrence d. it does not apply to the products completed operations hazard
d. it does not apply to the products completed operations hazard
523
The liability exposure arising out of a business location or activities is known as: a. premises and operations hazard b. completed operations hazard c. products completed operations hazard d. exposure hazard
a. premises and operations hazard
524
The medical payments of a commercial general liability policy will cover: a. a hired person who is hurt while fixing a broken window for a tenant b. an employee while working c. injury caused by an employee while working d. injury to employee while engaged in the business' sports team
b. an employee while working
525
The retroactive date in a claims-made general liability policy is: a. the inception date of the policy b. the last date a claim may be filed and covered by the policy c. the first date that an event may occur and be covered by the policy d. the policy expiration date
c. the first date that an event may occur and be covered by the policy
526
In commercial general liability, what do coverage A, B, and C represent? a. (a) bodily injury and property damage; (b) personal and advertising injury; (c) medical payments b. (a) medical payments; (b) personal liability; (c) bodily injury c. (a) personal injury; (b) bodily injury; (c) medical payments d. (a) professional liability; (b) property damage; (c) personal property
a. (a) bodily injury and property damage; (b) personal and advertising injury; (c) medical payments
527
Under the commercial crime coverage part, loss resulting from employee dishonesty is: a. always excluded b. always covered, provided the employee has not been previously responsible for such a loss c. excluded unless an employee dishonesty coverage form is attached d. always covered
c. excluded unless an employee dishonesty coverage form is attached
528
Which of the following is a commercial crime coverage form that provides virtually all risk coverage for money and securities? a. robbery and sage burglary coverage form b. premises theft and robbery outside the premises coverage form c. theft, disappearance and destruction coverage form d. premises burglary coverage form
c. theft, disappearance and destruction coverage form
529
A person has a commercial business policy with an employee dishonesty endorsement. Which of these is covered under the policy? a. robbery of an employee b. theft of inventory (theft of business stock) c. burglary of business stock d. employee who lost deposit on the way to the bank
b. theft of inventory (theft of business stock)
530
When would the insured collect under the employee dishonesty section of the commercial crime policy? 1. theft of money 2. theft of property 3. theft of securities 4. shortage of inventory a. 1 only b. 1 & 2 c. 1, 2, and 3 d. 1, 2, 3, and 4
c. 1, 2, and 3
531
Under commercial crime, the loss sustained during prior insurance clause covers the crime loss subject to: a. 6 months b. 9 months c. 1 year d. 2 years
c. 1 year
532
Which of the following offers the broadest crime coverage? a. theft b. burglary c. robbery d. larceny
a. theft
533
Under the commercial crime coverage, employee dishonesty does not cover: a. theft of business stock b. shortages of inventory c. theft of securities d. theft of cash
b. shortages of inventory
534
Employer that wish to cover employees' use of their own cars in the employer's business should opt to have business auto liability coverage apply to which of the following groups of autos? a. hired autos b. miscellaneous vehicles c. owned autos d. nonowned autos
d. nonowned autos
535
Employees are using their own cars for business purposes. The employer is concerned about liability exposure. What should the agent advise? a. tell employees to have their employer added to their policies as an additional insured b. tell employees not to use their own autos for business c. Have all employees insure their cars with the same insurer that the employer uses d. Have the employer add non-owned autos to his business auto coverage
d. Have the employer add non-owned autos to his business auto coverage
536
An insured whose business is earth moving wants to cover his equipment while it is being transferred from location to location. The insured would probably need: a. fixed property coverage b. floater coverage c. binder coverage d. short rate coverage
b. floater coverage
537
An owner of a parking lot wants coverage for her liability for damage to vehicles left in her custody. She needs: a. Business auto coverage b. garage liability coverage c. garagekeepers coverage d. employers nonownership liability
c. garagekeepers coverage
538
The type of insurance that an auto repair chop should carry is: a. garagekeepers insurance b. commercial auto insurance c. professional liability d. none of the above
a. garagekeepers insurance
539
General liability policies and business auto policies define the word "auto" and "mobile equipment": a. the same, to avoid confusion b. the same as the policy writers lack imagination c. differently, to avoid gaps in coverage d. differently, but it has nothing to do with gaps in coverage
a. the same, to avoid confusion
540
Business autos are identified by nine symbols in the declarations. The symbol #4 refers to: a. owned autos only b. owned autos other than private passenger autos c. owned private passenger autos only d. non-owned autos only
b. owned autos other than private passenger autos
541
A business auto policy (bap) has four coverages under physical damage. Which can be written together? a. comprehensive, specified causes of loss and collision b. comprehensive, specified causes of loss and towing and labor c. comprehensive, collision, towing and labor d. none of the above
c. comprehensive, collision, towing and labor
542
Commercial auto: a. covers garage liability b. automatically includes uninsured motorist coverage c. automatically includes medical payments d. allows the insured to tailor the policy by deciding what coverages should be applied to different vehicles
