Insurance Stuffs

Question 1

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

Answer 1

c. excluded unless an employee dishonesty coverage form is attached

Question 2

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

Answer 2

c. dependents of an employee must be given the same rights as the employee

Question 3

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

Answer 3

a. basic, broad, and special forms

Question 4

Who can sell Medicare supplement policies? a. property and casualty agents b. life analyst c. any licensed agent d. life agents only

Answer 4

d. life agents only

Question 5

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

Answer 5

c. theft, disappearance and destruction coverage

Question 6

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

Answer 6

d. offer the core benefits

Question 7

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

Answer 7

c. the insured’s stamp collection

Question 8

8. Medicare Part B requires additional premiums a. true b. false

Answer 8

a. true

Question 9

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

Answer 9

c. fire, lightning and internal explosion

Question 10

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

Answer 10

c. cannot exceed 6 stories or 100,000 square feet

Question 11

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

Answer 11

a. permanently, partially disabled

Question 12

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

Answer 12

a. true

Question 13

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

Answer 13

b. excess liability for accidents within 25 miles of the US border on trips of 10 days or less.

Question 14

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

Answer 14

c. total disability under the social security disability

Question 15

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

Answer 15

a. Basic

Question 16

Which of the following homeowners forms has the broadest coverage? a. Basic b. Broad c. Named Peril d. Special

Answer 16

d. Special

Question 17

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.

Answer 17

c. a separate coverage is needed due to the fact that most lines of insurance exclude boiler and machinery

Question 18

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

Answer 18

c. 8 hours

Question 19

Majority of the premium for a boiler and machinery policy is used for: a. inspection b. clean up c. Underwriting d. Company expenses

Answer 19

a. inspection

Question 20

Theft of inventory and shortage of inventory would be covered by Employee Dishonesty a. true b. false

Answer 20

b. false

Question 21

Which of the following has the broadest definition? a. theft b. larceny c. burglary d. steeling

Answer 21

a. theft

Question 22

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

Answer 22

c. shortages of inventory

Question 23

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

Answer 23

c. 3 years

Question 24

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

Answer 24

a. with consent and endorsement from the insurer

Question 25

Commercial packages must contain: a. conditions b. declarations c. two or more coverage forms (modules) d. all of the above

Answer 25

d. all of the above

Question 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.

Answer 26

d. all of the above

Question 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.

Answer 27

b. any insurance that is a single line (single module)

Question 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.

Answer 28

a. does not apply to the products and completed operation aggregate limit

Question 29

Who can write insurance through the FAIR plan? a. Property/casualty agents b. solicitors c. life and health agents d. any insurance agent

Answer 29

a. property/casualty agents

Question 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

Answer 30

a. insured’s who fall in the areas that are not reasonable risks or too expensive to insure profitably

Question 31

A house that falls in a designated brush fire area could not obtain insurance through the fair plan. a. true b. false

Answer 31

b. false

Question 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

Answer 32

c. transportation and communications equipment

Question 33

What type of coverage does inland marine provide? a. basic b. broad c. open peril d. named peril

Answer 33

c. open peril

Question 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

Answer 34

b. garage keepers

Question 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

Answer 35

a. care custody and control exclusion

Question 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

Answer 36

c. commercial general liability

Question 37

Liquor liability form is only for companies/businesses that’s sole business is serving and selling liquor a. true b. false

Answer 37

a. true

Question 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

Answer 38

b. commercial general liability

Question 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

Answer 39

a. transfer the risk from one person to an insurance company

Question 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

Answer 40

d. speculative risk

Question 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

Answer 41

b. replacement cost minus depreciation

Question 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

Answer 42

c. pro rata

Question 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

Answer 43

c. $6,000

Question 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

Answer 44

b. Total amount an insurer will pay out during a policy period

Question 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

Answer 45

b. a requirement of the amount of insurance that an insured needs to carry in order to be fully insured

Question 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

Answer 46

a. the pre-approval method

Question 47

The insured and the insurer can both cancel a policy as long as it doesn’t break any laws a. true b. false

Answer 47

a. true

Question 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

Answer 48

b. decrease the premium

Question 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

Answer 49

a. indemnity

Question 50

A house located next to a plant that makes bombs is what kind of hazard? a. moral b. legal c. personnel d. physical

Answer 50

d. physical

Question 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

Answer 51

b. false

Question 52

Under a dwelling policy personal property away from the premises is covered under what percent: a. 10 b. 20 c. 15 d. none

Answer 52

a. 10

Question 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

Answer 53

a. all risk

Question 54

Risk can be defined as: a. chance of loss b. chance of gain or loss c. certainty of loss d. proximate cause

Answer 54

a. chance of loss

Question 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

Answer 55

a. specific autos

Question 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

Answer 56

b. non-owned

Question 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

Answer 57

a. vicarious liability

Question 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

Answer 58

d. $1,000,000

Question 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

Answer 59

b. risk must be uncertain

Question 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

Answer 60

a. retroactive date

Question 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

Answer 61

d. HO5

Question 62

Medical payments and liability fall under section 2 of the homeowners form a. true b. false

Answer 62

a. true

Question 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

Answer 63

d. liability

Question 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

Answer 64

c. jewelry, furs, and other structures

Question 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

Answer 65

a. liability and medical payments

Question 66

Which of the following homeowners forms will cover a condo a. HO4 b. HO3 c. HO8 d. HO6

Answer 66

d. HO6

Question 67

Which of the following homeowners forms will cover a rental property a. HO3 b. HO5 c. HO8 d. HO4

Answer 67

d. HO4

Question 68

An HO4 provides coverage for? a. the building b. the other structures c. tenants personal property d. all of the above

Answer 68

c. tenants personal property

Question 69

What Homeowners form provides all risk coverage on personal and real property? a. HO5 b. HO3 c. HO6 d. HO8

Answer 69

a. HO5

Question 70

An HO1 is most similar to a: a. HO4 b. JO6 c. HO8 d. HO1

Answer 70

c. HO8

Question 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

Answer 71

d. full limit of personal property

Question 72

All insurance companies selling homeowners insurance must offer earthquake insurance a. true b. false

Answer 72

a. true

Question 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

Answer 73

b. damage to furniture while being removed during a fire

Question 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

Answer 74

c. single family, owner occupied

Question 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.