d. allows the insured to tailor the policy by deciding what coverages should be applied to different vehicles
543
Which of the following would have a need for a commercial automobile policy? a. owner of a trucking fleet homeowner c. individual with two autos d. farmer
a. owner of a trucking fleet
544
All are mobile equipment under a commercial auto policy EXCEPT: a. bulldozer b. forklift c. street sweeper which is self-propelled d. tractor on crawlers
c. street sweeper which is self-propelled
545
An insurer cannot rate a commercial auto policy based on the personal driving record of a hired driver while using his own vehicle: a. true b. false
a. true
546
What cannot be covered under a commercial auto policy: a. an owner of a parking lot who wishes to cover cars in her custody b. a garage that repairs trucks c. physical damage to mobile equipment d. the owner of a trucking fleet
c. physical damage to mobile equipment
547
Under a commercial auto policy reimbursement for towing expenses: a. is not provided b. provided only for private passenger type autos c. provide only for a limit of $25 d. provided for trucks only
b. provided only for private passenger type autos
548
Business autos are identified by nine symbols in the declarations. The symbol #7 refers to: a. owned autos only b. hired autos only c. specifically described autos only d. owned autos other than private passenger autos
c. specifically described autos only
549
Which of the following is not available under the commercial package policy? a. ocean marine b. crime c. boiler and machinery d. inland marine
a. ocean marine
550
Commercial package policies may have a number of coverage forms. Which would not be covered under a commercial package policy? a. commercial property b. dwelling property c. commercial crime d. boiler and machinery
b. dwelling property
551
Under the commercial package policy, who may cancel the policy in writing, is authorized to make changes to the policy with the consent of the insurer and is responsible for paying premiums? a. the first name insured b. the last named insured c. any named insured d. any insured
a. the first name insured
552
According to the common conditions of a commercial package policy, the insurer can do an audit of an insured's books and records any time during the policy period and during the three months following expiration of the policy. a. true b. false
b. false
553
According to the common conditions of a commercial package policy, the insurer can do an audit of an insured's books and records any time during the policy period and for a specified amount of time after the policy expires a. true b. false
a. true \*Note, up to three years after policy expiration\*
554
All of the following are part of the common conditions in a commercial package policy EXCEPT: a. inspections and surveys b. examination of books and records c. cancellation terms d. named perils
d. named perils
555
A monoline policy: a. is a policy that is written to cover property only b. is any insurance written as a single line policy c. is a policy that covers only lines of insurance which cannot be a part of package policies d. there is no such thing
b. is any insurance written as a single line policy
556
What are the advantages of having a commercial package policy compared to having monoline policies? 1. convenience of having coverage under one policy 2. cost 3. no gaps in coverage 4. no duplication of coverage a. 1 & 2 b. 3 & 4 c. 2,3, and 4 d. all of the above
d. all of the above
557
What is an advantage to having a commercial package policy instead of several monoline policies: a. there are fewer exclusions b. convenience of having coverage under one policy c. there are broader coverages d. claims are covered on an occurrence basis
b. convenience of having coverage under one policy
558
Commercial package policies must include: a. common declarations b. common conditions c. two or more coverage forms d. all of the above
d. all of the above
559
Commercial package policies must include: a. cause of loss forms b. common conditions c. common exclusions all of the above
b. common conditions
560
In a commercial package policy under common policy conditions "changes", it states that a policy can be amended or waived: a. only by endorsement from the insurer and made part of the policy b. by endorsement in writing from an agent or the insured without consent of the insurer c. only at renewal; never during a policy period d. none of the above
a. only by endorsement from the insurer and made part of the policy
561
In commercial policies, the use of a value reporting form: a. allows values for commercial property policies to be modified b. allows values on business income policies to be modified c. applies to commercial auto policies d. states the specified amount the policy will pay for an entire loss
a. allows values for commercial property policies to be modified
562
According to the common conditions of a commercial package policy, the insurer can do an audit of an insured's books and records : a. during the policy period and for three months after expiration of the policy b. only during the policy period c. during the policy period and for three years after expiration of the policy d. only with the consent of the insured
c. during the policy period and for three years after expiration of the policy
563
According to the CA department of insurance which term means "mandatory"? a. oath b. may c. warranty d. shall
d. shall
564
According to the CA department of insurance which term means "permissive"? a. oath b. shall c. may d. twisting
c. may
565
When advertising on the internet in CA, an agent or broker must provide all of the following EXCEPT: a. name of the licensee b. office address c. expiration date of the license d. license number
c. expiration date of the license
566