Answer 75

b. Have the client add a personal injury endorsement to the contract

Question 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

Answer 76

c. dwelling $80,000; garage $16,000

Question 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

Answer 77

c. he wants broader coverage

Question 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

Answer 78

b. bodily injury per person/bodily injury per occurrence/property damage per occurrence

Question 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

Answer 79

d. all of the above

Question 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

Answer 80

a. mechanical breakdown

Question 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

Answer 81

a. true

Question 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

Answer 82

c. suspension of the insured license or someone who regularly drives the car

Question 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

Answer 83

c. a car collides with an object or the upset of a car

Question 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

Answer 84

d. increase in premium due to financial hardship

Question 85

A personal auto policy would cover negligence of the insured which inherently causes property damage to others a. true b. false

Answer 85

a. true

Question 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

Answer 86

c. the personal auto policy does not cover a motorcycle under a personal auto policy

Question 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

Answer 87

c. both policies apply, the owner of the automobile’s insurance is primary and the borrowers is secondary

Question 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

Answer 88

a. other than collision

Question 89

At what age do individuals qualify for social security benefits a. 65 b. 60 c. depends upon date of birth d. 70

Answer 89

c. depends upon date of birth

Question 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%

Answer 90

d. 20%

Question 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

Answer 91

a. intelligibility for a Medicare supplement policy

Question 92

Who is affected by a blackout period a. surviving spouse b. the surviving children c. the surviving parents

Answer 92

a. surviving spouse

Question 93

At what age does the blackout period end a. 65 b. 60 c. 55 d. 70

Answer 93

b. 60

Question 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

Answer 94

b. 10 days

Question 95

Long-term care is least needed by the very rich and the very poor a. true b. false

Answer 95

a. true

Question 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

Answer 96

b. 10/20/3

Question 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

Answer 97

a. both provide open peril coverage on the dwelling

Question 98

In insurance terms, what term is mandatory a. May b. Shall c. Waiver d. Thus

Answer 98

b. Shall

Question 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

Answer 99

b. rescind the contract

Question 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

Answer 100

c. 8 years

Question 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

Answer 101

c. swimming pool

Question 102

The effort to decrease the dollar aount of a loss would be a. reduction b. loss retention c. pure risk d. loss prevention

Answer 102

d. loss prevention

Question 103

Anyone can buy flood insurance through the NIFP (National Insurance Flood Program) a. true b. false

Answer 103

b. false

Question 104

Legal liability case would apply to all of the following except a. general b. proximate c. special d. punitive

Answer 104

b. proximate

Question 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

Answer 105

d. denied the claim based on reckless behavior

Question 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

Answer 106

d. additional living expenses

Question 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

Answer 107

d. Never

Question 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

Answer 108

c. when the shop is listed to be used

Question 109

Can animals be covered under a homeowners policy? a. yes b. no

Answer 109

b. no

Question 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

Answer 110

b. To encourage competition among insurers who write business in CA

Question 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

Answer 111

c. Damage to the ship and fuel

Question 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

Answer 112

d. encourage insurance companies to compete

Question 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

Answer 113

b. excluded under earthquake exclusion

Question 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

Answer 114

a. coverage applies to continue after the premises are restored

Question 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

Answer 115

c. Auto liability insurance

Question 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

Answer 116

c. employee injuring a customer

Question 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

Answer 117

b. make auto insurance available to residents of the state

Question 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

Answer 118

a. to provide excess coverage for first party losses

Question 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

Answer 119

c. when the policy takes an effect and at the time of loss

Question 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

Answer 120

b. provides compensation for work related accidents regardless at fault

Question 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)

Answer 121

b. the commissioner of insurance

Question 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

Answer 122

c. fair plan

Question 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

Answer 123

c. prevent gambling

Question 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

Answer 124

c. social security

Question 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

Answer 125

d. net income and continuing expenses

Question 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

Answer 126

c. Ed is forced to leave the house due to an impending flood

Question 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)

Answer 127

b. specialist

Question 128

CAARP does not provide which of the following a. liability insurance b. medical payments c. collision d. none of the above

Answer 128

c. collision

Question 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

Answer 129

a. the insurer must make payment for the full amount of the loss even if there has been a substantial increase in the risk

Question 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

Answer 130

c. material misrepresentation

Question 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

Answer 131

b. collects policy premiums

Question 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

Answer 132

c. property off premises

Question 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

Answer 133

b. awnings

Question 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

Answer 134

d. arbitration

Question 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

Answer 135

b. never, mudslides are excluded

Question 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

Answer 136

a. the cost to repair a structure damaged by wind

Question 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

Answer 137

a. losses must be catastrophic in nature

Question 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

Answer 138

c. liability only

Question 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

Answer 139

c. opportunity cost

Question 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

Answer 140

d. commission

Question 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

Answer 141

c. they can be insured as business personal property

Question 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

Answer 142

b. inspections

Question 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

Answer 143

d. permanently installed radio

Question 144

Informs insurance clients about their right to privacy? a. illustration b. policy summary c. notice of information practice d. buyers guide

Answer 144

c. notice of information practice

Question 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

Answer 145

b. allow the insurer to inspect the damaged property before it is repaired

Question 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

Answer 146

c. 25 days

Question 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

Answer 147

c. 200 fine for the first offense, up to 1,000 for the third

Question 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

Answer 148

a. they are not insurable

Question 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

Answer 149

a. claims made commercial general liability policy

Question 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

Answer 150

b. they represent the insured first and foremost

Question 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

Answer 151

a. the producer is a surplus lines broker

Question 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

Answer 152

a. may be used to modify the insurance provided by the building and personal property coverage form