Why is having a large number of similar exposure units important to insurers? a. the greater the number insured, the more premium is collected to offset fixed costs b. insurer increases its market share with every insured c. the greater the number insured, the greater the amount of premiums collected to help cover losses d. the greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums
d. the greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums
567
When a mutual insurance company changes to a stock insurance company, it is referred to as: a. mutualization b. stock split c. stock buy out d. demutualization (or conversion)
d. demutualization (or conversion)
568
Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks? a. guaranteed b. insolvent c. solvent d. non-participating
b. insolvent
569
According to the California Insurance Code, an insurance policy must specify all of the following EXCEPT: a. the perils insured against b. financial rating of the insurer c. the property or life being insured d. the policy period
b. financial rating of the insurer
570
According to the CA Department of Insurance fraudulent is considered. a. misdemeanor b. a forgiveness c. infraction d. felony
d. felony
571
According to the California Insurance Code, what must appear on a Notice of Claim form given to an insured? a. telephone number of the Department of Insurance b. Information regarding the Arson Bureau c. information regarding an Insurance Claims Analyst Bureau d. A notice stating that any person who knowingly presents a false or fraudulent claim, is guilty of a crime; and may be subject to fines and confinement in state prison
d. A notice stating that any person who knowingly presents a false or fraudulent claim, is guilty of a crime; and may be subject to fines and confinement in state prison
572
According to proposition 103, the commissioner of insurance became an elected official. The commissioner may serve: a. as many terms for which he is elected b. one term only c. two consecutive terms (8 years) d. no mention is made in the insurance code as to term limits
c. two consecutive terms (8 years)
573
All of the following are valid reasons for the insurance commissioner to deny the application for an insurance license EXCEPT: a. applicant does not have a good business reputation b. applicant is not properly qualified to perform c. applicant does not have a California business address d. Applicant lacks integrity
c. applicant does not have a California business address
574
With whom are policy forms filed? a. Insurance Services Office (ISO) b. Department of Insurance (DOI) c. National Council on Compensation Insurance (NCCI) d. Internal Revenue Service (IRS)
b. Department of Insurance (DOI)
575
Records of an agent or broker must be available to the commissioner: a. at all times b. only after written notice from the commissioner c. 15 days after the license is issued d. never
a. at all times
576
How long must an agent maintain records sold in CA? a. 10 years b. 6 years c. 5 years d. 2 years
b. 6 years
577
An applicant for an insurance license had another professional license revoked. What would the commissioner most likely do? a. nothing, it did not involve insurance b. deny the application without a hearing c. take it under advisement d. deny after a hearing
b. deny the application without a hearing
578
When may an agent transact for an insurance company? a. when the agent received the action notice b. when the appointing company signs the action notice of appointment c. at the beginning of the fiscal year
b. when the appointing company signs the action notice of appointment
579
In the California Insurance Code there is a definition that reads, in short, "...a person who offers to advise for a fee, any insured having interest in life or disability insurance contracts..." This is a: a. an insurance broker paid on a fee for service b. a solicitor c. a life and disability analyst d. a claims adjuster
c. a life and disability analyst
580
If a licensee wants to terminate and surrender his license, what must he do? a. destroy the original license b. destroy the original and notify the commissioner c. deliver the license to the commissioner d. nothing
d. nothing
581
What must an insurer do, who accepts an application from an agent who is not appointed by that insurer, if they subsequently will issue a policy based on that application? a. the agent must become an employee of that insurer within 30 days or re-submit the application b. add the agent's name on the company's list of approved agents c. sent the agent an employment approval notice within 30 days of policy issuance d. forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application
d. forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application
582
Who is allowed to work with non-admitted carriers when the insurance cannot be found in the ordinary market? a. non-ordinary companies b. health only agents c. surplus lines brokers d. gap insurance
c. surplus lines brokers
583
Why is having a large number of similar exposure units important to insurers? a. the greater the number insured, the more premium is collected to offset fixed costs. b. the insurer increases its market share with every insured c. the greater the number insured, the greater the amount of premiums collected to help cover losses d. the greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums
d. the greater the number of insured's, the more accurately the insurer can predict losses and set appropriate premiums
584
When an agent accepts premium from the insured and uses the money for personal fain, it is considered: a. theft b. fraud c. concealment d. misrepresentation
a. theft
585
An act which requires a reporting agency to take action if a consumer complains about inaccurate information is: a. EPI b. medical information act c. fair credit act d. COBRA
c. fair credit act
586
In insurance terms, a representation can be considered: a, an absolute fact b. an implied warranty c. an express warranty d. none of the above
b. an implied warranty
587
When may a representation be withdrawn? a. at any time as long as all parties agree b. it cannot be withdrawn c. only before the insurance is in effect d. only after the policy is in effect