Question 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

Answer 153

d. physical damage liability

Question 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

Answer 154

a. cannot recover damages from their own insurer

Question 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

Answer 155

b. transferring

Question 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

Answer 156

a. ice and weight of snow

Question 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

Answer 157

c. signing a binding receipt

Question 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

Answer 158

b. giving an insurance quote

Question 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

Answer 159

a. conviction

Question 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

Answer 160

c. ordinance or law

Question 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

Answer 161

c. valuation clause

Question 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

Answer 162

a. nothing

Question 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

Answer 163

b. insuring clause

Question 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

Answer 164

c. life insurance

Question 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

Answer 165

HO-6

Question 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

Answer 166

c. merchandise

Question 167

Exclusions are found in what part of the insurance policy? a. declaration b. insuring agreements c. cause of loss form d. endorsements

Answer 167

c. cause of loss form

Question 168

A scheduled personal property endorsement provides what type of coverage? a. basic b. broad c. open peril d. all of the above

Answer 168

c. open peril

Question 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

Answer 169

d. collision

Question 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

Answer 170

c. excluded unless an employee dishonesty coverage form is attached

Question 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

Answer 171

b. is any insurance written as a single line policy

Question 172

A risk is: a. a peril b. certainty of loss c. proximate cause d. uncertainty of loss (chance of loss)

Answer 172

d. uncertainty of loss (chance of loss)

Question 173

A pure risk involves a chance of a. gain b. loss c. both a & b d. neither a or b

Answer 173

b. loss

Question 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

Answer 174

d. avoidance

Question 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

Answer 175

d. all of the above

Question 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

Answer 176

c. 25 days

Question 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

Answer 177

A. Replacement cost

Question 178

What is actual cash value (ACV)? a. replacement cost + depreciation b. market value-depreciation c. replacement cost-depreciation d. stated value-depreciation

Answer 178

c. replacement cost-depreciation

Question 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

Answer 179

a. personal loss

Question 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

Answer 180

c. it involves a catastrophic exposure

Question 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

Answer 181

b. not purchasing collision insurance on your auto

Question 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

Answer 182

d. tort law

Question 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

Answer 183

d. there is usually no direct correlation between the amount of general and special damages awarded to the victim

Question 184

Liability losses are referred to as a. first party losses b. second party losses c. third party losses d. none of the above

Answer 184

c. third party losses

Question 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

Answer 185

c. Declarations, insuring clause, conditions, and exclusions

Question 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

Answer 186

d. $5,000

Question 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

Answer 187

c. pro-rata cancellation

Question 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

Answer 188

d. an estimate of the amount that the insurer will pay

Question 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

Answer 189

d. underwriting

Question 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

Answer 190

d. direct loss

Question 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

Answer 191

c. indemnity

Question 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

Answer 192

a. anything that increases the chance of loss

Question 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

Answer 193

d. written consent of the insurer

Question 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

Answer 194

a. it is a method of transferring risk

Question 195

Grouping people by similar characteristics is: a. unfair discrimination b. prejudice c. fair discrimination a basic principle of insurance

Answer 195

c. fair discrimination

Question 196

A peril is defined as: a. a cause of loss b. increases the chance of loss c. a hazard d. an accident

Answer 196

a. a cause of loss

Question 197

The main purpose of insurance is to: a. transfer the risk b. reduce perils c. avoid hazards d. reduce the risk

Answer 197

a. transfer the risk

Question 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

Answer 198

b. it is a basic principle of insurance

Question 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

Answer 199

b. not purchasing collision insurance on your auto

Question 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

Answer 200

d. putting a fence around the pool

Question 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

Answer 201

c. it reduces risk exposure

Question 202

A house located next to a dynamite plant is considered what kind of hazard? a. moral b. legal c. physical d. liability

Answer 202

c. physical

Question 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

Answer 203

b. declarations

Question 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

Answer 204

c. it involves a catastrophic exposure

Question 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.

Answer 205

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)

Question 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

Answer 206

c. subrogation

Question 207

If an insured voluntarily relinquishes his rights, this is an example of: a. estoppel b. coercion c. waiver d. warranty

Answer 207

c. waiver

Question 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

Answer 208

a. replacement cost

Question 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

Answer 209

b. short rate basis

Question 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

Answer 210

c. flat cancellation

Question 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

Answer 211

d. 15 days

Question 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

Answer 212

a. 10 days

Question 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

Answer 213

a. only on the below average business submitted to them, keeping the good business for themselves

Question 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

Answer 214

b. A mutual insurer

Question 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

Answer 215

b. reduces the premium payment

Question 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

Answer 216

a. prior approval

Question 217

Which of the following is not a method for risk management? a. transfer b. avoidance c. retention d. variance

Answer 217

d. variance

Question 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

Answer 218

b. underwriting

Question 219

Insurance companies transfer part of a particularly large risk through what process a. reinsurance b. indemnify c. underwriting d. transfer

Answer 219

a. reinsurance

Question 220

Insurance contracts are between how many parties a. 4 b. 3 c. 1 d. 2

Answer 220

d. 2

Question 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

Answer 221

b. limit of insurance

Question 222

A speculative risk, like a pure risk is insurable a. true b. false

Answer 222

b. false

Question 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

Answer 223

d. all of the above

Question 224

Aleatory in nature refers to: a. ambiguous language b. enforceable c. unequal exchange by two parties d. waiver of promise

Answer 224

c. unequal exchange by two parties

Question 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

Answer 225

a. insurance company

Question 226

Failure to disclose material fact is: a. concealment b. fraud c, waiver d. estoppels

Answer 226

a. concealment

Question 227

Misrepresentation, deceit or trickery can be defined as: a. materiality b. false warrant c. conditional concealment d. fraud

Answer 227

d. fraud

Question 228

Provisions that deny coverage for certain perils: a. exclusions b. declarations c. endorsements d. conditions

Answer 228

a. exclusions

Question 229

The insuring agreement contains all of the following except a. perils insured against b. persons/property covered c. location d. exclusions

Answer 229

d. exclusions

Question 230

Assignment/transfer cannot be made without written consent from: a. additional insured b. agent c. first named insured d. insurer

Answer 230

d. insurer

Question 231

A deduction is the portion of a loss retained by the insured before the insurer will cover a claim a. true b. false

Answer 231

a. true

Question 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

Answer 232

c. termination due to non-payment

Question 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

Answer 233

d. all of the above

Question 234

Coinsurance refers to the amount of insurance an insured must carry in order to be fully insured a. true b. false

Answer 234

a. true

Question 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

Answer 235

b. there may be furniture but no people in a building

Question 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

Answer 236

d. all of the above

Question 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

Answer 237

a. a loss to the property would have some financial loss for the person

Question 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

Answer 238

d. concurrent causation

Question 239

A consequential loss is not directly caused by a peril but assumed as a result of a direct loss. a. true b. false

Answer 239

a. true

Question 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

Answer 240

d. all of the above

Question 241

Compensatory damages in a hearing will generally determine the amount of punitive damages. a. true b. false

Answer 241

b. false

Question 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

Answer 242

b. occurrence

Question 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

Answer 243

c. vicarious

Question 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

Answer 244

b. Foreign

Question 245

What department is set up in order to regulate insurance rates? a. DOI b. the FAIR plan c. CAARP d. ISO

Answer 245

d. ISO

Question 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

Answer 246

a. agent (producer)

Question 247

A person that sells insurance for only one company is a. agent b. broker c. captive agent d. independent agent

Answer 247

c. captive agent

Question 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

Answer 248

a. act in a prudent fashion

Question 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

Answer 249

c. commingling

Question 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

Answer 250

b. mutual insurer

Question 251

A way for insurers to avoid having to pay for large or catastrophic losses a. claims handling b. avoidance c. reinsurance d. underwriting

Answer 251

c. reinsurance

Question 252

What has a separate aggregate limit under CLG?

Answer 252

Products completed

Question 253

What is a deductible?

Answer 253

A specified amount of money that is paid by the insured before the insurer pays any money on a claim

Question 254

What is embezzlement?

Answer 254

Employee dishonesty, which isn’t covered by a crime policy unless an Employee Dishonesty form is attached (Doesn’t cover shortages, theft only)

Question 255

Who is a broker?

Answer 255

A person who represents the client in transaction. Property & Casualty only.

Question 256

What is Errors & Omissions insurance?

Answer 256

Liability insurance that covers agents and insurance companies if they make mistakes or forget to include information in a contract.

Question 257

What is Code: Section 770?

Answer 257

When buying a property that is financed, a lender cannot force the purchaser to buy insurance from a particular agent or broker.

Question 258

What is the Law of Large Numbers?

Answer 258

The greater the number of insured, the more accurately the prediction.

Question 259

What is standard risk

Answer 259

Classification of risk that is normal

Question 260

What is a loss sustained form?

Answer 260

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.

Question 261

What is a Discovery Form?

Answer 261

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.

Question 262

What is a substandard risk?

Answer 262

Classification or risk that is more than the normal acceptable risk.

Question 263

What is an underwriter?

Answer 263

A person whose job it is to asses risk and determine classification of the insured (an agent is a field underwriter).

Question 264

What are surplus lines?

Answer 264

Found in property and casualty insurance. A surplus line broker places insurance with a non-admitted insurer.

Question 265

What is a non-admitted insurer?

Answer 265

An insurer that is not licensed to do business in a particular state. (a surplus lines broker works with non-admitted carriers)

Question 266

What does section 2 on homeowner’s policy cover?

Answer 266

Liability and medical payments. Paid to others only.

Question 267

What pays excess liability amounts?

Answer 267

Umbrella, after underlying policy or retention is paid. Liability only; does not cover property.

Question 268

What is worker’s compensation insurance?

Answer 268

Insurance purchase by employers to cover their employees in case the employee is hurt on the job.

Question 269

What is excluded under CGL?

Answer 269

Pollution - with the exception of fuel spilled during normal operations. Pollution is normally covered under CPP policies or Builders’ risk

Question 270

Parking lots, dealerships, and repair garages need…

Answer 270

Garagekeepers coverage

Question 271

What is symbol #7?

Answer 271

Specifically described autos

Question 272

What is a retroactive date?

Answer 272

The first date an occurrence would be covered under a claim made CGL policy.

Question 273

What is symbol #4?

Answer 273

Owned autos, other than private passenger vehicles

Question 274

Under crime insurance, the employee dishonesty endorsement never covers…

Answer 274

shortages of inventory

Question 275

Worker compensation in a yacht policy

Answer 275

Part of the protection and indemnity (the liability portion)

Question 276

What is symbol #9?

Answer 276

Non-owned autos

Question 277

A, B and C of Commercial Liability (CGL) are:

Answer 277

a. bodily injury and property damage b. personal and advertising injury c. medical payments

Question 278

“Protection and Indemnity” on an ocean marine or yacht insurance

Answer 278

Liability & workers comp. portion

Question 279

Hull covers

Answer 279

Physical damage to insured’s ship or yacht

Question 280

What is a peril?

Answer 280

Cause of loss

Question 281

Open peril

Answer 281

All perils are covered except those specifically excluded

Question 282

What is vicarious liability?

Answer 282

Coverage that an employer has for employees, for when they are held responsible but not directly.

Question 283

What is risk?

Answer 283

Uncertainty of loss

Question 284

What is pure risk?

Answer 284

A chance of loss

Question 285

Who is the third party?

Answer 285

The insured party, to whom liability pays claims

Question 286

What is a hazard?

Answer 286

Anything that increases a chance for loss

Question 287

What is collision?