c. only before the insurance is in effect
588
CA Insurance code requires television commercial selling term life insurance to individuals 55 or older, must inform the consumer that: a. passing a physical exam is a requirement for benefits b. anyone who purchases term life insurance who's 55 or older, will receive a senior discount c. benefits and limitations should be considered prior to purchase d. all of the above
c. benefits and limitations should be considered prior to purchase
589
Any person who meets with a senior at the seniors home, is required to deliver a notice in writing to the seniors home. They must receive this notice prior to the initial meeting within how many days of the meeting? a. 12 hours prior to the meeting b. 6 hours prior to the meeting c. no notice is required d. no less than 24 hours
d. no less than 24 hours
590
An employee tripped over her shoelace at work and suffered an injury. This injury would be covered by: a. commercial general liability b. disability insurance c. workers compensation d. premises and operations coverage form
c. workers compensation
591
Under workers compensation medical payments, which is correct? a. there is a time limit for medical payments but no dollar limit b. there is a dollar limit but no time limit c. there is both a time limit and a dollar limit d. there is no time or dollar limit on medical payments
d. there is no time or dollar limit on medical payments
592
Workers compensation Part 1 covers: a. retirement benefits b. all sums the insurer is legally obligated to pay under common law c. all sums the insurer is required to pay by state law d. all costs of the employee required by state fund
c. all sums the insurer is required to pay by state law
593
To what does 24 hour coverage refer? a. it is medical coverage which provides around the clock protection b. it is the joint issuance of a worker's compensation policy with a disability insurance policy or other medical coverage for non-occupational injuries and illnesses c. it refers to the fact that a person needs 24 hour nursing care d. it means that there is a waiting period of 24 hours before coverage begins
b. it is the joint issuance of a worker's compensation policy with a disability insurance policy
594
The insurance commissioner: a. is appointed by the governor b. is elected by the state legislature c. is appointed by the state attorney general d. is elected by the public
d. is elected by the public
595
All of the following might make an agent act unethically EXCEPT: a. being mostly concerned about earnings b. associating with unethical agents c. being pressured as production is not up to quota d. placing clients' interests first
d. placing clients' interests first
596
The insurance code definition of an "insurance broker" is: a. someone paid to transact insurance on behalf of another person, but not on behalf od the insurer b. someone appointed by a fire and casualty broker (employer), receiving commissions form the employer, transacting insurance with the insurers the employer represents and acting on behalf of the clients c. any agent that writes more difficult to place business, with specialty insurers who have appointed him d. someone appointed to transact insurance with admitted insurers and receives commissions from them, but acts on behalf of the clients.
a. someone paid to transact insurance on behalf of another person, but not on behalf od the insurer
597
An agent held one appointment with an insurance company. The appointment was terminated. What is correct? a. the license is active until the end of the term b. the license is inactive c. the agent must be re-appointed by the same company d. the agent is required to have another action notice of appointment filed within 30 days
b. the license is inactive
598
Benefits under workers compensation would include: a. rehabilitation b. medical costs d. loss of time d. all of the above
d. all of the above
599
Which of the following is not a federal government program? a. flood insurance b. federal deposit insurance corporation c. federal crop insurance d. workers compensation
d. workers compensation
600
Under tort law, a person can face a claim for legal liability on the basis of all of the following EXCEPT: a. absolute liability b. intentional tort c. negligence d. breach of contract
d. breach of contract
601
A wrongful act other than a crime or breach of contract is a: a. tort b. proximate cause c. liability d. hazard
a. tort
602
What can an insurer do when a fraudulent and intentional omission is committed on the part of the insured proving a warranty false? a. have the insured imprisoned for up to 6 months b. rescind the contract c. force the insured to pay a fine d. force the commissioner to fine and imprison the insured
b. rescind the contract
603
Under which circumstances does a party involved in a contract of insurance need to communicate information based solely on his judgment? a. never b. only when asked c. only when relevant to the matter in question d. always
a. never
604
Neglecting to communicate that which a party knows and ought to communicate, so that the other party may make a sound decision is know as a: a. concealment b. material information c. boycotting d. none of the above
a. concealment
605
An act which requires a reporting agency to take action if a consumer complains about inaccurate information is : a. EPO b. Medical Information Act c. Fair Credit Act d. COBRA
c. Fair Credit Act
606
A person who acts in a capacity that requires an active license without having a valid license is guilty of a: a. fraud b. misdemeanor c. felony d. misrepresentation
b. misdemeanor
607
The mathematical rule that states that as the number of individual but similar exposure units increases, the easier it is to predict losses is which of the following? a. insurable interest standard b. contract law c. the law of large numbers d. materiality
c. the law of large numbers