Answer 287

Colliding with another car, an object or upset of a car

Question 288

What is absolute liability?

Answer 288

Liability imposed when hazardous materials or dangerous animals are involved.

Question 289

What is strict liability?

Answer 289

Another term for absolute liability, when a product causes injury or death.

Question 290

Real Property

Answer 290

Land, buildings… anything attached (does not move)

Question 291

What is a physical hazard?

Answer 291

Distinct characteristic arising from material, structural, or operational features that increase a chance for loss. (i.e. being next to explosives)

Question 292

What is the declaration?

Answer 292

a contract section stating who or what is covered, the amount of coverage, the policy period and the premium.

Question 293

What is personal property?

Answer 293

Property that can move (furniture, clothes, paintings…etc)

Question 294

What are exclusions?

Answer 294

Things that are not covered

Question 295

What is an insurable interest?

Answer 295

a financial interest

Question 296

What is judgement rating?

Answer 296

It is based on best judgement of underwriter in classifying a risk

Question 297

What is an HO-6?

Answer 297

Broad form coverage for personal property of a condo owner

Question 298

What is pure risk?

Answer 298

The insured has only a chance for loss and never gain

Question 299

What is experience rating?

Answer 299

Method used to determine rate based in insured’s loss experience

Question 300

What is a binder?

Answer 300

Confirms that coverage is bound. Temporary insuring contract (written or oral)

Question 301

What is contributory negligence?

Answer 301

When a person is at all negligent, and they cannot file or collect for a claim.

Question 302

What is comparative negligence?

Answer 302

A person can file a claim, but damages are reduced based on that party’s negligence.

Question 303

What is replacement cost?

Answer 303

The cost to replace without a deduction for depreciation. (NOT WHAT SOMEONE PAID FOR IT)

Question 304

What are CAARP’s minimum limits?

Answer 304

15/30/5

Question 305

What are endorsements?

Answer 305

Written agreement attached to a policy to add or subtract insurance coverage’s

Question 306

What is a direct loss?

Answer 306

The first loss that occurs (a fire burns down the store)

Question 307

What is a consequential loss?

Answer 307

A consequence of a direct loss… i.e. a store loses business income after a fire

Question 308

What is OTC?

Answer 308

Other than collision - anything causing loss or damage to the car, except collision/upset

Question 309

What is the Mexican liability endorsement?

Answer 309

Excess liability for accidents within 25 miles of the US border (trips of 10 days or less)

Question 310

What is the purpose of insurance?

Answer 310

To transfer risk

Question 311

What does OTC cover?

Answer 311

Earthquake, flood, hail, theft, hitting an animal, gunshots (no collision or upset)

Question 312

What are HO-3 and HO-5?

Answer 312

Both are special, and cover all risk on the dwelling policy. Only HO-5 covers all risk on “C” (personal property)

Question 313

What is market value?

Answer 313

selling price

Question 314

What percentage must be vacant for a building to be called vacant?

Answer 314

70%

Question 315

In a contract who is “we”?

Answer 315

The insurer

Question 316

How much coverage does a dwelling policy give for personal property away from the premises?

Answer 316

10% of the personal property limit

Question 317

Why is a yacht policy like an ocean marine policy, even though a yacht policy is a personal line?

Answer 317

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.

Question 318

What is not considered transacting?

Answer 318

Establishing a list of clients

Question 319

“Did” over “Should”?

Answer 319

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)

Question 320

What is livery?

Answer 320

A vehicle for hire, to transport people… i.e. limousines

Question 321

What is GAP insurance?

Answer 321

It pays the difference between the amount an insurer pays on a totaled car and the amount owed on the loan or lease.

Question 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?

Answer 322

4 days

Question 323

What is the minimum good driver discount?

Answer 323

20%

Question 324

Miscellaneous vehicle

Answer 324

Motorcycles, ATV’s (not autos or mobile equipment)

Question 325

How is hitting an animal on the road covered?

Answer 325

OTC (Animal movements are unpredictable)

Question 326

What has a split limit on the auto liability section?

Answer 326

Bodily injury

Question 327

What is a split limit?

Answer 327

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.

Question 328

What is single limit liability?

Answer 328

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.

Question 329

What has as single limit?

Answer 329

Property damage

Question 330

You have liability only and borrow a car… and collide with another. Which pays?

Answer 330

The borrowed car’s insurance is primary.

Question 331

What are qualifying areas under the FAIR plan?

Answer 331

Designated brush fire and los income inner city areas (subject to civil unrest)

Question 332

Is an object falling from an airplane covered?

Answer 332

Under extended coverage’s

Question 333

Where does a driver have coverage?

Answer 333

US, Canada and US Possessions (Puerto Rico, Guam)

Question 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.

Answer 334

a. the named insured’s resident son while driving a neighbor’s car.

Question 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

Answer 335

d. B.I. per person/B.I. per occurrence/P.D. per occurrence

Question 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

Answer 336

d. loss by theft

Question 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

Answer 337

a. collision with another car

Question 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

Answer 338

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

Question 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

Answer 339

c. mechanical breakdown

Question 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

Answer 340

c. nothing. coverage is automatic

Question 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

Answer 341

a. make and model year of the vehicle

Question 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

Answer 342

a. $300,000

Question 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

Answer 343

a. auto insurance policy

Question 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

Answer 344

c. suspension of the driver’s license of a person who is insured under the policy and who usually drives the insured automobile

Question 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

Answer 345

c. lap top computer stolen from the car which was parked on the street

Question 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

Answer 346

b. theft of necktie and briefcase from the car left at airport

Question 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

Answer 347

b. false

Question 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

Answer 348

b. homeowner’s policy

Question 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

Answer 349

c. a car collides with an object, or upset of a car

Question 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

Answer 350

d. will meet the minimum requirements of any other state with no additional premium due

Question 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

Answer 351

d. all of the above

Question 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

Answer 352

d. none of the above

Question 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

Answer 353

c. a vehicle self-insured by a government agency

Question 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

Answer 354

b. provide actual cash value

Question 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

Answer 355

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

Question 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

Answer 356

c. Montreal, Canada

Question 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

Answer 357

b. $42,000

Question 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

Answer 358

c. Mike’s use of an unowned company car which is provided for his regular use

Question 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

Answer 359

c. Janet runs over a mailbox while using an unowned company car that is provided for her regular use

Question 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

Answer 360

b. a tree fell in the street two hours earlier due to a storm. The insured hit it and caused damage to the car

Question 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

Answer 361

a. the PAP does not cover vehicles with two wheels

Question 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

Answer 362

d. all of the above

Question 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

Answer 363

a. true

Question 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

Answer 364

a. named non-owner

Question 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

Answer 365

b. both policies apply but the owner of the car’s insurance is primary

Question 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

Answer 366

a. coverage pays up to $20 a day to a maximum of $600

Question 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.

Answer 367

c. the auto owner’s liability is primary; the insured woman’s collision coverage will cover the borrowed car

Question 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

Answer 368

d. an American while driving up to 25 miles into Mexico

Question 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

Answer 369

a. if it is leased

Question 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

Answer 370

b. other than collision

Question 371

Damage caused to an auto by an earthquake is part of the OTC coverage in a personal auto policy: a. true b. false

Answer 371

a. true

Question 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

Answer 372

c. the tires are stolen from the insured’s car

Question 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

Answer 373

a. other than collision

Question 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

Answer 374

a. true

Question 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

Answer 375

d. none of the above

Question 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

Answer 376

b. by the insured’s physical damage policy

Question 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

Answer 377

a. by the insured’s liability policy

Question 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

Answer 378

d. all of the above

Question 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”

Answer 379

a. miscellaneous vehicle endorsement

Question 380

Which of these would be a covered auto under a personal auto policy? a. motorcycle b. trailer c. mobile home d. tractor-trailer

Answer 380

b. trailer

Question 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

Answer 381

a. the misrepresentation was immaterial, and the company would have issued the insurance to Bob

Question 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

Answer 382

a. the concealment was not material

Question 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

Answer 383

d. all of the above

Question 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

Answer 384

c. 20 days

Question 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

Answer 385

d. all of the above

Question 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

Answer 386

b. 15/30/5

Question 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

Answer 387

b. it covers any direct or accidental loss of, or damage to, the insured’s automobile, except collision

Question 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

Answer 388

d. none of the above

Question 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

Answer 389

d. Kelly’s neighbor’s son who is joy riding in Kelly’s car

Question 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

Answer 390

d. none of the above

Question 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

Answer 391

d. all of the above

Question 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

Answer 392

c. it will be covered up to the limits stated in her policy (Note: $20 a day up to a maximum of $600)

Question 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

Answer 393

a. true

Question 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

Answer 394

a. $50

Question 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

Answer 395

c. must be included in the policy, but can be waived by supplemental agreement between the insurer and the insured

Question 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

Answer 396

c. two-ton van used in part-time business

Question 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

Answer 397

b. paid if endorsed onto the policy for an additional premium

Question 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

Answer 398

d. physical damage

Question 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

Answer 399

b. $50,000

Question 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

Answer 400

a. CAARP

Question 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

Answer 401

d. policies are randomly assigned to all companies selling that class of insurance

Question 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

Answer 402

b. false

Question 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

Answer 403

b. vandalism

Question 404

Collision coverage under a personal auto policy would cover cost incurred for rental expenses following damage caused by collision. a. true b. false

Answer 404

a. true

Question 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

Answer 405

b. other than collision

Question 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

Answer 406

a. additional small claims

Question 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

Answer 407

a. 10

Question 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

Answer 408

c. An inspection is required if the insured wants other than collision and collision coverage

Question 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

Answer 409

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

Question 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

Answer 410

a. HO-3

Question 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

Answer 411

d. a residence in which the owner-occupant also maintains an office for her accounting business

Question 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

Answer 412

d. medical payments

Question 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

Answer 413

d. liability

Question 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

Answer 414

d. $48,000 on coverage A

Question 415

In a dwelling policy, what is coverage A?

Answer 415

Liability

Question 416

In a dwelling policy, what is coverage B?

Answer 416

Medical Payments

Question 417

In a dwelling policy, what is coverage C?

Answer 417

Uninsured motorist

Question 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

Answer 418

c. both a and b are true

Question 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

Answer 419

a. scheduled personal property

Question 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

Answer 420

b. Jewelry, furs, firearms, cameras, etc.

Question 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

Answer 421

b. to protect her from possible liability if a tenant is hurt on her premises

Question 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

Answer 422

c. personal liability and medical payments

Question 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

Answer 423

c. HO-6

Question 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

Answer 424

c. garage only

Question 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

Answer 425

b. $17,500

Question 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

Answer 426

b. The renter’s form

Question 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

Answer 427

a. HO-4

Question 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

Answer 428

b. an apartment tenant’s personal property

Question 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

Answer 429

a. Broad form personal property

Question 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

Answer 430

a. broad form coverage on a personal property of a condominium owner

Question 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

Answer 431

a. HO-3 endorsed with an HO-5

Question 432

An HO-8 is similar to: a. HO-1 b. HO-2 c. HO-3 d. HO-4

Answer 432

a. HO-1

Question 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

Answer 433

a. medical payments $1,000; persona; liability $100,000

Question 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

Answer 434

d. guests on the premises

Question 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

Answer 435

d. a resident family member of the insured

Question 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

Answer 436

d. a neighbor’s child trips over a sprinkler and breaks his leg

Question 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

Answer 437

d. a house guest is injured while going to the country club in the insured’s auto

Question 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

Answer 438

d. $2,500

Question 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

Answer 439

d. an article falls off an airplane falying overhead and crashes into the insured’s home

Question 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

Answer 440

b. pay up to the special limits in the policy

Question 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

Answer 441

d. full limit of personal property

Question 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

Answer 442

b. it provides “all risk” coverage for personal possesions on a scheduled basis

Question 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

Answer 443

a. must offer earthquake insurance

Question 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

Answer 444

d. all of the above

Question 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)

Answer 445

d. loss due to changes in construction code (ordinance or law regarding construction)

Question 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

Answer 446

b. damage to furniture while being removed during a fire

Question 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

Answer 447

c. single family, owner occupied, detached dwelling

Question 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

Answer 448

c. your house burns down and you incur more costs as you must rebuild the house to code

Question 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

Answer 449

a. true

Question 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

Answer 450

b. have the client add a personal injury endorsement to the contract

Question 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

Answer 451

c. dwelling $80,000; garage $16,000

Question 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

Answer 452

c. he wants broader coverage

Question 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

Answer 453

d. all of the above

Question 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.

Answer 454

b. dwelling, other structures, and personal property

Question 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

Answer 455

a. true

Question 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

Answer 456

d. the isnured’s non-resident spouse

Question 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

Answer 457

a. basic, broad, and special forms of dwelling policies

Question 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

Answer 458

c. the insured’s coin collection

Question 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

Answer 459

a. Basic, broad, and special forms of dwelling policies

Question 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

Answer 460

c. the insured’s coin collection

Question 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

Answer 461

b. $8,000

Question 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

Answer 462

d. fire, lightning, and internal explosion

Question 463

A basic dwelling policy automatically provides coverage against fire, lightning and: a. windstorm b. internal explosion c. explosion d. riot

Answer 463

b. internal explosion

Question 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

Answer 464

a. basic

Question 465

Which of the dwelling (homeowners) policies provide the most coverage? a. basic b. broad c. special d. standard

Answer 465

c. special

Question 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%

Answer 466

b. 10%

Question 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

Answer 467

d. the insured wanted broader coverage for a lower premium

Question 468

Which of the dwelling forms excludes damage due to burglary? a. basic b. broad c. special d. all of the above

Answer 468

a. basic

Question 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

Answer 469

a. trees, shrubs, plants and lawn

Question 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

Answer 470

b. a dwelling with 5 boarders

Question 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

Answer 471

d. only the broad and special forms

Question 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%

Answer 472

b. 80%

Question 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

Answer 473

c. a list of basic and extended coverage perils

Question 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

Answer 474

c. based on either a or b

Question 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

Answer 475

c. Loss of income resulting from property damage at the insured’s property

Question 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

Answer 476

c. property off-premises

Question 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

Answer 477

c. coverage which will permit the insured to continue in business without interruption following a property damage loss

Question 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

Answer 478

b. broad and special

Question 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

Answer 479

b. 50%

Question 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

Answer 480

d. nothing

Question 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

Answer 481

b. loss to building under construction, temporary structures, building materials and supplies.

Question 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

Answer 482

a. true

Question 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

Answer 483

a. net income, continuing expenses and payroll

Question 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

Answer 484

b. a requirement that the insured carry insurance equal to a specified percentage of the property value, to be fully indemnified under the policy

Question 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

Answer 485

a. to require the insured to carry insurance to value

Question 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

Answer 486

b. $150,000

Question 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

Answer 487

a. cause of loss form

Question 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

Answer 488

a. falling objects

Question 489

Under the commercial property basic form, what would be covered? a. falling objects d. flood c. earth movement d. sprinkler leakage

Answer 489

d. sprinkler leakage

Question 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

Answer 490

a. coverage for contributing locations

Question 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

Answer 491

a. true

Question 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

Answer 492

d. first named insured or the insurer

Question 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

Answer 493

a. improvement or betterment

Question 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%

Answer 494

d. 85%

Question 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

Answer 495

a. builder’s risk

Question 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

Answer 496

b. blanket coverage

Question 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

Answer 497

a. each policy shall contribute pro rata to the payment of such whole or partial loss

Question 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

Answer 498

c. specific coverage

Question 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

Answer 499

a. building, business personal property of the insured, and personal property of others

Question 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

Answer 500

b. businessowners policy

Question 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

Answer 501

a. the building to be covered / the perils to be covered / potential financial loss

Question 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

Answer 502

c. furniture and fixtures

Question 503

Inland marine insurance commonly provides _______ coverage/ a. basic b. open peril c. broad d. standard

Answer 503

b. open peril

Question 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

Answer 504

b. an automobile being kept for an individual in a parking lot

Question 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

Answer 505

c. a care, control, and custody exclusion

Question 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

Answer 506

a. a separate coverage form is needed as most lines of insurance exclude boiler and machinery risks

Question 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

Answer 507

b. inspection

Question 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

Answer 508

c. a disappearing deductible

Question 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

Answer 509

c. boiler explosion

Question 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

Answer 510

d. supplemental payments provided with additional policy limits

Question 511

Under a farm property coverage plan, what would be covered? a. liability b. property c. property but not liability d. liability and property

Answer 511

a. liability

Question 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

Answer 512

a. products-completed operations hazard

Question 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

Answer 513

b. excluded, except for contracts specifically defined as insured

Question 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

Answer 514

c. injury, other than bodily injury, arising out of such things as slander, libel, and invasion of privacy

Question 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

Answer 515

b. false

Question 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

Answer 516

a. retroactive date

Question 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

Answer 517

c. a customer on the premises

Question 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

Answer 518

d. a company whose business is the selling and serving of alcoholic beverages

Question 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

Answer 519

b. any insured

Question 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

Answer 520

b. an employee working in a customer’s home does damage to the customer’s property (causes an injury to the customer)

Question 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

Answer 521

b. there may be a gap in coverage

Question 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

Answer 522

d. it does not apply to the products completed operations hazard

Question 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

Answer 523

a. premises and operations hazard

Question 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

Answer 524

b. an employee while working

Question 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

Answer 525

c. the first date that an event may occur and be covered by the policy

Question 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

Answer 526

a. (a) bodily injury and property damage; (b) personal and advertising injury; (c) medical payments

Question 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

Answer 527

c. excluded unless an employee dishonesty coverage form is attached

Question 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

Answer 528

c. theft, disappearance and destruction coverage form

Question 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

Answer 529

b. theft of inventory (theft of business stock)

Question 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

Answer 530

c. 1, 2, and 3

Question 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

Answer 531

c. 1 year

Question 532

Which of the following offers the broadest crime coverage? a. theft b. burglary c. robbery d. larceny

Answer 532

a. theft

Question 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

Answer 533

b. shortages of inventory

Question 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

Answer 534

d. nonowned autos

Question 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

Answer 535

d. Have the employer add non-owned autos to his business auto coverage

Question 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

Answer 536

b. floater coverage

Question 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

Answer 537

c. garagekeepers coverage

Question 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

Answer 538

a. garagekeepers insurance

Question 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

Answer 539

a. the same, to avoid confusion

Question 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

Answer 540

b. owned autos other than private passenger autos

Question 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

Answer 541

c. comprehensive, collision, towing and labor

Question 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

Answer 542

d. allows the insured to tailor the policy by deciding what coverages should be applied to different vehicles

Question 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

Answer 543

a. owner of a trucking fleet

Question 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

Answer 544

c. street sweeper which is self-propelled

Question 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

Answer 545

a. true

Question 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

Answer 546

c. physical damage to mobile equipment

Question 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

Answer 547

b. provided only for private passenger type autos

Question 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

Answer 548

c. specifically described autos only

Question 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

Answer 549

a. ocean marine

Question 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

Answer 550

b. dwelling property

Question 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

Answer 551

a. the first name insured

Question 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

Answer 552

b. false

Question 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

Answer 553

a. true *Note, up to three years after policy expiration*

Question 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

Answer 554

d. named perils

Question 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

Answer 555

b. is any insurance written as a single line policy

Question 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

Answer 556

d. all of the above

Question 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

Answer 557

b. convenience of having coverage under one policy

Question 558

Commercial package policies must include: a. common declarations b. common conditions c. two or more coverage forms d. all of the above

Answer 558

d. all of the above

Question 559

Commercial package policies must include: a. cause of loss forms b. common conditions c. common exclusions all of the above

Answer 559

b. common conditions

Question 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

Answer 560

a. only by endorsement from the insurer and made part of the policy

Question 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

Answer 561

a. allows values for commercial property policies to be modified

Question 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

Answer 562

c. during the policy period and for three years after expiration of the policy

Question 563

According to the CA department of insurance which term means “mandatory”? a. oath b. may c. warranty d. shall

Answer 563

d. shall

Question 564

According to the CA department of insurance which term means “permissive”? a. oath b. shall c. may d. twisting

Answer 564

c. may

Question 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

Answer 565

c. expiration date of the license

Question 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

Answer 566

d. the greater the number of insured’s, the more accurately the insurer can predict losses and set appropriate premiums

Question 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)

Answer 567

d. demutualization (or conversion)

Question 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

Answer 568

b. insolvent

Question 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

Answer 569

b. financial rating of the insurer

Question 570

According to the CA Department of Insurance fraudulent is considered. a. misdemeanor b. a forgiveness c. infraction d. felony

Answer 570

d. felony

Question 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

Answer 571

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

Question 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

Answer 572

c. two consecutive terms (8 years)

Question 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

Answer 573

c. applicant does not have a California business address

Question 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)

Answer 574

b. Department of Insurance (DOI)

Question 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

Answer 575

a. at all times

Question 576

How long must an agent maintain records sold in CA? a. 10 years b. 6 years c. 5 years d. 2 years

Answer 576

b. 6 years

Question 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

Answer 577

b. deny the application without a hearing

Question 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

Answer 578

b. when the appointing company signs the action notice of appointment

Question 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

Answer 579

c. a life and disability analyst

Question 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

Answer 580

d. nothing

Question 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

Answer 581

d. forward to the insurance commissioner a notice of appointment within 14 days of receipt of the application

Question 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

Answer 582

c. surplus lines brokers

Question 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

Answer 583

d. the greater the number of insured’s, the more accurately the insurer can predict losses and set appropriate premiums

Question 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

Answer 584

a. theft

Question 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

Answer 585

c. fair credit act

Question 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

Answer 586

b. an implied warranty

Question 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

Answer 587

c. only before the insurance is in effect

Question 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

Answer 588

c. benefits and limitations should be considered prior to purchase

Question 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

Answer 589

d. no less than 24 hours

Question 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

Answer 590

c. workers compensation

Question 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

Answer 591

d. there is no time or dollar limit on medical payments

Question 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

Answer 592

c. all sums the insurer is required to pay by state law

Question 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

Answer 593

b. it is the joint issuance of a worker’s compensation policy with a disability insurance policy

Question 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

Answer 594

d. is elected by the public

Question 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

Answer 595

d. placing clients’ interests first

Question 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.

Answer 596

a. someone paid to transact insurance on behalf of another person, but not on behalf od the insurer

Question 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

Answer 597

b. the license is inactive

Question 598

Benefits under workers compensation would include: a. rehabilitation b. medical costs d. loss of time d. all of the above

Answer 598

d. all of the above

Question 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

Answer 599

d. workers compensation

Question 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

Answer 600

d. breach of contract

Question 601

A wrongful act other than a crime or breach of contract is a: a. tort b. proximate cause c. liability d. hazard

Answer 601

a. tort

Question 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

Answer 602

b. rescind the contract

Question 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

Answer 603

a. never

Question 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

Answer 604

a. concealment

Question 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

Answer 605

c. Fair Credit Act

Question 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

Answer 606

b. misdemeanor

Question 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

Answer 607

c. the law of large numbers